This is an excerpt. To hear the full interview, please click the Soundcloud or Youtube links.
In financial spheres, cryptocurrency and blockchain are most often spoken about in the context of ‘making the rich richer’–the technology is increasingly used by highly-ranked financial institutions as a way to improve the efficiency of their operations.
However, there are a number of companies and individuals within the space who are actively working to use blockchain and crypto to financially empower all people.
Recently, Finance Magnates spoke with Olga Feldmeier, who is one of these individuals. Olga is the CEO of Smart Valor, a company that is building “a decentralized, community-based marketplace for tokenized alternative investments.” We asked Olga about regulations in the cryptocurrency industry and how cryptocurrency is democratizing wealth around the globe.
Bitcoin Democratizes Access to Financial Safety
“I grew up in Ukraine, and my family was basically ruined by hyper-inflation. We lost everything,” Olga said. “We didn’t even have money to buy basic stuff.”
“Once you experience this, you understand the full power of post-national currency,” she explained. “Currencies that are not influenced by states, but are governed by math.”
While the conversation in the “rich world” surrounding cryptocurrency is often about institutional investors and the ways that blockchain networks can be used in governments and banks, Olga pointed out that “two-thirds of countries around the world, they have issues with inflation, and with corrupt governments and all of these terrible things that happen on an everyday basis.”
“There are means for rich people to protect themselves,” she continued, using offshore banking as an example. In the financial world, “safety and protection are only available for a privileged few.”
Ever wanted a peep into the day to day life at #SmartValor? 🤓@OlgaFeldmeier gives an insight into what it takes to run a forward thinking #StartUp in an interview conducted by the prestigious Swiss based newspaper @handelszeitung! https://t.co/kV4BOxjRu2
— Smart Valor (@smartvalorinc) September 3, 2018
Olga sees Bitcoin as the answer to this. “Bitcoin and decentralized money give the same [privileges] to everybody. You can always purchase one or two Bitcoins, and [use it as protection] from inflation in your home country.”
“The only problem is, of course, is that as long as it’s not part of the legal system, it’s very close to money laundering and [other kinds of things] that no financial institution wants to be associated with.”
Miners Depend on the Bitcoin Network, So Why Would They Practice Manipulation?
We also asked Olga if she is concerned with centralization on the Bitcoin network, both in terms of coin ownership and mining power.
“To be honest, I used to be really worried about it–about two years ago, I was really checking the numbers to see which pool is connected to which pool and if they would ever reach 51 percent, [wondering] ‘will I lose all my Bitcoins?’”
What is #Tokenization 🧐
I asked this tricky question to a couple hundred #Swiss Bankers at Lucerne School of Business during my speech on ‘What remains after the hype’…
— Olga Feldmeier (@OlgaFeldmeier) September 4, 2018
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“But the way the Bitcoin network functions, there are certain incentives in the system,” she said, explaining that it’s not in the best interest of mining pools to manipulate the Bitcoin network. “All those miners, at the end of the day, their business depends upon this network being alive and working.”
“If they collude, and kill it, there will be no future avenues and no future business for them.”
“Even if it’s not Bitcoin or Ethereum, there will be a new blockchain that solves these problems of scalability, of governance,” and of centralization. “It will just take time, and if Bitcoin fails (which I hope it will not), there will be better solutions.”
”You Need Favorable Regulations”
Olga also acknowledged that regulatory solutions are being continuously developed for the blockchain industry. “In general, I think this development is great,” she said. “The more that all these countries move forward, they create these legal frameworks that other, larger countries are looking at and saying, ‘oh, look, they developed this, so maybe we should also look at it.’”
Olga explained that she sees the global regulatory landscape in three groups of countries. “There are smaller countries, [some] with great reputations and some that have shady reputations,” she said, pointing out Switzerland and Singapore as two smaller countries with good reputations.
“If you’re in financial services, you need [these kinds of countries.] You need favorable regulations, but you also need a great brand and trust. Of course, it’s much more difficult to find this great brand and trust somewhere in Bermuda or in Malta.”
Spent the day today in #Liechtenstein at event dedicated to new #blockchain regulatory framework! tremendous progress and willingness of this government to fill this space with life and give companies like us an opportunity to challenge the Wall Street and financial establishment pic.twitter.com/CLS6zrlpRz
— Olga Feldmeier (@OlgaFeldmeier) September 6, 2018
Olga went on to say that the third group is comprised of large countries, like the US and Japan. “You see there that they are completely drifting apart,” she explained. “The US gets tougher and tougher on digital assets and ICOs, but on the other side, Japan is very active in creating the legal framework to enable the function of this industry.”
When deciding which of these groups to establish a company in, Olga said that it’s important to ask: “Which industry am I from–is banking relevant for me? What are the specific requirements for blockchain regulations?”
“If you’re building a company in the gaming sector, Gibraltar is perfect,” she said. “If you’re building a financial institution, it’s a little bit of a different game.”
”It Doesn’t Matter Where Your ‘Legal Entity’ Is’”
In terms of legal influence, Olga said that the largest countries in the world have the most power–”they are kind of giving the ‘tone’,” she said. However, in terms of “where the companies are created and where the growth is happening,” Olga explained that “the companies are everywhere.”
“It doesn’t matter that much where your ‘legal entity’ is; where your ‘headquarters’ is,” she said. “For example, here in Switzerland we saw in the last one and a half years around 400 blockchain companies being created–a lot.”
“Mostly, those companies are here just in the form of mailbox addresses. They are not really real companies, like us.”
She went on to say that nowadays, companies in the blockchain space have the option to “pick and choose the country and jurisdiction that most fits your needs in terms of regulation and be there. It’s of course an additional bonus if the country is very-well established and respected [in terms of] privacy and all of these great things that investors are looking for.”
To hear Finance Magnates’ full interview with Olga Feldmeier, click here.