Michael Jordaan-backed crypto platform eyes global expansion
Former FNB CEO Michael Jordaan-backed crypto-currency trading platform VALR.com is looking to grow beyond South African borders.
So said VALR CEO and co-founder Farzam Ehsani, who used to be blockchain lead at Rand Merchant Bank, after the firm launched rand (ZAR) trading to allow customers to buy and sell Bitcoin directly with the local currency.
Users of the VALR platform can start funding their accounts with ZAR today, while live trading will start promptly on 11 June at 11:11am local South African time.
According to Ehsani, the launch will showcase VALR’s advanced trading capability – its “Exchange Buy/Sell” feature.
He adds this will complement its “Simple Buy/Sell” feature that already allows customers to use Bitcoin or Ether to buy and sell over 50 other crypto-currencies.
VALR began worldwide trading in March, and to drive adoption, it made trading in crypto free of charge during that month.
“We have received huge support from the South African crypto community and beyond. Since launch, our customer base has grown steadily and we welcome many new customers onto VALR.com every hour,” says Ehsani.
“We are incredibly proud to have several thousand customers on our platform as we launch our flagship product, Bitcoin-rand trading.”
VALR raised R20 million in July 2018 and is backed by Jordaan and US-based Bittrex, one of the largest crypto-currency exchanges in the world.
Late last year, it announced its partnership with Bittrex to offer customers a secure, reliable and advanced trading option that is committed to compliance.
VALR’s platform uses artificial intelligence and machine learning to streamline the ID verification process, allowing new customers to be verified within minutes. It also offers an advanced application programming interface that allows automated trading on the platform.
“We have invested a significant amount of time and resources into our security, compliance, design and performance to offer our customers a platform that rivals the very best in the world,” says Ehsani.
He notes SA remains one of the most interested nations in Bitcoin and crypto-currency on earth.
“We have some of the highest search statistics on Google for Bitcoin and we certainly see this interest express itself with sign-ups on VALR.com.
“We have started in South Africa because we live here and we love this country. However, we also have a deep desire to serve customers regardless of nationality, race, or economic background and plan to expand beyond our borders soon.”
Ehsani points out that VALR is striving to help build a financial system that recognises the oneness of the human race.
“So, while we need to focus on South Africa at the moment to produce a platform that delights our customers, we have grand aspirations to serve millions across the globe.”
He believes crypto-currencies, in general, are still significantly undervalued. Institutional money has yet to come in and the general public, while dipping their toe in at the end of 2017, do not fully understand the power of this technology, he notes.
“We’re talking about the first public infrastructure that allows digital peer-to-peer transfer of monetary value. This is seriously significant. Up until now, we’ve had to rely on third-party intermediaries to transfer digital value across distances and they have often charged exorbitant rates.
“Now this can be done near instantaneously, at a fraction of the cost, without ever touching a financial intermediary,” says Ehsani.
This has huge implications for remittances and payments, he says, adding that up until now, financial intermediaries have extracted about $1.7 trillion per annum (representing about a third of total global banking revenue) from payments.
This revenue stream will continue to come under attack and crypto-currencies will play a significant role in bringing this down, he says.
However, Ehsani is of the view that crypto-currencies like Bitcoin will continue to be volatile.
“There is no way to value them [crypto-currencies] apart from the temperamental forces of supply and demand, so it is important to keep this in mind for anyone thinking about putting money into Bitcoin or other crypto-currencies.”
From its peak at the end of 2017 of close to $20 000, Bitcoin plummeted to $3 200 in December 2018 but has since increased to around $8 000 recently.
Ehsani says at their peak in January 2018, all crypto-currencies were worth $830 billion but this figure plummeted to $102 billion in December 2018 and has since climbed to $250 billion.
“To show you what a difference timing makes: if you bought Bitcoin in December 2017, by December 2018, you would have been 84% down. But if you bought Bitcoin in December 2018, your purchase would have more than doubled in value (150% increase) in the last five months.
“Volatility will be a component of this space for some time to come until we get much more adoption globally.”