BeInCrypto had the chance to take a seat down with Ilya Volkov, CEO and co-founder of YouHodler, a Swiss and EU-based Crypto FinTech firm. YouHodler gained recognition for its crypto lending, borrowing, and yield companies, which cater to customers trying to amplify their idle crypto holdings for varied buying and selling methods.
Throughout our dialog on the Web3 Banking Symposium in Lugano, Volkov shared his philosophy behind constructing a lean, self-sustaining firm within the crypto house, in addition to his ideas on the way forward for blockchain and crypto’s position in conventional monetary programs. From the challenges of integrating decentralized finance (DeFi) with legacy banking constructions to how YouHodler is pushing the envelope with new applied sciences, this interview provides worthwhile insights into one of many business’s most dynamic leaders.
Ilya Volkov on Constructing YouHodler With out Exterior Funding: How Private Values and Beliefs Formed the Journey
It was all the time on my thoughts and the minds of my companions that we would have liked to make use of a lean method. The good thing about this method is definitely quite simple. Should you concentrate on a lean method, you concentrate on effectivity.
Which means you construct merchandise that can be welcomed by your clients, and clients will vote with cash on your merchandise.
Once you evaluate this method to others within the house, particularly between 2017–2018, the distinction is obvious. Many corporations raised giant sums of cash by means of ICOs, and whereas not all of them wasted or misused these funds, a major quantity did. It was simple cash and simply as simple to spend.
So the cash was invested in questionable advertising and marketing channels and all types of influencers, and really not often did cash go to actual product improvement.
And once more, the important thing factor is that many corporations that raised a whole lot of simple funds weren’t targeted on product improvement. They have been targeted on being pleased with themselves, and that’s why lots of them failed.
Once more, disclaimer, not all of them failed, however sufficient to make the purpose. So that is the good thing about working your organization with a concentrate on effectivity and concentrate on the standard of your merchandise.
There are two downsides, truly. So the primary one is that if, like, in a couple of months after the launch of your organization, you may have tens of thousands and thousands of cash raised by means of ICO or some VCs. After all, you possibly can instantly put money into every thing, together with advertising and marketing, which is essential. Advertising and marketing could be very costly within the digital space.
Truly, it’s fascinating that these days, digital channels are dearer in comparison with conventional, offline channels, and good corporations who raised some huge cash received a giant push at first. I might not point out names, however I imagine some good examples of corporations that raised tens of thousands and thousands by means of ICOs, and now they’re fairly good, they usually hold, hold working. I can solely say bravo to them. So the primary profit for them is a fast good begin.
The second profit of getting exterior assist, notably when collaborating with top-tier VCs relatively than by means of ICOs, is entry to actual experience. Once you work with extremely skilled, VC-focused companies, you may have some extra experience. I can listing a couple of VCs like a16z. They’re very good guys with their very own concentrate on effectivity.
So, if you happen to work with professionals like them, you get the good thing about accessing a information base and a wide selection of market experience. However after all, you too can lose your freedom.
After years of arduous work, I believe we nonetheless have an opportunity to start out working with some good companions. However on one other stage, we aren’t a startup anymore. We’re perhaps greater than scaled up. And yeah, we’re open to working with good, strategic buyers. However once more, the important thing profit nonetheless is that you’ve your concentrate on the standard of merchandise, and you’ve got your focus in your clients who’re paying cash for actual worth, not simply hype or empty tokens.
Promising Crypto Applied sciences and YouHodler’s Function in Shaping the Way forward for Blockchain
There are various totally different sorts of dimensions and totally different sorts of use instances in our house. So, investments in buying and selling, funds, and shops of worth, proper? As for investments and buying and selling, we concentrate on itemizing all worthwhile cash and tokens for getting, promoting, lending/borrowing, and buying and selling. Our market division is all the time maintaining with the markets, with all of the tendencies.
After all, we’ve got all of the classics, and we’re following with one thing new, like the newest instance is the TRUMP coin. We monitored intently what was taking place in the marketplace, and we launched the Trump token inside 24 hours after the announcement of Trump. We received a whole lot of appreciation from our clients as a result of they have been pleased to commerce with it.
There are a whole lot of questions on the way forward for tokens like TRUMP, however anyway, it’s one thing very fascinating and really partaking for patrons. So, strategically pondering, I imagine that we are going to haven’t simply cryptocurrencies on our platform but additionally some conventional property within the mid-term future based mostly on partnerships with different monetary establishments.
So, we’re crypto native, however we’re partnering with conventional establishments. And really, the occasion – Web3 Banking Symposium in Lugano, the place we’re talking is an effective illustration of collaborations, of crypto and conventional establishments. So, we’ll hold including crypto and even some conventional devices to the buying and selling and funding half. That is primary; quantity two for our strategic focus is funds.
We make investments quite a bit in all pockets and cost infrastructure for purposes. With us, you will get your devoted checking account opened in your identify contained in the platform. After all, we depend on our banking companions to offer the service. You may hyperlink your playing cards, Visa and MasterCard, you possibly can simply prime up and withdraw with only one click on, and you’ve got your cash in your card, to pay your payments, purchase groceries, and all these sorts of every-day issues.
We’re on the ultimate, I might say, stage of releasing our personal card, a YouHodler branded card. To simplify the person expertise much more, after all, we’ve got every kind of banking protocols built-in into the platform. We do all that with a purpose to assist a 360-degree method for cost round crypto.
Additionally, we’re investing in some new options. And I’m so pleased that we’re one of many first members of the Common Cash Deal with (UMA) community constructed on Lightspark in Europe and Switzerland. That is an incredible characteristic. I may give you a couple of hints.
Lightspark is an organization that was created by tier-one entrepreneurs from corporations like PayPal, and Fb. David Marcos, Lightspark’s founder and CEO, is PayPal’s former president and Meta’s ex-High Supervisor. He introduced into Lightspark his experience in constructing PayPal and Fb’s cost options.
Do you bear in mind the well-known story of Libra and Diem? They discovered quite a bit from it. So, they launched Common Cash or UMA. That is just like PayPal, but it surely’s the following stage. It’s a easy, human-readable handle, just like e mail, however related to any type of cash – crypto or fiat. You may ship any cash and in a matter of seconds, your recipient will get his or her most popular forex.
So, with us, you should use this handle for crypto, any crypto, and Fiat. You need to use Euro, {Dollars}, British kilos, and pesos. Should you’d prefer to ship cash to another person, you merely ask your mate about his or her handle.
And in your aspect, let’s say you despatched Euro. However on their aspect, in the event that they’re, let’s say, in the US, they obtain USD. And the wonder is that within the US, they’ll even obtain it in USD, actually to their checking account in any financial institution in the US.
And it really works with totally different nations. So we’re caring for Switzerland and the European Union, and different members of the community care for different nations. We’ve companions in Argentina, the Philippines, and Turkey.
Once you ship cash, as an example euro on our aspect, it’s being transformed immediately to Bitcoin. It’s being transferred utilizing Bitcoin Lightning Community, and on the associate aspect, US, Argentina, no matter, it’s been transformed to native forex instantly contained in the platform.
So that you don’t want SWIFT or protocols, another financial institution protocols. You don’t want any form of different cost trails. You don’t even want stablecoins as a result of Bitcoin is used as a cost rail right here.
And due to the Lightning community, it occurs simply in a matter of milliseconds and seconds. The common time for the transaction is three seconds. Sounds wonderful, and we’ve got it, and it really works.
We are actually working some testing campaigns like we’re concentrating on, for instance, communities of Filipinos working in Europe. These days, they’re transferring cash utilizing Western Union, or Smart which is clearly costly.
We inform them, like, use us on the European aspect. Three seconds, a small fee, and that’s it. So that is simply an illustration of how devoted we’re to the pushing of, , boundaries of the expertise with once more, a concentrate on key values for the tip person.
YouHodler CEO on Ripple and Cross Border Funds
Again in 2016 or 2017, I used to be a giant fan of Ripple’s thought. It was to problem SWIFT, proper, and I beloved it. The query is, did they handle to problem SWIFT in spite of everything these years?
I don’t suppose so. As an alternative, we’ve got stablecoins, Circle, and Tether, that are mainly coping with the identical subject. We even have UMA concentrating on the thought of cross-border funds.
Coming again to a query about our contribution to that time, we additionally actively take part within the improvement of your complete business.
The market is so huge. As an alternative of competing and preventing with somebody, it’s higher to associate. And that’s why we try to carry collectively totally different corporations, even from totally different websites.
Three years in the past, once I stated I wished to attach banks and crypto corporations, individuals thought I used to be loopy. They informed me it might by no means occur. However It’s taking place now.
Bridging the Hole Between Web3 Anonymity and Conventional Finance’s Regulatory Calls for
There are two elements. One is about anonymity and the oldest level of KYC and AML practices. One other is self-custody. Let’s contact base on each.
So, as for KYC, I believe once we talk about simply frequent individuals, common individuals, common individuals, like we’re. It’s not an issue, truly. So I don’t see any points.
And we’ve got, imagine me, an enormous expertise with the KYC processes and instruments. So we’re talking about 1,000s of individuals coming day-after-day. We don’t see any points with the frequent individuals, as quickly as you may have actually good UI, so when you’ve got a very good answer to add and course of your paperwork, to make selfies and all these sorts of issues, it’s not an issue.
The issue seems with unhealthy actors who’re making an attempt to trick the system. And it’s not nearly huge fraud instances, but it surely’s additionally about some small frauds, like card fraud, for instance. Consider me; there are a whole lot of fraud instances taking place day-after-day in every single place, like thousands and thousands in the marketplace with stolen playing cards, faux identities, and all these sorts of issues.
Should you evaluate the worth of safety and protection from fraud with the complexity of KYC. And if you happen to look from the angle of the everyday center class, KYC will not be an issue.
However once more, we should always focus, and we’re focusing quite a bit on simplification of the UI/UX of our app. So, after all, there may be one other level related to KYC and AML, which is taxes once more.
So it’s not nearly Web3. Individuals have all the time appeared for methods to optimize taxes. If it’s finished legally, no drawback. If it’s finished illegally, that’s not okay.
And that is, once more, not concerning the trick of crypto. That is concerning the state of affairs typically. My level is that crypto will not be a strategy to trick taxation, under no circumstances. If something, money remains to be the best strategy to keep off the radar, proper?
My quick reply is that anonymity will not be an issue, truly, particularly when you may have polished person interfaces.
Once we talk about self-custody, it’s very fascinating as a result of our evaluation exhibits that there are two huge teams of customers: somebody who want to handle keys and somebody who want to have somebody caring for it. Once more, like with conventional banks, you’re relaxed as a result of that if you happen to overlook your password, you possibly can name buyer assist or go to the department, and will probably be mounted.
So the identical habits we see on the crypto aspect, which is okay, in order quickly because the service supplier is reliable, it’s completely fantastic. That’s why it’s necessary to have regulated service suppliers who’re serving you with these sorts of issues. Not everybody on this world can care for themselves, proper?
In order that’s why centralized establishments are nonetheless wanted, however after all, there are customers who want to handle their very own property themselves with noncustodial method, which is completely fantastic, and truly, we’re following up with this method. We began as a centralized establishment.
Now, we’re integrating Web3 connectors and pockets connects. It’s not dwell on the platform but, however will probably be obtainable quickly, very quickly. The concept right here could be very easy. We’d like to mix either side.
So, if you happen to’d prefer to nonetheless use your ledger, {hardware} machine, and even MetaMask, that’s fantastic, however in some unspecified time in the future, you should get a mortgage, or in some unspecified time in the future, you should convert your Bitcoin to native forex.
We give you a simple plugin. Click on the button, and also you hyperlink your pockets to our software the place you possibly can pledge crypto and get a mortgage, or you possibly can simply prime up your Visa or MasterCard. So we are actually testing the connector, and it’s fairly promising and by that, I believe we’ll fulfill each teams of people that don’t need to care for their keys and individuals who’d prefer to handle keys by themselves.
YouHodler’s Strategy to Balancing Crypto Anonymity with Conventional Monetary Laws
I can go deeper as a result of, truly, it’s a really fascinating query, once more. So, , it’s like you may have all the time acted quick, to remain compliant with all rules In some instances, they’re skilled. In some instances, they’re following totally different targets.
Simply to provide you an thought, simply in parallel, with our interview, there’s a PwC keynote taking place on the stage of the Web3 Banking Symposium , they usually’re talking now about CARF (Crypto-Asset Reporting Framework).
It’s a new crypto asset reporting normal that’s going to be applied within the European Union in 2026. In order that implies that, like, now we’ve got to be compliant with MiCA regulation, and we’re at, like, ultimate levels of coping with MiCA and DORA, and now regulators dropped CARF, so that you all the time have to speculate quite a bit following up with this, all these form of issues.
So, the quick reply to your query is that it’s not about discovering an ideal steadiness as a result of you may have all the time stored your programs updated.
We’ve our head workplace in Switzerland. We’ve a number of authorizations and licenses within the European Union.
Additionally, we’re absolutely dedicated to MiCA compliance and have invested quite a bit on this MiCA method. Our European crew is rising. We’ve some extensions, for instance, we’ve got our authorization in Argentina to work with Latin American markets. And, after all, we’ve got some plans for different markets.
Even with frameworks like MiCA, you continue to must observe up with totally different areas, and we do this. And it’s not simple. However that is the fact, proper?
How Growing Blockchain Laws are Shaping YouHodler’s Future and the Crypto Trade
Within the morning, on the Symposium, I offered one slide with easy charts just like the complexity of rules and their significance for the economic system. And we see that nations are looking for their place there and making an attempt to compete, compete with one another.
Let’s take the US, for example.
A yr in the past, we noticed an absolutively restrictive, loopy setting, with a whole lot of lawsuits. However, the monetary sector, the monetary expertise sector, and the banking sector have been all the time essential to the US.
The Trump administration is making an attempt to decontrol the business to assist the significance of the business. However on the similar time, the European Union determined to take a heavy method to regulation with MiCA.
So, I used to be saying that totally different areas and totally different nations are looking for a strategy to regulate crypto. Some try to decontrol and simplify with a purpose to improve worth for the economic system. Others try to control to defend finish customers closely.
We’re in Switzerland, and Switzerland is all the time good find a steadiness, and up to now, it’s balanced, and I hope will probably be balanced the identical manner sooner or later.
After all, perhaps blockchain gained’t return to the best way it was 10 years in the past, the Wild West days of whole freedom. However that is all the time how each business evolves.
Particularly once we talk about monetary markets. Are you able to identify me any of the monetary merchandise with out regulation? No, and it was all the time like that, like bank cards.
You bear in mind earlier than, bank cards have been based mostly on paper slips. It was not likely regulated, and that’s why they have been a whole lot of fraud, proper? Then regulation got here in, fraud went down, and but we nonetheless use playing cards in the present day. It’s simply the pure evolution of any main monetary product. And that brings me again to my earlier level.
So once we talk about common customers, not unhealthy actors, that is fantastic as quickly as UI is sweet, however UI goes to be good simply because we’ve got a whole lot of aspect instruments, even ChatGPT, we simply talked about, proper? AI helps to simplify interfaces. AI helps to work together with totally different programs.
Plus, I imagine there may be one that can have some digital identities. There can be no must resubmit your KYC on each single platform. So, once more, again to your query. Sure, it won’t be the identical as earlier than, with no Wild West, however nonetheless, will probably be fairly fantastic for absolutely the majority of customers, and the businesses can be specializing in the simplicity of UI.
Ilya Volkov Discusses How Crypto is Remodeling Conventional Finance (TradFi) and What the Future Holds
As you possibly can see, we have already got a whole lot of conventional banks actively working within the crypto house. I simply introduced this instance in the present day on stage. On the final yr’s Symposium was an instance from one of many oldest state-owned Swiss banks, one of many Swiss Cantonal Banks, with round 200 years of historical past.
They’ve determined to introduce crypto as a result of they’ve two teams of shoppers, the rich conventional clients and the younger and adventurous clients, they usually stated that rich conventional clients have already invested in every thing.
So that they invested in gold, they invested in several sorts of commodities. They already purchased Tesla shares, Apple shares, and Google shares, all high-tech issues, and now they’re demanding crypto as a result of it’s clear that it’s the following step.
And the financial institution informed us that it was clear that had they not launched crypto, they’d have misplaced the normal viewers that had been banking with them for the final 200 years,
On the opposite aspect, younger clients.
They have been saying that it’s clear that if they don’t supply their younger clients crypto, they’ll merely not come. So that is the most effective clarification of why conventional establishments are becoming a member of the crypto house.
One can say that it’ll improve competitors for corporations like us, however I might say no, as a result of it brings extra alternatives for partnerships. FinTech corporations are all the time one step forward, as we’re exploring some new horizons, and we are able to create one thing new that’s afterward being adopted by conventional establishments. Such collaboration is totally fantastic.
As I stated, blockchain will not be the Wild Wild West anymore, however there’ll nonetheless be one thing new as a result of corporations like us are all the time engaged on pushing the boundaries. So, it’s a continuing evolution course of.
