Disrupting the Crypto Banking Arena
Type of Business: Cryptocurrency Financial Services
Region: UK/North America
When it comes to financial services in the cryptocurrency arena, Celsius Network is revolutionizing the industry with their contrarian business model. Essentially, “un-banking” the traditional big bank system when it comes to cryptocurrency. Celsius Network is led by CEO Alex Mashinsky, one of the inventors of phone calls over the internet or Voice over Internet Protocol (VoIP) technology. Now, Celsius Network has created MoIP, which is Money over Internet Protocol—a term coined by Mashinsky.
Celsius Network was founded in 2017 with an unprecedented approach to crypto banking. It gives its customers the opportunity to earn interest on their cryptocurrency from which they can instantly borrow against. Also, Celsius Network shares up to 80% of its revenues with their customers in the form of weekly interest payments—up to 10%. In addition, Celsius Network provides their retail and institutional customers with the lowest borrow interest rates on the market. Finally, there are NO FEES for their services.
In a recent interview, Liz Rabban, vice president of global business development at Celsius Network, discussed their vision for the future of the cryptocurrency space and the industry’s current status.
“It’s our vision that crypto is the future of financial services for the globe. For it to be common for people to hold crypto as it is for them to have money. Two things to get there—we need a way to scale, and we need to make it really easy and user-friendly. Also, we need to provide value that the banks don't.”
The Road to 100 Million
The Celsius Network aspires to be a financial disruptor on a global scale and to bring the next 100 million people into cryptocurrency. They want cryptocurrency holders to maximize their holdings in the way that banks do not allow them to do so today.
“Our mission and mandate is to bring the next 100 million people into crypto and not just for the sake of holding a Bitcoin, but so that they can actually have everyday value and earn on their hard-earned money,” Rabban said.
Of course, achieving this milestone has its hurdles. Currently, the demand for cryptocurrency is weak. Technology has kept pace but still has a ways to go. Although more and more people are working with Bitcoin, the barriers into cryptocurrency remain—understanding different wallets, hashtags, transactions, and strings of numbers and letters. Celsius Network sees the future for the crypto market and how their platform will be a game-changer.
Rabban explains, “We need a killer app to get there. We'd like to hide the technology from the basic everyday user and make it seamless for them so that it becomes a part of their routine, much in the way that you can call somebody today and you don't pay $3 a minute anymore. We want an app that everyone in the world is going to use, much like Facebook, Google, WhatsApp, or WeChat. We want it to be Celsius for crypto. We need it to be easy, user-friendly, and provide continual value.”
The Genesis of Celsius Network
CEO Alex Mashinsky is well known as a serial entrepreneur. He comes from the VoIP space as with most of the executive team. Mashinsky tackled highly regulated industries and situations involving mass adoption. In fact, he helped put Wi-Fi in the New York City Subway. In 2013, Mashinsky turned his talents to the crypto market.
Celsius Network was created to provide value to people that the banks currently don't. They wanted to devise a system where people would deposit cryptocurrency into their app, and then the customer would earn interest. Also, Celsius Network would give most of its profits back to their community members and keep a very small portion for operational costs.
The genesis of Celsius Network was to create something viable and user-friendly, so people can deposit their cryptocurrency, earn interest, take cash loans against it, and possibly use it in other ways in the future. It's exactly the opposite of what current global banking structure looks like.
Today, Celsius Network uses BitGo Custody to store, secure, and protect their cryptocurrency. Subsequently, they will move assets into BitGo Trust Company, a qualified custodian focused exclusively on digital assets.
“We identified the best in class, which was BitGo and continues to be so,” Rabban said. “We knew we needed something with security, reliability, and trustworthiness. Also, you only want to partner with the brands that have the highest brand recognition and certainly trust. BitGo does that for us. When people know that BitGo is our custodian, it’s a comfort zone for them.”
Also, from a technical point of view, CTO Nuke Goldstein added, “BitGo allowed us to build a great product. Maturity of the BitGo product was crucial. Also, BitGo allows us to automate everything, and in terms of security and functionality, BitGo provides more robustness and flexibility. Finally, BitGo’s technical support is extremely helpful and responsive.”
The Benefits of Working with BitGo:
Regulatory compliance: qualified custody
Insurance covering both theft and data breaches
Robust security controls: SOC2, Cryptocurrency Security Standard (CCSS), and The Committee of Sponsoring Organizations of the Treadway Commission (COSO) alignment
Security thought leadership: Instructors at Carnegie Mellon University CISO and CRO executive programs and FS-ISAC membership
100% multi-signature technology
Bank-grade vaultsBroad support for coins and tokens, forks, and airdrops