Beincrypto had the opportunity to sit with Ilya Volkov, CEO and co-founder of Youhodler, a Swiss- and EU-based Crypto Fintech Company. YouHodler has been recognized for crypto loans, borrowings and Erd services. This is for users looking to amplify the crypto retention of their idols due to a variety of trading strategies.
During a conversation at the Web3 Banking Symposium held in Lugano, Volkov shared his thoughts on the construction of a lean, independent company in Crypto space and the future of blockchain and Crypto’s role in traditional financial systems. From the challenge of integrating distributed finance (DEFI) with legacy banking structures to the way YouHodler pushes envelopes with new technologies, this interview offers valuable insights to one of the industry’s most dynamic leaders.
Ilya Volkov Building YouHodler Without External Funding: How Personal Values and Convictions Shaped the Journey
It has always been in my mind and in my partner’s mind that I should use a lean approach. The advantages of this approach are actually quite simple. Focusing on a lean approach will focus on efficiency.
This means building a product that customers welcome, and customers vote with the money for your product.
Comparing this approach to others in the space, the contrast is clear, especially between 2017 and 2018. Many companies raised large amounts of funds through ICOs, and although not all of them wereted or misused those funds, there were quite a few. It was simple money and spent just as easily.
So this money was invested in suspicious marketing channels and influencers of all sorts, and it rarely went for real product development.
Again, the key is that many companies that have raised many simple funds are not focused on product development. Many of them failed because they were focused on being proud of themselves.
Again, disclaimer, not all of them have failed, but they are enough to make the point. Therefore, this is the advantage of running a company focusing on efficiency and product quality.
In fact, there are two drawbacks. So the first one is when tens of millions of dollars are raised through an ICO or some VC a few months after the company is launched. Of course, you can invest in everything right away, including marketing. This is very important. In the digital field, marketing is very expensive.
In fact, it’s interesting that these days, digital channels are more expensive than traditional offline channels, and smart companies that have raised a lot of money have made a big push first. I won’t mention the names, but I think you know some good examples of companies that have raised tens of millions of people through ICOs. I can only tell them Bravo. The first benefit for them is a good start right away.
The second advantage of having external support, especially when working with top tier VCs rather than via ICOs, is access to actual expertise. Working with a highly specialized business focused on VCs will have additional expertise. You can list some VCs like the A16Z. They are very clever people with a focus on efficiency.
Therefore, if you work with experts like them, you can get the advantage of accessing knowledge base and accessing a good selection of market expertise. But of course, you may lose your freedom.
After years of hard work, I think we still have the opportunity to start working with some smart partners. But on another level, we are no longer a startup. We are probably more than scaling. Yes, we are open to working with smart, strategic investors. But again, the key advantage is that it focuses on product quality, not just on hype and empty tokens, but also on customers paying for real value.
Promises the role of Crypto Technologies and YouHodler in shaping the future of blockchain
Our spaces have different kinds of dimensions and different kinds of use cases. So, trading, paying, investing in a store that’s worth it, right? When it comes to investments and trading, we focus on all the valuable coins and tokens for purchasing, selling, lending/borrowing and trading. Our market segment is always in a market with all trends.
Of course, we have all the classics. The latest examples, like playing cards coins, follow new ones. We closely monitored what was going on in the market and released our Trump token within 24 hours of Trump’s announcement. We received many thanks from our customers as they were happy to do business with us.
There are many questions about the future of tokens like Trump, but anyway, it is very interesting and very appealing to customers. So, strategically, we believe that not only cryptocurrencies on the platform, but also traditional assets of the medium term, based on partnerships with other financial institutions.
So, we come from code, but we are partnering with traditional institutions. And in fact, the event we’re talking about in Lugano – the Web3 Banking Symposium is a great example of collaboration, cryptography and traditional institutions. So we continue to add crypto and some traditional instruments to the trade and investment section. This is number one. Payments are the second strategic focus.
We invest a lot in all our wallets and payment infrastructure for our applications. Together with us, you can open a dedicated bank account with a name within the platform. Of course, we rely on bank partners to provide our services. You can link cards, Visa, and MasterCards, and easily refill and withdraw with just one click. You have money on your card, pay your bills and buy groceries.
We are in the final stages of releasing our own cards, a YouHodler branded card. Of course, there are all kinds of banking protocols integrated into the platform to further simplify the user experience. Do everything to support a 360-degree approach for payments around Crypto.
We’re also investing in some new features. And we are very pleased that we are one of the first members of the Universal Money Address (UMA) network, built in Lightspark, Europe and Switzerland. This is a great feature. I can give you some tips.
LightSpark is a company created by Tier-One entrepreneurs from companies such as PayPal and Facebook. David Marcos, founder and CEO of Lightspark, is a former president of PayPal and a former top manager of Meta. He brought his expertise in building PayPal and Facebook payment solutions to Lightspark.
Remember the famous stories from Libra and the Diary? They learned a lot from it. So they launched Universal Money or Uma. This is similar to PayPal, but at the next level. This is a simple, human readable address similar to email, but is connected to all forms of money – cipher or fiat. You can send money, and in a few seconds, the recipient will get his or her preferred currency.
Therefore, together with us, you can use this address for ciphers, any ciphers, and Fiat. You can use the euro, dollar, British pound and peso. If you want to send money to another person, you just need to ask your peers about his or her address.
And let’s say you send an euro on your side. But on their part, if that’s the case, let’s say they’ll receive USD in the US. And the beauty is that in the US, you can even receive it in US dollars into the bank accounts of any US bank.
And it works in different countries. Therefore, we are in care of Switzerland and the European Union, with other members of the network taking care of other countries. We have partners in Argentina, the Philippines and Türkiye.
For example, when we send euros on our side, it is instantly converted to Bitcoin. It is transferred using the Bitcoin Lightning network and converted to local currency within the platform, in the partners, in the US and Argentina.
Therefore, no other banking protocols, Swift or protocols are required. No other payment trajectory is required. Here, bitcoins are used as payment railroads, so you don’t even need stablecoins.
Also, due to Lightning network, this occurs with milliseconds and seconds issues. The average transaction time is 3 seconds. It sounds amazing, but we have it and it works.
We currently run several test campaigns that we target, including the Filipino community working in Europe. Today they are using Western Union, or apparently expensive wise men to transfer money.
We tell them to use us on the European side. 3 seconds, a small fee, that’s it. Therefore, this shows how dedicated we are to driving technology boundaries focused on the key values of our end users.
Ripple and Cross-Border Payment YouHodler CEO
In 2016 or 2017, I was a huge fan of Ripple’s ideas. It was quick, to try the right thing and I loved it. The question is, could they be able to quickly challenge after all these years?
i don’t think so. Instead, there are Stablecoins, Circle, and Tether, which basically deal with the same problem. Some UMAs target cross-border payment ideas.
Returning to the question of contributions to that point, we are also actively involved in the development of the entire industry.
The market is very big. Instead of competing with someone, it’s better to make them your partner. And that’s why we’re trying to bring together different businesses, even from different sites.
Three years ago, when I said I wanted to connect banks and crypto companies, people thought I was crazy. They told me that it would never happen. But that’s happening now.
Bridging the gap between Web3 anonymity and traditional financial regulatory demands
There are two sides. One concerns anonymity and the oldest points of KYC and AML. The other is independence. Let’s touch the base based on both.
So, when it comes to KYC, I think it’s time to talk about normal people, normal people, average people, just like we do. It’s not really a problem. So I don’t see any issues.
And we have great experience with the KYC process and tools. So we say there are 1,000 people coming every day. As soon as you have a really good UI, we don’t see any problems in the public. So, if you have a good solution to upload and process your documents, if there is a good solution to make selfies or something like that, that’s not a problem.
The problem appears in bad actors trying to trick the system. And it’s not just a big fraud case, but also some small frauds, such as card fraud. Trust me; as we’re in the market of millions with all these kinds of stolen cards, fake identities, and so on, every day, there’s a lot of fraud cases happening every day.
When comparing the value of protection and defense from fraud to the complexity of KYC. And from a typical middle class angle, KYC is not a problem.
But again, we need to focus, and we have a lot of focus on simplifying the UI/UX of our apps. So, of course, there is another point related to KYC and AML. This is tax again.
So it’s not just Web3. People have always been looking for ways to optimize their taxes. If it is done legally, it’s fine. If it’s done illegally, it’s not okay.
And again, this is not about cryptographic tricks. This is about general circumstances. My point is that codes are not a way to trick taxes, and not at all. If anything, cash is still the easiest way to get away from the radar, right?
My short answer is that anonymity is not an issue, especially when you hone your user interface.
When we talk about being independent, our analysis shows that there are two large groups of users, so it is very interesting. Someone who wants to manage the key and someone who wants to take care of it. Again, just like traditional banks, if you forget your password, you know that calling customer support or accessing the branch will fix it, so relax.
Therefore, the same behavior seen on the cryptographic side is fine. So, as soon as your service provider becomes trustworthy, it’s completely fine. That’s why it’s important to regulate the service providers that offer these types of things. Not everyone in this world can take care of themselves, right?
So, the reason why centralized institutions are still needed, but of course there are users who want to manage their assets themselves with a non-custodial approach. This is absolutely fine. In fact, we follow up on this approach. We started as a centralized facility.
Now you have integrated the Web3 connector and wallet connection. It’s not live on the platform yet, but it will soon be available. The idea here is very simple. I want to combine both sides.
So, if you want to use ledgers, hardware devices, or meta masks, it’s fine, but you’ll need to get a loan at some point. At some point, you will need to convert Bitcoin to local currency.
Provides a simple plugin. Click the button to link your wallet to the application, encouraging crypto to get a loan, or you can easily refill your visa or Mastercard. So, we are currently testing connectors, and it is very promising and I think it will satisfy both groups of people who don’t want to care for their keys and those who want to manage their keys themselves.
YouHodler’s approach to balancing crypto anonymity with traditional financial regulations
Because in fact, that’s a very interesting question. So, you know, it seems you’ve always been acting fast and in some cases they’re professional to keep up with all regulations. In some cases, they follow different goals.
In parallel, in our interview, they are currently talking about CARF (Crypto-Asset Reporting Framework) to provide the idea that PWC keynotes are being held during the Web3 Banking Symposium stage.
This is the new Crypto Asset Reporting Standard, which will be implemented in the European Union in 2026. This means that we have to comply with MICA regulations now, and it’s the final stage of dealing with MICA and DORA, and now the regulators are dropping CARFs, so we should always invest in investing in that we are following all of these types.
So, the short answer to your question is that it’s not about finding a perfect balance, as you keep your system up to date.
It is headquartered in Switzerland. The European Union has several approvals and licenses.
We are also fully committed to MICA compliance and have invested a lot in this MICA approach. Our European team is growing. For example, there are a few extensions. For example, you have permission to work with the Latin American market in Argentina. And of course there are some other market plans.
Even using frameworks like Mica, you will still need to follow up in different regions. And that’s not easy. But this is reality, right?
How blockchain regulations are rising, shaping the future of Youhodler and the crypto industry
In the morning, at the symposium, I presented one slide with a brief chart of regulations complexity and importance to the economy. And we see that the country is trying to find their place there, it is trying to compete, it is trying to compete with each other.
Let’s take the US as an example.
A year ago we saw an absolutely restrictive and crazy environment with lots of lawsuits. However, the financial, financial technology and banking sectors have always been extremely important to the US.
The Trump administration is trying to deregulate the industry to support the importance of the industry. But at the same time, the European Union has decided to take a heavy approach to MICA regulations.
So I was saying that different regions and different countries were trying to find ways to regulate cryptography. Some people are trying to simplify regulations by relaxing them to increase the value of the economy. Others are trying to regulate it to significantly protect end users.
We are in Switzerland. Switzerland has always been wise to find balance, and hopefully so far it is well balanced and equally in the future.
Of course, blockchain cannot return to its 10 years ago. But this is always how all industries evolve.
Especially when talking about financial markets. Can one of the financial products be named without regulations? No, like a credit card, it was always like that.
You remember before, the credit card was based on paper slips. It was really unregulated and that’s why they were so many scams, right? Restrictions then came and fraud fell, but I still use my cards today. It is the natural evolution of any major financial product. And it brings me back to the previous point.
So when talking about normal users rather than bad actors, this is no problem immediately if the UI is good, but it’s good because the UI has many side tools. AI helps simplify the interface. AI supports interaction with a variety of systems.
Plus, I think there are some with some digital identities. There is no need to resubmit KYC on all platforms. So, again, I’ll go back to your question. Yes, it’s not the same as before, and there’s no Wild West, but it’s still very ok for the absolute majority of users. Companies focus on the simplicity of their UI.
Ilya Volkov discusses how Crypto is transforming traditional finances (Tradfi) and how the future holds
As you can see, we already have many traditional banks working actively in the crypto sector. Today I brought this example to the stage. Last year’s symposium was one of the oldest state-run Swiss banks, one of the Swiss Canton Banks, with a history of around 200 years.
They decided to introduce crypto as they have two customer groups: wealthy traditional clients and young, adventurous clients. They said that wealthy traditional clients have already invested in everything.
So they invested in gold and invested in different types of products. They have already bought Tesla stocks, Apple stocks, and Google stocks, all the high-tech ones, but now it’s clear that it’s the next step, so they’re asking for a code.
And the banks told us that if they hadn’t implemented the code, it was clear that they had lost the traditional audience they had been banking with them for the past 200 years,
On the other side, young customers.
They said it was clear that if they didn’t provide crypto to younger customers, they simply wouldn’t come. Therefore, this is the best explanation for why traditional institutions are taking part in the crypto space.
It can be said to increase competition for businesses like us, but I say no. Because it brings more opportunities for partnerships. Fintech companies are always one step ahead as they explore several new perspectives. And we can create new ones that will later be adopted by traditional institutions. This kind of collaboration is absolutely fine.
Like I said, blockchain may no longer be Wild Wild West, but there’s still something new as companies like us are constantly working to push boundaries. Therefore, it is a constant evolutionary process.
