Torbjorn Bull Jenssen is the leading specialist on Bitcoin and blockchain in Norway and a popular public speaker. He has an MSc in Economics, did his theses on Bitcoin in 2014, and has consulted agencies such as the Office of the Prime Minister, the Norwegian Central Bank, and the Norwegian Ministry of Finance, also companies in the financial and tech industry.
Interview Date : 13th August 2020
How is Crypto being regulated in Norway?
In terms of regulation in Norway, it is the same as across Europe. Crypto exchanges are required to have wallets registered with their local financial authorities. It’s up to every single country to create its own framework for this registration and regulations. If you want to open an exchange and target Norwegian users, you have to register with the Norwegian financial authorities. If you want to target Germany, you have to register with BaFin. Likewise, if you want to target Swedish customers, you have to go to Swedish financial authorities. By being regulated by a local regulator and approved by them, the banks are much more willing to work with you. The FSA of Norway announced in a written statement that they expect the banks to provide bank accounts to the companies that are registered with the Norwegian FSA. So, it’s making it easier to get traditional financial services for crypto companies.
The Money Shift
What Arcane is progressing towards is to help companies with cross border payments, leveraging bitcoin. Norway is a small open economy, which means that we import and export all over the world. Norwegian companies receive payments from all over the world, and increasingly, companies in different sectors are being asked if they could accept bitcoin or stable coins. They don’t know how to deal with that. Most of them have done business in fiat currencies in the past. So, what we are developing is a solution for those companies, so they can accept bitcoin and end up with traditional money in their bank, without being crypto experts. Through this, the payments become way faster and cheaper, and you don’t get screwed up due to the exchange rate as you would if you use banks. This is especially important for small to medium-sized companies. If they let their banks do the exchange for them, just that exchange through the bank will quickly cost you around 1% of your payment. So, you can cut that much more by levering bitcoin and the solution we are setting up.
Scandinavian Crypto Infrastructure
In 2018, the prices were collapsing in the spring, but the infrastructure and the technology were progressing at record speed. Big players like Microsoft had come into space, so it looked really bullish when you looked at how it was evolving regardless of its price. At the time, I came in contact with two well-known Norwegian investors who had been looking into space for a long time. They wanted to build a company with robust exposure to this new industry they saw emerging. The investors didn’t want to go into the market in 2017 because there was too much hype. So, the spring of 2018 was what they thought was the best timing. I completely agreed with them. After having several meetings, we started Arcane Crypto together, intending to develop and provide the infrastructure needed to leverage the power of bitcoin and open blockchains.
We have now built a portfolio of several different business lines. Rather than betting on one horse, we wanted the robustness of a portfolio, while going after the benefits of synergies and consolidation. We went after business models that were known from other industries, and that could be applied in the crypto space. It was important for us to have a market fit that would bring fast and effective results, and not a 5-year plan in a space that is moving this fast. We have built a portfolio of 6 businesses that include a market maker, an exchange, an interbank market, a hedge fund, a payment technology company, and research and content creation. By combining several of these businesses, our aim is to go after cross-border payment. We can provide faster and cheaper transactions that would not be possible with traditional payment rails. This can be achieved by leveraging bitcoin and the lightning network as a payment rail for fiat denominated transactions.
Why is Arcane Crypto needed in the Nordic region?
Exchanges need someone to be a market maker to operate smoothly, so you could reach out to some other market makers. However, if there is an external party, you wouldn’t have control over the pricing. By having those businesses under the same roof, it’s much easier to work together. The same thing with payment solutions; the flow from the payment solution needs hedging, and some of that flow could be matched with the demand for buying bitcoin on the exchange. The content we create both informs us of what’s going on in the space, and it also helps to make Arcane much more visible. Thereby, it opens doors for us to get in contact with other companies whom we can build partnerships with or make an investment in.
Arcane Crypto on NASDAQ Exchange in Stockholm
Right now, we are in the process of listing arcane crypto on NASDAQ First North in Stockholm. We are doing it through a “reverse takeover”. By the end of this year, it will be a publicly listed company. This is to accelerate our current lines of businesses because we have seen we have both direction and traction. We already have some revenue streams form most businesses in our portfolio. However, these models are very scalable, so we need to have access scale and seize that opportunity. The companies under the Arcane umbrella benefit from the visibility and credibility of Arcane being a listed company. Lastly, the crypto space is very fragmented, so we want to continue taking an ecosystem approach. We will be investing in both startups and larger companies that are at the forefront when it comes to technology, and that have interesting ideas.
Why Sweden and not Norway’s Stock Exchange Market?
The main reason for listing Arcane Crypto in Sweden is because we already have become a multinational company. Arcane is a Norwegian company, but we do have two offices, one in London and one in Stockholm, in addition to Oslo. Trijo, the retail exchange, and Eric Wall, CIO Arcane Assets is based in Stockholm, and the market in Sweden is bigger, thus there is more liquidity. I think technology companies can do well in the Oslo stock exchange. However, if something would happen with fish and oil industries, it will take all the focus. In Sweden, you have a stronger technology and fintech focus.
Interviewer , Editor : Lina Kamada
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