CVA Podcast: Alexander Suhobokov, Dukascopy

Transcript

[Music] hello hello this is your host tres ahmed ready to kick off another bite size episode of the crypto valley association podcast a special thank you goes out to script for supporting us now let's discover together the growing trends of this fast moving space and try to shed some light on the mysteries it contains today we are joined by alex suhobokov head of fintech at stuccoscopy a swiss innovative online bank based in geneva providing internet based and mobile trading services banking and other financial services so proprietary technology solutions so let's dive straight into the hidden world

of banking alex happy to have you with us how are you doing hi hi charles thanks a lot thanks for having me my pleasure i hope uh yeah all everyone who listens uh uh all good in this uh complicated times and uh i hope that uh it will end up end up soon as we as we just just discussed yes i hope so too and let's hope that your this conversation here brings some uh light and brightness into people's people's days so um maybe we can start straight off by by you telling our audience a little bit about your first blockchain related experience uh yeah thanks a lot yes so uh my sound is a funny story but uh my first experience with creep to just

as the one for uh for the bank for the scoopy bank i was not that pleasant because i think it uh was some years ago hard to remember when like five maybe maybe more so we as uh as a representing online industry online banking having having services and uh in this area so we were always uh and still unfortunately a target for different types of you know hackers and then lead those attackers so some years ago some maybe five to seven years ago we you know started getting like messages from them that uh if you want to prevent

you know adidas attack please pay us that many uh bitcoins so that was that was the first so bad blackmailing was the first experience of ours uh with crypt and unfortunately uh because of that uh let's say this first introduction was uh had a very negative kind of uh context uh but then gradually uh yeah we were looking at crypto from from a different stance uh from a different viewpoint and uh at some point uh something like i think already two and a half years ago an understanding came to us that uh there are very interesting opportunities

so that was uh i think a proper introduction uh to this area to the crypto that me personally and uh we inside the scope bank okay that's uh it's a different one than we normally get on the show it's normally something like oh you know surfing the net but wow i guess yeah so there are two signs to to every coin so maybe you can tell us a little bit more about dukascopy bank and what differentiates you from from other banks in the world and switzerland yes uh absolutely what what makes us different uh is uh the fact that uh we started uh so yeah as also we discussed before

before the podcast that uh how the transitioning right about the digital transition that uh most of you know traditional banks are facing right now and uh yesterday i read an article about how complicated it is for you know large banks to transition to digital uh so we for us it was a different let's say kind of perspective that we were facing so we started as in digital fully in digital uh so from the very first day and uh we into the you know the fintech space uh before you know the war this label fintech uh even uh emerged so we definitely developed along a very different

uh a very different perspective a very different path uh so we had all the you know apis and uh in-house developed platforms uh years ago so let's say 10 years ago when uh we started as a bank when we think a banking license from uh from finland so uh in a way it has it has been uh easier for us uh to you know to adapt to uh this kind of fintech uh environment on another hand uh definitely we had to [Music] so it was it was challenging to step into uh crypto in particular because we were one of the first movers

uh years ago and uh we had the very ambitious plans at that time to introduce our own token uh which we finally which we finally successfully did wow okay i'm really looking forward to hearing more about that and i'm glad that you didn't take any of these negative experiences that you had in the the past to heart and you've been able to let's say accept and integrate more crypto in into your day-to-day life so how open is the bank to crypto uh that's uh that's a tough question you know we uh definitely develop crypto projects across uh several uh several parts one of them is just the extension of our main business which is online brokerage

and uh on this side we offer closures to different well well-known uh cryptocurrencies uh so anyone willing to take such an exposure can open a trading account with us and then uh get access to these instruments through our platform trading platform we have uh other projects on the digital banking site so the digital banking arm and the digital banking activity is relatively newer for us comparing to the trading one on this side so we have developed our own uh token as i explained it's called ducascoin uh so i think we will dedicate uh some more time

to tell in more details about it and uh also we have an extremely extremely ambitious plan uh on the side of stable coins this is a very new area uh so there are several tokens let's say out of regulative space that uh variable know like tesser so we want to introduce a regulated uh activity into this uh into this industry and into this uh stable coin to me and as you know there is like lots of things going on in the space on the regulation side uh for example uh european commission just has just issued its

proposal for regulating stable coins as part of uh crypto industry regulation in general so we are looking forward to steps uh from from fema but yes we have uh let's say a ready-made plan for for the product and the negotiating with with the regular with the regulator uh on uh on the launch date yeah well okay yeah i'm very very curious to hear hear more about that so before before we move on to some of those very interesting uh topics maybe you can tell our audience a little bit about how uh you choose some of the the crypto that you offer uh onto onto your platform is do you do it by the the top ten is it by volume is it by particular

preference by by some of your senior management how how do you decide them uh well the decision is not that complicated yeah because you know that uh let's say top five uh cryptocurrencies they uh by far larger larger than uh everything else uh on the market so we didn't uh look you know too long to to identify uh the tokens that would be interested uh for the audience and uh as it helped you know always happens you know there are like one uh currency which is of course bitcoin uh which grabs all the attention but we uh if i remember correctly we offered five uh cryptocurrencies by now uh on our platform obviously ethereum and

uh and bitcoin yeah they they yeah they're also always the most wanted uh ones is absolutely yes and and so um do you offer leveraged trading or leveraged products um within this yes yes so our platform is uh the one that i spoke about uh on the trading side is for leveraged instruments yeah so you can uh well it's up to the investor it's up to the trader uh to decide which amount of risk uh he's willing to take when uh taking the exposure on uh different types of instruments so it can go uh to very high levels or you can be one-to-one so it remain unleveraged but

the opportunity opportunity is there okay and very high levels like uh how high uh for traditional instruments it's uh one two hundred even one to two hundred like currency pairs like traditional fiat currency pairs uh but uh uh for crypto currencies of course it's lower than that because of volatility oh yeah still uh you know for risk lovers uh definitely it's an area you know to look at and decide which risk levels are comfortable yeah i definitely understand exactly what you're talking about i mean you you just mentioned that it's

it's up to the the investor the trader to to define the the risk that they put on on these trades do you believe that let's say a retail an investor or trader has the education or the financial uh knowledge uh needed in order to to trade uh leveraged products is there something that uh you at dukascopy bank do to to educate them on these uh different products or something that could be done uh well first we definitely comply with all the regulation uh in this area in europe you know uh there is let's say more how to say more advanced or more elaborate regulation uh in this area i personally believe that uh it's you you well you cannot you cannot

prevent you know people from uh doing what they what they actually want so i don't see this regulation in europe to be like extremely successful because uh people who love to take place uh you know who want to take risk they find uh you know the ways to do it and normally it's in the unregulated space so uh there is definitely a downside to this type of regulations but i should also mention that and we see from our clients that you know the level of education among just lay people uh is constantly constantly growing so uh that's because of access to media internet

so now younger people they're far more educated in the financial space than they used to be i think decades uh decades ago so uh i think it may it makes sense to be to remain you know open-minded and then protect the regulated area and not to push out you know people to the unregulated one i i guess that's the unfortunate consequences of uh such uh interferences and yeah such attempts that's a dual edge sword right i mean being able to have higher gains you can also have a higher yes but also in our industry it's customary uh to offer uh let's say that what what is called

demo platforms right so it's the same totally the same environment uh but without taking like a real risk uh so it's trading with paper money there is always an opportunity to improve the understanding of how you know platforms work but it's just like with any other you know area that it's it's up to a person to get properly trained you know before uh i don't know jumping into some some activity no no yeah i totally got what's mean and yeah i mean demo accounts are are are good fun and and i think can be used but it the whole game changes when you have uh you have skin in the game and you're there actually you know that the money money is on the

line but yeah i think uh there's a lot that's done uh within this uh space to support uh sport people and uh at the end of the year it is it is their decision right i mean if they want to go to the casino and gamble away then that's uh their uh their choice and you can only provide them with with a certain level of education that that they need but um that's it's very interesting maybe you can tell tell us more about your initiative than uh with dukkha's coin and and how things are moving on that front uh yeah so regarding uh ducascoin that was a very interesting in their i would say of hours so we had well that was uh like a very ambitious plan because we

we started you know thinking about uh issuing our own uh crypto tokens uh i think already like two and a half years ago so it's hard to remember the precise kind of dates but in any case that was a very beginning you know stage and uh speaking about a vanquishing uh tokens uh it was uh well very very uh ambitious from from the from the part of the bay anyway yeah we saw that we saw the opportunity of course we didn't plan uh let's say in ico right we didn't intend to attract financing because that just wouldn't fit any kind of regulative

framework we had a different type of idea so that was part of our retail banking so digital banking or challenger banking activity that we we've been developing uh because just as uh our peers or competitors like revolution 26 who had extensive uh referral systems we we had hours as well so we paid you know fiat money for our clients to attract their friends uh so we decided to make an experiment with crypto uh with our own cryptocurrency to replace you know fiat referral system with the crypto uh and that's what we did we we developed an airdrop

concept uh that basically replaced our fully replaced our uh referral system right so today for example uh if you as a client you open an account at our digital bank uh you will get five dookus coins for free and uh if you bring afterwards you bring your your friends so all of you uh will uh i mean you and your referrer will also get that five to cons lucas points for free basically this is the only way how new docus coins uh are minted there there is there is no uh there is no other way so this creates the supply for tokens

and uh the demand side we offer it to our clients uh a staking program uh as part of the staking program they can choose between uh crypto or even fiat reward and this is absolutely exclusive they have to accumulate a certain amount of tokens and then they can stake them they can stake them for three months or for one year and in return they can get either fiat or coin reward so if we have i yeah it's uh will be a long story but you can uh look it up uh on the website of the project which is lucasfilm.com so it's it turned out to be a very interesting instrument uh for our clients and for our

prospective clients who you know uh come and uh open accounts with us so after you open an account you'll have an opportunity to either sell uh tucs coins on our internal marketplace or on our partner exchange marketplace or you can keep accumulating them so the accumulation works in two ways uh where there are two options for that so you either bring you know friends who open accounts with the bank or you just purchase duke's coins from again either internal external marketplace okay well i might just have to open uh open account now then yeah yeah go ahead go ahead uh go and go ahead and try but we already have you

know hundreds of people participating in staking uh program and uh since uh we launched pros and so already more than two hundred thousand uh of our clients they got uh their well-deserved uh duke's coins for opening uh for opening accounts at the bank so uh that's that's what i i would say it goes beyond the marketing experiment it turned out to be like a monetary uh like a full-scale monetary experiment i it was extremely interesting experience i think for all of us uh inside the bank participating you know because of course we had our experience with the trading platforms with uh ecn networks where well basically we you know pull

liquidity from multiple providers onto a single market single platform which we uh give to our clients uh so but we never had experience with the issuing you know our own currency and managing it and and seeing it developing so that that has been a massive uh experience for for the bank and the this positive experience also led us to the stablecoin concept uh which we we've been developing for quite a while uh already yeah i encourage uh everyone uh to just go ahead and uh and and try and uh on uh this project's webpage just to look up

you know uh the the offerings for for speaking and uh well it seems to be like a very interesting you know alternative type of instrument definitely no definitely a alternative even to crypto you know alternative to bitcoin because it's absolutely uh uncorrelated with uh with anything right because it has its own russian now kind of its own logics behind which is based on supply and demand flows but has been already alive for a year and a half so since uh even more than that since february last year so you can track all all the history from price points that you will find on the webpage yeah from the genesis wow that's uh that's truly incredible and so you mentioned uh quickly the the stablecoin

initiative is this um duca's cache uh or is this uh completely two different things yeah it has a working name of uh ducascash uh so what it is it has been changed say the way we are trying to find you know a proper name for that we started you know developing the project before there was uh like this massive uh attention from the global regulators to stable so uh and the threshold as you all know was the coming of facebook into this market which kind of changed you know upside down the attitude of of global regulators to the stablecoin instruments yeah so uh since then yes we have been uh let's say

adapting our white paper and our processes and procedures to this new uh kind of regulative requirements and we are really looking forward to you know get the green light so it's been already a while since we started developing the project and uh we also yeah it was very interesting to see let's say the uh the framework uh designed by european regulators uh on how they plan to regulate stable coins and we were delighted to see that they understood that there should be a room for private issuers for stable coins because there were how to say the rumors or or

or discussions among the regulators that you know stable coins should remain uh limited for only for let's say public issuers we believe and i personally believe that uh this is uh an incorrect way of looking at this at this instrument that this problem in general because unfortunately let's say in this circulations and these discussions uh the public the authorities are forgetting that uh innovation right that of course now everyone speaks about and not now but already for quite quite a while uh innovation is a product where it mainly comes from the private uh industry

right not the public one so i believe that the main role of uh you know the authorities and then the institutions uh public institutions is to create yes well regulated uh but uh still an environment where you know private uh companies can innovate properly yes so stablecoin as as an instrument it definitely creates huge opportunities for the future development of finance in general so it's uh it's definitely not correct to limit uh private companies from having access to this uh to this instrument and uh to you know jump through competition of course

uh jump into innovation uh for of course for the benefit of all the future finance and all the future infrastructures yeah we see it from from this perspective and uh therefore yeah it was a very positive sign from european regulators who uh yes they created a tough legal and regulator framework but uh they still uh you know left this room for uh let's say for for private issues of stable coins and uh still uh i personally i'm quite quite cautious and uh looking into what you know central banks are doing well what plans do they have because i'm i really don't want to find let's say financial industry

in uh a scenario where uh you know central banks just get into this kind of play uh of uh how to say it correctly or privatizing in a way this this new area right because i i see i see the enthusiasm with which they are getting into this uh activity and uh to be frank it's sometimes it's a bit it's a bit frightening we and now i'm referring to the crypto valley and the regulatory working group uh you know dedicated stable coin task force that uh combines uh the prospective issues of staple coins

so we all expect and hope that in switzerland uh there will also be a room for private issues of stable coins because i'm pretty much aware of uh and familiar with already multiple projects uh in switzerland uh from banks and from non-banking companies as well who issue their own stable coins they all seem interesting they all seem perspective of course the question you know is how many stable coins uh do you need for for a market but uh it is about you know it's for competition for anyone else yeah it's really great so do you believe this kind of competition between stable coins is something that's healthy and that's

there's one that's going to come on top would you believe that it should be one of these kind of public uh entities that should really kind of rain upon it one of the central banks that should be like no these private initiatives are not operating it in the right way it should really be just one entity that creates uh a stable how do you believe this kind of competitive environment uh i believe that we should always uh remember about modern economics and re-read the economic textbooks clearly state that uh innovation is uh a good friend uh of competition right or even the family member let's say unlike uh extensive uh regulation you

know uh so regulation and innovation yeah you know they can be friends but uh we all should be very careful not to make them you know enemies but when it comes to competition and innovation they are definitely always uh friends let's say and as i told even closer than friends uh therefore you know remembering that let's say and uh i believe in in in these concepts and i believe that you know everything should be decided from uh the competition uh stance not from let's say imposed uh regulation on a completely new industry which will not allow uh some interesting projects to

even uh you know get started i don't know i i totally see that and then states staying on the same wavelength of competition and innovation uh there are some people that that have this uh saying where they say uh goodbye banks and uh buy bitcoin how do you believe this kind of banking uh that there will develop in in the crypto space with this kind of competition uh and innovative well uh yeah that's a very very interesting question i'm thinking about it uh all the time myself uh well definitely uh definitely some of the banks will find it very hard to survive and to find you know their ways to this new reality i'm not let's say afraid uh we're not fearing

you know about the position of the scope bank because we as i explained we we've been you know in the digital space uh since the beginning so we are very quick to it up and you can see from our projects that uh we are here to grab uh grab the opportunities in the crypto space uh but it is also our position that you know traditional finance which we still represent and this new wave of uh innovation this innovative say financially innovative the main finance they can totally live up together what i personally believe is uh that you know the future of uh the financial industry development is in

ecosystems uh and partnerships like deep partnerships between uh the traditional banks and the uh the new players in this area and also non-financial companies as well which are in the digital speaker i don't know anyone from game developers uh to you know modern contemporary channels for like sales channels the the the future competition i think and and the the the main beneficiaries uh from uh the competition in uh in this space and highly competitive space will be uh the groups of companies from different industries that will uh get together to form uh partnerships uh

to offer you know a whole completely new product to service to clients which will combine anything from you know financial service to gaming to uh different types of uh different types of activities crypto trading of course as well yeah so uh yeah answering your question the competition will be tough uh definitely not everyone will survive but there will be uh an opportunity to cooperate and that's that's the only way okay okay and so and so your youtube vision of this whole industry is that is that corporation approach whereby even though there will be

a competitive landscape at the end of the day these kind of like private public uh sectors and the traditional and the more innovative space will start collaborating closer as well that's again that's uh that's the only way so there is there i don't see other ways therefore we have started to develop for instance our ecosystem uh already a while ago when we already have partners uh partner crypto exchanges for instance so our current ecosystems may be a few words about that we developed uh is a way of cooperating for a traditional bank which is glucoscopy and a crypto exchange right uh so how it works so under uh the current uh tough iml framework

uh we offer basically uh a way to cooperate and the way to do business for crypto exchanges right so creepy exchanges can come to us we will uh of course conduct a due diligence on them uh we'll provide an account for them but also for their clients right so we have developed a very advanced onboarding system inside the bank which is based on video identifications identifying clients through video which allows you know a total with a global uh scope to apply to clients to a global perspective so we will offer accounts for the clients of cryptic changes as well

so that's creating basically an ecosystem and then powered by api which uh crypto exchange would integrate we will provide a very comfortable experience user experience for the clients of exchange where they can actually trade crypto on one hand and another can get a comfortable access to fiat without uh breaking anything on iml side so under you know full-scale iml control of the bank okay i see so so that is that synergy between the two i mean that's yes yes exactly and we already have working partners for this ecosystem and it's

working extremely well uh we are very happy with the with the this experience that we gained and uh we only you know became uh more confident in uh understand our understanding that the future is for ecosystems with ecosystems and uh with developing this deep partnership and everyone is speaking now so you can find like lots of conferences by speakers with uh hours you know talk about uh ecosystems but in reality there is definitely a deficit of that you know uh the deficit the the deficit coming primarily from uh well on both sides right so on one hand uh the banks are not always ready

and technologically not ready to offer something like that and on another hand you know companies uh are not always ready to share kind of their clients but the synergy is uh far beyond the any any challenges that can emerge and we have tested that already and we can only prove and prove uh with our example that uh that is absolutely the case yeah yeah well thank you so much alex for those insights and unfortunately i'm sure we could we could continue on for for many hours we need to uh slowly come to an end here is there anything else you'd like to share with our audience today uh but maybe a few words

about uh so i know that so this podcast is uh let's say for encrypt enthusiasts primarily right though uh anyone interested in uh as an announcement and i i'll take this opportunity to make an announcement so anyone interested in stable coins first of course uh i encouraged to become the members of uh cva and then we would welcome them in uh our task force in our work uh working group uh regulatory working group to discuss discuss everything related to you know to crypto and to stable coins in in particular the topic is extremely interesting it's in the very beginning of its development uh i believe i hope also that there is a bright future for uh this

type of instruments uh and uh just welcome anyone uh anyone interested awesome well yes you heard it from alex here if you if you enjoyed this conversation feel free to check out more on our website uh cryptovalley.swiss where we host plenty of events educational content and even provide information on how you can join our growing community and the cva working groups including the one that alex leads with regards to stable coins so thanks again alex for joining us thank you very much my pleasure so stay tuned stay safe and until next time from the crypto valley in switzerland