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EXCLUSIVE: ‘The Knowledge Exchange’ – Jonathan Metais, Shadman Salem and Aysenur Yükselal Aji, Bitstamp in ‘The Fintech Magazine’

In a tumultuous year for the crypto industry, Bitstamp set out to restore faith by tackling the biggest obstacle to adoption… ignorance

As the crypto winter deepened, following the collapse of what turned out to be a very unstable stable coin ecosystem built around TerraUSD and Luna, the world’s longest-running exchange launched a new online resource. Its goal was to help investors of all stripes and none get a handle on what was going on more broadly in the alternative currency universe.

The Bitstamp Learn Center aims to explain the mechanics underpinning blockchain technology and crypto assets in an unbiased manner. The need for education is more important now than ever, especially after the 2022 capital-destroying events that led Bitstamp’s Asia Pacific general manager Leonard Hoh to describe the year as a ‘watershed’ for the industry. By the time the year closed, trillions had been wiped off the value of the total crypto market, and FTX, another leading exchange, had collapsed.

US federal investigators later extradited FTX’s co-founder from The Bahamas to answer fraud charges. In the wake of these seismic events, regulators around the world accelerated efforts to bring crypto providers into line with the long-standing supervision frameworks designed to ensure the fiat-based economy operates with an acceptable degree of probity and integrity. Thailand and Singapore have already taken action, Hong Kong’s new framework will be introduced this month (March) and Australia says legislation is on track for later this year. Bitstamp’s most recent Crypto Pulse survey (in August 2022 – before FTX hit the skids) revealed that 26 per cent of the 23,000 people it polled worldwide didn’t invest in crypto because there was ‘not enough regulation in the industry’.

Bitstamp, however, was the first crypto services provider to be granted a payment institution licence in the EU and it now holds 51 licences worldwide, including in EU member states, the US and Canada. Almost a third of its workforce is involved in compliance, regulation, legal, risk management, security, and internal audit functions. But, as with any investment vehicle, it’s also behoven on individuals to conduct their own due diligence and to at least understand the asset and the fundamental mechanisms involved in trading it. The problem is, no one teaches this stuff. That’s what the Bitstamp Learn Center sets out to address.

The Fintech Magazine sat down with three members of the Bitstamp team involved in delivering the resource – content manager Jonathan Metais, head of strategic partnerships Shadman Salem, and head of retail product marketing Aysenur Yükselal Aji. We began by asking how good a grasp some of them had of crypto when they first became involved with it.

“The Center is an online educational hub that anyone can access and learn about blockchain technology, cryptocurrencies, and general finance and investing”

Jonathan Metais

JONATHAN METAIS: I purchased a fraction of Bitcoin in 2017, the day that it reached its high – and I rapidly witnessed my investment crash throughout the next few months! When this happens, you either have to cut your losses, or learn more. I chose the latter and haven’t looked back since.Once you go into that rabbit hole, it’s very hard to get out of. I was a teacher at the time, and secured an internship writing educational content at CoinDesk during the summer. I found that writing about the space was the best way to learn about it. Eventually, I moved from teaching to working full time in crypto – still teaching, but in a different context.

SHADMAN SALEM: I used to work in asset management at a major Canadian bank and am a CFA Charterholder. From that TradFi Perspective, I always regarded crypto as a risky alternative asset class because I knew very little about it. In 2017, I was working as a management consultant and my team conducted a research project for a global fintech on the opportunities and threats that crypto-based tech presented to their core business model. Once I put in the hours, I realised that ‘crypto’ can be a technological (and sometimes philosophical) upgrade to the traditional financial system, incorporating cryptography and a single source of truth to enable transactions without manual intermediation. The major barriers were certainly in communication – the industry often uses new language and jargon to describe activities, which I had to put in the hours to overcome and bridge my TradFi mental models to crypto.

TFM: So how much do people outside of the industry really understand about the space?

SS: We ran several research surveys with retail and institutional participants in the financial services industry to really understand what acts as a barrier for them to engage with crypto – and what we found was, overwhelmingly, there was a lot of interest in the transformational potential for the tech, but a lack of trust in institutions that act as the gatekeepers. On the institutional front, those that understand crypto, understand it well and are taking high conviction positions in trading or other blockchain use cases. But, on the retail front, it’s a mixed bag. There are power users who really know what they’re doing and engage with crypto and DeFi in meaningful ways but that’s still a small percentage of users overall. When you look at more mainstream users, there’s still a massive gap in understanding and a lack of credible educational resources.

AYSENUR YÜKSELAL AJI: As service providers, we have started to gain a deeper understanding of our customers, both existing and potential. This helps us to bridge the gap between our services and the requirements of retail investors. Education is one of the most crucial needs of these investors.Based on the latest customer research that we conducted among the individuals who are new to the crypto world or indeed plan to become investors, they feel very confused. They find the crypto landscape to be like a minefield, with its own language, filled with jargon.

And they don’t know where to begin.Younger generations, like Millennials, have a higher level of passion and optimism towards crypto. This enthusiasm motivates them to learn more and educate themselves, but their focus differs from the older generations.They have a good understanding of the new coins and projects, but it’s questionable how deep they go into the detail. On the other hand, older generations prefer to gain a complete understanding of the fundamentals before they invest.

TFM: So who bears responsibility for improving their understanding and communicating the risks and benefits?

JM: I believe crypto should be taught in schools. But I firmly believe that investing and finance more generally should also be taught in schools, and they’re not, either. Learning about Bitcoin has helped me acquire general knowledge about economics, technology, investing, and finance. That’s the beauty about crypto. You can learn and teach a wide range of topics through it. And crypto is exciting; it’s new and it’s fun, this would help engage students and help them learn about more than one topic through it.

“Overwhelmingly, there was a lot of interest in the tranformational potential for the tech but a lack of trust in institutions that act as gatekeepers “

Shadman Salem

SS: The industry. It’s our job to simplify the user experience and remove educational and communication barriers for our users. The pandemic saw increased penetration of e-commerce and a need to engage with others in virtual settings, and a lot of those consumer behaviours and habits are sticky and won’t change back. So, if you think about the things that you need to facilitate a truly seamless and digital experience, the ability to store and transfer value in a trustless and/or digital native way is crucial.

Digital assets are very much front and centre of that type of experience and I absolutely believe that education is key to ensure mainstream users are aware of the risks and benefits as they start to navigate increasingly digital worlds.

AA: As service providers, it’s our responsibility to provide better educational assets to overcome the various challenges in the market. To make crypto more widely accessible, we need to address several layers – including security and regulation. Our survey in the financial services industry also showed that nearly half of the retail audience views crypto as less regulated compared to other investment tools, primarily from the non-investor segment. So here, the lack of knowledge becomes apparent. At the operational level, I can’t envision someone who is not tech-savvy, such as my mother, performing a crypto transaction between different wallets. To make crypto more accessible, we need to make these operations more user-friendly so that people feel confident and secure when making crypto investments. Once we’ve addressed the fear in these layers, I believe crypto will become more accessible.

There will always be bad actors trying to take advantage of new users. This is not about crypto; it’s about humans. Service providers like Bitstamp apply strict security and due diligence processes to protect their users from these bad actors, but when new users have a better education about crypto services and assets, they will be better equipped to choose the right service provider and investment assets for themselves.Investment has many different layers, but the two most important ones, in my opinion, are firstly how to understand the value of an asset, and then how to choose the right investment model, according to your personality. The first pillar can be addressed with educational tools like Bitstamp Learn Center, but the second pillar needs more long-term education. People need to learn the fundamentals of investment early in their lives.

TFM: How does the Bitstamp Learn Center help address the ignorance and fear around crypto, then?

JM: The Learn Center is an online educational hub that anyone can access and learn about blockchain technology, cryptocurrencies, and general finance and investing. We are keen on providing thoughtful, well-researched, and unbiased content, to reach anyone, regardless of their crypto knowledge, and help engender trust in the space. There’s a lot of misinformation out there; it’s very easy to read false claims and fall victim to scams. We try our very best to research thoroughly and make it easy for the average user to understand each topic.Our articles hover around 1,000 words – a five to 10-minute read – on crypto and blockchain technology. We are also developing other topics, such as Web3, people profiles and security best practices. We’re a cryptocurrency exchange, too, though, so it’s essential for us to educate our users on trading and investing.

“Individuals new to crypto, or those who plan to become investors, feel very confused. They find the crypto landscape to be like a minefield… they don’t know where to begin”

Aysenur Yükselal Aji

We have articles reaching a wide variety of topics, from dollar cost averaging, to the different trading patterns present in candlestick charts. It’s important for us to give a holistic and global view on safe investment practices as well as safe practices within the crypto space. While we don’t want to spook users, we do want to make sure that people safeguard their assets and are well protected.

Most of our content is catered to those with no to medium experience. We’re trying to provide a bias-free zone for anyone wishing to either start their crypto journey, or further their learning. Our goal is to eventually build out content to reach the more experienced users . Being an educator myself, its very important to me that education should be readily accessible to all types of learners. Our goal is to eventually create different types of content, so that anyone can consume articles, via reading, watching, or listening to them.

AA: Bitstamp Learn Center is an education hub for no-nonsense articles, videos, and how-to guides to all things crypto. People can learn more about technical details of a specific coin, how to buy and sell crypto, or different kinds of trading techniques. The most important and most beautiful part of the Bitstamp Learn Center is that it is jargon-free, and people can easily understand when they are reading. We certainly don’t use complex and complicated terminology there. It’s an educational tool, and we want our readers to feel comfortable while they are learning about crypto.

TFM: You’re obviously doing your best to make ordinary users feel more comfortable and confident using crypto. But do you think it will ever rout fiat and go mainstream? And, if so, what will be the tipping point?

JM: We’re closer than you think. The technology is here; we just don’t have the right platforms right now – at least, we don’t have platforms that are completely intuitive to new entrants. That comes with time. The internet that you know today was not built in a day, so you have to be patient with crypto. But, you know, Bitcoin is already being used around the world, from big initiatives like worldwide remittances, to smaller ones, like purchasing pints at a local pub. So, while there is a lot happening behind the scenes, I’d say it will be another five or six years before we see increased mainstream adoption.

SS: That’s a tough one to answer, because there are so many ways to think about what that future model looks like and so many different stakeholder groups that are working towards optimising for their objectives. But for digital assets to play a truly meaningful role as an alternative currency to fiat we’ll need to see more institutional involvement – from retail and commercial banks, to regulators to central banks. We are definitely headed in that direction – with more than 100 central banks working on CBDCs (central bank digital currencies) and many private institutions working on transactional use cases for stablecoins. So I don’t think it’ll be long before blockchain-enabled digital currencies are in mainstream use – but ‘crypto’ will very likely look different to what it has in the past.


 

This article was published in The Fintech Magazine Issue 27, Page 70-72

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