This story was migrated from our old blog, originally published on December 15th, 2020.
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We were the first to provide crypto buying and selling from an in Germany licensed institution.
Ulli Spankowski, CDO Börse Stuttgart Media Partnership This podcast is in media partnership with the Crypto Assets Conference, an event taking place each year in spring and autumn in Frankfurt, organized by the Frankfurt School of Finance and Management and their Blockchain Center.
You can learn more about the conference here: https://www.crypto-assets-conference.de/
You can learn more about Philipp Sandner, head of the Blockchain Center in our interview with him here:
https://www.startuprad.io/blog/the-german-bill-to-permit-crypto-securities/
The Chief Digital Officer This time we talk to Ulli Spankowski ( https://de.linkedin.com/in/ulli-spankowski-08652916 , https://twitter.com/uspankowski?lang=en , https://www.crunchbase.com/person/ulli-spankowski ) a fintech and blockchain entrepreneur, who sold his company to the Stuttgart Stock Exchange, which than promoted him to be the CDO (Chief Digital Officer).He is an economist by training, who did his PhD in market microstructure.He co-founded his fintech startup with co-founders from Slovenia.
We met with the CIO of Börse Stuttgart — back then — and discussed what can be done with financial markets in the future, if you completely rethink it, based on blockchain technology.
Ulli Spankowski, CDO Börse Stuttgart Affiliate Links Is your startup in need of a bank account in Germany? Try our partner affiliate Penta http://bit.ly/3bdHX3d
Bitcoin was much bigger in Slovenia.When my co-founder told me to do something in bitcoin, I said … Bit-What?
Ulli Spankowski, CDO Börse Stuttgart The Startup Back in 2013, Ulli founded his startup Sowa Labs together with co-founders from Slovenia, which he met during an EU-funded project during his Ph.D.Thesis.
The idea of aggregating data from across the web and social media on cryptocurrencies evolved into cryptocurrency trading.They then sold the startup to the Stuttgart Stock Exchange in 2017 and developed what has become their BISON app: https://bisonapp.com/en/ ( App Store , Google Play Store ).
This was not a bad move, since Börse Stuttgart is the market leader in Europe as a trading venue for retail structured products and one of the 10 largest stock exchanges in Europe.
We started out with cryptocurrencies, but we are planning to move gradually into security tokens.
Ulli Spankowski, CDO Börse Stuttgart The Video Interview is set to go live on Tuesday, December 15th at 21.00 CET (Frankfurt/Paris/Zürich/Milano) at 3 pm Eastern (New York, Boston, Washington DC) https://medium.com/media/f8d379f94f5189905fce2978ef384959/href When I was attending conferences [at the beginning of cryptocurrencies] I always said “The biggest problem of cryptocurrencies is that no one cares about them”
Ulli Spankowski, CDO Börse Stuttgart The Audio Interview https://medium.com/media/63f2c37d3ad2eeee710d15a47b2d7541/href Further Readings / Additional Resources Market Microstructure: https://en.wikipedia.org/wiki/Market_microstructure
Börse Stuttgart: https://www.boerse-stuttgart.de/en/
Multilateral trading facility: https://en.wikipedia.org/wiki/Multilateral_trading_facility
Euwax (The market for retail structured products, not related to BISON, but we talk about it as an offering of Börse Stuttgart): https://www.boerse-stuttgart.de/en/investing/euwax-segment/
OTC Trading: https://www.investopedia.com/terms/o/otc.asp
AML: https://www.investopedia.com/terms/a/aml.asp
Feedback Reach out to us, here is our audience survey, to give us feedback, suggest topics, interview partners or just to say “Hallo!” https://forms.gle/mLV6mVKwGwKuut8BA
The Interviewer This interview was conducted by Jörn “Joe” Menninger, startup scout, founder and host of Startuprad.io.Reach out to him:
Automated Transcript (may contain mistakes) [0:00] Music.
[0:08] Startuprad.io, startup podcast and YouTube blog covering the German startups.
With News interviews and Live Events.
[0:21] This is Joe from celebratory all your startup podcast and you to block from Germany today it’s shortly before Christmas and of course I have something special for you I do have the chief digital officer.
Of buzzer Stuttgart and if you know some German it’s the Stuttgart Stock Exchange.
[0:43] Where stood guard is City to the south west of Germany Southwest of frankfurters well you may know it as the headquarter of Mercedes Benz or Bosch but
I would like to welcome you Haley how you doing.
[0:59] Hey Joe hi I’m fine thank you thank you very much for the invitation it’s always my pleasure to have you as a guest
we’ve been talking a lot before and basically you have a very interesting CV and as always everybody would like to reach out to you over at you down here in the shown on stage your LinkedIn profile.
[1:20] Been looking a little bit at you and basically you’ve not always been.
A corporate employee as you’re now but before that you have done quite a lot of interesting stuff can you walk us a little bit through what you’ve done before your current position.
[1:39] Yeah sure Joe thank you very much so
um actually said my my academic background is economists I did my PhD then and finance and market microstructure and this is also where I
basically started my career than as a start-up entrepreneur I was doing
European research project which was funded by the European commission for a Consortium back then consisting of large European International Enterprises and.
[2:15] Research institutions and the
back then the idea was basically this was already in 2009–2010 to extract all possible information from on the semantic basis from the internet so unstructured data
analyze this type of data in a very structured way so that you can use this for trading decision support.
And this is also where I met my co-founders of the company that I have the same Tech startup that I found it afterwards these guys are based in Slovenia.
And they are coming from a research Institution for physics and T and R
primarily brilliant data scientists and developers and was always for me you know I had a lot of ideas what you can do in the financial domain particularly of analyzing data to use it in a
it’s a structured way for trading support and those guys were incredible in transforming my ideas into actual products so
once the research project that we did for the European commission was over.
[3:28] I asked the guys whether they would like to join me for a fintech startups so in 2013 we get together already
the the developer side that my co-founders stayed in Slovenia and I was based in Stuttgart Germany.
And the company was founded in Stuttgart and this is where it all started in 2013.
[3:55] So we gradually moved from this data analytics part more also into
evaluating data about cryptocurrencies as the co-founders come from Salute Slovenia
Bitcoin etcetera is in Slovenia much larger back then than it was in Germany basically I never heard about Bitcoin before 2014 when my co-founder actually told me hey Willie let’s.
That’s that’s also analyze all this data on social media about Bitcoin and I was like did what so and
I never heard about it so my co-founders from Selena obviously had a much closer connection to Krypton to bitcoin as maybe another fact that it’s damp is coming from Slovenia
and so the whole.
[4:48] Topic of cryptocurrencies was much larger in Slovenia at earlier stage than it was in Germany and then we in 2014 started to look into it also you know creative products and
analytics tools on cryptocurrencies and the company gradually grew we had
institutional clients like Boards of Stuttgart like Swiss re fact that interactive data back then
and then we were scaling up and we met with Bruce’s took guards CIO back then and tested a little bit you know.
[5:33] What can be done with financial markets in the future if you if you completely rethink it based on blockchain technology on and also on cryptocurrency.
[5:44] And to the same time the company was also moving more into creating trading systems
for financial instruments of any kind so crypto or regular a financial assets
and then in 2017.
He actually wanted to scale up find another investor to move forward to move to the next step
we got together with there’s a Stuttgart design their digital strategy so the CEO back then Alexander Heffner and myself we were designing the strategy.
And then we decided that probably it will be best for both parties if we would join forces and that actually led to the fact that we sold the company in 2017 already two versus two code completely.
To move together and create a digital strategy of course is to code.
[6:43] We met at this point that versus good gut is pretty big in.
Trading trading place for especially retest Structured Products so going into the direction
of crypto trading especially for real for retail did make sense of course for them right.
Yes exactly so let me give you a little bit about the background of bruises to good so this is this 160 year old exchange which is based in Stuttgart Germany and.
And we are among the 10th largest exchanges within Europe.
And in the particular field of retail Structured Products so warrants derivatives any kind that are actually tailored for for retail investors.
We are European market leader and back then the strategy to go into this retail oriented products actually also led to the fact.
As a stock exchange obviously you have all these retailers that are trading the products but always have the intermediary in between.
So they go over their broker or the bank and you don’t really have direct access and this was the main idea to say look
now we have cryptocurrencies and.
[8:07] We are able over the asset class of cryptocurrencies to create a direct access.
Without any intermediary to get our client base directly on boarded and this was this was then back on the I do too
let’s do crypto and then we gradually see where the market moves and where the blockchain community moves and then of course you saw all these things coming up back then with ico’s and
what well is now more the token economy and security tokens that are evolving.
And we back then already saw that this would be something really interesting for the future also for this retail oriented Focus starting from cryptos then gradually moving on into the security token field.
[8:58] And to the best of my knowledge you guys are the only licensed Stock Exchange.
In Europe where you can actually trade cryptocurrencies is that true.
[9:12] Well so the fact is that when we started we have to
type of trading facilities where you can purchase it fun as a retailer so one is our app called Bison this is where you can directly buy and sell cryptocurrencies on a broker base your counterparty
is always bilaterally evacs Aggie which is a subsidiary of pursuit got group it’s our own brokerage company and.
Pu has bilateral trading against oil box and as you just mentioned oil acts is
in Germany licensed financial institution so we were the first to provide
crypto buying and selling from in Germany licensed financial institution if you want to put it that way we created on top afterwards
was multilateral trading to civility which is actually meant for more
institutional way of trading so we created versus to traditional exchange which is a multilateral trading to sylheti and the.
[10:23] The multilateral trading facility is actually licensed by another company of versus Tucker Group which holds the license which is then fully licensed as a
MTF within Germany so yes you can say within Germany we are the only party that actually provides Bitcoin trading under an MTF license.
And also the currencies obviously and also other cryptocurrencies sorry I’m afraid I interrupted you there very shortly
so my under so we may add or Vox is the
the place at person stood guard we can trade all the fancy week is structured product of course we’ll have a link down here in the show notes we can read more about this
so can you tell us a little bit because.
Not everybody is familiar with the term but T’s multilateral.
Trading facility and TF and can you explain a little bit just in layman terms what
that actually is so at the multilateral trading facility you actually have to have certain things in place as for instance trading surveillance so if we would do peer-to-peer training.
[11:42] Which is quite unregulated you me can do whatever we want it’s also not controlled by any let’s say surveillance.
Entity and surveillance body if you do trade on a multilateral trading facility which is very similar to an actual exchange yeah.
Then you have these things in place and of course this gives an edge to the investor and gives more protection to the investors amongst each other because they can be sure that the trading that happens there
is working under certain a certain set of rules and this I think is a main differentiator also.
If you look into the crypto space of any of the unregulated exchanges you know if you really want to do institutional Trading.
[12:39] Crypto currencies and you want large International Banks to join.
I think it needs to be set up in this regulatory let’s say.
Save way to or in this regulatory
controlled way where the investors have the security of having these rules in place
yes that’s that’s totally true I totally agree sorry for the short Interruption but OTC.
Means over-the-counter trading which is when many people still associate with Trading
people hanging on the phone talking directly to their counterparts and making deals there that will be what is.
[13:32] Yes exactly and so looking at the regulatory let’s say levels you have an MTF which is then already pretty regulated and then the next step is actually the exchange there is
even more rules but for the purpose of cryptocurrencies I think an MTF licenses perfectly suitable and fine so this is where we decided to actually do that and
have this in this regulatory
way that we want to offer these type of asset class and products to our customers.
Let us get a little bit into the Bison trading app first it’s of course an interesting idea from a germany-based company to call it like a North American mammal.
Interesting naming maybe you have story behind this and I would be interested.
Who could use it in terms of citizenship in terms of location can you use it from all over the world to trade cryptocurrencies and how does a customer Journey user experience would look like on this app.
[14:45] Yeah so first of all few words about the with the brand name.
So yes bison y buys emits a first of all it’s a beautiful animal it’s strong and you know it has this kind of.
Hurting idea what you bring to together a lot of people
or you bring together the hurt which then relates to you bring together a lot of people into an asset class by the way and Advising is not only an animal
in North America in the used to be also assisting in Europe but it was some time ago unfortunately extinguished so.
[15:24] Yeah the the other point of violence of course we do want to bring in a lot of the traditional trading world into a completely new asset class so about you know in the traditional World bear and bull is the the two animals that resemble the markets right
and if you look at the Bison it looks a little bit like a mixture between.
Between a bear and bull and obviously it has this strong Association also the Bible is quite similar to the to the ball
and the idea of the app actually was pretty simple so back then crypto trading was.
Totally difficult for the mass Market
to actually go into it so you have a lot of issues so first of all you have these wallets private key public key 99% of the people out there in the street and really get the difference
between the private and the public key and if you explain to them they’re like okay that’s too much information I think is not interesting for me.
[16:29] And then you also have these news about fraud about you know hacking attacks to crypto exchanges and we thought
if you could take away all these critical points having
product within Germany under a regulated regime in Germany from.
In Germany regulate institution that would offer you these type of assets and
you take away all the complications make it very simple make it very smooth and easy access so from the user experience of the customer experience everything needs to go mobile first
one app onboarding happens within three to five minutes you set up your account you you sent over
your Fiat money and it reaches a German bank account and with all these obstacles taken away we thought it’s a great
create product to really bring crypto assets to a mass-market marketable area
I was also asked a lot of crypto
crypto conferences where I see the biggest obstacles when it comes to bitcoin and other cryptocurrencies.
[17:44] Obviously these were quite Tech related conferences and everybody was always thinking my answer would be yeah this protocol has is inferior here this protocol has inferior there
but actually my answer was always the same I said you know the biggest problem of cryptocurrencies is that nobody cares about it and.
That as a fact is of course quite insulting to the people who have spent so much dedication into this space of cryptocurrencies and I don’t mean to insult but actually as.
[18:17] Now as of now and maybe after the announcement of Facebook’s Libra.
We get a little bit of reveling in the space of cryptocurrencies but before really it was
very niche of a niche and only a few people were interested about it now we can see there’s a lot more
from the retail space obviously also due to the hype sand in the price increase moment and but also on the institutional side institutions actually think.
That it can be an interesting asset class and of course they also see the demand that they get from their retail side.
So we’re moving gradually into the space where we started this Mass adoption and therefore we created a product that is actually met mark.
[19:01] Talking about mess Market which markets are you talking about.
This podcast is hurt has been charted in 41 countries across the world and my question would be.
Which of those countries.
Could use your app I assume the US and China are out right now how about South America Africa Asia.
It’s a that’s quick question so actually the app can be used.
[19:31] 72 Nations worldwide however you need to have your principles seed of residency within the European Union
for Switzerland so this is mandatory and I mentioned before and I talked a lot about this regulatory setup
this regulatory setup on the one hand I see this super positive and I think it’s actually the way we need to go
because it gives stability and this kind of let’s say transparency and secure notes to investors on the other hand this also of course sets up certain restrictions that you have.
[20:14] We are a financial institution providing the service.
As a financial institution you have very strict rules on AML you have very strict rules
on many other topics and how you do the development of your product how you test the the product how you secure that it’s actually all running smoothly and can be run by any party and can be
audited and monitored by.
Third parties so having these restrictions makes it a little bit more complicated so unfortunately we are not able to provide the product throughout the whole world and all locations.
It’s mainly within Europe.
[20:57] But as I mentioned 72 Nations so also if you are for instance from Kazakhstan or from Australia living in Europe you can use bison.
[21:09] I’m just want to add a ml refers to Auntie money laundry meaning you have to make sure that the money is not coming from dubious like drug-related
cause us any is laundered there to be legal again.
[21:28] So what can people trade there in the Bison app is it like the whole universe of cryptocurrencies.
[21:36] So at the moment we are offering Bitcoin Bitcoin cash Litecoin ether and xrp
which a lot of people also referred to as Ripple which and if you go into the communities you get bashed if you say we try a triple because it’s actually except p.
But I don’t want to go into these details so this is at the moment what we offer in India for trading
the idea is that we onboard another set of cryptocurrencies which will be around 10 to 20 more within next year also here obviously my wish and wish of the customers would be to have these
up and running already now but we have to do a lot of background check about the cryptocurrencies from the regulatory perspective from the
legal perspective from the tax perspective from the custody perspective because one big part of the app is actually that we do custody on an escrow account so the cryptos are actually
custody within a subsidiary of purses to good group.
Be careful it doesn’t mean that it’s not your keys not your coins it is not your keys not your coins as long as you decide to leave it with
us obviously but you always have the possibility to take the cryptocurrencies to your own wallets and also to bring them back into our system here.
Again we have to have a really.
[23:06] Important set of rules for the Auntie money laundering in place that we can secure that
the kryptos that come into our system are not connected to any kind of illegal activity or are being used for money laundering
so that also means compared to other crypto trading platforms which are completely coming from a party that is not regulated by a German
regulated it has slower processes in some kinds so I just give you an example.
If you would bring in 50k and see it in a cryptocurrency of any kind that’s a Bitcoin there’s automatically a check because.
The check will be on a manual basis you probably would be even ask questions where you have the money from because after certain set of.
After certain level of money inflow or money outflow we are bound to really fulfill our
our Regulatory and standards and that we can secure that this money is not being used in any terms of AML.
[24:28] So that means you have a lot of Regulation to go through a lot of Hoops and dupes to jump through but basically you manage that to enable people
trading with a regulated financial institution and keep the cryptocurrencies
there when I think about that is it just the Bison app or would it be possible for a fin Tech entrepreneur out here who’s listening or watching this.
[25:00] That they would be able to kind of connect to your multilateral trading facility.
That’s exactly the point where we created the versus Dude good digital exchange because bison is pure retail Focus pure let’s say a bilateral trading against oil rocks but.
The births took a digital exchange the setup is actually also for institutional clients so if you are a start-up if you are a financial institution if you are whoever we have everything
almond AP base API base that you can connect to the MTF and do you trade
do you trading there you will be on board as an Institutional client of course there will be checks you know background checks about the company background checks about the management but once this is there.
You’re connected and you can do fully automatic trading their overall our apis.
ICN everybody who would like to learn more good can go down here in the show notes there will be a link to downloading the Bison app as well as going to digital.
Exchange of Bursa stood guard only.
It was a great pleasure having you here thank you for making the time so she would be for Christmas I know getting close to the end of such a crazy year you have to be drowning in work.
[26:26] Thank you very much Joe it was a pleasure for being able to speak here so thanks again and wishing you all the best for Christmas.
And the upcoming year.
[26:39] Music.
[26:45] Interviews at www.starturpad.io sharing is caring.
[26:52] Music.
The BISON App Allows Uncomplicated and Reliable Trading of Cryptocurrencies on the Smartphone was originally published in Startuprad.io on Medium, where people are continuing the conversation by highlighting and responding to this story..