Financial Services: Blockchain-Based And Decentralized

The idea that blockchain can be divorced from the crypto realm and used to trade and store assets is quickly gaining, well, currency.

And in one example, Nash — a financial services platform registered in Liechtenstein — looks to provide a funds management service tied to digital wallets that will help users create and operate accounts across several blockchains while retaining custody of their assets.

To that end, Fabio Canesin, co-founder and lead developer of Nash, said that among the driving forces behind the platform is that idea that blockchain is the infrastructure for digital assets in the future (including currency, securities and other holdings).

Blockchain for Trading 

Canesin told PYMNTS a decentralized exchange (in beta launch scheduled for the end of this month) is connected to the wallets.

Trading protocols that operate across the blockchain, he said, are non-custodial, which means “sovereignty over your assets. It means keeping your assets yourself, not with someone else. In the traditional financial world, this would mean storing your money in your home, clearly a security issue.” He said, too, there have been several instances where the custodial arrangement has failed holders, citing small banks’ bankruptcies to the financial meltdown of whole countries.

“The main challenge so far has been providing self-custody in a safe and simple way that can rival the best custodial solutions in convenience — and the good news is that we now have mathematics that allows us to have different degrees of custody. Using cryptography, we can secure accounts without learning anything about them and while having no power to control funds,” Canesin told PYMNTS.

Asked about JPMorgan Chase’s recent embrace of blockchain and crypto, he termed it a “big legitimization of the superiority of the technology, but it is a closed network. Major banks will follow, and blockchain will be adopted in trade finance as another technological tool to implement their services and bring higher efficiency, but that is not the end goal for blockchain — decentralized self-custodial assets are.”

The near-term road map for Nash, beyond cryptocurrency trading, is to move to securities (amid smart contracts) as licensing and compliance is achieved for each case. Canesin said the Nash platform allows the firm to display different markets for people at different geolocations. “We will use it to expand our services as allowed and as we progress on licensing,” he said.

On a broader scale, blockchain, he said, allows for speedy and secure transaction settlement on a global scale, a more efficient way of trading securities and other assets beyond today’s limitations of regional exchanges where he said there are “several levels” of bureaucracy that set constraints on trading.

“Blockchain enables us to do things in portfolio management that were not possible before — you can allow professional managers at investment firms to trade your funds without having custody, putting enforceable limits. You can do real-time settlement monitoring and revoke access,” he said of investors.

Blockchain can also benefit the professionals/firms on the other side of the trade, the ones who serve the customers. “There is a lot less risk and red tape,” he told PYMNTS. “Self-custody of portfolios and blockchain access control will allow for an expansion of the market and reduce the required trust between users and services.”

Blockchain, Wallets and Payments

“In payments,” Canesin said of cryptos and wallets, “there is no easy way to spend yet — there are several mobile wallets, but we need a fast integration with legacy networks.” The wallets service “will allow someone to use near-field communication from newer smartphones to do payments.”

The potential for a mobile wallet function, as tied to payments and eCommerce, can lead to “borderless digital money in your pocket,” said Canesin.

He offered the illustration of traveling to Greece and “when paying for the dinner, just scan the QR code or touch the POS terminal to pay and send tip.” If one likes the hotel or a destination on the trip, he said, one can conceivably “invest right there in the digital securities of the business, or buy the land that you have discovered that has great potential … No capital is stopped, your money is always working for you, you keep invested, and do real-time trades to pay, giving you access to your wealth everywhere and anywhere.”

As he put it, “the amount of new information being introduced at borderless markets can greatly improve the access to better returns for investors and the cost of capital for business.”