Mogo to lease bitcoin mining machines

Part of strategy to woo young Canadians

Mogo Finance Technology Inc. has reached an agreement with DMG Blockchain Solutions to l ease 1,000 bitcoin mining machines. This will allow the Vancouver-based fintech company’s new subsidiary, Mogo Blockchain Technology Inc., to begin bitcoin mining later this quarter.

“The biggest use cases and revenue-generating cases for blockchain are bitcoin mining, and buying and selling bitcoin. This will allow us to tap into both of those,” Mogo president Greg Feller said in an interview. “It starts to give our investors exposure to not only buying and selling of cryptocurrency once we launch accounts, but also bitcoin mining, which we believe has very attractive economics.”

Mogo’s joint venture will allow the mobile- focused fintech firm to generate its own supply of new bitcoin after MogoCrypto is introduced later this quarter. That product promises Canadians convenient buying and selling of bitcoin through their MogoAccount, as well as transparency of ownership.

As a consumer- oriented financial services provider with more than 500,000 members, the move into blockchain is part of Mogo’s strategy to become a go- to financial brand for young Canadians.

Feller noted that Mogo is pursuing a broader initiative around the blockchain space that will use related technologies to enable better and more efficient experiences with financial service products, whether that is mortgages, payments or something else. The company also sees the potential to license blockchain technologies it develops to other companies, potentially in the financial sector in the long run.

Blockchain is the distributed ledger technology that has been touted for its ability to improve security and reduce cost, and is best known for being the support platform for bitcoin transactions.

“With a proven technology platform, strong and increasingly recognized brand, and quickly growing member base, Mogo is well positioned to make cryptocurrencies accessible to more Canadians,” Dan Reitzik, DMG’s chief executive, said in a statement.

DMG will manage the machines under its mining as a service ( MaaS) model at its facilities in British Columbia.

“The cryp to currency space is very fast moving,” Nikhil Thadani, an analyst at Mackie Research Capital, said in a Jan. 2 report. “Therefore, it is important Mogo’s new Crypto features launch rapidly and scale in order for Mogo to gain market share in this market. We expect positive news on various initiatives in Q1.”

Postmedia Network Inc., owner of the Financial Post, has a marketing and revenue sharing agreement with Mogo.