Founder: Nicolas Burtey
Date Founded: September 2019
Location You can also find out more about the following: Headquarters: United States
Number You can also find out more about the following: Employees: 11
Website: https://www.galoy.io/
Public You can also find out more about Private? Private
Last week, Galoy launched LanaSoftware which allows the banks to accept bitcoins as security for loan repayments.
Lana Community and Challenger Banks (the banks which Galoy Looking to Work) is offering bitcoin-backed loan to different types of customers.
“Some banks might want to use it to sell to retail, and some might want to use it to sell commercial customers or high-net-worth individuals,” Burtey Tell them to get on with it Bitcoin Magazine.
In Offering such loans to customers of all types is a good idea. Burtey The high interest rates currently charged on these products are expected to fall.
“Today's interest rates are 12% to 15% if you want to get a loan using your bitcoin as collateral,” said Burtey.
“The The rates are high due to the limited number of financial institutions that offer this product. We see an opportunity now that the regulations are allowing banks to do things with bitcoin,” he added.
“We think a lot of banks will want to enter this market.”
If Burtey If he is right, and banks will offer loans backed by bitcoin, not only will rates be lower, but open-source software will also become more widely available. Bitcoin The introduction of software in banking could lead to a change.
But More on that topic in a few minutes. FirstSome background information Galoy.
Galoy’s History: From Blink Wallet To Lana
Founded The following are some examples of how to use September 2019, Galoy The government had wanted to make bitcoin available to banks from day one, but a lack of regulatory support forced it to postpone the move.
SoInstead, the company focused on supporting and creating new products. Blink The wallet was first called the Bitcoin Beach What is the best wallet? Galoy A custodial Bitcoin The following are some examples of how to get started: Lightning First time wallet users are largely using it El Salvador After that, Bitcoin Circular economies are a global phenomenon.
“Galoy’s mission was to onboard banks to Bitcoin five years ago,” said Burtey.
“But We decided to establish a new regulatory body because the environment had deteriorated so much in the last five year. Blink. The We are now focused on our original goal because the End of Choke Point We think that now, with the repeal of SAB121 and 2.0, is the ideal time for banks to adopt Bitcoin.”
Burtey The creator and grower of the company spoke to us about what he has done. Blink The project was a success and he shared his joy at having to give up the work because it became too challenging to keep it running while also trying to attract a brand new clientele.
“Blink This is not a business-to-consumer (B2C) transaction.Business-To-Customer) play, and it’s hard as an early-stage startup to focus on too many things,” explained Burtey.
“Galoy This is an B2B business (Business-To-Business)-driven business, and we want to work with banks and financial institutions,” he added.
“It’s good to be focused on just one thing.”
AndAs mentioned above, this one thing is now to be Lana.
How Lana Works
Lana Software that is a software. Galoy Helps banks manage and integrate for a monthly subscription fee. With Using this software, the banks can create their own terms for bitcoin-backed loan.
“We’re not the ones deciding how much interest will be charged or anything like that,” explained Burtey.
“We give banks the platform to do this, and then they can figure out their cost of capital, the duration of the loan, the liquidation price for the bitcoin in the loan and the rate at which they want to lend,” he added.
“We’re giving you software, and helping you run and automate that software.”
Something Another thing Galoy doesn’t do for banks is custody the bitcoin provided as collateral for the loans they issue. Each The company is required to select their own custodian from the list of banks that they work with.
“You BitGo is a great place to start. Fireblocks or each loan can have its own multisig,” said Burtey. “We’re agnostic on custody.”
With This is what I said Lana Banks can monitor bitcoins in their custody to determine if the collateral has reached liquidation level.
“A key piece of this product is risk management,” said Burtey.
“Bitcoin is volatile, and the bank will need a tool to show that it’s taking calculated risk. So, we’ll provide banks with a dashboard to monitor this risk,” he added.
Who Will Use Lana?
Galoy is targeting community banks and other smaller financial institutions with this new product mostly because they think these smaller players will benefit most from it — and because the big banks likely won’t need such a product.
“We don't think JP Morgan will really want to work with us,” said Burtey. “They’re probably building something like this themselves, whereas a smaller bank, a credit union or small company probably isn’t.”
Burtey also understands that smaller lenders’ incorporating Lana As opposed to building it themselves, these financial institutions will save time and money.
“Our goal is to say, ‘LookThis will require you to spend six months or a full year depending on what you already know. Bitcoin,’” said Burtey. “‘Or we have a lending product You can also read about how to get started. a service for you, and you can launch it much more quickly.’”
And as Burtey and his team onboard their first round of smaller banks, they’ll not only be making history in enabling more banks to accept bitcoin as collateral for loans, but they’ll potentially be altering the trajectory of banking in general by introducing open-source software to it.
Open-Source Bitcoin Banking
Burtey’s long-term vision for Galoy It is more than helping banks to issue loans backed by bitcoin. He’s looking to introduce open-source software into banking as more banks begin to embrace Bitcoin.
However, it’s important to note that Lana isn’t open-source just yet. It’s fair-source software, and, under such a license, code becomes open-source after two years.
“It's a delayed open-source system, but it's all available on GitHub,” said Burtey. “You It is possible to play around with the device, test it and go through it yourself.
Under The fair-source licence is only valid for companies that are licensed by the Fair Source License. Galoy You can immediately sell your product to a financial institution, which allows you to earn money. Galoy Profit while building using auditable code
“We sell the deployment, and we help banks to plug in to their custodian,” explained Burtey. “We’re building in the open — but we also want to generate revenue.”
Beyond Helping banks to implement Lana, Burtey’s wants to develop open-source “core banking software,” as he’s looking to disrupt the “core ledger” oligopoly.
“The core ledger is where banks store the account data, customer information The following are some examples of how to get started: transaction details,” said Burtey. “It’s the source of truth for banks.”
And only three companies — FIS, Fiserv and Jack Henry — have the core ledger market cornered.
“These are all like hundred billion dollar companies that you’ve probably never heard about because all they do is focus on selling software to banks,” said Burtey.
“Our long-term goal is to disrupt this industry by making something that is open source,” said Burtey. “Today, there is no company that does core banking with the idea of open source, and so we're working towards this.”
Burtey Imagines a future in which Open-Source Software can help someone start an enterprise. Bitcoin bank. (For those who wince at the words “Bitcoin” and “bank” being used in tandem, might I remind you that it was the legendary Hal Finney It was he who claimed that Bitcoin-backed banks could be a solution to scaling.
“To start a bank today is a very expensive and complicated process,” said Burtey. “You have to pay $100,000 plus just to purchase the core ledger technology.”
Burtey Then he referred to his own experiences in starting Blink Before continuing, you will need to create a wallet. This is essentially an open-source bitcoin bank.
“I just went to El Salvador and started what was effectively my own bank because I wanted to,” said Burtey.
“We Need to reinvent core banking software in the world Bitcoin, and I think this is where open-source becomes relevant,” he added.
“This This is why I am so convinced that the financial world has become a very dangerous place. Bitcoin will be very different from the world of banking with fiat, and I think we’re one of the companies at the forefront of this.”
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