The company that developed the DeFi Aave platform has obtained an official license from the Financial Conduct Authority (FCA) of the UK to operate as an authorized Electronic Money Institution.
Therefore, as of 7 July 2020, Aave Limited, based in London, is authorised to issue electronic money (e-money) and provide payment services.
The license only covers the issuance of e-money in fiat currency and the provision of payment services in the United Kingdom of Great Britain, and has nothing to do with cryptocurrency and DeFi, but may allow Aave Limited for example to also handle fiat currency transactions directly, without having to go through other intermediaries.
FCA license not for DeFi
This is not directly related to the smart contract on which the DeFi protocol created by Aave is based, or its token ERC-20, but to the wider ecosystem that is creating the company.
In this way, in addition to continuing to develop the decentralized platform, the company will also be able to provide centralized services in fiat currency, which necessarily require an intermediary and appropriate authorizations.
Aave’s founder and CEO, Stani Kulechov, said the application for authorization to the FCA was filed as early as 2018, long before the launch of the DeFi platform in January this year.
„The goal was to help Aave Ecosystem to access payment accounts, and users to enter the DeFi world. Electronic Money Institution is the same authorization that Coinbase and Revolut have in Europe. It will mainly support the inclusion of new users in the Aave Ecosystem and the decentralized protocol. Aave will experiment in the UK, before covering the entire European market and expanding globally. The service will allow users to move from fiat to stablecoin, and other assets, natively within the Aave ecosystem and then use these assets in the Aave protocol.
The Aave protocol itself is decentralized and will be governed by AaveDAO, however, the Aave integration entity will seek additional licenses to help newcomers enter the ecosystem until the ecosystem is widely adopted.
Aave, funds tripled in DeFi protocol
Meanwhile, the volume of funds immobilized on the Bitcoin Method Aave protocol has almost tripled in the last ten days alone, from $529 million on August 14 to the current $1.4 billion.
In addition, it had never exceeded 250 million until June 20, so in just over two months it has multiplied by almost six times.
Thanks to this real boom, Aave has now become the absolute DeFi protocol with the highest volume of fixed assets, surpassing even Maker, albeit by just a little.