For over a decade, Paxos CEO Charles Cascarilla has been executing on his vision of building financial market infrastructure that underpins a more transparent, secure and open financial system. Along the way, Charles has seen bad actors come and go and two crypto winters, but these events only emboldened his vision.
As recent events benchmark historic steps toward achieving a modernized financial system, Charles explained why Paxos and its clients are more eager to build than ever.
“I think crypto has been an experiment that has had a lot of successes and of course, a lot of failures. But what it’s been able to do is show what the world would look like, if you are building a financial system based on blockchain technology, that financial system would be more open.
It would be public, it would have mechanisms of being able to create trust and programmability that allow inclusion and lower costs. They create a change to how the fundamental movement of money happens, which is something that, right now, has a lot of costs built-in, especially for the unbanked and underbanked, which is billions of people around the world.
And you can imagine a system that has a fundamental shift, where it doesn’t just become about who has more capital, and who has more access, it becomes about who has better ideas of how to use the access that now everybody has. And I think the financial system, for a lot of reasons as a private closed network, did a very successful job at enabling the real economy for a long period of time. But now, it’s really hindering it.
It’s hindering who can have access to the real economy. And it’s hindering the costs at which the real economy can operate. And if you unshackle that, we can fundamentally have a much different economic outcome and economic distributions than we do today.
The way end users engage with their assets today is generally through some intermediary.
It’s not always, you can hold cash in your pocket, you can bury some gold in your backyard. But if you look at the vast majority of somebody’s wealth, they’re actually held through an intermediary, maybe it’s a bank, maybe it’s a broker dealer, maybe it’s a custodian. You generally don’t hold those assets, and that’s for good reason.
But this technology means that you don’t have to do that. So today, if you want to hold a stock or bond, it has to be in a broker. No one has paper certificates anymore, you can’t hold bearer stocks. If you want to hold most of your savings and you’re going to transact electronic dollars, you have to hold all electronic dollars in a bank, even if it’s in Venmo or Square, Cash App, whatever, it’s still held in a bank. It’s just a different interface that you’re dealing with. So you’re always having to deal with an intermediary for anything that’s electronic today.
Process of blockchain technology means that you could hold it yourself, you can download a wallet, you could hold your assets there. Now, many people aren’t going to want to do that, but the idea that they could means that they have financial freedom in a way that they wouldn’t otherwise.”
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