Cloud Hosting

Welcome to Future of Finance, whereFortuneasks prominent people at major companies about their jobs, how their firm fits into the crypto ecosystem, and what it all means for how we use money.

Before venturing into crypto, BitGo CEO Mike Belshe helped revolutionize technology with his work at Netscape and later at Google, where he worked on the Chrome team and later built HTTP 2.0, a major rework of the internet.

As CEO of BitGo, Belshe is now trying to help revolutionize finance through crypto. Fortune caught up with him to learn more about his companys recent $100 million raise, the changes in the industry over his career, and why having stable money is a human right.

(This interview has been edited for length and clarity.)

What are some of the biggest impacts youve made over your career, in both tech and in crypto?

In starting your career, you dont always know which direction to go in. But hopefully you gravitate towards projects that have big impacts. Early on, I was fortunate enough to join Netscape before anybody had heard of Netscape. And, obviously, that ushered in an era of change in the internet like wed never never seen before. Growing in my career, I did a number of startups, created one that did email search before people thought about email search as a thing. I sold that to Microsoft, so hopefully, that was worthwhile. And then I was lucky enough to join the Chrome team, kicking back into the browser space, where we saw that Internet Explorer was the de facto standard for browsers, and nobody liked it.

We just wanted to have web applications be first-class alongside their desktop counterparts, and the incumbents in the space were not necessarily interested in making that happen. Of course, Im talking about Microsoft and Apple. So we wanted to come up with a standards-based browser that really pushed. Nobody on the early Chrome teamI was one of the first 10 guys therenobody thought that Chrome would be as successful as it turned out to be. And of course, today, its at 90% market share. We, at Google, were probably one or two companies on the planet that could have pioneered a better internet protocol. We hadnt seen change for the HTTP protocol for 15 years. We hadnt seen much change to the transport layer for 30 years, and we started figuring out how to do that. So I became the lead author of HTTP 2.0. I led a team to make that happen inside of Google, and I was really lucky to be able to see that through.

Turning our sights to the future, maybe where I am today, we are working on finance. Software, as Marc Andreessen said back in the early 90s, mid 90s, has a tendency to just eat the world. What that means is that when software gets into a particular fieldand it doesnt matter whether youre talking about browsers and information technology, or whether youre talking about supply-chain management, or whether youre talking about autonomous drivingsoftware just has a tendency to turn industries upside down. With the advent of the blockchain, were finally seeing that software is starting to eat into financial services, which is pretty exciting.

Right now, as we speak, the price of Bitcoin in Argentina is the highest its ever been. Theres so much demand for it because their main currency is implodingits not the first time that Argentina has seen this movie. Its happened three times over now. Maybe one last thing, just to really frame the importance of finance: Its been one of the last industries to really be breached by software. But its clearly the most important. Youre working right now, Im working right now, and we are spending our days in the pursuit of money. Its important to us, for our families, for our housing, for our food. When you have bad money, which most of the world has, you can lose your life savings due to nothing, no fault of your own. So software is coming to change all of that. Ive been doing this for 10 years now. I think its going to take a little bit longer. But, hopefully, when you ask me at the end of my career, maybe in another 10 years or so, well be able to say Yeah, that was worth spending time on.

Could you talk about BitGos recent $100 million raise? How will you use the money, and what does it say about the business that youre still able to raise significant capital in this current market?

Were pretty excited about it. Its a difficult time to raise, in all of the markets, theres just not a lot of liquidity available right now. I think it speaks huge volumes to the status of BitGo as a brand, as a key foundational part of the digital asset landscape today, and then, hopefully, also to the fact that theres so much potential out there for the future. Investors are excited about not just where we are, but of course, where were going to go.

We recently launched the BitGo Go Network, which is really the first big attempt by anyone in the market to try to solve market structure. You can try to mandate it, I suppose, and have regulators come in and say it has to exist, but so far, none of those have been able to work. But this is really the first true attempt to start to separate a way. Youve got trading and youve got custodyvery different skill sets, very different risk profilesits very important to have checks and balances between these two different parties so we can have strong markets and that everybody else can invest without having to worry about someone taking their money.

What do you think has changed the most about crypto in the decade youve been in the industry?

Were seeing innovation happen, and were seeing some of the unsolved problems of legislators and regulators be unearthed. So back in 2012, 2013, when we were building the first multi-sig capabilities for safely securing Bitcoin, this idea that money can be held not by a single person but by multiple people was brand new. You never had this idea to deposit at both Wells Fargo and Bank of America, but with multi-sig you can do that. Our laws didnt address some of those basic things. Since then, theres been a ton of innovation. We went through 2017, which is this ICO boom. Suddenly, people are like, Is this a new way to raise money? No, its not. We had to go through some sorting out there. But the idea that we can create subtokens that can be used for all different purposes and start to set the rules for those inside of smart contracts, thats an innovation and an evolution thats happened. Obviously, theres a ton of use cases that are being pursued, as we go onblockchain scalability, just fundamentals of the technology, how do we scale this up to billions of humans, trillions of transactions, theres been a lot of progress there. You can see across the different competing blockchains, a number of different approaches. The advent of stablecoins has come along, the idea that, Hey, maybe we can have a digital representation of just our regular currency, our dollars, and use that programmatically in ways that youve never been able to use money before.

The industry is changing tremendously. I think, in terms of reconciling that with what I said about legislators and regulators, the legislators and regulators have new problems surfacing that theyve known about for a long time but never had to tackle before. Specifically, we are now in a global economy, with a global financial system, whether we like it or not, and yet weve been regulated in very regional ways. The U.S. has got its rules. In Europe, youve got each country having its rules, but then, of course, its overlying E.U. rules. Youve got Chinas rules. All of these have been kind of local fiefdoms, and all of a sudden digital money breaks through all of the borders between our countries, and riding on top of the internet which connects all people. These are challenges that are yet unsolved.

Generally, how are you feeling about regulations for crypto in the U.S.?

Wall Street has been the economic powerhouse around the globe for decades. Part of that is because we have good, safe markets that you can invest in. Not only can Americans invest in them, but foreigners can also participate. Thanks to the fact that we have a democracy, theres a level of trust. Thats the good news.

We now have a new asset class, and, frankly, the unsolved problems that I mentioned, from a global scale, the regulators dont know how to solve them. Not only that, a lot of the people that are in power today were not around when the rules were made. They may not have a very strong grasp as to what makes good money, as to what investor protections they should be caring about, and how to prioritize the many different investor protections that theyve put in place. A lot of things that we hear about the SEC are disclosures. I strongly believe that if youre selling an investment security that you should disclose and be open and transparent. But if I had to prioritize perfect disclosures versus somebody being able to just come in and rug-pull, take the money out from underneath everybody, I would prioritize that: Solve the rug-pull problem first. Im not saying that the disclosures arent important. Theyre very important. But you got to be able to prioritize these things, and I think our existing regulators are struggling to figure out how to build the foundation first.

Making sure you can prevent insider trading is a big deal. There are so many investor protections that the U.S. market has, it becomes pretty complex for any single person to solve. The legislators and regulators look at this from the top without having a full understanding. The net summary is its going to take a while to untangle this and really sort it out. The risk, I think, for the U.S. is if we try to apply too quickly the rules that were built for yesterday to todays markets, that somebody else around the globe is going to build a new set of trading and market systems, which take advantage of whats now possible with the technology. So, anyway, its going to take a while to sort out, but in the end, people want digital assets.

What would you see as being a key part of a revival in crypto markets? Is there anything that needs to be done at all?

Were still working on making it easier to use, but lets make sure we dont have the problem misstated. What we have right now is a macro downturn. It doesnt matter what industry youre in. Everybodys affected by the current financial health of the United States. We are concerned about the inflation that was caused by the money printing and the monetary policy of the Fed, which was employed during the COVID period. That affects everything. As a result, crypto assets are also down now.

In the early stages of a technology or an asset class, in this case, I would expect higher volatility in that new asset class simply because its not big enough. Its not plumbed into enough markets. The market efficiencies that you see in other markets havent fully been built yet. It is hard to use. Regulations are unclear. People are still trying to figure out how its going to work. So its going to see higher highs, and its going to see lower lows. I think this is just a general market problem. And I think the U.S. is going to have to solve its monetary policy issuesand nobody knows how to solve those yetin order to help make the overall markets better.

It feels like from what youve said theres more time needed for some of these use cases for crypto to reach its full potential. Some will point out that crypto has been around for a decade and had plenty of time to develop a killer use case. What would you say to those critics?

The traditional financial markets have been evolving for 80 years now, 90 almost, and theyre still evolving. Major new regulation happens every decade or so. Dodd Frank is, what, 15, 20 years old, somewhere in that range? Were constantly tweaking the markets and the regulations in order to try to make it better. Crypto has only had a few years, but heres the main thing, the simple statement: Bitcoin, since its inception in 2009, has had the longest-standing unchanged monetary policy in all of humankind. That is, there has never been an economy, a market under human control, which has been able to keep a consistent monetary policy for as long as Bitcoin already has. I mean, thats an amazing accomplishment. I dont see how people can see it for anything else. Now, changing and upending 100 years of markets, solving the global financial problem which has never, ever been solved before, I mean, these are big deals, and so I would expect them to take a long time. I think we will be continuing to evolve forever, but I think its absolutely unquestionable that digital assets are going to carry a huge part of all future markets.

What do you see as the future of finance?

I like to bring this back to something that most Americans dont think about, because we have a pretty stable financial system. I got lots to complain about in the U.S., but were probably better off than most other parts of the world. But I think the future of finance is actually one which provides better human rights than anything weve seen before. And that is, people all across the planet are trying to make their lives better, make their familys lives better. They want to have an education. They want to live a reasonably healthy life. They want to have a roof over their heads, etc. When youve got monetary systems that collapse, whether its Argentina, Turkey, Venezuela, Nigeriago around the globeyoull see lots of these have happened. These are really an erosion of human rights. It causes massive disruptions for the people that are affected, and we can fix this. We can fix this with a global financial system that has transparency and immutable rules at its core, and, frankly, needs to take some of the power away from some of the humans that otherwise will mismanage it. The future of finance is good. I think were going to see a much better human quality of life if we keep going down this track.

Read more:

Future of Finance: BitGo CEO Mike Belshe on the companys recent funding round and why crypto is an alternative to bad money - Fortune