Short term, the Danish startup Aryze is making a state-backed cryptocurrency – without involvement governmental institutions. In the future, they will be able to convert everything with value to crypto-copies.

“The rapid development of cryptocurrencies and innovation such as smart contracts, micropayments, robot payments and cross-border transfers do not happen to normal fiat currencies, such as Danish kroner, dollars and euros. So 99.9 percent of the population is secluded from the innovation. We want to change that.”

This is how Jack Nikogosian – or Bitcoin Jack, as people in the crypto community dubs him – explains the mission behind his startup Aryze. They want to use technology to tie new digital currencies together with the classic state-supported fiat currency using a virtual debt agreement – a so-called IOU.

“All of us normal people use kroner, dollars or euro – state guaranteed currencies. We want to link the value of state-issued currencies to a virtual cryptocurrency that we create using open source blockchain protocols. The cryptocurrency is tied to the underlying economy and at the same time have the benefits of crypto, “explains Jack Nikogosian, CEO at Aryze.

Jack Nikogosian - aka Bitcoin Jack - CEO i Aryze.
Jack Nikogosian – aka Bitcoin Jack – CEO i Aryze.

Unlike the old-fashioned and conservative currency, the crypto eKrone can be moved around on a blockchain without the 3-4 intermediaries a common purchase in a webshop easily involves, when fiat currency is used. At the same time, it will be easier to trade cryptocurrencies against an eKrone than a normal krone, as the coin is based on the same platforms as existing cryptocurrencies and therefore easily traded using automation and smart contracts.

Stablecoin based on bonds

Multiple companies are already working on connecting cryptocurrency to fiat currency, so it’s possible to pay with the digital money without worrying about the heavy rate fluctuations – so-called stable coins. Someone even calls stable coins the Holy Grail in the pursuit of making cryptocurrencies common means of payment.

Morten Nielsen, CFO at Aryze.
Morten Nielsen, CFO at Aryze.

Aryze makes the eKrone stable by issuing them only when a corresponding amount is deposited in ordinary kroner. Aryze keeps the ordinary krone safe, so there is always value behind the eKrone. And Aryze does it a bit different from its competitors: they deposit the old-fashioned crowns into several banks and government bonds. In that way, the value is to a certain extent supported by the state, even though the Nationalbank is not involved in the project.

“The technology involved in creating an eKrone is not the hard part. The difficult part is to make an eKrone that is safe – that individuals and companies want to use. If all of our liquidity is tied to one bank that goes bankrupt, our liquidity and thus all the money of the users are gone. Therefore, we spread our liquidity in several banks and government bonds, so they are insured. We create an ecosystem that provides a currency that is government backed,” says Morten Nielsen, CFO at Aryze.

A new, economic management system

Aryze’s mission is not only about making eKroner in the long term. They will make an economic operating system that ties the crypto economy to the current financial ecosystem. An operating system is able to crypto-fy old-fashioned values.

“With eKroner, you do not move 100 kroner – you move the key to the 100 kroner that is kept with us using various multi-signature protocols and rules. All of this happens without intermediaries. And in reality, it does not matter whether it’s kroner, dollars or shares for that matter,” says Jack Nikogosian.

Have you read? Could ICO’s be the future of funding for startups?

Aryze calls their system modular. They will make the foundation, while third parties will be able to connect their values to the system.

“You can compare our modular solution with the Chrome browser and its extensions. As a starting point, you get a mobile application made as simple as possible. But then you might want to add your Shell card or H&M membership and associated bonus points into the app, and you will do that with an extension. For every extension you add, you can do more,” explains Jack Nikogosian.

Moving ownership instead of values

The stable cryptocurrency is the first step towards creating an economic operating system where value can be exchanged without intermediaries on the blockchain. Initially, Aryze holds the user’s keys to their kroner, which the users can exchange with other users. And in the long term, they can also exchange their kroner-keys for Tesla share-keys or Matas bonus point-keys.

“We believe that all derivatives will live on a consensus network in the future. It makes sense to have a virtual version on a blockchain because it makes it easier to shop and move values back and forth. In the future, we will not move the actual money – it’s the ownership of the money we move around, “says Jack Nikogosian.

If Aryze’s platform turns out to be the future, it means we’ll start thinking about value and payment in a completely different way, he thinks.

“We are not far from a future where we can pay rent in Netflix coins or pay for gasoline with flight miles.”