Interview with Swissquote: future plans

The Cryptonomist interviewed Carlos Martin, Product Manager for Cryptocurrencies at Swissquote.

He has been in the blockchain space since 2010. Academic career, he focused on engineering and economics. His professional career developed in tokenization, research and PE investment. He is an early investor and collaborator in many cryptocurrency projects, with special emphasis on DeFi, infrastructure and DAO’s.

What is your relationship with crypto? How do your services work in the sector?

Our relationship with cryptocurrencies dates back to 2017, when we were among the first banks to offer cryptocurrencies to our clients (the first one when it comes to retail investors). 

We currently offer 35 cryptocurrencies to our clients for trading, 3 of them to transfer outside our platform and 4 of them for staking. As for how we work around the assets, we currently custody ourselves the majority, with some residual amount on partner exchanges, mainly to settle our client trades with them. 

This will further improve thanks to the launch of our own cryptocurrency exchange SQX, that will allow us to reduce the counterparty risk even further.

What do you think about the future of crypto? What about blockchain?

The whole sector is in constant transformation and still in what I would call the “discovery phase”. Institutional adoption sits at an all-time-high and numerous financial institutions are not only entering the cryptocurrencies space but also looking into the broader subject of digital assets, investing billions of dollars into R&D. 

Soon, most of our financial transactions will be executed into private and public blockchains, greatly improving the efficiency and transparency of the system. Governments are also exploring with great interest the space, with focus on digital sovereign money (CBDC) and national identification initiatives (ID NFT). Digital assets will certainly grow exponentially in the next decade, with more capital concentration on the infrastructure part while staying volatile yet more professionalized in the “cryptocurrencies” part.

What do you think about the collapse of FTX?

The collapse of FTX happened just after the biggest bull-run and crash in terms of USD value that the digital assets space has ever experienced. It was created thanks to a climate of complacency, increase in risk appetite and a brutal expansion, where investors and users got distracted by the improvements in the technological risk area but misread the legal and credit risks.

In the case of FTX, numerous warnings were always visible thanks to on-chain analysis (relationship between Alameda and FTX), but were judged as “normal” back then because of a blind trust on the founders (FTX=SBF/TERRA=DO KWON).

Others were invisible given the opacity and complexity of the current traditional corporate world, with +150 entities in +10 opaque jurisdictions involved to FTX founder SBF and its closest executives. Usually, this part is cleared when reputable investors like Sequoia, Softbank and Tiger Global, pass their due diligence processes, which again, due to the complacency and in some cases a personal executive push, failed to properly assess those risk points.

The collapse of FTX now represents a challenge for the crypto community and an opportunity for more traditional and regulated players to enter the space, expanding the use case for other “forms’ ‘ like securities and other regulated financial assets, while pressuring regulators to strengthen their initiatives.