EXCLUSIVE: ‘Quenching the thirst for crypto’ – Charlie Meraud, Woorton in ‘The Paytech Magazine’

Charlie Meraud, Co-founder and CEO of Paris-based altfi market-maker Woorton, wants to see digital assets go mainstream… but he’s not convinced he’ll be paying for café au lait with Bitcoin any time soon

Lowest possible cost at the fastest possible speed: those twin objectives have been at the heart of payments modernisation for the past decade. There are obstacles to both in the cross-border context, but, by and large – be it splitting a bill with friends over WhatsApp, making an account-to-account payment for goods and services or a one-click purchase on Amazon – the aspiration has been reflected in consumer experience.

All these innovations and more have, of course, been built on top of a unit of exchange that’s remained stubbornly unchanged for hundreds of years: fiat currency. It’s odd, then, that the pretender to that throne – cryptocurrency – fails so spectacularly when judged on the same metrics. Not only are transaction costs often prohibitively expensive, especially for small purchases, but it’s also incredibly slow at processing. Bitcoin’s maximum processing capacity is seven transactions per second. Visa’s average is 1,700.

It’s partly why Charlie Meraud, co-founder and CEO of Paris-based Woorton – a market-maker in the digital asset industry, dealing with 300 counterparties across the world, including institutional investors, asset managers, exchanges, brokers, OTC desks, payment providers, blockchain foundations and crypto startups – believes ‘no one is ever going to pay for a cup of coffee with Bitcoin’.

“That might have been the idea when it was created, but I think we can be sure it’s never going to be a currency in that sense,” he says.

That will no doubt disappoint Starbucks, which recently announced that its customers could use Bakkt, a digital asset platform, to convert Bitcoin to USD to load onto their Starbucks accounts. But it will please investors in companies that have grown spectacularly on the back of crypto trading. Coinbase, the first cryptocurrency exchange to be listed on a US stock market in April 2021, saw its valuation climb to $85.7billion on its first day as a public company. Six months later, those shares were still changing hands at almost 18-times their projected earnings for the year. Its initial public offering (IPO) was described by one commentator as crypto‘s ’coming out party’ and Meraud agrees that it sent an important message.

“It’s quite an achievement when you have a company like that with an IPO with such numbers,” says Meraud. “It’s great to finally see it being accepted by the traditional world of finance. It’s like they gave up fighting it. Actually, they gave up mid-2020, when they all started buying Bitcoin,” he laughs. “It’s important to finally have an asset that anyone can buy, anyone can be exposed to, and that is reflecting the success (or not) of our industry.”

There is some irony in the fact that the Coinbase listing gives everyone the opportunity to own a piece of a Securities and Exchange Commission-approved business that has made its fortune on the back of an unregulated financial market. Meraud himself describes the industry that Woorton is dedicated to expanding as ‘exotic’ and, given the ‘madness’ of the market over the past two years, one that it’s hard, even for those on the inside, to get a true perspective on.

“I think there are two periods that stand out for me. The first was the end of 2019, when the retail flow of small orders on the exchanges grew with no real explanation. I personally think it was down to the industry launching so many great products. You had great exchanges, a super way of storing your crypto, mobile apps where you could follow the price and buy/sell really easily.

“The other moment was in mid-2020, when huge institutions began buying. At one point, I remember Grayscale, which is a Bitcoin index, buying more Bitcoin in a week than the number of Bitcoin created, so you had literally more demand than offer. At the same time, PayPal announced it was active in crypto. Half of the Bitcoin created was needed just for those two – and that doesn’t take into account Binance, Coinbase, and all the other exchanges.

“You don’t know if we are already in the mainstream adoption phase or if it’s just because everyone is talking about it, waiting for it to be mainstream,” Meraud adds. “You can’t disagree with people when they say it’s a bubble. Yes, it is still kind of a bubble, but this bubble has exploded many times and every time it has reformed. So there must be a reason for that.

“The question is, will there be more moments like this, where we ask ‘is it still pure madness?’ and what do we need to happen for that moment to be real? Does having Coinbase listed now on Nasdaq mean a lot of people are going to create accounts? Or do we need tokens that allow people to buy a cup of coffee? I’m not sure.”

In fact, there is a concerted effort to put digital coins on a level playing field with fiat currency. It’s called the Lightning Network and it aims to facilitate low-value, high-volume, lightning-fast blockchain payments at exceptionally low fees. It works by creating a dedicated transaction layer on top of the blockchain, but anchored to it so that, ultimately, all value exchanges appear as an immutable record.

A recent study by crypto intelligence platform, Arcane Research, identifies three retail payment environments in which it predicts Lightning could take sizeable volumes away from traditional payment processors between now and 2030 –namely, gaming, video and audio streaming services. Arcane estimates that Lightning could end up handling one trillion such micro-transactions per day. While Lightning addresses the issues of speed and cost, there is no getting away from the fact that, at the moment, digital assets like Bitcoin still float, untethered to value in the real economy, unlike stable coins that are pegged to a national currency.

“Some of those are super-liquid, so you could imagine using one to buy your coffee – it would be cheap, it would be fast, it would actually be as good as USD. But the thing is, people are just using it to trade Bitcoin,” Meraud says. “And that’s where the crypto ecosystem is very singular.”

Meraud doesn’t deny that the industry attracts thrill-seekers – working on the trading floor of a French bank (where he met his fellow Woorton founders) didn’t compare with the excitement of his shadow life in crypto at the time.

“I wanted to do the same job, but in a different environment, and crypto was the perfect product – it was virtual, more innovative,” he says. “There were a lot of opportunities I couldn’t find in the traditional space… it’s a bit irrational, but I was just having fun when I was working in the crypto scene, and I wasn’t having fun when I was working elsewhere. So that’s why I decided ‘OK, I need to do this every day, actually; not just during the night when I can’t sleep’.”

That same excitement drives him to help Woorton move cryptocurrency closer to the heart of the economy as an asset in its own right, standing on its own merit.

“Decentralised finance is attacking a strong industry,” Meraud says. “But, in the US, you’ve now got institutions buying into crypto. In France, that’s not happening yet, and I want this to change, so that they finally say ’instead of having one per cent in gold, let’s have 0.5 per cent in gold and 0.5 per cent in Bitcoin’. Then, I think, we will achieve our goal.”

This article was published in The Paytech Magazine #09, Page 49-50