Canada has recently approved the world’s first regulated bitcoin fund, First Block Capital. The fund deals solely with investments in cryptocurrencies and the approval sets Canada up as a world leader in the space. To discover more Digital Journal spoke with Sean Clark, CEO of First Block Capital (formerly of Shoes.com) about the initiative.
Digital Journal: Hello Sean, what are the advantages of bitcoins and other cryptocurrencies for businesses?
Sean Clark: “Bitcoin is a cryptocurrency that is based on blockchain technology. Bitcoin and the blockchain will fundamentally transform business and the economy. There are many advantages of bitcoin and cryptocurrency for businesses. For example, bitcoin can be used as a financial rail which helps businesses transfer money globally more quickly and more efficiently. Further, bitcoin and cryptocurrency can help business by using the distributed ledger technology to help increase transparency and reduce costs.”
DJ: Are there similar advantages for consumers?
Clark: “Consumers will benefit from Bitcoin even more. Currently 6 billion people in the world are “unbanked”, this means that they do not have the ability to open a bank account and they are not participating in the global economy. Bitcoin will allow a consumer to hold money in their mobile phone and transact for goods and services directly with the company, without the need for a bank account. The same way that mobile phone technology allowed people in emerging economies to leap frog access to information using the Internet, bitcoin will do the same for banking.”
DJ: How do you see cryptocurrencies disrupting commerce and business activities?
Clark: “Cryptocurrencies are expression of blockchain code. This means that as blockchain code gets applied to solve business problems, cryptocurrency is the “fuel” that will power these new businesses. The profound shift that is happening is that cryptocurrency and blockchain will “disinter-mediate” existing business models. Essentially this new technology will remove the middle man. Remember, at this point Google, Facebook, PayPal and even governments are middle men. Cryptocurrency and the underlying technology of blockchain will create new, more efficient business models because middle men are no longer relevant.”
DJ: Please explain what the aims and mission of First Block Capital is?
Clark: “First Block Capital was formed to be the bridge between institutional and retail money and the deep technology world of cryptocurrency and blockchain. FBC is the first regulated crypto investment firm in Canada and our goal is to create a fleet of investable products that will give investors exposure to the emerging digital currency asset class, based on blockchain.”
DJ: How will the FBC Bitcoin Trust work?
Clark: “FBC Bitcoin Trust is the world’s first regulated open ended Bitcoin Trust. It is simple, you give us money and we buy Bitcoin with it. The Trust charges a 1.5% management fee because we keep your Bitcoin safe giving you piece of mind. Further, we allow scalability so that you can now easily access large quantities of Bitcoin without any hassle, that is our value proposition.”
DJ: How was approval gained? Were there any major obstacles?
Clark: “Our principal regulator is the BCSC and we worked with other jurisdictions in Canada as well, namely the OSC. The Canadian Securities Administrators were extremely cooperative, and we spent six months educating them on our process and on cryptocurrency and blockchain. We approached the commissions in the spirit of cooperation and transparency. Essentially we took it upon ourselves to educate the commission, and that paid off by them granting us our licenses in a landmark decision.”
DJ: What has the take-up been with the Bitcoin Trust to date?
Clark: “Education is really the key. Cryptocurrency and blockchain is a complex technology that takes time to understand. However, once the full scope of what the technology means for broader society is fully understood, the adoption has been fantastic.”
DJ: What types of investors do you attract?
Clark: “The FBC Bitcoin Trust is being sold under Offering Memorandum only to accredited investors. Currently we have had inbound global demand from funds of funds and institutions that understand the space and who were waiting for an open ended regulated fund to be brought to market. There is a lot of pent up demand from the larger allocators globally.”
DJ: Why is the FBC Bitcoin Trust especially important for Canada?
Clark: “Canada has proven to be very innovative and supportive of cryptocurrency and blockchain. There are many intelligent people working in the space creating valuable companies and also the regulatory environment is eager to assist and learn more. I think we are really lucky to be based in Canada and I see this country as a global thought leader in this space.”
For budding cryptocurrency entrepreneurs, we asked Sean Clark about his path to launching First Block Capital.
DJ: Please can you explain a little about yourself and your career to date.
Clark: “I am a technology entrepreneur and a proud husband and father. After earning my MBA I joined an online retail company called ClearlyContacts.ca. I was responsible for launching the Australian business and grew that website from $3M in sales to over $25M in sales in two years. In 2012 I founded SHOEme.ca, a Canadian online footwear retailer. I sold that business in 2 years for $15M and stayed on with the larger Shoes.com organization helping to grow that business to $300M USD. I found bitcoin and blockchain in early 2017 and have since co-founded First Block Capital, Canada’s first fully regulated crypto investment firm.”
DJ: What other projects are you working on?
Clark: “Initial Coin Offers (ICO’s) are a new way to raise capital. We have formed an ICO investment bank called First Coin that will assist companies with raising money through an ICO. This is a very exciting space, look out for more detail on this initiative very soon.”
DJ: What other trends do you see set to disrupt the business and finance worlds in the coming years?
Clark: “I believe that we are in the nascent stage of blockchain. Blockchain is the next inflection point in the digital age. First there was personal computing, then the internet, and now blockchain. The amount of disruption that Blockchain will have on business and the economy is more than those two previous events combined. I am happy to be a part of it.”
