The news came almost quietly after it has been earlier rumoured. The Litecoin Foundation and TokenPay have entered into a strategic partnership to buy a stake in a German bank, WEG Bank AG. The bank confirms TokenPay Swiss AG and the Litecoin Foundation as investors on its website with 9.90% stake each.

It is worth noting that under German banking law, it is not possible for any entity to own more than 9.9% of a bank without regulatory approval. In this case, the crypto projects have the options to buy approximately 90% overall of WEG Bank pending the customary regulatory approval. When approved, TokenPay and Litecoin could own more stake in the bank. So what does this portend for the crypto industry as a whole:

Red Tape
WEG Bank is very small going by figures available. It started in 2010 as a company that buys real estate and changed its name to WEG Bank in 2016 when it started offering small loans to buy real estate. Not much information is available about its operation. However, it can be deduced that partnering with it, as a registered and functioning bank, means issues such as regulation, certificates and establishment have been covered.

Game Changer
While this is an indication of a strong project and a team with the foresight for a future outlook, their move is also a game changer that could cause more crypto projects to follow suite. The crypto world has been seeking ways to collaborate with the traditional financial system to ensure seamless integration on both sides. This could be the beginning of something worth referencing in coming years. It is a huge start for digital currencies and real world banking.

Crypto Confidence
In a way, this development will make the crypto community a bit stronger as it will help build credence in cryptos at least to another level especially in the West. With the stake in a licensed bank, the crypto projects will have access to main products and services that have been built around fiat currencies. It will be on the crypto projects to develop consumer-driven solutions based on the confidence they will gain from their reliance on the bank to access new investment opportunities that have been deprived them due to the friction that tends to exist between the crypto and traditional financial systems.

Mutual Benefit
This development seems to push further the view that banks are and will always be part of the global financial system and the crypto world needs them. Users need a gateway between traditional banking services and cryptocurrencies. However, despite this need, it is not hidden that crypto businesses often struggle to find banking options. This initiative may break the ice on many more collaborations to come.

Considering the recent cut-off between banks and support for crypto-backed debit cards, for example, this move is likely to remedy the situation by making debit cards and other forms of merchant solutions more feasible. In particular, it could make it easier for exchanges to convert cryptocurrencies into fiat and vice-versa. It could translate into enhancing the adoption of cryptocurrency since real time settlement for merchants will be possible.

The stake in the bank is not expected to yield much market results in the short term but in the longer term. However, Litecoin’s price picked up a bit since the report of a stake in WEG Bank was made public on Tuesday July 10. It touched $80.47 by the next day from a low of $75.60 (though it now trades around $78.40 as at the time of this writing).