As the worlds of cryptocurrency and traditional finance continue to converge, pioneering ventures like Kauri Finance stand at the forefront of innovation, reshaping the landscape of digital banking.
In a candid discussion with Alexey, the founder of Kauri Finance, we delve into the journey that led him from early Bitcoin adoption to the creation of a groundbreaking web3 banking platform. Exploring topics ranging from strategies for mitigating risks in the cryptocurrency market to the integration of decentralized applications (dApps) into banking infrastructure, this conversation offers insights into the future of finance and the pivotal role of technology in shaping it.
Join us as we uncover the vision driving Kauri Finance and its commitment to empowering users in an era of financial transformation.
Alexey, considering your background in cryptocurrency investment and development, what inspired you to venture into the realm of digital banking with Kauri Finance, and how do you see the convergence of traditional finance and blockchain technology shaping the future of banking?
I was an early Bitcoin adopter; I bought my first BTC in 2016 and started building a web3 bank in 2017. Since 2018, Kauri has owned crypto licenses and has evolved from a company where opening and obtaining a license cost 6000€ to having a statutory fund of 250,000€, audited by regulators every three months. When you deal with money, you realize there’s no more liquid asset. I don’t know what else I could do; perhaps only be a rentier, but after being involved in finance, everything else seems complicated and illiquid.
In light of the recent surge in interest and adoption of cryptocurrencies, particularly Bitcoin, what strategies does Kauri Finance employ to educate users and mitigate risks associated with investing and storing digital assets?
I often talk about this because I’ve already weathered two crypto winters and now I’m experiencing the third bull market. The best strategy is buy and hold. Here’s how it looks: choose an asset, for example, BTC, a day of the week, and an amount you’re comfortable investing. Every week, on the same day, invest the same amount. For example, 100€ in BTC every Sunday. Then transfer these funds to a web3 wallet for safekeeping. After 1-2 years, you’ll have a 200-300% profit. At least, that’s how it’s been several times over the past 5 years.
This isn’t financial advice; it’s just how we do it at Kauri. It’s the strategy of every team member and myself personally.
With the emergence of Web3 technology, what potential opportunities do you see for Kauri Finance to integrate decentralized applications (dApps) and smart contracts into its banking infrastructure, and how do you plan to leverage these innovations to enhance user empowerment and financial inclusivity?
Everything we wanted to implement is included in version 3.0, set to release in May 2024 for individuals and in June 2024 for businesses. It will include a swap order feature that allows complex transactions with a simple order, multi-signatures for businesses where you can choose roles and signing limits, and a web3 passport that allows token verification transfer, which already exists.
But in the future, we want to expand the number of blockchains our users can work with, and that’s exactly what we’ll do through the integration of dApps and smart contracts. As a self-funded project, Kauri Finance has relied on revenue generated from software sales to fuel its development.
Could you elaborate on your experiences in bootstrapping the project and how this approach has influenced the company’s growth trajectory and strategic decision-making?
Yes, indeed, the concept of software sales saved our company in 2018. There was a month when I didn’t have enough money to pay my employees’ salaries. It was then that I proposed to key team members to become co-founders of the project and take their salaries in equity, shares in the company.
There were four of us then, and we became the foundation of Kauri and still work together now. Even the team motto “we are one” stems from that. The idea of selling software as a way of further monetizing the company and its development came in that month.
So, what seemed like a disaster at the time became the foundation and confirmed the key rule – never give up.
Given the dynamic nature of the cryptocurrency market and regulatory environment, how does Kauri Finance adapt its products and services to meet evolving user needs while ensuring compliance with legal frameworks, and what measures are in place to safeguard users’ funds and personal information?
Kauri is a fully regulated platform. We’ve had a license since 2018, and we undergo both internal and external audits annually. However, since June 2024, with the introduction of MICA, we are expanding the geography of our licenses and are already in the process of obtaining licenses in Switzerland, Singapore, Indonesia, the Philippines, Tanzania, and the UAE.
