Visions and Prospects of Financial Services from Mr. Kim and Mr. Lee
Co-founders of Cryptocurrency Investment Bank ‘CIBank’
CIBank is a cryptocurrency-based investment bank and became the first to initiate a new type of stablecoin, CBD, with its value pegged to bonds in 2018. Unlike the other stablecoins, they distribute to customers the returns from investing in bonds. Due to its combined properties, this is a hybrid stablecoin.
Now, we’re going to walk you through our interview with Mr. Kim and Mr. Lee about the future of cryptocurrency financial industry and the vision of CIBank. The interesting part is that they both started their careers as office juniors and worked their way up from there.
Thank you very much for taking the time for this interview. I feel like a lot of investors must be unfamiliar with the name, cryptocurrency investment bank. Can you please tell us briefly about CIBank?
Mr. Lee: Hi, My name is Jeongpyo Lee. I am one of the co-founders of CIBank and also the Sales Executive Officer.
First of all, for those who have been suffering from the persistent coin market plunge, I’m really sorry. I want you to look at the further future in the market and to be inspired by that.
CIBank is short for Crypto Investment Bank and, just like its literal meaning, we take the form of an investment bank. The concept of investment banking is not really known to a lot of people in Korea. Banking is broadly classified into two sectors, commercial banking, and investment banking. CIBank is an investment bank using cryptocurrency, which boosts investment in the big market. In addition, blockchain technology enables contracts to be made in a transparent manner with much smaller transaction fees.
Is there any specific reason why you started an investment bank using cryptocurrency? If so, when did you actually start to think about this type of business?
Mr. Lee: I have about nine years of experience in asset management as starting from my time in a stock company. So, I observed this from my own experience. The more money you have, the more secure and the higher return-yielding products you are able to pick up to invest in.
We made a 17% yearly profit over the last two years on average, and it all went to customers. This got me thinking, if we have more people take interest in investing, it would give us much more money to invest; and that would enable us to invest in more secure and high-yielding products. Then, I started taking an interest in cryptocurrency as a means of turning that idea into this business.
Mr. Kim: Hi, my name is Kangsan Kim. I am also the co-founder and Investment Executive Officer in CIBank. I lived in France until my early 20s, which gave me valuable experience in the financial systems of Europe.
Throughout my career from an officer at a stock company to an asset management expert, I realized there has not been an investment agency service in Europe yet available for everyone; even though there are some for established companies only. So, if it is possible to spread out the financial system in Korea, it will bring a lot of benefits to people in need of asset management and investment. That’s how I reached out to blockchain technology and cryptocurrency.
You have issued a new type of stablecoin, CBD. We are not really familiar with the concept of bond-pegged stablecoin. Can you tell us the reason why you issued a stablecoin and also give us some explanation of the properties of CBD?
Mr. Lee: As I have many years of experience in the financial industry, I developed a good eye for investment opportunities. In my opinion, the most important thing in investment is if it gives you a continuously stable income.
The reason why the cryptocurrency holders feel insecure about the coins is due to its volatility. As for investment purpose, it shouldn’t be volatile, so I set my mind on stablecoin from the beginning.
Mr. Kim: In order for cryptocurrency to have the same functionality as fiat currency, its value has to be stable, which is why it is stablecoin. In addition, as stablecoins are circulated as a digital asset, they are not bound by the constraints of time and space.
Unlike other types of investment transactions which cost extra 10−20% in fees for exchange currency, there are almost no extra fees when customers make transactions with stablecoins and that is what makes it stand out to investors.
Moreover, CBD (Crypto Bank Dollar) has its value pegged to bonds, which could deem it more investment opportunities, while other stablecoins have their value pegged to the US Dollar where the value stays almost the same.
Can you tell us how investors are benefiting from holding CBD?
Mr. Lee: As the value of Bitcoin goes down, people simply turn their attention to stablecoins like USDT in order to minimize the loss. However, that is nothing more than just an effort to avoid the risk of loss. If you buy CBD with Bitcoin when it shows the sign of plunge, you will be offered financial products. These products come with up to 10% interest rate, and you can easily set the options (e.g. for how long you would like to hold this product, the interval of interest payment, etc.). That is why it is more worthwhile than other stablecoins like USDT.
How do you circulate the money from investors?
Mr. Kim: As I mentioned earlier, CIBank purchases bonds with that money. It varies from ABS and real-estate to Performing Art products. We are also planning to expand our investment pool. The returns on investment mostly go to investors; the rest is used for operating expenses and kept on reserve.
Can you tell us more about its service model?
Mr. Lee: Okay. People purchase CBD issued by CIBank. The money raised into CIBank is invested in various bonds. CIBank gives back profits made on the investment to the customers in a form of interest payments. In order to make everything transparent, CIBank goes through a monthly audit by a third party. The audit reports are fully disclosed to the users.
There are some parts where blockchain technology is applied. The first part is this CIBank Block Explorer, which shows you the volume of CBD coin issuance. Anyone can go on and check. Just so you know, the volume of CBD coin issuance must remain the same as the asset value appearing on the audit reports in order to function as a stablecoin. We are making every effort to keep this as transparent as possible while many other stablecoins do not really provide this information in detail.
Secondly, the interest payment is given out to the users of CBD coins in their chosen interval. With the private blockchain technology applied here, the transaction is fast and precise without any remittance fees.
Those two factors have convinced us that blockchain technology and cryptocurrency will lead the financial industry in the future.
I see. Thanks for your explanation. It’s a very interesting service model.
I’m also wondering where you are going to navigate CIBank this year, 2019?
Mr. Lee: Since this February, we have started selling CBD and doing some saving promotions on our website (cibank.io). However, people only in Korea have access to promotions for now until July this year. This experience being a stepping stone, we are planning to fully open the door next year to everyone in the world.
Mr. Kim: Let me tell you this. We see this year of 2019 as the time to build up trust with customers and solid foundations for asset management and the overall system. That is why we purposely try not to expand our business. However, we anticipate there are more demands in other countries, so we frequently contact other overseas entities for the reference of partnership.
You just mentioned that CIBank is selling CBD coins. Can you walk me through how to do it?
Mr. Lee: Simply go on the CIBank website and make a wallet. If you already have one of the four coins; Bitcoin, Ethereum, Litecoin, and Dash, you can also buy CBD with one of them. There is an ongoing event now, so if you go for it, you will be entitled to that high-interest revenue generating opportunity.
A demo account is also available so that you can play around on our website. You can even go through a depositing simulation. Please, feel free to use as much as you want.
Demo account: cibank_demo / cibank_demo
For those who are interested, can you introduce your social media channel if you have one?
Mr. Lee: You can contact us online through a Telegram group chat, (http://t.me/CIBANK2018). You can also check out the new updates on Instagram@cibank_, LinkedIn@cibank2018 and Reddit@cibank.
What makes CIBank appealing to investors?
Mr. Kim: I’m not saying this because I hope the cryptocurrency market plunge (laugh), but it makes a huge impact depending on what kind of coins you are holding when the cryptocurrency is falling.
Let’s just say that there is this person who has held Bitcoin for a year and made a 50% loss. If this person converted his Bitcoin into CBD and went for a saving product with a 10% interest yield, he would have enjoyed more than the net 60% positive return.
In that respect, CBD plays the same role of avoiding risk as other stablecoins like USDT, but at the same time, it also provides an opportunity to raise your asset value.
From my long experience in the financial industry, I can confidently tell that just holding stablecoins like USDT or TSUD brings you a negative effect on your asset value when you take the inflation rate into consideration. This is what makes CBD stand out.
Recently, JP Morgan’s issuance of cryptocurrency has caught a lot of attention. What is your view on the cryptocurrency-based financial industry?
Mr. Lee: I take JP Morgan’s action as proof that blockchain technology has expanded into financial products. One of the e-commerce companies in Korea, TMON, started issuing a cryptocurrency and has been encouraging people to make payment with it since then. Hopefully, having more people use this system will attract investors’ attention and lead to voluntary investment.
Mr. Kim: I also have some thoughts on that. Firstly, cryptocurrency will replace the existing currency, particularly in the financial industry. Since 2000, there has been no border for information, but there still exists the clear border for assets. In other words, you are simply not able to invest due to geographical constraints even if you have access to information.
Cryptocurrency will lower the bar for entering the investment market so that anyone can invest anywhere and anytime.
Secondly, distribution is also the key to the financial market. Even if you have a good product ‘A’, it’s not you who sell it. You have to go through the supply chain. That means, the more chains you go through, the less profit you will make sense you need to share the pie with more people.
Just like the Internet development has boosted the direct trade in general; it will also take out many steps from producers to customers in the financial industry. The closer they get with each other, the more beneficial it actually is for customers.
Mr. Kim and Mr. Lee, we are so grateful for this interview.
Thanks for your time, guys — it was interesting to get to know you and your product!