Rodrigo Batista has a long history of entrepreneurship. He founded and led the Mercado Bitcoin exchange for 6 years, is a partner in other financial startups and is the only Brazilian to have projects approved in the three Brazilian regulatory sandboxes.
He is now CEO and founder of exchange Digitra.com, the first crypto startup to have US exchange Nasdaq as a technology partner. In this interview, Rodrigo shares his vision of the cryptocurrency market and the opportunities that will arise in the coming years.
How was your trajectory in the crypto market from the creation of Mercado Bitcoin, to Digitra.com
I started software programming at age 12 and studied technology in high school. Then I studied business administration at USP, took a postgraduate course in financial engineering, and now I’m taking an entrepreneurial course at Harvard called OPM.
On the professional side, I spent 18 years working in the traditional financial market in brokerages, stock exchanges and investment banks.
Because of this financial and technological experience, I understood Bitcoin very early, still in 2011. In 2012, I made my first transaction, when I bought 14 bitcoins for $4 each, from an American businessman. In the same year, I began designing a cryptocurrency exchange project, a plan that culminated in the creation of the Bitcoin market. I was founder, controlling shareholder and CEO of the foundation exchange in 2013 until my departure at the end of 2018, when I sold my share of the company that was the market leader.
After leaving, I worked on creating other startups, including some in the crypto world, and managed to get projects approved in the CVM Sandbox (Estar.Finance), Susep (88i), and BACEN (nTokens). In 2019 I started setting up a new exchange that serves customers from all over the planet, Digitra.com.
What do you think about the current status of the crypto market?
I have a certain reading of the present moment and also of where we are going.
To explain how I think, I like to draw a parallel with the development of the Internet.
The commercial Internet started in 1983 and in 1996 there was the IPO of Netscape, a sensation at the time, but it no longer exists.
Around 1996, some services started to gain prominence, such as Amazon selling books. The companies of this time had one thing in common: they were Internet adaptations of business models that already existed, such as bookstores.
Just about 15 years after the internet turned our lives upside down and created new consumption habits previously unimaginable through companies like Tinder, Uber, AWS or iFood.
With the innovation of digital assets, I see the same sequence, but we are still in the phase of adapting the world we know to the crypto world. What is being done today is taking things that already exist and giving them a hammer to fit the new technologies. And this gets fancy names: before it was blockchain, today it’s tokenization.
I think we are between 5 and 10 years away from the Uber moment of crypto technology where we will see new business models that we just can’t imagine today and couldn’t possibly imagine.
Today, most innovation comes from decentralized systems, but I believe that eventually this software will be co-opted by centralized structures, either by regulators or because centralization provides convenience and ease of use for customers.
In summary, we are still in the 90s of the crypto world. The crypto market will grow more than a thousand times over the next ten years.
Speaking of tokenization, a lot of people in the market say it’s the big use case for digital assets and blockchain, what’s your take on that?
Turning things that already exist into tokens is one of the most obvious uses for technology, and it’s nothing new. As late as 2012, people were already tokenizing assets on the Bitcoin network with the so-called “colored coins”.
I believe this is a natural step in the process of understanding the potential of what Satoshi Nakamoto created in creating Bitcoin. But we are far from done creating innovative and unprecedented solutions for the ultimate audience.
I think most of this tokenization movement is foam to sell advice, just like the blockchain craze 2 or 3 years ago. But that will probably come from that 1% legitimate innovation that can change our lives.
In Brazil, there is already a regulation of the cryptocurrency market approved last year. In the US, there is great pressure from local authorities against companies in the sector. What do you think could happen with the regulation of this market?
The discussion about the rules of the crypto market has gained momentum pretty much all over the world, largely due to the fall of the FTX exchange, and it is often done with this case as a catalyst and it shouldn’t be.
Proper regulation of the crypto market is the opportunity of a generation. It can create Silicon Valley equivalents in countries that create regulations that encourage innovation.
In the case of FTX itself, it is possible to see how much the regulation of the Japanese market has maintained consumer and institutional interest in the country, without hurting the establishment of brokers.
A relevant point for regulators is that with remote working it is very easy and it is getting cheaper to run a technology company from any country in the world. So countries that do not regulate with a bias to encourage innovation and entrepreneurship will lose many of their professionals and financial resources to more competitive countries.
In fact, I see it happening every day. Today in Brazil it is already possible to see several examples of entrepreneurs and crypto companies who chose to go to places with more favorable laws to serve their customers.
Take a closer look at their new exchange, Digitra.com. Why create an exchange now in such a competitive market, with falling prices and regulatory uncertainty?
The digital asset market is still in its infancy and needs robust solutions. We saw a demand for exchanges that are global and highly liquid, with a high level of governance and compliance, and with technology that adapts to the tremendous speed of the market.
History is full of success stories that emerged precisely during moments of crisis. To name very big examples, this is the case, for example, with Microsoft, Airbnb and Instagram. In times of crisis, we can be more creative, manage costs better and focus less on what’s happening in the market and more on what customers need.
I also see that the crypto market is very similar to other technology markets, such as social networks or cloud computing, for example. It is mostly shared by international companies adapting to local markets.
We see this example in the Brazilian market itself. When I sold my previous exchange, we were the market leader, holding more than half of the market. Today, more than half of the market is owned by international companies.
I also think that a mature and competitive market is no reason not to innovate. As an example, we have the banks that dominated the Brazilian financial market for a long time, and very quickly new brokers and digital banks created relevant solutions for customers that in less than 10 years became as big as the almost hundred-year-old banks.
Who do you see as competitors and how do you want to differentiate yourself from them?
We want to capture market share from global crypto exchanges such as Coinbase and Binance. But we are still at the beginning of the journey and we are not competing with them in any way.
To differentiate ourselves, we have an experienced team working hard on app, website, OTC and API experiences.
We’ve created a lot of things that the audience is beginning to understand and experience and enjoy the experience.
First, we have zero fees for all crypto asset buying and selling transactions on the platform. We were the first global exchange to do this. We also have insurance for clients’ cryptocurrencies. Today no one offers this in Brazil and few offer it in the world.
We have created our own token called DGTA. The first 1,000 customers to fully register with us won 200 tokens. We are now distributing 100 of these tokens to customer number 10,000. Everyone who is active on the platform also earns tokens. Every day we distribute 15 thousand tokens to everyone. Then there are clients who trade once a day to earn the tokens. We call this incentive Trade to Earn.
With my experience in the financial and crypto universe, we managed to create an architecture that no other exchange in the world has; we received a contribution of 5 million dollars from the chairman of the board of directors of Itaú in Latin America, Ricardo Marino, we kept the cryptocurrencies in the largest custodian company in the world called Fireblocks.
And also the icing on the cake, that it is the first exchange in the world to partner with NASDAQ to use them in the trading environment. I am very proud of what we are building.
Nasdaq is arguably the top brand when it comes to the intersection of finance and technology. How did a Brazilian trade with them and why did they choose you to get into digital asset trading technology?
I created the Digitra.com plan in the OPM course. From there I started talking to people and potential partners and Nasdaq was one of the first, but it was a long process. They wanted to make sure that I am a serious person, that the business plan was consistent, after all, it is their brand that is involved in such a controversial market for the first time.
They raised the bar quite a bit in terms of demanding real solutions to the issues I raised. They asked for assurances that we would be a market without manipulation and with a level of security and governance that led us to create systems and processes that very few crypto companies have.
Today they are our partner providing the technology that brings together the buying and selling activities (technically called a matching engine) and we have learned a lot from them about serving a solid market.
How is Digitra.com doing in the market today? Are you reaching the global audience in the way you wanted?
We entered the market 6 months ago. In the beginning, clients could only trade through a very limited application, but today it is already much better and this week we are launching the trading website and APIs for clients to work through robots.
Our DGTA token will start trading in May and has seen strong international demand, which has led us to create a presale process for this remote audience. We have a manager who takes care of that.
Our application has already been downloaded in almost every country in the world, more than 20,000 times. Today, customers are mainly from Brazil, Turkey, Nigeria and Bangladesh, but they are geographically dispersed. Despite the poor market, we have seen great results post-launch and proved that it is possible to be competitive on a global scale from Brazil.
Source: Live Coins
Barry Siefert is an accomplished journalist and author at The Nation View. He is known for his expertise in the field of cryptocurrency, and has written extensively on the topic. With a background in finance and economics, Barry has a deep understanding of the underlying technology and market forces that drive the crypto industry.
