In the U.S., despite over half the states having legalized medical marijuana and more than one-fifth allowing recreational marijuana, banks are still prohibited from working with marijuana companies. This means no accounts, no loans, no credit facilities – nothing. It leads to marijuana being an all-cash business, which is extremely unsafe for everyone and prevents individuals from being able to launch new endeavors unless they’re already flush with cash. A federal bill hopes to reverse this inadequacy, but it isn’t moving quickly and, in the meantime, mother is the necessity of invention. As Arizona is preparing a FinTech sandbox, a marijuana-focused company has been approved for participation and will develop a stablecoin for the marijuana industry.
According to a press release from the Arizona Attorney General’s (AG) Office, AG Mark Brnovich has accepted a request by blockchain startup ALTA to participate in the sandbox. ALTA is the seventh entity to be approved for participation, and is developing a system that will allow marijuana businesses to send and receive digital payments without having to rely on banks.
ALTA incorporates digital tokens in order to facilitate transactions between members of its own financial services organization. Those members can transfer ALTA coins, which can be redeemed for cash and the value, as with virtually all stablecoins, is designed to not fluctuate.
ALTA is set to test onboarding and remittance through the sandbox. Its currency is reportedly backed by U.S. dollars and members can use a smartphone or a computer to access the platform, as well as to conduct transactions in real time.
ALTA Chief Operating Officer and co-founder Sarah Wessel explains, “The cash economy for legal cannabis in Arizona exceeds $350 million annually. These are legitimate companies, innovators and entrepreneurs that are forced to operate in cash. We offer them peace of mind. Our digital payment technology lifts the burdens of having to operate solely through cash and makes our communities safer.”
ALTA’s other co-founder and CEO, Jesse Forrest, adds, “We help solve the banking challenges facing medical marijuana companies and their vendors. ALTA uses blockchain and geofencing technology to protect clients’ digital payments and transfers. Other digital payment companies require a bank account. We provide all the financial services medical marijuana companies need without requiring a bank account.”
Arizona is the first state to offer a FinTech sandbox. It was launched in August of last year, and the absence of other such programs in the country is a stark reminder of how the U.S. is dropping further behind in FinTech innovation.
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