Anthony Watson has held board level positions at Barclays, Citi, and Wells Fargo, and served as chief information officer for Nike.
In short, he is used to dealing with multi-billion dollar balance sheets and huge technology budgets.
But the 39-year-old’s latest position is on a very different scale — Watson is CEO and President of 10-month-old Bitreserve, a startup aiming to harness the technology behind bitcoin to create the “internet of money.”
Bitreserve is on Wednesday re-branding as Uphold and opening up its platform to the mainstream.
Until today its digital wallets could only be stocked with bitcoin (although this could be converted to 24 currencies). But now Uphold now lets you upload cash from traditional bank accounts and credit cards across 33 European countries, including the UK. US, and Chinese accounts will be available in November.
Aside from storing money online, Uphold’s big selling point is it lets you transfer internationally and switch between currencies for free.
Business Insider sat down with Watson earlier this month to hear about the new service, why Watson decided to join the company, how his homosexuality has shaped his approach to the world, and how he hopes Uphold can tackle the “injustices in the financial system.”
“Those who can least afford it always pay the most”
Watson, a gregarious and confident Irish-American, credits the 2008 crash with helping inspire his decision to join Uphold by highlighting the flaws within the world of banking.
“When the financial crash happened, I was on the board of [US bank] Wachovia in Hong Kong,” said Watson. “I was summoned to a meeting with the Hong Kong regulatory authority and basically governments were calling in their loans.
“It’s one thing when a business wants to call in their loan. When a government calls in their loans we’re talking multiple billions of dollars. And when multiple governments call in their loans it’s a very different conversation. I got on a plane on Hong Kong not knowing if I’d have a job when I landed in Charlotte, North Carolina.”
Wells Fargo ended up buying Wachovia. Watson stayed for a bit, then did a 5-year stint at Barclays running their technology across Europe, Africa, and the Middle East. But he decided he’d had enough of banking. He was disillusioned with the fact that the world of finance hadn’t changed since the crash and was still carrying the same risks as before.
“At that point I said, you know what? I’m done with financial services,” Watson explains. “I don’t like the business model, I don’t like how they operate, I don’t like the fact that those who can least afford it always pay the most, I don’t like the risks that banks pose to global economies. Nothing has fundamentally changed [since the financial crisis].”
‘A bitcoin company? No thanks’
After Barclays, Watson went to Nike as chief information officer for just under a year, before leaving for personal reasons. It was then that Halsey Minor, the founder of Bitreserve, approached him.
Minor is a well-known US entrepreneur who founded consumer electronic website CNET in the 1990s (sold to CBS for $US1.8 billion in 2008). He was an early investor in Salesforce.com, and founded Grand Central Communications, which became Google Voice when it was acquired by the search giant.
“He’s a Steve Jobs type character,” Watson enthuses. “The guy is brilliant, he’s a future technologist.”
But he was sceptical at first. Watson says: “When Halsey reached out to me, I was thinking, ‘A bitcoin company? No thanks, I’ve no interest in bitcoin.’ But he said no wait let me explain.”
Halsey launched Bitreserve in 2014 as a way to harness the blockchain technology that underpins bitcoin to makes money transfers cheap and simple. In fact, Bitreserve’s technology that works with the blockchain means transfers are completely free.
To Minor, this is also about making financial services fairer for everybody, something that chimed with Watson.
Watson says: “We met at the Ivy Club [a restaurant in London’s Covent Garden] and after 10 minutes I knew immediately it was what I wanted to do. His vision to transform the broken financial system and integrate legacy fractured systems of today with the future of money, and how that benefits everybody in society, just spoke to me.”
“I wanted to get involved with something that made a demonstrable difference. I’m at that age now, I’m 39. I wanted to give back.”
“Let me be clear, we’re not just doing this to make money”
Uphold, as it’s now known, is trying to rethink the way a bank should operate, with the everyday customer in mind rather than investors or wealthy individuals.
Once customers put money into their accounts, they’re free to send it to any other member on the platform, and free to convert it into 21 other currencies and 4 commodities. Transfers are at the best market rate and Uphold charges no commission or fees.
The only charges people incur are when money is taken off the platform, but even then people can withdraw up to £8,000 ($US12,278) a year for free and above that only a 0.5% fee is charged.
Watson explains how Uphold can do it: “People forget it doesn’t cost you to buy [money] at the mid-market rate, it’s what everyone pays. For example, a bank will buy $US500 (£326) at the mid-market rate, no one can buy less than that unless someone is taking a hit somewhere.
“But then they add a forex fee to that and they add a conversion fee and a percentage and before you know it that $US500 they bought, they’re charging you $US570 (£371) for it. That’s how banks and transfer services make their money. That’s not our business model.”
Uphold’s makes its money simply by keeping as much money as it can in people’s accounts and earning a modest profit from the interest. The downside of this is customers don’t earn any interest on money held in accounts.
Traditional banks hold only a fraction of total customer deposits, between 7-11%, but Uphold will keep all client money rather than investing any. Watson says: “Let me be clear, we’re not just doing this to make money. We’re trying to make a profitable enterprise that is of value add to the world. There are other ways of obviously building businesses like this, but we believe this is the most fair and equitable way.”
‘I’ve always been a champion of the underdog’
Watson is most passionate when talking about how Uphold can give a better deal to the downtrodden and poor who are under-served by banks at the moment.
A typical polemic runs: “Look at the remittance corridor between the Mexico and the USA, it’s about $US25 billion a year. The fees that are charged are around $US2.5 billion a year. So basically it’s cost 10% to send money between Mexico and the USA. Why? There’s no fundamental reason.
“Those in our society who can least afford it, Mexican immigrants who demographically aren’t on the highest payrolls, are paying fees you or I wouldn’t in our dizziest day dreams. It’s just wrong. Those are the injustices in the financial system that we’re trying to tackle and we believe our model is very compelling because we’re real time, we’re free, we’re transparent.”
Our hour-long conversation is peppered with declarations like this. Watson says it’s his personal background that makes him so passionate about giving a fair deal to everyone in society.
Watson studied theology at university and planned to become a priest before realising he was gay. He’s now an outspoken advocate for LGBT rights, sitting on the board of GLAAD, an LGBT homeless charity in the UK, and chairing the European diversity awards.
“I’ve always been a champion of the underdog. I’ve faced discrimination in my life and I’ve overcome it. I don’t say it in a way of “oh look at me, boohoo.” No one ever promised you life was going to be easy.”
“It’s a very important part of who I am. That’s why I’m very sensitive when any minority or are group are marginalised by society. You should be treated equitably and fairly no matter who you are, what you do or where you do it, as long as you don’t do evil to your fellow man you should be left alone to do what you do.”
But there is a lot of inequality and unfairness in financial services.
Watson says: “The person who lives in Brixton will pay a very different interest rate to someone who lives in Knightsbridge. You can’t say you’re publicly discriminating against somebody but your postcode tells a lot about you. It talks about your demographic, your income. It’s not the rich white guy like me that pays the most, it’s the person who can least afford it.”
‘Financial services will become broadly as simple as sending email’
Up until now Uphold has only been open to the bitcoin community, but has been hugely popular within it. The platform has processed over $US400 million (£260.95 million) worth of bitcoin transactions between its 25,000 members, around 22% of all available bitcoin.
Watson is hoping that by opening up the service to traditional finance it can help the platform go more mainstream and he is hoping Uphold becomes as revolutionary in banking as models like Wikipedia have been in online publishing.
He says: “I believe financial services will become broadly as simple as sending email. If you think about it, in the mid-1990s your industry” — meaning the media — “went through a huge upheaval. People were saying you can’t give content away, that’s how we make money. Nobody pays for content anymore.”
Uphold has trademarked the phrase “Internet of Money” and Watson promises deposits and money transfers will only be the start. A physical and digital Visa card linked to the account will launch later this year.
Uphold has raised $US22 million (£14.3 million) since launch, including $US10 million (£6.5 million) through crowdfunding in the UK, and Watson says the company isn’t looking for any more investment.
“People have approached us — one major US bank has approached us — but we’re not interested. We’re not here to make a fast buck, we’re here to change the world. Nothing would make me as proud as to leave a legacy behind that we helped make the financial world a fairer place.
“I think it’s important that those of us who have been successful in life have an obligation to give back and this is part of me giving back.”