We’ve had an opportunity to talk with Dr. Mervyn G. Maistry, CEO & Founder of Konfidio and Kintaro Capital. We’ve touched many interesting topics, including the future and mass adoption of the blockchain, the advantages and disadvantages of the technology, and STOs.
We continue to talk with influential people from the cryptocurrency and blockchain industry. You can read an interesting conversation with Krzysztof Piech, an economist and expert in cryptocurrency field, or inspirational talk with Yanina Petrovskaya. Today, we present a talk with Dr. Maistry from Germany.
Dawid Paluch: You said, that you love blockchain. Why do you love it, though? What is so special about it?
Dr. Mervyn G. Maistry: I think that the main thing about it is that the first time the technology exists, that allows multiple people to transact each other at fairly low cost, without having to pay of centralized system of trust.
So why isn’t the blockchain technology mass adopted yet? Why isn’t it in everyday life?
The blockchain is a very complex, mathematical cryptographic technology. It means that not only the technology itself is complex, but the concept behind it is complicated. Because of that, it is very difficult for ordinary people to understand it, and – more important – it has been difficult for many people to use it. The tools and the interface to the blockchain are currently not simple enough. But this is going to be developed more and more. So, people are developing interfaces to the blockchain with a secure but simple approach. I think, because of that, the adoption of the technology will increase.
So, from now on, blockchain will cover only more and more fields?
The blockchain is really important. One thing about the blockchain is decentralization.
I think of it as an organic, decentralized agile [a method of project management used for software development – ed.]. It’s not the normal, centralized standardization waterfall [different method of project management – ed.]. Because of that, the blockchain will not develop like almost every other technology.
Can blockchain be replaced with something even better? With different, more accessible technology?
Do you have a bank account?
Do you have a bank account?
And you got online banking?
When you’re logging to the online banking account, what technology is the bank using?
I don’t know.
And you don’t care. That’s exactly what’s going to happen to the blockchain. In these sorts of environments, we’re looking at the blockchain in terms of solving problems that currently exist. For the users, in the future, they won’t care whether it is blockchain or not.
Let’s jump into STOs (Security Token Offerings). Are they the best way to raise funds?
There is a number of options for capital raising. One of them is VC [venture capitals – ed.]. One of them is STO. One of them is ICO (Initial Coin Offering). I believe STO is a sustainable solution because they offer investor’s protection, and as a result, you are more likely to raise money from reputable investors. The current immaturity with STOs is that there is no secondary market. It means that once you buy it, you can’t trade it on a secondary market. I think that problem will be solved within two years. When that problem is addressed,
So, STOs are here to stay? Do they just need to develop themselves? Won’t they share the fate of ICOs?
STOs are much more versatile than ICOs. STO can be designed to mimic any financial instrument.
Yes, any: a bond, a stock, a share, etc. So, an STO is a really versatile instrument. Sure, the technology needs to be developed a little bit more, because in those [bonds, stocks, etc. -ed.] you have much more insurance. You have things like the listing of the obligations and the rights, and you also have the transfer of the rights. When you transfer rights, you’ve got a transfer to another recognized person, who is going through KYC [Know Your Customer – ed.] and AML [Anti-Money Laundering – ed.] protocols.
The difficulties are, that current securities law does not allow for a transfer of rights without notarization. And that is one of the key problems with STOs today.
The real problem is in regulation?
The problem is that regulations currently demand a centralized register. So, we have CSDs [a Central Securities Depository – ed.] for share sales. For bonds, we don’t have it. For options, we don’t have it. It is only for shares. If you’re using an STO to replace a share, then you got a problem. If you use an STO as a bond or option, it’s easy. It has a standing coupon rate, and maturity rate is very easy to establish.
STO isn’t for only one thing, but it is for many.
Yes, it is the ultimate solution. Any financial instrument, at least under European director, you can structure and design with an STO. That makes it so interesting.
Dr. Mervyn G. Maistry – Founder & CEO of Konfidio Blockchain Venture Studio and founder of Kintaro Capital. Former COO of Deutsche Bank Analytics & Information Services and advisor of George Soros Open Society Foundation. He gives speeches about usage and future of the blockchain technology across the whole world.