Get Ready For Crypto Banking, DeFi & CBDC Surprises - Venture Capitalist
Banks will likely open crypto accounts next to fiat accounts, decentralized finance (DeFi) will claim its trillion-dollar company, while central bank digital currencies (CBDCs) will suprise many by entering our lives sooner than expected, Marc van der Chijs, entrepreneur, crypto-focused venture capitalist, and co-founder of VC firm First Block Capital (FBC), said in an interview with Cryptonews.com.
The good and bad of crypto banking
If banks decide to open such crypto accounts, "this will have major implications, because it allows people to more easily buy and hold bitcoin or other crypto tokens," according to the entrepreneur.
"Once people realize that they are losing money by holding dollars or other fiat currencies, it will be an easy switch to putting money into bitcoin," van der Chijs said.
(As reported, some large companies are already using bitcoin (BTC) as a hedge against inflation.)
And while the entrepreneur advocates for holding one's bitcoin in a personal wallet, keeping in mind the famous and very true phrase 'not your keys, not your coins,' he finds that "this is a good first step." (Learn more: US Banks Offering Crypto Custody is 'Insanely' Bullish and Risky)
Furthermore, the trend may also play a role in the next bull market, because it will create more demand, according to van der Chijs.
A bumpy DeFi road towards first trillion
The FBC founder also discussed DeFi, describing it as "very interesting," but something that "has a long way to go before it will go mainstream." And while "the current hype is good because early adopters now all know about the future of finance," there will be a lot of disappointment in the space "because it will take much longer than most people think." Van der Chijs estimated that it will be at least five years before DeFi will grow out of its current niche space.
He further noted that now is a great time to build DeFi tools, but warned people not to expect that their solution and their token will be one of the winners a decade from now. "The innovation in DeFi is amazing but it's still too early for long-term investors," he said. "Eventually it might replace traditional finance, but most of the current DeFi tokens will be long gone by then, just like most of the top altcoins from 2013 are not around anymore."
"That being said, the next trillion-dollar company will likely be a DeFi company. It will disrupt the banks and the insurance companies, and I don't think they see it coming yet," van der Chijs added.
However, innovations in the Cryptoworld might be slowed down by regulators, but at the same time, they will make it less risky to start a crypto company. This is an area where many Asian countries are "ahead of the curve," especially Singapore, and they will attract "the best teams and the best crypto investors," because of this.
"I know several companies that decided to move from North America to Asia, simply because the regulations there are clear and you won't get prosecuted in the future because you did something that might be prohibited in the future," he said. (Learn more: Ripple Has Three Favorite Countries In Case it Leaves US)
CBDCs coming sooner than one may think
Van der Chijs mentioned other trends that he has noticed in the crypto/blockchain space, and which are not necessarily discussed as much as they should be.
The trend towards CBDC in the entrepreneur's opinion is very important, and it will come sooner than many people think, because it gives central banks power by distributing money directly to the people, instead of through commercial banks.
"It allows Central Banks to let commercial banks go bankrupt without blowing up the financial system," he said, adding that he's not a fan of CBDCs, as they allow the government to decide what somebody's money can be used for, and they can take people's money whenever they want.
But there is a silver lining here as well, van der Chijs finds.
"This is scary, but it will likely lead to a lot more people learning about bitcoin. Suddenly there will be a very important new use case for bitcoin, because that currency will give you the freedom to do whatever you want."
Your digital identity
Another relevant trend that is on the venture capitalist's radar is digital ID, where he notes interesting and rapid developments. "Within this decade every person on this planet will likely have a digital ID, that's how fast things are moving," var der Chijs said. And here too issues are likely to occur: for example, governments can take people's IDs, or tag them so to prevent travel, and there is the possibility of bugs occurring, leaving people without an ID and thus without the ability to participate in most standard activities.
"However, the upside is that a Digital ID will make daily life much easier for most people," van der Chijs told Cryptonews.com. "There will be a lot of innovation built on top of Digital ID and I believe there will be many future unicorns that will seize this opportunity."
A medical project
Meanwhile, van der Chijs himself is working with a new Swiss project called the Ikigai Network, which is yet to launch, and which aims to bring a global electronic medical records (EMR) system. The token that comes with it will give every person access to their own medical data, and allow them to share the data with anybody else, which would earn them more tokens. Furthermore, the data can be mined using AI, in order to, for example, find new cures, or predict if a person has COVID-19, among numerous other uses.
Van der Chijs is also a co-founder of a new medical company called CareProtocol (originally 'Nth Opinion'), which works closely with Ikigai and will use the token as a reward and as payment for virtual doctor visits. CareProtocol aims to offer "a one-click solution to set up a virtual clinic for any medical practitioner." Among other features, it comes with an AI virtual assistant to make bookings, a virtual waiting room, a telehealth solution, and integrated payments. The company was started during the pandemic with "a very successful" hackathon, after which several of the top hackathon performers were invited to join the team. CareProtocol is live in an alpha version and is set to go live in beta in November.
Learn more: VCs Learned Bitcoin & ICO Lesson The Hard Way - Marc van der Chijs