This episode of the Fintech Layer Cake podcast features a deep dive on pain points in crypto with Sara Xi, Chief Product Officer of Prime Trust.
Fintech Layer Cake is presented by Lithic and hosted by Matt Janiga, our general counsel, and Reggie Young, our product counsel and author of the Fintech Law TL;DR newsletter.
Highlights
What is PrimeTrust?
Sara Xi: We're a fintech infrastructure provider. There is a huge space for infra providers that hasn't been very well understood. All the businesses launching new products in blockchain and crypto space all share the same set of needed functions. And oftentimes, as they start their business, they don't quite understand what they need.
We not only offer the whole ecosystem of products they need but also walk hand-in-hand with them and explain to them these are the considerations. And because we've gone through all the integrations with different partners and we staff an internal team to help our customers, that central position to launch new products and optimize existing products and services for our customers is really helpful, especially when they're just getting into crypto and trying to understand the space and what they need to get started.
What does a typical crypto journey look like?
- If you service any end user that touches fiat, you will have to KYC that end user and understand their source of funds. KYC is typically the first hurdle.
- You want to think about who's going to help you with the custodial needs.
- Once the account is open, you need to on-ramp some fiat to token.
- If you're starting a project or you're starting a company, you want to think about how can you add other products and services that might help you boost revenue and kick out your run rate.
What is the responsibility of being an infrastructure provider?
Sara Xi: It's our responsibility to keep everyone operating within the confines of what the banks require and we handle chargebacks. And we also give our customers suggestions on how you can improve your customer onboarding. It starts with who you onboard to really reduce fraud in this space. That's the overlapping circle view that I usually apply to planning out our product strategy and road map. I think it also aligns with our responsibility, not just in terms of making our system available all the time, but also help our customers with product innovation.
When do maintenance windows and deployment schedules happen?
Sara Xi: Pick your window that affects people the least. Communication and transparency are key. Give people status updates, email your customers, or have account managers contact them directly.
It's actually harder because people trade crypto all the time. So what is the ideal window? It's hard to say.
What are some of the harder infrastructure problems in blockchain right now?
Sara Xi: We’ve so many new layer ones coming out, interoperability and how to be able to deploy apps. Basically EVM compatibility, to me, is pretty important and how to really figure out where the trend is going to go. So many layer ones, which ones have the most promise, and how do you design your app so that you can deploy at a mass scale.
The other point is how to make it easier for consumers, who are just getting into the blockchain space, to use it. Just to sign up for an account on an exchange, you have to upload a lot of documents. How do you do privacy preserving KYC?
And then if we can figure out easier ways for people to have access to self-custody wallets or do blend it like self-custody or a semi-institutional custody to make it easier.
What are you really excited about coming up for the rest of 2022 as you think about blockchain infrastructure?
Sara Xi: I'm very interested in the true power of smart contracts to solve real-world problems. Why is title search so hard? You can easily solve that with a smart contract and turning every transaction into an NFT.
Or how we use smart contracts to solve royalties. If we tokenize it correctly, you can pay every player in the ecosystem, from the artist to the platform, to the buyer. You can pay everyone fairly and automatically.
To do all of that, you need a very secure, fast, efficient and scalable chain.
What trends are you seeing in crypto on their way out? What do you see coming this year and 2023?
Sara Xi: Easier UI/UX has continued to stay. For new user acquisition, you’ve got to make it easier and secure for the average consumer. Crypto needs to be its own payment rail.
What are some things you think this administration has to nail to really advance things for blockchain and crypto?
Sara Xi: More clarity around tax treatment. And then for us, we spend a lot of time trying to make sure we have accurate data, accurate Siemens impact reporting for our customers and their end users. So more clarity around that, I think, will help the industry operate more efficiently and take the guesswork out of it.
Be sure to check out Crypto and Fintech: A World of Opportunities at the Intersection to keep learning about crypto.
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About Fintech Layer Cake
Fintech compliance. It can be complicated and overwhelming — even if you've been in the industry for a while. But what if there was a podcast that made learning about it a piece of cake? That's what Fintech Layer Cake is about.
It's hosted by two popular fintech lawyers, Matt Janiga and Reggie Young. In each episode, they use their experience from working at companies like Lithic, Stripe, Square, and BlueVine to break down some of the toughest topics in fintech.
Listen on iTunes, Spotify, or your favorite podcast app.