Pavel Matveev, the chief executive of Wirex, a crypto wallet, exchange, and payment solution, talked with LearnBonds.com about the cryptocurrency market and how their company continues to grow.
He has mentioned what new products Wirex may explore in the future and how ‘staking’ might be the next trend in the cryptocurrency industry. Matveev also discussed Facebook’s Libra and the regulatory environment in the sector.
1. Considering the cryptocurrency market is very volatile, how is Wirex affected during bear markets or periods of lower interest for cryptocurrencies?
“As a payments platform that offers both crypto and fiat currency purchase and exchange solutions, we’re less affected by market volatility. People will always need to exchange currencies, whether they’re traveling or off-boarding their crypto based on market movements.
The Wirex Visa card gives people another option to spend their crypto and fiat currencies anywhere in the world, at any time. During bullish market trajectories, we generally see more people purchasing various cryptocurrencies, whereas bearish movements preclude people wanting to cash out. The increasing popularity of stablecoins as a means of mitigating market volatility will enable people and businesses to fully embrace the benefits of a digital ecosystem. We’re releasing 26 fiat-backed Wirex stablecoins in partnership with Stellar soon, so watch this space.”
2. What were the main reasons behind launching the Wirex WXT token?
“We’re long-standing proponents of the token economy. As we developed the Wirex ecosystem (business-to-consumer, business-to-business and stablecoins), we realised that the platform would benefit from its own native token. By creating a utility token, we provide our customers with unique benefits such as reduced fees, enhanced Cryptoback and higher limits – making our services more cost-efficient for frequent users and giving people more reason to embrace the digital economy.
Ultimately, we believe that creating our own token is the best way to prepare for a future economy in which thousands of tokens will be spendable and exchangeable in everyday life.”
3. What are the benefits of having a Wirex business account?
“The Wirex business account provides business with a crypto and fiat-enabled solution for sending and receiving payments in cryptocurrencies, as well as instant currency exchange at OTC and interbank rates. Businesses can register in their legal company name, with complete control over access and permissions for their registered account.
Another great benefit of Wirex for Business is that it allows businesses to utilise traditional banking infrastructure (Swift, Sepa and faster payments) whilst making instant payments via the blockchain. This means unparalleled control of digital and traditional currencies with greater efficiencies in terms of cost, speed and security.”
4. What is your relationship with regulators, and how have things changed with them in the last few years?
“Cryptocurrency regulation around the world is still very much a work in progress, although a few countries such as Japan have implemented sensible and thorough rules around the use of digital currencies already. Wirex is a regulated entity and one of only 3 crypto-friendly companies to hold an FCA licence in the UK. We work closely with the FCA, who are one of the only national financial authorities to have issued guidelines on the use of fiat-backed stablecoins as a means of transferring value.
Currently, we’re in the process of becoming fully regulated in Japan – we hold a type 2 licence for crypto and are currently awaiting a full type 1 licence from the FSA. Japan is the only country in the world to fully recognise crypto as legal form of currency, doing so in April 2017.
As a responsible, regulated company we also work closely with the MAS [Financial Transactions and Reports Analysis Centre of Canada], Fintrac [Financial Transactions and Reports Analysis Centre of Canada], and US regulators to ensure that we adhere to the appropriate local legislation and protect our customers, wherever they use Wirex.”
5. You launched a suite of 26 stablecoins earlier this year, what is the benefit of these stablecoins for users and the economy?
“Stablecoins offer a much sought-after middle ground between the decentralised nature of cryptocurrencies and the relative market stability of traditional money. This is particularly important for the international remittance market. Stablecoins allow for near-instantaneous payments to anywhere in the world, without the volatility risk inherent in traditional cryptocurrencies. Significantly, they bypass conventional banking rails which are both expensive and relatively slow, increasing efficiency and value for the sender. Our view on stablecoins is ‘the more, the better.’ Another benefit of stablecoins is that you don’t need a local liquidity provider such as a crypto exchange to exchange them, because they represent a local currency and can be easily exchanged via the traditional FX market.”
6. Given that you work with Visa as your card provider, do you think the growth of cryptocurrencies should threaten card payment organisations?
“Yes. Visa works on conventional banking rails which haven’t changed much in the last 40-50 years. Using the blockchain can revolutionise the payment industry as scalable and more cost-efficient options become available. I believe traditional card payment companies will start to embrace digital currencies as their novel applications and superior scalability becomes more apparent. The proliferation of stablecoins are integral to this mass adoption, as they remove the volatility inherent in the value of most cryptocurrencies.
Stablecoins represent a cheaper option for merchants than conventional infrastructure, allowing them to receive payments instantly whilst reducing chargebacks. I’m sure Visa and Mastercard are looking at this closely.”
7. Do you believe Wirex and other crypto-multi-currency accounts will make crypto wallets obsolete in the future?
“No, market forces will promote competition. I believe that, as regulation becomes more standardised over the next five years, we’ll see some crypto wallets disappear and the more ethical products survive and secure the market share. Awareness around the benefits of the digital economy is growing, partly due to major corporations, such as Facebook, embracing the technology, so people will become less hostile to the idea of a decentralised economy. This will lead to further growth of multi-currency accounts and crypto-enabled payment solutions generally.“
8. Facebook has recently announced its Libra cryptocurrency, despite the current regulatory issues around it. What do you think about it?
“Currently there’s not enough info around regulations or how their stablecoin will be pegged, so the jury’s still out in my opinion. Overall, I feel it’s a good thing for the industry because it’s bringing crypto to the attention of regulators and improving awareness in the mass market. It will be a while before we see it launch though.“
9. Wirex offers payments using both cryptocurrencies and traditional money. Have you ever considered becoming a challenger bank rather than a payment platform?
“Wirex was created to solve a major problem within the crypto industry – the ability to quickly and efficiently exchange crypto to fiat currencies and spend them in everyday life. Hence, the launch of the Wirex Visa card back in February 2015. As the industry has developed, the range of products and services has grown. I believe that Stablecoins will transform the remittance market and become the major currency for M2M payments, which are starting to become a reality today.
We gradually integrated certain aspects of traditional banking, such as Swift, SEPA and faster payments, to give people increased options and flexibility for making payments. It helps that people are more aware of current, conventional banking methods, allowing us to introduce the benefits of digital currency in a familiar setting.”
10. Do you think you’ll ever start offering crypto loans or savings accounts in the future?
“It’s something we’re looking into. Staking, as it’s known, is the current trend in the blockchain world. The issue here is the amount of red tape involved. Primarily, there’s no regional regulation for crypto loans; you need a lender licence in every country, which is easier said than done.”
Thank you, Pavel, for the conversation!