Regulation and consumer awareness of digital currency on a global scale is now an urgent necessity. We have all seen the Wild West mentality and its results in crashing the market with rampant speculation, outright fraud, and scams: almost destroying the industry. But there are solutions when a serious and properly thought out project is involved. The Saga Foundation is poised to provide these solutions based on the expertise of its panel of professional experts which includes experienced entrepreneurs, technology experts, researchers, economists, and financial professionals, as well as on the development of its own digital currency – the SGA Token .
Significantly, in order to avoid the risk of volatility and speculation, Saga, at the offset, did not depend on an ICO but was well funded ($30 million dollars) which is rather unusual for a start-up in this innovative field. Saga is a Swiss Foundation falling under Swiss Legal Jurisdiction and supervised by ESA – (Federal Supervisory Authority for Foundations) and AML compliant through its membership in the Swiss VQF SRO. It will operate from Israel and Switzerland.
Today, cryptocurrencies suffer from high volatility, justified objections from regulatory bodies due to user anonymity, and fear of market stability.
Saga is a project designed to address this issue from a monetary perspective. The Saga currency (SGA) aims to serve as a global means of exchange endowed with sophisticated, central-bank-like mechanisms. Saga is working towards an ‘evolution’ of money, unlike other cryptocurrencies that call for overthrowing traditional Fiat money. Saga describes itself as:
Non=Anonymous – with full Know Your Client (KYC) and Anti-Money-Laundering (AML) compliance, Saga is working closely with financial regulators to create an environment that encourages financial institutions to safely cross the bridge into this new era. Modelled – Designed for tamed volatility, Saga deploys a variable fractional reserve, deposited in regulated banks within reputable jurisdictions. The reserve is completely transparent and is governed by a blockchain-based mathematical algorithm. Researched – The design of a currency requires a broad, interdisciplinary effort. While technology provides the tools, the essence resides in solid monetary tools.
For this, Saga can depend on its growing team of experienced professionals. So, will the Saga Foundation’s regulations be a solution for the upcoming Blockchain 3.0 protocol?
We spoke to Ido Sadeh Man, founder and council president of the Saga Foundation.
Ido Sadeh Man, founder and council president Saga Foundation Saga Foundation
What do you believe are the main stumbling blocks as regards to regulation in the crypto industry?
“We identify two main regulatory stumbling blocks to-date. First, there’s the need to align token classifications among the different jurisdictions.
It needs to be very clear to which type of asset class blockchain-based currencies belong, and what regulations derive from that type. The more unified the different jurisdictions be in that classification, the better it is for them and for the industry alike. Secondly, there’s a growing need in Know Your Client (KYC) and Anti-Money Laundering (AML) checks on fiat currencies generated from cryptocurrencies among FATF banks.
The standard should be just as clear and unified as it is for fiat currencies”.
How will the Saga Foundation propose to change this regulatory mish-mash?
“Saga will only onboard clients who have successfully completed a banking-standard KYC/AML processes, in accordance with the Swiss AML Act. However, we see this merely as the minimum common ground. Saga plans to take as many additional measures as needed in accordance with banks’ and regulators’ requirements in other jurisdictions. Moreover, we are making notable efforts to introduce Saga’s model and vision to stakeholders and regulators around the globe, with the hope of increasing education, transparency and clarity in the financial ecosystem.
A number of distinguished figures are on the board of the Foundation. What will they bring to the table in terms of approach?
” The main request we posed to our Advisory Council members was to be an internal opposition, to constantly challenge us so as to have us defend and improve our monetary model and governance policy in order to meet the market with the utmost maturity. The design of a digital currency is an interdisciplinary effort.
It needs to derive from economic and monetary principles and models and cannot, therefore, be led by technology experts alone. Thus, the ability to consult with global subject matter experts, to have a former member of a Central Bank’s Monetary Committee as Saga’s Chief Economist, is priceless to the robustness of our model. New technologies can provide the tools for the implementation of policies which were not imaginable in the past – but the essence of building a currency remains in policymaking.
We knowingly chose to not try and reinvent the wheel and to not discard previous know-how in monetary policy, but rather to adopt those practices and instruments that have proven successful and implement them in the new context of a blockchain based-currency”.
The current market slump has badly dented investor confidence. How do you believe that a sound regulatory approach will change this sentiment?
“Several times in the past, a new technology was overestimated in the short run and vastly underestimated in the long run. In the past few weeks, we have been witnessing yet another signal of trust variance in the market because of unhindered speculation gone wrong. A sound regulatory approach is an overall positive step in the long haul, a step which helps to cleanse the noise and hype in favor of a longer-lasting value proposition.
It would allow this industry to grow while avoiding over-legislation at such an early stage when both the industry and regulators are on a learning curve. Additionally, a sound regulation is one that provides clarity and draws a clear line between legitimate and illicit actors and activities”.
You have raised $30 million from private funding. Why did you resort to this model? Does it mean you do not have faith in ICO’s or STO’s?
” ICOs are surely an interesting framework for the democratization of fundraising. Whether they provide enough protection for participants and bridge data inequalities in an adequate manner still remains to be ascertained. Saga’s decision to conduct a more traditional, VC-based raise was based on our wish to bridge between the established financial market and the world of digital currencies. Investing in the Saga initiative carries the same risk as is the case with any startup. It was our clear preference from the very beginning to approach accredited investors who have the knowledge and apparatus to ask the hard questions and properly weigh their risks, over addressing the public.
We will address the public only once we have a solid product to deliver and tangible value to demonstrate”.
Is the Saga Foundation a solution for the upcoming Blockchain 3.
0 protocol? How do you hope to change that?
“Blockchain 3.0 is an abstract name, the contents of which are still debated. We believe that the crucial issue to address is governance. That’s the issue which will enable the next breakthrough in the blockchain sphere. Native blockchain governance is a naive, non-efficient way of decision-making. Saga is in a late stage of developing a governance framework which takes inspiration from both state and corporate while utilizing the direct-democracy model enabled by blockchain.
Our governance framework leaves the fundamental decisions to participant decisions while allowing them to delegate their vote when it comes to professional, expertise-based decisions. We believe it is not only a better apportioning of representation and governability but also a means to help avoiding hard-forks such as the ones we have all been painfully experiencing over the last month. Forks should remain a solution of last resort and not the immediate go-to solution”..
