FV Bank is a Puerto Rico-based global digital bank that provides business and individual accounts globally. FV Bank supports multiple currencies, international payments, and investment accounts along with debit and prepaid cards. Pulse 2.0 interviewed FV Bank co-founder and CEO Miles Paschini to learn more about the company.
Miles Paschini’s Background
What is Paschini’s background? Paschini said:
“I became interested in payments and technology back in the ‘90s when I owned cell phone stores. We were always trying to minimize the cash in our registers due to theft risks. Then, one day, the carrier introduced prepaid cards, little plastic scratch-off cards that were worth $25 and $50 each. It was such a nightmare with security, logistics etc. to manage those cards, I decided to invent the real time creation and distribution of the PIN codes to change that industry, this led to several patents and ultimately selling the company to Blackhawk. From there, I was caught on the payment-tech bug and had been developing scalable industry-leading payment solutions and innovations since.”
Formation Of FV Bank
How did the idea for the company come together? Paschini shared:
“I have been intrigued by crypto since 2012. In 2013 I launched a bitcoin debit card product from Europe, which scaled to nearly a million cards issued in over 70 countries and handled hundreds of millions of dollars in BTC to USD transactions by integrating and leveraging Visa card transactions in a new and innovative way. However, right as we were scaling, we encountered banking issues and industry concerns due to lack of education on compliance-related concerns with the scheme.”
“My co-founder and I recognized the necessity for specialized banking tailored to the unique demands of the intersection of traditional banking and the crypto industry. This required us to develop specialized compliance functions, risk management, processes, procedures, and expertise.”“After some careful market research, we ended up in Puerto Rico where we obtained our banking and custodial license. Today, we specialize in providing USD banking tailored for fintech, blockchain, and crypto companies.”
Favorite Memory
What has been your favorite memory working for the company so far? Paschini reflected:
“I think it comes every day with a reminder of just how complex building this business has been. We are taking on multiple challenges simultaneously — regulatory, compliance, technical — creating new products and learning from our mistakes and developing a bespoke team.”
Core Products
What are the company’s core products and features? Paschini explained:
“FV Bank harnesses the combined capabilities of a licensed bank and qualified custodian. We provide USD depository accounts to businesses and high-net-worth individuals globally. Our comprehensive payment options include domestic and international transfers, SWIFT, ACH, and cross-border payments in more than 10 foreign currencies.”
“Additionally, through strategic partnerships, we allow instant deposits and USDC-to-USD conversion, allowing customers to receive USDC deposits in their bank account, settled as USD. We provide digital asset custody and settlement services (fiat to crypto and vice-versa) and access to money market accounts to our customers. We are principal members of VISA, and we are going to roll out our VISA debit cards for individuals and corporate expense cards for businesses later this year.”
“Our commitment to innovation extends to the Banking as a Service model, where all our banking services are accessible via APIs. This empowers enterprises of all sizes to integrate banking and payment solutions directly into their platforms, leveraging our robust infrastructure to customize financial solutions according to their unique needs.”
“We have also set out to develop an industry-leading Compliance as a Service platform to seamlessly manage the complex compliance and monitoring this industry and regulators require.”
Challenges Faced
What challenges has Paschini faced in building the company? Paschini acknowledged:
“Providing USD banking to the Fintech and blockchain industry is not a simple endeavor. And running a global startup comes with its own challenges and hurdles. Our primary challenge lies in securing correspondent banking from the US. To overcome this, we focus on proactive relationship-building and strategic partnerships while remaining agile in response to regulatory shifts. These correspondent bank partners are key to our success while we wait out the lengthy process of applying for a Fed Master account.”
Evolution Of FV Bank’s Technology
How has the company’s technology evolved since launching? Paschini noted:
“Since our establishment, our technology has undergone substantial evolution. We’ve developed our own version of a core banking system and seamlessly integrated it with modern digital asset custody solutions. This integration offers our customers a streamlined experience, enabling independent handling of both crypto and fiat transactions within a unified account. We have also built a custom payment gateway enabling us to intelligently route payment transactions to the best provider, all based upon business logic.”
“Today, FV Bank is both a bank and a tech stack provider. Enterprises of any size can harness our compliant infrastructure to develop their financial products, driving innovation and scalability within the industry.”
Significant Milestones
What have been some of the company’s most significant milestones? Paschini cited:
“I believe our greatest milestones are on the horizon, and I’m eagerly anticipating their arrival.”
“With that being said, achieving cash flow positivity for FY 2023 stands out as a pivotal achievement for an early stage bank. This milestone holds special significance, particularly considering the challenges faced by the banking industry during that period.”
Customer Success Stories
After asking Paschini about customer success stories, he highlighted:
“FV Bank has empowered numerous businesses in the crypto space by providing them access to global banking and payments solutions. We’ve facilitated the setup of operational USD bank accounts tailored to the specific needs of these businesses.”
“Crucially, our USDC stablecoin to USD direct 1:1 conversion has played a pivotal role in meeting crypto businesses’ off-ramp requirements. This has enabled efficient conversion between crypto and fiat currencies, removing the need for the client to go through Circle, enhancing liquidity and facilitating seamless transactions for our clients.”
Funding
After asking Paschini about the company’s funding information, he revealed:
“FV Bank has raised a total funding of $12 million comprising $8 million in equity and $5 million in convertible debt. We’re currently exploring opportunities for another fundraising round to accelerate growth later this year.”
Total Addressable Market
What total addressable market (TAM) size is the company pursuing? Paschini assessed:
“FV Bank’s target market encompasses a broad spectrum within the fintech and blockchain space. The TAM encompasses a diverse range of entities, including over-the-counter (OTC) providers, numbering in the hundreds across the US, EU, and Asia, alongside hundreds of crypto exchanges worldwide. Additionally, FV Bank is targeting fund and wealth managers, fintech companies such as e-wallets, neobanks, and payment service providers (PSPs), as well as international traders and trading companies engaged in cross-border e-commerce. Furthermore, the TAM includes stablecoin issuers, custody providers, liquidity providers, and family offices, reflecting the broad scope of FV Bank’s market expansion strategy.”
Differentiation From The Competition
What differentiates FV Bank from its competition? Paschini affirmed:
“Fintech and blockchain companies are adept at creating innovative fintech products but are under-served with existing banking solutions, and very few banks have the risk appetite, focus, compliance tools, or the technological capability to serve the growing needs of these companies.”
“We solve the problem of limited access to banking services for these companies. We are one of the few regulated banks to provide a bank account that works seamlessly with digital assets. We have enhanced the capability of our own core banking system and created a solution that allows customers to perform banking operations alongside managing their digital assets. In the same account, customers can:
1.) Accept fiat as well as digital assets
2.) Perform fiat as well digital asset transactions
3.) Convert between fiat and digital assets from custody accounts
4.) Manage treasury with money market accounts
Future Company Goals
What are some of the company’s future company goals? Paschini concluded:
“I am very excited about the new products we are working on. We have catered our products for the crypto / blockchain industry. And in the coming months we are launching some of the very innovative products for the blockchain industry. Some of them include ‘tri-party custody solutions,’ specialized expense management cards, and enhanced stablecoin settlements and some very cool tokenized treasury management products.”
