Businesses around the world are facing growing demand from customers, prospects and partners to integrate cryptocurrencies into their operational and treasury functions. Mainstream banks have been slow to respond. Meanwhile, existing crypto platforms only serve the extreme ends of the customer spectrum — that is, either small retail customers or multi-million dollar institutional customers.
The idea behind it BVNK is to close this banking gap. Through the only BVNK banking platform, businesses can manage their finances, payments, returns and foreign exchange between fiat currencies and digital assets according to their unique commercial needs and appetite for growth.
Jesse Hemson Struthers
Jesse Hemson Struthers is a serial cryptocurrency entrepreneur. He recognized the market opportunity for BVNK’s services while trying to find third parties capable of fulfilling the digital asset banking requirements. He is also known for founding Coindirect, a cryptocurrency payments platform that provides companies with cross-border payment solutions for doing business in emerging markets.
What has been the traditional corporate response to FinTech innovation at the national level?
Traditional banks have a bad reputation when it comes to the quality of their services, which are characterized by excessive and opaque fees, cumbersome authentication processes, and long timescales for delivering standard services like transactions and payments.
However, customer demand for intuitive, digitally enabled personalized financial services is driving the emergence of new providers and transforming the sector. We have already seen this fundamental shift with so-called neo-banks, which have steadily attracted millions of customers around the world.
In reality, however, open banking and neo-banking have changed very little to the underlying banking systems. Much of the innovation has happened at the user interface or application level. The services are still built on the outdated, pre-digital banking infrastructure.
For example, FAST, the global network for international payments, laid the foundations of its systems in the 1970s. It can still take four days for transfers to arrive, unnecessarily slowing the movement of money, goods and services around the world.
How has this changed in recent years?
What we are now seeing in the cryptocurrency sector is innovation based on a rethink of how blockchain and digital assets can transform core banking – where and how processes and systems can become faster, more efficient and less expensive. Blockchain and digital assets, for example, enable instant, decentralized, cross-border exchanges with low fees. And that is just the beginning.
This potential for innovation is already being applied to some areas of core banking, eliminating bottlenecks and inefficiencies in the legacy structure. As a result, blockchain and digital assets are serving as a catalyst for companies to rethink their capital management. This innovation is particularly evident in emerging markets, where fiat banking infrastructure presents more obstacles.
Digital asset lending markets are also now running parallel to their fiat counterparts and are on track to become an integral part of global financial systems. Firms are becoming aware of the fact that digital asset markets offer high yields that compete with the low to negative yielding fixed income investments offered by the less dynamic traditional finance world.
Is there something that created a culture of change in the company?
The ability to thrive in the midst of rapid change and capitalize on it is at the heart of the BVNK proposal. Agile responses to new technologies, changing market demands and strengthening regulation are crucial.
We believe that the worlds of traditional finance and digital assets are converging. We enable our business customers to build a bridge between fiat and cryptocurrencies to manage finances, payments, income and foreign exchange.
This means that many of the solutions we build are new and provide banking experiences for both crypto-native and crypto-curious businesses. . For example, BVNK Yield offers diversified funds through a number of leading institutional credit counterparties. Business clients can access institutional crypto lending with a much smaller capital requirement and earn returns without being directly exposed to the volatility of the cryptocurrency markets.
Which fintech ideas have been implemented?
To stay at the forefront of the industry and deliver the solutions our customers are looking for, we focus less on building everything ourselves and more on partnering with world-class providers of custody solutions, loan desks and liquidity pools.
BVNK recently entered into a partnership coppera company that offers an insured, secure, end-to-end custody architecture for digital assets the integration of Copper’s custody via its ClearLoop capability with BVNK’s flagship yield service.
What benefits have these brought?
Integration with Copper’s ClearLoop means our customers can deliver digital assets to lenders to generate returns, typically between four and eight percent, without ever leaving the protection of Copper’s safekeeping.
Not only does this reduce counterparty and settlement risk, but it also allows for instant completion of transactions and access to funds.
Do you see further challenges for the industry on the horizon?
BVNK follows regulatory developments closely. As new technologies emerge and regulators consider how to regulate them, they more often try to fit them into existing regulatory frameworks. In the US, we see this approach leading to multiple agencies with different jurisdictions claiming to regulate the crypto sector. This piecemeal approach is unhelpful and impedes progress.
The situation in Europe is much simpler with a pan-European Union approach. The EU may not be able to match the entrepreneurial vigor and investment power of the US, but through a consistent regulatory approach on a continent-wide basis, it has the potential to create a hospitable environment for the development of the sector.
In the UK it is encouraging to see the formation of the Crypto and Digital Assets GroupComprised of UK MPs and Members of the House of Lords working to ensure new rules for the digital asset industry support innovation.
Final Thoughts…
Looking ahead to 2022, we see continued momentum in the digital assets space and strive to be at the forefront of developments.
NFTs, the metaverse, Web 3.0 are all signs of where the industry is headed with blockchain underpinning these developments and everything it can do to automate agreements and exchanges, along with the ability to and manage, monetize and record usage rights.
Companies that are innovating in this space (crypto-native companies) need a banking provider that can bridge the gap between fiat and cryptocurrencies. While those companies that are increasingly keen to take advantage of the growing supply of digital assets (crypto-curious companies) need financial products to help them with their treasury, investment and payment goals.
For example, more traditional venture capital firms are forming crypto funds and pouring billions into these crypto companies, and a growing number of mid-market companies are joining the cryptocurrency fight. This capital needs adequate banking infrastructure to be mobilized and the financial products to make its movement dynamic, fluid and secure.
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