IN a digital economy, these three’s a company. Just like their counterparts, Nichel Gaba, Yang Yang Zhang and Krystian Kucharzyk, who are all in their 30s, believe that the future of the economy is toward digital.
With this in mind, the troika formed this year Fyntegrate Inc. doing business as the Philippine Digital Asset Exchange (PDAX).
Gaba, a cofounder and CEO, finished his management engineering degree at the Ateneo de Manila University and master of business administration (MBA) in finance and real estate at the University of Pennsylvania-The Wharton School. A chartered financial analyst (CFA), Gaba also worked as vice president interim head of trust department of Hongkong Shanghai Banking Corp.
Yang is very adept in mathematics and economics, and graduated with an economics degree and management science from the Massachusetts Institute of Technology. Kucharzyk, who finished accounting and finance in Northeastern University, has a strong background in finance and accounting, having worked in global organizations such as Merrill Lynch, General Electric and Goldman Sachs. He holds an MBA degree from the Institut Européen d’Administration des Affaires (European Institute of Business Administration), more known as Insead.
In an e-mail interview with the BusinessMirror, Kucharzyk said PDAX sees a lot of potential for cryptocurrency in the country as manifested by the use of local companies in helping Filipino expatriates in their remittances to the Philippines.
Although millennials are expected to take the lead, Kucharzyk believes other sectors in the corporate world will enter the market. Moreover, he said the other objective is to help the unbanked Filipinos to have access to an alternative financial and investment service.
Since cryptocurrency, or crypto, is a new development in the country, do you think this is also a leap on your part to open PDAX in the country?
Cryptocurrencies have only recently caught the attention of many economies across the globe. The Philippines has actually been a leader in adoption when compared to most other countries.
Philippines-based remittance companies have been using crypto for years as a means to reduce costs for OFWs (overseas Filipino workers) sending funds back home to their families. It was recently estimated that over 5 million Filipinos have used or invested in cryptocurrencies.
Ultimately it is the lack of transparency in the market that makes it seem as though cryptocurrencies are a new development here in the Philippines—something PDAX, as an order-book-exchange, can help solve.
Do you think the country’s huge millennial population is favorable to the growth of PDAX in the country?
Because they were raised in the digital age, where technology plays such a huge role in their day-to-day lives, millennials have been early adopters of cryptocurrencies. We do think that as the large millennial population enters the work force and disposable income grows, they will increasingly look at digital assets as an attractive asset class to invest in and grow their wealth.
As a follow-up question, do you think millennials will take the lead in investing in digital assets?
While millennials were certainly early adopters, the market is seeing increased interest from more tenured investors, as well as financial institutions. US-based cryptocurrency wallet Coinbase estimates that $20 billion worth of institutional money is waiting to enter the cryptocurrency market as soon as regulations are finalized. We also see an increasing number of OFWs looking to cryptocurrencies as a low-cost means of sending money back home to their families here at lower costs.
Is being a millennial a big factor why the group put up PDAX?
Being part of the millennial generation has certainly helped us identify opportunities such as digital assets as an avenue to investing. However, the platform can help make the market more efficient and investing more accessible to all Filipinos, not just millennials.
What are the advantages of investing in digital assets?
While every digital asset is unique, the key advantage of digital assets is the underlying blockchain technology that makes it so innovative. Digital assets built on blockchain technology do not require brokers, nominees or agents like with traditional assets.
Each of these intermediaries increases the costs associated with investing. Because blockchain removes these intermediaries, the minimum to invest in digital assets is far lower, making the market more accessible for all Filipinos, not just the privileged few.
You mentioned in an interview that investing in digital currency levels the playing field in terms of reaching out to the unbanked sector. Please expound how PDAX will give access to the unbanked.
Investing in digital assets levels the playing field for all Filipinos.
Right now it’s very costly for Filipinos to access traditional assets, such as real-estate, commodities, even equities.
Through our platform users can begin investing in cryptocurrencies with as little as P200. What is so revolutionary about the blockchain technology underpinning cryptocurrencies is that it can bring traditional assets into the digital world.
For example, there are companies here in the Philippines looking to put real estate on the blockchain. PDAX would be able to list these assets on our platform and enable users to invest in real estate for as little as P200.
We offer over 10,000 outlets nationwide for Filipinos without bank accounts to deposit and withdraw cash to and from their PDAX accounts. These outlets include 7-Eleven stores, pawn shops, and over-the-counter desks at banks. We are actively investigating even more options that will help investors who cannot maintain the minimum balances required to keep a bank account.
Can you describe the business model of PDAX?
PDAX is an order-book exchange, akin to that of any stock exchange, such as the PSE or NYSE. This guarantees that buyers and sellers are always getting the best available price on the market.
PDAX will take a small trading fee on every trade that is executed, less than 0.5 percent, significantly reducing the overall cost of accessing the market for Filipinos.
Is PDAX planning to tap local companies as future investors toward expansion?
Our platform supports both individuals as well as companies looking to invest in digital assets.
Besides investing on our platform, we are always open to exploring partnerships with local companies that understand the pain points for Filipinos and we want to work together toward financial inclusion by making investment more accessible.