Arizona, home of the first U.S. FinTech Sandbox, has admitted another cryptocurrency startup into the program that is designed to ease regulatory burdens for entrepreneurs in the financial technology space. According to a statement released by Attorney General of Arizona, Mark Brnovich, ALTA becomes the seventh firm to be inducted into the regulatory sandbox. On its website, ALTA describes itself as a “digital payment club where cash-intensive businesses pay each other using digital tokens instead of cash.”
RT @GeneralBrnovich: The Attorney General’s Office has accepted the newest #FinTech Sandbox participant.ALTA is the 7th company in the Sandbox. @ALTA_financial is a digital token-based cash management company that will serve AZ medical marijuana biz https://t.co/5Eynr1znXR
— Jeff Weninger (@JeffWeninger) July 25, 2019
How does ALTA stablecoin work?
The crypto startup mainly provides its cash management solution to medical cannabis vendors. Basically, members buy ALTA tokens on the startup’s exchange, enabling them to make payments to other members by transferring the tokens. The tokens are redeemable for U.S. dollars at a rate of 1:1.
With U.S. banks and other financial institutions averse to offering their services to cannabis-based businesses due to the varying laws and regulations that exist across state lines, it is not mandatory to possess a bank account in order to buy ALTA tokens.
The startup provides armored car pickup services for those members who use cash. Per ALTA’s co-founder and chief operating officer Sarah Wessel, this is a $350 million opportunity:
“The cash economy for legal cannabis in Arizona exceeds $350 million annually. These are legitimate companies, innovators and entrepreneurs that are forced to operate in cash.”
Arizona is blockchain-friendly
While it’s the seventh startup to join Arizona’s Fintech Sandbox, ALTA is the second firm in the blockchain and cryptocurrency space to do so since the initiative was launched last August. The first crypto startup to be admitted into the regulatory sandbox was Sweetbridge, a firm focusing on blockchain-based lending solutions.
Medical pot industry getting new options to avoid having to deal only in cash as @GeneralBrnovich approves experimental program using “tokens.” https://t.co/HtBgoMaakv
— Howard Fischer (@azcapmedia) July 26, 2019
Arizona has also made other steps which have demonstrated its credentials as a blockchain-friendly state. Last April, for instance, the state’s governor, Doug Ducey, signed into a law a blockchain bill which recognized the data shared by corporations on the blockchain as valid.
Additionally, Arizona State University is home to the Blockchain Research Laboratory. The program was launched two years ago to foster research and education in distributed ledger technology.