The disconnect between traditional and crypto economies imposes numerous risks. These can be in the form of liquidity risks from bottlenecks faced by exchanges in converting between digital and traditional assets, fraud threats from a lack of oversight and governance, and systemic risks from project funding stored in cryptocurrencies locked in smart contracts.
Jibrel Network, one of the first blockchain technology startups, bridges the gap between crypto-economy and traditional financial infrastructure to enable investors and users to store, send, receive and exchange assets. It is the first decentralised platform that places traditional assets, such as currencies, bonds, equities and commodities, on the Ethereum blockchain, thereby leveraging the cost efficiencies associated with storing and transacting digital assets.
This is done through CryptoDepository Receipts, or CryDRs. These are tokens representing a traditional financial asset's value, denominated in Jibrel Network Token, or JNT. CryDRs can be used for remittances, global payments, trading and hedging. These can also be used to create automated and decentralised financial instruments such as bonds, commodities, debt instruments and securities.
This enables users not only to benefit from the efficiency and cost of using blockchain technology to transact, but also to remain within the realms of existing regulations and stability of the traditional economy.
"Blockchain and cryptocurrencies are a technology, and not a means to circumvent existing financial regulations, that is why we focus on 'smart regulations'. This is a revolutionary method of automating the enforcement of financial regulation by translating regulations into code and embedding it into our token. This is a huge differentiating factor that places Jibrel in the driver's seat when dealing with banks, regulators and existing financial infrastructure," said Talal Tabbaa, co-founder of Jibrel Network.
With volatile markets heavily influenced by speculation and consumer behaviour, it is imperative that on-chain entities have stable assets to store funds. jWallet is the official wallet of Jibrel and aims to be the first institutional grade token storage and transaction solution.
Tabbaa said: "We initially sought out to provide a way for crypto-investors to diversify their holdings into non-volatile, stable, traditional financial assets. But as we began building out the network, we realised the potential for a strong focus retail/consumer banking."
Jibrel is gradually building the infrastructure to automate the consumer banking funnel. It will be possible for a consumer to sign-up for a loan, get approved and make monthly payments; an investor to buy a debt backed security?-?and the same dollars used to pay the loan, pay-out the investor holding the security, automatically, transparently and privately?-?cryptographically enforced.
"The demand for blockchain services is booming across the globe, as businesses, governments and individuals realise this technology will reshape the way business is conducted. However, it is important to appreciate that this is not instant demand. With technology, the process takes time and adoption is usually gradual," said Tabbaa.
He said blockchain and its applications have been highlighted as a key focus area for the Dubai Government. This is shown by the launch of the Dubai Blockchain Strategy, which aims to make Dubai the first blockchain capital of the world. Therefore, widespread adoption for blockchain technology and its applications is expected in the UAE, and Dubai, specifically, he added.
"Jibrel acts as an enabler for a region dependent on trade, and populated by a significant portion of expatriates. Through our firm, businesses can benefit from greater efficiencies brought about because of seamless transactions built on smart contracts, while expatriates or citizens enjoy the ease of international money transfers as well as efficient consumer banking," said Tabbaa.
He said Jibrel has no competitors in the region, however there are some, though not direct, global competitors including Tether, Blackmoon Crypto, Polymath and OmiseGo.
He said the company has several key differentiators. "Most companies tokenizing real-world assets focus on listed/public equities, the Jibrel does not do this. Most companies ignore regulation, but Jibrel translates real-world regulation into solidity code and deploys it on-chain.
The Jibrel Network will allow a user to sign up for loans, get that loan securitized, and allow for an investor to buy the security containing the loan and every time the user pays his monthly loan repayments, the investor holding the security is getting paid."
And what is the company's strategy to stay ahead of rivals?
"With an empty landscape and almost all territories untouched is a very unusual position to be in. Our developers and team have freedom to come up with unusual ideas and test them out," said Tabbaa.
"The portal has not yet launched in live version, but we have deployed the test version since May. We have developed our products and even released our first product last month, the jWallet. Given that Jibrel is still undergoing its ICO, the Jibrel Network Token will be listed from February 1 onwards."
Regarding the current total valuation of Jibrel Network, Tabbaa said with cryptocurrencies and public token sales, traditional valuation methods don't apply, but the firm has a total of 200 million JNT.
Jibrel has raised over $3.2 million in the angel round and pre-sale, which ended on October 25. It is currently undergoing its ICO, which launched on November 27 and will be active until January 26. Results from the ICO have been very promising with a total of over $7.5 million raised.
Ahmad Hamed, board member and angel investor based in Abu Dhabi, said: "I'm a firm believer in the potential of blockchain technology, but I'm also very conscious of the fact that compliance to existing regulations is critical to success. After extensively reviewing the project, I decided to not only invest but to take a more active role and join as a board member."
The main challenge that Jibrel faces is a lack of certainty globally with regards to regulations. To mitigate any potential legal and/or regulatory risks, Jibrel AG has been registered as a public limited company in Zug, Switzerland.
Tabbaa's advice to those running new startups: "Prepare yourself for sleepless nights, lots of unexpected problems but stay focused on the product. Marketing will follow if you have the right product."
Regarding how conducive is today's environment for startups with the fast development on the technology front, he said: "Of course, it is, but that is very natural, as a startup in a non-technology field wouldn't be an attractive investment since the added value it can bring to the world economy can't be matched with tech startups."
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