Cyrus Fazel (EDHEC International BBA 2007) co-founded SwissBorg in Lausanne in 2016. His wealth management firm, which specialises in cryptocurrency, now has more than 200 employees. From private banking to fintech, here’s everything you always wanted to know about blockchains but were too afraid to ask …

How would you sum up your current position and responsibilities?

I’m Chairman and CEO of SwissBorg. I make sure that employees have a good atmosphere to work in and a clear vision of our objectives. My work is similar in terms of our community: unlike other businesses, we have no investors but a very large number of users and blockchain token holders, around 150,000 worldwide, mostly concentrated in Europe. This means I do a huge amount of videos, meetings and conferences to reach out to the community. So there’s an element of evangelisation and leadership to it, while at the same time making sure we adhere to our strategy. 

Is it important to have a figure like you who embodies confidence in cryptocurrency?

Yes and no. No-one ever really knew Satoshi Nakamoto, the inventor of the Bitcoin! In any case, I’m clearly the poster boy at SwissBorg, because the technology is generally difficult to materialise, despite its transparency. And having several visible faces – co-founder Anthony Lesoismier-Geniaux and my brother Alexander, who also run the project – allows us to give substance to what we do.

Does SwissBorg’s international presence allow you to show that cryptocurrencies can be “embodied” all around the world?

The aim of blockchains is decentralisation, so that the decentralised community can be represented. Three-quarters of our community are now based in Switzerland, United Kingdom and the EU. SwissBorg has got to where it is today thanks to an international crowdfunding campaign in late 2017 and early 2018, which saw participation by 25,000 people from 149 different countries. That’s the strength of the blockchain ecosystem: it allows everyone to access the technologies rather than asking a super investor or a club of investors to bring several million to the table.

SwissBorg also wants to facilitate access to financial investments. What prevents private investment in cryptocurrency?

It’s becoming easier and easier to access cryptocurrency, but the ecosystem remains quite difficult to understand. So far there are very few platforms out there for “basic” investments in cryptocurrency, and it’s generally not very appealing for savers to invest in. The problem isn’t just about access but also the lack of knowledge about the subject. Business schools and society in general need to start talking about this. If we don’t invest, we’ll lose money every day with inflation. Today even educated people from renowned business schools have no idea about investing, it’s a real problem.

But some people invest in real estate ...

Investing in real estate is a very good foundation, it tracks average inflation, but no more. At SwissBorg, we emphasise what is now known as educatement, a combination of education and entertainment. We are trying to develop motivating products, such as investing in a scheme for female CEOs: this supports feminism, as well as generating excellent returns. If we don’t have really tangible things to offer, it will always be the same people who invest and the small savers unfortunately won’t have the chance to take an interest. Whereas with crypto currency, everyone can get involved! And it is that evolution or revolution that can democratise all industries. Our mission is to democratise wealth management by making it more fun and fairer – finance is generally neither fair nor transparent – and to create a community with whom we can grow together.

Ultimately it’s more of a political and social endeavour than an economic one …

Blockchains are a mix between finance, technology and governance, with a little dose of mysticism. If you compare it to religion, you might say the Bitcoin is Abraham, the founding father. The social dimension is often what makes humans want to change things. You can still be driven by profit, but our generation has learned from the mistakes of our elders. You can be proud to invest in a tech firm if you realise that it can change the world. We feel the same way about blockchains. And together with our community we are moving forward.

You and your associate were in asset management before founding SwissBorg. What encouraged you to make the switch?

Nothing is ever grey or black, whatever the area. I started out in private banking in 2007 with multimillionaires, and then in 2008 things changed somewhat. We no longer felt connected to our mission in our respective careers. I think it’s important to set out a clear societal mission. I don’t really see the point in making money just for the sake of it or making the rich even richer, as all you achieve is to widen the gap between the rich and poor. After a decade, I realised that it’s important to have an impact, to build something for the people you love. We took a great deal away from traditional banking, hedge funds and various fintech firms in which we had worked. We wanted to do this with a community, with regular people rather than with investors. Anthony and I don’t pay ourselves dividends, that has always been very clear. Every 6 months we pay out bonuses in tokens to all employees and the community for innovative projects. That creates a virtuous circle, alignment between employees and the community.

What have blockchains changed about the way traditional banking works?

I think it’s still too early to tell. In 2021, we are only beginning to realise that financial and data transactions are evolving. It’s very difficult for banks, which makes sense, because they can’t change as quickly or as drastically as they would like. But there is no doubt that they’re going to move into blockchains. The European regulations on cryptocurrencies are being developed, but there are always new innovations in blockchains, and so banks will always be one step behind. In Switzerland, the United States and Japan (unlike the European Union), many private banks have already moved into cryptocurrencies.

What are the changes affecting the blockchain and cryptocurrency sector?

Most cryptocurrency players work in trading, i.e. the buying and selling of cryptocurrency. That’s where things are beginning to take off. Recently, we’ve seen the development of non-fongible tokens (NFTs). For example, you could keep the recording of this interview and decide to put it into the blockchain. The royalties would then belong to that token holder. If you want to put it in a video game or a streaming platform, the owner would then earn money for every click. And they can always sell it. Platforms like Spotify won’t exist anymore, instead there will be decentralised companies where everyone can put their own music. NFTs are still small, but some are already beginning to trade for $50 million. In the future everything will be dematerialised and tokenised because everything can have value. That value can be traded accordingly, without having to ask the big four tech firms whether you have the right to sell. 

How are cryptocurrencies regulated?

Many major financial markets have introduced specific regulations for cryptocurrencies: the AMF in France, BaFin in Germany and the FSA in Japan. Others, like the SEC in the United States believe that traditional financial regulations should be applied. Whatever the approach, cryptocurrencies are now being tackled by most legislatures, with a desire for harmonisation in the European Union for example. In short, there are now several categories of cryptoassets, all of which respect distinct regulations: payment tokens (Bitcoin), blockchain operating tokens (Ether), utility tokens (SwissBorg), stable coins (USDC) and security tokens (traditional tokenised financial assets). SwissBorg holds a licence authorising us to provide cryptocurrency services and we carry out strict anti-money laundering diligence. Like regulated firms and financial service providers, we must know who our users are by conducting identity checks and asking for documents as proof. 

What are the big areas in terms of solidarity that blockchains should position themselves in over the years to come? 

Technology can always be used to achieve great things, or on the contrary to put in place an authoritarian surveillance regime like in some countries. We should never forget that. Building a digital identity on a blockchain can be a great project. When you go to a nightclub, why do you have to show your ID to prove that you’re over 18? You may not feel like revealing your age. A blockchain could easily be used simply to check whether someone is over 18. It will probably be the same for purchases. Estonia and a few other European countries have already gained ground when it comes to digital identity. Once a transaction has been added to a blockchain, there’s no going back. That’s very encouraging, for example when it comes to ensuring democratic elections. At SwissBorg, we’ve created a representative parliament of our token holders. There are people on the outside and employees. Like in Switzerland, the parliament proposes initiatives that are then submitted to a vote in the form of consultative referendums. So SwissBorg’s strategy can change depending on the final proposals. 

What message would you like to give to students from EDHEC?

What you do at school won’t necessarily determine your career but rather your vision and your drive. The School is there to create a network, stimulate you to think and make a difference.