Kris Marszalek, CEO & Co-Founder of Crypto.com
Everyone says ryan cells and you're listening to missouri's unqualified opinions each week. I interview cryptos top. Builders investors and personalities discuss key trends in the industry straight today. I'm speaking with chris marsh l. co founder and c._e._o. Of crypto dot com and talk a bit about crypto payments how to make the mainstream scale them and whether they're still relevant and should be an exciting conversation so let's dive right in and this podcast is presented by block works the top blockchain events and media production companies. I've worked with for exclusive content events that could help you with insight into the crypto blockchain space check amount at blockbuster group dot by and you will not be disappointed all right everyone welcome back to missouri's unqualified opinions <music>. I'm your host ryan celicas at two-bit idiots. We got a good one today with chris marsh alec who's the co founder and c._e._o. Of crypto dot com. We're gonna talk about their new credit card. We're gonna talk a bit about payments they still matter in crypto jury still out on that and some of the defy applications that they're working on as he disclosure crypto dot com is part of our registry and disclosures initiative but <hes> we we certainly hope that that becomes the norm versus the exception as we've now got fifty participating projects on so chris thanks for thanks for joining the conversation station you kind of sit in this middle market of of projects that are large in terms of dollar value valued headline value that certainly shipped a number of applications but still i seem to kind of fall below the radar of the general all conversation on krypton twitter at least in terms of hype and maybe that's maybe that's a good or bad thing but what are we start by just talking a little bit about the projects. That's the overarching goals of crypto dot com because <hes> there is quite a bit going on and you've got a few different moving pieces that have shipped at this year what <hes> how did the project come and do exist anson and kind of what what are the most important components that people need to know about if they're just us getting introduced for the first time <hes> first of all thank you for having me ryan a pleasure to be talking today well trip to the common our visions very very simple cryptocurrency in every wallet <hes> and in every product to be released <hes> we try to <hes> move the industry forward adoption adoption <hes> so we started with a visa cards a lot of his you twenty four seven access the money that you hold in crypto <hes> and we would launch in singapore and cupolas share and just last month in july. We begin shipping customers in the u._s. <hes> besides <hes> this image guts a also an interesting product <hes> allowing you to earn up to eight percents percents <hes> on <hes> coney beleaguered stove here deposit n._b._c. or interesting to see if you're interested in the eighth etcetera <hes> we also you should instant loans on our app <hes> which are caught <unk> b. c. so it's a full sweep of the of products <hes> essentially allowing that currency holder to replace their digital banking completely and it's <hes> like i said we are not really big on <hes> hyping the project up. We are steady builders. We've been gene working on this for three hundred now. The company has over a hundred fifty people and abs- of being donald it's <hes> son fifty antica times so small but you know slowly gaining traction <hes> one one of the first questions i asked before we turn the camera on was about <unk> stable coins so when you think about payments when he thought when when you think about interest-bearing products volatility in the underlying currencies can and be quite dramatic and so if you're thinking about mainstream usage beyond just speculation how oh have you build the product so that when someone is spending money you're borrowing or lending and earning interest <hes> that it's actually compelling because nine times out of ten if you had an account that was denominated in bitcoin if principle is swinging wildly early in value the interest doesn't really matter get very messy and can skew some of the incentives in terms of default risk and and things like that and in fact that's why some of the early crypto lending products failed right it wasn't until more recently that that you started to see a resurgence there and it was for different reasons because more about hedging being in a hedge fund investors managing their own positions where where does kind of stability the underlying currency fit in or have you thought about that as a challenge for some of these applications that you have the way we build the trouble. It's it's about the <hes> giving option so <hes> we support fiance kenny vance in in in dollars. There's euros pounds you name it <hes> so bank transfers are free are out for me and my trip of credit cards are cards are multi all to currency and and so you can actually store multiple crises fiat currencies on the cottage style <hes> and we support a <hes> <hes> a number stable consider buffer so users can use it anyway. They walked for the landing specifically typically the way we approached this is this is bill for people who believe in a currency so <hes> out objective is support. Our users have to access to cash without the needs to actually sell the crypto so you've got the full spectrum of options you can if you want to catch the stability of a staple coin or at pet's appearance you can have it if you want to have that site of cryptic inhabits the also thanks tremendously useful how what type of usage maybe the use cases. Have you seen for crypto credit card because i remember back in twenty thirteen. It seems like once a years someone else types that a credit card is either coming or has been released. You know at first it was coined. Base was rumored number two do it. Zappa had a credit card. You know there's been like six or seventies. I feel like every couple of years from from <music> all walks of life in the industry who's using them and wire. Our payments still important jordan. If you're if you're using the legacy rail or at least the legacy card infrastructure to transact crypto it seems counterintuitive so the first thing is that there might have been attacked and bill like this before but this is the first the extra makes commercial sense user so <hes> a sweet spot for us cargo oversee three percent cashback it back and christie sort of perks that <hes> are very competitive against best <hes> the kerr concentrate by banks today. It's like access to our there or it's perfect. Internet exchange rates as you travel <hes>. There's no trace defined. That's because there's plenty of those are designed metro cards. It's a premium product and the your typical coin based car probably roughly fight percents <hes> author all using our carbon every transaction right says just a better deal for the customer and <hes> while we as a company also is we're building a native cryptocurrency payment network shows come chain that settles transactions instantly and <hes> and gets a much lower cost design work and it supports all the apprentice out there so all the good stuff is bill team but people still need a form factor they understand and will be banks to this to the table. Label is acceptance of fifteen legend locations globally so you've got this <unk> via instant trust in the product and pasta uh-huh kirks results in people being asked about it. They like it for them so a <music> a business strategy. This is customer acquisition kill so we won't build solarge distribution at using these guys than we've noticed a correlation relation between user school actually are live of the army just transact and use more frequency and here's the cut into what what can you talk a little bit about the usage of the c._r._o. Token versus other cryptocurrencies or other stable label coins that that could be transacted system because whenever you talk about a a an actual currency right so not just a utility token or or something that's distributed file storage or bandwidth o'rourke at good governance token and prediction markets like there's all have certain participation rates in in network. It seems like you are hoping that the c._r._o. Token will serve as a bona fide currency by yet you offer all these other more mainstream crypto currencies alongside of it <hes> for freeze and show so where where to c._r._o. Fit in the product why do people will benefit from using that versus just using bitcoin and <hes> and then some of these other more liquid assets that have been around for longer so basically building a new public chain of taylor for the cryptocurrency payments percents <unk> and we don't restrict. Is these sierra payments. You can use all the other. There's lots we just need to network allows us as mentioned any ripta anywhere for instance settlements and and the sierra overall basically served as the second chrissy on this on this network. <hes> you know we compare the solution to votes. <hes> visa edward cried so you've got some multiday settled lands times <hes> <hes> huge costs appeasing network not even today day even older workers put in will be still transaction fee up. Only i'd say all the other major god schemes so we feel there's a need to build infrastructure that allows all this to happen sh <hes> seamlessly with lower costs and this is the most condition project would be working on and if successfully bring millions of this form and eventually tens of means of consumers i it will help us get closer to this vision of reward <hes>. We are using a very proven <hes>. I'm very proven go to market strategy. That's worked very well for guys like a a and we pay so basically incentivise usage rush merchants. I'd in customer side and any continent <hes> the incentives with really sleek sleek cast league <hes>. I experiencing as to be extremely small. We're taking be <hes> this learning strong large players <hes> out of china and inch deployed into cryptocurrencies world doesn't doesn't it undermine some of the use case for for c._r._o. In particular though just the fact that so little of it is currently liquid floating right now <hes> because you kind of have well first of all let let's it's gonna break down the rollout and and and kind of treasury of c._r._o. Because it was created all at once is not necessarily all liquid. One one of the things we're working on with your team is trying to bring better transparency into how this is gonna hit the market but i didn't have a chance to check before this call paul refresh my memory. I think it's it's only eight or nine. Percent is currently circulating right now and the rest is locked in a number of different things yep so that's a massive overhand potentially right and we've seen this stellar. We've talked about this with ripple and to the extent that people are are are interested in acquiring c._r._o. They've they've got this massive amounts of the token supply that that there's still kind of overhanging in the market over the course of action number of years so how'd you manage that and how do you think about making sure that the incentives incentives are aligned in the in the short term but certainly in the medium and longer term knowing that if you are to be successful and if that token is to continue to grow in value that token ecosystems community grow you've gotta do quite a bit in terms with central banking wizardry or or at least setting the structure in place so that this doesn't become problematic. What what what were some of the design design decisions that led you down this path that such a large reserve well first of all we begin a trespassing so we <hes> <hes> late on the clear schedule of talking race over the next five years and <hes> there's a very strong beliefs within our team that you know to be a successful network ten year horizon because just this is the kind under timeframe that is required to bring on board <hes> critical mass merchants incredible muscle customers and <hes> and it's it's not the cost effectively they look at the airports of off which has a <unk> literally billions of dollars on incentives for you're both sides of the platform so this approach be asking of the coin is today those clear roadmap paul <hes> where what are we doing every month for incorporation every year in order to make sure is limited and in terms of <hes> the economics and we also published consultation episode the community and <hes> work together on figuring this out. I mean we've got some proposals council school. There's also <hes> for election stan how the staking taking war and those numbers will be picked over time and <hes> as we as we green construction. I don't think that's <hes> they can figure this out. Two hundred percent one decade in advance but we just keep an open mind and make sure that we are transparent process and and make sure that we are building <unk> people actually use <hes> so the next key milestones ends on. You also had had an interesting dynamic between 'em c._e._o. Which was explained the relationship between c._r._o. N._c._o. Which was the other related related. Token is one way or are you in the migration right now. So <hes> we open our public chain progress we sh- <hes> open source and original testified in september title has four public testing ready for everybody to around with <hes> every single milestone that we we are conditioned head of schedule so many of the desert for next year <hes> and there's going to be a migration the the yasser again for schedule to the to a maintenance coin coin the easiest way to think about <hes> instagram's stories and seriously talking access to services centralized realized custodial services at them dishes because they are concerned changed to be eventually decentralized network <hes> away. I wasn't naked coin. <hes> the powers work <hes> animals you know <hes> trusting these payments decentralized square so moving any tax so that it works even without congress ultimate goal the the general distribution you should than for c._r._o. Which in maine net coin this migration will take place the currents <hes> stakeholders in the network. We'll have a small slice of the larger sierra network and then is at sixty percent is split or or eighty percent split between a few the different participants that there's this concept of council nodes customer choir knows there's a lot going on but i guess the the important takeaway then is either the different stakeholders that you see in the future chain not necessarily crypt dot com company <hes> reserving in selling off this treasury over time right so so what is what is your ongoing steak and how how you ultimately get some of those other stakeholders acres to join the fray and ensure that you when you do get to main net launch. You've got a pretty well distributed system. That's working as intended again. We growing the size of every single day and gets <hes>. We are a graphic twenty percent lung partners company so we're at son of fifty k. users today from kate one meeting <unk> ember so those numbers are still very a small but if you extrapolate type of growth rates now for two three years then beckham distance size of the woman fine with it becomes much easier to onboard the merchants <hes> and get people to two years <hes> our installation in general so i guess again and we start and end with which the customer hardly make this useful useful. How do we get people to use this outta. Get legislators this <hes>. This always takes priority and <hes> over in the details. You know how it's distributed or the general point of view is that issue did you bring in and meetings of medicine board and tens of millions of customers it took an economics <hes> will work itself out and again we interest find about the every step of the way and we always sell her nineteen source ideas. How introverts works best for all this echo because we're we're is your team based and then where's the project based and most part teams basing hong kong got over a hundred people in hong kong office. We've got a team of a <unk> fifty people <unk> bulgaria mostly dealing with backoffice support like some service china crossing risk management kind of which would expect <unk> business <hes> we've got very tiny peasants in the u._s. and <hes> and singapore to support our programs in just the last month we we saw was saying shannon lunch hour. We're stealing engineering teams to exploit the buildi- on the product side two. It's safe to say that the lion share that community then you're generating right now is in asia versus the west or or where what efforts made in in the west because this is kind of an ongoing topic that has been coming up more and more last few weeks. I'm starting to get the opinion indian that we as a company and then we're data services. We're not even necessarily touching these assets or financial services company or token issuer <hes>. I'm wondering if we should even be u._s. Right now we want. We want this to be a successful large enterprise because it's just so painful. Oh <hes> what what are you seeing righteous from if you're pretty well taken care of as a company domiciled overseas and with most of your operations in hong kong but certainly as you build out this distributed network can you do have the u._s. Card program some other applications that you're gonna wanna roll out here. How do you think about the the other stakeholders and kind of incentivizing folks that are going to secure the network and actually use these applications and unhelped scale this and and at least encouraging some type of activity in in the u._s. and europe in particular yeah yeah so <hes> we compliance. I approach here again. We didn't bring lunch. Partners like visa corroborate. The region wind banking partners through our product. We didn't bring those guys in borgo shooting a blind seriously so req- i see this is around the farm and we operates in line with local organizations so in case of the u._s. We simply stayed by a a review. Our product features has communicated. You know it's it's huge overhead. I'm going to say the at something in simple to do because it s over tweeden's to launch their u._s. <hes> and you've definitely more restrictions than in in some national markets coins can lays out for <hes> extremely earthly and there's a <hes>. There's a reason why a number of companies leading u._s. Market altogether the cost of the complexities just none of us yes <hes> for us. It still twenty five thirty percent of our entire user base missile. We've invested so much you know. I'm gonna probably us. We just hyundai. I guess the bottom line is that's. He needs to be appliance. You scale <hes> business leaders of abused <unk>. That's our way of doing it anyway. Just not taking any risco are playing by the rules and slowly talking building it up where so twenty five percent in the u._s. or twenty five percent of the west total twenty two and twenty in fact furniture saying the u._s. Extreme got are probably a quarter in europe and the rest of asia of the world <hes> so it's a tricky well distribute the user base in seventy countries where our app is available today. You've got payments you. You got these <hes> interest bearing accounts. What's the what you see is. The growth driver is something that's highly differentiated that has alternately going to be the killer app you promote the most heavily as you approach the main net launch next year because if the goal is to ultimately build a better faster back end facilitate transactions than it seems like a partnership is about steppingstone because that's that's really the bread and butter that you're trying go after but at the same time lending marketing is exploding right so <hes> the the number of companies that have gone from zero to one hundred encrypted lending this year especially is is just astounding at the rate of growth are are those kind of equal weight. No you can't have one without the other what what's what's going to be the one thing that you really need to get right from a product suite two to get your foot in the doors of brandon handed and make sure that this is a market that you can continue to scale into and then maybe cross sell other services is as you win that i application. We kind of took this. Yes <hes> look for. I'm trying to these patients. Plus payments is the distribution <hes> thoughtful ride so our a car payment network <hes> they will allow us to bring in meetings abusers into the fray and lex like lending away to monetize <hes> and we can generate your bus revenues through ending to our user base so again the more land and on the popcorn umbrella generated you can simply pumped more <hes> investment back into the payments for letting us abuser incentives or a new features and it'd be reinforcing circle. I i still believe the payments is a killer app. <hes> in terms of growing in growing the number of users grassy gobble gobble. It got what fifteen people who for most traded as a us us news acid cost today right. If you want to go to five hundred meals a billion. There's no better use case in payments. It's just a basic basic. Go buy groceries every day. Buy stocks saturday. It's just that simple one unna one last question i have and it's a little bit more on the tactical choices that you're making i guess in the medium term because i feel like we're gonna see more for more interoperability across these different protocols take yearly with polkadot and that's on the horizon obviously a theory and was the only game in town you started with with two thousand ten. The goal is to migrate your also using tenements consensus out our them on the back end. So how do you think about the different interoperability solutions and kind of base layer <hes> technology stacks. Are these going to be important for you going forward or are these just stepping stones right so you started the earth day twenty you might use bits and pieces of these other platforms but at the end of the day you know as you hit scale and as as you head to your main net launch <hes> do you just completely divorce yourselves from these other protocols and just focus on the crypto dot com. What's what's what's the relationship going like see. I think that's a whilst you have a platform of games of user as i'm very pragmatic diagnostic. I i think enterpreneurs don't spend enough time thinking about holidays gonna get distribution proceeding harrigan and get people to use it at scale so for us the eighty percent of our efforts to grows up to scale and once we are scale <hes> signing partners a section of the complex. Everybody wants to partner with you <hes> just because he's got scale. I think we have a very transparent. Pardon inclusive approach as a company so we we do not intend to build a walled garden that that's <hes> <hes> is closed. I will be definitely open to partnering for people who <hes> bring to the table. If mentioned we are using bits and pieces from tender man some from costlo's licensed technology from intel we started and enter the customer technology so <hes> we can do a good job of for accustomed. There's technology out. There helps us get it done assorted customer. You're gonna bring it in and get it together and we. I really am a strong believer in building networks. Ah don't have a single on of failure and you constantly do that. If you just do everything in house and you can't do that you're building a wall garden so juicy jalousie from monsignor lower <hes> more open episodes paris <hes> being on bringing on award into the eco-system always fifth customer mine always custody mine's not for the sake of you know partnerships just as archbishop russian well. That's very amazonian way to end. I guess we'll be on the lookout to the test net target date. Do you have a target dated minder sometime in late september so ever ever know they'd hits great <hes> and where can people find you. It's it seems like it should be relatively straightforward to find given the name of the project but how how can they get involved and where some of the the areas of greatest need right now on the on the development side look <hes> these this way to begins to go to the man a call auditor trip the home <hes> and fuller progress there again we are very open as is an an older people who have great ideas to join us no journey. It's an implacable so far. I think it's just the beginning chris the pleasure thanks for joining us greatness. Thank you wrapped lap. Thanks for listening new episodes of unqualified opinions go live weekdays at noon eastern time you can follow me in the meantime on twitter at two bit idiot. You want to continue the conversation or otherwise. I'll see you next week <music>.