[There is a great deal of sound and fury around the topics of cryptocurrencies and blockchain which unfortunately many in financial services drown out or dismiss as confusing noise and wild speculation. In our opinion, it would be a mistake not to see all this activity and debate as signifying something… something radically groundbreaking for financial services industry and the rapidly coming future.
To better understand what truly is happening in this area of rapidly developing innovation, we reached out to JP Thieriot, Co-Founder and CEO of UPHOLD, a leading global digital money platform that serves 184+ countries across 30 currencies (fiat and crypto), as well as, commodities and creating new innovative universal lending and earning products.]
Hortz: I see how you are characterizing what your firm is doing as changing the way people access their money describing it as the “Internet of Money”. Why are you so passionate about this mission? Why is this so important?
JP: The internet has profoundly changed every single industry from transportation to entertainment to hospitality to communication, except for finance. Financial services has not been torn down to the studs and rebuilt in the internet’s image process as most other industries has undergone. Largely, that is due to a couple of issues that the advent of bitcoin ten years ago started to resolve.
Predominantly, all the characteristics of protected industries have run rampant in finance. You have had banks having a monopoly, on the whole, of the holding of this type of information that we call “money” and it has been sheltered away from the reaches of innovation and access that the internet has wrought on everything else. For us a key missing piece is a lack of transparency in the industry – the kind of transparency that presumably you wouldn’t have gotten to the savings & loan crisis or a 2008 meltdown. Everybody would have been operating off of the nature of information that those kind of systemic issues could have been prevented. There was no obligation to be fully transparent and with banks being competitive with one another, they have a motive to misprice risk, with the US taxpayer footing the bill when things go wrong.
So you have those aspects and then you have other ones that are more optimistic in the sense that they deal less with correcting some of the really bad stuff about the banking industry and are more about creating access to things people haven’t had access to, like venture capital or real estate or other elite asset classes that only upper middle-class on up in northern hemisphere have access to versus a 20-year-old in India or everywhere else. All these expanded possibilities come into play when you start to digitize things and put it up into a global transport layer, what we refer to an internet of money.
So full circle, our view is that money is 1’s or 0’s, just like pictures or words over Skype or email, thanks to bitcoin solving some computer science and cryptography issues. There is no longer a need for those things to be siloed in banks. So, at the most philosophical level, if we are able to take those 1’s and 0’s and put them up into a global transport layer and have them fully exposed to innovation, then you will finally allow the forces of the internet to incorporate money, alongside pictures and words and everything else, and that should accrue to the benefit of everybody. It’s a financial democratization process attempting to level the playing field for everybody, everywhere.
Hortz: You state that you designed your firm to be a platform app model with payment connectivity? Why did you choose that business model?
JP: From the get go we were focused on open API for third party digital money applications. We strongly feel it is not up to us to come up with every innovation that may be meaningful to some real market. So what we try to take care of underneath the API is regulatory coverage, connections to legacy money networks like US banking through ACH, European banking through CIPA, but at the same time we are trying to add to the breath of what we refer to as “financial content” to the platform. That said we are now able to try to create an out-of-the-box offering where people can innovate and benefit from what they are getting from us which is support of all these different types of unit of accounts, some of the requisite regulatory coverage and the very necessary connection to legacy money networks across the world.
We started with 30 fiat currencies and major cryptocurrencies, 4 precious metals and started a broker/dealer and hope to roll out fractional US equities in the first quarter of next year and it would be great to add private equity and real estate and other assets that can be denominated in $1 or less increments so anybody can participate.