Institutional Adoption: Where We Are Today, and What Comes Next - TOKEN2049 Singapore 2022

uh I'm Anton very nice to meet you all thank you for joining the talk over the next uh 15 minutes we are going to be talking about institutional adoption so if you don't care about institutions this is definitely not a talk for you this is literally all we do you know but first of all just to tell you a little bit about uh who we are and what we do and why we're I think uniquely positioned to talk about institutional adoption in crypto crypto assets I'm going to tell you just a little bit about the firm so first of all Dallas is institutional provider of uh platforms for large institutions we have what we do is we connect traditional institutions and crypto native institutions to the underlying asset class we provide trading capabilities to those vertical institutions so what we do is you know we work with we connect our clients on the buy side on the cell side to underlying custodians so we provide multi-custody Solutions we work with multiple custodians to do so we work with a number of lenders to add the credit capabilities to the ecosystem we work with exchanges we work with dealers we we work with prime Brokers so really our job is to serve as a layer that connects larger institutions to the underlying asset class and this is actually you know it's in the background it's my in my personal background this is the back of our entire firm this is stuff we used to do for the best 15 years unfortunately and we've rolled out this kind of infrastructure for the rest of the market we've done it in foreign exchange we've done it in fixed income and treasuries and uh Futures and whatnot today our clients are divided they're obviously Global globally represented and we're getting more and more traction in Asia but generally speaking we have two types of customers we have buy side customers and those are the hedge funds systematic trading desks we have proprietary Traders so anyone we have asset managers anyone that's actually trading crypto using their own capital or the capital of their clients are doing a lot of them are doing that through Talos and primarily we target medium to largest organizations so that's kind of like been our sweet spot so far but in the past two years we've also added Southside institutions and those are the Brokers you know retail Brokers institutional Brokers we have custodians um we have Banks so those are institutions that are offering crypto trading capabilities to their customers that's generally our clientele and as a result of that you know we we have uh I think what like about 60 of our clients or 50 of our clients are probably us don't missile but in the past year we've seen quite a lot of quite a lot of shift to Asia Pacific um we have quite a lot of customers in Europe and so we're seeing a diversification in fact as a result we have a pretty good understanding of what institutional adoption has been in the past four years um obviously it's through our eyes so I'm gonna walk you briefly through that and and then um you know we'll see where we go from there and maybe talk a little bit about the future of digital assets all right so generally speaking we were we founded the company in 2018. pretty much all of us came back came out of uh Capital markets having done a lot of the similar things and we've seen an evolution of uh you know we started seeing the evolution of crypto asset class and we you know the realization was very simple we knew that if there's going to be a serious asset class institutions will play a very vital role there so we started building very similar infrastructure to the one that we developed in traditional assets to allow these institutions to trade because institutions obviously need a very different tools than the retail sector uses to interact with uh with it with their online asset we spent probably about a year building that out and in 2018 the institutional participation was basically aspirational I think we definitely could not with a straight face tell anyone that institutions are here this was uh you know we knew that we're building towards the future here and and that was kind of like the entire intent I think around 2019 we're starting uh you know when the infrastructure was getting ready for production we started getting quite a lot of inbounds and so we started working with crypto native trading firms to start using our apis and our uis to connect you know through a single point to the rest of the market at that point we were offering primary connectivity Services we were connecting to exchanges of the cdesk we were doing algorithmic trading and more and so you know that was kind of like the evolution of the firm we we started primarily working with uh crypto Natives and those were really the first institutions that took the bite those are usually the you know the the risk-friendly institutions to do so over the the following couple of years so especially around 22. we're starting to see a lot a lot more traction from traditional institutions that are starting to come in and really these are the multi-asset trading firms right they are actively in the market for equities or for futures or for treasuries and they're starting to add crypto trading capabilities and and that's kind of like where we start seeing more maturation of the ecosystem we're seeing custodians we start seeing risk systems um and obviously our systems were used by these kind of Distributors so we expanded but still about 100 of our clients were primarily in the buy side domain and those were hedge funds or proprietary training desks over the past two years this is kind of like where we've seen the real shift and this is the first time that we can actually say institutions are here to an extent right the institutions in general are obviously not a not a binary uh it's not a binary thing to say whether institutions are in or not there is very very uh there's a gamut of different institutions and they're coming in at different basis so what we've seen over the two the last two years have been really the service providers that are starting to get in and we started seeing this in the United States we have been interacting with custodians in the United States we've been interacting with banks more and more retail Brokers but over the past year we've seen a lot of maturation especially in that sector that that basically made us uh to to put additional efforts into especially the the dealer portion of our company and so today you know what we have is we have a a very large amount of bicep institutions but about 50 of the of the clients for Telus globally are definitely sell side service providers so there we're seeing you know try action on the banking side on on The Brokerage side we're seeing quite a lot of custodians that are coming into the mix and starting to offer trading capabilities through our platform uh to their customers you know and so the one key thing that I did want to mention here I think that it's quite important is that while in the rest of the world in in us and in emea we're seeing a fairly balanced you know distribution between buy side and Southside institutions they're kind of coming in in a in the same clip in Asia we've been exhibition for the past year and starting January this year we we have a we have a branch of our company in Asia we've been growing very materially here in Asia we've seen kind of like almost like a lopsided effect which is a little bit counter-intuitive for us we've seen about 70 I think of the pipeline actually built up from the service providers so more and more across the different you know APAC is obviously a very big Zone but across the different jurisdictions in APAC we're seeing more emphasis on service providers that are looking to really build out the scalable solutions to provide access to their underlying customers whether it's institutions whether it's a retail client so kind of interesting we were that's where where things are trending too it looks like in Asia the the service provider side is going to be uh significantly stronger than what we have and then just to talk about like some of the some of the next things that are that are coming up you know those are obviously some of the logos of uh of of larger you know financial institutions some of them are Global some of them are us don't miss out that are interacting with crypto today and it's safe to say that when you have these kind of these kind of organizations that are interacting with crypto the environment is way way more mature than it was two years ago when it was four years ago but where does that actually take the ecosystem right for us what this means is that these kind of players are looking for a much much wider tool set right so the couple of things that are coming up we almost divide the world of institutional crypto adoption into into these two zones we're talking about the the short term and the long term on the short term there's a couple of really really known things that need to happen in order to facilitate further adoption of the institutions right regulatory is number one we've been building a lot of questions across all the domains that we're working in we run regulatory Clarity um obviously the United States regulator is starting to push the the envelope and actually start coming up with with more clarity but we're seeing this across the world across emea definitely across APAC and the remote of the Mas here so these type of Institutions the largest ones that are providing traction and providing services to their clients are looking for that kind of clarity and that's that's starting to happen now furthermore the institutions are looking for a broader collection of tools so while we currently provide you know capabilities around treasury management around portfolio management around trading we are doing clearing and and settlement there's a lot of additional tools that are still being added to make sure that institutions can actually travel that entire trade life cycle for crypto assets and pretty much do what they're used to do in in capital markets so things like Risk and risk engines are becoming very very important and has been featured in this um in presentations here a couple of times portfolio manage distance back office systems all the infrastructure that institutions are used to see in in other markets are becoming a lot more important so in the near term we are you know we're looking for a number of vendors that are we're looking at the number of vendors that are completing this kind of picture of the um of the digital you know trade life cycle and obviously quite a lot of things are done uh under the Telus umbrella as well um and then you know the on the long term what we're really thinking is again being the having built a lot of the infrastructure behind Capital markets beforehand you know it's very easy to see that the the world is likely going to be the especially the financial institutional world is going to be impacted by the infrastructure that digital assets provide our biggest bet in the company is that we are definitely going to see other asset classes migrate to digital assets rails and you know obviously that's a completely separate topic and probably not one we can capture in 15 minutes or so but we see a lot of momentum in terms of how every single asset class will move to digital assets domain and what kind of uh you know optimizations can bring about there so you know like in short these are some of the things that we're we're most um excited about we're we're seeing a lot of adoption and a lot of infrastructure being built that provides institutions with the ability to to complete their life cycle the trade lifecycle investment lifecycle in a similar way as they do so in capital markets but more and more we're starting to look into where is this world actually going and some of the interesting things is that again you know for us we started building Talos not because we just wanted to make sure that we get to parity parity is interesting like to make sure that the institutions can actually trade digital assets like they trade other asset classes it's kind of interesting but that's not usually why you you go into an unknown domain and build it we really think that the you know some of the capabilities behind digital assets allow us to build better tools allow us to build a an ecosystem a financial ecosystem that's a lot more transparent a lot more optimized and so these are the kind of things that we're thinking about these are the kind of tools that that we're looking and the kind of Partnerships that we're looking to strike going forward so yeah so this is tallest and natural am I forgetting anything generally okay we have three minutes and 10 10 seconds any questions yeah I know it's scary to go from there it doesn't make sense um if you're interested in the institutional space and especially providing infrastructure institutional space feel free to go to our website telus.com uh you can find us on social media or just come by and talk to us we're we have a booth here that's it thank you so much