058. The Case for Stablecoins and Crypto Asset Management with Alon Muroch from Blox

Alon Muroch, CEO at Blox, shares with me the fact that one great thing about crypto is that there is no barrier to entry. Anyone with a computer can start using it. This, he explains is opposite to the traditional financial world where the cost or barrier to entry keeps rising.

We have a thought-provoking conversation around stablecoins, crypto assets and security tokens.

In comparing Bitcoin to Ethereum, he notes advantages and disadvantages of each. Bitcoin is more decentralized and not dependent on a CEO or founder. Whereas, Ethereum is the leading smart contract platform and the public identifies the project with Vitalik Buterin who is seen as a “driving force behind the scenes” and we’re still used to identifying projects with their founder. Would we have seen Apple in the same with without learning about Steve Jobs? What about Amazon without Jeff Bezos or Tesla without Elon Musk?

When we get into the idea of stablecoins, Alon has some very strong opinions. 

“I think that stablecoins are probably the biggest threat to traditional banking, more than anything else we saw in the in the blockchain space. I don't think that Bitcoin is competing with the dollar.”

He explains that, before stablecoins, the two main advantages that fiat currency have had over crypto have been:

1. Fiat allows you to hedge against crypto
2. Fiat allows companies to pay salaries

Stablecoins can do both of these things.

And, given that many banks are unwilling or unable to work with crypto at all or with crypto companies, now crypto companies can work exclusively in crypto with a stable crypto for hedging and for paying out salaries.

Alon essentially describes this new economic possibility where fiat isn’t needed by large companies who want to deal exclusively in crypto.

Alon carries this idea even further, by asking me to look at the younger generation as an example. Teens who are beginning to build their financial future now will have an alternative., he explains. Young people starting out, can choose to manage their entire financial lives outside of the traditional banking system.

He talks about crypto assets as a resource -- as a currency, but also as a technology that now needs a new system of management. Traditional systems won’t cut it. Now, financial teams, development teams, management teams and compliance teams will all be interconnected and Blox helps with crypto companies new interconnectedness.

I asked Alon about Security Tokens, and from his perspective as a technologist, his biggest question around the idea of security tokens is why they would need to exist on a blockchain.