The Paypers sat with Michael Shaulov, CEO of Fireblocks to learn more about the company and the digital assets industry
What is Fireblocks for those who do not know it yet? What is your target market/customers?
Fireblocks is an enterprise-grade platform delivering a secure infrastructure for moving, storing, and issuing digital assets. Fireblocks enables payment solution providers, exchanges, lending desks, custodians, banks, trading desks, and hedge funds to securely scale digital asset operations through the Fireblocks Network and MPC-based Wallet Infrastructure. Fireblocks has secured the transfer of over USD 300 billion in digital assets since it launched in 2019 and supports over 180 financial institutions.
Our target customers range from PSPs to banks and neobanks, digital asset exchanges, lending desks, OTCs, market makers/prop traders and hedge funds.
The Fireblocks platform delivers three main capabilities. An MPC-based wallet infrastructure utilised to safely store and transfer digital assets – without jeopardising operational efficiency for customers and trading teams. The Fireblocks Network serves as a settlement and payment layer that connects customers to over 180 liquidity partners, trading venues, and counterparties in one platform for instant settlement, rebalancing, and payments. Lastly, the tokenisation engine enables PSPs and FIs to securely manage the full minting, burning, and token transfer process for stablecoins and security tokens.
Fall 2020 has been a period of notable growth for digital assets. Many agree that 2021 is the year crypto and virtual assets will be entering the mainstream financial world.
What are your thoughts on this, will it happen considering some of the gaps within the crypto market (gaps in regulation, accountability, transparency, and the abundance of ‘bad actors’ on sites, facilitating crime or other fraudulent activity, and creating a bad name for the industry)?
More than USD 3.8 billion in digital assets were stolen by hackers in 2020 due to private key theft, spoofing, and compromised credentials. While blockchain-based assets by themselves are cryptographically secure, safely moving digital assets between counterparties, exchanges and liquidity providers for trading and settlement presents operational risks. The other component is speed. Given the 24/7 nature of crypto, instant access to capital and liquidity has become a competitive advantage. Fortunately, there have been some breakthroughs in cryptography in recent years such as MPC and MPC-CMP that are better suited for digital asset management and are ushering in a new wave of digital asset businesses.
The recent regulatory clarity by SEC and OCC on BTC/ETH and stablecoins has been helpful. A year ago, regulations weren’t very materially different than they were 3 years ago. But in the last 3-6 months, things have accelerated – so many parties are rushing to add support for digital assets. Now that the SEC allows Broker Dealers to custody digital securities and clients are becoming more open to Bitcoin as an asset, banks have become highly interested in setting up infrastructure for digital assets.
At Fireblocks we’ve seen close to 200 institutional players join the Fireblocks Network, which serves as a SWIFT for crypto – these participants include some of the largest traditional banks, digital banks, liquidity providers, lending desks, OTCs and trading venues. With secure rails for trading, settlement, and clearing they’ve collectively moved over USD 300 billion in digital assets over the Fireblocks Network.
You have just announced a partnership with First Digital Asset Group to launch a wallet and infrastructure for financial institutions to connect to the Diem network to facilitate transactions.
Firstly, is Facebook’s/Diem Association’ s token live (does it address end consumers, institutional investors, or both)? Please share some details regarding your collaboration with the Diem Association.
The Diem token is currently in pre-mainnet planning to go live within the next few months. Now we have the technology to help qualified VASPs securely and efficiently accept Diem token payments, while helping them manage risk, on/off-chain communication and liquidation for their consumer payment applications.
Secondly, in what ways is this partnership significant for the usability and adoption of the Diem token for institutional investors?
The partnership between Fireblocks and First provides institutional investors an easy-to-use platform for licensed providers to launch services supporting Diem, which will accelerate the adoption of Diem payments.
And finally, there have been many important announcements in the crypto space coming from BNY Mellon, Tesla, Mastercard. What does it all mean for the financial industry?
When FIs enter the space, they have to address certain operational challenges, because you can’t custody and settle assets the same way you do with traditional asset management. How are you managing accounts? How do you set up custody? Should you take counterparty risk to a third-party or self-custody? What about compliance? Much of what we hear from institutions who are not yet in the space is that they are quite eager to get in on the action but have decided to be fast followers as some of these earlier questions get answered. We believe that the strong commitment some of these big brand names have demonstrated for digital assets is key to bringing truth to many of the rumours and expectations for the industry through the rest of 2021.
Technology is going to play a major role in all of this, so you need a tech stack that is both secure and flexible, enabling your business to continue to evolve with the market.
About Michael Shaulov
Michael is the CEO and co-founder of Fireblocks, a secure digital asset infrastructure company. Prior to Fireblocks, he co-founded Lacoon Mobile Security, which was acquired by Check Point, and was then appointed the Head of Products, Mobile and Cloud Security for Check Point. Michael is a serial cybersecurity entrepreneur and investor. He is also a recognised industry speaker, delivering talks at RSA Conference, BlackHat, and Infosec.
About Fireblocks
Fireblocks is an enterprise-grade platform delivering a secure infrastructure for moving, storing, and issuing digital assets. Fireblocks enables exchanges, lending desks, custodians, banks, trading desks, and hedge funds to securely scale digital asset operations through the Fireblocks Network and MPC-based Wallet Infrastructure. Fireblocks has secured the transfer of over USD 300 billion in digital assets and has a unique insurance policy that covers assets in storage and transit. For more information, please visit www.fireblocks.com.
Every day we send out a free e-mail with the most important headlines of the last 24 hours.
Subscribe now