London-based startup DAG Global is aiming to become the “first digital assets merchant bank” in the United Kingdoms, the Financial Times reported on 10 February.
According to the article, the firm plans to apply a second time for a full banking license in the U.K. next month, in order to bridge the gap between the crypto-based companies and the traditional banking system. On its website the company says its aim is to:
“Deliver next-generation merchant banking solutions to the underserved fintech, digital and SME sector, by re-establishing the historic and trusted connection between bank and client to promote dynamic and sustained future growth.”
The firm tried to receive a banking license back in 2018, but its application was unsuccessful. After its failed attempt, DAG reportedly engaged in “constructive dialogue” with the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA), Britain’s financial watchdogs. If successful in its second application, the firm plans to offer bank accounts to crypto-based companies starting next year. The company reportedly said:
“DAG is currently applying to the PRA to obtain a full UK banking license. This will allow us to provide a full suit of classic products and services across digital and fiat currencies and asset classes.”
According to the company’s CEO, Sean Kiernan, DAG has not raised any “red flags” with the regulators so far. He also said in the report that the current lack of crypto-friendly banks is due to the “lack of understanding and reputation risk”, as well as fears over money laundering.
Currently, only a very small number of financial institutions that are licensed, and willing, to serve the local crypto space, such as Clearbank and its partner BCB Group. DAG’s Chief Commercial Officer, Stephanie Ramezan, told the FT that there is currently a growing demand for the company’s services in the area, seeing as businesses are “fed up with what they’re faced with to meet basic business banking needs at the moment”.