Norwegian savings bank Sparebanken Øst has invested $1.65 million in a local bitcoin exchange as demand for cryptocurrencies booms amidst an ongoing economic slowdown.
Sparebanken Øst purchased a 16.3 percent stake in Norwegian Block Exchange (NBX), a digital assets trading platform founded by airline tycoon Bjørn Kjos. The founder of Norwegian Air Shuttle, Scandinavia’s largest airline is set to launch NBX by mid-September after spending almost a year on its development. His new partners at Sparebanken sees the exchange as something that could “challenge existing financial ecosystems” with its range of services.
NBX plans to offer digital asset trading, payment and saving solutions, and other blockchain-based services.
“As these digital asset initiatives begin to become part of the mainstream, Sparebanken Øst has decided to take an ownership stake in NBX to obtain new knowledge and solutions as well as learn from and understand disruptive initiatives. This understanding will equip the bank to manage competition and future-oriented solutions for customers,” — read the bank’s press statement.
A Business Hedge Called Bitcoin
The announcement follows Kjos’ decision to interconnect his airline operations with their cryptocurrency exchange. The business magnate stated in late July that Norwegian Air would start accepting payments in bitcoin. Sparebanken believes it is a great strategy to drive airline’s as well as exchange’s operations. The bank wrote:
“Possible collaboration with the airline Norwegian Air Shuttle, a key player with NBX, could be a platform for launching new solutions on a mass scale, and the bank sees great market potential both nationally and internationally.”
Kjos’ interest in cryptocurrencies surfaced in public conscience right after he relinquished control of Norwegian Air Shuttle. The tycoon tended to fly into an unchartered territory of digital assets as his airline services delivered lower-than-expected results in Q2. The shuttle’s net profit plunged 75 percent in a year to $8.5 million, marred by the grounding of the Boeing 737 MAX, which makes for over 10 percent of Norwegian Air Shuttle’s fleet.
Meanwhile, two weeks after his resignation, Kjos announced that he would launch NBX. Around the same time, benchmark cryptocurrency bitcoin established its year-to-date peak of $13,868.44 on San Francisco-based Coinbase exchange, promising further gains in the wake of escalating trade tensions between the US and China, weakening China’s renminbi, and the potential launch of a string of bitcoin derivatives products on Wall Street.
“It is essential for Sparebanken Øst that the company can satisfactorily meet the quality requirements imposed by the authorities, including customer identification and anti-money laundering, with which NBX is aligned,” wrote Sparebanken. “NBX, as a company, is in an early development phase, and Sparebanken Øst believes that the potential for learning and development in this initial phase will be great.”