A collaboration between an experienced financier and a Bitcoin entrepreneur has led to huge success for a Danish fintech company.

Aryze’s CFO Morten Nielsen comes from an investment banking background with two decades’ experience and in 2017 he joined forces with Bitcoin Jack to create the company.

Jack Nikogosian gained the Bitcoin Jack moniker after paying for his food, rent and even a tattoo with Bitcoin for an entire month in 2015.

“Jack and I had met at a couple of conferences and I was quite impressed and in September 2017 we agreed to join forces to create the company,” says Nielsen.

“I have been involved in start-ups since the dotcom boom of the late 1990s and I have never seen anything move as fast.”

Reducing cost

Aryze uses distributed ledger technology to move the ownership of value, which reduces the number of intermediaries and therefore cost and time for processing payments.

Such is their speedy success, they have already won the Copenhagen Fintech Startup of the Year award and were finalists in the Nordic Fintech Startup of the Year award.

He says: “It’s not just about awards. It is about making good on the promises to deliver the technology.”

They aim to bridge the gap between conventional fiat currencies and cryptocurrency by creating a true digital representation of cash with a payment infrastructure that enables people, businesses and IOT devices to make instant payments globally.

Traditional assets

It issues fully redeemable stablecoins backed and pegged to traditional assets.

Nielsen says the gap between the crypto market and the traditional world is “too big for transaction cryptocurrencies to gain mass acceptance and adoption.”

The volatility of transaction cryptocurrencies on top of fiat foreign exchange volatility is too high for corporations transferring money across borders.

He says the recent volatility, for example with Ripple XRP, would be “unacceptable for many corporations.”

“We are creating the best possible product with no central point of failure.”

Digital society

The advantage of being based in Denmark, is the market is the “most digital society in the world – way ahead of Germany and other countries.” With a relatively small population of 5.7m people, it’s an ideal opportunity to try out the new digital concepts.

“It is like a family and while it is a small community it is also big at the same time with huge talent. People talk openly about what they do and it’s a good set up.”

A stablecoin is necessary as cryptocurrency is so volatile. “We are trying to reduce the volatility and cater for a more traditional world and bridging that gap,” he adds.

They aim to bring down the cost of transferring funds across the world “to almost zero % with only the foreign exchange cost, which is on average 1%.” Currently, the costs of transferring funds across the globe range from more than 7% to up to 14%.

Absolute fortune

At the moment, it costs “an absolute fortune” to move money across the world, often for the poorest of people who have no access to bank accounts.

“I come from an investment banking background and I want to make a contribution to the world that goes beyond what I’ve done in the past,” he says. “I significantly believe it can make a difference and that is a key motivator and driver.”

For example, “if someone in the US wants to send $10 to a person in the Philippines after a hurricane, they will be able to do this and $9.90 will arrive in the local currency.”

It can be used to help economic development from the bottom up.

On cryptocurrency, he describes the “highly immature market” and pinpoints a rush of ICOs in 2017/8 which had “no transparency, business models that were highly conceptual and no clear insight into their revenue streams.”

So it is not surprising that 60% of the ICOs from 2017 “do not have a product or are not even close to having a product on the market.”

Next wave

But he’s looking forward to the next wave – or version 2.0 of ICOs which will have “a much higher degree of corporate governance.” He says it will be a completely new asset class.

Security Token Offerings will be “catering much more for the requirements of the traditional world than what a cryptocurrency entrepreneur would have thought possible,” he believes.