Interviews 14 February 2019Charles Miller
Hans Henrik Hoffmeyer: Regulators are keenly aware that this is a paradigm shift
There’s general recognition in the cryptocurrency world that if crypto is to achieve its potential, it needs to work closely with regulators. One of those trying to make regulation useful to crypto and crypto acceptable to regulators is Hans Henrik Hoffmeyer, COO of the Copenhagen fintech company Coinify.
Hans is bullish about his discussions with EU officials and politicians. “Most of the regulators I meet nowadays are keenly aware that this is actually a paradigm shift,” he says. There is “a profound understanding of this technology, and the implications and potential.”
That level of engagement and comprehension is new: “It has completely changed, and I have been surprised by the speed.” Hans says the EU is “keenly aware that if they apply a regulatory framework which is very hostile, then the business will in principle just move elsewhere.”
For instance, the EU has agreed to update its existing anti-money laundering directive to include virtual currencies and cryptocurrencies. And companies like Coinify will now be registered with their national financial services authority. That’s “hugely important for the industry,” Hans says.
Coinify is a payment gateway, working with payment service providers to act as “the bridge between the traditional financial world and the new, emerging world of virtual currencies.” It specialises in helping people from the financial industry to get involved in cryptocurrencies and likes to think of itself as a “Mastercard for virtual currencies.” In other words, it acts as an intermediary between a customer and a retailer, allowing transactions to take place in different currencies—just as a credit card holder may have their account in pounds sterling or euros but is still able to use the card in the USA, to pay for something in dollars.
Currently, Coinify accepts around 15 different cryptocurrencies, and offers transactions online, where Hans says the company has “very good traction.” It’s now also working with prototype systems to test ways of offering its services in physical stores.
For bigger merchants, Coinify offers a simple interface, a bit like Worldpay’s. But the majority of merchants work with Coinify through their existing payment service providers, which makes it simple for the merchant to add virtual currencies to their existing payment methods.
Hans says there have never been so many ways to pay for something—which may be good news for the likes of Coinify, allowing it to play a useful role in simplifying a complex range of choices for merchants and customers. Part of what Coinify offers is to take the risk associated with accepting volatile currencies on behalf of the merchant and the payment service provider.
Now Coinify is adding Bitcoin SV (BSV) to the cryptocurrencies it supports—although Han stresses that the business is “blockchain agnostic.” But with BSV, “the attention that is given to the regulatory compliance side and to ensure transparency is something that we appreciate.”
Coinify doesn’t actually hold any currency—which makes it different from an exchange, which would be required to hold currency in order to carry out its business. Indeed, in its transactions, Coinify finds the best price by comparing between different exchanges to optimise deals for its customers.
Another part of Coinify’s business is closer to the end user. It gives wallet providers the chance to offer cryptocurrencies to their users without leaving the wallet. It’s called “in-wallet buy and sell.” It’s all part of Coinify’s efforts to make life simpler for its customers, many of whom may not be familiar with the new world of virtual and cryptocurrencies: “unless we help everybody from the past to be onboarded,” says Hans, “then we will fail.”
Listen to more from Hans Henrik Hoffmeyer on the latest CoinGeek Conversation podcast:
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