Keeping the FlyWheel Spinning How Legacy Finance is Fuelling Next Gen Products

Welcome. Disappointing they've taken away the bell, but never mind. Um, well, thank you so much for joining. Um, it's already been an incredibly busy finance week here in Abu Dhabi. The topic of this session is keeping the flywheel spinning.

How does uh traditional finance um help fuel next generation products? I'm Constantino. I will be moderating this session. I'm joined by a fantastic panel of speakers. Welcome.

Um if I can ask you to introduce yourselves and your organizations before we jump right in.

Sure. I take the lead. So my name is Yasmina Kazitani and I'm the president of the Blockchain Game Alliance. We have over 600 members across the world in the uh ecosystem of gaming from fashion, music, protocols and we are trying to defend and support the games as a whole from web 2, web 3, web, any number that comes from the innovation side of it.

Yeah, sure. Thank you for having me. I'm back. I'm a general partner at Hash. We've been early stage global venture fund for blockchain investments uh since 2017.

Uh we recently opened office right here in ADGM. So very excited to be part of the finance week.

Hi, my name is Om. I'm the CEO of Kaiko and we're a global data analytics and data infrastructure company in uh digital assets.

Hi, I'm Avara from Rock and R. Uh we have started business from 2018 that we provide crypto exchange service including cash and magic trading and also we provide a web reward too. That's

thank you. Um, Beck, you're a VC very active in this space. Where are you placing your highest conviction bets in the embedded finance stack?

For sure. Um, 2025 was a pivotal year for, you know, embedded finance and also general institutional adoption. You know, we've seen, you know, big progress in uh regulation, but also the general asset size growth within the blockchain onchain. um as investor you know we see across the stack and we've been seeing a lot of the progress especially around you know RWAS real assets uh onchain finance but not only that you know we've been seeing a lot of adoption through the you know institutional uh companies uh using wallets or using even defy protocols um to be part of their service to serve you know clients and end users. So uh we've been quite excited about you know general you know bottomup stack that we've been seeing whereas you know compared to the top down enterprise stack that we've been seeing more in the treified space.

Thank you. Um Amber in traditional finance uh data is a is a trust layer to inform decision making. What are the biggest blind spots you see in crypto and how do we solve for that problem? I think the the data question in in crypto is extremely interesting. Um specifically when you think around tokenization and kind of bringing capital markets on blockchains which is a big trend this year.

Uh you just said it right. Data is a very important reference point in traditional finance. Uh in a world of blockchain and smart contract execution where we disintermediate the execution of the workflow. um meaning that we remove intermediaries literally uh the data that you input into the contract becomes critically more important um and so I think we're going to see an explosion of the value of market data as we think about bringing on traditional financial market data onto blockchain to enable traditional capital market style applications. So data in crypto has always been extremely important.

We've been providing for now 11 years uh price transparency and you know market micro structure transparency by providing all sorts of financial market data activity on crypto. But now as we're getting into this world of bringing global markets on chain, we're going to enter another stage of data infrastructure which is more about bringing IP protected trfy market data on chain to enable traditional financial applications. And this is a very important piece of the market infrastructure required on chain to enable capital markets.

Tatuya um Rakutan wallet is is a huge player in Japan. Um it's um probably a very good example of uh the embedded finance ecosystem. um how has the regulation helped uh evol the wallet evolve in time and what's the situation currently in Japan in terms of regulation of

all right so Japan is one of the first country to make a regulation for the crypto exchanges 2017 now so we the turning point of course regulation will be changed when I start the crypto business in Japan uh it under the regulation of the are are uh uh transfer the services act. But a change to the uh financial uh their products and then so we control the and the uh financial products uh next year. Then so it means uh many uh traditional the financial services like banks and securities are going to the enter into the market then so we expect the biggest and bigger and the crypto uh market is a chance next year and also taxation will change and the discussions that kind of situations

that's very very interesting um yes meanina from all the industries that are currently ly um using and slowly turning into embedded finance and uh defy blockchain gaming has been a pioneer in that space. What lessons can we take from that world and apply them in traditional finance and defy? I would probably start by saying that yes uh the gaming has always been the first step into any innovation across the last 50 years because gamers are very easy to uh to jump into anything right and try them. On the other hand, what we have learned through the last I would probably say the five years is that DeFi is the best way to create a fractionless uh small let's say transactions for the players because usually when you buy one skin, two skins, a sword and so on and so forth on the traditional platforms, it is very costly and it takes time for people to get money back. when the DeFi applies to the games and to the blockchain then this fractionless little transactions start being really useful because it's kind of like instant instant and also it's uh cost effective but on the top of that what we also seen within the game ecosystem is that the centralized one are letting down the gamers like the Counter Strike recent uh update that kind of devaluate all the digital assets of all the gamers.

So it's like you're putting your money in a bank, traditional bank, and then you wake up in the morning and this digital asset is not at the same value. So you lo you lost maybe 50 60%. So the DeFi kind of helped that part of it by retrieving your own asset and you kind of take them.

Um Beck in legacy finance we see deep infrastructure, we see embedded compliance. um this culture has not yet made its way in uh DeFi. How can we recreate it and as as an investor I'm sure risk and compliance are very important to you when you make an investment decision. How do we recreate this culture in DeFi?

Yeah, definitely. You know, with the more clarity with the regulation, I think we're seeing more of this adoption happening. But I think the remaining big question is is the traditional finance going to be going in a route of becoming fully onchain finance at the end of the day as a different stack or DeFi become just another um tokenized you know funds within that fits into traditional finance which is a very different approach and we're seeing both approaches happening you know within the industry within the traditional finance. Uh as a venture investor you know we want to invest in something that disrupts or you know you know makes a paradigm shift. Uh so we're investing in a lot of the founders that are building out the solution that could you know change the basically the the rail uh whether that's you know stablecoin pay or whether this is you know RWA you know usage or whether creation of a yield um and what's been really interesting this year is that um you know previous years a lot of the use cases has been more focused on mechanical usage.

What I mean by that is uh um many times institutions think about embedded finance through blockchain. They think of it as a more of a automation or you know less fee um more efficiency or more secure potentially uh but now uh a lot of the clients and the partners we work with are becoming more creative on new business ideation that has different model completely that doesn't really fit into their existing business model. Um so I'm quite excited about you know what will come uh with the you know iteration that we've been seeing in the space past 10 years and the next 10 years.

Duette what have been the biggest breakthroughs in building institutional grade trust for web 3. Oh, so web street uh to uh and so Japanese governors are to set up the uh the project team of the web street and the read the Japanese market and then so still we have to need so more use case for the web street but so for example so stable quant is one of the are the key

and then uh now so uh Japanese banks like Mishi and Mizo and get together and the issue the stable fine and so try to create other next generation of the uh the digital ecosystems uh which in are the new uh web series areas I believe we touched on stable coins yes Mina do you see tokenization in particular stable coins as another efficiency play or is it going to fundamentally reshape the markets the the the how we treat value and ownership.

Yes, I think that's um it's very important to look at the stable coin as the next edge in terms of uh the DeFi because everyone I talk today about crypto or blockchain, they say, "Oh, it's very volatile, right?" But the stable coins in terms of the games is the best way because you can peg it against gold against USD whatever the currency you want and basically it doesn't have this fluctuation or volatility that usually crypto has and we know that we are working currently with Nexus and I protocols and uh we are trying to embed that because there are two major things that are important with the stable coin is that one thing it can be played from Japan all the way to LA very easily and at the same time you can get your money in and out which usually takes ages when you're on to uh crypto or even FIC like other uh currency and the second part is because stable coins allow this uh I would probably say the consistency of the value that's also a very important part when you're putting your assets somewhere you don't want them to be devaluated because someone woke up in the morning and something happened and then you lose everything right guys so I think that from the stable coin perspective We are looking at it's not just the simple crypto that we see today but a more of a sustainable one for the next economy.

Amber, in what ways do you see DeFi complementing trade and how would you expect this is going to change over the coming few years? I think DeFi has I mean crypto and DeFi is an incredible innovation, incredible technology. What I think is interesting in the context of traditional finance is that it it provided a sandbox environment in some way to prove that blockchain works as a technology that smart contract works to represent uh financial contracts whether it's you know lending and borrowing protocols whether it's dexes like that we have shown to tradi using defy that you can use smart contracts to do all sorts of financial type activity so I think that is one angle that I find very interesting and we're you know very grateful that we had DeFi as a proof of essentially a very large scale 247 proof of concept which is very powerful. The second thing that I love is DeFi and crypto has provided innovative technologies that is now taken by tradi and I'll give a very concrete example perpetual swaps. Perpetual swaps is a cryptonative instrument that was designed for trading crypto and now we are seeing the emergence of um per dexes on which you could start listing uh equity markets and that I think is an incredible proof that crypto didn't just bring the underlying infrastructure and technology which is what we spoke of the most but also actual product innovation.

And so I think that this merging of crypto and DeFi and Trafi is extremely interesting in the sense that we are it's going to take time. I don't think we're going to on board 30 trillions in a year and a half. Like I think there will be a moment in time where we will see parallel systems existing and and that will take time to merge. But if we do it right, we can actually take the best of both worlds. uh try to remove the you know intermediated kind of value chain that we currently have in Stratfi, put that on the blockchain rails and using the great things about DeFi and Trati without necessarily repeating some of the you know mistakes of of both uh and I and I think this is fascinating.

So DeFi is, you know, an incredible sandbox environment for TRFI. And now we're bringing on the regulatory clarity, the collateral, the regulated cash leg with regulated stable coins. Like we are onboarding onto the chain all of the assets that are required to bring capital markets on chain. And I would argue that the big missing piece of that capital markets onchain infrastructure now is 247 real-time data infrastructure that can preserve trady. I data IP accuracy and timeliness and those are I think the interesting questions from a data standpoint when it comes to um the challenges of next year.

Yeah, I definitely agree with Embry. Um you know I think we're nearing the inflection point where um you know decentralized exchanges volume will surpass centralized exchanges um quite quickly and it's inevitable and it's already kind of seeing the uh signs in many uh regions. uh for example in Korea um token uh trading volume is frequently uh over um towering the volume of uh domestic stock market volumes and that's happening in many uh countries around the world and I'm sure it's going to be happening uh through the UAE uh likely as well. Uh so with that you know when the market answers and market moves much faster than you know how products get developed um you know the treifi will have to adjust and adapt and we're already seeing that sign um them giving hints that they're intending to understand intending to make that part of their um uh rail uh but I think a lot of these markets will become so big that you know this will completely kind of shift how financial market has been designed today um just looking at the speed too right you know crypto being 24/7 seven compared to not uh worthy to having closing hours. Um it's a significant change in how corporates have been operating or how they design the front office back office.

Um so I think we're really nearing the inflection point on these.

Agree. Open question to all of our speakers. Um you're giving me examples from South Korea, you give me examples from Japan. Looking from east to west, um do you see Europe falling behind the curve in uh fostering innovation and uh in terms of regulatory trends? In other words, is European regulation too hostile for this new industry, this new environment that is currently developing?

I happy I

go ahead and then I go

I'll be very quick. I'm not an expert on regulation but what I can say is we're seeing very different approaches to regulation like clearly Europe has been you know all about well it's always about regulation and and we provided a framework uh quite early on but it is quite cumbersome and uh and all of the you know fragmentation of Europe and getting your mica in some country and passporting it and everything does create some form of asymmetry in in the various uh regulatory frameworks that companies uh get. Um I feel that in in APAC it's more about sandbox environment and then getting those to scale. Uh and so it's easy to get into the sandbox stuff but harder to scale. That's the feeling I'm getting.

And then in the US uh they look at how Europe approaches regulation and then are 10 times more efficient at bringing things to life and injecting capital which is exactly where Europe completely lags behind. I mean European capital markets and European ability to provide capital is clearly not there.

Yeah. I mean Europe is highly respected within the industry. Um you know for you know bringing out a lot of the regulation framework uh for us to kind of think about how we can regulate these currencies around the world. Uh but I think the big difference is really not coming from the regulator but the market itself. uh comparing Europe to Asia, Europe to US where you know especially in Asia you know the consumer market you know consumer apps are moving so fast with such a different iteration innovating with the market demand uh and most of the trading volume and the usage the actual users of web 3 are based in Asia and that pushes the regulators to think about in a much faster manner uh whereas in Europe it's been mostly more on the kind of tokenized funds institutionals banks uh which is very different um a lady conser conservative demographic that's thinking about adoption.

So, they're really starting at different points of a pressure. Uh not so much, you know, these regulators are better than these. Yeah.

We have just under three minutes left. So, I'm going to ask you to each give me a prediction of where you see this market moving over the next 5 to 10 years. Um Tatuya, let's start with you.

All right. So uh so from the US status to new uh uh you know uh generation for the crypto and the web areas and the Japanese horror that the US situation and the uh European situations just for now we expect there are more uh easy to use uh new technology for the end users and expand so far especially so uh pro programmable money It's a you know uh huge potential for the uh e-commerce and other industries. I think

Amber your prediction

capital markets on chain. Keep it short.

Definitely a huge market.

Yeah. Um I I see a lot of the parents here. I I believe the first asset that your kid will own is probably going to be crypto assets in their wallet. Um that is not through the blockchain app. So um should be uh you know be prepared and I think you should guys should ride the wave together.

I'll probably divide this question in two one from the gaming where I come from and my prediction in the next next five years is that epic game Fortnite kind of things and Roblox platform we start adopting half decentralized stable coin because now they see utility of it with all the gamers around and the you know the the regulation around which means that we're going to see the adoption of a 1 billion people through uh the traditional platforms that are going to embed that you in a very smooth way. The second part from the prediction is that the digital identity where for example we working with the UK government to kind of put it in a smooth way and this is where like the prediction in terms of the you know everything that we're talking about from financial capitals and everything but identity overall will be rolled out easily and if the UK start I think the rest of Europe will kind of follow and then we're going to have a wallet with all different identities and everything that you have on chain. Well, thank you very much. I'm afraid that's all the time we have today, but I'd like to thank you for a very, very interesting panel.

Thank you so much.

Thank you.