Regulatory breakthrough: ZTLment becomes Europe’s first payment institution built on blockchain

Danish fintech startup Ztlment is the first in Europe to receive a license allowing it to operate fully regulated payments on top of blockchain.

For the first time, an EU regulator grants a payment institution license to a company where blockchain rails are used to move funds. The company, Ztlment, developed smart contract software to move euros peer-to-peer on the blockchain in full PSD2 compliance. With its solution, digital marketplaces and cloud-based B2B platforms can move money and value instantly and automatically between buyers, sellers and financiers.

The company has raised €1.3 million in pre-seed funding from venture funds specializing in fintech. The startup’s smart contract software moves euros instantly and automatically on the blockchain in full regulatory compliance.

“Our goal is to build a completely frictionless system where business partners don’t have to bother with complex banking infrastructure or deal with volatile cryptocurrency, unregulated stablecoins or complicated consensus mechanisms,” says co-founder and CEO, Mads Stolberg-Larsen.

Blockchain and programmable money have been some of the most hyped technologies of the past five years, but mainstream adoption has been slow. According to the founders, the two most important reasons for this are poor user experiences and regulatory uncertainty.

“The advantages of the technology are clear. Digital marketplaces and cloud-based B2B platforms can instantly and automatically move money and value between buyers, sellers and financiers. But so far, user experiences have not been built for business workflows, and compliance with European payment regulation has been lacking, says Stolberg-Larsen.

Ztlment’s smart contract software has now been approved under the Payment Services Directive 2 (PSD2), a European open banking framework, in a regulatory first. The European regulator, the Danish Financial Supervisory Authority, granted the licence.

“We are opening a new playing field for moving euros and other fiat currencies between business partners with simple IF-THIS-THEN-MONEY logic. It’s like direct debit, but with rocket engines on it, says co-founder and COO, Harry Kearney.

When milestones are met or relevant workflow events are recorded, funds are moved peer-to-peer in five seconds or alternatively paid out to traditional bank accounts. All transactions are made in euros and other fiat currencies and in full compliance with PSD2.

“Our customers can focus on building great user experiences and confidently leverage the benefits of technology,” said co-founder and CTO, Jason Spasovski.

Ztlment targets digital marketplaces and other cloud-based business platforms, which connect buyers and sellers. With a piece of code, they can tie money and value to existing workflows – or build entirely new ones with smart contract software built in from day one.

The risk between trading participants and financial partners can thus be reduced as funds are only moved when relevant milestones have been reached. This opens up data-driven trade finance models, which in turn can bring much-needed working capital to merchants worldwide.

“Eliminating the global trade finance gap is a €1.7 trillion opportunity,” says Stolberg-Larsen, who was previously Head of Fintech and Blockchain at procure-to-pay platform, Tradeshift.

The team has been supported by Upfin, a Nordic fintech fund, and Giant Ventures.

“Like Mads, Jason and Harry, we believe that the tracks for money and value are changing, but financial regulation is here to stay,” says Johan Lorenzen, CEO of Upfin.

“We support world-class purpose-driven founders who use advanced technology to solve the planet’s biggest challenges. By abstracting the blockchain complexity, the team unlocks enormous socio-economic potential,” said Managing Partner of Giant Ventures, Cameron McLain. “Ztlment can deliver the trust, transparency and efficiency benefits to blockchain.”

Ztlment is a European payment service provider offering smart contract software fully compliant with PSD2. With a piece of code, digital marketplaces and cloud-based B2B platforms can offer business flows that instantly and automatically move money and value between buyers, sellers and financiers.

The company was founded by Mads Stolberg-Larsen, Jason Spasovski and Harry Kearney and is headquartered in Copenhagen. It is registered as a payment institution with the Danish Financial Supervisory Authority (FTID 22043). Read more on