Blockchains.com founder buys Nevada bank to push for decentralization

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The founder of Blockchains.com, Jeffrey Berns, has acquired a community bank in Nevada to facilitate his dream of a fully decentralized financial system. Berns acquired Kirkwood Bank, located in Nevada, through a holding company that will be separate from Blockchains, his blockchain-focused investment and incubation firm.

Berns intends to use the bank to not only offer financial services to blockchain businesses which many banks have shunned, but to also prove to regulators that blockchain systems are way better than the existing centralized systems.He told the Nevada Independent:

“Purchasing the bank was basically security for me to make sure that Blockchains and myself had access to the financial system. But secondarily, it’s to create an environment where the blockchain ecosystem, the legitimate businesses out there who are trying to build projects that are going to empower the individual and better the world, that they have a bank that understands what they’re doing and isn’t fearful.”

While banks globally are conducting pilot projects with blockchain, they are still too far behind, Berns believes. With him at the helm of Kirkwood Bank, he can play his part in accelerating the progress. Moreover, “the current financial and banking systems are incompatible with his vision for a distributed, decentralized blockchain-based system,” he said.

Berns doesn’t intend to change much in the way the bank runs, other than a name change. The bank’s president, John Dru, assured all its customers that the executive management and the staff will remain onboard.

The 56-year-old Berns also stressed that the bank and Blockchains will remain independent of each other. This will exclude the Sparks, Nevada-based incubation firm from unnecessary scrutiny from the regulators. He explained, “Only bank holding companies can own a bank, and if Blockchains owned the bank it would have to do reporting much like a bank holding company would.” However, Blockchains will develop blockchain-based fintech products for the bank.

His plans with the bank are grand, he revealed:

“I needed a playground. I needed a place to do proof of concept with regulators to show that loans can be done in such a way that if I have $1,000, I could invest 10 cents in 10,000 loans and, it would all be done on the blockchain and micro payments would be made, and there’s no funny business.”

Berns decided to purchase the bank in 2017 and has been negotiations with the owners ever since. He signed the acquisition agreement in August 2018 and purchased the bank for $25 million, with an additional $3 million for investment purposes. The bank, which was established in June 2008, has around $86 million in assets, with a 9% return on equity in 2019.