Fintechs of the Future: Anywhere and Everywhere

Carlos Ponce (00:00):

Good morning everyone. Welcome to another episode of Tech Leaders Unplugged. And today we are getting unplugged with Rob Harrop, who is the CTO of Bitso. And,well, as you can imagine, Bitso is a cryptocurrency company. So I'm gonna tell you all the details because I, I'm gonna leave that to Rob to elaborate on what the company is about, but I just wanted to say that I look forward to this conversation. I've been looking forward to it for a while now. So thank you, Rob, for being with us today, and of course, thank you. My fellow teammate and co-host, Wade Erickson. So thank you both, gentlemen, for being here with us today on Tech Leaders Unplugged.

Wade Erickson (00:58):

Thank you guys. All right,

Carlos Ponce (01:00):

Excellent. So let's start with you, Rob. So please tell us a little bit about you tell us, you know, your background, your story, tell us a little bit about you, please.

Rob Harrop (01:11):

Sure. So I've been in the tech industry for a little over 20 years now, currently serving as CTO at Bitso, which as you said, is a cryptocurrency business out of Latam. I have, I've mostly been startup for like the bulk of my career. I started my first company when I was 19, did another startup when I was 22, did another startup when I was like 29. I've, I've, I've very rarely worked for a real organization. In fact, Bitso is the longest job I've had, like, not working for a company of my own. And I've been here since the summer of 2021.

Carlos Ponce (01:46):

Excellent. Thank you so much, Rob, for sharing a little bit about you now. Tell us a little bit about your journey with Bitso itself as a company. What it's been like, you know tell. Can you share a little bit about what your journey has been like working with Bitso?

Rob Harrop (02:04):

Yeah, sure. So my journey with Bitso has been quite an interesting one. I, I took the job, I kind of, on a whim almost a friend of mine called up and said, Hey, I'm working at this company and there's been this outage, like, are you interested in a job? And I said, yeah, I'm definitely interested. And I quit my job the next day. I didn't actually have a formal offer. I just thought this sounds exciting. I've gotta, I've got to get this job. Thankfully, I actually did get the job and joined as an engineer. I was a distinguished engineer specifically on the infrastructure, reliability, and performance engineering part of the company. And I did that for about a year and then took on the role of chief technologist, which was more of a kinda a mix between that infrastructure role, that, that kind of deep tech role and kind of a steering role, trying to help other engineers in the company keep up to speed with technologies and so, so on and so forth. And really just try to formalize the way we did things at Bitso to add a little bit more rigor and a little bit more structure. As you can imagine, a company that went from being a nine-person, very founder-led startup to this 600-person company with 200 plus engineers, there was a lot of structure that needed to be put in place. And then in summary this year one of the co-founders, Ben Peters, who was originally CTO, decided it was time for him, to step down in that role and do something far more interesting. He's now leading our r and d lab, and I was offered the role of CTO. I had sworn never to take another leadership role like that, but I've, I've enjoyed my journey at Bitso so much. I felt like I'd been doing my best work again quite late in my life. I'm in my forties now and just couldn't turn the offer down. So for the last six months, I've been CTO here as well.

Carlos Ponce (03:54):

Great. So you know it, it's, it's funny when you say you're in your forties and your later stage in your life, I'm not going to say anything, say anything.

Wade Erickson (04:06):

You got a long ways to go.

Rob Harrop (04:08):

It's relative, right?

Carlos Ponce (04:12):

Is just a number as they say. Alright, well thank you, for sharing that part, Rob. So okay, now let's move on to the topic itself today we're going to be talking about FinTech of the future, anywhere and everywhere enabling FinTech innovation in remote first organizations. So let's continue there. Please tell us and the audience why you chose this particular topic and why you thought it was let's say relevant for this day and age.

Rob Harrop (04:43):

Sure. So the reason why I was so flippant in giving up my job and trying to get a job at Bitso is I found that this is an organization that's at the intersection of three of my biggest passions. So I, I have a big passion for large-scale infrastructure, like, you know, like real tech problems. I have a real passion for finance and in particular for finance that is aimed at trying to level the playing field. I grew up with quite a poor background relative to like the UK standard of living, and I've always been interested in how we provide a wider access services access to, to things that are traditionally only for people with high degrees of wealth. So I've always been interested in finance businesses, and this is actually my second foray leading a finance business, but I've always worked adjacent to that. And because of my background in startups, because I very rarely worked in like a traditional business, I've pretty much always worked remotely. And as I went through my career and went to more and more companies and, and bought out my people from, from various startups discovered that actually I was kind of unusual in that respect. And then Covid hit and all of a sudden everybody else is doing remote and trying to, to live in this world. And I felt like I had this, massive unfair advantage by pure chance I'd never knowingly set out to, to build expertise in, in being a remote leader. It's just all I'd really known. I, and I find that remote and finance are particularly interesting together. I have a thesis that the best finance products are built by a diverse set of people because you want a diverse audience. And if you are remote, you have a much higher chance of finding that diverse set of people. You have a much higher chance of the people building your product, representing the people you are selling your product to.

Carlos Ponce (06:38):

Great. Excellent. So needless to say, I mean I was in, let's say in crypto a while ago, and I have a bunch of questions, but I'm going to let, I'm going to pass on the mic to, to Wade, you know, because I think Wade has his own set of questions assembled, so please, Wade, by all means, feel free to take the mic.

Wade Erickson (07:04):

Yeah, thanks a lot Carlos. So yeah, I've been following, you know, crypto for a long time. I think it, you know, back when blockchain was, you know, early, early technology and, and Bitcoin was really only the player, the only player out there, and then Ethereum came along I was always an advocate and interested in using it as a, an exchange currency, you know, not really a store or an investment. And you know, la Latin America is a very interesting continent because of the language differences, the inflation challenges of some countries and, and all of that. And I think it is very ripe to actually be a currency of, of exchanging for goods, you know you know, especially with Argentina and all those kinds of things with the inflation. Tell me a little bit about, you know, 'cause we get a lot of news about what's going on in the U us. We've had a bunch of exchanges that got shut down and sent out of the US and it's been quite volatile this year in the West. Tell me a little bit about the Latin American environment. Is it embraced more? Is it less regulated? Tell me a little bit about that. Is that something I don't know as much about?

Rob Harrop (08:14):

Sure. I mean, so the one thing I I would say is like, it's hard to treat Latam as like as like a block. In fact, you know, if going to different countries, there are very different attitudes, very different levels of maturity when it comes to crypto adoption in general though, when compared, certainly when I compare it to like the UK the regulatory environment is far further along in countries like Mexico than it is in the UK. It's not, it's not, I think as a lot of people might expect this unregulated free-for-all, what instead you find is that the governments and the central banks have a much more, well-formed thesis about the role that crypto has to play. It's very different between companies, in between countries. So a critical part of success for Bitso and, and, and any of our peers in the, in, in the, in the geography is having people in the company who understand that, who can, you know, help shape and understand that public policy. But if we just take our major market, like Mexico, for example, the Central Bank has a well-understood policy around crypto, how it interacts with the normal banking system, the traditional banking system. And it's very easy for us to operate because the rules are well understood. When Bitso first started, and I take no credit for this idea, the founders very presciently thought that the future success of crypto relied on you kind of acting like there was this regulatory environment that at that time, nine, 10 years ago didn't exist. So Bitso has always acted like there was a regulatory environment similar to the one that exists in trad far traditional finance. And what we've seen is that the regulatory environment has slowly, you know, evolved and grown around us. And because we were there in the early days, we've helped inform what that environment should look like. And there's been a lot of turmoil in the industry over the last year or so, but I think is most interesting is the companies who've always taken a strong stance on regulation compliance, a more maybe like, I don't know, conservative, mature approach to, to crypto, are still here, Bitso coin based, the likes of those companies who are like really embraced trying to integrate with the trade aand the crypto world.

Wade Erickson (10:33):

How, how does that work with taxation? Because I know that's something Coinbase had to adjust for.

Rob Harrop (10:41):

Oh I think the question Oh, you are, you're back.

Wade Erickson (10:44):

Yeah, no, I'm sorry. I didn't notice I, yeah, I dropped out, but I could still see you guys. Yeah, so the question was about taxation. I know when Coinbase and these others in the US had to start reporting transactions and it's now taxed at, you know, capital gains of the transaction. Not the end of the year. How much money you made? How does that work with Bitso? Do you have to report back to other foreign countries the types of transactions that are made on your platform since it's foreign to the US?

Rob Harrop (11:14):

Yeah, so I don't know if we have to, right now, I think I'm, I'm perhaps the wrong person to ask like, legal questions of, but I also know that from a product perspective, we want to Okay. You, it's, if you, you know, going back to the answer I just gave, it's incredibly likely that the long-term situation for crypto products is that you will have to report them in one way or another for taxation purposes. You know, and I, I do that like I have a savings account in the UK, and at the end of the year, I have to say, this is how much interest I made. And there's a tax burden to that. There's a similar tax burden to crypto earnings. What we are trying to do is build products that no matter where you are, no matter where you're transacting, we can give you the data to report your taxes as efficiently as possible. And then if some regulator says, Hey, you have to tell me this information, we'll be well poised to do so.

Wade Erickson (12:02):

You know and, and what's interesting is that it seems like the regulations are driving more of an investment model of crypto instead of the current, exchange. I mean, you know, no one tracks my use of a dollar bill, you know when I go out and buy the grocery store and, and no one tracks my, you know, checking account in, in, you know, every time I buy a, a some item or maybe somebody I need to switch it from Bitcoin to Ethereum because the company only takes Ethereum and I've got Bitcoin or whatever. How do you see that affecting the actual adoption of using the currency of exchange?

Rob Harrop (12:42):

Yeah, it's, it is a great question and I think I can give you my personal answer. I don't need it, I don't know that we necessarily have a corporate answer because the space is so volatile. What I think we're going to see is a clearer separation between crypto instruments that are for investment and crypto instruments that are, for currency usage. So I think stablecoins are very much going to drive the latter using stable coins as either a payment mechanism as an individual or very likely as some kind of cross-border instrument for businesses who need to transact across different FX regimes. But also there'll be, there'll be, there'll be coins, there'll be instruments that are more, more geared towards building wealth to, towards you amassing some sort of wealth. The interesting thing to me personally, and I was having this conversation with our VP of data science yesterday, is one of the things that I think crypto enables is blurring the lines between those two things more easily. Because you, the, the fungibility of one token to another token is quite high when you compare, say the fungibility of dollars to copper, that's not super fungible. So I can, I can hold some assets and via, you know, maybe a margin loan or some other kind of kind of instrument. I can get USD stable coins or GBP stablecoins. And I think that's one of the areas where we'll see crypto and Defi really separate itself from Tradify over the coming years.

Wade Erickson (14:13):

Great. Also one thing, you know, given, you know, I do remember the days of, of when there was only a handful of coins out there and it was really about you know, looking at this whole thing of cryptocurrency taking hold in comparison to normal fiat currency. You know, now there's, I mean, I don't know how many altcoins and you know, that are out there and some of these have billion dollar, you know, market caps. And you kind of think to yourself, what if we, you know, combined all of these altcoins and pushed them into a handful of cryptocurrencies? You know, I mean, Bitcoin now is getting close to a trillion in the Mac market cap today. If we pushed all these other altcoins into some consolidated, maybe a top 10, it would be many trillions I would imagine that is actually in the backing. And at that point, countries have no option but to embrace this stuff. In the US we're still struggling to adopt this as a country, as a currency that you can, you know, that's not such demonized, you know, in the, in the media and stuff. And I mean, if it was, let's say we had 10 coins, 10, 10 coins that were represented, $15 trillion in market cap, you can imagine the power that would wield and regulations would've no choice but to bend to that and banks would've no choice But to bend to that, what are your thoughts about the, the, the dis decentralization of all these altcoins against the crypto, the main, you know, coins that are out there like Bitcoin, Ethereum, and a handful of others?

Rob Harrop (15:57):

Wow, there's a, there's a great question and it's a shame we've only got like 20 minutes. I mean, look, I think you're right. It's kind of like a, it's like an order of magnitude or two hours of magnitude larger than looking at like agglomerating all the stocks in the world. And obviously, the overhead to create a token list of token grow a token is very, very, very, very low. And I, I don't know that we'll see tokens munging together, but we'll, we'll almost certainly see funds of tokens. You know, we've already heard a lot about BlackRock, and CTF, which I think will be on the horizon very soon. Well, that's not, it's not a leap to think, well, when do I get the equivalent of I invest in an index fund in the UK of a blend of all of the, you know, S&P 500. When do I get the S&P 500 coins fund? Probably not that long, right? Probably not that long. The question about like the, I guess maybe your underlying question is whether or not there's like utility to these tokens and what the point of them all is. It's actually very hard. 'cause A big part of our job is being a centralized exchange. And when we list a coin, we tacitly give it some, some approval. Right. and there have been many, many times where meme coins have gone ballistic and we didn't list them 'cause we were a bit worried about the implications of them. And sometimes we're right, sometimes we're wrong. We, as a company, take a very conservative approach to what we kind of promote. We definitely believe there is more of a push towards decentralized trading. So more Defi less need for a centralized exchange like us to facilitate a buy or a sell in that world. It's kind of interesting, like, you know, how, how do, how do you protect someone who doesn't know a lot about crypto from buying a really good meme coin versus a meme coin That's just a joke or a scam. It's, I guess un un unknown. It reminds me very much of like the early days of stocks being listed and you had all these penny stocks and these stocks in the newspaper you could buy and you had no idea what they were. Right. but over time the regulations evolve. It's just super interesting to me how quickly technology is evolving in the crypto space and how, and how just technology in general has been able to accelerate the adoption of crypto. And you see that regulators and, and central banks and governments just can't keep up with that pace of innovation. 'cause There are millions of people driving this innovation and obviously there are not millions of people who are trying to regulate it.

Wade Erickson (18:29):

Yeah. And, interestingly, you bring it to that because that might be how this comes together is that much like, guys, y'all still, can you still hear me? I'm not sure where I'm dropping.

Rob Harrop (18:43):

You're back.

Wade Erickson (18:44):

Okay. you know, it, the stock market, you know, not anybody can just put their stocks on the New York Stock Exchange. So I'm, you know, it's a great analogy that at some point, because you guys are centralized, you know, maybe there's going to be five major centralized cryptocurrency exchanges that become the ones that actually have regulations and qualifications to actually get your coin on there. And it isn't so much you guys figuring out, you know, who the fakers are and who the real ones are, but it actually is a formalized process that you have to have certain history and people back, you know, behind it and most kind of things. And that, you know, and maybe that is maybe five or six major exchanges kind of come out of this. 'cause That's typically how large enterprises are typically six enterprises control 80% of any market, you know, so. That's an interesting, I think that's probably the most likely way this is gonna actually come together and get rid of a lot of these coins that are just jokes out there, you know, and push them to the of the world, you know, almost, you know,

Rob Harrop (19:48):

It's interesting, isn't it? I I think you might be right. Like it might be the most likely, but I hope it's not right. I, for me, part of the promise of crypto is not having six mega organizations who can pick and choose what I can and can't buy and who I can and can't trade with. And I, this is a philosophical issue that I really struggle with because I'm quite tech savvy. So I feel like I could make some choices and, and probably inform myself enough to know what, what coins are good and what are not. But I worry about like my friends or my family who perhaps, you know, don't have 20 years of experience in this industry to go, to fall back on who's, who's helping them. What I really hope we see is a fully decentralized underpinning where there are these trusted players who somebody who doesn't have a huge amount of experience can still go and buy from. They can go and buy from a BlackRock or, or whatever, but isn't BlackRock controlling it? It's still fundamentally a decentralized underpinning.

Wade Erickson (20:49):

Yeah. That sounds great. So you get kind of best of both worlds.

Rob Harrop (20:53):

Yeah, I can, but hope I suppose.

Wade Erickson (20:55):

Yeah. Alright, we're, we're getting near the end. You know, a lot of times I think folks we're pivoting a little bit to your background. Noticed you went from VMware to be a CTO. And then of course, as you said, your background is in a lot of creation of startups. And I think both of those things are kind of interesting to the viewers one, what do you think was pivotal in the events that allowed you to jump from a middle manager into an executive role in that first one? And then second, you have a lot of startups. What's kind of giving you the courage to go out there and say, you know what, I'm gonna do this on my own. 'cause I, I think that is still a rare breed that's needed in our society. And some people just need that little nudge to, to, to say, you know what, Hey you know, you gotta do this at some point in your life just to experience it and to fail. Mm-Hmm. <Affirmative>, it's okay. You're probably gonna fail, but, you know, just realize that it's not easy. So tell me a little bit about those two things.

Rob Harrop (21:59):

I'm glad you said it was courage. I kind of feel maybe it's a little bit more like hubris. I mean, I guess I got lucky to a certain degree 'cause I was, I I, I found myself in a situation where I was very young with very few commitments and I had an opportunity to start a startup with a friend, and we did so and we started it. And then I found myself getting more and more plugged into the open-source community. So I was able to meet some friends through, through that who were working on this open-source framework, the spring framework, which became very popular. We started a company around that. This was kind of at the height of these open-source frameworks, Java-centric companies being a thing. And, we had an opportunity to sell and we sold to VMware. So, my path into VMware was less traditional. I, I went in via acquisition and quickly found that I just didn't, you know, I didn't fit in that place. Having had a startup success under my belt made it a lot easier to start another startup. I mean, I completely pivoted and decided to go from a pure tech play to a financial services business, which I had no background in at that time. But that, that's the hubris, right? That's like, I guess the benefit of having had a startup that exited and then, and then doing that again. And then, yeah. And then it was just natural for me. Like, I went back to another startup after that, which was machine learning. And although the business area was new to me, startups was all I all I knew. And I guess I just felt more comfortable in that space. It's, I think it would be very hard now, like in my forties with commitments, family, mortgage, all those kinds of things to say, Hey, yeah, I'm going to quit my job and I'm going to start a startup, or I'm going to join this startup where I can't guarantee to get paid. So some of it was timing and, and yeah, I guess that that that feeling when you are young, that what's the worst that could go wrong.

Carlos Ponce (23:52):

Rob, I have a question for you, Rob. Well, we're approaching the final segment of today's conversation. So what I wanted to ask you is as I announced, as I mentioned to you at the beginning when, when we were chatting off the air, that my question is more from the layman's perspective, from the user, from, you know, average, front of the mill person who is learning about or getting into crypto and all that. Right? So, the tagline for today's conversation is enabling FinTech innovation in remote first organizations. So I, I would like to ask you, what do you mean, you know, for, for us, for me and for the viewers, what do you mean exactly by FinTech innovation and specifically in remote first organizations?

Rob Harrop (24:44):

So I went to Bueno Aires this year for the first time as a British citizen traveling to Argentina visit Bueno Aires. And Bueno Aires is a closed currency. So I, I can't buy before I go. I can't buy Argentinian pesos. And if I pay for something on my credit card and then go through the, the get, you know, pay the, the conversion rate, it's an extortionate rate. And one of the things you can do is, you can take US dollars and you can pay with US dollars if they're pristine and you've looked after them. Like, it's not the easiest process. Bitso has a, had had an app at the time, something we were, we were trialing called Bitso Pay, where I could just scan a QR code and pay with my USD stablecoins. I tried buying similar things with my credit card and with my Bitso pay app and compared the rates, and I was paying half on Bitso what I was paying on Amex because the Amex rates were so punitive. And this is kind of what I feel is the, is the innovation of, of crypto. It's like, you, you, there are so many paths, so many possible ways of combining this technology to solve a problem like aboriginal citizen wants to spend money in, in Argentina, that you, you kind of can always beat the house. You can always beat the traditional system. And the reason why I think remote thirst is so important to this is when we were more Mexican-centric, we hadn't thought about that product. It wasn't until we started hiring people out of Argentina and thinking about Argentina as a market and having people who live there and who experience being an Argentinian who say, Hey, you know, this QR code thing exists. You could build this, you could offer this service. And the number of times that happens, the number of times you, you have this experience where you have a person or a set of people in a market and they just really understand what those customers care about, how they talk, the words they use. And you're just not going to get that if you hire like 60 people in San Francisco. They're not going to understand what makes people in Columbia tick. They're just, they're just not. It's just not how that works. So I, that's one of the reasons why I'm super passionate about this intersection of finance and, and remote first businesses.

Carlos Ponce (27:00):

Perfect. Thank you so much for elaborating on that. Now it's all more, a little bit more clear to me. Thank you. Well, we're about to wrap up today's conversation, but before we go, I just would like to make a quick announcement and that is we have one more guest for this year that's going to happen next week. And that is Pascal Weinberger, the CEO of Bardeen ai. The topic is going to be automation for delegation, and how AI will streamline and customize workflows. And now just for this one occasion, it's going to happen a little bit later than usual. So it's going to be happening at 1:00 PM Pacific, right? Instead of 9:30 AM Pacific. So that's going to be on December the 27th. Just mark your calendars for December 27th at 1:00 PM Pacific. And let's all meet here, right here on Tech Leaders Unplugged. That being said, again, thank you so much Rob, and thank you Wade for having been with us on the show today.

Rob Harrop (28:12):

Thanks for having me.

Carlos Ponce (28:13):

And see you next time. Thank you.