BlockState Interview Part One: Institutional Investment Framework Story
The mainstream media narrative has shown an uncompromisingly negative bias towards institutional crypto investment of late and it only seemed fair that we got in touch with some people who have professional expertise in the field.
BlockState is a platform that aims to deliver a modular blockchain-based legal and technological infrastructure for financial institutions which combats the low interest and return rates offered by traditional asset classes.
We spoke to the three co-founders: Paul Claudius, Michael Weber and Samuel Brack regarding the nature of the project. In addition to how they met and how it all started, their current status, and their plans for the future.
BlockState in Brief
On their website, the BlockChain team states that their intention is to provide “a technological and legal bridge between blockchain technology and financial markets.”.
It is an infrastructural platform upon which organisations within these sectors build or inform their own solutions – and is unashamedly focused towards providing products for the institutional investment crowd.
On the One Hand…
When asked about the ethics, technological approach and modus operandi of BlockState, Managing Director Paul Claudius was eager to provide a comprehensive, dichotomised summary.
“On the one hand we are creating the basis for institutional investors to access the digital assets markets.
“Investment banks can’t simply open a wallet on their phone and start buying crypto-assets. They need a range of services and processes in place to make sure that they abide by regulation and their internal requirements.”
The BlockState consensus is that there are insufficient frameworks in place to mitigate the obstacles faced by companies unfamiliar with the many intricacies of the crypto-space at present.
This is not to mention the prohibitive nature of the past progression of technological and regulatory standards, which are largely non-standardized.
… And On the Other
The ‘other hand’ to which Paul refers to is the lack of blockchain or cryptocurrency integration at product or service levels within the institutional market.
For this reason: BlockState posits the second half of its service as an offering to:
“help institutions leverage blockchain to improve their existing processes… helping them tokenize financial products and using smart contracts to govern their execution… [to] save massive amount of resources while making their systems more transparent and efficient.”
In theory all transactions will be immutably recorded on the blockchain, which will ensure that all parties involved can access this data and that all transactions will be processed quickly.
Performance can distinguish a winning cryptocurrency from a useless dud.
The Three Musketeers
In addition to Paul Claudius, we got the opportunity to speak to fellow founding members Michael Weber and Samuel Brack.
Paul specialises in Strategy and Business Development, whilst Michael’s role is to take the lead on Product Development and Project Management duties. Their specialisms are Strategy and Business Development, and Product Development / Project Management (respectively).
Samuel Brack is the cryptocurrency brains of the operation and performs something of a hands-on position, donning the title of Chief Technology Officer. He sits in a more hands-on position, acting as Chief Technology Officer (CTO) for BlockState.
Paul recalls that the executive leadership team had “all already knew each other” before the BlockState project even began.
Whilst he and Michael Weber had made acquaintance whilst studying together at the ESPC Europe business school, Michael had met up with Samuel Brack as they were co-founding partners on a prior blockchain based project entitled ‘Goodcoins’.
Whilst they have sold their stake in Goodcoins since, Samuel at least considers his time on the project to have equipped him a knowledge which has been brought forth to BlockState.
On a more personal level: Paul Claudius described his first interaction with the world of cryptocurrency as being the moment in 2012 in which a friend had recommended Bitcoin to him as a potential investment.
He has not disclosed exactly how much Bitcoin he purchased in 2012 but if story is true, considering the token’s contemporary value of $13: Paul would have made a profit of a whopping 51614.53% on his investment. No matter the amount invested.
Products, Pains and Peers
Michael Weber (product lead and project management professional) broke down the trio of primary services / product lines that BlockChain focuses on as being “asset management, dept capital, and derivatives” – with a perceived overlap between the three.
This is as well as the ability for tailoring packages for clients from these tested specialisms.
If these products names appear distinctive yet simple, then you would be correct. Of course, this is one of the main objectives of marketing – however it does not help a company to distinguish itself from its peers.
“While most focus on very specific needs, our infrastructure integrates solutions at every level of the financial product lifecycle, from issuance to reporting always with a view to improving current products on the market.”
This isn’t an easy task however, with obstacles to full-automation rearing their heads alongside undesirably long payment clearance times,
“Some of the major pain points specific to the asset management and derivatives markets and resource consuming operations are settlement and clearing, which can take up to 30 days… with manual processes like getting signatures and manual transactions.”
With a Little Help From My Friends
The three musketeers of BlockState with whom we have already spoken are supposed to possess their own unique-yet-compatible inventories of skills and experience. If the team has any luck it will prove a winning combination.
Three men cannot rule an empire alone however and as the popular idiom goes: successful leaders fill the gaps in their expertise by surrounding themselves with knowledgeable advisors. Following this, BlockState boast a roster of advisors who may just fit the bill for now.
They include (according to Paul):
- “Patrick Storchenegger, co-founder of the Ethereum Foundation in Zug, is our advisor on legal questions. He brings years of experience from blockchain, capital market law and international tax and business consultancy…
- “Andrea Voinea, who helped to structure the first Gold Exchange Traded Fund, is a seasoned professional from the asset management market…
- “Ludwig Schrittenloher, who spent nearly six years at Credit Suisse, offers a breadth of knowledge in DCM and structuring…
- “[and] Martin Schröder, currently a Director in an investment firm, is an expert in derivatives and also very knowledgeable in capital markets and structuring.”
Estimated Time of ETN
Looking not to the past or present, but forward to what the future may hold for BlockState (or at least, what they plan to happen), we asked Paul Claudius some closing questions in an attempt to reach some conclusions on what may come next…
“At the end of September, we will launch the CTF15 Exchange Traded Note, and it will also be listed on a major European Stock Exchange – to be announced soon…”
An Exchange Traded Note (or ETN) is “a type of unsecured, unsubordinated debt security”
Perhaps more exciting even is the fact that the team are currently in the process of preparing the launch of an ‘Equity Token Sale’, issued as part of the company’s equity in a public sale.
According to Paul, it will be “one of the first companies ever to tokenize their equity in a fully regulated and compliant manner, driving the adoption of security tokenization in the financial space.”
Paul, Simon and Michael parted our discussion by asking to remind readers of a forthcoming event at which all three will be attending: the Delta Summit in Malta, which takes place from October 3rd to the 5th.
Stay tuned for the second part of this interview coming soon: in which the team will deliver their commentary on recent news, the present situation; and future predictions on the market and industry.
Featured image courtesy of Shutterstock.