Leading financial institutions are actively exploring and implementing asset tokenization, viewing it as a pivotal moment for the industry to enhance efficiency, democratize access, and create new financial products, though significant regulatory and infrastructural hurdles remain.
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all right wonderful it's good to be back
here um why don't you each take 30
seconds very briefly to introduce
yourselves and what your firm is doing
on chain and then we'll take it from
there great hi guys Sandy call I'm with
Franklin Templeton um we are very
invested in this digital asset space
we've been working in the space since
2017 uh we have a tokenized government
money market fund we have multicoin smas
and portfolios we have private uh funds
and Venture Capital funds and we have
several ETFs um we've built our own
infrastructure we're deployed across
eight different public blockchains uh
and we do our own node verification
across 12 different chains so uh I'm
very excited as someone who gets to be
part of the leadership of this group uh
and I'm thrilled to be here with some of
the people I've worked uh with for many
years in the industry today
hi uh I am uh with the digital Asset
Management business um at Fidelity uh we
at Fidelity have been um in this space
uh for over a decade now and and as we
look back on um The Journey uh what you
know we can um look to is um where we
started which was um with Bitcoin um and
and a big part of you know that journey
and and why Bitcoin was um really just
understanding um blockchain technology
and and what the um you know overall
possibilities um are for um the capital
markets ecosystem and in financial
services um and then from there how do
we actually harness um this technology
and and deploy it uh into um Capital
markets and and so infrastructure uh is
is where we started um in building out
our own custody solution uh and then
from there as we continue to expand over
the years um Asset Management uh was a
very natural extension and and a couple
of years ago um we built out uh a um
Investment Management um business which
included um research um building out
data uh infrastructure uh to make that
data uh compatible with uh many of our
traditional back offices and what that
did was it really set us up um for being
able to bring um traditional investors
into um uh getting exposure into um the
digital ecosystem uh what we are working
on more recently uh is um the other side
of um the liquidity um and capital flows
between traditional markets and and
digital markets um and and this is you
know being able to bring um uh
traditional instruments uh on chain uh
in order to allow for um digital Capital
uh to be able to flow um the other
direction so while we have um helped
facilitate with others um in this space
bringing traditional Capital into
digital markets um Capital needs to flow
both directions and and that um is a
really exciting um part of of U this
journey that that we're going to be on
together hey everyone I'm uh will peek
I'm head of digital assets at Wisdom
Tree uh Wisdom Tree is uh the world's
largest independent ETF sponsor managed
something like10 billion do in assets
management uh so with that we do have a
suite of uh crypto exchange tra products
uh here in the US and also out of Europe
that's one part of our digital assets
efforts and uh the other part is around
tokenization as you could tell by the
panel uh so we've got a suite of uh 40
act uh mutual funds that are tokenized
here in the US stable coin gold token as
well and then some products and services
around those so for retail that's Wisdom
Tree Prime here in the US and then we've
got a B2B platform we call Wisdom Tree
connect so great to be with you
today I everybody Mark gabian pleasure
to be here today I am the director of
digital assets and tokenization for
Wellington I have not done nearly as
many cool things as the people to my
right here uh they are pioneers in the
industry and I'm pleased to be sitting
next to them but uh uh we have uh made
some progress in the space we've been
partnered on a lot of the proof of
Concepts that have um hit the airwaves
and and made a splash in many different
areas and we've been exploring
tokenization particularly of the fund
vehicles uh we view that as an
opportunity to democratize access to uh
Financial products to be able to uh put
our Al Al into the hands of more people
across the world and uh give them a
better end decline experience and so um
we've made a lot of progress in the
space and continue to do some research
in the area awesome well one of the
topics of the day is that we could be at
a pivotal moment in the tokenization of
assets and moving financial markets on
chain it certainly kind of feels that
way to be honest but that has not always
been the case right and I know you
alluded to it uh you guys started a
while back uh can you just elaborate a
little bit on what was it like over the
years to kind of pursue that
tokenization agenda does now actually
really feel different uh what is that
like sure I'll I'll get started I
Cynthia has been in it longer so I feel
like I should I don't know about that
but but um yeah I I mean look it has
been a very interesting Journey because
there's really two sides to this
business right you need to engage with
the crypto Natives and really understand
the businesses they're building the
thinking behind the businesses they're
building because I am a a absolute
believer that crypto natives are
disrupting the industry in ways that no
one from within the industry could have
done themselves right we grow up within
a system it's very hard to think outside
the boundaries of that system and so you
know making those efforts to really meet
to accept on their own terms to listen
with open ears to the digital natives
has been a critical part of the journey
because you know you can't improve the
Innovation if you don't understand the
Innovation and a lot of people's
knee-jerk response to all of the changes
that are enabled by these new crypto
Technologies is to say no bad don't want
it not real why would that have value
right and so you have to get over that
internal hurdle I I've been in the
industry 40 years right 40 years in an
industry you're pretty steeped in the
industry thinking um so you have to make
a conscious effort to get outside that
thinking and then it has been a very
difficult and slow slog with The
Regulators particularly here in the US
um we have made a tremendous amount of
progress with The Regulators even during
the recent regime but it has taken an
amazing amount of effort right we have
an entire team who does nothing but
create materials for The Regulators so
that The Regulators can have frequently
asked questions answered that they can
see the same presentation over and over
and over till they get it that we can
meet regularly with them to answer
questions that we can stage out the
enhancements and improvements we're
asking for so that they're comfortable
at each stage that they're not going too
fast so on one side you've got to go
very quick and be very open-minded and
be very willing to disrupt yourself and
on the other side you really need to
take The Regulators on a journey with
you and use your reputation as someone
they Trust to get them comfortable that
it's okay to move forward and so I I do
love what you and what Nathan were
saying Ian and that it is a pivotal
moment I think mostly because some of
that Journey on the regulatory side does
feel like it's going to get a little
easier uh and I think that there's
growing and more acceptance and
excitement about the innovations that
are available I couldn't agree with
everything that you said more and um
such appreciation for um you know your
your and Franklin's work and and will
and and the work with um with Regulators
I think more of um you know voices
coming from um you know traditional
Financial world and and thinking about
how we can help translate um uh the the
utility we talk a lot about um instant
settlement and we talk about um you know
cheaper transaction costs but but that
alone doesn't really resonate with most
everybody that you know we talk to um in
in traditional markets because I think
what Sandy just said um you know a lot
of people will say things work really
well in public markets um you know
Capital flows um but I think they missed
the point that um there is still um a a
demand um that outstrips the
availability of capital to fund um you
know businesses and and that's even here
in the US and and we see that with the
growth of um you know alternative um you
know Bank financing options um and and
so you know from the asset manager lens
um when we talk about what this
technology can do and I you know very
much love um the framing that you know
in talking to um entrepreneurs and and
developers in this space um they're able
to think about Capital Flows In in ways
that are not in any way um you know
guarded by um the way that traditionally
things have happened this way and
traditionally this is what we do um and
so therefore why do we need to change
things um but they're coming at it from
a completely different way and and being
able to provide that translation uh into
real life use cases um is is really I
think what we are now um able to have
those conversations and and deploy um
not just in proof of concept but right
live market um um whether we call them
live market um Pilots but but putting um
these Technologies into actual practice
to move um and allocate Capital
differently anything to add uh I'm
reminded of uh some dangerous words in
finance This Time It's
Different I uh I think a lot of like
I've been coming to conferences this is
probably the nicest one of these but
conferences and tokenization you know
for the past I don't know five years and
like some people have been working on
this for a long time like really banging
their heads against the wall and at each
one of those they said oh it's this is
time it's time now uh so I'm like a
little you know like I don't know that
everything's going to change
automatically overnight I think there is
more recognition and I couldn't agree
more with what Nathan said earlier it's
like so everyone used to say like oh you
should do this with private assets right
like let's tokenize this hotel and it's
like well does anyone want to buy the
hotel right like it's not like the
existing financial markets
infrastructure is so bad that if people
wanted to buy the hotel they couldn't
right like what actually is tokenization
doing it on public blockchains doing for
you anyway um so I think there's more of
a recognition of like well we see stable
coins right stable coins now at $200
billion I think coinbase put out a stat
recently that they uh stable coins did1
trillion in uh volume in transaction
Volume last year so like clearly there's
something there and I I think the next
question is being be what can you build
to like serve additional users like
people who are using stable coins it's
solving some need for them can other you
know tokenizing other assets solve more
of those needs as well so that's the
approach that I at least take towards it
um I think it is different than like ah
things don't work over here so we're
just going to Whole Hog rip it out and
like do something else I say that like a
little factiously uh but that's um if
it's going to be different this time I
think it's a combination of that
recognition and also like a more
constructive regulatory environment
around that but even that you know could
take a little bit more time that I think
people are
expecting I'll go quick uh everything
everybody said was excellent uh you know
we've had two Endeavors in the space one
uh was through proof of concept and it
was uh simulating token tokenization of
uh a private vehicle the other one uh a
sub-advisory relationship with an issuer
out of Singapore funbridge uh and
they've you know published out a uh
issued out a fixed income fund um both
of those were pivotal within the
organization and I think with a lot of
our peers and partners that I've had
conversations with particularly because
when we started through this journey the
question that I would often get is how
are we going to afford the technology
costs and the operational costs to go
out and put a tokenized fund into the
marketplace and there's going to be all
of these compliance issues that we're
going to have to comply within
everything and in reality when we went
through both of these processes the
entire firm and again our peers and
partners uh recognized that you can
Outsource a lot of that to uh you know
platforms uh particularly you know in
the case of um where we are in Singapore
with funbridge Library we've partnered
with you know they handle all of that
technology capabilities that you need
and from the asset manager perspective
the investment manager perspective we're
just focusing on what we do best we're
picking the best assets to put into the
portfolio delivering what we call
business's usual uh product and service
and now having open up um access to to
New Markets and new client segments and
so I think as more and more people start
to get used to uh that potential where
where it doesn't take a huge budgetary
outlay in order to access this
technology um that that's going to
really move the needle forward wonderful
well as you all know uh Ando is building
out a platform to facilitate the
issuance of tokenized assets and
bringing more institutions on chain and
probably very bored with it at this
point because I feel like I spoke to you
guys a lot about it um but as you all
have moved on chain already in various
shapes and forms um what has been the
main hurdle that you have faced or I
guess put differently what is really
still needed in order to move trillions
chain um yeah I someone asked me the
other day um do I think it's um Supply
or demand um that's going to drive the
next wave of of tokenization um and and
I said I don't think the answer is
either one of them um uh there's you
know no shortage of the supply of of
tokenized assets uh that people have
been trying to tokenize there's lots of
tokenization platforms that say if you
bring me your asset I'm happy to
tokenize it for you and and I think
that's not the hard part of of um seeing
this next wave of adoption Supply or
demand I think of um as there's nobody
um you know that's calling up um anybody
at Fidelity saying um I really want to
buy a tokenized asset um and I think
will um you know mentioned this uh
earlier um the the the tokenized asset
or buying that asset on chain is not in
and of itself what people are looking
for people are generally looking for um
you know Financial Solutions to help
them manage their financial lives and
and so um I think it's really utility
and and you know what I liked about um
you know Ian what what you and Nate uh
are are talking about is is not just
bringing assets on chain um but building
the applications to allow people um to
deploy those assets to be able to get
access to Capital or to be able to right
generate yield um in in ways that you
know make it easy and seemless for them
and and I think that's really where um
we're going to see more adoption and so
you know why there hasn't been a lot of
adoption um and and you know we've got
lots of folks in our organization who
say this is definitely not the first or
even the second time they've heard that
This Time It's Different um and and that
this time it's different um the the
answer as to why you know they they
would point to as to why this didn't
work so well was um there's just not um
that that utility that is is going to
cause people to um build the um
infrastructure to be able to plug into
and get access to those tokenized assets
and and I think without that
infrastructure um you know there there's
not going to be this um wave of adoption
and and that infrastructure isn't going
to get built until people right find
that um there is utility that is worth
them making that investment to build the
infrastructure for yeah I I would add to
what Cynthia said which I think is
spoton I would add there's two
foundational mindset shifts that have to
happen in our financial ecosystem for us
to really get to Broad tokenization and
as particularly of real world assets and
the first is don't
underestimate how difficult it is going
to be to move from an an account based
system to a wallet based system right
you need a wallet to hold a token you
need a wallet to enable many of the
benefits that blockchain provides and if
you don't have a wallet infrastructure
it's very hard to really get excited
about tokenization and all of these
traditional Financial firms are
traditional intermediaries the financial
Market um in entire ecosystem everything
has been built around accounts there is
no such thing as a real portfolio a
portfolio is a virtual construct of
different accounts and therefore the
idea that I could commingle assets and
use assets interoperable is completely
foreign to anyone coming from a
traditional background so we need to
make this pivot from accounts to wallets
which is going to take time and more
importantly we have to unwind everything
that we did in the early
1970s right prior to the early 1970s we
traded one trade at a time right this
was the problem this was why we had the
paper crisis because you had to exchange
your paper certificate to get paid for
having a transaction and we couldn't
keep up with the volumes that were
starting to grow and so we put together
committees just like we're putting
together committees now there's an
amazing parallel in what's happening to
the early 1970s but we're putting
together committees we're working with
The Regulators we're trying to come up
with a new system but the system system
they came up with started to have
Central counterparties started to have
Central depositories we started to have
clearing organizations acting as buyer
to every seller and seller to every
buyer we started netting portfolio
positions we started doing book order uh
entry and ownership right we have to
unwind that whole system to make this
new system work um and until we really
recognize that and embrace that it's
going to be a hard slog I think from the
real World asset side and the motivation
right and the motivation right that's exactly
exactly
it yeah I think a lot got well covered
there I you know we think about things
in ETFs a lot you know wiry was kind of
founded on the premise that you could
have a better index and also in the
better structure so ETFs are better than
mutual funds and uh that's really been
true board has to be true over time
where ETFs have taken in you know tens
of trillions of dollars uh and mutual
funds relatively flat at least on a flow
basis or down um so you know for us that
was the attitude that we brought towards
it but you got to remember like the
spider the first ETF sat there for like
seven years not getting used so like
it's not always so obvious like what's
going to be this great or these things
just take time as I guess part of and
it's not a Perfect Analogy but maybe
it's helpful so despite my joke about
this time it's different like sometimes
these things do take time I completely
agree with uh things that uh Cynthia and
Sandy were saying around you got need
wallets we got there's a lot of stuff
that needs to change for like the model
of like hey instead of buying you know
the S&P 500 in my Robin Hood account I'd
buy it like in a wallet different like
maybe that's not actually how it goes um
so um yeah I don't know that's my only
additional color on that H so I'll Echo
the wallets are are definitely key
proliferation of wallets I think um
building in more use cases for wallets
you know digital identity Frameworks
embedded in a wallet that you can use
and you know I was at the airport today
it' be nice to not have to carry my
physical license on me um you know and
still be able to to get onto a plane so
so the wallets are really key
integrating that into um into people's
lives Nathan talked about it earlier uh
and I I love the way he said it but
today you know you have multiple
different accounts that hold your
financial assets you have password
protected websites you go in you know
your assets are segregated over here for
that account your assets are segregated
over here for this account uh what this
technology allows you to do is sort of
bring those assets together in Under One
Roof and that enhances the utility of
those assets asss the utility of those
assets we all experience through defi
today it's a beautiful system you can do
a lot with those assets the
infrastructure is phenomenal the ux is
difficult it's very hard for me to get
uh the general person on the street to
want to go explore defi they're they're
afraid Frank Frankly and so um I think
the next Paradigm for solution and again
you know innovators building platforms
are obviously doing this but but um
building a better user experience
something that uh your general public
feels really comfortable going in
accessing and can do it in a confident
and safe manner but be able to get that
defi experience yeah no well very well
said um I want to shift gears a little
bit and talk a more about why are you
tokenizing Assets in the first place
feel like you were starting to go there
a little bit uh mark But like why do
this in the first place what are some of
the results that you have seen to date
with your broad digital asset efforts
and the tokenization of assets and maybe
this time I'll actually start with Mark
because you guys are the most recent
entry I think into the space at least on
this panel thanks absolutely uh so you
know it's a barbar approach that we've
looked at right now um and so starting
on the uh private side private markets
and alternative funds uh that's an area
that you know we expect to be growing in
the marketplace uh you know for the for
next few years um and you know there
there's a large segment of the public
that is locked out does not have access
to those Investments uh so you know
everybody wants to have uh a private
Equity allocation potentially private
credit allocation within their
portfolios those uh you know both are
attractive Investments it's um regularly
be being considered as as part of proper
asset allocation now however um due to
uh the way way that those vehicles are
set up and uh account minimums funding
minimums for getting into those vehicles
um you know and some of the other
restrictions again large swaps of
society get uh restricted from access
tokenizing them being able to
fractionalize them being able to use
digital identity being able to add uh
additional liquidity mechanisms through
secondary trading really opens up access
for a large swath of the public
democratizes access to those uh to those
investment opportunities and so you know
from that side it's exciting uh on the
other side of barbell you know you talk
about traditional funds uh you know
short duration and and other money funds
that are out there um there's a lot of
different uh areas of applicability if
you just think about you know
traditional finance and and traditional
business um the whole process today of
pledging assets as collateral within the
traditional uh Financial ecosystem
pledging assets as collateral in order
to take a borrow for overnight loans and
or you know lending money overnight um
uh it's somewhat inefficient it's a
myriad bunch of systems you you know end
of day settlement um uh it's clui lots
of different reconciliation using
tokenized funds within that
ecosystem uh could add a ton of
efficiency and um we're already starting
to see it with the pioneers there that
you know now you're able to bring that
to intraday borrowing and lending uh
which just frees up more liquidity into
the market which benefits everyone so um
yeah no two two pronged approach where
the benefits
are uh you know I alluded to some of
this earlier I think this idea of like
what could be this like next disruptive
rapper and um also I mean asset
management is incredibly competitive
like uh you know we're up here with a
bunch of people who manage trillions we
don't manage trillions and like we had
somebody managing trillions speak before
like it is a highly highly competitive
space and I'd say the ETF industry in
particular has has like ruthless fee
pressure and competition uh and that's
great for customers right it's also I
think for all of us who are in this
business you're trying to find ways that
are able to like do right for your
shareholders kind of solve additional
problems for people uh maybe not not
even charging more fees but kind of
growing the addressable market for stuff
that you're able to sell products into
and so that was kind of an attitude that
that we took towards this which was like
hey we think this could be like the next
rapper or maybe it's not going to be
that simple but like part of the next
wave of innovation and asset management
and uh we think it grows the pie for
people that were offering our products
and services to and um over time right
that may not happen today but like we're
talking about like a global world of
billions of people who are able to get
access to like us Financial products and
things like that over time using this
infrastructure that's a big deal uh and
so for us um that was kind of the reason
we approached it um and I think you can
point to things which frankly have not
totally been born out out yet about
liquidity transparency standardization
you know peer-to-peer native
peer-to-peer transfers being things that
are better about tokenized re World
assets versus like Legacy systems again
those need to be borne out more and more
over time and hopefully with you know
changes in regulation and some other
stuff more developments they will be uh
so it should be a good customer
experience for people who want these
things uh and also hopefully for all of
us doing this from a business
perspective good business to offer these
products to
them so um I think a couple of things
maybe I I would add to everything else
um that's been said which I I very much
agree with um looking at it from from
the asset manager's lens and you had
just said this will about thinking about
um tokens as maybe just another delivery
vehicle or another um you know way to be
able to um deliver in in a right one um
uh one token one um uh stop fashion a
particular investment experience and and
you can do that and deliver that um in a
more cost effective and efficient um and
highly customizable way um and these are
all things that as asset managers have
evolved over the last several decades um
we've struggled with this idea of um how
do we pull um client assets um in ways
that you know we can scale um the
offering of of the different exposures
that that we can create um but then
still be able to deliver and offer a
customized able individual client
experience and and managed accounts
right is is one way that um has sort of
gone beyond what right uh comingled
Vehicles ETFs and and U mutual funds
have been able to do um but then of
course that is still subject to all of
the same um you know traditional Capital
markets challenges around now we're into
t+1 settlement and I remember back in
the day right it was t plus three and
there was t+ 5 and and and so each time
we've you know shaved a day off of the
settlement period everybody's like hrah
um but you've like massively changed the
back office processing um because you
know a lot of these back offices have
hardwired right the expectations of
settlement times um and and if we now
have um this technology that can speed
the settlement um yeah know you're
massively going to have to change
people's back office processes again um
but you know from our standpoint you
know we think about it as you know
reducing the risk of of these extended
settlement times you're improving the
capital efficiency of of not having
Capital tied up right over the um
periods of these settlement times and
and so when we talk about um you know
what the benefits of tokenization are
it's not we can suddenly move it
everything on chain and and it's going
to be great um uh the the value of um
you know reducing risk the value of
capital efficiency and managing your um
collateral um more efficiently and your
balance sheet Capital right is is put to
more effective use um those are themes
that really resonate more with people um
than just simply saying um you know we
can do instant settlement and and
cheaper transactions um so so when we
talk about it from that standpoint it is
truly revolutionary how it is that we're
going to do all of this um but it is a
massive journey to get there yeah and
the only thing I'd add to all of that is
the economics of this for asset managers
is very important right I mean we have
seen over over the past just 13 years
there was a recent report out that said
operating expenses have gone up 85% for
the asset management industry at a time
when average fee revenues are down 15%
those are not workable long-term trends
right um and so we were very fortunate
at Franklin Templeton because our CEO
had run Ops and Tech for many years um
and we were our own transfer agent and a
transfer agent basically keeps the
shareholder record every mutual fund has
two records it has a record of all of
the Securities that are owned by the
fund and then it has a record of all the
people who own shares in the fund so you
know you've got two shareholder you've
got two ledgers for every fund we have
thousands of funds on our platform so
you can imagine the bookkeeping expenses
that we had in just that one function um
and so we began our blockchain
experimentation to try and see can we
save costs that was a very simple um
kind of value proposition we were
testing and we found a 50x savings uh in
our cost that's a huge shift that starts
to really wake you up to how costly and
inefficient and stagnant a lot of these
firms have been to manage all of these
operational processes uh but what it
also woke us up to was oh my God these
blockchains are great they're cheap to
work on they're
developers can come to the table they
get things done so quickly right it also
showed us the value of the ecosystem and
that's why we always tell people do
something in the ecosystem even if it's
a proof of concept because once you work
in the ecosystem you really start to
understand the power of what these new
technologies can do so I think it really
in addition to everything they said the
capital efficiencies the settlement
deficiencies it's going to also allow
firms that have been in business for
decades or more um to remain competitive
and and reassess our own cost structures
to be here in another 50 years sitting
on a stage talking about the next wave
of Wall Street
3.0 can I just jump in really quickly
because we danced around something the
the four of us here but we didn't call
it out specifically super important uh
it's crossborder distribution and so you
know we've seen this with stable coins
like one of the big successes of stable
coins is it goes into every single
country you know seamlessly when you're
talking about tokenized uh Securities
tokenized uh comingled vehicles and
stuff like that there's obviously uh
compliance and jurisdictional
restrictions that are required to be uh
complied with in in every single country
that you issue it into that leaves a lot
of underserved markets because it's hard
for uh an investment manager to deploy a
vehicle directly into one jurisdiction
and then be able to generate enough
assets for that vehicle to be profitable
within that jurisdiction serving the
clientele uh
tokenization uh you can embed those
compliance controls directly into the
asset itself revolutionary revolutionary
right there in our industry uh that
makes that asset capable to cross
borders go into each one of those
jurisdictions pick up the assets that
are within that jurisdiction and have a
profitable vehicle as a game Cher yeah
100% I love it uh I loved where you
started going too about partnering up
with the ecosystem and I love where
you're going with the like new
technologies that are enabled with this
new infrastructure uh we actually had an
announcement Ando Finance had an
announcement this past week with a lot
of the asset managers on this panel um
where we announced Ando Nexus uh we have
Diversified the backing of USG Beyond
Biddle to include a lot of the assets
that are being issued or managed by
these entities on chain so that
ultimately we can build towards 247
redemptions against stable coins of
these tokenized funds uh 247 over time
right that to me is a perfect example of
these like new types of innovations that
a crypto native company like Ando can
build towards and then offer it to other
asset managers so I guess building on
that point what are some of the things
that Crypt native companies do very well
what are some of the things that the
asset managers do really well and how do
we bring together The Best of Both
Worlds freefor all go for it well I I
think that uh and Mark had started to
touch on it I think that the thing that
they've done really interestingly well
in the crypto ecosystem besides invent
the ecosystem so thank you um is I I
love the solutions that we've started to
see around digital identity and I think
identity is still one of the biggest
hurdles to us transforming the financial
ecosystem um the way the rules are
written now today Cynthia will mark my
firm we could each have the same
customer and we could be trading with
the same customer and we cannot share
our know your customer anti-money
laundering uh rules with that customer
this is a huge burden every single one
of our organizations has to do all the
work to do the investigation of that
customer we can't share the work there's
no Central ledgers that we can go to to
update data we all have to update that data
data
independently uh there's sometimes uh
instructions attached to that data that
gets out of sync and we have to spend
days trying to reconcile with each other
what our instruction systems say it's
just a mess right um and so one of the
things I'm most excited about is this
opportunity to completely rethink how we
identify uh and enable a transaction
identify the the participants in a
transaction and enable those
transactions and there's lots of
interesting solutions from soulbound
tokens to centralized uh ledgers that
everyone can share and update and
centralize the risk in The Ledger but
there's so many potential Solutions and
and I if I had to pick one spot that I'm
super excited about it's what's going to
be possible with digital identity and
how that will open up the system so much
more effectively yeah um I can add on to
to that part um because absolutely 100%
there's a customer experience um as well
and and you know on on some larger you
know Financial platforms um you end up
you know as a customer having to give
your AML kyc information multiple times
to the same organization because even
within those organizations um they have
not figured out how to share
um I'm not calling anybody out here um
but I I think to add to that what what I
really you know have appreciated about
the way in which the developer
communities and and you know the the
crypto natives as as we've been saying
um is is this focus on um you know
public um infrastructure and standards
and and when we explain to you know
people um about why it is that you know
public infrastructure is important
versus private infrastructure and I'm
not saying that um there's not a place
for for for both types um but in order
for a market to really truly function um
you need to have right trust in being
able to facilitate transactions and
where um I think Sandy talked a lot
about uh the the different centralized
um you know counterparty uh clearing um
agencies that have formed that's all
about how do you get the large um you
know counterparties in the um industry
and in the market um to agree on some
centralized standard for how they can
trust one another um in transactions and
and what you know the blockchain and and
what smart contracts enable is um not
the need for this you know centralized
group of people you can agree on a
standard um and have that embedded in
the code and and that have that right
available Market wide um and building
with that standard embedded versus each
person building their own thing and then
realizing hey wait a minute in order for
me to be able to trade more freely I
need to get everybody together in a room
and we need to set up another Committee
in order figure out what the standards
are um so this is an opportunity I
think yeah I mean I think kind of laugh
I think the cynical way to say this
would be like oh like the crypto
Industries found a great way to monetize
like gambling in a certain way right
like I don't no I'm serious like well
I'm joking but I'm also serious I think
Nathan alluded to this earlier like yeah
a lot of the stuff is like price token
price goes up I want to buy it that
draws a lot of you know it's volatility
attention more Capital comes in chasing
those returns companies have figured out
ways to monetize it although you know
some certainly better than others um so
that's one thing but I the kind of
better answer is uh what cynthy was
saying around these Open Standards and
kind of permissionless natures of
blockchains like I think it is
interesting like if you did one of these
conferences five years ago you would
have talked a lot about like private
blockchains or these big Consortium that
did like these you know big things and
like or trying to do these big private
blockchain things where they brought a
lot of people together and like that was
kind of a concept aour at the time and I
think that's faded away a little bit and
people recognize that no like the
permissionless nature of these
blockchains the fact that you have kind
of Open Source stuff going on that
people have a set of standards that
allows it to communicate and that's
really where the advantage comes around
I think that's been a uh you know a
really important development that I
think something that a lot of
traditional Finance firms can learn
because I think one of the concerns with
you know not just more the big Banks
than the big asset managers is that
people are building these little fums of
like oh this is like my little
blockchain over here that I'm using for
this stuff which to me is kind of an
athma to like the the ethos of like
what's trying to happen here or what the
benefits are coming from so um I I guess
that'd be something that trafi could
learn from crypto
here uh so I'll round it out um prior to
to stepping into the role that I'm in
now my background was trading and Market
structure and I was in that space for uh
for two decades and um really I've
traded everything every which way all
across the globee the first time that I
used uh the Unis swap application I was
blown away I what I received was no
counterparty risk no credit risk no
settlement risk yes there was platform
risk but something with which um I could
digest and an immediate increase in the
velocity of money because the
transaction was uh was instantaneous uh
and not only that but the way that the
platform is set up is I could move from
any asset to any asset those are all
huge game changers for our industry as
well I mean again increasing the
velocity of money that's a huge game
Cher not having to go uh from an asset
to a cash leg back to an asset uh that's
a game changer um you know we've been
trying to solve uh in traditional
financial markets we've been trying to
solve the the sort of retail orderflow
dilemma for a very long time uh
commissioner Pierce has touched on this
herself but you know it's perhaps these
um decentralized exchanges the protocols
that are like uniswap and the evolutions
since Unis swap has come out uh that
could be the best way to to solve um you
know the the retail trading Paradigm and
um you know to give that liquidity the
best shot that it deserves uh other
applications you know I we could talk
about a uh a also great Innovation just
in terms of collateralized borrowing
lending and opening that up um as a
platform you know GMX a couple of other
ones that have really re revolutionized
uh leverage trading and uh you know done
it in a way where it's not sort of adversary
adversary
um and so yeah I think crypto has done a
lot of those Innovations very well and
it's coming upon us to sort of figure
out how to institutionalize and you know
make that uh make those um applications
something that we can take advantage of
on behalf of clients I love it you could
have been the introduction to the D5
panel later on I love it all right we
have four minutes left so probably time
for one more question and there will be
you know short answers um it's been
mentioned a little bit before that the
the past couple of years has been I
believe you mentioned a slog with The
Regulators uh clearly this new
Administration has a more favorable view
towards the industry um we'll hear from
some Regulators later in the day but if
there was one thing that you would
prefer to get clarity on in the next
couple of years what would it be well
for us the one thing we'd want Clarity
on is we want to be able to trade
tokenized real world assets in the same
Exchange changes and through the same
market makers that we can trade crypto
assets right I think it's the
interoperability between the systems
that's going to really be the spark that
allows for these new models to really
take hold so that would be I guess it's
the special purpose broker dealer rule
or I don't know what the official rule
that limits us is but getting rid of
that rule very
good I honestly wish for the same and
and maybe the U the coral are to um you
know having intermediary Clarity um you
know as an asset manager i' I'd like to
know um that I can put um tokenized
assets and traditional Assets in a mixed
asset portfolio um and know who I have
to call in order to get that product
register please that too that too right
sounds reasonable I'll pick a different
one just to pick a different one I think
uh banking Regulators right like I think
um I think to some extent like the
difficulty in banking crypto crypto
related businesses was real and um I
think seeing change from kind of the
various you know different Bank Federal
Banking Regulators out there giving
people more clarity you know doesn't
need to be everything but stable coins
right like how are stable coins going to
feel are they going to feel more
connected to the existing Financial
system here in the US um I think would
be a big
development I talked a lot about uh the
defi applications so I'm going to stick
with that theme uh there was uh an
update uh proposed to Reg ATS and and it
doesn't seem like that's going to go
forward it would have swept up protocols
like Unis Swap and I think that would
have been a loss for the industry um and
you know and now we're looking at uh
again both uh the SEC and the cftc that
seem like they want to find ways with
which these applications can be brought
into more of the regulated sphere and so
that's a welcome change wonderful thank
you so much for joining this panel and I
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