Hu Liang of Omniex: Five Ways That We Can Help Stabilize The Cryptocurrency Market

…Perhaps most importantly, use-cases around crypto and blockchain are really starting to resonate, especially in a post-pandemic world. Whether you see this new technology as a way to revamp the antiquated payment systems or as a new inflation protected asset class during these unprecedented times of global quantitative easing, the potential use-cases are truly on a scale similar to this thing we once called the “Internet.”

As part of my series about the “5 Ways That We Can Help Stabilize The Cryptocurrency Market”, I had the pleasure of interviewing Hu Liang.

Hu Liang is a Co-Founder and CEO of Omniex, an independent, end-to-end digital asset investment and trading platform, custom-built to meet the specific needs of institutional participants. Hu has extensive experience in the technology and banking industries and is a strong advocate for digital asset adoption. Before co-founding Omniex in 2017, Hu served as SVP of State Street Bank and founded the bank’s Emerging Technologies Center, focusing on blockchain and cryptocurrencies, among other emerging technologies.

Thank you so much for doing this with us! Our readers would love to “get to know you” a bit more. Can you tell us a bit about your “backstory”?

I have a passion for technology and finance, professionally. That’s a good way to describe me. I’m an Electrical Engineering undergraduate, and that’s given me an analytical underpinning. Both of my parents were EE majors as well. In fact, most of my family were in engineering or academics. Perhaps this family leaning toward the STEM discipline created a streak of rebelliousness in me which pushed me toward business and finance later in life.

I started at IBM’s Almaden Research Lab in San Jose, California just as this thing called the “Internet” was taking off for the moon. Rather than reaching the moon, I lived through the great Dot Com bubble instead. That experience really made me wonder how business dynamics mixed with technology can create such long-lasting companies and fast fading ones as well. I had the fortune to work in big companies, small companies, pure tech companies consulting-type companies, and along the way, I became more and more interested in finance and business.

Very early on, I was fortunate enough to be involved with a startup company in Silicon Valley called Currenex. Currenex paved the way for the institutionalization of electronic currency trading (FX), creating the necessary technology infrastructure and business relationships to spark the electronification of institutional FX. We became part of State Street Bank & Trust in 2007. During my 10 years at State Street I was able to oversee technology and business functions, both domestically and internationally, including a four and a half year stint in Hong Kong.

I would say my passion really hasn’t changed much in all these years. I still love technology and I still love business.

Can you tell us the story of how you got first involved with the Crypto markets?

This is a story that I don’t think I’ve told many people. At the end of 2011 or early 2012, I was still in Hong Kong at the time running State Street’s Electronic Trading Platform businesses for Asia Pacific. Bitcoin was the topic of a particular episode of the show “The Good Wife,” my wife’s favorite show at the time. Not sure if Bitcoin was real or just for some TV storyline at the time, I looked it up the next day. Realizing its bold goal and discerning how it’s underpinned by encryptions, which was part of my first job out of school at IBM Research Labs, I read the white-paper immediately. While you could call that the story of how I got introduced, I didn’t fully dive into the world of cryptocurrency until a few years later.

In 2014, I was planning my return to the US from Hong Kong to establish State Street’s Emerging Technologies Center (ETC) in 2015. We were exploring all sorts of new technologies that could have a long term impact on institutional finance. Enterprise blockchain was going to be a major topic amongst the list. This was way before the ICO bubble. Bitcoin and Ethereum were the two major camps, but even Ethereum was just a pre-sale newbie. So I really started researching crypto and blockchain around the end of 2014. I purchased my first Bitcoin, post the Mt. Gox blowup, while still in Hong Kong on the streets of Wan Chai doing research on how the Bitcoin blockchain really worked. Certainly didn’t know at the time it was going to take on a life of its own.

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?

This is a pretty easy one. I owe tremendous gratitude to my two other co-founders of Omniex. Ideas are easy to think up. However, turning one into a truly actionable concept and building a company around it is much easier said than done. Most companies are founded by multiple people because it’s hard for one person to think through all the details or have the mental fortitude to push through all the difficulties that founders and teams surely face.

John Burnett and I met in 2015 just as I was forming the ETC at State Street. He led all things blockchain and crypto for State Street. Prior to that, John did similar work for AMEX, being known as their “blockchain guy” way back in 2013. John’s formulation around Omniex’s strategy gave me the confidence to make the liftoff. Our other co-founder was Kamal Mokeddem. Kamal and I date back even further to Currenex. An amazing technologist from MIT and trader in mindset, Kamal continued his technical track and became head of quantitative trading and research for a large multi-billion dollar hedge fund in LA, after State Street’s acquisition of Currenex. His technical direction and hands-on development paved the way for Omniex’s overall platform foundation.

We’re different from each other. That’s how a team should be. I’ve learned tremendous amounts during these few years and I have my partners to thank for that.

Can you share 5 things that should be done to help stabilize the Crypto Economy?

I want to start off by pointing out we’re focused on an institutional offering, which I think is quite different from retail offerings. Not everyone will see it the same way, but that’s perfectly fine.

1. Broader adoption of digital assets by institutional investors. We’ve seen tremendous involvement on a consumer level, both in terms of crypto as an investment vehicle as well as a technology platform. With crypto being the only asset class that originated from the retail side, we need more institutional involvement to stabilize the overall ecosystem. As a platform provider, companies like Omniex are building the requisite infrastructure necessary for broader institutional adoption.
2. More established, concrete regulations across jurisdictions. This has already been happening the last few years and it has given comfort to many participants in the industry. Further regulation is needed for larger institutions to feel comfortable and get involved. We’ve already seen numerous jurisdictions around the world establishing clearer guidelines. If regulators can come together to create more comprehensive cross jurisdictional protocols, it would truly accelerate the adoption of this global asset class.
3. Improved transparency in price discovery and execution. Crypto, the most notable digital asset today, are mostly considered currency or commodity products. As such, they can be traded on non-regulated exchanges or over the counter (OTC). Unlike fiat currencies, which is the oldest asset class in human history and have international bodies to regulate settlement and provide price “fixings,” crypto price discovery and execution are largely left to self-discovery. A proper technology solution and regulatory framework would provide much needed transparency and protection to consumers and institutions.
4. Comprehensive solutions that go beyond just solving point problems. As any industry that is developing, initial solution sets are not necessarily comprehensive enough to solve existing workflows, especially complex workflows in the institutional space. Solutions providers need to lower the entry barriers for adopting institutions. Beyond necessary features, this means end-to-end workflow solutions that have regulatory hooks as necessary to provide transparency and meet regulatory requirements.
5. A give and take with healthy competition and cooperation in the industry. We’re all trying to grow this new industry and get a big share. But early industry participants need to understand that cooperation between competitors can help build a much bigger ecosystem in the future. This can help satisfy the previous goal of providing a more comprehensive solution since it’s difficult to offer complete solutions individually, at least from the onset. Healthy competition can get us to the critical mass point sooner, and drive home the point that there’s truly room for everyone in the diverse and inclusive cryptosphere.

In your experience, what are the top strategies that crypto firms should be considering in order to have a competitive edge?

Again, peering through an institutional lens, the competitive advantage is being able to understand your potential client. This is different from a pure retail perspective. We’re all involved in retail interactions on a daily basis as we walk through life. It’s easier to understand and easier to relate to.

Institutional finance is different. It’s more opaque and filled with complexities unseen by the public. As the head of the ETC at State Street, I worked with numerous startup companies looking to revolutionize or upend a particular industry, but oftentimes these founders don’t have in-depth knowledge on how a particular function works. When hundreds of millions of dollars are on the line, versus a few hundred dollars on a consumer level, the stakes are different. And that’s precisely why institutional finance is harder to crack. And while regulation is often looked upon as a negative, a primary objective is to protect the participants.

So the main competitive advantage is knowledge and understanding of how and why institutions would use the product your company is developing. We often talk about building a product that “looks and feels familiar to the client,” as to help them lower the bar to entry into a new asset class. We’re a unique team of technologists and financial experts, this knowledge base is our competitive advantage.

What are the 3 things that most excite you about the blockchain industry? Why?

This would be a much easier question if I can just list them all…

1. While I am a bit biased, I do think it is very exciting to see how many institutions are becoming more involved with blockchain and digital assets. We are continuing to see major institutions and industry leaders speak out and recognize the value of digital assets or the power of the blockchain and that’s a huge step. We were nowhere near this level of progress two years ago and it’s been extraordinary to see how far we’ve come.
2. 2020 has brought on a lot of new regulation and opportunity in the cryptocurrency and blockchain industry. Regulation and compliance is a telling sign that the industry is truly maturing and these rules are here to keep us safe. A regulated industry will lead to a powerful one that is more open and transparent, and this something we at Omniex can’t wait to see.
3. Finally, and perhaps most importantly, use-cases around crypto and blockchain are really starting to resonate, especially in a post-pandemic world. Whether you see this new technology as a way to revamp the antiquated payment systems or as a new inflation protected asset class during these unprecedented times of global quantitative easing, the potential use-cases are truly on a scale similar to this thing we once called the “Internet.”

What are the 3 things that worry you about the blockchain industry? Why?

1. While steps toward regulation across jurisdictions means we’re making progress, there’s still work to do in harmonizing the global regulatory landscape. Institutions expect guidelines. If regulators are unable to articulate these guidelines, then it could be difficult for larger institutions to truly get onboard.
2. Financial institutions are generally risk averse, holding out for a complete solution before getting involved. From an institutional perspective, this has the negative potential of delaying adoption until a fully developed end-to-end solution is available. While it’s true that many solutions in the market today tackle a singular area when it comes to investing and trading, companies need to provide a more complete solution to truly meet the needs of institutional clients, and this is something we’re working around the clock to do, which isn’t an easy feat for many in our industry.
3. There will always be doubters. While many institutions are getting onboard with crypto and digital assets, others may look to old myths and misconceptions. It’s hard to find a middle ground with some institutional players, but it’s not impossible. Fortunately, I think this year has shown us it’s anything but that; more major financial institutions are talking about bitcoin, and that means other institutions are listening and will become more educated as time goes on.

How have you used your success to bring goodness to the world? Can you share a story?

While my focus now is on building Omniex with my team, I have a desire to share my experiences with others, particularly the difficult moments. I think these less perfect instances help us grow stronger and become more resilient over time. I’ve had an interesting upbringing, immigrating to the US when I was ten, living in many parts of the US and the world and having had the opportunity to work in many types of companies with varying degrees of success. If I can help other people realize that speed bumps along the way, personal and professional, are a normal course of life, then I love sharing that story.

Recently, a business acquaintance brought me in contact with a group called Ascend, the largest non-profit Pan-Asian organization for business professionals in North America. In celebrating Asian Heritage month in May, I was invited as a speaker on an event called “Resilience in the Journey from Crisis Response to Recovery.” I had an opportunity to share my personal and professional story with a large group of people on things that we’ve done as an organization to push through the current pandemic. It was a great change of pace from our daily rush and a great way to help others through my experiences.

Can you share a story of a time when things went south for you? What kept you going and helped you to overcome those times?

I’m going to pass on a single event because there are so many! Things go south all the time when you’re balancing a startup with a family, especially during the global pandemic we’re in now. I’m very goal oriented and like to solve problems. Perhaps that’s my engineering side coming out. I’ve found that whenever I hit a roadblock, whether it’s professional or personal, my desire to solve the problem and meet the goal is what keeps me on track.

It all comes down to keeping things in perspective. A past manager used to always ask us a question when the team was hitting hard times or starting to really worry about an outcome. She would ask “is anyone going to die?” This type of outlook always helps me see the bigger picture. Fortunately, the answer to this question has always been a resounding “NO.” This has a very calming effect, and reminds me to keep it all in perspective at the end of the day.

Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?

I had read Steve Jobs’ biography by Walter Isaacson in early 2012 shortly after Jobs’ passing. While we clearly can’t emulate our careers after someone like Steve Jobs, nor do I fully subscribe to his way of doing things, there was a quote printed in the book that Steve said during an interview he had in 1994 that stuck with me ever since.

He said, “Life can be so much broader, once you discover one simple fact, and that is that everything around you that you call ‘life’ was made up by people who were no smarter than you. And you can change it, you can influence it, you can build your own things that other people can use. Once you learn that, you’ll never be the same again.”

It’s actually the second part of the quote that really resonated with me, the part about our ability to change and influence life around us. I don’t think he was saying we’re all equally smart in terms of technical capabilities, there are clearly differences amongst people in that respect. I think Jobs was saying that we’re all different people filled with different experiences, and in that respect, we’re the same and have our own points of view that do not necessarily make us “smarter” than someone else. And that you can use your experience and perspective to change and influence and create things.

How can our readers follow you online?

You can follow me on Omniex’s Twitter and Linkedin pages.

Thank you so much for this. This was very enlightening!