Adrien Treccani from METACO talks about the functioning and significance of the management of digital assets due to the growth of the crypto industry.
1. Tell us about your role at METACO?
I am the founder and CEO of METACO, the leading provider of security-critical infrastructure enabling financial institutions to enter the digital asset ecosystem.
Our institutional operating system for digital assets, SILO, enables large financial institutions to securely integrate cryptocurrencies, tokens, and distributed ledger technology (DLT) use-cases into their core infrastructure, and has been implemented by Tier 1 and Tier 2 banks in Europe, Asia and North America.
As CEO, my role is to lead a diverse team of industry specialists in software, security, cryptography and banking who are working together to transform the financial services industry. Already, I believe we are beginning to see such a transformation, as more and more financial institutions look to incorporate distributed ledger technology into their core infrastructure–a development in part aided by increased regulatory clarity in jurisdictions such as the United States.
2.Can you tell us about your journey into the industry?
My background is originally in academia and software engineering. I received a PhD in Mathematical Finance and High Performance Computing from the Swiss Finance Institute, and worked as an Algorithmic Trader in the hedge fund industry.
I came across Bitcoin in 2012, first as a speculative investment before quickly realizing how algorithmic trading applied particularly well to Bitcoin trading. I successfully built arbitrage and trading bots over three exchanges and started generating exponentially growing revenues using algorithmic trading.
When two of these exchanges were hacked and our funds were compromised, it brought the realization that the crypto industry urgently needed professional infrastructure to store assets along with secure key management, proper governance, and trustworthy companies.
METACO was founded exactly for this reason: to build institutional grade infrastructure for the management of digital assets. By operating as a trusted infrastructure partner to banks and financial institutions, we enable the onboarding of such institutions into the digital asset ecosystem and can propel traditional finance into a new era.
3.How do you think technology is upgrading the financial sector?
The financial sector in large part has been slow to embrace the benefits of innovation and technology.
However, 2020 has been the year of institutional adoption of cryptocurrencies and DLT, and the race for building digital asset custody solutions among financial institutions is well underway.
Major global institutions, such as our client and partner Standard Chartered Bank, have publicly announced plans to launch a Digital Custodian in conjunction with us, while other significant payments platforms such as PayPal have announced plans to bring crypto trading to its 325+ million users.
Beyond the race for secure institutional digital asset infrastructure, Central Bank Digital Currencies (CBDCs) looks to be the next key area where fintech will restructure our financial system. Research and development is a central pillar of the METACO brand and we are proud to be working with two of the leading global central bank security suppliers Giesecke+Devrient and SICPA in the area of CBDCs.
4.Can you explain to us in detail what role a “digital asset operating system for banks” performs?
Launched in 2018, SILO, our digital asset operating system for banks, provides a full-stack solution for the management of cryptocurrencies, tokens and smart contracts.
SILO is unique in the scope of services that it offers institutions, far beyond the secure storage of digital assets and robust key management, it offers a programmable entitlements system which allows custom risk and control workflows for transaction execution and administration. The smart contract engine built into the solution secures the entire tokenization process including minting, burning and transfers. It supports the management of the full lifecycle of tokenized assets, including corporate actions.
SILO also integrates a complete ecosystem of services for liquidity, compliance, tax reporting and sub-custody to ensure that users demands are fully met. SILO also has a number of flexible integration options and can be deployed as on-premises, hybrid cloud, or managed service, with a network of service providers for security consulting, project management, infrastructure hosting, and system integration.
5. What digital asset infrastructure bottlenecks does SILO take care of?
It is somewhat difficult to predict the success of any individual cryptocurrency or blockchain-based tokenization project in the long-term. However, it is clear that as adoption of digital assets rapidly grows, secure infrastructure will be the key base layer across all DLT use-cases, required for the safe and secure storage of such assets.
METACO is the market leader in providing such infrastructure, with our solutions trusted by financial institutions across the globe to securely manage their digital asset use-cases. As regulatory developments such as the recent decision by the Office of the Comptroller of the Currency to greenlight nationally chartered banks in the US to offer custody services for digital assets, the race among financial institutions to implement such infrastructure into their core services is quickly accelerating.
6. How is METACO able to provide strong security guarantees to banks?
SILO is engineered with a unified infrastructure to provide institutional-grade security to banks and financial institutions. The infrastructure combines certified tamper-proof hardware for the key management with hardware-enforced governance workflows. The solution also allows for both hot and cold wallets, which is ideal for the storage of assets both long-term and short. Through the tight interaction of software and hardware security, SILO ensures that all critical workflows are protected in its purpose-built, hardware secure enclave.
The cutting-edge security of the platform has also been verified by third-party firms. SILO was the first digital asset storage solution to be fully insured. A panel of London insurers brokered by insurance firm Aon, offer underwriting terms to clients using SILO to protect their assets under management in hot and cold storage.
7. What features of your platform differentiate it in the market?
SILO is unique among custody solutions on the market in the scope of services that it offers. Its programmable entitlements system, its smart contract engine which secures the entire tokenization process across the lifecycle of assets and its support for an ecosystem of services including liquidity, compliance and sub-custody, supports every aspect of institutional needs.
Furthermore, SILO is already trusted and implemented by Tier one and two financial institutions including Standard Chartered Bank, and other FINMA, BaFin, Banco de España, ECB, and MAS regulated banks and exchanges to manage their digital asset infrastructure.
8. What advice would you give to technology start ups?
I think market timing is key to the lifecycle of many technology startups. At METACO, we realized that when we started the company in 2015, banks were simply not prepared to move into the industry as of yet. Looking ahead to future needs was integral to our success.
A good product is not always enough to create a successful business, the wider market must also be ready and willing to invest.
Creating a compelling business case, one that established companies see as an opportunity for growth, and where the potential growth outweighs risks, cannot be understated.
9. What innovation in digital asset infrastructure will be the highlight of 2020, do you believe?
Currently, there is a heated debate among digital asset custodians as to whether
Hardware Security Module (HSM) or Multi-Party Computation (MPC) technology offers the most adaptable key management solution for banks.
HSM based solutions allow crypto-asset owners to store the keys for their assets in cold storage, a storage method in which the carrier of the crypto key is not directly connected to the Internet. MPC based solutions use cryptography algorithms to create signatures splits over several users, where the signature process does not require signers to disclose their key to others.
I think we are likely to see significant development in the near future which will address this issue and allow financial institutions to benefit from the advantages of both forms of key management.
10. How do you prepare for an AI-Centric world?
AI and Big Data will undoubtedly play a critical role in the next generation of our financial system. At METACO, we pride ourselves on always seeking to innovate in what we do and related areas of interest. Research and development is a core pillar of our company philosophy and we are always looking to explore how emerging technologies can complement our existing expertise in cryptography, security and digital asset management.
11. What movie inspires you the most?
The Matrix, in that it forces us to realize the world may be very different from what the consensus view is. Putting things into perspective, making bets about what the future holds and daring to think outside the box are some of the most important traits one should possess in my opinion.
12. Can you give us a glance of the applications you use on your phone?
Call of Duty mobile! It is hard to believe that such an impressive game can now run on a simple smartphone. Having lived through the evolution of video games, I am impressed every day with how fast this ecosystem is evolving. Maybe one day we will end up in The Matrix after all!
