Stefan Kimmel, CEO of M2, on the Ethereum ETF, Institutional Crypto Adoption, and How Crypto Exchanges Can Offer 10% Yields | Ep. 342
Cryptonews Podcast’s Matt Zahab sat down for an exclusive interview with Stefan Kimmel, the CEO of the global crypto investment platform M2.
He discussed the Earn product, the ways M2 creates yield, and how TradFi is crypto’s biggest promoter.
Kimmel also talked about the major differences between the UAE and the US and why crypto companies avoid the latter.
Lastly, he touched upon the trends shaping the industry’s future.
Setting a Strong Foundation and Finding the Sweet Spot
M2 is a regulated exchange and investment platform, with a home base in Abu Dhabi.
The company has licenses from the Abu Dhabi Global Market (ADGM) and several international regulators.
And this is the key part of M2’s position, said its CEO. “Whatever we do, we want to get fully regulated, registered, transparent, safe, as the foundation of everything.”
GM & welcome to June!
What do you think the new month will bring for #crypto?— M2 (@M2Exchange) June 1, 2024
On top of that, the team has built several product lines.
One is the pure trading side of things, with a few more products about to launch soon, and the second is the investment products.
This also encompasses earning yield on a passive income.
This is the “sweet spot,” Kimmel said – the combination of these products and being fully regulated.
Three Yield-Creating Avenues
Due to the industry’s rotten apples over the past few years, there is a lot of skepticism in regards to M2’s Earn product.
Critics argue that it can’t be legit or sustainable.
Yet, Kimmel said that “for the last seven months, we did a good job.” The product is regulated, supervised, and externally audited.
On Bitcoin specifically, he said, there are three avenues the team has used to create the yield:
- working closely with a Bitcoin miner – M2 is partially owned by one of the largest, publicly listed Bitcoin miners, Phoenix;
- introducing a lending product for fully collateralized loans;
- having an in-house asset management team that uses specific strategies to generate yields.
Moreover, the team has worked on loans and new trading tools. It also has crypto payment cards and is improving its fiat rails.
“There’s more coming, some interesting partnerships with banks on that front. Super exciting,” Kimmel said.
Our next 6 weeks will be insane. @M2Exchange will launch M2 cards, M2 loans, rewards hub 2.0, learn to earn, new trading features, and a bunch of new trading pairs.
Exciting times ahead— Stefan Kimmel (@M2Stefan) May 23, 2024
TradFi is Crypto’s Biggest Promoter
A major question for the entire industry is how to onboard more people.
“Funny enough, TradFi is helping lots,” Kimmel remarked.
Massive companies like BlackRock, Goldman Sachs, Fidelity, and “all the guys that are launching ETFs are the biggest promoters now for the credibility of the space.”
Additionally, some of these companies are running ads for Bitcoin exchange-traded funds (ETFs) on national TV in the US.
On May 23rd, 2024 the SEC gave the green light for spot Ether ETFs.
What are Ether ETFs, and how can they impact your crypto journey? Our blog dives into recent developments and future projections ↓ https://t.co/ubjvT8662D#M2 #ETHETF#M2Learn
— M2 (@M2Exchange) June 4, 2024
People already in crypto can claim the space is safe “all day long.” But with the entrance of traditional finance companies, the general view on the industry is shifting.
He advised that people not put money in crypto that they need to live normally—nothing they need in the short term.
“But if you have a six, nine, 12-month timeline or a seven-year time horizon, it’s a pretty stunning asset class.”
Regulations: UAE vs US
Speaking of ETFs, there is a giant regulatory elephant in the crypto room.
There is a very good reason M2 – and numerous other companies – have chosen the UAE or another crypto hub as their home base to branch out from, despite the US being such a massive and desirable market.
The UAE and the USA stand on the opposite sides of the spectrum, Kimmel noted.
The UAE has very clear rules that are easy for service providers to embrace. It’s easy for banks to make partnerships and for institutions to invest.
The supportive government has formed a supportive infrastructure.
The US, on the other hand, struggles to provide a clear regulatory framework and is generally unsupportive.
However, Kimmel said that this is hopefully changing.
US politics has turned strongly pro crypto. Within only one week, we saw:
– SAB 121 senate vote for favourable accounting for crypto
– FIT 121 house vote finally providing regulatory clarity for crypto
– ETH spot ETF approved
– House passes bill banning CBDCs— Stefan Kimmel (@M2Stefan) May 23, 2024
The US is still the largest capital market in the world, so in the long run, M2 would like to enter it.
But in the short term, as long as the regulation is not clear, “we’re definitely not touching it. We’d love to, but we can’t, because you just end up getting sued,” Kimmel argued.
This is pretty much the sentiment across the crypto board.
Trends Shaping the Crypto Industry’s Future
Lastly, Kimmel touched upon some key industry trends.
One of the biggest trends is not a crazy, new technology but institutional investors coming in and broad crypto adoption.
This will impact market caps, trading volumes, and the accessibility of the markets in the long run.
2020 vs 2024#BTCHalving pic.twitter.com/YdqUKPgsd2
— Stefan Kimmel (@M2Stefan) May 15, 2024
Another exciting trend is real-world assets (RWAs). It gives the standard retail investor the opportunity to invest in things they find interesting but can’t usually invest in.
Finding a way to tokenize relevant assets and provide reliable price feeds will be “a complete game changer and a very, very important use case for the technology,” Kimmel said.
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That is not all.
In this interview, Kimmel also discussed:
- M2 “making a splash” at TOKEN2049;
- what the impact of ETH ETF could be: ‘a slower grind rather than an insane peak’;
- the possibility of Solana ETF, Cardano ETF, baskets, etc.;
- why crypto companies do not want to stay in / enter the US even though ‘everybody wants to play there’;
- UAE as one of the strongest capitals for crypto globally;
- which country could rise as the next crypto behemoth.
You can watch the full podcast episode here.
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About Stefan Kimmel
Stefan Kimmel is the CEO of the global crypto investment platform M2.
The company’s mission is to establish a world-class global digital currency investment platform.
Kimmel has over 25 years of experience in finance, fintech, and digital innovation.
He held prominent executive roles in the fintech industry, including Chief Commercial Officer at Kraken MENA, Chief Operating Officer of the Commercial Bank of Dubai, and leadership roles at PWC, IBM, and Oliver Wyman Middle East.
