IVAN PETUHOVSKY: we are currently working on the implementing the blockchain system for one of the largest banks in the world

interview Victor Gry

Technology, which is most often associated with cryptocurrencies, is predicted to change a number of industries. Unlike centralized systems, the blockchain uses a peer-to-peer network consisting of peer-to-peer node nodes, which are always available for reading or writing. This makes transactions much quicker and easier. In the conditions of a constant race for increasing profitability, innovations like the blockchain can become a lifeline for investment banks.

In this connection, the question arises: “What are the real advantages and business applications offered by blockchain? Today we will talk about the future application of blockchain technology and its impact in the banking sector with Co Founder at EXMO Finance LLP mr. Ivan Petuhovsky.

- Hello Ivan

To you, as the head of the crypto exchange, bankers and large financiers are likely to seek advice. What questions do they ask about the blockchain, and do they think about the entry of the blockchain into the banking sector?

And the blockchain is gaining wide turnover, it enters into different spheres of the economy. How do you see the future of the banking industry in the next 5 years?

- Hello, Victor, it’s a pleasure to speak to you.

Yes, you are completely right, almost every day some institutional investors or bankers, or just top managers of the large financial companies call me and ask me questions about the future of banking and financial sector.

As the cryptocurrency market has grown to a global scale, it is difficult to answer their questions unambiguously. Given the pace of growth and market development, we can expect that in 5-10 years the cryptocurrency market will grow into the separate financial system. Despite the ban on cryptocurrencies in some countries, a group of other countries still show loyalty and interest in the development of this segment of world finance. Most likely, the market itself will regulate the mutual relations of the parties in it. Today there are a number of associations that somehow regulate the work of market members. For example, the Bitcoin Foundation is a nonprofit organization, which main goal is to standardize, protect and promote the use of bitcoin cryptographic money for the benefit of users worldwide. EXMO exchange cryptocurrency platform is one of its notable members that share its values and vision.

But as for now, cryptocurrency mostly serves as a store of value, as well as a trading instrument. However, under the condition of the appropriate legal and economic regulation, in the nearest future, the blockchain-based currencies can be used as a financial settlement system. At this stage, it is important that the cryptocurrency rate becomes less volatile and more predictable. Thus cryptocurrency will be able to become the means of payment method with no extra commissions.

- Did you receive a proposal of cooperation from bankers to implement the blockchain in the banking sector?

- Yes, we have received plenty of proposals, and we are currently working on the implementing the blockchain system for one of the largest banks in the world (could not name it due to NDA). It’s very clever and simple - to use our blockchain devs, and do not reinvent the wheel.

- The emergence of a blockchain in the banking sector will reduce the human factor and the costs associated with this. Does this mean that the use of the blockchain by banks will strengthen the money and will be able to protect against inflation?

- Sure, I am strong believer, that сryptocurrency may be a solution to regain the value of our savings/earnings on a global scale.

If Bitcoin were accepted as the world’s reserve currency, this could potentially create an environment that could curb inflation and introduce a moderate amount of favorable deflation until all 21 million bitcoin are eventually minted.

- What combination of innovations will become the main instrument of transformation? Which sector of the economy primarily needs a blockchain.

- I am sure, that such technology as blockchain could be disruptive for many spheres: starting from utilities to financial sector. But as far as I am much closer to finances and fintech I most certainly could assure you, that blockchain can solve a lot of problems continually faced by banks and financial organizations nowadays. And despite many banks are too conservative, clumsy and floppy to admit that, you will see in a few years that they will accept that. As Blockchain technology provides a high level of safety in storing and transmitting data, open and transparent network infrastructure, decentralization and low cost of operations.  The implementation of blockchain will enable unnecessary mediators to be abandoned and provide customers and banks with cheaper services.

- The EXMO exchange is one of the few that deeply studies the market of cryptocurrencies and the blockchain. The next transfer of the launch of EXMO Coin crowdsale for September. What external factors influenced the change in dates?

- As you probably noticed, last week we called off a planned crowdsale to the wider investing public due to full supply of its own funds for margin loans and other product launches.

All our financial indicators are going to the moon, including registered users (currently, we have more than 1.5 million traders, and there are more than 10 000 people that register on EXMO every day). And that allows us to fully supply our product business plan. And as far the process of selling units of a cryptocurrency ahead of its launch is unclear, EXMO can not guarantee the absence of unexpected changes in the legal framework, which in turn will lead to high risks for our investors. We find this situation unacceptable, as the safety of our partners is our first priority.

- One of the important indicators for investors is the commission when withdrawing funds. On EXMO it varies from 1 to 8%. Which payment systems with the minimum commission and fast enrollment will you advise your depositors?

- We have plenty of payment systems that fit every taste and every currency (as you know we have 5 fiat currencies): starting from world-known MoneyPolo, SEPA, Visa/Mastercard, Skrill, AdvCash, Neteller, Wire Transfer, Perfect Money, Payeer, and Rapid Transfer, to more local, like Qiwi and Yandex.Money. The commissions start from 0% (it depends on the payment system, withdrawal or deposits and capacity). We also have the code system - EXMO generates special codes that allow fund transfers between user balances inside the exchange. Making use of this ultimate way you can cash out with an exchange voucher in literally 5 minutes and receive the funds.

- In the financial sector, constant growth is very important. Share your statistics for the first five months of 2018. How many participants, the number of transactions and overall financial performance?

- Notwithstanding the fact that current state of cypto market face smooth decline in USD nominal, after enormous rise in prices of BTC in winter time period, the goal for EXMO was to keep stable growth in daily trading volume in BTC nominal, which, in fact, has increased from 4,200 BTC per day to 6-8,000 BTC in last 5 month period. The Company has strong liquidity position, which in turn provide us with capability to expand our products for such instrument as fiat exchange platform.

We have more than 1,5 mln people on the platform, 50 000 active traders, 315 000 daily visitors, 56 trading pairs, 5 fiat currencies (USD, EUR, RUB, PLN, UAH) on the platform.

- In the crypto-currency community there were suspicions that ordinary investors are simply cut off from the ICO market. Why ICO increasingly began to be held behind closed doors, is it a collusion of large investors that would prevent private sector finances?

- Currently, ICO trend is not as popular as it was last year. The market is genuinely overfilled with the variety of start-ups. Unfortunately, there are many projects which realization is ended up with the fund raising.

The market is overvalued, there are a lot of scamers out there, that’s why crypto investors are not so eager to invest in ICO, as they were last year.

That’s why private placements are becoming more popular than token generation events (just think about the model that Telegram used). While certain industry participants may be chagrined that only accredited investors had an opportunity to participate, from the issuer’s perspective, a private sale is far less costly and risky and it still manages to far exceed initial expectations. And of course, from a regulatory perspective, I think a public sale is considerably riskier for than a private sale.

- Crypto currency start-UP of 2018 is significantly different from last year’s projects. They have become more technologically advanced and have much more chances to grow into a full-fledged product that will linger on the market. What projects can you predict the financial future?

- As I said earlier, today is much more difficult to hunt out the worthy projects among this big ocean of scammers. But you will never be wrong if you evaluate not only the idea, but the MVP and the team. If the idea is great and new, the MVP is live, the roadmap looks great, and the team is fantastic - here is your good investment.

Thank you Ivan for the interview.

Thank you for having me!