Ahead of next week’s Cards & Payments Asia conference I caught up with speaker Marcelo Garcia Casil, Co-Founder & CEO at DXMarkets and one of the leading minds on turning blockchain theory into business reality, to discuss how he sees the the technology transforming the financial services industry as we know it:
Can you share with us a little about your background?
I’m an Information Systems Engineer by formation and have specialised myself in capital markets, working for investment banks mostly in London and more recently in Singapore. Back in 2013 I started experimenting with Bitcoin, playing with home-made miners and pointing my trading algos at the exchanges available at the time, which to my disappointment would continuously either crash or fail as they could not handle the high-frequency nature of trading algos. That motivated me to write my own exchange, which was how DXMarkets started.
Fast-forward to present time, our company is now fully focused on blockchain technology for capital markets. On one hand we’re building a platform to digitalise investment-grade physical assets to make them tradable as financial instruments and on the other hand we have a product to disintermediate the consumer payments space. There are announcements coming very soon on both fronts.
I’m quite active in terms of speaking at events and giving presentations. I think it’s a great way to share insights and to connect with like-minded people. This is a fascinating industry and I’m very excited about the prospects of how technology will transform it in the coming years.
How are you advising banks and other FIs to think about blockchain technology application?
There is a lot of hype and misinformation about blockchain technology and what it can and can’t do. My advice to FIs is always about the reality and practicality of what blockchain can do today and the potential it has. As a technology, distributed ledgers are still immature and as such they’re not ready to replace live systems. However, this is changing fast and banks and FIs should start planning and investing in the technology, and start thinking beyond the proof-of-concepts.
There are also specific business areas, in particular those which are not too demanding in terms of transaction volume and transaction complexity, where distributed ledgers in their current form are very close to being ready for prime time. I’m talking about a three to six month timeframe. First-movers in these areas will have a significant advantage.
Are banks right to be worried about the future viability of their role as custodians of wealth?
Absolutely. Blockchain technology will break centralisation and intermediation of assets. In the same way the Internet disintermediated global communications in a decade-long journey, distributed ledgers will disintermediate the global avenues in which assets travel and will dramatically change the dynamics between participants. Banks will continue to play a role in the industry but it will be a very different one over time. This is a transformation that will take at least ten years to materialise, but there is already strong evidence that this process is in full motion.
What are the most intriguing blockchain based business models that you have seen?
I’m very curious about the more radical use cases of blockchain, like self-governed consortiums that use a form of distributed consensus to make decisions. However, some are borderline science-fiction and we may not live to see them materialise (if they ever happen). What really excites me is the topic of tokenisation of assets, and what may trigger the beginning of an era of hard assets and the end of fiat currencies. If you could hold hard assets like gold or even real estate in your mobile wallet, and use them to pay for goods and services on a daily basis, what would be the point of having a government-controlled currency that is not backed by anything? This is a very interesting concept and I’m intrigued about how market will evolve in the coming years.
What is your opinion of bitcoin as the future of currency?
I think there is a strong use case for a 100% electronic currency. Bitcoin is just the first one, but better alternatives continue to emerge. I personally believe that Bitcoin will continue to be around for some years to come, but it may lose popularity and might even shrink significantly if stronger alternatives with more efficient governance emerge. The biggest thread that I see is that governance around Bitcoin as a technology is very messy right now and I see little evidence of that changing any time soon. There is definitely an opportunity for another currency to take the top spot. Perhaps it would be Ethereum.
There is still time to book your ticket to attend Cards & Payments Asia to hear Marcelo and many others speak! Register your ticket now here while you still can.
Photo credit – David Russo