Big financial institutions recognize the superiority of blockchain technology, but are intimidated by the prospects of bitcoin replacing them, so they will try to censor, control and manipulate it before ultimately they will be forced to accommodate it on public demand, says Grigory Rybalchenko, founder and CEO of Emirex, an exchange and a marketplace for digital assets and cryptocurrencies.
Gregory will be among the top blockchain and crypto techies present at the Future Blockchain Summit and other events as part of Gitex Global taking place in Dubai during 17-21 October.
“Great things take time to happen. Crypto is certainly cocooned here and there, but if you watch the markets and startups – all of them recognize that the majority of people don’t know anything about crypto and therefore aren’t interested. So, they are all working on educating users and spreading the word about the technology. This indicates that the industry is expanding and will soon reach a tipping point where it will just explode. At that point, integration of the crypto and mainstream financial ecosystem slowly becomes a reality,” Gregory told the Arabian Post in an interview.
Asked about the pace at which the new ecosystem is being adopted by the financial system, Gregory pointed out it is a mixed bag.
“The rates of adoption are radically increasing in some places and plummeting in others depending of course on laws and regulations and market volatility as well as other factors. I think many recognize that by now this is not about a full-scale shift to a new system but more about fixing problems, working hard, and making the best possible product. Great tech will eventually find adoption, so no rush in that regard,” he said.
But he has no doubt that at some point of time in future, there will be enough people who are paid in crypto, and they wouldn’t be exchanging it but use it the way it is supposed to be, triggering a massive chain effect.
This could happen sooner than later, asserts Gregory.
Here is the full text of the interview:
The biggest dilemma faced by cryptocurrency is that it has to be approved by the same authorities that the crypto ecosystem is seeking to replace. Do you think such irreconcilable interests can ever accommodate each other?
Well, this is a very good question, because currently there needs to be a certain point where users can move their money to the blockchain and the majority of users still choose a centralized exchange because it’s much easier to deal with an email and password and have customer support. However, when markets boom, exchanges tend to experience technical issues. In February’s market surge, Coinbase, Binance, Kraken, and Gemini, four of the world’s most prominent cryptocurrency exchanges all suffered outages as investors clamored to buy into the rising prices. Centralized exchange’s reliance on centralized cloud providers like AWS makes it increasingly difficult to prepare for traffic spikes. I think DEX is going to be the future, but for now, we have what you may call centralized decentralization. To give a broader answer to the question, it is realistic to assume that the majority of people would have no problem with a single entry point. The centralized entry point is problematic, but not impossible to reconcile. In that way, these interests are already accommodating each other in that CEXes are facilitating the entry to DEXes, and at the same time the incredible DeFi applications are pulling in audiences like never before due to the ongoing innovations and applications in the field like NFTs and GameFi.
Currently, the crypto ecosystem is operating nearly in a vacuum, in the sense independent of the mainstream financial system. Can you see the two being integrated any time in the future?
I would say that the crypto ecosystem is filling in the vacuum in the mainstream financial ecosystem since it is creating applications that are genuinely helping people and providing them with solutions. In that sense, crypto is not operating in a vacuum but working in parallel to the mainstream financial system and showcasing the possible solutions, even in this infant stage. Great things take time to happen. Crypto is certainly cocooned here and there, but if you watch the markets and startups – all of them recognize that the majority of people don’t know anything about crypto and therefore aren’t interested. So, they are all working on educating users and spreading the word about the technology. This indicates that the industry is expanding and will soon reach a tipping point where it will just explode. At that point, integration of the crypto and mainstream financial ecosystem slowly becomes a reality.
The legacy system is ready to embrace blockchain technology, but not cryptocurrency, which is a logical conclusion of the new technology. How can this dichotomy be explained?
Of course, blockchain is a brilliant technology, far superior to what we had before. Big financial institutions want the good stuff, but not when it seeks to eliminate them. So they can employ blockchain technology, but bitcoin will always remain a threat to them. This has to be faced at a certain point when they wish for their infrastructure to interact with other decentralized ecosystems with billions in TVL and trading volume. Many of them will eventually accept the logical conclusion of blockchain, but they will try to censor, control, or manipulate it which will drive consumers to decentralized crypto even more. At least that’s my opinion.
Some of the mainstream banks have started offering crypto-related services. Does this indicate any future trend? What is the crypto industry’s estimate of the time frame by which a full-scale shift to the new system will become inevitable?
No one can say. The rates of adoption are radically increasing in some places and plummeting in others depending of course on laws and regulations and market volatility as well as other factors. I think many recognize that by now this is not about a full-scale shift to a new system but more about fixing problems, working hard, and making the best possible product. Great tech will eventually find adoption, so no rush in that regard. However, we are eager for people to find out more about this technology and how it can truly enhance their life, financial status, and independence. So far, there are many people already benefiting from and employing this technology in their everyday life. People are paid in crypto, they exchange it and use it to live. At some point, you can assume enough people might be paid in crypto, and they won’t exchange it but just use it the way it’s supposed to be used and maybe trigger a massive chain effect. This could happen sooner rather than later. We hope the future will bring about true decentralization and a better world.
Is the technology development gaining the traction required for the level of disruption envisaged by the crypto concept?
There are many roadblocks and skeptics on the road to the perfect crypto-pia, but we already know that it is unrealistic to expect everything and everyone to suddenly jump into this new concept. The market certainly goes through its ups and downs, but you can see the advancements being made quarterly. All kinds of startups and legacy companies are investing in research and everything necessary to find solutions to the current problems. On one hand, you can say that there is a lot at stake for some companies, and it’s not going according to plan. On the other hand, many companies are well funded and use their resources to disrupt the market.
Your website lists Egypt, Kuwait, Saudi, Bahrain, and UAE are the countries with the maximum demand for digital assets. Can you elaborate on the basis for the claim, other than that your company is operating in the same zone?
Our company actually operates in over 150 countries, but Emirex sees incredible potential in the MENA region and especially the listed countries. Emirex intends to provide people with the best technology available to enhance their lives and have access to digital assets. Emirex is welcomed in these countries and is working with many of them to construct beneficial partnerships and bring about change to the legacy systems. Our company operates on a global scale, and we bring our expertise and knowledge with us to Egypt, Kuwait, Saudi Arabia, Bahrain, UAE, and more. However, these were originally thoroughly researched to be deemed the countries with the most demand for crypto and digital assets. Now, it is safe to say that every country has a high demand for digital assets and the numbers are increasing every day.
What exactly is your company offering to the average investor? And how is it different from the legacy system?
The list may be too long to count. First off, as an investor let’s say in real estate, Emirex offers you the opportunity to tokenize your property. In collaboration with SolidBlocks, you can participate in tokenization projects and even make your own. If you dream about having an exchange, Emirex offers you Exchange as a Service (EaaS) as a white label solution. We offer access to really unique and eco-friendly Initial Exchange Offerings on Emirex like TheraFoundation which intends to reforest all the lost parts of the Amazon Rainforest and Dimitra Agtech that might just disrupt the agriculture industry around the world. Emirex also offers easy and intuitive UI/UX, and trading of over 300 crypto and FIAT pairs, many of them trading against AED, USD, BTC, and ETH. We have a lot to offer that the legacy system really can’t come close to. We also have EmiFlex and EmiComp and the Emirex treasure, the 3 DeFi products of Emirex that offer users high APY and very good returns. Investors have a choice here between the old and the new. Emirex is building the Infrastructure for the New Digital Economy.