Nicolas Burtey is the founder of Galoy, a private business that was established in September 2019. The company is headquartered in the United States and maintains a lean team of 11 employees. The official website of the company is https://www.galoy.io/. Recently, Galoy unveiled Lana, a software solution that allows banks to accept bitcoin as collateral for loans.
The primary focus of Lana is to facilitate community and challenger banks in offering bitcoin-backed loans to a diverse clientele. This includes retail customers, commercial clients, and wealthy individuals. Burtey shared his thoughts on the matter with Bitcoin Magazine, explaining that different banks may have different strategies for selling their services.
According to Burtey, the hefty cost associated with such loans will decrease as they become more prevalent. Currently, interest rates for loans using bitcoin as collateral range from 12% to 15%. High rates are a result of the limited number of financial institutions offering these types of products. However, with the changing regulatory landscape, Burtey expects that more banks will be eager to enter this market, thereby driving interest rates down.
The background of Galoy reveals a company that has always been interested in enabling banks to utilize bitcoin. However, due to regulatory restrictions, the company initially focused on creating and supporting the Blink wallet, previously known as the Bitcoin Beach wallet. The Blink wallet, which was recently sold by Galoy, was a custodial Bitcoin and Lightning wallet primarily used in El Salvador and Bitcoin circular economies worldwide.
Lana is a software solution that Galoy offers to banks for a subscription fee. Using Lana, banks can issue bitcoin-backed loans under their own terms. Galoy does not interfere with the banks’ decisions regarding interest rates or other loan conditions. Instead, it provides a platform for banks to manage their loans and make determinations based on their capital costs, loan duration, liquidation price for bitcoin, and desired lending rates.
Galoy’s target market for Lana is mainly community banks and other small financial institutions. The company believes that these smaller entities will benefit the most from Lana. Additionally, smaller lenders can save substantial time and effort by integrating Lana instead of developing something similar from scratch.
Galoy’s long-term vision extends beyond helping banks issue bitcoin-backed loans. The company aims to bring open-source software into banking as more banks begin to adopt Bitcoin. However, Lana is currently fair-source software, meaning its code will become open-source after two years.
Ultimately, Burtey aspires to disrupt the core ledger market, currently dominated by three major players – FIS, Fiserv, and Jack Henry – by developing an open-source solution. The core ledger is the database where banks store account data, customer information, and transaction details. Burtey believes that open-source software can greatly simplify the process of starting a Bitcoin bank.
