Epiphyte: Bridging the blockchain

The blockchain is at the heart of Epiphyte, but CEO and founder Edan Yago is more interested in what the technology can do for banks to power instant, low-cost financial transactions.

Epiphyte is less a disruptor and more a benign presence: the company’s software is a bridge between newer blockchain-based networks and the established financial systems.

While the blockchain-powered service is part of what makes Epiphyte so intriguing, they try to not place too much emphasis on it, says Yago: “We try to downplay the blockchain technology as much as possible, because ultimately the technology doesn’t matter. What matters is the features you’re able to provide. What we do as a company is not blockchain – we provide a service for instant settlement of securities transactions.”

The reason why Yago says this, it should be noted, isn’t because blockchain is irrelevant to what the company does – it’s indeed at the heart of the operation. But the word “blockchain” can be terribly distracting. It’s not as bad as it used to be, says Yago, and there’s certainly a lot of interest in blockchain from the established financial industry. “People are getting a better sense of how this technology has huge potential, and there are a large number of use cases,” says Yago, pointing out how distributed ledger technology can be used for remittance, trade finance, and securities to name some. “But there’s still a great deal of work that needs to be done in terms of talking about how you’re actually using it in specific cases.”

edan yago epiphyte
Edan Yago

Reputation has not been the only obstacle for the budding blockchain industry to gain traction – it’s also the fact that it’s simply not been all that approachable. This concern was one of the reasons Yago founded Epiphyte in 2013, as he explains how billions of people worldwide are essentially excluded from the financial system: “It’s what allows us to store value, to transfer value amongst each other, … and to allocate resources. It’s a big part of what allows society to exist.” But the cost of financial transactions is excessive, adds Yago, not to mention how the murky inner workings of the economic system leaves it vulnerable to crashes. Blockchain technology has the potential to improve not just financial inclusion, but also transaction efficiency and overall transparency:

“We have a technology that’s fundamentally capable of fixing a huge amount of these problems. It’s able to provide low-cost access to basically anyone in the world,” says Yago, adding how the technology can automate even sophisticated financial tools, reducing the need for having so many intermediaries. “But for it to be adopted, it must be able to integrate with the existing financial system. We see it as our mission to work with financial institutions to make them better, and to utilise this technology to bring out these benefits.”

That means Epiphyte isn’t asking banks and financial groups to change how they do things. Instead, the startup is working with customers to expand on what they’re already doing: “Our solution allows them to process payments the way they’ve always processed payments. But we add a layer of APIs which allows them to now process it instantaneously.” The Epiphyte technology, explains Yago, essentially lets banks do things they’ve never been able to do before, such as processing high-volume cross-border transactions at low cost and high frequency.

Currently employing eight people between London and New York, Epiphyte is now working with a number of global banks on instant settlement for foreign exchange transactions and securities transactions. In November, Visa announced it has teamed up with Epiphyte to test how blockchain technology can improve remittance service in terms of fees, speed and ease of use. “Our big focus right now is providing API access to non-bank institutions, so they can integrate and start trading with these banks and provide support. We’re working with insurance companies, hedge funds and fintech companies who need these services,” says Yago. “Our big thing over the next six months is going to be opening up our APIs beyond banking, essentially for everyone to use.”

Ultimately, Yago doesn’t want to see blockchain technology replace the existing financial systems, but to become an integrated part of them: “We’re working on making our tools easy to adopt, conforming to existing regulation and existing business processes, and making the technological integration as low-cost and low-friction as possible. It’s a big challenge, but if you can do that, you can generate tremendous value without creating huge risk.”

Source: fusionwire.net

Author: Jason Williams

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