BVNK interview at FMLS 2022: Chris Harmse talks regulated crypto payments

The conference accommodated a varying array of industry panels, workshops and fireside chats led by pioneers of the financial services, crypto, payments and fintech industries.

Among them was BVNK, a UK-based payments startup that provides crypto-enabled payments to global businesses

FinanceFeeds spoke with Chris Harmse, who co-founded BVNK after a decade in cross asset (Equity, FX, Rates) capital markets.

BVNK at the intersection of crypto and fiat in a regulated way: EMI and VASP licenses

BVNK launched in September 2021 and leverages partnerships with leading names within the ecosystem such as B2C2, Genesis, Modulr, Fireblocks, and Copper.

The goal is to allow customers to bridge between fiat currencies and digital assets to make payments borderless, instant, and secure.

At its core, BVNK is a payments business, but it innovates by building crypto payment products such a crypto gateway for brokers and merchants to accept crypto payments without the hassle of converting crypto to fiat and back. The firm also boasts a global settlement network that allows merchants to do cross border payments through an upgraded infrastructure using all regulated fiat-backed stablecoins.

This puts BVNK at the intersection of crypto financial systems and fiat systems in a highly regulated and compliant way, Chris Harmse told FinanceFeeds Editor-in-Chief Nikolai Isayev, adding that on the fiat side the firm is regulated through EMI (Electronic Money Institution) licensing, while on the crypto side of the business, the firm holds a VASP (Virtual Asset Services Provider) license in Spain.

BVNK earlier this week announced the acquisition of SPS Ltd, an FCA-regulated EMI which opens the door to a broader product offering: a one-stop payment solution for businesses that includes e-money services, e-wallets, and multi-currency accounts for merchants.

“Bad actors in crypto doesn’t mean crypto is bad”

The conversation then moved from BVNK to the current sentiment within the crypto industry. An “unfortunate turn of events”, he said about the collapse of a number of big players, including Celsius Network and most recently, FTX.

Chris Harmse pointed to a number of reasons that led to the ‘crypto winter’, including startups that scaled to quickly to outright fraud, but the existence of “bad actors in crypto doesn’t mean crypto technology is bad”, he affirmed, while also taking the opportunity to remind the audience that BVNK wasn’t minimally affected by these events.

The startup does not associate itself with the volatility of asset prices, quite the contrary, as its business relies on providing conversion between fiat currencies and cryptos through fiat-backed stablecoins. Still, the collapse of a few digital asset industry giants due to failures in risk management and even fraud is notably leading to a period of slowdown in adoption.

“We’re seeing a natural skepticism from end users”, Chris Harmse admitted. “We need time for things to settle down.”

Focus will go back on the real use cases of crypto

Regulation will hopefully bring back trust to the space and BVNK is “obviously following regulation closely”. Chris Harmse applauded Europe for coming together with the MiCA regulation, and lamented the United States’ current regulatory environment, namely the infighting and the SEC’s regulation by enforcement practice.

“At the end of the day regulation is good”, he continued, pointing out that it needs to be “well thought out, clear, and globally adopted” in order to “avoid regulatory arbitrage”. Unified regulation is thus the way to go.

As to the key themes for crypto in 2023, the quick answer was “regulation” and how agencies react to what’s currently happening in the space. We’ll also be dealing with the contagion effect as the ‘crypto winter’ continues and at the same time, the focus will go back on the real use cases of crypto.

“We are really well positioned. Our business is building around the payments use case. There’s obviously speculative use cases that have come to crypto. In boom markets these things come out. At the end of the day, the payment use case is an upgrade of traditional payments infrastructure.”

BVNK will be relaunching a few products and services and is currently working on further products, still in their proof-of-concept stage. In the meantime, the firm will continue to work with highly regulated financial institutions to bring about compliant payment services for brokers and merchants.