Nuo Bank, a Mumbai-based blockchain startup, has raised $ 250,000 (Rs 1.6 crore) from payment gateway firm, PayU India’s CEO Amrish Rau and Managing Director, Jitendra Gupta, as reported by Economic Times.
Nuo Bank is the first crypto investment by Rau and Gupta, who, since the acquisition of their fintech company Citrus Pay in 2016, are heading PayU India.
About the startup
Nuo Bank is a recently formed startup by Varun Deshpande, Ratnesh Ray, and Siddhartha Verma. It is a blockchain cryptocurrency based virtual bank that operates a decentralised cryptocurrency platform. That platform was launched last week.
The Savings are stored on the blockchain and instead of interest on savings, customers will be getting a virtual share in the revenue of the bank. Nuo Bank will offer around 20% of its 1 billion tokens – Nuo Coins – to customers.
The value of these coins will be determined by smart contracts, where the terms of the agreement are would be encrypted.
These contracts will stipulate that up to 25% of the bank’s revenue should be reserved for these tokens.
The bank shall earn revenue from the transaction fees, or merchant discount rate ( MDR), on its payments products as well as a share of the premium from its peer-to-peer lending business.
The app’s peer-to-peer lending facility will allow users to pledge Ethereum-based tokens and borrow money from a lender, who will be another customer of the bank.
What do the founders and investors think?
Nuo Bank has plans of giving 100 tokens each to the first 10,000 users. Deshpande, one of the co-founders of the firm said they have already registered 5,000 customers in the first 36 hours.
Speaking about their investment, Amrish Rau said,
“We invested with the rationale that if cryptocurrency can challenge fiat currency, then there would be a crypto bank required and credit would also become borderless.This is an experiment in a space, and if it takes off, we want to be a part of it.”
What does the government have to say?
It is still unknown as to what would be the government’s stance with regards to entities like that of Nuo Bank.
Finance Minister Arun Jaitley had made it clear that the Indian government doesn’t consider cryptocurrencies legal tender but will adopt blockchain technology to encourage the digital economy.
However, since the Finance Minister did not specifically state that trading in cryptocurrencies was illegal, it continues to be business as usual for Indian cryptocurrency exchanges such as Zebpay and Unocoin.
The income tax department had sent tax notices to thousands of people dealing in cryptocurrencies after a nationwide survey indicated more than $3.5 billion worth of transactions had been conducted over a 17-month period.
It is believed that the Indian government’s policy think-tank, Niti Aayog is experimenting new methods to employ the blockchain technology in education, health, and agriculture.
Also Read: IBM Launches Cheaper Platforms For Startups To Build Blockchain Projects
 from payment gateway firm, PayU India’s CEO Amrish Rau and Managing Director, Jitendra Gupta.){kind=link}