Today, the number of Cryptoenter mentions is on the rise across the crypto industry. IBM Silver Partner, Silver Linux Foundation Member, and General Member of the Hyperledger consortium recently gave us yet another good news: this time, the blockchain infrastructure has become part of the IBM Marketplace, which may well be a sign of the company’s imminent success in the market. We spoke with Pavel Lvov, the CEO and founder of Cryptoenter, about the project, its features, and plans.
Pavel, please tell us what Cryptoenter is. Why do we need to know about it?
Cryptoenter is an infrastructure solution that is transforming the banking sector. In fact, it is a blockchain infrastructure that enables the users of the same or different banks to interact with one another directly. For example, if you and I were users of the same bank, what opportunity would we have to interact with each other? Transaction only. A one-way communication, essentially. In Cryptoenter, thanks to two private keys, users—even if they’re with different banks—can transact in real time, with no middlemen, based on predetermined parameters.
Let’s imagine that the banking sector is a radio communication—you can listen, but not speak. And our project is already a full-fledged cellular communication, when you and I talk to each other on the phone. This is what Cryptoenter is all about.
How did you get the idea to create this project?
I have been in the IT industry for a long time and have always been associated with Internet technologies. I started out with technologies that preceded the Internet, was an active participant in FidoNet, and had my own BBS. More than 25 years ago, the Internet was mainly for freaks, something that held true for blockchain tech until just recently. The accumulated experience and knowledge helped me at some point realize the value of blockchain technology. I liked it very much, and then I believed. It seemed to me that it was exactly where the future belonged. And I wasn’t wrong. So four years ago, we started developing the project. Back then, lots of people had been already involved in blockchain, but no one knew about DeFi. I was fascinated by the idea of decentralizing the banking sector so that users of different banks could have a direct interaction. At the end of the day, that is what we implemented in Cryptoenter. That said, our clients will be able to deal directly using the parameters they’ve set themselves.
By the way, deals. What operations are available to Cryptoenter users?
As I’ve said, two private keys allow users to interact. And this already opens up all the possibilities. For example, the simplest financial instrument is direct exchange transactions between clients (P2P), when two users want to exchange some values (say, Bitcoin for U.S. dollar). They agree on a rate that suits both of them, sign this request with their private keys, and the blockchain network validates it. After that, a simultaneous transaction takes place in real time—a certain amount is debited from one user and credited to another. This is, like, the simplest example. You can implement more complex things with a decentralized marketplace as well. This is when one user generates some kind of content (financial or as a service), while others consume it directly.
Ideally, what we want to achieve is a streaming Super App, where the customer of a Cryptoenter member bank enters their personal account and opens a kind of feed (as, for example, on social media) that shows a list of goods and services. Imagine that you are a customer of one bank who’s planning to buy a Mercedes, while a customer of another bank wants to sell it. And in this feed, you see all the offers, pick the one you think is the most fair, and make a deal in one click. At the same time, when buying this Mercedes, you do not leave your personal account. You just need to click the “Pay” button. Cryptoenter will know that you want to buy a Mercedes and that you have sufficient funds for this purchase, so this will all be targeted. Thus, the length that funds go from the buyer to the seller is significantly reduced.
To be honest, it reminds of eBay.
Yes, a good analogy, but the only difference is that eBay is a marketplace, and Cryptoenter is a blockchain-based infrastructure solution for digital banking. The marketplace is only a tiny part of the Cryptoenter ecosystem, where you can buy or sell something, but it is implemented atop banking infrastructure. We have one click from purchase to payment.
That is, if you want to purchase a certain model from Mercedes and have an account in bank A, and Mercedes has an account in bank B, then you first click on the banner, then go to the company’s website, look for this car, and to make a payment, you may be redirected to the personal account in your bank to confirm the transaction, and only after that you can buy. And in our case, you are already in your personal account, you have already found what you need, and the only thing that separates you from the car is the “Pay” button.
Smart Block Laboratory and IBM call the project unique. How does Cryptoenter differ from numerous other projects that launch almost every day?
Imagine an infrastructure solution like Visa or MasterCard. They do not compete with banks. Being technology partners and giving the opportunity to provide acquiring services to clients of different banks, they complement them. Cryptoenter is the same, but with broader and more innovative functionality. We are not rivals to banks, either; we also supplement them, expanding their product lines with innovative functionality that is implemented in the Cryptoenter blockchain infrastructure—cross-border payments, peer-to-peer (P2P) interaction between users, real-time value exchange, crypto exchange operations, digital acquiring, a blockchain-powered social network for investors with the crowdfunding option. Integration with Cryptoenter will bring significant benefits to the bank in terms of reducing IT infrastructure maintenance costs, providing new disruptive functionality, additional income from providing customers with novel services, and connecting retail players (on-line and off-line stores). To use the Cryptoenter service, even the cheapest $20 smartphone will do, just make sure it has access to the Internet. Whatever the circumstances, the bank’s client will be able to enjoy the whole set of banking services. That is, all you need to do is connect to Cryptoenter.
I also want to say that the product we have developed is unique because it focuses not only on functionality, but also on the causal relationship found in the product. It does not challenge nor competes with the existing banking infrastructure or other players in the market. That is, if most projects need to convince 100 000 people that their solution is better than the one they already use to bring in 100 000 customers, then for Cryptoenter, it is enough to convince one single bank that already has those 100 000 loyal customers. And, of course, this is our key advantage. We are not an alternative, we are an addition.
How did you partner with IBM?
We have been developing our product for a long time. IBM noticed us at one of the networking events. They believed in our project, and we received a $120 000 grant from them and became their partners. By the way, besides IBM, while we were creating the product, we also struck partnerships with Linux and the Hyperledger Foundation. We are also present in Silicon Valley and plan to open an office there for closer collaboration with local companies.
How do your partners help?
Of course, it’s worth saying that membership with Linux and Hyperledger gives good marketing support for the company market-wise. And this simplifies the present and future interaction with other world-renowned banks, which are also their partners or community members. And IBM, in addition to providing financial aid, also closes some tech issues for us. And just recently, they added us to their IBM Marketplace. The IT giant serves about 98% of the banks in the world, and this opens up the opportunity for us to quickly reach banks around the world, and for them, to easily reach us back. Meaning it is also possible to integrate Cryptoenter with other IBM partners in just a few clicks. So IBM is also our potential sales channel.
Do you think you could have done it without the support of IBM, Linux, and Hyperledger?
If we talk about development, then yes, we could. Even despite the fact that we are very closely interconnected with Hyperledger. Let’s just say that they provide the perfect complement to us, and very soon, we will start perfectly complementing them.
Sounds great! What is the Cryptoenter team doing now?
We recently launched the Cryptoenter project and are now stabilizing and optimizing the product in order to start full-fledged production and onboard banks. In the short run, we plan to enrich the functionality offered by Cryptoenter. As of now, users see very little compared to what we have already done. As beta testing progresses, we will roll out new features. And, of course, attract investments.
When do you plan to start trading?
Transfers and exchange of values (P2P) are already available to users. In a while, we will promote this functionality with marketing tools. As for the next year, we plan to connect the trading venue module. We will add several banks, we will have many clients, and it will give us the opportunity to launch a platform with a large volume of liquidity on the interbank market.
What exchanges are you planning to list on?
We have already been listed on 1inch.exchange. We’re now considering listing on one of the world’s largest crypto exchanges from China. Perhaps we will appear there in the near future.
If I am a person who does not understand a thing about blockchain and cryptocurrency, what would interest me in your infrastructure?
It is important to clarify that although the project is called Cryptoenter, we are not about crypto. This is a derivative clearing platform that allows you to clear relationships between users. As I’ve already mentioned before, our solution is to allow direct transactions between users of different banks in real time. They may not trust each other, right, but the transaction will be guaranteed to complete. There are a lot of scammers on the Internet and the risk of being deceived is very high. Cryptoenter is implemented on the basis of a banking blockchain infrastructure—users, being logged in to the personal account of their bank, can make secure purchase/sale transactions for any value in one click without fear of being swindled out of their hard-earned money. For example, in Cryptoenter, you can buy an apartment: according to a smart contract, funds will be automatically sent to the seller once the owner of the property has changed. Thus, you can safely sell anything that has a value and do it at a minimum fee.
Pavel, what are Cryptoenter’s plans for 2021?
We are now completing the integration with the IBM Marketplace, and the service will soon be available on the IBM Cloud to connect more than 10 000 banks around the world. We are also planning to launch Cryptoenter SandBox on Cryptoenter testnet in the first half of the year. This will enable any financial institution from anywhere in the world to integrate with the service and test the functionality of Cryptoenter in just a matter of weeks. As a result, Cryptoenter is a retail software solution that has already implemented innovative functionality that banks will be able to provide to their customers at no expense.
We also plan to attract investments and integrate with banks in the U.S., E.U., Asia, and Russia. We expect to conquer 3 to 7 large banks in 2021.Try out Cryptoenter now >
Cryptoenter in Numbers
💁🏻♂️ 17.000 registered users
🏦 11.000 banks planned to onboard
🔄 1.200 transactions per second
⚒ 4 years into development
💸 0.3% in transaction fees