Blockchain in Banking: Threat or Opportunity | Artur Kartshikyan

Speaker A: Our classic ATMs becomes exchange machines, they become payment machine. So our ATMs do more than 100 transactions in the same time, time and not stops. So we should be modern and we should keep these changes in our daily reality.

Speaker B: Stablecoins moved 27.6 trillion in 2024. And I was looking before the recording, the preliminary data shows about 33 trillion in stablecoin transactions volume for 2025, which is roughly 72% year on year. Do you see this as a threat to banks or an opportunity for collaboration between banks and fintechs? Hi everybody and welcome to the Curiosity Code podcast. I'm your host Alex Chimenkov and today I'm joined by Artur Karuchikyan, head of digital banking at ECBA bank and founder of Aida Wallet. Arthur. He's one of the key figures driving fintech innovation in Armenia and building bridges between traditional banking and the future of digital payments. In this episode we'll explore how he's reshaping the region's fintech landscape and what it really takes to innovate from within. Welcome to the show, Arthur.

Speaker A: Hi Alex. Thank you for having me.

Speaker B: All right, let's start with a bit of. I know your background just to get a context. When did you first get involved in digital banking and can you paint a picture of what was the industry like back then?

Speaker A: I came to the banking space from the 2018 and in that time I had no idea what banking is, the banking, how it works, how is the future of banking? Because I came from the another industry, from telecom industry and I had my own business in that time. So when I received an invitation for me it was good news and the same time it was a challenge because as I said, I didn't know what is it mean, the future and digital and I don't know, innovation of banking because for me at that time banking were just some, I don't know, company who are just trying to solve the companies and individuals problem. And even I did not understand what kind of innovation we can do over there. So after researching, I don't know, one week and understanding the main trends, the changes in the financial landscape and all of the technologies that doing this kind of changes, I agreed to be a part of one of the leading Armenian banks and lead the digital banking department and started first of all to learn to see what kind of trends now we have in the market, what kind of changes we have in a banking business globally and what kind of opportunities we have powered by technology so we can implement, we can build new Business models, we can monetize them and bring the new revenue streams to the bank. Where I worked in that time, Armenian financial landscape were not so developed from digital banking perspective because remote banking, I don't know the payments, even the mobile application were too simple. Only like to check the balances or pay some utilities or make some simple transfers. So I mean the main market were generally the same. But my colleagues and my friends from another banks, they also started this kind of changes. And beginning from the 19th, let's say until now, we have very huge, let's say growth that I would develop. So from 2019 until now, we have a very big growth of digital banking, mobile application, digital services. And now in Agba bank where I work and in a market in other banks, we have very developed mobile banking application. Mainly some of banks, yes, of course they are now focused on a platform banking. I don't know range banking. It depends on the strategy. But in our bank we are focusing on building digital platforms like obela platforms like ATM platform. It's a little bit stretch to listen how ATM can become digital platform. In our case we rebuild it atm now in Akbar, our classic ATM becomes exchange machines, they become payment machine. So our ATMs do more than 100 transactions in the same time. So people can buy, I don't know, tickets, they can pay for, I don't know, services, they can fill some penalties, they can do exchange of money. So for us, digital platform is not only mobile app, it's more than mobile platform. And we are going to grow up these platforms mortgage platform, like leasing platform. So our strategy is platform based bank.

Speaker B: That's a great overview of how end of 2010 looked like. I can definitely recall the changes in many banks worldwide. The banks that I use, the banks that my friends use and just you know, overall buzz and mass media and yeah, it's a great context. By the way, we had a great conversation about ATMs it's. It's interesting that you mentioned that and I after that conversation I was truly inspired by the idea that the ATMs are the main domain transition between digital and physical. That's how digital money becomes physical money. And that's interesting idea talking about digital payments and definitely your experience at bank influenced that in a way. Let's talk about your another venture, Aida Wallet. What sparked the idea for that and was there a particular gap in the market or a moment that made you realize this was the next frontier for

Speaker A: digital payments being in an epicenter of all of the changes and following the main trends and main technology innovation that now we have in a space. I understand that not only me, me and my teammates, we understand that now we are in a, let's say momentum because financial landscape now is changing. It's another wave of changes that we have thanks to webshare technologies because beginning of blockchain era or crypto era a lot of people were skeptic about these technologies. But now we have even regulation in Europe US we have regulation and we have mature technology to build services that can replace traditional ones. For example cross border transfers now very slow in our region in Eastern Europe, Central Asia corridor does not have a modern infrastructure of payments that's compared for example in Europe they have a SEPA instant gateway. In America there is ach but in our region we don't have such a payment services. We have traditional Swift which were built in 70s, we have coupled services which are based on car trails but we don't have a, let's say unified services for region. And new technologies like blockchain and especially stablecoins which are, you know, 101 to traditional money gives us opportunity to build these cross border transfers. So IDA Wallet, it's a first product that we are going to build using blockchain and stablecoins. Main mission of IDA Wallet is to help people and companies and in future also the banks and fintechs to build better rails and make transfers much easier and much cheaper, much faster between our region and Europe, our region and us because as I mentioned it's still slow and it's still expensive. So my focus for now is to build these rails.

Speaker B: So when we talk about crypto digital payments I think mainly we think about stablecoins and stablecoins moved 27.6 trillion in 2024. And I was looking before the recording, the preliminary data shows about 33 trillion in stablecoin transactions volume for 2025 which is roughly 72% year on year. Do you see this as a threat to banks or an opportunity for collaboration between banks and fintechs?

Speaker A: Yes, you Truly mentioned that stablecoins are booming. They have very big volume starting from 2024, 25 and it's a good momentum for banks, for fintechs, for a newcomers, for startups to build innovational and very, you know, productive services. And there is no need to think that it's a threat, it's an opportunity. And I always, when I raise some meetings or some conferences, I'm always telling that it's an opportunity and banks and traditional financial companies should use it because it will bring Cheaper services, faster transactions, less intermediaries between transactions. So it is a new opportunity for them. And beside this we have a AI in a space. So using stable coins I have all this digital money. So we can implement AI services better with them. Because the fast settlement, I mean instant settlement with a real time transaction, we can understand a lot of data and then offer some process or for some personalized offers. For example, in our startup in Ida Wallet we are going to that way to build infrastructure using stablecoins, to build Rails, using blockchains and then having this data, having this transactional data, we are going to implement agentic payments, agentic transactions and bring to the market, bring to the people, to the companies, to the banks, more personalized, more individual based prices and services. Because until now we could not do such a things because it was, that's a classic model, one service for everyone. But later we can do it. And also these technologies will build a lot of services from scratch, let's say lending, deposits, escrow services. I mean it's a really good opportunity for banks not to think that it's a threat. It's an opportunity, but need some, I don't know, mindset changes, architectural changes from the banks. So with the hybrid with trust that banks has and with the technology that we have now, I am sure that it will become something very interesting in the future.

Speaker B: You mentioned quite a few of advantages for traditional banks to look into the blockchain based solutions. And I totally agree with you that it's a huge opportunity and it shouldn't be looked at as a threat. But at the same time, as a person who've been building software in the industry for quite a while, I always face and talk to players in the industry, companies, enterprises, the buy versus build solutions, whether we should build it internally or we should partner with someone and use their technology. So in your opinion, how would that work out for traditional banks? Is partnering with fintech startups smart path forward for them or they should be focusing on building this technology in house?

Speaker A: We are living in a, I don't know, fast changing world. So being fast, being agile, it's very important because even in Armenia, which is a not very big market, we are also in an influence of big techs like Google, Apple or big fintechs. So they can, I don't know, take the region and take part of the market. So we should go and build some things in house, something outsource. But anyway we should be ready to competition. Personally, me, I think that it is correct to delegate some part of the work to fintechs or technological companies. Because if you are going to be a fast, it will be the right way. But in some banks there is some strategy that are going to build everything in house, which is also strategy. I mean it depends from the bank from their strategy. Personally me, I think delegation is the right way because you'll be much faster. Also if it includes some risks, I don't know some also data leaks, etc. But anyway you should just compare all of these models and understand your goals. Strategic goals is number one that bank should understand if you they want to become number one or they want to take some part of the market, they should go from this things.

Speaker B: Makes sense. Makes sense. When you lead such a large digital transformation inside such organization as bank, that definitely takes lots of work to define new ways how things should be done. And yes, it it total depends on the strategy. But also at the same time it looks to me that you need to balance the compliance aspect of this. Can you talk a bit more about how you balance this two aspects of digital infrastination? Innovation and compliance. In such a regulated organization as bank,

Speaker A: like ICBA bank, as we talk, yes, everything is changing. Business model is changing, customer behavior changing, internal processes. So world is changing. So the compliance is also changing. So if you want to be, let's say in a competition with your colleagues in other banks or other players, you should work and your colleagues from compliance or legal department, they should also be ready to this competition and they should try not to stop you or innovation or the growth of the company. Of course, keeping the rules, keeping the regulation models. But anyway, the mindset should be innovational based compliance. So it should bring solution to the innovation, solution to some risks that appears and not stop it. In my case, I'm happy that my colleagues understand these changes and we don't have any question in the air that we should do it or we should not do it. If we should do it, we should understand what kind of risks or what kind of legal stoppers we have and understand how we can use some alternatives to go to next step. Because we cannot stop. We cannot stop, for example global changes in a blockchain trends or I don't know, stable coins. We should understand how we can change regulation or how we can work with our colleagues from central bank to change or build something new for this environment, for this reality mean time not stops. So we should be modern and we should keep these changes in our daily reality. Otherwise just being too compliant or too legal, we will lose the game.

Speaker B: Makes sense. Let's Talk about Yerevan and Armenia in the context of bringing talent in. And you mentioned Caucasus region and for me that's an interesting region to be in and to innovate. What do you think needs to be done to make it a regional hub or experimental space for startups and banks?

Speaker A: It's an interesting question because I'm also trying and doing a lot of things besides the bank, beside the startup to build Armenia as a hub in the region. Did not mention during our conversation that I'm also co founder of Twink Digital Forum, which is an event about fintech, about digitalization, about technologies and we are positioning it as an international forum and for that we are inviting global famous specialists and innovators and regulators and famous companies to Armenia to share their experience, to share their knowledge and make Armenia, let's say this little innovation hub. Last year for example our government and one of the Armenian companies where very important collaboration with Nvidia. Now Armenia will have fourth biggest AI factory in the world. So it is also very interesting news for the world because after then a lot of famous companies now are interesting interested to this region and I believe and I hope that with bring big names to the country.

Speaker B: We're getting close to the end of this episode and I usually like to wrap things up with a bit of outlook in the future. I'd like to ask you the question about the future of banking. What bank of the future can you imagine in 10 years from now? Forget it, let's call it five years. I think 10 years and more in timelines is just too far away. Things could change in one year so much that you can't even realize that it happened one year anyway. In your opinion auditor, will it still be a bank in the way we all understand it now? Or we're looking at more like a decentralized platform where finance is just one layer of value creation.

Speaker A: It's an interesting question because we are living in a period where nobody knows what would be in the next year. But anyway, let's say if everything will be go normally without any big geopolitical shaking. So each region, each market will understand what they need to change to become more competitive. One thing is clear, that big tax will go to the financial services because now they have a new services that they did not have before. They have peptide technologies, they have a stable coins that they can use globally and they don't need sometimes to have a regulation because they can just connect some regulated partners and that's it. So now and in the future will be different because the big techs will come to the gate Regarding traditional banks they should be more open because they should be ready to this kind of changes and offer some APIs, some integration with these newcomers like big takes or some maybe fast growing up startups. Because without integration, without understanding this moment they will be outsider because the banks want to stand this moment they will be winner. For example, if some big players come to the our market they need only to take one API and they can take, I don't know some services of that market and grow up because they have data, they have a big platforms what need more Google he has a keys database and they can have only one payment API and that's it. They can either issue a card and give some services to the market or another players they can come, they can offer for example new type of payment system and they can accept payments and take the acquired business from the world. And this is not too far from this day. It's just a question of priorities of these big companies. Because now they are maybe focused lat arm region, Africa but in the future, maybe in a couple years they will just look at the map and say there is a Caucasus, let's go to that site. And it will be challenging for the banks. So it does not mean that bank should scare about it. They should be ready, they should be ready to disintegrations and become trust provider. Become no internal an API provider for them. I think the future will be powered by big techs.

Speaker B: Thank you very much Arthur. Thank you for sharing your outlook into the Armenian market, banking and digital payments environment. That's been a great conversation.

Speaker A: Thank you to Alex.

Speaker B: Thank you for interesting conversation for the listeners. Thanks for staying with us and don't forget to hit the like button and subscribe to the channel and we'll see you in the next episodes.

Speaker A: Bye bye.