Jiko, a fintech startup offering an account where all customer deposits are turned into Treasury bills, has received the regulatory all-clear to buy a bank.
Jiko, which is led by former Goldman Sachs trader Stephane Lintner, has bought Minnesota-based Mid-Central National Bank after securing approval from the Office of the Comptroller of the Currency and the Federal Reserve Bank of San Francisco.
With the bank's license in its hands, Jiko is set to emerge from beta and launch its app-based account that immediately turns deposits into T-bills. When customers make a payment or an ATM withdrawal with their Jiko card, the equivalent amount in T-bills is sold to cover it.
Jiko has spent the last three years quietly building its core infrastructure, which merges payment rails with real-time, 24/7 principal trading capabilities on T-bills. This means that an investment can act as a liquid and spendable alternative to cash.
The benefit of the model, says Jiko, is that customers get to keep the yield on the treasuries. Lintner tells CNBC that the Jiko account generated a 3.3% annualised return last year.
"People's relationship to money must be fundamentally improved for everyone. One of Jiko's primary goals is to give people what they deserve: more organic and direct returns, without intermediaries and unnecessary friction," says Lintner.