Square Bank will give loans to small business and corporations. It will also sell debts to third parties and engage in blockchain development.
Twitter’s Jack Dorsey is a vivid supporter of Bitcoin as a technology. He was saying a lot of times that cryptocurrency is the future, pointing to the success of Bitcoin’s inception. The Federal Deposit Insurance Corporation (FDIC) initiated voting among the board members regarding Square. The company wants to put insurance on the holdings to loan. Per the voting results, Square received a green light on creating a crypto bank under Square supervision.
The bank’s name is Square Financial Services. They sent a second application for approval to the Utah Department of Financial Institutions (UDFI). That’s because they reside in Salt Lake City, Utah. Again, no troubles with receiving the approvals. As Jaqueline Reses, Executive Chairwoman at Square wrote in a press release on Wednesday:
“We appreciate the FDIC’s thoughtful approach to our application and their recognition that Square Capital is uniquely positioned to build a bridge between the financial system and the underserved. We’re now focused on the work ahead to build out Square Financial Services and open our bank to small business customers”
Twitter CEO Jack Dorsey doesn’t engage Twitter in activities such as unlawful data collection, spying on users, political bans. So, the approvals are flowing in without any trouble.
Square Will Open Crypto Bank in 2021
The primary task of Jack Dorsey – create a crypto bank with loans for institutions, as well as small businesses. Jack claimed in the past that small business is the basis of the economy. So, his decision to support this category of people, not only big corporate sharks, is understandable. The business will also sell loans to third-party investors, as well as receive deposits.
During the fourth quarter of 2019, the 5 billion valued Square already made huge profits via their Cash App. Half of the profits made out of the Bitcoin ecosystem, with Dorsey putting profits as an investment to Transparent Financial Systems. TFS will handle the creation of an innovative ‘cryptographic settlement network‘.
The Square Bank’s Chief Executive role appears in the hands of Lewis Goodwin, a technician from Square. Goodwin works with Dorsey for a long time. He was working as a top manager in Toyota Savings Bank, West One Bank, Green Dot Bank, and Chrystler Financial Bank. During recent weeks, this is second-time government gives green light to crypto bank. In February 2020, Varo Money received a license from the FDIC.
Dorsey, Square Receive License without Any Trouble, Unlike Facebook’s Libra
It looks like Jack Dorsey is very smart because he had no major troubles with financial regulators so far. Contrary to that, Facebook‘s Libra received a ton of criticism because of Mark Zuckerberg‘s habit to dump the data and spy on users. Reputation, not the fact of using crypto technologies, is critical when you launch a financial service. And Jack understands that.
He also remains the head of Twitter, despite the Board of Directors recently made a sneaky attempt to remove Jack from his own company. However, this trick worked only once, with Steve Jobs. In 2020, it is not as easy as they thought to prevent a genius from continue innovating.
Despite the attempts of one of the investors Paul Singer to initiate voting against Jack, all failed. The reason behind such a move is that Jack spends his time with two companies at the same time. Per Singer, it is not good that Dorsey involves himself in crypto-related startup Square. Also, Paul sounded concerns over Dorsey’s announced intent to live in Africa for 6 months. It is not clear what is bad in the intent of Western billionaire to live on the poorest soil on Earth. Leonardo DiCaprio said that, if you never visited Africa, you cannot complain about life.