Singapore headquartered Crypto.com, is dreaming big and hopes to have 100 million users on its platform by the end of 2022. Brand recall & trust are going to play a big part in acquiring new customers for the crypto exchange. So what are the challenges ahead of them and how are they dealing with cross jurisdiction regulatory differences? Find out in this conversation between Forkast’s Editor-0in-Chief Angie Lau & Crypto.com’s Eric Anziani.
Angie Lau: At first it was just Bitcoin, the OG of the digital asset world that started as open source code and 11 years ago it cost 10,000 bitcoins just to buy two pizzas. They better have been good pizzas, let me just say that. But what a world we have created since then. And boy, have we come a long way. Bitcoin now joined by thousands of cryptocurrencies and the question today is just what kind of world are we building? A lot of people are wondering about that.
Welcome to Word on the Block, the series that takes a deeper dive into blockchain and all the emerging technologies that shape our world at the intersection of business, politics and economy is what we cover right here on Forkast.News. I'm Forkast, Editor-in-Chief, Angie Lau, on location in Singapore.
Today we are in conversation with COO of Crypto.com, Eric Anziani. And Eric, it is so great to have you in your office here, but bringing Word on the Block to you and here in Singapore, it's great to be here.
Eric Anziani: Sure. Welcome to Singapore into our office. Thanks for havin me
Angie Lau: It's a brilliant office, but it also shows the enormous growth that we've seen from Crypto.com. How did we get here?
Eric Anziani: Well, for sure, when we started about four or five years ago in Singapore, actually was the launch of our first product. It was a card product and we've grown to a full ecosystem to 50 million users that we announced recently across the globe. So it has been a tremendous journey of growth from people and customers as well.
Angie Lau: How has the product evolved from four years ago to what you are today?
Eric Anziani: We started with payment and very quickly our users wanted to do so trading, being able to buy cryptocurrencies with traditional money. So we went on that journey to build this bridge between traditional fiat and digital assets, creating all this bank transfer capability, digital wallet acceptance, debit, credit card purchase capabilities. And so we did that across the globe and really created a platform that is safe and easy to use to bridge between that traditional finance world and the digital asset world, that was trading.
Then our users wanted to do a little bit more with the assets kind of grow. So not only spend, not only trade, but also grow. So we launched interest earning products, lending products. And more recently, about a year ago, we entered fully into the NFT and Web 3.0 and GameFi space with the launch of our NFT platform. So it's been quite a journey building that full ecosystem from payment trading, financial services and NFT, Web 3.0 blockchain infrastructure.
Angie Lau: And I think that you say four years ago, but four years ago it was very heady space, but also it was the cusp of crypto winter and a lot of people didn't believe in the industry and had a lot of hesitation about it. We kind of find ourselves having grown over the past four years and here we are again at the cusp of something. What do you think is happening now?
Eric Anziani: Well, we are definitely back to some bearish times. And it's true, we actually launch our first product was in 2018, in May, which was just at the beginning of that bear cycle. So we have a lot of learnings from that. And I think today and if you look at some of the results that are public and you look at the volumes or so across the industry, it's definitely softer. There's also a lot of macro environment to take into consideration stock market inflation, the current crisis in Ukraine. So all these factors are putting our market in much more choppy environments and softer market conditions. So that's where we are today. I think for as a company, for us, it's a great time to invest in, build, stay, focus. I think that's critical and prepare for for the next cycle.
Angie Lau: You have a lot of learnings yourself. You come from traditional finance, Goldman Sachs, etcetera, etcetera. What are the learnings that you kind of brought from that world? What brought you into the crypto world? Eric. I think this fascinates a lot of people because this journey of Crypto.com is also a personal one for so many of the people in your firm and in the industry.
Eric Anziani: Definitely for me it was personal interest. So I've been in the tech sector for about eight, nine years before the banking and the consulting days. And I was at PayPal when I first discovered Bitcoin, mostly through attending startup bootcamps of young startup at the time in 2013 and 2014 that were mentioning and trying to work on blockchain. It felt very early at the time and I kind of really got back into it in 2016 and read the Bitcoin whitepaper, starting talking to people, going to meetups, investing and looking at the space and feeling it, experimenting with it. And I was just fascinated by, one, the technology.
Second, the game theory around it. It's not only about the distributed ledger, it's how do we prevent bad actors from interrupting transactions or double spending, that whole game theory, the incentives that are around it, so powerful to make it work at scale in a decentralized manner. And the people, I think the community is built around the space where fascinating people so excited, so much innovation happening. So those were kind of the reason that put me through the rabbit hole.
Angie Lau: You know, the rabbit hole is deep. The game theory is definitely very innovative. But right now we're in an environment where algorithmic based stablecoins as one of the concepts of game theory in how to back the stability of a a stablecoin it's kind of wavering and falling away and definitely causing a lot of devastation in the market. When you think about innovation, when you think about the cycle in which we're right now, how do you view it from your personal point of view, from Crypto.com? How do you how do you navigate the space right now?
Eric Anziani: Yeah. So usually when you have these more positive cycles, there's a lot of money flowing in, a lot of talent coming in, and innovation starts to spur from it. And it's a little bit more challenging when you get into the bear market. But this is where people can start really finding, trying to find product market, fit, experiment and test things out. The stablecoin front is still a very large land of experimentation. It's still very hard to find the right recipe, and it's important that we continue to invest because stablecoins are such a big piece of the ecosystem. They enable people to kind of go back and forth out of of volatile assets in theory. So there's so much that needs to happen for us when these times comes. It's really about focusing on our people, innovation, building product that makes sense, iterating on our product and preparing for the next cycle.
Angie Lau: How do you deal with some of the backlash that we're seeing in the market even experienced from Crypto.com itself? When you withdrew the the staking rewards from card users, a lot of people reacted negatively to that. What what was the response from Crypto.com? How how did you take all of that in?
Eric Anziani: As you know, we've moved a year ago from 10 million users to 50 million users now. And as the platform grows, we have to make it sustainable and ensure the economics and the benefits we're offering can can sustain in the long run. So we had to make those decisions as we're continuing to grow where we want to hit 100 million users by the end of the year and more beyond. We don't always get it right 100%. It's very hard, and that's why we're always extremely tuned to what the community has to say. So we announced some changes on the benefits. The reactions were quite strong, so we rapidly made some adjustments and I hope we found some balance in the outcome.
Angie Lau: Yeah, balance is important thing, especially in this environment. There's also and how does Crypto.com work with users and clients and customers money? There's sentiment in the market right now, it's going a little bit viral about exchanges in general. So we want to address it with you that the the customer would buy an IOU when they buy Bitcoin and then that Bitcoin is sold to another person who buys that IOU. It is similar to how traditional banking leverages the deposits of customers money. How does Crypto.com do it?
Eric Anziani: So we're a regulated entity across the globe and today with crypto assets in most jurisdictions, you do have to have 1 to 1 and you need your account to to balance out. So this should not be any notion of fractional reserve for Crypto.com or anyone else that is regulated. So I think that's why it's very important for users to look at how people have developed certification and where they have licenses to ensure that they have peace of mind with their funds.
Angie Lau: You know, the regulatory space is is kind of a murky one to navigate. You headquartered in Singapore, but you're also expanding overseas. We saw some Super Bowl commercials, to be specific and certainly around the globe. Talk about, first of all, the importance why Singapore, why here as you grow? What's next?
Eric Anziani: Well, Singapore was a place of choice for many reasons. First of all, this is where we launch our first product, it's kind of a special,it has a special place for us, Crypto.com visa card.
Second, I think Singapore has been a very strong pioneer in the regulatory frameworks and the Web 3.0 space in general. They were one of the first country in the world to come up with a fit for purpose regulation around DPT – digital payment tokens, and giving that clarity that businesses are really looking for. And it's super important in our industry. It is also has created an environment for people to innovate sandboxes and frameworks for people to continue to bring new ideas, bring talent in. So I think it was a natural choice for us to to put our global headquarter here.
Angie Lau: And what about the US? What about the Middle East? How has the shifting regulatory stances changed perhaps, global strategy, global growth?
Eric Anziani: There's definitely a shift, that is for sure over the last few months. Most of the big jurisdictions have changed their approach towards crypto and Web 3.0 regulation. It seems that there is a very strong need to attract talent and businesses as this is the next big economic opportunities. We've seen it in the US with the executive order, in the UK recently, in the UAE.
I was there a few weeks back. It was incredible to see the energy, the interest to bring talents in and innovate out of Dubai and Abu Dhabi and the whole UAE region. So even Australia and Singapore know from quite some time ago, but over the last few months we have seen that shift. It's extremely positive for for the industry to see regulators and governments wanted to take a share and grow the Web 3 opportunity.
Angie Lau: I think once upon a time it really I mean, even when both Forkast and Crypto.com back in 2018, I think one of the big concepts was jurisdiction swapping. And now as a lot of other countries and top tier countries, quite frankly, in the United States being the gold standard, if you will, in Singapore, very much holding that role in Asia. How do you regard this groundswell? Do you think that it is picking one over the other? How do you view from a regulatory stance this kind of ecosystem that is is it a leveling playing field? How would you characterize it?
Eric Anziani: Yeah, so I think there's always opportunities for regulatory arbitrage, but our approach to it is quite different. We want to be regulated in each of the jurisdictions where we operate. So although we have a global headquarter here in Singapore, we have local entities in the US, we have MTL, same in Europe, we have an image license with a crypto license in Africa, same in Latin America, in Brazil, same in Asia.
So it's very important to engage and get the right level of licensing in each of the markets where you operate. And I think that's the way it will work, especially if you want to provide that seamless connectivity between the traditional fiat world and the digital asset environment. So for us being relevant locally, having hearts and minds in the market is critical and of course operating out of Singapore globally.
Angie Lau: I think a lot of people I don't want to say disregard but often forget about the role of Asia in blockchain innovation and the industr, it's a critical part. Singapore has seemingly tightened its regulatory stance on retail investors on a lot of crypto exchanges, Binance pulled out, etc., etc. But growing interest in NFTs and GamiFi. So how do you balance what you need to do at Crypto.com and how are you regarding this shifting stance?
Eric Anziani: We fully appreciate regulators mission to protect customers from risk that they may not understand. So this is something that comes with an engagement with regulators in Singapore or elsewhere to explain and find ways to educate customers better. So there is ways to distribute and market the products that are available. It's a journey, and it's important to respect that each country has different approach to it, and they have good reasons for for making those decisions. In Singapore, the approach that we have is really working with the local association.
We are partnering with the Blockchain Association of Singapore on the NFT topic. We are also a part of the Singapore FinTech Association and we chair the Web 3.0 committee and we are in the payment as well, working g roup and we work with Accesso, which is another association here in Singapore. And through these working groups and these industry position, we engage with the regulator and we try to make things evolve. But it's important that we protect customers interest and we respect also how different regulators perceive the level of risk and how they want to ensure they balance innovation with customer protection.
Angie Lau: Why is this interesting space for Crypto.com and for so many people in this market right now?
Eric Anziani: I think NFTs are very unique. They are a way to showcase, first of all, ownership in the digital world of any assets. But it's also the primitive of new ecosystem being built, whether primitive of identity or land or other types of asset where people, developers, creators can build upon. And that is what we are seeing today with the PFP, with avatar, with gaming that NFT creates that base, that foundation that gives you that ownership but also enables you to build upon it, those new world, virtual worlds and ecosystem. And that I find fascinating.
Angie Lau: I think the sports world also finds this very interesting. Everybody is crowding into the metaverse space and Crypto.com and the sports world seem to be having strengthening relationships. And it follows on what we saw from FTX and naming rights of stadiums and arenas. What is Crypto.com strategy when it comes to building your brand recognition for a growing audience that doesn't necessarily know what crypto is and who you are? And what is the message that you're trying to send working with the sports world here?
Eric Anziani: I think we have to go back to our mission, which is to bring cryptocurrency to every wallet and to be able to do so; having a trusted and global brand is critical. And there's many ways to develop the brand. And it's true that last year we started doing that at a bigger scale, especially working with top brands in the sports arena, whether it's a Formula 1, UFC renaming, also the Staples Center into Crypto.com Arena, working with the 76ers, etc.
We try to partner with global and exciting brands that share some of our values, whether it be commitment to innovation, commitment to education and technology, and looking at brands that have quite a wide reach, sometimes global, sometimes quite deep locally, to make sure we can reach to customer segments that are not too far and may be interested in the cryptocurrency space. And then the importance of working very closely with the brand to embed the brand in a relevant and meaningful way for fans of the sport and activating it when it makes sense for the fans.
Angie Lau: Are you integrating crypto into FIFA, into these sports teams? Are you are they starting to flirt with this innovation and embedding it into their own processes and even business transactions?
Eric Anziani: Definitely. I think payment is kind of the low hanging fruit and we've been working with quite a few in their stores to integrate Crypto.com pay, one of our payment solutions and NFT is another big one. It's a new way also for brands to interact directly with their consumers and create new experiences in the digital and physical world. At the same time, we worked many times with UFC, 76ers and Formula 1 in creating memorabilia or items with utility that speaks to the fans. So we've been engaging on these topics. I feel we're just scratching the surface. There's so much more to be done.
Angie Lau: And finally, Dubai. So we briefly touched on it. How how interesting is Dubai right now for not only Crypto.com, but for the industry?
Eric Anziani: It's definitely a place full of energy for Web 3.0 companies, talent, developers. For us we see the opportunity not only for licensing of course, and creating some innovation in the country, but also helping the overall country develop and attract talent. That's why we were the funding partner of this event that groups, global leaders and experts on how to solve global problems, leveraging also Web 3.0 technology.
Angie Lau: Do you vision ultimately for crypto.com, you know what's next? Is there an exit? Is there an IPO? Can we expect? What can we expect from crypto.com? What can the industry in the market expected from Crypto.com.
Eric Anziani: I think as a company, we're well funded today, so there's no need to to IPO or to raise funds. But we want to mature as a business and operate as if we would be a public company. So we've been working already for quite some time on this and we'll continue to do so. I think it's part of just good practices across the business as we scale, how do we organize ourselves, governance processes to make sure we mature. We also are regulated entity in many countries. That's also defines how we operate. So it's a journey for us, there's no set date for an IPO, but as a company we're preparing to operate as if we're a public company.
Angie Lau: Will you surprise us if we see something a year from now, two years from now, or what's the time horizon?
Eric Anziani: I think we'll have to see. Yes.
Angie Lau: We shall. Eric, it was a pleasure. Thank you so much for joining us on Word on the Block.
Eric Anziani: Thank you for having me.
Angie Lau: And thank you, everyone, for joining us on this latest episode of Word on the Block, on location, in Singapore. I'm Angie Lau, Forkast’s Editor-in-Chief. Until the next time.