The company that developed the DeFi platform Aave has obtained a official license of the Financial Conduct Authority of the United Kingdom (FCA) to operate as a licensed electronic money institution.
Therefore, as of July 7, 2020, Aave Limited, based in London, is authorized to issue electronic money (e-money) and provide payment services.
The license only covers the issuance of electronic money in fiat currency and the provision of payment services in the United Kingdom of Great Britain, and it has nothing to do with cryptocurrencies and DeFi, but it can allow Aave Limited, for example, as well handle fiat currency transactions directly, without having to go through other intermediaries.
FCA license is not for DeFi
This does not directly concern the smart contract on which the DeFi protocol created by Aave is based, or its ERC-20 token, but to the broader ecosystem that the company is creating.
In this way, in addition to continuing to develop the decentralized platform, the company You can also provide centralized fiat currency services, which necessarily require an intermediary and the corresponding authorizations.
The founder and CEO of Aave, Stani Kulechov, said that the application for authorization to the FCA was submitted as early as 2018, well before the launch of the DeFi platform in January this year.
“The objective was to help Aave Ecosystem access payment accounts and users integrated in DeFi. Electronic Money Institution is the same authorization that Coinbase and Revolut have in Europe. For the most part, it will support the addition of new users to the Aave ecosystem and to the decentralized protocol over time. Aave will pilot test in the UK, before being rolled out to cover the entire EEA and expand globally. The service will allow users to switch from Fiat to stablecoins and other assets natively in 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 incorporate newcomers to the Aave Ecosystem until the ecosystem reaches wide adoption. "
Aave, Blocked Funds Tripled on DeFi Protocol
Meanwhile, the volume of funds locked on the DeFi Aave protocol has almost tripled in the last ten days alone, from $ 529 million on August 14 to $ 1.4 billion today.
In addition, until June 20 it had never exceeded 250 million, so in just over two months it has multiplied by almost six.
Thanks to this royal boom, Aave has now become the DeFi protocol with the highest volume of locked assets, surpassing even Maker, although only by a small margin.