My “Aha” moment was in 2013 at PayPal. We called ourselves “The Internet of Payments” and had spent so much time plugging into traditional payment and settlement systems around the world, eliminating buyer and seller frictions, as long as they all used PayPal. Moving bits of data is easy when everyone is using the same database.  I thought to myself, I don’t know if it’s 10 years or 20 years, but when distributed ledger technology scales, they will eventually overtake traditional payment networks. We started thinking about what infrastructure would be needed to spur the development of financial services for the “token economy” and that’s eventually how CRED was born! Hi Dan Schatt, welcome to our series “Behind the Startup” tell us about your journey from the payments industry to decentralized finance (DeFi)? Please tell us about your story behind the Cred, how did you start, and what is your vision? For me, it started decades ago when I was a Peace Corps Volunteer in Satu Mare, Romania. I met many smart, talented, capable people during my time in Transylvania, many with enterprising ideas, but with no access to capital. I thought to myself, how can we connect the Money Centers of the world to people with brilliant ideas, wherever they may be...That got me thinking -- where you’re born shouldn’t dictate what financial services you receive. With blockchain technology, you can now allow everyone to access loans and earn the same rates, regardless of where they reside and what banking relationship they may have.  It becomes the great equalizer and hence, our tagline -- “Bank on fairness”. Covid19 pandemic is causing considerable losses to traditional businesses, and federal interest rates are on a continuous decline. Do you see a rise of DeFi products and adoption in such a scenario? Yes, DeFI will continue to rise, but it will take some time before it has attracted the level of liquidity, confidence and support that traditional CeFi has. However, the two are certainly not mutually exclusive -- both will develop together, leveraging the best of each other.  Today, you probably wouldn’t trust all your money to a fully decentralized custodian, just as you wouldn’t likely place all your money with a traditional money manager. The blockchain industry is facing a lot of regulatory hurdles in many jurisdictions, and Cred has an excellent track record of meeting such regulatory requirements. What challenges does the company face while dealing with regulators, and do you see their outlook and behavior change in the future? One thing we’ve been very outspoken about -- it’s necessary to engage regulators and politicians directly - they are key constituents to help support a strong, functioning economy while safeguarding the community from bad actors. We’re proud of the fact that we are licensed and headquartered in California and have been actively engaged in positive dialogue with local mayors, Congressional representatives and regulators in virtually every state, exchanging industry knowledge and working together on licensing requirements. This can only lead to positive change. Recently the OCC, the regulator of national US banks indicated its support to have banks act as custodians for digital currencies.  This couldn’t have happened without a lot of industry interaction with regulators, and we at Cred will continue to take leadership roles to help educate regulators. How does Cred work? Further, how does a user earn by using Cred solutions? Cred partners with wallets, exchanges, and various institutions to offer earning and borrowing services for digital assets. Customers can lock their assets for up to 6 months at a fixed rate of return and choose the interest payout method that best works for them. Customers can also pledge their assets to borrow from Cred. So, we have 29 digital assets supported right now, and counting. That last part – “and counting” – is important, so to get an up-to-date list, you want to talk to our people about practical options. We support Bitcoin (BTC) and Ripple (XRP) and a number of other major coins, as well as some altcoins and even precious metals! Cred has over 15 partners today and 100,000+ registered users, and another 11M+ that can potentially take advantage of the Cred offering today! How many digital assets do you support right now, and which of them as the most usage and adoption? Our readers would love to hear some hardcore statistics and insights from you. We are big believers that commerce transactions will increasingly involve stablecoins and merchants will be able to leverage efficiencies that just don’t exist in today’s market. For instance, most merchants can’t collect credit card payments for a few days, interchange fees are still high, and they must provide a large deposit with their banks to deal with potential chargeback solutions. These inefficiencies can be addressed with a combination of  blockchain technology and traditional lending. While COVID has slowed down many merchant initiatives, we’re excited about the potential to give merchants much better financial services in the future, and Cred intends to be a part of the solution. What is Cred Merchant Solution? Can you explain to our readers how it is different from traditional finance? In terms of what Cred does that is unique from its competitors. It’s basically everything we just discussed, and a lot more. Essentially, we are allowing for that broader entrance into a crypto world where you know why you’re investing, and it makes sense to you and everyone else. Can You explain what ‘Cred’ does that is different from its competitors? Early adopters often got a barrage of questions from other people – why would you want to own bitcoin? Why would you want to own a crypto coin? Together, we’re helping to make these questions obsolete. If you can show how blockchains and decentralized finance work and demonstrate key ways to innovate in banking and finance, people aren’t going to ask those questions anymore. Then there’s the merchant functionality that we talked about – before these kinds of systems, merchants just didn’t have these types of options. They built up cash and carried it away from their point of sale locations in armored trucks. That system is thoroughly outdated and really archaic, and it needs to change! In less than one year Cred has signed up customers across 190 countries and 29 US States, what makes your venture stand apart from other players? Further, what’s the strategy behind expanding so aggressively? Yes, we are expanding pretty quickly, in blockchain fashion... Who doesn’t want to earn on their crypto? We love the old saying “History doesn’t repeat itself, but it rhymes.”  In the heyday of online banking, many customers would choose a bank based on online interest rates and ease of use.  Security and risk management were “must haves” but customers expected more.  We think it’s only a matter of time before every wallet, exchange, and eventually every bank will need to offer some sort of yield on digital assets, and if they don’t, they will lose customers.  We’re here to help! You have partnered with leading exchanges, wallets alliances, and foundations across the blockchain ecosystem, tell us about the future roadmap and purpose behind these partnerships? We believe that customers should be able to do their banking where they feel most comfortable. That’s what makes us fundamentally different -- we are partner-driven, answer and we are excited by helping our many partners deliver the very best earning and borrowing services the industry can deliver. We learn about what works best, and the fact that we’re integrated with so many partners, helps us learn, improve and continually offer better and better services to our partners and their customers.  You can expect Cred to offer more financial services, including defi, as part of its overall product roadmap with its partners. Do you believe that we are in a global recession due to coronavirus pandemic? If yes, where do you see DeFi products fit and act as a catalyst to bring the worldwide economy out of this recession? Yes, we’re clearly in a recession, and just as bitcoin was born out of the 2008 crisis, the Corona crisis is an opportunity for DeFI to spread its wings.  It will take some time to attract a level of confidence and resulting liquidity to really support the market, but this will happen over time and will certainly help stabilize some of the past volatility that we all experience with crypto assets. To a newcomer in the blockchain industry, would you suggest Crypto lending as a recession-resistant personal finance strategy? I would say crypto lending can be more efficient - it is easier to secure, transfer, and exchange crypto assets like bitcoin, which can lower settlement and investigation costs and therefore improve returns. What major trends and challenges do you see for the cryptocurrency industry in 2020? Further, do you have any advice for young entrepreneurs who want to build in this industry? A new level of interoperability will be coming as DeFI exchanges accept wrapped tokens.  As an example, the Universal Protocol Alliance, whose members include Cred, Uphold, Ledger, Certik and Bittrex have recently put out several ethereum based tokens all backed 1:1. This includes a gold token (UPXAU) (backed by the Perth Mint), a USD Token (UPUSD) a Euro token (UPEUR) and a bitcoin token wrapped in ethereum (UPBTC).  As defi continues to take off, it becomes seamless to move from a euro to gold to bitcoin since all tokens are on the same protocol.  There are many exciting tools and applications to be built to support the use of these tokens and the opportunities to move in and out of many asset classes so frictionlessly!  Exciting times for entrepreneurs! The purpose of this article is to remove informational asymmetry existing today in our digital markets by performing due diligence by asking the right questions and equipping readers with better opinions to make informed decisions. The material does not constitute any investment, financial, or legal advice. Please do your research before investing in any digital assets or tokens, etc. The writer does not have any vested interest in the company. Interviewer - Ishan Pandey, Founder of Blockchain Research.

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Disrupting and Decentralizing Lending - ​Dan Schatt [Interview]