ORO Bank: Asia’s first Full Reserve Digital Bank launched for the Gelephu Mindfulness City

In a major development for the Gelephu Mindfulness City (GMC) project Asia’s first Full Reserve Digital Bank called ORO Bank has been launched to serve the GMC project.

The bank also aims to help global startups and innovative emerging businesses.

While the website was launched recently there is not much known beyond the site. The Bhutanese interviewed the ORO Bank CEO Mike Kayamori and also looked at the site in detail.

CEO Mike Kayamori said the bank helps the GMC by providing banking and financial services to entities located in the GMC, facilitating financial transactions between international and local entities doing business with entities located in the Mindfulness City, and providing banking services to international individual or corporate customers who align with the values of the Mindfulness City.

“In the process, we support the growth and development of the Mindfulness City, helping to generate economic activity for Bhutan and employment for Bhutanese citizens,” Mike added.

In traditional banking banks hold only a small percentage of the depositors’ money in reserve and lend out the majority which is also called fractional banking practiced by all banks. However, this can be risky in tough times when depositors rush to take out their money and the bank does not have enough liquidity.

ORO Bank says this happened in 2023 in USA when there was a liquidity problem in some US banks after rate cuts leading to some of the biggest bank failures in US history and USD 620 bn in losses.

However, in the case of a full reserve bank like ORO the bank holds the full amount of each depositors’ funds in reserve and does not lend it out. The bank makes money by offering other services or interest yielding long term deposits.

Mike said while fractional-reserve banks gain profit by investing and lending a proportion of deposits held at the bank, ORO Bank does not. As a result, ORO Bank’s business model will include small transaction fees for value-added services such as forex, yield-generating products and card services.

The bank will provide Current and Savings Accounts as part of its transaction banking offering.

Mike said these accounts will benefit from the highest degree of security based on its 100% full reserve structure.

Customers will be able to invest in products that generate returns in a similar manner to other global banks. ORO Bank will provide a broad range of investment products which customers can choose from based on their personal or corporate priorities.

The website says ORO bank believes in safe and sustainable banking without the vulnerabilities of traditional banking.

The CEO said, “These features of ORO Bank provide stability and security to our customers, granting peace of mind. This is in line with the values at the core of Gelephu Mindfulness City SAR and reflects Bhutanese culture, which prioritises serenity, happiness, and harmony.”

ORO Bank’s technology partners include Finastra, which provides ORO Bank’s core banking system technology, and a range of other best-in-class providers across different parts of bank operations.

Details on how investors, business people or individuals will gain access to visit Gelephu Mindfulness City have yet to be finalised. That said, ORO Bank customers who visit the rest of Bhutan will be required to apply for the same visa as all foreign travellers.

The bank on its website says it welcomes deposits from internet/fintech, bio-tech/health-tech, AI/Deep Tech, Blockchain/Web 3, ESG Enablers/Climate Tech, Content Creators/Influencers, Institutional Investors/Investment Funds/Family Office etc.

The CEO said the above is not a complete list of the types of companies that ORO Bank will do business with. Rather, it highlights examples of the types of business that are likely to thrive in the Mindfulness City, which welcomes startups and established businesses that have the potential to develop Bhutan’s economy, provide employment opportunities for Bhutanese youth, and serve as bridges between the Mindfulness City and the rest of the world.

“At the same time, these companies will be expected to operate in a manner that is compatible with Bhutanese culture and values, which prioritises mindfulness and holistic well-being; sustainability and harmony with nature; spiritualism; and innovation to drive sustainable growth. To this end, ORO Bank will carefully onboard value-aligned customers via a process that prioritises international best practices such as Know Your Customer (KYC) and Anti-Money Laundering (AML) protocols.”

When asked when ORO started and if it has its started accepting deposits the CEO said that once ORO has conducted all necessary testing, they expect to start accepting deposits.

The ORO bank currently accepts 9 international currencies right now which are USD, Euro, Yen, Pound, Swiss franc, Hong Kong dollars, Singapore dollars and Yuan but the bank plans to expand this to transact in additional currencies in the future.

The bank offers a lot of services like supporting IDs from 220 plus countries and territories, screening 14,000 plus documents in 37 languages, direct check access to government databases for India, Indonesia, Nigeria, Brazil, and Argentina and 400M + AML files in companies and UBOs available for KYB via Sumsub, same day approval, global compliance screening, PEP screening, continuous media monitoring and AI powered anti money laundering/Combatting of Financing Terror risk detection.

The CEO said with the emergence of technologies such as AI and support from best-in-class technology and service partners, ORO can offer a wide range of banking services that are governed by strict Know Your Customer (KYC) and Anti-Money Laundering (AML) protocols and subject to transaction monitoring.

“Our staff are highly skilled and experienced professionals and are expected to continue to develop their knowledge by onboarding emerging global banking industry best practices. Utilising advanced technologies enables certain day-to-day functions to be automated while our staff members continuously monitor operations and drive improvement and development.”

He said this will ensure that ORO Bank is at the forefront of international banking best practices.

The website says the banks aims to foster collaborative partnerships with customers, strategic partners, and the wider ecosystem, aiming to bridge the gap between traditional finance and future of finance while driving collaborative innovation.

The CEO in his message on the website says while ORO Bank was established to serve the GMC they welcome customers from all corners of the world.

“We accept individual and corporate clients regardless of geography and income level. Our onboarding process is designed to enable startups and innovators with unproven, unconventional or potentially disruptive business models open accounts, leveraging cutting-edge technology such as artificial intelligence to implement dynamic and perpetual Know Your Customer (KYC) and Anti Money Laundering (AML) protocols alongside global regulatory frameworks and best practices.”

“If you are a startup or aspiring entrepreneur, ORO Bank is your partner in innovation and growth. Account holders will have access to a broad ecosystem of Traditional Finance and Future Finance services and the confidence that ORO will help them remain at the forefront of financial technology.”

The site says ORO Bank is regulated in Bhutan by the Royal Monetary Authority. The bank will operate within Bhutan’s GMC and it offers global individuals and businesses a unique opportunity to bank in an ecosystem that promotes innovation, sustainability and mindfulness. In line with these values, ORO Bank will actively monitor and offset its carbon footprint and will donate 1% of its profits to initiatives that promote sustainability.

It says that while Bhutan’s GMC offers the opportunity to do business in a new way ORO Bank represents a transformative experience, delivering financial stability, peace of mind and a solid growth foundation for innovators and entrepreneurs in Bhutan and around the world. 

The Bank as of now will not be open to Bhutanese.

As per the website the other members of the ORO management are Ken Mazzio who is its Chief Compliance or Regulatory Officer, Chin Nguyen is the Chief Technology Officer and Ben Gaw is the legal counsel.

The Governance Council is comprised of Finance Secretary Leki Wangmo, DHI CEO Ujjwal Dahal, Royal Office for Media Director Gelay Jamtsho, Mike Kayamori and Ken Mazzio. 

ORO Bank CEO Mike Kayamori is a graduate, of University of Tokyo and Harvard Business School. His bio for the World Economic Forum says he has extensive experience in investment, business, management, IT and venture capital for over 20 years in Japan, the United States and Asia.

As per his LinkedIn profile he started as project manager Mitsubishi Corporation’s New Business Initiative Group from 1996 to 2003, he was then Senior Director in the Globespan Capital Partners, an independent venture capital from 2003 to 2011, he then was Senior Vice-President, SoftBank Group, managing its Asia/India operations from 2012 to 2016, also working as Board Director in both SingTel and Bharti Group and as Chief Investment Officer in Gungho Asia. In 2014, he co-founded QUOINE which is one of leading Blockchain Financial Services in Asia and was there until 2022.

He has been the CEO of ORO bank since June 2023.