Two entrepreneurs, Anatoly Knyazev and Georgy Klumov, develop a new cryptoplatform, Stasis, capable to issue so called cryptoeuros and other digital analogues of fiat currencies, European ones in the first instance. The project will be launched in the jurisdictions where legalization of digital assets is highly possible, such as Kazakhstan and Malta. The project initiators have already established close cooperation with the governments of the above countries.
Draft the laws, do the jobs
Georgy Klumov, Stasis’ present-day CEO, is also Investments Director at Matrix Advisors financial boutique. His partner in the Stasis project, Anatoly Knyazev, has lived in Malta for many years and is a co-founder of Exante Bitcoin Fund, the oldest Bitcoin fund. Both Knyazev and Klumov are official advisors to Malta Financial Services Authority and assist it in drafting a new set of rules and regulations intended to protect interests of investors in digital currencies. Last July Knyazev and Exante’s other co-founder, Alexei Kirienko, discussed the prospects of implementing Bitcoin and blockchain technology in Malta with Maltese Prime Minister Joseph Muscat who is a cryptocurrency enthusiast calling on his European colleagues to make use of the cryptocurrencies’ potential to turn Europe in a Bitcoin continent.
A similar law on cryptoassets is now drafted by the Stasis team for Kazakhstan, or for Astana International Financial Centre (AIFC), to be exact. AIFC is a special zone governed by the English law where cryptocurrencies will be legalized. As Georgy Klumov explained to Invest Foresight, once drafted, the document will be reviewed by AIFC’s Board of Directors. AIFC and Stasis have signed a cooperation agreement. Baurzhan Bektemirov, AIFC’s Chief Economist, pointed out to Invest Foresight, though, that the agreement is just a general memorandum and does not provide for any specific obligations of its parties.
The founders of Stasis now expect that their project will be registered as a legal entity in jurisdictions with respective legislations. Those, with the greatest probability, will be Malta or Kazakhstan, where Stasis has already got a subsidiary.
Mirror for euro
As Stasis founders see it, the platform will serve institutional investors (various funds and investment companies) and cryptoassets issuers. As an interim currency the platform will use tokens secured by reserves in fiat currencies.
Stasis’ first token will be a token linked to euro, one of the world’s major currencies by the trade turnover.
“We create a mirrored euro in blockchain. You use euro to buy cryptoeuro, and then you can buy any other cryptocurrency. So that will be an instrument for legally entering the digital world. To purchase a cryptotoken now, you have to transfer your funds to some murky exchange and get no legal protection whatsoever. Cryptoeuro will become a full analogue to euro. It will be stable and secured by currency reserves. It will also be subject to audit. Should anything happen, you can file a claim with a court governed by the British law and then get some assets of the company which kept the euro”, Georgy Klumov explains.
For every hard currency unit exchanged for its electronic analogue, there will be a special token issued, SET, fully secured by the hard currency. In case of a reverse exchange, tokens will be nullified in an amount which equals the hard currency reserves diminution. This way, the value of tokens will be tied to the value of its fiat equivalents.
Cryptoeuro (cryptopound, etc.) may simplify the process of converting hard currencies into cryptocurrencies and vice versa. In this context cryptoeuro may be of interest to issuers who have no lawful ability to use the funds they raise at ICOs or, in other words, to cash cryptocurrencies earned during ICOs. The matter is, lots of cryptotokens issuers register in offshore jurisdictions, at Cayman Islands, for instance, while banks, to avoid suspicion of involvement with money laundering, frequently decline dealings with offshore countries.
A digital currency tokens will therefore be secured by a real currency which will be reserved and managed as a monetary market fund. The profits from investing reserves will be converted into highly liquid and highly reliable assets such as short term sovereign bonds, bank deposits and other financial instruments. Who is going to manage the reserves, will depend on the final edition of the legislation. If under the law a licensed manager is required to run the business, that manager will have to appoint an independent auditor.
Reserve fund and activities of Stasis Fund will be subjected to government audit intended to ascertain the reserves are available in the amount required to cover the existing number of tokens. Since a token will be a formal liability of the company, an auditor can offset liabilities against assets (reserves).
As for the technical specifics, the platform will employ Ethereum blockchain which allows performing 20 transactions per second, whereas transfers between SET owners will be arranged via a crossplatform of its own design.
It will not be possible to trade Bitcoins and other cryptocurrencies at Stasis.
“Our goal is establishing a legal platform for digitalization of fiat currency which can thereafter be exchanged for any other cryptoasset. The largest marketplaces have already demonstrated interest to SET listing”, Klumov says.
Tokens for EU
In case cryptoassets market grows, demand for SET will be demonstrated by traditional capitals entering the market via Stasis platform. If the market shrinks, SET will be of interest to cryptocurrency investors intending to secure their capital in a stable currency and reduce portfolio volatility. Preliminary assessments show the funds transferred to the system may reach two billion euro by the end of 2019.
SET will permit its holders to become key members of the system: issuing agents, master nodes or, for qualified investors, beneficiaries of Stasis Fund managing company.
As early as in 2012, prior to the similar experience of Pantera Capital, Exante became the first in the world to securitize Bitcoin in a hedge fund format.
By now 15 hedge funds dealing with cryptoassets have invested $395 million of the reserved capital of $1.5 billion.
By Natalia Kuznetsova