Innovating in the crypto storm

“One day, we want to move to a place where crypto is just as easy for people to use as the internet,” says Easy Crypto co-founder and CEO Janine Grainger.

She’s sitting down with Caffeine to discuss the innovation behind and launch of two new products: a New Zealand dollar-backed stablecoin called NZDD (New Zealand Digital Dollar) and a crypto wallet offering one wallet for all cryptocurrencies. 

Easy Crypto is New Zealand’s largest cryptocurrency retail platform, where customers can buy, sell and trade cryptocurrencies, including Bitcoin and Ethereum. 

Launched in 2018 by siblings Janine and Alan Grainger, the company has since transacted more than $2 billion in total sales. It is headquartered in New Zealand with reach in Australia and South Africa.

Innovation, especially in a sector as young and outwardly inaccessible as cryptocurrency, is essential. 

The two new products, which much of the company has spent the last year working on, are integral for Easy Crypto to remain relevant, serve its customers and grow, says Grainger.  

She believes that assets, from house deeds to a person’s basic identity, will be 100 percent digitised over the next 10 to 20 years and says overcoming two of the biggest hurdles to cryptocurrency adoption – volatility and complexity – is increasingly necessary as digitisation grows. 

“Our vision is to ensure everyone can participate safely in the new digital world by simplifying all aspects of the crypto experience. This includes innovating into key areas that represent barriers to the wider uptake of crypto,” says Grainger. 

The company was able to fund the development of the products from the reserves of a 2021 series A led by sovereign-backed Nuance Connected Capital, in which it raised $17 million. 

Describing the process as a “meandering journey”, she says innovation requires conviction and meeting customer needs. 

And with no governmental regulation on the horizon, it's up to crypto providers to stabilise the field themselves. 

“It’s very much ‘make the best decisions you can with the information that you have’,” says Grainger. 

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The crypto landscape

According to the IRD, roughly 10 percent of the New Zealand population use cryptocurrencies – digital assets that can be transferred, stored and traded electronically through a ‘private key’ that allows the owner to use the asset, as a PIN does on an EFTPOS card. 

‍MoneyHub estimates there are around 6,000 cryptocurrencies, with the top 20 coins making up about 95 percent of the total crypto market capitalisation. For the basics on cryptocurrency, see here. 

Going into the innovation process, Easy Crypto wanted to create a ‘seamless onramp’ for Kiwis considering crypto. Stablecoins emerged as one of the solutions. 

Representing a category of cryptocurrencies backed by reserve assets, such as fiat currency or precious metals, the coins are designed to have a constant value over time rather than fluctuate like many other cryptos. In the case of Easy Crypto’s new NZDD, the backing is the New Zealand Dollar (NZD). 

Stablecoins have globally grown in popularity as they offer users quick, secure and low-cost transactions with 24/7 access to the currency. Easy Crypto says that NZDD offers a stable way to start investing in the digital world and a ‘safe haven in the crypto storm’ for first-time investors.

The second product, the secure wallet, meets what the company sees as a market gap, acting as ‘one wallet for all your crypto’ with unlimited sub-wallets, multiple blockchains and a growing list of coins within one app. 

The wallet is self-custodial, which means users – not Easy Crypto – hold their own coins, and features multiparty computation and social recovery. Grainger says that family and friends become the safety net rather than having to note down or remember seed phrases or digital keys. 

The wallet has always been in the pipeline for Easy Crypto as most people cannot find one wallet to meet all their needs, she says. 

“We did an event the other night, and I said to people, ‘how many different wallets do you have?’ I started at one, two, three, and everyone in the room pretty much had their hand up. I got to seven.” 

The barriers to crypto identified by Grainger – volatility and complexity – are not solely New Zealand issues but “pain points” that she says are faced worldwide, hence the company’s international intentions. 

“We’re focused first on New Zealand as it’s a really good opportunity for us to test the product out [...], but ideally, we will be going global with it when the market changes,” Grainger says. She expects this to be next year. 

“You can beta test; you can customer survey. But, it’s not until you actually get it out in the hands of people that you know you’re totally hitting the mark,” she says. 

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Innovation adversary

Innovation has not been an easy road for Easy Crypto, with an RNZ article earlier this year, featuring Grainger calling out the banks for concerning behaviour. 

At the time, Grainger said big banks sometimes refused to complete transactions made to cryptocurrency firms, such as Easy Crypto, and that three different banks had denied it the ability to open an account for the product launch. 

While crypto is legal in New Zealand, it runs outside of government regulation and the banks. This means that if something is bought with cryptocurrency, the transaction is ‘peer-to-peer’ with buyer details kept anonymous. This differs from traditional purchases, where the bank holds a private record.  

Many banks’ aversion to crypto can be attributed to ‘patch protection’, says Dr Alex Sims, associate professor in the commercial law department at the University of Auckland. “Banks [are] protecting their patch, protecting their business model, and they don’t particularly want a different payment mechanism coming along.”

As owning the market is how banks make their profits, they try to make it as hard as possible to use cryptocurrency in New Zealand, says Sims. 

“Banks are a really important part of the infrastructure for businesses like mine. You can’t run a business if you can’t get a bank account,” says Grainger. However, she envisions a future where cryptocurrency like NZDD provides an alternative path for businesses. 

“Everything that you can do with regular New Zealand dollars, you’ll be able to do with NZDD,” she says. 

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Disclaimer: Crypto is volatile, carries risk and the value can go up and down. Past performance is not an indicator of future returns. Please do your own research.