The Fintech Times sat down with Stephen Stonberg, the CEO of Bittrex Global, a US-based blockchain digital asset trading platform, to learn more about the implications of crypto and blockchain on financial inclusion.
Tell me about your role within the company?
I used to work in traditional finance, so in big banks or hedge funds, with a much more leveraged model of people running global financial service products but with a small team. Now, my day to day job includes dealing with regulators, as an example we obtained another license during the pandemic. Right now it’s an interesting window and as business has boomed it’s got more challenging to manage the regulation.
What was the purpose of Bittrex Global when it was created?
So the three founders, who still own the whole company, came from a very regulated tech based background, places like Amazon and Microsoft. What that meant was they brought a very mature team with them all with strong technology backgrounds.
We started off as a US company in 2014 highly focused on security. What changed was that US regulation lagged behind the rest of the world. The EU is well ahead with a more competitive advantage. For the US, there are rules but its unclear, and most of our clients at Bittrex are based out of the US, so our offices are all over the country and we’re growing to meet the needs of clients.
Bittrex was one of the first crypto exchanges to provide real trading with Alt coins in the early days. It got eclipsed by other exchanges, but these haven’t been as focused on regulation, perhaps they haven’t understood the regulation like we do. It meant that we stopped growing and were more inwardly focussed, looking specifically at the regulation. Competitors now seem to be retreating, regulators will always catch up with you so we made the right call.
In the current way we do business, what types of communities do you believe are underserved?
One out of three people are unbanked according to World Bank. That’s a huge number. Financial inclusion is a global problem too, and is even home-grown with 22% of Americans being underserved.
How does crypto and blockchain play into this you may ask? We wanted to create an institutional grade platform as we knew they were coming in the future, but also to provide retail and liquidity to clients. Though mobile phone access, we have clients all over the world now trading on a very safe exchange like ours which you couldn’t do before. The combination of the technology and not having to go through banks that can charge large fees have changed the landscape. And for those who are underserved thats really empowering.
In what ways can we increase financial inclusion?
At Bittrex we have huge benefits that are helping financial inclusion. For example, far more people have phones than bank accounts. To set up a traditional account you have to physically go to a bank, limited to that country and go through all the paperwork etc. We do all digital onboarding that you can complete from home, and that isn’t compromising security either, our digital onboarding is better than some of the traditional banks.
We also have no limits, You can have 0.01 bitcoin or a similar percentage. Buying fractional amounts opens up the market to so many more people – you don’t have to have a lot of money to invest, you can start with 10 dollars.
I see blockchain as the Amazon moment of financial services. The internet changed the front end but not the back office when it comes to banking. Why does it take 3 days to send a bank wire? And why do banks charge such huge fees? There is no reason why they should, and crypto and blockchain as a use case for this scenario is really going to change things
What do you think is a good example of financial services infrastructure?
Blockchain really is a tsunami, There’s no stopping it. Millennials and millionaires have 25% of their assets in crypto, thats huge. And with blockchain, there are different business models that are allowing people with no money to have access to diverse portfolios and that is so empowering.
It goes without saying that financial systems are very antiquated. And there seems to be no incentive to upgrade. This is where blockchain is just a better way of doing things, its really game-changing. Banks had the opportunity to take that on and they passed. Now that its getting more popular and proving to be more efficient, they’re now starting to dip their toes in but its too late.
Where do you think 2021 and beyond will take us? Do you agree that 2021 is the Year of Crypto?
Absolutely. Right now, its the decade of blockchain. Like how the 90s was for the internet, now is absolutely the year of crypto. There’s a ton of disruption, a lot of new players entering the market as well consolidation and divergence. Everyone is excited about NFTs particularly–and really it comes down to will the banks buy the crypto or will crypto buy the banks?