How Institutional Digital Asset Market Infrastructure is Actually Built | EBC12

OK. Thank you very much for the introduction. I am very excited to be back in Barcelona to talk about the infrastructure of institutional digital asset markets with all of you and our expert panel. So, my name is Coco Chen. I am the Deputy Director of AFME, the Association of Financial Markets in Europe.

Our members underwrite 90% of underwrite 90% of corporate and sovereign debt in Europe, as well as 85% of equity issuances. So we largely represent large investment banks, working with them for the last few years to advance their digital asset and distributed ledger technology (DLT) strategies. I have a panel of experts with me today , and I would like to ask you to introduce yourselves, starting with Darko. So, I'm Darko Hadukovich, I'm responsible for the work on digitalization of securities at SIX. I am Hans-Jürgen Griesbacher.

I am the CEO and co-founder of Custody Digital Asset Operating System. I am Chris Beck, founder of Tradias, and after the merger of Tradias and Boerse Stuttgart Digital, Tradias and Boerse Stuttgart Digital, co- CEO of Boerse Stuttgart Digital, responsible for institutional business and trading. I'm Nadine Teishene. I lead the tokenized securities and cryptoassets business for Citi Services. This includes our services for investors, issuers, as well as cash settlement and trading businesses.

I am Nashwan Khatib. People call me Nash. I am the co-founder and CEO of Valereum. Perfectly. Thank you all.

So, perhaps to start, I would like to outline the general picture of what is happening in the institutional space. I think we can confidently say that over the last 2-3 years we have observed significant dynamics. Today, the question of tokenization and DLT implementation at the highest institutional level is no longer “if” it will happen, but “when” and “how.” There is also significant public support for tokenization. I believe tokenization.

I believe that Europe is increasingly considering tokenization as a strategic priority. We see the ECB's Apia project, which focuses on the medium- and long-term development of European capital markets infrastructure. The Bank of England has a similar initiative, and of course the BIS is implementing the Agora project, which deals with cross-border payments in different currencies. All of this actively encourages institutions to take action. But, of course, the private sector is also developing in parallel with networks such as Canton, RL1, and the Swift network, which are becoming increasingly widespread.

And I think these are very positive and constructive signs of scaling and commercialization, because as one of the panelists said earlier, we are long past the proof of concept ( POC) stage. We need to commercialize. We need to scale and make a profit now. So I think now. So I think if we look at what we're creating today, it's going to be quite interesting to first evaluate why we're doing it, and then maybe we'll move on to the "how" in the second half of the panel discussion.

Turning to the participants, perhaps to you, Nadine, since you represent the sell side , can you tell us why you are building this and how you have been doing it over the last few years? Of course. In our service business, we provide market connectivity and infrastructure level. We are a global custodian in 100 markets, 64 of which are markets, 64 of which are direct. We have one of the largest payment banks in the world.

So, we actually provide access to the markets, which allows our clients to issue assets, invest, trade, hold them, and also provide servicing of these assets and funds. Therefore, it is very important for us to increase the capabilities of our business to be ready for the digital future. We see this as an evolution of financial market infrastructure and an evolution in asset formation. The most exciting thing about this The most exciting thing about this is the real- time operation of the blockchain, its constant availability, its single source of truth, and the programmability of assets that we are starting to see in the funds space—thanks to tokenized money market funds and vaults, which the previous panel talked about. I believe that when implemented, it will lead to significant operational efficiencies for market participants.

And for our customers, this will mean a more seamless system and, hopefully, lower costs. As for our bank, we have been considering this for quite some time. We started working with blockchain back in 2015. We have moved from enterprise blockchain to developing broader capabilities. We worked on the basic components necessary for customers to connect to the digital world.

This also includes wallets. We created the wallet infrastructure. We have already connected it to the digital financial market infrastructures (FMI) . Now we are going to move this to a permissionless network and support crypto as well as tokenized securities. So, extending this to tokenized money market funds and securities.

We are also already working with tokenized money internally , where we use the internal Hyperledger Besu blockchain. We transfer and tokenize deposits for our clients, making global transfers in real time, 24/7, solving their urgent problems. The next step is The next step is the ability to connect to external networks. Mhm. And the ability to ensure such an unhindered movement of money and assets.

So, we really worked on the basics: tokenization capabilities, as well as corresponding storage features and wallets. As a network bank, we believe this will allow our customers to seamlessly connect and put together the pieces of the puzzle that will help scale. So, I think connectivity is the main topic today, and maybe I'll move on to you, Darko, and then Christopher and then Christopher , to talk about how you support your customers. Yes, LSE is an infrastructure player. That's why we think about how to help customers operate in both the digital and traditional worlds.

We should not specify how to trade certain securities. We need to provide connectivity, as you said, and allow customers to choose whether they want to trade in an analog way in a traditional system. Although nothing is purely analog right now, in the current or new technology stack technology stack —we have no preconceived notions. People will decide for themselves what is best for them, and if customers decide that the digital path is better, and I think it will path is better, and I think it will be. This is great, and this is how we will promote the adoption of technology.

So, as an infrastructure player, what are we working on? Of course, the LSE is known for many large-scale infrastructure assets, starting with the London Stock Exchange. We announced that in the first half of next year, the London Stock Exchange will move to a 23.5- Exchange will move to a 23.5- hour trading cycle, now called LSE 24.

We are exploring how the digital infrastructure can support this. We announced that we are creating a digital securities depository , and this is very important for us, because DSD allows for settlements in digital securities, but I mean, we live in a digital world, but let's face it : real assets, digital securities, like " securities, like " digital" securities, simply do not exist. Nobody really...There's no scale in this market. So when we build something, we have to create something that works for both digital and traditional securities, and that's what DSD will do.

We also announced a partnership with Kraken, which will see X stocks products listed on LSE 24, and we also announced the creation of tokenized rights holding tokens, equity tokens, as part of our entry into the DSD market. It's a lot of things leading to one goal leading to one goal — providing access to our customers. So you're doing a lot, but it seems to me that you're connecting different customers between legacy and new systems. You also combine asset classes. You largely serve as a connecting link, continuing your role in the digital world.

This...this was six weeks ago, so I almost forgot about it. We have so much going on. We have also signed a memorandum of understanding with HSBC to develop an interoperable connection for Digit, which is a UK government bond. Yes , that's true.

Correct , that's true. Correct . Perfectly. Christopher, tell us more about what you do on your end. I know you are also very active in pilot mode.

So, honestly, when I look back at what we've been working on over the last 6–12 months, it's definitely the merger of Tradeweb and Broadridge to go digital. And I think the reason for the merger is related to the broader view we have of the European market. I think the landscape has changed with MiCA, right? And we finally have a harmonized framework, which is great because it allows bigger players to enter the market. At the same time, we believe that competition will also increase from non-European players who will try to enter this market, as it has become more attractive.

Therefore, for us, joining forces to cover the entire value chain and create a European leader European leader capable of providing infrastructure for large players seeking to enter the digital asset market is a key task. And what does that really mean? In this combined structure, we offer trading, custodial services custodial services , staking, and tokenization services. We're definitely not going to stop there. I think we prefer to think in two dimensions.

Of course, in the field of crypto assets we see the very first and clearest use case for DLT technology. Therefore, large players choose trading and custody services as the first step to enter this market . In the cryptosphere, our next step will be to enable efficient use of capital. Things like staking and expanding our capabilities in this area, as well as lending, are topics we are actively working on. But there's a second big topic—tokenized assets, right?

And here we want to eventually extend all the services we provide for crypto assets to other asset classes. Within the next 6 months, we will launch a tokenized certificate that will be traded 24/7 with a crypto asset as the underlying instrument underlying instrument . However, we are talking about a security that complies with MiFID requirements. This has already been approved by BaFin, allowing us to issue certificates and also trade them 24/7. This is available to institutional clients, but they can also offer it to their retail clients.

This is exactly the direction we want to develop, because that is where we see long-term growth, although the merger of companies has taken a lot of time and effort over the last 6–12 months. And now it's time to realize these opportunities for our clients. Yes. That is, not only to develop digital infrastructure, but also to expand the list of products and types of risks that clients can work with. Undoubtedly.

To be honest , I already said this yesterday: Europe created the rules of the game, and now it needs to start winning this game. And I think that's quite right. We need to move from fragmented players providing very specific services to a more holistic offering for mass adoption of technology. This is what we are trying to build over the coming months and years. Yes.

And I think it's a great transition to Hans-Jürgen and Nash to talk about talk about how you operationally support institutional players. Maybe we 'll start with you, Hans, tell us about Trevor and... Yeah. Of course. I mean, it was logical to start with all the financial licensed parties that we heard from first.

So, Trevor is a technology provider. We call ourselves an infrastructure provider, although everyone here calls themselves that . We bring the system directly to the bank to operate digital assets within the processes that the bank is already accustomed to. So we are connected to different platforms. For example, the former Tradias was our first client, and it still remains there and connected to this platform.

This way, the bank itself can decide who to use for certain things. All these players offer different services. They have different workflows, different data flows, etc. And if you want to use this internally on a large scale, there are already processes in place. And we are actually the " we are actually the " missing link" here.

In general, we work on a very simple basis. We are talking about digital assets, which means cryptocurrencies, electronic money tokens, former stablecoins, digital securities, and digital securities are everything. So pretty broadly at that level, I would say. But to break it down very simply, digital assets require three things. You need to execute, transfer, and keep records at the bank level.

And in fact, as we see in current banking systems banking systems , all three of these components are separated there. And in our case, we're bringing them together so that even if you're thinking a step or two ahead where digital assets and everything goes to blockchain, you have immediate settlements or payment against delivery. And submitting an order to the order management system, transferring or working with a smart contract, and keeping records of this is an essential point. So, we are just a technology provider that helps banks connect to players like this. And I think that's all in one sentence.

Yes, definitely, by supporting this operational integration between the participants. Anastasios, we are reaching out to you to talk about Valereum. Yes. So, we at Valereum, like Trevor, are a technology provider, a purely technology provider. We provide a non-custodial MPC non-custodial MPC wallet.

Today, most transactions are based on a single signature. One signature means one side, one mistake, and that, well, that's unacceptable. So we're working to make all transactions signed by more than one party using MPC, multi-party computation. In addition to MPC and multi-signatures, we also take care of connecting to blockchain protocols blockchain protocols . The idea is to provide institutions with a ready-made product.

We try to provide them with a product with certifications, audits, and incident reports according to their schedule. So that they don't have to defend the software to their auditors. And so that their verification becomes simply a document, not a subject of discussion. They get a truly finished product. For example, we pay companies to try to hack our MPC.

We conduct regular security audits. We have ready-made certificates, such as ISO, SOC 2, etc. This is significantly more security and stability that comes from That's right. blockchain properties. This is very interesting.

You paint a very comprehensive vision of what an institutional-level digital market infrastructure should look like . Before moving on to the next section, I wanted to ask the panel how far you think we have come in operational integration with the digital marketplace infrastructure. What percentage do you think we are on the path to full scale? I'll give you a few seconds to think. But maybe I'll turn to Nadine first: your brief thoughts on what Nash said and what you think are the institutional requirements for implementing a digital market infrastructure.

What distinguishes institutional needs from, for example, the needs of retail clients or other trends you observe in the market. Regarding your question about the percentage, I believe it is quite low, and one of the reasons is that a fundamental architecture is required. You need to be able to manage your wallets. You need to be able to handle the entire lifecycle of digital assets. It is necessary to move systems to 24/7 mode, as well as change the operating model around this.

This is not an easy task, each blockchain integration is quite significant, but there are providers on the market that can provide faster connectivity and interoperability, and we see some institutions moving in this direction, although commercial cases and volumes are still small. But for the institution, above all, regulatory clarity is absolutely necessary . We cannot operate in a gray area. We are very selective about the markets and infrastructure we connect to, and we recently connected to the Swiss Digital Exchange for asset storage. We issued a digital depositary receipt in that market.

Switzerland was one of the first to create a regulatory framework, followed by Europe. This is very important, and we need a reliable infrastructure. I believe that operational risks do not change, and we need a resilient infrastructure with an appropriate legal framework, and this is true for both traditional and digital infrastructure. I think this resonates very much with the work that AFME is doing. Earlier this year, we published a report outlining our vision for future European architecture.

We surveyed all surveyed all member banks in our association to find out what they need to scale. Important issues included security, regulatory compliance, and network effects of certain protocols and networks. Darko, addressing you, what stage of this journey do you think we are at? Are we just at the beginning of the path to operational integration, or perhaps we already have all the prerequisites and it's just a matter of adopting the technology adopting the technology ? No, not all the prerequisites are in place, but let's not create unnecessary obstacles for ourselves.

Financial markets today are not very interconnected, and not everything works as efficiently as possible, right? I was once at a discussion where they said, "We won't be able to fully implement DLT until the entire financial infrastructure is transferred to blockchain." I said, "Great, see you in 150 years." So let's face the truth. I agree truth.

I agree that there is a lot of work ahead, but we need to create certain basic things and capabilities. I mentioned the Orion connection we're working on. Actually, I called it wrong. This is not interoperability, this is two-way communication, and this is an important distinction because we are still learning how the connections between institutions will work. How will they unite and, more importantly, why?

Yes? Let's not go around in circles . Financial markets are fickle these days, but they work, right? Everything, absolutely everything is being done. Sometimes it's a little inefficient and a little expensive.

So why are we all sitting here and why are we at this conference? We are here because we want to create something better for our customers. Something that will allow them to do things not just a little bit, but in a radically new way. It will require architecture, it will require connections, and that's what we're working on. But let me take a step back.

And let's look at the big picture. So, thinking about each individual use case that use case that we are talking about here is quite correct. We need to substantiate the business substantiate the business case for each of them and convince the market that this is the right path. But let's not forget about the big picture. If we create a series of disparate solutions to solve individual small problems, we will not achieve scale.

And when I explain what we do at Elsec, it gives you some idea of ​​how we see the situation. You need places where you can get the most out of it, where you can access liquidity in bonds, stocks, funds, and everything else. I don't think the market is waiting for us to go on this platform, that one, another, and another. Then we will make the situation even worse than it is now. So we need to think about the connection between all of us to understand how to improve the user experience for our customers.

Yes, I just wanted to say that I probably support your opinion, Darko. I think the issues of compatibility and fragmentation are relevant today. Or, an intermediary will solve this by connecting to multiple networks and making the process seamless for the issuer and investor. Or the infrastructures will have to interact with each other, and I think we will see a combination of both approaches, but interoperability is certainly a very important factor for us from a financial market infrastructure perspective. Certainly.

I think we'll move on to what else is needed to ensure this compatibility. Maybe Christopher, turning to you, what stage do you think we are at on the path to operational integration ? Yes, while my colleagues are answering questions, I'll do a little math. I think we're at 0.2 I think we're at 0.

2 %, and how did I get that number? I think if you look at the market cap of RWA, excluding stablecoins today , we're at about 36 billion, give or take billion, give or take . That number has grown fivefold in the last couple of years, so that's already significant growth, but when you look at the global financial market, which is about $16 trillion in capitalization, it shows how small we are or how early in the adoption curve we are, right ? So the potentially bad news is that I think the two systems will coexist for a very long time, right? I think it's going to be very gradual, um, essentially gradual, um, essentially , where the rails will slowly shift to DLT will slowly shift to DLT .

Some asset classes are faster than others because the use cases are more obvious, but, yes, I can only support what my colleagues have said . I believe we are at the very beginning, and I think the implementation will happen gradually but surely. So, 0.2%, but the trend line is going up. That's what I hear.

Just don't repeat it in the audience and don't correct me. I think that's more or less correct. And maybe Nash, what do you think, given that you interact with many different market participants? So, uh, what's the question about? Sorry.

Do you want to give us a percentage of where we are on the path to full operational integration with DLT? Uh, I think it's, it's, it's, more than 0.2%, uh, definitely. Uh, but yeah, we, we're still pretty far from that. Uh, but I believe that one day we will remove the word " will remove the word " digital".

We will simply have assets. And, uh, one day it won't be a division between traditional and digital. We will only have one asset. And, uh only have one asset. And, uh , one system, one team, uh, one set of approvals and controls and all that.

It will simply be different rails or, say, a different level of calculations. But yes, we are still far from that. And, and Hans-Jürgen, where, where are we? Yes, good question Yes, good question . I would say I agree with Chris.

This is an upward trend, and I think that's important. If you had asked me 5 years ago, I would have thought that now everyone, everything is already on-chain everything is already on-chain . So definitely not there. So, I would say, at the very beginning. Um, I also think the more important question is the next step from crypto now to electronic money tokens and the digital securities part, what exactly is the factor that is really accelerating that now?

As we hear from the market, BlackRock, etc., and here on the panel, everyone is ready for digital assets, yes. But what will be the turning point? So it's really changing, and I think very slowly, yes. I didn't expect that in the financial sector , it takes time, yes.

All the processes, just think about liquidity management, yeah. How it works in a bank today and how it will work if everything is online. I definitely believe, as this is Travala's vision, that every asset will one day become digital, and then we won't need to call it digital, because it's just an asset. Hmm, this is the way to the future. So I would say that at the very beginning, and over the years it will evolve, and I think it's a chicken and egg problem: is there a stablecoin that is fully used, is there a security token that is fully used, and how do they interact with each other?

Yes, and I think, yes, you can guess what my next question is: why is it taking so long? And I think we've already heard about some of the challenges: lack of interoperability, liquidity isolation, legal and regulatory issues regulatory issues , lack of a monetary component or perhaps consensus on assets for monetary settlements, and also perhaps lack of standards. Um, why is this taking so long , Darko? Well , is that really true? Let me remind you, the internet was actually invented in 1986, the HTML protocol at CERN.

And in 1990, you could say, "You know, this Internet thing this Internet thing , it's not going to take off." Look, 4 years, nothing has taken off. 1992 nothing has taken off. 1992 too, 1996, so it took 10 years for the Internet to become popular. So I don't think we're moving slowly.

You...just these facts, I think we're acting very, very quickly. Another important thing: when we think about use cases, people often come to me and say, "Well, okay, what will this look like in 5 years?" Well what will this look like in 5 years?" Well , you can kind of see the outline on the horizon of what it's going to look like, but really it's like saying in 2000, "Okay, 2010, tell me exactly 2010, tell me exactly what we're going to use the internet for?"

I mean, who could have predicted that we would use apps? Who could have predicted that we would be using AI today? I mean things we don't know about. So we don't know about. So , we're creating technology that solves certain problems, but it's going to be used in ways that we can't currently predict, and that's okay too.

So I wouldn't be too hard on us. I think we're moving very quickly, and in fact we've done more in DLT and FMI this year more in DLT and FMI this year than we've probably done in the previous five years previous five years . So, I think things are moving quickly. There are things that we certainly have to worry about and think about when it comes to applying DLT, and that is liquidity, as you said. We must be very careful not to allow liquidity fragmentation, because that will not facilitate implementation.

So we need to think about how to create liquidity, and I'm not saying that DLT will create it automatically. This will not happen, in fact, we see that this is not happening. We need to think about how transitions and interactions will occur between traditional solutions and blockchain solutions, between private and public blockchains. All of these issues need to be addressed from an operational perspective operational perspective , a technological perspective (which is probably the easiest), and then, of course, a regulatory perspective. So, I believe that everything is moving at a pace, and as it is implemented, development will accelerate even more.

Yes, we all know that liquidity needs to be consolidated, we need greater integration, and the way to achieve that is interoperability between different networks. I'm curious about the panel's thoughts: how important is it that banks and participants implement the same network, or maybe it doesn't matter at all if there are bridges between networks and we standardize cross-protocol transfers and asset mobility. Yes, let me add on the liquidity issue. With our Trade EOS market maker in mind, this is what we are focused on. Isn't that right ?

I think in the crypto market you see that liquidity is still quite fragmented quite fragmented . It took us years to build an infrastructure that allows us to offer sufficient liquidity even in stressful market situations. And have access to deep liquidity at all stages of the market. And I think on the tokenized asset side, when we talk about, for example, financial assets financial assets ... The main problem that I still see is that you always have to check where the liquidity is concentrated for any asset that you want to value, right ?

And for traditional assets, it is still on traditional exchanges or with traditional market makers. So market makers. So , you will ultimately need traditional infrastructure as a market maker, in most cases, to hedge your risks, right? And transfer this liquidity to the digital world. And that means these costs still arise somewhere, right?

Maybe not on the client side. Maybe not even on the bank side, but maybe at the market maker level, one step below. So, you essentially have these two levels on top, and that actually, at least for a while, increases costs, right? And I think that's something that needs to be addressed. There could be traditional markets that integrate distributed ledger technology (DLT), right?

And you have the option to switch, but I think it's very, very important. Otherwise, you won't have the cost efficiency we're talking about. The same goes for weekend trading, right? I mean, if I don't have a reference price on the weekend, do I feel confident as a market maker trading Tesla stock when Elon Musk might write something on a Saturday at 4am? I'm not sure, or the pricing won't be what you expect, right?

So, I think those are the issues that we need to address on the liquidity side. There are solutions, right? And I think there is progress, but this is what we are really focused on for the next phase. So, regarding the challenges, Nadim, what do you see from your side? Liquidity, legal and regulatory certainty, what is most important for your institution?

I believe regulatory clarity is already emerging in certain markets. So, I think that's very positive. So I probably wouldn't focus on that. I think liquidity is the key, and interoperability and common standards are a very important part of that, and that's what we've always talked about. But I really think that banks and infrastructures have a role to play in connecting traditional markets and traditional assets with digital ones.

So, the entry and exit of assets is very important, as are tokenized cash transactions, stablecoin to fiat conversion, tokenized cash to fiat, ensuring such seamless compatibility, just like for assets. And I think we're starting to see that happening now, for example, with DTCC and other market infrastructures developing these capabilities. So, I think as think as intermediaries and infrastructures start to enable this interoperability, it will help lay the foundation for solving the liquidity problem. So, there is some progress in addressing the liquidity issue. Hans, again, what do you see from your side as the biggest challenges to achieving operational integration?

Mm. So, liquidity Mm. So, liquidity , yes, is an interesting topic. I think there are already three partners here who know how to ensure market liquidity. What market liquidity.

What we're seeing now with digital securities—because I think that's a major theme for liquidity, because digital money tokens don't have that problem right now . If the asset can be liquid, I think liquidity will appear because these partners will provide it. There are market will provide it. There are market makers who will bring it. Just think of the traditional market.

If you think about any tokenized bond, yes, not every bond is automated to have high liquidity and be fully tradable. This is even true for the traditional market. What I really see is a lot of, let's say, national or geographic regions. They have different speeds of integration of the infrastructure itself. I see a lot of players trying to become the new standard, right?

But there is no new standard. So, just think about it, when it comes to electronic money tokens, there are different forms of digital euros, right? There are euro-based stablecoins. There aren't as many of them as there are per US dollar, but they are there. So, even here there are various banking consortiums that are involved in the process of issuing stablecoins issuing stablecoins .

So we are still very far from having a single standard. And I think that's something we'll have to work with. So, the market is fragmented the market is fragmented . It will remain fragmented for the next few years. This is also the reason why a solution like ours allows them to continue working with these different forms.

Ultimately, I think it's more a matter of mentality, right? If you think about it, you are now comparing it to a traditional market that has been around for many years. At this point, it is extremely effective. And digital assets can bring all the promises to the market, like faster, cheaper, safer, eliminating middlemen, etc. But there's still some work to be done on the infrastructure.

And I really hope to see some breakthrough projects over the next year, right? So that everyone can see: " can see: " Okay, it's possible." But we cannot compare the highest level of scalability of a traditional market with a new, emerging market. And we see banks using one asset and being surprised by having a completely new infrastructure and new players. And why doesn't this case work?

Yes, of course, no, right? This is an investment in the future, which now seems to be evolving along the path of DLT. Yes, and I think, Darko, you also hinted that we are starting to see the outlines of what this future market architecture looks like. And I'm very interested in this particular question, because I think if you ask the ECB, they have ideas about a universal registry. If you ask the Bank for International Settlements, they have some ideas about how cross-border platforms work, particularly based on different currencies.

Obviously, if you ask the institutions, each one has its own DLT each one has its own DLT platform, connected, as you mentioned, to others on a bilateral or perhaps multilateral basis. What are we actually moving towards in the future? Is this one network? Are these multiple networks interacting with each other? A network of networks?

Is this something like an extended Canton network or a regulated level 1 regulated level 1 ? What do you think this will ultimately look like in terms of technical infrastructure? Christopher, do you have any ideas about this any ideas about this ? So, honestly, when we talk about this infrastructure, I mean we see a need for a more coordinated effort to define common standards and then decide whether it will be, for example, a coordinated one level or one chain that everyone will agree on at the institutional level institutional level ? I think the push here, in my opinion, has to come from the big private sector players, right?

Within Europe, to really define common standards, and then of course we come back to that same word— same word— interoperability, right? And I think that's where everything is heading. I'm a little skeptical that we'll see a hyper-centralized push from the central bank. We started implementing stablecoins, for example, on our side, to move the monetary segment to the blockchain, even in the euro, together with Forge from Société Générale. I think this is the first step towards truly integrating the monetary aspect into distributed ledger technology.

And I believe that such coordinated efforts in the industry will help find common standards and move forward. But, honestly, I see so many different approaches to this topic right now that I'm not sure how things will play out in the next 5 years. I think it's too early to talk about this yet. And do you think we particularly need cross-protocol standards? Yes.

Good. Any thoughts on this , Darko? Well, we are certainly heading towards a world that will be much more interconnected, cross-border, and multifaceted. People will have to think across multiple jurisdictions, and we need to find ways to do that. I would n't go into detail about different blockchains.

Honestly. I don't want to give up...I don't want to seem arrogant, but frankly, blockchains themselves don't matter. We need multi-chain need multi-chain solutions. There will only be a few blockchains that will scale, and we're definitely not going to pick a winner.

We will connect wherever our customers want, and by the way, there are about 700 blockchains running right now , of which only 300 have any activity, and probably only 10 of them have any real value. Honestly, when you use online use online banking, you don't delve into the intricacies of the cryptographic keys that exist in the system. You don't go into all these details. You don't care, and I think that's exactly what we need to get to—an infrastructure that's not called " not called " digital," because that's incorrect, because everything is digital today. We don't use carrier pigeons, do we ?

We shouldn't even call it DLT. Ultimately, it just becomes infrastructure becomes infrastructure . People just connect and use it for different things. Yes. I think the burden for market makers and institutional players is that you have to provide a seamless interface for your clients.

Regardless of whether they are retail or institutional. And, you know, to some extent, we're all trying to establish a system of connections right now. And I know, Hans-Jürgen, we talked about this before the panel started, whether your solution is blockchain-agnostic blockchain-agnostic , whether it will allow institutions to switch between networks in the future. Mhm. Yes.

Regarding blockchain itself, I think the question is not which protocol will become dominant. They can be combined, but it is not entirely clear yet. Even in 5 years, a new protocol may appear , for example, with quantum protection. There will be changes, but in my opinion , from the perspective of an investor or a regular bank, the technology behind it doesn't matter much. I believe the future lies in digital securities becoming programmable assets.

This is their biggest advantage, because corporate actions and similar processes should be fully automated. I think we are moving towards the financial industry as a service sector becoming much more efficient. It won't require as many people involved as it does now. The entire industry in which we operate is being serviced. I think we will see how the effectiveness of DLT begins to manifest itself.

This means faster, cheaper, and more service-oriented delivery. So, Nast, what do you think about this issue with the networks? I agree that there are a lot of blockchain networks, over 700. However, I disagree that the cryptographic key is not of great importance. On the contrary, I believe this is the fundamental and most important thing.

Who owns the key and who signs? A blockchain-agnostic technology like MPC will greatly simplify the addition of new networks. This is just another level of calculations. Once you have configured the repository, signers, approval levels, and control, this does not change when adding a new network. You have it, and you can just keep going by adding a new network.

And...What I see as a challenge in this industry and how we're moving is that and how we're moving is that we have a cash settlement, and next month there's a port test. But what we're still missing is who signed the transaction, who approved it, what evidence is there? It doesn't move, it stays separate in each institution. And we need a standard here because it's really, really important.

We need to see this. And one more thing see this. And one more thing : we don't have to choose between DLT and the traditional system traditional system . I think the traditional system works perfectly. We need to combine them.

So, the traditional banking system banking system is not the enemy. Why should we avoid it? She is okay. We should definitely use DLT for transfers. This is much better.

We all agree with this. But we need to connect them. And we can use DLT for transfers. And the traditional banking system can be used as a separate registry. I think that's a pretty optimistic view of the ending.

And maybe before we finish, I wanted to ask the panel: Given everything we've discussed today, what would be your one- sentence advice for the institutions in this room? Maybe we'll start with you, Hans-Jürgen, then move on to Darko, then Christopher and Nadine, and... Okay, yeah. One tip: find a use case to get started with digital assets. You can't do everything at once.

Start with the simplest use case and be ready to scale once the market is fully operational. You have to be ready for this . I would say that...by the way, I don't like giving advice. So I would say that everyone needs to really think about how they interact with the market and what they want to let through these new channels that are being created now.

Yeah, I would say, act confident, right? I think it's very important, as we move towards DLT, and this is consistent with what Hans-Jürgen said, to have a long-term vision that DLT will play a larger will play a larger , and eventually dominant, role in the infrastructure of capital markets. Identify a specific use case use case , but honestly, if you're a big bank, there's not going to be one single option that will make a difference , right? They will develop over time. Start with one and then develop it further.

So, you must act decisively, starting from the very top. Yes. I would say everything listed, but focus is definitely important. Focus on one use case that delivers real business value to customers. We value to customers.

We ...I think this is fundamental, and only then can we build further. Don't underestimate the complexity and security. Also listen to DORA, they pay a lot of attention to the problem of concentration. It's a huge problem if we all use one big player for everything.

What happens if it fails? That's it. Risk merging, as always. Perfectly. Well, thank you very much for sharing your thoughts with us on this extremely important topic, and I think we will see even more shifts in infrastructure.

So, thank you very much. Thank you.