In the summer of 2020, as pandemic volatility hit markets, SoftBank Group shocked Wall Street with a series of huge options bets on US tech stocks. Behind these trades – which earned SoftBank the nickname “Nasdaq whale” – were Akshay Nahetaan executive whose career has been marked by bold bets on upsets.
Now, after orchestrating multibillion-dollar deals, including an attempted merger of Nvidia and ARM, Naheta is making perhaps his most ambitious bet yet: That the global payments infrastructure is ripe for reinvention.
His startup based in Zug, Switzerland, Distributed Technologies Research (DTR), is attempting to bridge the gap between traditional banking and blockchain technology, joining an army of companies trying to modernize the global payments infrastructure.
The startup claims its technology can eliminate various payment inefficiencies, from transfer costs and interchange fees to currency conversion fees and settlement delays. “Current payment networks suffer from inefficiencies – transfer costs, interchange fees, currency conversion fees, settlement delays and other opaque fees,” Naheta told TechCrunch in an interview.
DTR’s core technology, AmalgamOS, essentially connects banks to blockchain networks. Through APIs, it allows businesses to integrate payment capabilities while maintaining compliance with local regulations. The system can handle everything from merchant payments to fund management, supporting both traditional currencies and major stablecoins in 48 countries.
The startup has built what Naheta describes as a “global orchestration network” that automatically routes transactions through either traditional banking lines or blockchain, depending on which path offers the best combination of speed and cost. “We are connected to 12,000 banks in Europe,” he said in an interview. A business that integrates DTR’s APIs can enable its customers to initiate transfers directly through banking applications.
DTR’s push into payments infrastructure comes at a seemingly opportune time. Visa and Mastercard — both charge 2-3% slippage feestypically the second-highest cost for merchants after payroll — face increased scrutiny of their monopoly, and the proposed U.S. Credit Card Competition Act could require banks to offer merchants alternatives to the dominant networks.
DTR’s early customers say its infrastructure fills an important gap. Philip Lord of Oobit, a crypto wallet startup, said the system allowed his company to transfer money from its crypto wallet to a UK bank account on Christmas Day in less than 30 seconds – a transfer that would have taken days via traditional channels.
Naheta’s interest in payments infrastructure comes from an unlikely source: SoftBank’s acquisition of Fortress Investment Group in 2017. The deal put about $20 million worth of Bitcoin on SoftBank’s balance sheet.
While studying the underlying blockchain technology, Naheta says he saw an opportunity to apply his background in wireless communications to payment networks. While still at SoftBank, Naheta had begun assembling what he hoped would be DTR’s founding team. He contacted his undergraduate thesis advisor, Pramod Viswanathwireless communications expert who now leads Princeton’s blockchain center and Sreeram Kannanwhich would start later Eigen Layer.
The team saw blockchain as a peer-to-peer communication network, one that could apply decades of research into wireless systems to revolutionize payments. Naheta said he nearly quit SoftBank in the summer of 2018 to focus on DTR and crypto business Bakkt, but was persuaded to stay by senior executives, including Rajeev Misra and Masayoshi Son.
Naheta’s previous forays into the payments space also included SoftBank’s investment in Wirecard, which later collapsed. SoftBank was still profiting from its Wirecard investment. “I had a lot of mistakes,” he admitted. “I looked at it from the perspective of, here’s a company that has all these regulated licenses around the world, it clearly has the payments technology.”
These experiences appear to have influenced DTR’s emphasis on compliance and institutional credibility. This measured approach extends to the company’s growth strategy. “Even if I increase my headcount to 60 people by the second quarter, we will be free cash flow positive,” he said.
The startup faces competition on multiple fronts. Wise has built a successful business matching currency flows between countries, Ripple offers blockchain-based settlement despite legal problems, while traditional banks also say they are upgrading their systems through initiatives such as SWIFT. Last but not least, Stripe’s recent $1 billion acquisition of Bridge will help the world’s most valuable fintech startup delve deeper into payments.
However, Naheta sees an opening in serving businesses that are in between these worlds – particularly digital nomads, creator economy platforms and companies operating in emerging markets.
“Banks are not equipped to operate KYC/AML at this small level, where you’re paying $200 to $10,000 a month,” he argued. The fragmented nature of national payment systems creates particular challenges for businesses operating globally, as each jurisdiction maintains its own rails and regulations.
The payments industry’s high margins and network effects make it notoriously difficult to disrupt. PayPal has a market cap of $70 billion even after recent declines, while Visa and Mastercard combined are worth more than $1 billion.
“I really think the retail customer is struggling with payments,” he says. “And it’s not the banks’ fault. They’re tied into legacy systems and it’s very difficult to convert a Titanic.”
The Lord of Oobit said in an interview that the space remains wide open. He pointed out that until just a year ago, the only option for businesses that needed to move between crypto and traditional banking systems was “to go to an OTC store and pay maybe 1 to 3% to move it.”
“It’s crazy that for so many years, we’ve had so many startups, so many coins have emerged, and whenever I wanted to do an on-ramp or off-ramp, there was no other formal system of legal ideas around,” he said. DTR’s solution is “one block faster” than the alternatives.
