Crypto in Asia: Wealth Accumulation, Not Decentralization

By November 23, 2021DeFi
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Vauld was established three and a half years ago as a crypto lending and trading platform out of Singapore with backing from multiple venture-capital investment firms. It currently serves 350,000 customers, primarily in the Asian market, including India. Vauld works by aggregating capital, which is then deployed to generate a yield that is passed on to its customers. It also has a brokerage platform where customers can execute orders on Binance, with little slippage and low fees.

In this exclusive interview, Vauld CEO Darshan Bathija discusses crypto liquidity in Asia, the differences between crypto usage in developed and developing markets and the need for regulatory clarity.

We like to work with long-term players who are looking to accumulate wealth over the long term. What we’re able to do is deliver stability, which ensures that more institutional investment comes to us rather than a volatile DeFi platform. What we deliver is predictability, and institutions love that.

Accessing traditional markets or exposure to sophisticated instruments was only available to the very wealthy individual or corporations. But crypto is open for everyone. We see individuals now doing inflation hedging with crypto by just holding on to stablecoins in the medium- to high-inflation countries. And in developed markets, customers come to us because the banks are just not able to generate similar returns.

Clarity around regulation brings a lot to the table for our business. We want to make this asset class much more mainstream, and regulation prevents the perceived downside risk of using something that’s unregulated. With regulation, crypto becomes just another asset class that customers could get exposure to, which is fantastic. About 50% of the individuals that are invested in securities in India also own crypto, which is just an astonishing number. But regulation will go a long way to make that number 100% or even 120%, meaning more individuals will own crypto than traditional securities.

Why do you think that is? Is it because there are fewer and fewer ways to accumulate wealth in the traditional markets? Or is it something more fundamental about the nature of decentralized finance?

I think it’s more of the former, to be honest. When we talk to our customers, very few of them champion the voice of decentralization; rather, they see crypto as a way to accumulate wealth.

Wealth accumulation should not only be accessible to people who can work with Goldman Sachs or JPMorgan. Decentralization can significantly reduce barriers to entry in multiple asset classes, not just crypto. This could drive significant diversification for someone in the Asian markets who may want exposure outside of their national economy.

Do you think crypto will still have a place at the table if we get back to some kind of interest rate normalization?

Yes, because the current crypto yield will not stay the same. We already pay some of the highest stablecoin yields in the market at 12% APR monthly compounding, which works out to be 12.7%. There is still significant demand for stablecoins and for leverage. I also see interest rates going up as a positive … it’s not binary. We are not really competing with bank deposits.

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