Usually unlisted companies do not appear on boersengefluester.de. There are, of course, exceptions: When we met Peter Reuschel, the co-founder of the crypto specialist Leondra in Frankfurt, for a background discussion in late autumn 2017 (HERE) we were hooked. Finally someone who approached the then still hot topic of ICOs and tokens very competently, also from a regulatory point of view. In view of the crazy rally of Bitcoin and other digital currencies, we have now met with Peter Reuschel for a longer (virtual) update. And lo and behold: The company is currently facing very important decisions – including on the financing side. The topic is therefore not only interesting for companies and potential retail customers, but also for family offices and other institutional investors who want to get involved in the sector.
We had already met for an interview in 2017. That was quite a while ago. What has happened at Leondrino since then?
Peter Reuschel: As you know, we are building a platform for the issuance and administration of digital company currencies. With Leondrino, we want to gradually create a standard for digital company currencies that enjoys broad market confidence. At the end of 2017, we decided to concentrate on the first larger customer situations in the German market as part of the first ICO wave and to further develop our Leondrino platform based on the requirements of these customers. Of course, we also suffered from the bursting of the first ICO bubble in 2018, as some larger interested parties withdrew again for their own digital currency. However, we have already been able to generate 3 million euros in sales in our core business in Germany through our first corporate customers and have around 20.000 Leondrino wallet users won. Until demand picked up again at the end of 2020 / beginning of 2021, we used the time to completely revise our product platform, to benchmark our beta version of the upcoming Leondrino MainNet in preparation for the mass market and to interface with outsourced services such as KYC or Connection of brokers / exchanges, to be further developed and supplemented. Selected service partners have already been connected via these further developed interfaces; more will follow.such as KYC or connection of brokers / exchanges, to be further developed and supplemented. Selected service partners have already been connected via these further developed interfaces; more will follow.such as KYC or connection of brokers / exchanges, to be further developed and supplemented. Selected service partners have already been connected via these further developed interfaces; more will follow.
So a lot of movement. How does it look in the short term?
Peter Reuschel : We are currently experiencing a new surge in Leondrino wallet registrations and inquiries from companies. We are glad that we were able to bring out our new Leondrino platform generation at the end of last year in order to serve these inquiries more quickly and also as a basis for growth in the mass market. This also includes a heavily revised UI / UX design of the Leondrino Wallet, which we want to offer in the medium term as a white label solution for banks. Last year we also related the restaurant currency LEAF launched our Leondrino Payment App. In addition to standardized payment interfaces with eCommerce systems, we are also able to offer a standardized method for paying with Leondrino currencies at the checkout in the store, e.g. in the restaurant. At the same time, we actively participated in the discussion about the legislative initiative to create our own crypto custody license via Bitkom. We have already received this license for the time being and are waiting for the final grant.
Source: LEAF – the Restaurant Currency
Interesting. The market for crypto currencies and digital assets has developed rapidly since our first interview in 2017. When do you expect this to have a substantial impact on the future market of digital company currencies?
Peter Reuschel: Before the market for crypto currencies and digital assets ran hot during the pandemic, Libra was announced in 2019 – driven via Facebook in partnership with strong consumer brands such as Spotify and Uber . At that time, this announcement led to a lot of queries from us, especially from corporations in Europe who are looking for their own positioning on the topic of digital currencies. Suddenly the question of whether there would be such a thing as corporate currencies at all was no longer asked by companies. It was and is really only about when.
Still a sensitive issue, especially from a political point of view.
Peter Reuschel: Indeed. And so the announcement by Facebook also led to a violent communicative counter-reaction from politicians in autumn 2019 – especially from the German and French finance ministers. European corporations naturally observe this political communication very carefully from a risk perspective before deciding on their own company token. In the meantime, the situation has eased somewhat: On the one hand, Facebook has adapted its own concept. With the change in concept, a ban appears almost unlikely in many Western countries under the current legal framework. On the other hand, regulatory efforts for an innovative environment for European companies via MiCA (Markets in Crypto-Assets) significantly advanced. At the same time, several central banks, including the ECB, are working through the Bank for International Settlements on framework conditions and concrete implementation for Central Bank Digital Currencies (CBDC), although there are still many questions about the differentiation from commercial banks. The current superstructure does not actually provide that every citizen can have an account directly with the central bank.
What does this mean for the Leondrino concept?
Peter Reuschel: We feel well positioned with our Leondrino standard lifecycle. At the beginning of the introduction of digital currencies, companies can start with the so-called Leondrino Token Class D or potentially also directly with token class C , which can be classified as vouchers and, depending on the possible use, as multi-purpose vouchers. We currently map these Leondrino token classes with classic database systems. Only with token class B the transmission is carried out on a blockchain, in future by default on the Leondrino MainNet. From Leondrino token class B, external licensed exchanges are also connected. Of course, we can transfer company tokens that do not meet the strict criteria for Leondrino token class B to a public blockchain, such as Ethereum, and release them from the Leondrino standard.
Since tokens of the lower Leondrino Token Classes E to C are mapped with classic database technologies and are classified as vouchers, companies can start very quickly and unregulated. Only from token class B do we switch to crypto technology and the regulatory classification changes. In any case, we recommend that many of your own consumers become familiar with the token in token classes D and C at an early stage and that they provide proof of payment before a company moves into token class B and thus into the regulated environment of crypto values and broader tradability up to full tradability in Leondrino Token Class A across multiple exchanges.
To get back to your original question, even if a broad public introduction of digital company currencies in the form of the highest Leondrino token class A by large global consumer brands will probably take another one to three years, the prerequisites for these brands to enter via the Lower token classes with a promising perspective from a regulatory point of view in Germany and the EU are already given.
In your opinion, which sectors of digital branded currencies could bring the breakthrough for the mass market?
Peter Reuschel: Digital company currencies are particularly interesting for industries whose business has many digital touchpoints with the customer and where the customer’s future purchasing behavior can be assessed well based on the payment transactions. From the point of view of the brands, it is of course a matter of influencing the “purchasing decision” for themselves without media discontinuity and through targeted offers and prices. So service providers in the field of mobility, companies from the catering and hotel industry such as Leaf Systems via the LEAF token (see https://www.leaftoken.io), companies from the entertainment sector and broad-based retail companies are of course included also with the first interested parties.
A digital currency can also help enforce the power of consumers through the use of this currency when paying. For example, the following approach is being pursued by a customer with the aim of improving climate protection: By selecting the eMobility Token EMC when paying for a charging process, financing is to be supported in the expansion of renewable energies (see https://emc-token.com). If you pay with EMC, it is ensured through appropriate supplier contracts and, in the medium term, also through technical guarantees of origin, that only electricity from producers of renewable energies is purchased and paid for. These producers can help secure their direct and continuous electricity sales at an early stage by supporting this initiative. Let’s see how quickly such a young initiative will develop.
What do you think of Non Fungible Tokens (NFTs)? Do you play a role in the cosmos of future corporate currencies?
Peter Reuschel: NFTs will play a major role in corporate currencies – especially in the sports business just mentioned, with its extremely emotional and reputation-hungry character. As just described, it is important for sports clubs, for example, to make NFT offers using their own club currency in order to bind many of the tokens sold in the next few months, e.g. when the blocking period expires, via attractive, very exclusive offers to be able to. Years ago we prepared concepts within the respective company ecosystems, the time for which now seems to have come. I do not want to comment on specific NFT ideas from clubs at the moment, as the clubs also want to secure unique selling points.We will offer NFTs via our Leondrino platform based on specific customer ideas and develop standardized NFT offers from them.
How do you see the long-term positioning of digital company currencies in relation to the digital euro in payment processing?
Peter Reuschel: I believe that the digital euro, i.e. accounts for citizens and companies directly at the European Central Bank, will come in the long term. The current questions about the demarcation of services between the ECB and commercial banks as well as potential penalties for higher balances of private individuals with central banks will be answered step by step. I am assuming that the EU and especially the euro countries will not isolate themselves with regard to future company currencies, as this would disadvantage European companies in the medium term. I also assume that the ECB will not compete with the many payment service providers and payment platforms in the short and medium term. Rather I believethat the private currencies alongside the public currencies in the area of payment services will be similarly manageable.
What is it that makes you so sure?
Peter Reuschel: Ich bin davon überzeugt, dass die großen Marken die Vorteile aus der Datenauswertung von Zahlungsinformationen in Zukunft direkt mit den Konsumenten teilen werden. Sie werden dieses Geschäft nicht anderen überlassen wollen. Über die Belohnung von loyalem Verhalten abgelesen aus den Zahlungsinformationen, durch dynamische Preisanpassungen in Echtzeit und durch individuelles Marketing auf Basis der Abschätzung der nächsten Kaufentscheidung wird die Effizienz der Kundenbindung deutlich erhöht. Wir bereiten uns von unserer Seite darauf vor, dass es ein System von öffentlichen und privaten digitalen Währungen geben wird, die jeweils barrierefrei beim Bezahlen nutzbar sein werden. Außerdem bereiten wir uns darauf vor, dass öffentliche Zentralbanken auch Positionen in digitalen Firmenwährungen und insbesondere langfristig in unserer zukünftigen Brücken- und Reserve-Währung für Firmenwährungen (XLEO) aufbauen können.
The sale of the XLEO as a so-called native token of the Leondrino Ecosystem has been underway since the end of February. What is behind this and what are the advantages for buyers of these tokens?
Peter Reuschel : As already mentioned, the XLEO should become the bridge and reserve currency in the Leondrino Ecosystem in the long term. The creation of a European foundation is planned for this purpose. In the short term, the XLEO has a role as a utility token at Leondra GmbH (Leondrino Germany), ie it can be used to pay bills for services at Leondra GmbH in the future. (For details see https://xleo.leondrino.com). This is particularly interesting for companies that are planning a token rollout in the medium term. The XLEO is also of interest to classic investors and small investors because, in addition to the potential performance of the XLEO, we will enable XLEO account holders to buy company currencies by paying with XLEO at an early stage. The current low introductory price for the limited initial contingent of the first sales phase therefore has interesting development potential. For data center operators who want to operate the Leondrino MaineNet, the purchase of XLEO at the low starting prices is a particularly interesting investment option. Even if not yet planned for the first two years, the acceptance of XLEO as part of a proof of stake approach will be a medium-term utility function.
What about “normal” private investors?
Peter Reuschel: Due to the risk that exists in the early phase of the introduction of a token by a young company, for small investors in the current first sales phase, every XLEO purchase transaction is worth EUR 100 and a total of EUR 1,000 per month limited. Small investors can obtain the XLEO directly via the Leondrino platform, for example via a SEPA instant transfer, after they have successfully passed the required KYC test. The transaction limit mentioned above does not apply to the other target groups. Representatives of these target groups must contact us directly in order to be able to conclude a purchase contract.
Why are you issuing this token through Leondra GmbH – meaning in Germany?
Peter Reuschel: Decisive reasons are the expected opportunities from the German crypto custody license with medium-term passporting capability in the EU and the strategic statements on the development of a regulatory framework for crypto assets in the EU. Even if the development of the regulatory framework and especially the development of supervisory structures for digital currencies by companies are still in their infancy, in the past two years we have seen the clear political will to embrace this great opportunity for the development of the financial market with vigor and speed put. In particular due to the Brexit and the expected competition between the EU and Great Britain, we assumethat this goal is not deviated from and that the framework conditions for European growth companies are made sufficiently attractive.
If Leondra GmbH plays such a special role in the Leondrino Ecosystem: Can you also imagine that Leondra GmbH will go public in Germany as an independent company?
Peter Reuschel: A very good question and exactly at the right time: Since the beginning of February this year, there have been some inquiries from potential investors in Germany whether we are opening up Leondra GmbH to external investors for a capital increase. We have decided to carry out a financing round at Leondra GmbH in order to further strengthen core capital and to allow other investors in addition to Leondrino Inc. We are already holding talks on this. Since we founders currently have the majority by far at Leondra GmbH and there is sufficient authorized capital, we are also able to act very quickly in this regard. Due to the potential of the expected business with company currencies and potentially also other types of tokens, such as NFTs, an IPO in Germany is also an option,that we don’t want to exclude. However, Leondra GmbH is currently not mature enough for such a step – both in terms of sales and organization.
Peter Reuschel ist Chief Financial Officer und Chief Operating Officer bei Leondrino und Co-Geschäftsführerund Co-Gründer der Leondra GmbH. Peter gründete und war Mitbegründer mehrerer Unternehmen und war mehr als 27 Jahre in Führungspositionen mit Schwerpunkt auf General Management, Finanzen, Betrieb und Strategie für etablierte Unternehmen (IBM und SAP) und Startups (z. B. InterComponentWare AG, Leondra GmbH & Co. KG) tätig. Darüber hinaus war er Mitglied des Aufsichtsrats der YellowMap AG.is Chief Financial Officer and Chief Operating Officer at Leondrino and co-managing director and co-founder of Leondra GmbH. Peter founded and was co-founder of several companies and has held management positions with a focus on general management, finance, operations and strategy for established companies (IBM and SAP) and startups (e.g. InterComponentWare AG, Leondra GmbH & Co. KG for more than 27 years ) active. In addition, he was a member of the supervisory board of YellowMap AG.
Gereon Kruse is the founder of the Frankfurt-based finance portal boersengefluester.de and has been a profound expert on capital market issues and an expert in data journalism for many years . He specializes in German stocks – especially small caps. Investment professionals from the small and mid-cap sector rate the quality of boersengefluester.de’s reporting according to the IR.on media study 2020/21 with the top grade of 1.67. In the overall ranking of the online media, the site is by far in first place. In the financial blog award from comdirect bank, boersengefluester.de won the audience award and also third place in the jury evaluation. Before that, Gereon Kruse worked for the investor magazine BÖRSE ONLINE for 19 years – from 2000 to the beginning of 2013 in the position of deputy editor-in-chief.