From facilitating global payments to issuing digital coins and securities, and managing customer clubs, Fireblocks leverages its technological platform to help large organizations develop various applications on the blockchain and securely manage their digital assets. This comprehensive support enables businesses to efficiently harness the potential of blockchain technology across a broad spectrum of activities
Assaf Levanon, in collaboration with ICBW3. 03 September 2023
"Blockchain technology has not yet achieved widespread adoption, and most people in the world do not currently benefit from it," states Idan Efrat, the founder and VP of Product at Fireblocks, a platform for managing digital assets and developing various blockchain applications. "We believe we have the opportunity and capability to make this technology accessible, and anticipate that in the coming years, hundreds of millions of people worldwide will use blockchain—whether they realize it or not. They will perform actions without necessarily knowing that they are operating on a blockchain platform."
Efrat, along with his colleagues in company leadership—Michael Shaulov (CEO and co-founder) and Pavel Barengholz (CTO and partner)—have backgrounds in cybersecurity, with significant experience and successful ventures in the field. They established Fireblocks in 2018 initially to address the ongoing security issues associated with blockchain activities. "Our mission is to make digital asset technology accessible to organizations looking to shift their operations to blockchain, and to provide them with a secure and user-friendly environment," Efrat explains, articulating the company's vision.
How do you do it?
"We provide solutions for all types of organizations, enabling them to build services related to digital assets on top of the blockchain, and/or use a system that securely manages the digital assets they hold. Initially, most of our clientele came from the crypto sector, such as crypto exchanges. We built their services on our platform, which allowed them to offer wallet technologies based on the Multi-party Computation (MPC) technology we developed. This was also true for hedge funds, crypto trading entities, and loan platforms. This focus on the American market dominated our main activities for about two and a half years. In the last two years, however, we decided to broaden our scope from 'crypto' to 'digital assets.' Now, we enable customers to manage activities and utilize various blockchain applications, maximizing the technology's potential, from smart contracts to encryption for protecting information privacy."
One such application is in payments. Fireblocks facilitates the transfer of global payments over the blockchain and partners with large, notable payment companies like Worldpay and Checkout.com. "Paying through blockchain is more efficient," Ofrat explains. "Unlike the traditional banking system, the blockchain operates 24/7 and transfers money instantly. Various protocols, including Ethereum, allow for real-time tracking of money—its location, the full cost of transferring it from one place to another, and the expected arrival times. Conversely, a bank transfer from one account to another across different parts of the world can take up to five days, including weekends and holidays. Therefore, we believe that blockchain payments will be one of the most significant developments in the industry in the coming years."
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A sort of financial internet
Another area of focus is transferring securities to the blockchain, where the company collaborates with banking entities eager to utilize blockchain technologies and digital assets to enhance their operations in the sector. Clients include major financial institutions such as BNY Mellon, BNP Paribas, ANZ Bank, NAB, ABN AMRO, BTG Pactual, and SIX Digital Exchange.
"The conventional banking system is quite decentralized, uneven, and assembled in a patchwork manner," Ofrat explains.
"This is why transactions take a long time to process. There's also inefficiency in compliance, as adhering to regulations requires significant resources and the integration of various systems. Blockchain offers a unified system that everyone uses, akin to a sort of financial internet, which eliminates the need to invest heavily in connecting all these systems. We assist banks in adopting these technologies and collaborate with them on projects for issuing regular currencies on the blockchain. This process is known as 'tokenization': taking a real asset and placing it on the blockchain so it can be traded there."
As an example, Ofrat highlights the company's collaboration with banks in Australia, which have issued the Australian dollar on the blockchain. This initiative enables real-time transfers to other locations. Fireblocks is engaged in over 50 similar projects with other banks worldwide and views the transfer of tradable financial assets as its core activity. Additionally, Fireblocks has directed its focus towards Web 3.0, which facilitates the use of blockchain technology by consumer companies and brands. "We conduct various activities with leading global brands, aiming to represent real or digital products and enable their owners to trade them," says Ofrat.
Please illustrate this
"For example, loyalty points from customer clubs are significant. One challenge in this area is that when you receive points from an airline or a cellular operator and wish to redeem them, the service provider must link to the Point of Sale system that enables the conversion of these points. This connection becomes complex on a global scale. However, with blockchain technology, connecting and transferring value becomes straightforward. Each 'loyalty point' is essentially a token. With this token, transactions can be conducted easily, allowing participation in the customer club regardless of the user's location."
Issuance of government bonds on the blockchain
Fireblocks is now a global company, employing around 600 people, with over 300 stationed in the development center in Israel. The company has significant activities in Asia and Europe and is experiencing substantial growth, boasting over 1,800 customers worldwide and annual revenues exceeding one hundred million dollars. To date, Fireblocks has raised over a billion dollars, with its most recent funding round valuing the company at eight billion dollars. It stands as a leader in its field in several aspects—customer base, number of properties supported, and the volume of funds processed. "We are the world's leading provider of infrastructure for blockchain technology and digital assets, and one of the largest unicorns in Israel," Ofrat highlights. "To put it in perspective, more than four trillion dollars in digital assets have been transferred through the Fireblocks platform, which processes in one month the volume of transfers that eBay handles in a year."
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What are your activities in Israel?
"We are engaged in various projects with a range of local clients. For instance, with the stock exchange and the Ministry of Finance, we are running the 'Eden Project' to issue bonds on the blockchain. Anyone connected to the blockchain can hold these assets and quickly transfer them from one party to another, much like sending a file. This makes trading more efficient and global. The stock exchange has issued treasury government bonds on the blockchain, allowing any investor to trade them using smart contract technology, which facilitates real-time conversions.
Traditionally, an intermediary—a trusted entity to hold the money—was necessary, but smart contract technology eliminates the need for this intermediary. The blockchain itself handles the conversions and eliminates the need for costly brokerage services. We also hope to play an active role in the Bank of Israel's digital shekel project and believe that Israeli talent can significantly impact the development of this field."
In collaboration with ICBW3.
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