Fireblocks CEO predicts Digital Assets in all Retail Wallets and Regular Apps

DeFi has had a massive impact on the ecosystem in the last 18 months with new protocols, open-sourcing, and app stores for digital assets. An exciting area of development has been to bring Decentralised Finance (DeFi) to the institutional market to unlock more participation, according to Michael Shaulov, CEO of Fireblocks, digital asset custody, transfer, and settlement platform for institutions.

“An exciting area of development has been to bring DeFi to the institutional market to unlock more participation”

At a fireside chat hosted by European Blockchain Convention (EBC), Michael, who has two decades of cybersecurity experience, shared his insights about institutional adoption of digital assets by banks, exchanges, hedge funds, pensions funds, and other financial institutions and what he anticipates the future to be.

Moderated by Charles Walton, Senior VP & General Manager, Digital Identity at Avast, the engaging chat began with Michael taking the audience back to 2017. He was part of an investigation team looking into a cyber attack in South Korea by North Korean hacking groups, resulting in a loss of $200 million in bitcoin. He realised a significant gap in the infrastructure of the institutional players trying to enter the cryptocurrency space.

Visual of Charles Walton & Michael Shaulov elaborated at the 6th EBC

Michael says any fintech company worth its salt has a strategy for cryptocurrency going into 2022. Paypal, Revolut, Robinhood, and Square are just a few of the payment players in the crypto market. Banks including BNY Mellon, Cross River Bank, and Solarisbank have also entered the fray by creating capabilities.

“Any fintech company worth its salt has a strategy for cryptocurrency going into 2022”

He expects digital assets to be available in all retail wallets and regular apps, but what gets him excited is to see the DeFi space acquire traction outside of fintech, as gaming companies are at the crossroads of gaming and the metaverse. By opening up the assets confined to the gaming world, there is a compelling case of building a much bigger ecosystem with NFTs. Streaming and content creation services want to leverage NFTs and stablecoins, he avers.

Revolut, one of the largest neobanks that integrated with Fireblocks to scale operations of the digital asset class is already building staking, a process of participating in transaction validation, similar to mining and other capabilities, explained Micheal.

“The problem with financial institutions is that they are not too open. To avoid jeopardising their licence, licensed banks or custodians must comply with KYC regulations and guarantee that their clients are not on any sanctions lists. In DeFi, people who interact anonymously could not participate,” said Michael about the challenges.

Founded in Israel, Fireblocks enables licensed institutions that stand a chance to generate about 4-6 percent yield by incorporating stablecoins. He anticipates that, by 2022, DeFi will have spread to the mass retail market. Social media heavyweights like Facebook are launching stablecoin projects. Stablecoins have low costs and are extremely fast and efficient. He said that stablecoins account for about 30% of Fireblocks’ own invoicing.

Keynote Visual elaborated by EBC team

In response to a question on the risk of losing private keys due to self-custody, Michael explained using Multi-Party Computation (MPC) technology that encrypts private keys, offers escrow, and streamlines backups ensuring no single point of failure.

“I envision a future in which there will be a convergence of payments, DeFi, and NFTs, as well as the integration of being able to pay and have financial applications native to the Internet and the ability to tokenize content and other things consumed on the Internet”, Michael concluded emphatically.

“I envision a future in which there will be a convergence of payments, DeFi, and NFTs”

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Published December 14,  2021, Barcelona