FINANCE - FINTECH

Crypto

Future private cryptobank Coinhouse to set up shop in Luxembourg



Step by step, Coinhouse and its CEO Nicolas Louvet are working on every dynamic of a private bank specialising in cryptos. (Photo: Coinhouse)

Step by step, Coinhouse and its CEO Nicolas Louvet are working on every dynamic of a private bank specialising in cryptos. (Photo: Coinhouse)

French cryptocurrency broker Coinhouse continues to advance in its project to become the first European (private) cryptobank. At the end of December, it obtained its second licence in Europe, from the CSSF, to develop its activities in Luxembourg.

Coinhouse is well on its way to expanding its business in Luxembourg after the financial sector supervisory commission on 28 December gave Nicolas Louvet's fintech and its sister company Coinhouse Custody the fifth and sixth virtual asset service provider licenses, after those given to Bitflyer, Swissquote, PayPal and Bitstamp.

While waiting for the European authorities to agree on the 168 pages of their legislation on financial markets in crypto products, fintechs have no choice but to look at the specifics of each country's legislation and decide where to try to obtain a licence to deploy their activities.

Coinhouse, the first French fintech to obtain virtual asset services provider (VASP) status from the French Autorité des marchés financiers in March 2020, does not hide its intentions in targeting Luxembourg.

Guided management and savings account in cryptos

“Luxembourg is a very interesting country for us,” explains Coinhouse CEO Nicolas Louvet, “firstly for its connection to the financial markets, but also for the presence of many family offices, and therefore potentially large fortunes, or for the presence of functions associated with investment fund management. This licence allows us to establish a point of presence, with two or three people, and to start canvassing potential clients.”

Coinhouse, with its €15m turnover in 2021 and 70 employees, “multiplied by a little more than six in one year”, according to its CEO. It’s not an “exchange”, or a place where internet users come to buy €20 of Bitcoin, he says.

First of all, insists Louvet, “each client is accompanied, as is the case in a private bank.” At the end of the year, Coinhouse launched two innovative products, “a managed investment mandate” and an interest-bearing savings account that promises up to 6% return per year.

The first, with an entry fee of €15,000, allows investors to manage their crypto portfolio according to three profiles, similar to what is done with ETFs: defensive with 25% Bitcoin and 75% USDC or USDT (stable coins indexed to the US dollar); balanced (50-50); and offensive (75-25).

Crypto custodian for funds

The second relies on three stable coins (USDC, USDT and EUR-L, the first European stable coin available exclusively on Coinhouse) to guarantee a 6% return per year. Again, there is an entry ticket, which has recently been lowered from 50,000 USDT to 20,000 USDT (€17,641).

But the part that explains the company’s deployment in Luxembourg, where it has been registered as a business since November 2020, is the legislation that allows it to be a crypto custodian for investment funds. “Our subsidiary, Coinhouse Custody, has the French state as a client, or even the ICOs of some video game publishers, and we are talking to other partners. It's like a secure safe, with a culture of custodian businesses,” says Louvet.

Although he is not yet talking about it, the media is already buzzing about the next projects of the French fintech headquartered at Lhoft, in particular its desire to move into payments.

his story was first published in French on Paperjam. It has been translated and edited for Delano.