The Fintech Effect

The Egyptian pound is more useful than cryptocurrencies, tech CEO says

Key Points
  • Fintech firm TransferWise claims the Egyptian pound is more useful than cryptocurrencies.
  • TransferWise announced a partnership on Monday with France's Groupe BPCE, to offer its low-cost money transfer service to the lender's customers.
Banks see they can't fix everything so they partner with smaller fintech: Transferwise CEO

The co-founder of an online money transfer service claimed that cryptocurrencies aren't flexible enough to be adopted on a widespread basis.

TransferWise is an Estonian developed and U.K.-based money transfer service, launched in January 2011. Its co-founder and CEO, Kristo Kaarmann, said Monday that while cryptocurrencies are interesting, they currently have limited use.

"It would be super exciting if the world decides that everyone will use it to buy homes and cars and sandwiches," he told CNBC's Arjun Kharpal at the Money 2020 conference in Amsterdam.

"But the last currency we launched (our service for) was the Egyptian pound and there is actually more things to do with an Egyptian pound than some of these cryptocurrencies," Kaarmann added.

Cryptocurrencies have excited investors and the financial services industry who cite a potential for global use. However, problems with exchange platforms, wild fluctuations in value, and an association with criminality have led to questions over the technology's worth.

Banking deal

TransferWise used the conference to announce a partnership Monday with French banking group BPCE, saying it will offer its low-cost money transfer service to the lender's customers.

The service will be integrated via the group's banking apps starting in 2019. Kaarmann claimed that BPCE is going to become "the largest bank in the world that is transparent with pricing," adding it will also become the cheapest bank in France for those looking to move money abroad.

Taavet Hinrikus and Kristo Käärmann, founders of TransferWise
Source: Transferwise

TransferWise has around 3 million users transferring 2 billion euros ($2.3 billion) each month. It recorded its first full-year operating profit in 2017 and Kaarmann said Monday that he hoped to repeat the trick this year.

Despite being valued at more than a billion dollars, Kaarmann said TransferWise had no plans to list on the stock market or to apply for a banking license.

Kaarmann wouldn't be drawn on either subject and said his firm would simply continue to focus on making money "borderless."