QUOINE PARTNERS WITH THE GIBRALTAR BLOCKCHAIN EXCHANGE | Interview with Mike Kayamori and Nick Cowan Recap

I am extremely excited today and if you are a subscriber of my channel you are definitely in for a treat. Today we will hear a different viewpoints and perspectives from 2 CEOs leading the way in innovation and development of financial services and technology.

Without further ado, i’d like to introduce Mr. Nick Cowan, the CEO of the Gibraltar Stock Exchange and Mike Kayamori, the CEO of QUOINE, which is a leading fintech company that provides trading exchange and new-generation financial services powered by the blockchain so thank you so much!

Anthony: My first question is: There’s typically 5 stages to consumer adoption (Innovators, Early Adopters, Early Majority, Late Majority, Laggards). There seems to be a make-or-break moment that’s called the chasm. There was a time you saw BlackBerries all over the place and then they really quickly disappeared, which showed that they failed to pass the chasm or the make-or-break moment. I just wanted to see where you see us currently with these newer technologies?

Mike: We just started QASH ICO. When i started 3 and half year ago. I think we are still very early. We are right at the cusp of mass adoption so i think it’s one of the most exciting times right now.

Nick: i think Mike is absolutely right and I agree. I think if we look at the current token space, you will start to see that it’s going mainstream despite chasms and the government is going to follow.

A: I hope it will be the way and its extremely confirming to hear from two leading experts. This leads me to my next question which is about crossing the chasm and what it takes to continue moving forwards. I see that you both have formed a partnership which I think is crucial to the development of these technologies. However, many people think that you are more like competitors since you offer very similar products. How would this partnership work out to benefit them both and what will it entail.

N: If you look at the big picture, there’s an adoption by both property institutions and corporate where we see a mainstream drive towards acceptability of distributed ledger technology etc so we think on a 10-year view, the tokenization of economies is happening. As part of that what our obligation and our duty is together with Mike, we will try to bring some governance and best practices to this market. You know the world is an enormous place. This is the start of a mainstream cycle then you know we want to do everything we can to bring liquidity and best practices to the community. Somebody once told me don’t reinvent the wheel and QUOINE have a proven fantastic business model. Mike and I share the same core values. We can bring some governance and qualities and investor protection mechanisms to this market that’s only going to grow the community.

A: I hope that sums up a lot of questions for anyone that was uncertain or on the fence regarding the partnership and what it actually entailed. Hopefully now you have a deeper understanding of how crucial these partnerships are and how they can be advantageous to both parties. Now thinking a bit about technology and the QUOINE development team I see that the team is going to develop a blockchain for the QASH token is that going to be in 2019?

Mike: That is correct but if I can go back to what Nick just mentioned. If you look at it from the bird’s eye view, we are all stewards of this new crypto token economy. When you look at it from a clear distinction standpoint, there are people who are pro-regulation and there are people who are anti-regulation. They’re more ideology driven towards a free society and those are the people who really built and supported the initial growth of cryptocurrency and specifically Bitcoi. Now as Nick mentioned, it’s going mainstream, that means it needs to be safe and secure, there needs to be governance, there needs to be compliance. So that is the direction that the market needs to go or else, they will continue to be a niche industry. When you look at it from that perspective we’re all part of the same ecosystem and we need to work together. When you look at stock markets and exchanges worldwide, there are many and they’re all starting to consolidate. We believe that we have the best technology the best platform and we want to build that ecosystem and it was natural for us to work with Gibraltar.

A: Yeah I think that’s great I mean what Nick said as well about not reinventing the wheel and taking on the technology. You guys already have a great team in place to develop. This fragile moment in time is also groundbreaking and revolutionary. It’s people who need to understand that regulation will give the crypto world some legitimacy and not to be so scared where you know you’re either pro regulation or no regulation

M: Actually anytime someone touches a store of value or when it’s a medium of exchange, no government is going to leave it free. There’s gonna be some kind of regulation and it’s a good thing. That means it’s becoming mainstream so you should embrace it and you should take advantage of that and that’s how we look at it.

A: And with Nick you have the upcoming Rock ICO and I think that would be a good way into talking about the sponsorships and how all those different metrics will work. It looked like you guys are going after two main things, the ICO platform and the exchange as well

N: Yeah I think it ties into your last question you know. I think no we’re not going to evolve into a mainstream market until you know we can demonstrate that there are some core values and best practices in place. I think if you look at the volatility over the last week, it’s a very good example as the market matures and you have institutional accounts starting to really get involved in this market. I think a lot of the volatility will probably settle down as the market matures and that’s a really important thing because at the moment there is definitely a huge degree of risk particularly for people who might not really understand the difference between risk management and money management and all those sorts of things. I think these actually are vital.

What we’re trying to do is to say we can actually play a small part in trying to help that revolution and I think it starts with the fundamental core. We need to try to help issuers get access to funds. And they get access to funds by meeting contributors. We want to be able to bring those two parties together into a secure and trusted marketplace and that really is the kind of driver here. I think from the utility token space, if we can bring best practices to that market space in terms of having a sponsor firm being able to take an issuer through the process and introduce them to a clear pool of contributors I think that’s a great first start.

I think secondly as the market space is maturing rapidly, a FinTech company decides in three years time to maybe release a little bit of equity, they should able to offer that same service for us as we go from GBX the utility token exchange to GSX which effectively will be able to have tokenized securities on the same exchange.

A: Now with those two separate exchanges that you have, to my understanding, aren’t you guys more of fund managers stock exchange as you mainly focus more on funds and then offer them through GSX based on the tokens

M: No, I think there’s a number of things we can do. We were expanding at a rate at which they were happy to come on board with us because we were the first stock exchange in Gibraltar and they had never regulated a stock exchange. We started in the funds business then went into fixed income securities with the first bitcoin asset-backed security. Then we go to the equities business. We were looking at the archaic redundant technology that was on offer and we thought the token space sale is absolutely exploding. Why don’t we try to actually do something innovative as opposed to being a bit of a follower? That was our thought process and that led us to look at the token sale space. I think this is a world of opportunities.

In fact one of the things which we’re excited about is we can help issuers get access to funds and we can help investors get access to those opportunities whether it’s utility or security in a safe marketplace. That’s only going help everybody

A: Yeah I definitely agree. I loved the direction you guys are going. With Mike and this is kind of for both of you, looking back into regulation and talking about the SEC, it just makes me think about the overall exposure the US market has. We saw that China discontinued their ICO platforms or they deregulated them and then forced them to go to places like Singapore and Japan. Do you see that’s just happening like a currency outflow in a way of innovations are now going to be open to these countries that are more open to the innovation of technology

M: yeah I mean it was always the case right? Especially in the digital age, innovation doesn’t have boundaries and that is one of the beauty of innovation as well where talent is also borderless. Also your customer base is going to be the entire world so how do you try to regulate a certain industry or a certain business model within just one country? Especially when it’s completely all digital. That’s why when you look at the existing utility based ICOs where you issue your tokens which is digital, you collect your funds or or purchasers via Bitcoin or Ethereum or these tokens that’s also digital. It’s very difficult for one country to try to regulate that at each country level. With that said, there’s already existing laws around securities, around equities. Last year 2017 and this year, it’s all around the utility token but I think as Nick mentioned there’s gonna be a security token, equity token or securitized products that will come into the market as well. The countries or the governments or the entities that are innovative, that are progressive are the ones that are actually going to embrace innovation.

A: Yeah I completely agree I think this is a very exciting time to be a part of it all and watch it all develop and unfold. It seems like they have a lot of questions regarding the ROCK token and the QASH token being that they’re very similar. They’ll coexist on two separate exchanges. I think that one might outshine the other. I just wanted to get some clarification on what’s the strategy for both of them coexisting on separate exchanges.

N: Yeah the rock token has a number of aspects to the utility and I’ll answer the first question then Mike can take over about QASH.

We wanted to try to create a really strong community based on our core to protect the integrity of the market. You can read about them in our white paper. The Rock token is also about accessibility and if you hold a thousand dollars worth of Rock token then what will happen is you will get access to that first twenty four hour of every token that comes through our platform as the public sale kicks off and that’s a really valuable utility.

In terms of QASH, we see that strategically as a signal of the importance of our relationship with QUOINE. Secondly, the way GBX works is listing fees and sponsor fees are payable only in RKT. The trading fees are payable in any currency but if you pay in RKT or QASH, you get basically a hefty discount and so for us we wanted to open up not just our clients to using QASH but we wanted to open up QUOINE clients to get access to a marketplace over here. As this goes mainstream, you know Mike could be talking in two years time to Sony and Sony are interested in doing some type of token and Mike says oh by the way have you thought about a dual listing on our partner GBX or GSX and then you’ve introduced Sony to a global marketplace whether they’re paying in QASH or RKT to settle their trading fees.

What important is the community is just suddenly grown exponentially larger and that’s what this is all about.

M: For example we don’t have any banking relationships in Europe. We don’t have any subsidiary or entity there either for a lot of our European customers. They always say it’s difficult to wire fiat and by the way that’s why I think there’s a big opportunity for crypto because it’s still a fiat dominated worldwide economy we don’t have any access to Europe so it’s almost natural for us to find a partner that we fundamentally share common vision common goals. So it was natural for us to work together.

As Nick mentioned we’re already talking to large Japanese companies who are interested in doing an ICO. They’re interested in us not because that we’re regulated and licensed in Japan but we can give them access to global listing and global offering and it’s almost natural for us to bring that to GBX because Japan was the first country at a nation level to regulate cryptocurrency and also they embrace ICOs as well.

So for a Japanese company they want to raise capital and they want to be listed globally and that’s how we work with GBX as well

N: I think it’s also worth adding that you know the crossover of crypto to traditional I think is absolutely vital to to acknowledge. If we were to think of ourselves as a working example. I had tried in the Q4 17 to run around the world trying to sell equity in GSX I can tell you it would take me a year and I have no idea how I would have got on. I think what’s happened with what we’ve done as a company is we’ve now been introduced to a whole new world of clients which is a acutely exciting.

A: yeah I definitely love what you guys are doing. Two countries coming together to raise the standard and set the bar for years to come and really pave the way for new innovation. Do you guys think that this market will innovate and move faster than you even anticipated.

M: A year ago today no one didn’t really understand ICO. A year from now, no one knows what kind of innovation might happen. From that perspective, it’s a pretty amazing environment where the community and the service provider, the token issuers and the token buyers were all part of the innovation because they fund through buying the token. Token issuer is going to build a service based on the capital that they raise so this is an entirely new way of building a business, building an industry, and building an entire sector where the community participate in building something innovative.

If I say I knew what’s gonna happen it a year from now or five years from now or ten years from now, I would be lying. What I know is the improvement speed, the innovation cycle is all gonna be shortened so it’s exciting time and we’re actually fortunate and honored to be part of that

A: Now Nick I know you’re a professional trader I was wondering if I could pick your brain and get your take on what we’re seeing across the board. Almost everything is dropping by 50 to 60 percent.

N: I guess people paying for Christmas right? I think what happens in every market cycle and the way the way I’ve evolved as a trader is you know, you’re looking for market movements and I think we’re in a we’re in a pretty nascent market in crypto. I think somebody asked me at a conference in probably November what would I do currently and I said look at the moment it’s a one-way bet and everything is basically going up so what you’re looking for now is probably some type of climactic action and that’s actually probably what we’ve just seen climactic action followed by accumulation so I think the correction from 20,000 to 11,000 or whatever the move was or from, you know ethereum from 300 to 1,400 back down to 750. That has the signs to me of a bit of climactic action and I suspect there’s been a large amount of accumulation over the last few days.

I believe the outlook for everything is positive because the community are going to find solutions

I think at the moment people are cashing in and taking profits, I think it’s a present opportunities. Again it comes back to the more people that come in, the more institutions that come in, the greater the liquidity that grows, the less volatility you will see.

A: Maybe the QASH blockchain will be the next Ethereum?

M: The first mover is not always the most successful or the most dominant it’s the follower who comes with a better product. Google was never the first search engine, Facebook wasn’t the first social network. Maybe Amazon was the first e-commerce but they were the first and the fastest right? So when you look at that there’s always going to be disruptive innovation. Being first is not always the best.

One of the things that people are saying is that 2017 was a year of ICOs and 2018 is the year of forks. It’s actually easy to do a fork if you have a supporting minor who can help you but again when you look at it from that perspective, there is always newer, better technology. When we look at the landscape and looking at Bitcoin, Ethereum and any of these blockchains, they were not catering for the financial services. That’s why we were not able to build our exchange on top of a blockchain because there was no way we could achieve the performance, the latency that we wanted. That’s why we are building our QASH blockchain and it might not be a block, it just could be a distributed ledger. We are looking at the best of breed so that the next generation of FinTech companies can use our chain or our DLT to build the best services out there. So there’s always going to be innovation. There’s always going to be disruption. If you can do that internally, you will win.

A: One way I look at it is there’s only so many talented people on that level and there are so many of these companies. Are you worried that you will run out of talent?

M: Talent is everywhere. Giving that talent the right opportunity? That’s the difficult thing. That’s why a lot of these blockchains or initiatives are opening up their platform to bring in developers who can contribute so that their platform becomes stronger and better. I’m a big believer of the public blockchain because you want people to contribute and make your platform better to continue to improve .

A: And that’s what Nick was saying. I watched in one of his latest videos about the younger kids they’re telling you what to do and that you’re so old and things like that.

M: I think we need a mix. There needs to be the gray hair with experience and knowledge for governance and compliance because that’s where it touches the real world but you also need these fresh minds, these hyper performing developers, mathematicians, physicists. We need both.

A: It’s a hard mix too right? You know being able to adapt to the market that doesn’t stop and then keep security in place and try to have it open source in some aspect to allow the whole community to accelerate.

M: That’s why you need a shared vision, you need a common mission.

A: What do you think will stabilize the crypto market?

N: I believe the more participants that come into the market and the more products you have, then the greater the liquidity pools. I think Mike is absolutely right. Our job is to try to provide the stewardship to allow innovation to evolve beautifully. That’s what we bring to the table, being able to get regulators to understand what is happening to get governments to try to understand how to enhance this and not be scared of it then we’re filling our role. I’ve always tried to hire people smarter than me which for me is extremely easy.

A: Now talking about adding more participants and exposure in the market, I have questions from the community wanting to know if the Rock token is going to be listed on more than just the GBX and QUOINE exchanges?

N: During the public sale obviously we don’t necessarily want to talk too much about listing because we want to focus on utility but as of day one we’re on QUOINE. We want to provide that functionality utility from day one. We will consider listing RKT on other exchanges after the public sale ends. I mean the answer is probably. But at the moment we haven’t talked to anybody other than QUOINE. We know we will look at it and a lot of the things come from client solutions but we’re very happy with our current position.

A: Along with Gibraltar and Japan, you were speaking about setting up a meeting with the SEC and getting them to understand your platform?

N: yeah I don’t think my job is to help the SEC understand anything, I think they’ll understand. We have regulators now talking to us and our government and our regulator. We can say as one of the first jurisdictions in the world to have have framework for licensing and regulating DLT and hopefully one of the first licensed and regulated exchanges in the EU to have a sponsor based and listing rules based solution for token issuer, we’re trying to actually take the lead here in terms of providing our investors protection. Our documents and everything is going to be on our website so that there are no secrets there but I think if we can make other regulators comfortable then we could have those conversations.

One of the core values of QUOINE is they are licensed and regulated you know and that is our mission as Gibraltar PLC to do whatever we can do to basically help any regulators that want to know more. We’re completely at their disposal

A: Considering both of your companies will be developing platforms that will help ICOs come to market and find the liquidity they need for development, I was wondering Mike you said earlier is this year when ICOs become legit.

M: Correct! Absolutely! I think it’s also gonna be the start of equity token ICOs. When you look at the ICOs that are happening yes they claim that they are utility tokens but when you look at the utility element, it is very limited.

So we there’s there’s a little bit of this gray area there, I think there’s gonna be a little more clarity around utility tokens and securities or equity tokens. The progressive governments or regulators will be able to embrace that so I think 2018 is going to be a year of progression for the crypto token economy but it’s gonna be much more clearer. I think Nick mentioned you don’t need to educate the SEC but we talk with the Japan FSA almost every week. When you actually look at it, we are actually over regulated. What the problem right now is they’re trying to put up a square peg in a round hole. They’re trying to put an entire new industry into an existing regulation which doesn’t make sense in most cases. That’s why Gibraltar came up with DLT. They’re putting a new framework. It’s regulated in a traditional sense but needs to be thought a little differently so we continue to work with the Japanese regulators to show them what’s actually happening in the world.

A: I completely agree and I love that angle. What kind of capital do you think we’re going to see this year?

We need more participants. Until recently, it was more of the ideology driven people. Right now institutional investors are coming in the crypto market. That said we need a nice balance of retail and institution. We also need product and features as well. The equity market has been around hundreds of years. The crypto market just started so it’s important that CME CBOE Nasdaq all come in. It’s important that we have a certain amount of leverage and other derivatives products. All these things will be necessary.

I actually think when you look at Generation X and the younger generations, the Millennials, I think the market could be bigger than the equities market since it’s easier for them to understand. It’s new, it’s shiny. It’s something that they can resonate with. It’s not these old companies anymore, it’s these new and emerging technologies.

When you talk to the younger Japanese people or even when you go to Korea, the younger generation are not even interested in bonds. They’re not interested in equities they’re interested in cryptocurrencies and tokens. I used to look at cryptocurrency as a sub-segment of the entire financial industry. Now I actually think if done right it could be the main segment.

Nick: If you look at this whole new universe of people coming into the market, the Millennials. If they are currently owners of utility tokens, I don’t think they will cash in their utility tokens and open an account with a brokerage. What they’re interested in is actually buying equity in the same company which they own the utility token from and I think that will be the cycle we go through. The more participants come in, the more margin offerings, the easier you are going to get the millenials to be involved in the broader market.

What has happened over the last couple of years has completely transforms the way fintechs and startups and innovative people can get access to funds to make a difference. This is just going to be a phenomenal thing over the next five years and those big exchanges and particularly futures guys are going to be quite vital to the to the adoption.

A: How will that work?

N: Well my view is that a future is me making a promise to you that I’m going to deliver you something in the future right? That’s the same with an option. You’re going to give me a premium to have the right over me to do something. So I think you know it’s it’s a variation on a very similar theme. My view is if I want to short ethereum today where do I go? I know my public sale is gonna give me some ethereum. My public sale is in the next three weeks so can I go and hedge that today because right now when the price is going from 1400 to 700 to 1050 I’m sitting there thinking what am i going to do with my ethereum on that day if it’s flying around 25%. Okay so if I had that ability today’s the perhaps stick out a fourth to lock in and absolutely know that I’m gonna get the money that I’m looking to raise I would I would be looking at that market and whether that was buying a book, shorting a call or doing something in the swap market, that’s what you need to be able to get. That’s the reason for that market developing.

A: What blew my mind with QUOINE so much is the different prime brokerage offerings you guys are giving that we’re gonna see in the future. I know you guys are both big CEOs and super busy and is there anything you wanted to add in that maybe I didn’t pinpoint on and we could let the new traders out there know about the Rock token and any new developments coming out of QUOINE? Did you want to add anything about the sponsors and how that’s going to work or just wait for it to come out on Friday

N: Yes so the step one for us is we’re gonna release our sponsor code and we’re hoping that’s gonna be released tomorrow and that’ll be published on our GPX website and that allows applicants globally (if they want to to download and fill in the application form and apply to GBX) to be a sponsor firm. Then we’ll be releasing the listing rules for token issuers in the next couple of weeks. And then we will look to test and get the QUOINE techs in for hopefully late March early April.

Meanwhile, we’ve got the RKT public sale which is underway. We’re in white listing at the moment and then in early Feb we will basically move to our public sale and we are absolutely hugely excited about that. And then RKT will start to be traded on QUOINE in the third, forth week of Feb. I will let Mike sum it up.

I was actually talking with the guys yesterday as well that our customer support or ops team needs to increase like tenfold. We are needing hundreds of people because there is so much customer requests on many things so other than performance platform, foundation, your operations or customer support really needs to be top-notch because the amount of people coming in is amazing.

What we want to focus on is to make sure that we have a wonderful amazing and successful Rock token public sale. This is actually one of our first opportunities to do real ICO together.

On our QRYPTOS platform, we’re gonna have a self-service ICO listing platform. But for the ones that we really work together on this is gonna be your first one. Part of this is we’re going to work on the GBS platform as well. So those are the two key milestones that we are working on and it’s exciting times.

I actually want to know the details as well and I actually told Nick how can I participate on the public sale because there’s probably going to be a cap, there’s no real opportunity to own significant amount but im waiting to hear the details

A: Isn’t it that RKT tokens will be releasing for the first 24 hours to your users and then it will be on QUOINE? I mean, what if it sells out in the first 24 hours?

N: We’ve got whitelisting now and then there’ll be a 24 hour window for everybody cleared for that first period of the public sale. And then what we’ll do is we’ll set a cap for the maximum subscription during that first 24 hours. Now if there’s any left then it goes to the public the following day and this time, there’s no cap. It will be first-come first-served and if there’s any left then obviously that would be your second opportunity. In fact we’re actually saying to the people you know get whitelisted because you’ll get potentially two bites at the Apple. That’s our process. We’re absolutely just ecstatic that that’s being done through Mike and that gives us access to his expertise, his client base, a whole new market and that’s just absolutely brilliant because it’s introducing those people to us as well so this is just an absolute win-win.

A: How did you guys originally connect?

M: Well I think we were destined to meet but my former boss introduced us. These things just find their ways right? If you’re in the same space and share the same vision you’re destined to meet.

A: I’m not surprised to hear that it worked that way and that’s why I’m just so fortunate to be able to get to talk to both. I mean you guys are really like heroes to me

M: We already have hundreds of thousands of users who are KYC cleared so we’re actually asking or advising our users to sign up with GBX as well. This way because of the cap, you can potentially get in on both of the sales or you can still miss out on both as well because there’s not a lot that goes for public sales. It’s an opportunity for our users who are already white-listed or kyc clear to sign up with GBX beforehand so that they have an opportunity.

A: Well this is sports to me in a way just sitting back and watching everything unfold. I really appreciate you both spending time to walk me through this and educate our viewers a bit. I hope I can get back to you guys in about six months and follow up on the developments and how everything went through. I had a great time talking to you guys

N: Thanks for being a great host!