How Fipto helps companies repatriate funds from their foreign subsidiaries using cryptos

Wednesday, March 6, 2024

This French start-up has come up with an ingenious system to facilitate transfers from exotic currencies.

For many companies with subsidiaries in certain poorly banked areas of the world, it's always the same problem: how do you repatriate funds to the European parent company without suffering huge inconveniences when the changeover to the euro takes place?

Between the sometimes very high fees and transaction delays, finance departments have plenty to pull their hair out...

"In Africa, many banks are unable to serve their customers because of a liquidity problem, while in Asia and Latin America there are difficulties in finding trusted intermediaries to convert currencies," says Valentin Hautefeuille, in charge of sales at Fipto, a French start-up specialising in cross-border payments for businesses.

The company has come up with an ingenious crypto-based solution to help them. It uses stablecoins (usually USDC or USDT) as an intermediary between local currencies and the euro. Intermediation costs are lower and transfers can be initiated very quickly.

With stablecoins, there's no need to wait for the day or the weekend for banks to open their doors. The system operates 24 hours a day, 7 days a week. "That's one of the great advantages of blockchain," Valentin Hautefeuille points out.

"In the Africa zone, we won't necessarily be cheaper than traditional systems, but we will be able to operate transfers in a day, when that timeframe can extend over several weeks under normal circumstances," he details.

The challenge for Fipto, which operates mainly in Mexico, Argentina, Brazil and several African countries, is to forge partnerships with trusted local players to manage conversions between local currencies and stablecoins.

The start-up co-founded by Patrick Mollard (which raised €15 million in September 2023) also has to navigate a degree of regulatory fog in some countries. In Egypt, for example, the law prohibits the use of cryptos.

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This analysis is not investment advice. It has been prepared without taking into account your personal situation, particularly your financial situation, risk profile, and investment objectives.

Before investing in any product, investors should fully understand the risks involved and consult their own legal, tax, financial, and accounting advisors.

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