Digital Securities: Exploring the Benefits of Tokenizing Debt, Equity and Funds | EBC10

[Music] okay so um waiting for the panel to sit we're going to kick off so my name is Alex andraes COO of gly gly is a organization Distributing legal entity identifier around the world to identify legal entities I will ask my uh um panel to to introduce themselves with the first question actually so can each of you briefly introduce yourself and share what you and your organization have been working on recently in the area of tokenized depth Equity or funds starting with you so good morning everyone first of all thank you very much for inviting me to share this amazing panel with these amazing colleagues my name is Andres Fila and the head of blockchain and digital asset strategy in in bbba asset management and Global wealth and we are nowadays pretty focus on the tokenization of mutual funds money market funds and also alternative funds we are exploring we are developing we are finalizing our integration with a private Network and we will go live with a pilot in in a few months thank you John uh John wheen I'm the managing director of uh crypto and digital assets for Bank of Santander's corporate Investment Bank uh we and I are one of the oldtimers in tokenization of assets on blockchain chains going back to 2016 really um we work across the full space uh related to digital or tokenized Securities I think that the big opportunity in front of large Money Center financial institutions relates to what I call digital collateral Mobility which means effectively uh tokenizing or automating the entire multi-trillion dollar uh balance sheets of the financial institutions of the world that's the long run story um it's going to take 20 years to get there so baby steps right um and we've done other work on digital cach and uh crypto topics and and different things so uh happy to talk about any or all of it how long it will it's the last question how long it will take uh we'll all be retired by the time it happens and H good morning I'm Garcia I'm respons for security in Europe security is an American companies it it was set up back in 2017 and from then its role has changed from just organizing to managing the full ecosystem of digital Securities H we've got licenses in the USA for transfer agent broker dealer and ATS and we're in the process of getting those same licenses here with the pilot regime and investment F license um the largest Milestones we've had is the uh the of bidle which is blackr U institutional um money market fund which is H an absolute change gamer ER Game Changer sorry in the uh in the business it has already 522 million US Dollars issued and and the main beauty of it it's its instant Redemption and its capability to be moved across the institutional uh ecosystem David I'm David ker um I'm the uh DT uh crypto and e-money Lead at gft I'm also um an ambassador for Spain at the um um gbbc so the global blockchain uh Business Council um we um at gft we do lots and lots of different things um we've been uh working um in the uh in the tech area around DT and crypto for about 10 years um and the most recent I think developments which are kind of interesting to this are um around what we've been doing probably with the udn the universal digital payments Network um where we've been tokenizing Financial Services instruments like bonds and then being settling them with um with kind of Central Bank digital currency but in Pilots so basically kind of like a pilot or PC Central Bank digital currencies either centralized ones or decentralized ones and connecting them to the to the network that we have so that's quite an interesting thing and then the other thing that we're starting to do now as we're and this is actually the first time this been publicly spoken about as we're starting stting to partner with with chain link um around how we use some of their services for the um tokenization of things like funds bonds um and all of these kinds of things so I think maybe that second thing is is something we're starting to do internally watch this space and it will kind of come out soon and last but not least Thomas thank you uh I'm Thomas from aceta and aceta is a fully EU regulated um um sorry um Capital Market for investing and trading of security token and I have to say that many many people are using security token with the digital Securities and blockchain based financial instruments for us it's all the same as we have the two licenses in in Austria which we have notified throughout Europe and are offering retail and professional clients the investing and trading of uh Securities being tokenized um currently we are having uh tokens on the platform for trading uh such as shares bonds funding units and others like Revenue participation and we are currently looking at adding more token on the platform as well as uh and also on this on the buy side cooperating with large wallet communities in order to kind of create the liquidity which is certainly not there currently in the security token Market thanks so I guess you're all working on uh digital Securities or tokenized Securities see there must be a reason for that so what what are the advantages that you see uh uh tokenized instruments have over traditional form of instruments anybody can start David let's see I think I think one of the things is so so I think it's two things right it's it's it's about kind of you know the security of the transactions that you have with the with the digital instruments um so everything that you're doing is going onto a ledger um everything that everybody how people are interacting with it um is going onto a ledger so that means that you have more Security in all of these processes that's potentially better for things like reconciliation and all of these you know all of these very complex um uh let's say like uh settlement processes that you have with with with Securities um yeah I think I think that's that's really important but I think one of the most exciting things is how can you uh put instruments out to different secondary markets right so we're not seeing that huge amount but there's potential there to be able to issue to one of the largest secondary markets in the world right the you know the the main main net blockchain and if that does happen in a way that's kind of regulated and secure then you can actually maximize your secondary Market much more uh than than you would be able to do with a traditional secondary Market which is uh that we have at the moment right so I think those are probably the two main things I would say are are really driving this right okay in in my opinion I think that it depends on the security that you are trying to tokenize obviously technology should be agnostic to the security so in my case in terms of funds I think that the the scope or the approach of the entity is to like black rocks one um a money market fund probably the best key benefit is to streamline other processes for other companies in my case I belong to a financial group so in my case by tokenization of money market funds maybe I can we can use it as collateral in OTC derivative operations or repos and if we the to go through alternative as I have mentioned before maybe the main benefit there are two main key key benefits the first one is providing potential liquidity to something that is liquidate by using or creating secondary markets based on blockchain and the second one is to the whole man adustment of the whole life cycle of the of the vehicle in this case an alternative funds even the E on the capital calls pay of dividends EDC anybody wants to add anything yeah I think another thing that is also important is H that this uh new way of of uh of managing the uh the assets let us go into different sources of finance that is no longer available for specifically for retail people so with the with this technology we can reduce the uh the size of the tickets and that way we can get access to retail people who usually do not get access to so for example everything that has to do with commercial paper or reducing in the fund tickets and things like that are also important because that way financing that usually comes from institutional can also go down to retail people at a lower cost I think it's fundamentally about efficiency so if you think about how assets are recorded in the various uh databases and core Bank systems and securities broker systems today they're very simple they're recorded in an electronic database in a static form there's your name your account number and a balance and all of the business logic associated with what can be done with those assets are external to the database now digital asset you've got the name the account number the balance and then all of the business logic about the life cycle events that can happen with the asset itself are encoded directly into the asset so essentially you've made the asset digital instead of electronic digital and programmable now if you also have it exactly the same time the same possibility with the cash leg you've effectively automated the entire pre-trade trade post-trade life cycle opportunity for all the asset classes on your balance sheet so the long run play is simply about efficiency we'll move from you know complex networks of CCP Central clearing parties CSD Central Securities depositories which today are responsible for performing the DVP delivery versus payment of asset against the cash to ledger to Ledger with cryptographic verifiability when Sant andere does a you know billion dollar repo with BBVA potentially we don't need to use ccps and csts any longer we can do ledger to Ledger with very very fine grained resolution no longer overnight 2 day 3 day we can get it down to minutes or seconds fully programmatically probably run by an AI on top that's the long run play it's about efficiency Thomas do you want to add anything on that room a lot of has been said already yeah a lot was said maybe the the the market access for the the clients whether it's a private or it's a professional client in our case we offer direct access so you're going to connect your wallet and you can run uh any kind of transaction on chain with us even also the clearing settlement is done on chain with the atomic settlement it's it's pretty new and I think still there's a long way to go uh even for and there was a panel before that said the next 18 months even also institutional clients will uh kind of uh be heavy Traders actually participating in the ecosystem I think we see two three years down the road for the asset managers to allocate up to 10% and even also for institutional on any function from from tokenization to custody we certain need another 5 to 6 years till end of 2030 to have the wonderful kind of what you said before the ecosystem and ledger to lger transaction which is certainly the the goal just just a quick note to amparo's Speech but because I think that it's important to highlight that even we are talking about the maybe the democratization of the access to New Markets because of the tokenization both business models will play in the same way because the same way they are tokenizing KKR or Hamilton Lane and make it more access I to the clients Black Rock one runs in the same infra so it is cool and I think that is important to is not a m but is a new possibility to have a new access to New Markets and the democratization of the alternative for example alternative products I think that is very important because both business models will play in the same way in the same field so quite a few of you already touched on the fact that it's it's going to take some time so what are the challenges actually that that is uh impeding the uh mainstream adoption of tokenized or issuance of tokenized instrument Securities and and and trading and settlement of those instruments maybe I can charart you can start if you want very quick because we have too many people to talk about the challenges in my opinion I can summarize into the Four Eyes the first one is the institution we need all the institutions in on board in order to gain traction to break frictions and to make things happen the second one is the infrastructure Ure we need an infrastructure a maturity infrastructure but with interoperability that is the third eye and the last eye is the Insight education insights education large institutions financial institutions in order to gain adoption between or among institutions we need to educate the top management educate the people that is in the institutions in order to find the business the business case in order to make understand from the Crypt Bros from the web three companies to the very very very large and very traditional financial institutions the business case maybe is not the business case like Michael Jordan saving Nike or the sson saving the fox but there are business cases that we have to take into account that we have to analyze that we have to review and for that we need we need also education and we need training and we need to speak a lot to break down too many doors to obtain too many green lights and it's about insights about education Thomas one thing to add here is uh what we are looking at with our business model distribution and the secondary trading we're looking at the standardization of the tokenization process per se meaning uh there are a few companies out there who have certain standards on tokenization but they're working with different blockchains and different Financial systems for us the operation is sometimes a bit uh I wouldn't say difficult but uh for a lot of effort has to be done and and uh even also on the identity would be useful and to have an onchain and also on a tokenization certain standards so that the distribution and the trading and the kind of a liquidity everyone is asking for is definitely then kind of a matter of fact and timing another another challenge for me is the regulation itself and The Regulators ER as of today we have no DLT pilot regime license yet and there should be at least one H after 18 year 18 months since it was H available and uh and they still growing the the regulation with the with the guidelines with the q&as and so on and unless we've got infrastructures that are able to operate there won't be any distribution and there won't be any uh any trading so that's for me the first H challenge we've got and once we've got these infrastructures working we need them to be able to operate at scale H which the pilot region doesn't let us here in Europe and that's an important element for me for the attraction amongst institutional because otherwise it's going to be only um it's only going to be a pilot exercise a Sandbox exercise and uh institutional are not going to be able to move its infrastructure into these new ones uh I agree with aaro 100% % the primary challenge is regulatory um normally for mainstream Securities issuance in most developed economies the instrument itself needs to be first registered uh at a central Securities depository a CSD in order to be eligible for secondary market trading and liquidity on uh regulated venues um that's simply not possible today with natively issued digital Securities in European Union in the United Kingdom or in the United States right which are the big Securities markets now the way to bypass that is to figure out how to take traditional Securities feed them into a system so they pop out kind of digital gives you a lot of the capability you can add to traditional Securities we've seen amazing platforms come into existence from our good friends at JP Morgan JP Morgan Onyx does some of this hqx ftium broadridge and some of the other tools that are out there so there are pads to get most of the benefit out of making your security a programmable digital object without native issuance but in order for Native issuance to achieve scale it has to we have to solve the regulatory problem any Regulators in the audience let's see some hands that's a zero good it's not enough good one and the truth is I don't think that they really understand the implications of doing this properly in a lot of circumstances and it's not to say The Regulators worldwide are not smart they are but we we really need I think a deeper understanding about the power of this Tech and where it can take the future of the financial industry that's problem number one and and then problem number two is as uh uh my colleague from bbba just mentioned uh it's critical mass if we want all of the financial institutions to play together we kind of sort of have to be on more or less the same systems at the same time in order to be counterparts to each each other's transactions that will happen but it's a slow process so so I I totally agree with with what everybody said here today I think you know these are all really valid points um I think also um as well as this uh we have a kind of you know problem around education right so I think um there's some people that even today think that you know blockchain is crypto and crypto is blockchain and that's all bad because you know somebody's going to go and you know don't know do illicit activities and buy guns or whatever it is um when it's got nothing to do with tokenized Securities so I think that's one part of uh you know education but I also think it's it's about uh you know education as in what are the real benefits from um uh from from being able to like tokenize your securities from a actual let's get into the numbers of how much you're going to save as a financial services institution um by doing it so as John said previously one of the main reasons for doing this is actually operational efficiencies right and only I you know we've worked on so many projects like this over the years but only I think one or maybe two of the projects we've worked on in the white papers that we produced ourselves have we put like we are saving x amount of hundreds of thousands of pounds in in operational uh cost and it's really those numbers right that are going to be able to make the sea level people uh kind of get behind it put more money into this industry and basically be able to you know really make a boo and make all of the not just the really big Financial Services institutions that are already in capital markets you know like like Goldman Sachs or or JP Morgan or even uh s d you know the really really big ones on the on this on the Capital Market side but also the small players kind of get behind it and say well look you know I have a limited budget but I think this is worth investing in because it's going to be making money for me right in a significant way not just in a small way maybe one thing on on the regulator I like actually John questioned that there is no no one from the regulator here today even Al I can confirm that The Regulators are smart and they are well educated because there's a younger generation coming who actually also is growing up with uh the internet and the blockchain and they are eager to learn and they eager to support Innovation on the one hand on the other hand they are certainly also scared in a way of uh they're going to give you a license and then the reputation is on them practically because you're bankrupt and they have still the bad reputation especially in Europe you look at all the other ncas then certainly this NCA has done it and has all the the bad reputation so also be a bit more seem like a business partner like we we did we had to do uh in a way of going back and forth going back and forth explaining how we do it uh they asked questions we had a lot of iterations however in the end we kind of found a solution which is practi which is doable for us and certainly also they have all the necessary controls in place to make sure that they have uh yeah protect the investor at the end of the day as a main goal say we so we've been working a lot in the regulated uh crypto uh you know institutional crypto area and I'd say that when we started doing this um The Regulators really didn't have anybody who actually crypto specialists at all so they had people that were Innovation Specialists that were working with the with with their teams who are trying to be able to help them understand crypto and actually now they have crypto Specialists who have been working in the industry theyve brought into their teams and it's it's it's really like night and day like if you actually work with a regulator and they have somebody who really understands the technology is completely different and the good thing is they even have also some ideas how you can actually do a process or I can shortcut Etc so it's it's worth talking to them yep so I used to work at six digital exchange before joining life and one of the challenge I thought we were facing every day was first the the speed of change that banks are able to embrace uh it's not necessarily A fintech so they there is a lot of uh bureaucracy and heaviness in in the customer base that uh sdx has for example but also the fragmentation of platforms because we all creating our tokenization Islands we don't necessarily talk to one another so an asset on ethereum cannot be transported easily on Solana cannot be transported easily on R3 quarter and that's in my view one of the major Challenge and uh companies like chain link for example are looking at finding solutions for that interoperability of chain for assets but in my view one of the things that is also missing and you mentioned it earlier is identity portable identity that can be used on multiple chains to permission the same company on multiple chains so what what if you have a view on on on that and it's close to my heart because obviously I'm working in the identity business is that is that a challenge or it's a secondary challenge that will will be solved over time and I'm taking a risk by asking that question this way uh in Securities markets identity will apply as we say in Spain COC yes or yes that's it there is no way to avoid it take securitize ID you it's a it's the starting point to access the securitized platform nice platform by the way and certainly for uh a regulated depository institution like Sant andere uh we're going to do the same kyc know your customer AML anti-money laundering controls on you as as a digital Securities client as we would a normal Securities client the same applies there's no way around it at all yeah I also think that is also important in terms of interoperability and knowing exactly what's going on in the whole of the system H because one of the good of the beauties of for example of delay is that you are able to know exactly what are the positions a specific entity has in all the different markets and in all the different entities and if we are able to do to build that also on on blockchain at least without having the interoperability we will have at least the information outside of what's going on so the counterparty risk will be reduced and I think that's an important element in terms of security within this market so I think um like Adas is coming you know so it's it digital you know having your own verifiable credentials through a digital identity is going to be something that going to be uh required right or at least available for um all of the banking uh clients uh because they are identity providers um so uh I do think it's a really important uh uh thing to be able to connect that to your digital Securities and why would you not do that if you have the two things available um and yeah we've been working in digital identity projects and I see that most of the banks that we're looking at that we're working with has have also got digital identity teams that are also trying to figure out how do we uh you know work with Adas do we do just more of a cryptography kind of approach to it do we do a we use distributed networks uh like polygon ID or over Amo um and how does that link into our traditional Financial Services whether that's payments or Securities or whatever it is they're really Keen to to to get those things linked up right so I think definitely yeah so uh thank you on the uh regulatory side of things we did discuss uh already that Regulators or regul or lack of Regulation or maybe the wrong regulation can be an impediment or a challenge so what could Regulators do actually to reverse the trend and actually help and support the adoption of tokenized or dig digital Securities or tokenized Securities uh beyond the uh the DT pilot regime for example uh what else could they do okay now that I know that there is no regulator in the room I feel free to talk about thank you John no maybe they are but they know hands up no the real thing is that at the end of the day for me for example that we are Global AS stand there we have different countries different regulations different implementation phases and different approaches in order to make things happen in terms of tokenization or the use of blockchain technology in order to gain efficiency create new products new ways of distribution new business models etc etc and one problem is that for example in a very large institution such as bbba one principle is to build ones and reuse many and we cannot use it that nowadays with the regulation scopes with different regulation Scopes in different countries because we operate in different countries different continents such as Latin America Europe Asia and the and the states so different approaches impact and imp and this is crucial for us so sandboxes are great but we need need to jump over production DT pilot regime is great Agora project is great but we need to jump over production in order to have sensibility to see the real potential to to to to to move from potential benefits to real benefits and talk about real benefits and it's great because two years ago I was here and people in the room people in the on the stage was talking about exploring the opportunity of tokenization now we are doing Pilots we are doing proof of contest but we need more pushing from Regulators in order to move from Pilot poc's to go to production make sense would Mika uh lead to that uh production phase uh M does not apply to Securities M applies to crypto does but well so you can m m mik is narrowly formed really for more crypto specific markets for digital Securities at least from the point of view of a financial institution the regulation that applies in Europe is Mid 2 and the equivalent regulations in the United States and Brazil and Mexico and everywhere else we do business forget ma for Securities maybe there's a tiny tiny little bit of overlap at least that's the point of view that you will find in trafi large trafi any other I I can just from our own experience because we have a Mii 2 license and we thought it might going to be uh useful to have a staged approach starting to build a market with the the tokenization with tokens available even on the security side which is not that many to be honest and on the other hand investors to gener generate the first liquidity generate First Market and then move on because the miit versus the D pilot regime is a regime which exists for many many years it's kind of notified throughout Europe and it's stable uh the biology obviously is not that stable or at least there a lot of questions coming up we also applied for the TLT however um we are quite happy with what we have right now to uh come from a whatever you call it uh license application to the production because I can tell you uh this step is a lot of pitfalls a lot of things to be done a lot of things to change uh till you're going to have the first product life two more ideas on on my end one is this is a very good opportunity to start thinking of globalization and if we did it properly with this technology we would be able to trade the Securities on a more Global basis than with the traditional Securities and we're not going to be doing that because we're not going to be even doing that in Europe H in addition to the regul to the European regulation we've got National regulations so the way we tokenize the Way digital Securities are treated the a functions so that's everything that has to do with the management of these tokens and so on is absolutely different from one place to the other so for me one of the things that the regulator should do is start thinking of harmonizing the regulation and doing things in a way that works for all of us that's one thing and related to that the second problem we've got is that even the pilot regime for example which which is where I work mostly uh the things that are provided in the pilot regime are exemptions that are only transitional visis the overall regulation that the operators need to comply with so we are in the end despite having a new technology which has different requirements we still try to subset it into the traditional system and until we we are able to understand that this is something new that needs to be treated in a new way we won't be able to move forward so as suppose you know I'm not I'm not really a regulatory expert as such I'm definitely much more on the technology side um gft as technology services provider I mean I would say that you know this uh you said and uh yeah this was said also by by John and by Thomas that um at at the end of the day it's at at this point in time it's all about miid uh being being compant into mid and to a certain extent that that just makes it clearer as to what you have to do I think when you compare it to something like crypto which is just so like a completely different thing that hasn't been around for well it has been around for a while but not in the regulator space for such a long time uh people you know people have an understanding of how Securities have been traded over what 50 100 years right so it's very kind of clear what a how a security should be traded what the rules are right so um um to a certain extent I think it's kind of almost it's it's kind of clear how it should be now where you compare it to something like crypto whereas actually that's a very kind of like you know a very new market which is changing all the time you know so uh challenges on the regulatory side but they they there are some some good students I would say probably globally so the next question is about what jurisdiction do you think is the most mature in terms of regulation in terms of uh of friendliness towards digital Securities and enables what you're trying to achieve uh more easily than than others I'm going to be biased I'm going to say Switzerland because I live there and I see that happening every day and it's effectively quite quite quite strong as as a regulatory framework but am I right Am I Wrong any other places where it's good to do business in the digital Securities space we've done a lot of work in Hong Kong Singapore um definitely those two um just because again like Switzerland Regulators very forward thinking get stuff done kind of mentality um Germany also now I think you know there's a lot of Regulation but there's also a lot of people who want to get you know very involved a lot of people from the crypto scene they kind of going into Financial Services entities as well and I think that that's great any other opinions I I see a bit of a concern that in some uh regions you have a different regimes for virtual currencies and for digital Securities and if you're going to look in Dubai under Nevada they have all Under One Roof so it makes sense Under One Roof because at the end it's a digital asset we run our operations for virtual assets and for digital Securities the same way the same onboarding the same compliance the same EML all the same procedures so it's just another asset on the blockchain so better have it under one roof but in Europe we're going to have me me and the deal bot regime uh and yeah so it makes sense have Under One Roof from asset perspective but do understand that we have two different regimes in Europe the me and the m in place currently imagine in the US it's sometimes five or six roofs that you have the regulation under and different states and whatever uh in Europe the best regime of all is Switzerland hands down uh finma in 2007 17 took a very pragmatic approach to crypto and digital Assets in general they said these are Financial assets like any other same regulations apply you need a custody license for custody you need a broker dealer license for broker dealer activities and you need a banking license for anything that constitutes banking activities and off you go and it's we saw an explosion of Neo Banks and Finch and existing banks in Switzerland get into the space sdx of course launched uh subsidiary of six um I think that if I could point to uh a learning opportunity I think for Regulators worldwide it would be to look to the uh finma approach in 2017 and the simple level of pragmatism which was hey these are Financial assets like any other regulations apply and there are some modifications of course that they made but um worldwide then things getting increasingly complicated and fragmented European Union is uh very fragmented Capital Market in any case with 27 different jurisdictions kind of Under the Umbrella of European Union uh regulatory umbrella let's say um United States is quite complicated with uh SEC for Securities cftc Commodities Futures Trading commission for Commodities fin for broker dealers and that's at the federal level and then at the state level you've got different uh uh Regulators in different states that require different licenses for different types of activities particularly if you're retail facing Etc uh then there's varying degrees of complexity in different parts of the world or in some places there's absolutely no complexity at all because there is no regulation and you run into a roadblock which is as a financial institution would be we can't do anything because there's no guidelines at all for us even to uh to navigate let's say um but if I could pick top a list I would agree Switzerland yes if I if I get back to your point on the pragmatism from uh from the USA I you know that we've got the two legs the one in Europe and the one in the USA I think it's true that from a pragmatic point of view they did it very well because they let them isue and and do the things very easily in the USA in the very beginning I think in the long run the approach of the European Union from a theoretical point of view from a systematic point of view is much better the things that we will be able to do here in Europe despite the uh the pilot regime in terms of the ticket sizes of the uh of the so sorry the size of the markets the size of the products and and things like that if you think in the long run the way it's been constructed makes more sense because what we are experiencing in the USA is that is that we can do everything but in reality it's not a digital security because it's not digitally native whereas in in Europe the the assets that we are issuing are digitally native so we will be able to explode them in a much better way than the way they've got in in the USA and the payments leg is much more developed here in Europe than what they've got in in the USA and that will have a problems in the in the long run for them if they don't act properly and usually we had the disadvantages because of us has been ha and front running but I guess uh the next 5 years we do have a good opportunity in Europe with the meit me can D the bot regime and kind of develop uh the ecosystem the market uh with the protection also for the on the other hand yeah so I'm happy that you agree with Switzerland by the way next week we celebrating the 10th anniversary of the ethereum foundation Creation in Zug my little village so we will have a party with all the authorities of Switzerland coming and celebrating that's an that shows also how open that market is and to go back to your comment about finma I like that i' I've engaged with quite a few Regulators in my life finma is the only one where they don't when you start saying well I would like to do this they're not going to say no you can't do it because this and this and that they're going to say okay it's a bit different let's find a way for you to do it in a compliant way and that's the approach of you know the proactive creative approach of finma that that is always very appreciated from the Swiss participants in the in that market crypto and securities uh accounted so we have 9 minutes left perfect we still have two questions but that should be fine um so we have on the panel Banks and also newcomers I would say in the in this in the field uh I'd like to ask the question about what you do you think tokenized Securities well or blockchain maybe in general will have in terms of impact on traditional players so how are they going to evolve uh and how their services are going to have to evolve to be more uh in line with that the new capabilities that that technology is offering I'll start with you because you are one of those I think that the impact should be huge but we have to to to manage expect expectations because for example the the the first panel yesterday was about organization of funds 2025 the takeoff year and the answer for the panelist were no I think that the it's a problem of meaning of what's takeoff is meaning nowadays because takeoff could takeoff could take just a few years or maybe two digit years of taking off in in in order to get to mainstream but the impact I think that should be great should be huge because in the first period of this impact we have to maintain both infrastructures because we are running our business as usual in one infrastructure of chain that is at the end of the year that what pay our salary our bonus so we are not going to touch that and we have to build a parallel one build on blockchain that has potential benefits but we don't really saw the benefits in our p&l account so the the impact should be incredible in terms of integration in terms of it Integrations in terms of Education in terms of way of doing things business models but I think that the journey from now to a Target operating model completely efficiency efficient efficient with blockchain will last Maybe not two digit years now because it's the same as I say two years before but maybe n nine about 9 eight or nine on a half answering the last question already so uh it's more like an evolution rather than a revolution in the work of banking that's what you're telling me it's like um a small based Revolution uh I think the long I think I've said this already I think the long run destination is where the entire balance sheet of Institutions corporates and individuals are or is programmable and digital it just makes perfect sense right from A bank's point of view that means that you have the ability to automate theoretically your balance sheet significant parts of your balance sheet and that should mean that messages clearing settling reconciliation they all happen together that should eliminate or dramatically reduce the amount of back office and middle office requirements you have that's efficiency as I spoke about earlier um and it's going to take a long time it'll be a huge Evolution but the nature of the Manu so the demand for companies and people to uh you know borrow raise money whether it's debt or Equity to hedge Financial exposures that's not going to change I think that's going to I think the nature of the Securities and the assets themselves will remain more or less business as usual but the entire value chain for the manufacturer and production of those assets and securities that's going to change and it'll be quite revolutionary in the same way that the manufacturer and distribution of content video content we still sit in front of a screen like we did 100 years ago but how it gets to your eyeballs is very different than it was 100 years ago and I think that's going to happen in financial services and but it'll be slow because we have to run the existing baau business as usual uh and they're you know plugged into large parts of economies we can't just switch them off so there'll be an evolution over time from the traditional world to what becomes native digital I think take a long time I laugh I call it job security it's going to take a long time so what is your long time like this you can answer the the last question of the panel so you said nine years what would you say 15 10 I was a Floor Trader in the trading pits in Chicago in the early 0000 and people talked for had been talking for 25 years about how the trading pits would go away it took 25 years for technology to eliminate them I think this is a 25e journey for the full financial industry but there's a lot being done today right we we shouldn't there's all kinds of interesting things happening from the startups from the fintech from the Neo Banks and also to the mainstream Banks Empire on the uh on the impact on traditional Finance institutions and maybe the time it will take for adoption ER I think it will I I fully agree with John it will take us longer than we expect I remember seeing Tom back in 2017 asking him on blockchain because we were working together at that time and he was the only one talking about blockchain at santand at that time ER it's been six years later there are few more people talking on it but it's not yet a reality so if I take that into consideration and I think that the technology can grow exponentially but for the long R sorry for the uh escalation H to be done properly I think less than 25 years is by no means okay so I think um yeah I think in terms of you know how banks will have to adapt I think at the end of the day they'll have to pass on these benefits to their clients so that will mean that they'll have to try and pass on these operational benefits to their clients reduce the price of the services make them attractive to their clients and in that respect they're going to have to adapt to be able to compete with other you know new startups in this area right um so I think that's probably one of the things that's going to be interesting um and then obviously integration you know we're integration Specialists uh integrating with banks who have a 100 systems for and extremely complicated to be able to do is not something that happens overnight it's very very difficult to do there's a lot of uh politics are involved as well as technical challenges sometimes um so uh there's a lot of work that will go into that actually like oh well if we're going to get rid of this system what's the knock on effect on this system right um and that's that's that's a big challenge it's not like oh we just turn it over overnight it really you know there's a lot of planning and these migrations are not easy um and then you know how long uh would it be I mean anyone's guess to be honest with you I think it's going to be a long time I definitely agree with John uh on that uh I think it depends on the jurisdiction as well um I think here in Europe maybe 10 15 years but yeah I even then it's like very early for everything to be switched across I mean I I don't I don't I don't know I don't have a very good crystal ball idea of how long it's going to take to be honest with you but a while well Thomas if it's take if it's taking 10 to 25 years for the traditional players to get into that space that's an opportunity for newcomers to take over their business right at the end of the day well well next 15 years is a long time to be honest try to reduce the average please but let let me start from a different angle um I have been working for banks and I do understand running to systems all the necessity costs and there is little Financial benefit now but if you're going to split up the different processes the different Services meaning tokenization banks are already in tokenization it's not a big deal if you have technology and you have your few people um custody it's not a big deal if you're going to run an existing or if you have a software from an existing wallet provider is the same stuff like being a usual I said earlier being a bank who is kind of doing the custody for Securities and more important in between you have the trading the distribution of the security token and in fact the trading on their own accounts and trading on behalf of clients I do see earlier depending on the offer we're going to make in in kind of Market Place in the ecosystem and there a lot of fun companies out there just the like Black Rock but who are gear eager actually to see uh this products be distributed so I think it's a linear development I don't give any numbers here but we see it step by step it's it's growing the market and is it 10 or 15 years I don't know but in fact financial institutions are totally necessary to get this up and running or get this flying well we're going to stop now it's 20 seconds before the end so it's perfect we went through all the questions we had uh today uh thank you so much for to the panelists for their uh thoughts I think it was very uh at least for me very interesting to hear I hope it was for you as well and see you at our next event big round of applause thank you Alexander Andre John Amero David and Thomas wonderful stuff