The Path Ahead Looking Ahead, Digital Assets Will

[Music] [Applause] [Music] thank you thank you everyone for coming uh thank you for the introduction so what a time to be in this industry in the industry of uh blockchain digital assets and uh the the intersection with this in the in the financial markets so we will move straight to the to the fars side chat the first the first um question is about the global landscape so we we see how the different jurisdictions well we all know about the the US new promising future with with Trump and all the crypto-friendly uh people in in his cabinet also the announcements from uh Russia and the bricks for their own coins the movements from all the International Banks and the and the and how they are exploring blockchain and the interoperability with this so how do you see uh Philip the the the the global landscape of uh digital assets and and the financial industry big word big words uh hi everyone uh so I run xbto uh from Bermuda it's our first regulator and obviously we are here now in Abu Dhabi where uh we got an IPA last uh last summer and looking to be fully regulated very soon um what we've noticed obviously we've been in this space for 10 years what we we've found is obviously a very fractured regulatory environment um you sometimes really don't know what you can and cannot do it's very unclear um if you look at the US I think we're getting some interesting developments that probably will Propel the US uh back into the mix where for a while it's been it was a little bit complicated to to look at but for us we're we've been moving East frankly uh you know we we moved uh to Bur you that early on and we are uh about 100 people about 90 people worldwide with offices uh uh started in New York we still have our New York office Bermuda London Paris and now Abu Dhabi and uh we're super happy to be here I think it's been uh we've been you know very welcomed here and we're going to be talking about Hub 71 and everything that uh that the ecosystem has been providing to us um and it's uh it's the way to forward its Clarity in regulation without strangling Innovation exactly so as as uh the moderator said so I've been 9 years here so I'm as old as adgm so adgm for those who don't know is 9 years old last uh last September so when when we started talking about blockchain and digital assets here there was no uh FS there was no VA there was no no no Regulators here and abudabi has been introducing himself as as a leader in this space being one of the first jurisdictions introducing a digital asset framework so I would like to ask you Philip I mean from from all over the world because you are originally licensed in Bermuda right that's the other side of the world so probably you have a evaluated different places and different jurisdiction so what what uh called you to to see Abu Dhabi as a right place to establish some operations I think abui has a lot going for it obviously and we we we see it a lot it's the capital of capital and that's true it's a true statement for sure uh it's a place that's so vibrant it's a place that is very compatible with something so uh vibrant as digital assets right so for us um in our team it was a natural uh move to to come and be regulated by a place that is so openly uh welcomed uh welcoming of of digital assets and innovation in general right we want to go to places where um regulation helps us not uh hurts us right uh it's already quite difficult to be an innovator in the space because you have so many risks of trying to figure out your business model it's it becomes very difficult if if you're basically working with Regulators that don't want to work with you right because you're at the Forefront and so Regulators are naturally kind of trailing you and you need Regulators that are you know open-minded looking forward and uh and that's what we found here right and the ecosystems been so so so again so welcoming in terms of capital in terms of putting an ecosystem that works and that makes sense um and so you know it is the crossroad between you know Europe Middle East and and Asia it it makes a to Total a ton of sense for us as more of a B2B player to be here in Abu Dhabi yeah I I totally agree so regul regulation can be a douet sort can be an enabler and can be a hardle right so I think what being years here and and seeing all the Regulators uh from from scratch here so I think the difference is the the welcoming attitude for the for the people that are trying to conduct business and do business here here in the UAE and uh we work with companies that are established all over the world and the and the common narrative is that in other places it will be very hard to get response from the regulator and uh in the UA is one of the few places where you can know The Regulators by name you can meet them you can H discuss like uh innovative business models that you are trying to do that in other places like if they don't fit into the regulatory regime probably will be a very difficult discussion but here really they sit with you and then and then uh they they try to understand and help to identify the best way the best way forward so um changing a little bit uh gears in the in the in the conversation so um the foundation of any successful digital asset solution in the financial industry is the infrastructure right so we have many components there we have first of all the selection of the blockchain network that you want to use you have a tokenization platform you have a smart contracts that also have to be audited and Etc so xpto does a few of these components so how do you think that the infrastructure is currently meeting the the the the needs of the financial industry and is preparing for the upcoming needs and what xbto is doing about that yeah it's we've come a long way from 10 years ago when uh things were uh extremely fragmented from a technology perspective you didn't know who you could trust from uh a custody of asset obviously Regulators it was very too early for Regulators so it was difficult to to choose your vendors right um a lot of a lot of our peers used to self- custody a lot of things and with self- custody it can be very powerful thing to have the option of self- custody and you hear it a lot not your not your keys not your coins but at the same time it brings a lot of risk right and an institution cannot take that kind of risk so 10 years uh now since we started in February 2015 we see a a a uh an ecosystem that's really been um institutionalized to a point where you can now welcome billions if not billions of dollars into uh crypto assets and blockchain and crypto native and then you know what we'll call tokenized assets will permeate traditional Finance it will take over at least that's our thesis it's always been our thesis Bitcoin set aside you're going to see a lot of things that are going to end up on a blockchain uh we have tokenized bonds of companies we're looking at tokenizing Equity of companies Structured Products funds um alternative assets um and and these are these are products that are going to live on on the blockchain for a long time and they need to be secured in the right way right this this is there's too much money at risk now to not have a proper technology and infrastructure and Regulatory regime right um so you know we've we're absolutely embraced it we're you know we're um uh as as a platform we're kind of vertically integrated platform we do quite a lot of things from Asset Management to Capital markets but obviously we have a custody license in Bermuda where we could custody all kinds of um all kinds of tokens on all kinds of blockchain you you mentioned which blockchain to choose which tokenization engine to use um these are all things that we end up helping issuers with right so we basically cater to businesses um issuers and exchanges on one side and then investors on the other and we have products for each one of those and um you know they have plenty of questions you know they they want to they want they want Assurance they want to understand how you how you custody especially Crypton native tokens not less of an issue with things that are less bare asset where you know it's it's it's a register on a blockchain of a corporate bond it's less of an issue if you lose your token but if it's a Bitcoin that's real money lost right if it's gone it's gone right and and we hear a lot about the hacks and everything so um we are here to provide comfort uh as a regulated entity that's been around for a long time to provide the kind of advice that uh the next generation of investors will need and want right so when we start talking to Pension funds and Sovereign wealth funds and you know even certain you know corporates um they need all this because they're publicly listed and they have to answer to their shareholders and they have a governance uh that they have to to abide to um so yeah so we you know we're completely dedicated to this uh I think we're still in the early days um but I think in in next 10 years I mean you're going to see you know where where I don't know how much has been tokenized so far we're talking trillions of dollars but we're talking tens and hundreds of trillions of dollars that's that's uh very important what you're saying to have the different components because companies that are moving into digital assets they are they are somehow lost it's a new world where they need uh to understand what are the different building blocks and uh from what I understood from XB you are building many of these building blocks to have an integral solution but not only that but also the the regulated part to make able to be able to uh sell the the the outcome of those of those solutions that uh that you're building that is that is pretty interesting um which brings me to the uh challenges and and opportunities in the in the in the field uh we've been talking about some very interesting things that that you have done like you were mentioning about corporate bond tokenized corporate bonds but I would like to ask you where do you see the the opportunities in the in the space and and maybe if you can mention one or two challenges that are still uh left to be resolved yeah maybe I'll start with the the challenges and I'll end up with the the positive and the opportunities I think the challenges remain regulatory fracture between uh what you can and cannot do jurisdictions navigating that is is a challenge and will continue to be a challenge for I think years to come uh you know um what is a security in some places and then a security in other places and and I think that's the sort of uh yard stick that a lot of regulators look at these days is you know is this you know the product of of a few um is this a security effectively this SEC has been Harper on quite a lot uh or is this something that is more of a utility token and and something more of a you know like a meme coin that doesn't really have any any any real value well U to some at least but um so so I think that is the main um difficulty the other difficulty is meshing traditional Finance with decentralized Finance um because kyc AML as you know in defi is a idea but it's just an idea but it's not so it's it's very critical in in traditional Finance right uh most people demand it most investors will demand it uh it's part of um it's part of the rules right and so the intersection of these two things is uh is challenging to um to to to reconcile now in terms of opportunities I think uh again we go back to bringing trafi into um into blockchain and tokenizing everything that is going to be a huge opportunity um and and the people who are able to integrate from being um a a service provider like like a bank to tokenizing with the technology to to tokenize and then providing the liquidity uh to a token which is absolutely critical and when you think about tokenization actually people don't really care about the token right what they care is the outcome okay now I've got a token people can buy the token and to buy the token they need liquidity so they need a market maker so that we're an integrated player so when we talk about tokenization we talk about from underwriting to listing to Market making um you know customing Etc right so so we think that's where the the real value is then AI of course is going to be a big thing AI will Converse in digital currency because it's not going to understand dollars it can't Converse really with with dollars I mean it could in a certain way with stable coins but it has to be on a a blockchain layer it has to be digitized in a way where uh it can actually freely convert and that's the that's the power of digital assets right it's that freedom um that uh there's no censorship um if you're you're working in on in a in a decentralized fashion um so yeah I think that is the the the looking ahead the statement No the the the possibilities that it opens for for for everyone for uh the the the freedom of choice of different Financial products and the flexibility of them and and uh there is an say that from probably a couple of decades ago saying everything that is subject to be digitized will be digitized so now we could say that everything that is subject to be tokenized will be tokenized right absolutely yeah so any any last thoughts in terms of where do you see the the the future of uh thees in the financial industry I me I'm very excited about next year obviously it's going to be a big year uh hope hopefully it's not a disappointment but I think with the US on board it's going to be a great great uh cycle so as I said what a time to be in this in this field thank you thank you very much thank you so much [Music] [Applause]