London Ethereum Meetup [10/5/2016] : Tramonex - Regulated FX Settlement Prototype

first of all thank you all for coming uh thank you for the other presenters who will be speaking after us uh thank you to Imperial for hosting us obviously and I know a lot of work goes behind the scene in in organizing these things sending out the invitations managing the the list so thank you to the crypto compare guys especially Vlad for doing this month after month for the for the last I don't know how many years uh I have been attending the ethereum meetups for the past two years and I I I normally sit at the back and and keep quiet so it's it's you know it's a nice opportunity for me to actually take the stage and present to the community about what project uh the project we're working on uh so as I mentioned uh our company is uh trinex and we're going to uh present uh we have a presentation we want to show you and then we'll open it to uh Q&A uh and uh we we work in the payment space uh specifically Al we we have an existing uh business in international payments where we can execute the foreign exchange uh our clients are uh in mainly in Continental Europe Emerging Markets Africa businesses that do import export uh shipping companies Airlines of a variety of corporates we're very much B2B uh and uh as we built this business over the last two years we had to develop a lot of internal uh uh procedures about AML compliance risk Etc and we obviously we have been working with the FCA the financial conduct Authority uh very closely we we are regulated and our license is passported across uh all EU countries uh so last year we were doing a bit of research and development uh in terms of what are the emerging technologies that will have a big business on a big impact on our International payments business and you know you you you cannot Escape coming acoss blockchain it's it's it's in the news it's in academic Publications you you cannot Escape uh noticing it and uh we as we did our research we noticed uh so we are we are we are familiar with uh the existing uh problems in the existing banking uh uh infrastructure which is sort of one side of the slide and then we discovered that uh this emerging uh blockchain cryptocurrency space uh also has some some problems so namely on the banking side uh you have um often clients have to wait for 2 days when you're in Emerging Markets up to 5 days to receive the payments uh there is no way to to track the payments so you don't know if it's if it's the sitting with the uh the bank in your country with the bank in the other country is it is it you know what is it waiting for which is amazing because if if you look at the ups and uh postal Parcels you can track them every step of the way they get scanned every step of the way you you know if your parcel is in in the delivery van in the Distribution Center whether it's been picked up what time it's been picked up the name of the driver when it comes to payments it's it's a bit of a black hole so of money goes in and hopefully a few days later it comes out in the right place and and and the amount of uh sort of exceptions and issues that arise uh to give you an example if if you're if you're company and you're making a payment of uh 300,000 uh and you want to convert it to Euro uh to fund your account have to send 300 if you say if you send 325 chances are the payment will be rejected and then because of the 25 pounds excess and then you have to do it again and each time you do it there's fees involved there's time involved people phone calls Etc So in theory uh blockchain and cryptocurrencies can address a lot of these issues uh in terms of providing transparency in terms of providing speed especially I'm I'm I'm referring to uh public blockchains not not the private permission blockchains uh so so so that's great we why why don't we all start using uh cryptocurrency and ethereum to transact well so it turns out that cryptocurrencies are in a regulatory Gray Zone so in other words if if uh it's not very clear are the exchanges regulated that tradeing cryptocurrencies once you have cryptocurrency it's not very clear well what what rights do you have uh as a consumer is there a public body you can turn to if if things go wrong and uh I mean Regulators in many countries and central banks are watching this space and and regulation is evolving but at the moment it's a gray zone so we came along we we studied very closely the technology uh we have our existing uh business so we we put the two together and decided Well is there some way to bridge these two is there some way to do crypto in a regulated [Music] way so that is our our solution we try to position ourselves as a bridge between the regulated Financial uh system and you know blockchain blockchainbased payment uh uh Services uh and and and the way this works in the in the context of uh ethereum it's if you go on the ethereum web page you will the first thing you will learn is how to issue your own digital token on the ethereum blockchain it's very straightforward uh the the problem is that token normally doesn't have any value doesn't mean anything so we are giving value to our token by holding collateral in in Fiat at a segregated bank account and we're able to do that because of our regulated status and because of our uh knowledge and expertise in in the traditional uh banking environment um okay and and why why why do we do this uh we think it will enable a lot of new businesses uh things like micro payments which are currently very difficult to do because of the uh the cost of processing a payment uh so so in theory blockchain should bring a significant cost advantage to uh blockchain based Payment Systems uh but also as we know ethereum is natively enabled for smart contracts and later tonight we will hear about various smart contract projects that other companies are working working on and a pain point for many of these projects is if they need to move money they either somehow need to interface the blockchain with a bank API which which which bank apis are very very notoriously difficult to get hold of uh or if someone like us can provide a digital token directly on the ethereum contract on the ethereum blockchain you can your smart contracts can interface directly with them so whether it's an insurance contract that that needs to collect premiums or make a payout whether it's just a direct uh payment link to your card uh whether it's something more complex like uh we'll show you an example later of uh uh sort of uh government money how you can restrict the uses of of uh money so so in effect you know on on the blockchain so so we want to have the benefits of uh National currencies because people understand what they are you know people understand pound sterling people understand US dollar people don't understand Bitcoin unless you spend 5 hours explaining it to them and then they still have their reservations uh on the other hand blockchain is is a fantastic and and ethereum especially is a fantastic technology with with a lot of uh benefits built into it so I mean these these are some of the the benefits of uh this kind of arrangement uh you can see it enables quite quite a few things so what I'm hoping is people who are who are U working on very smart contract ideas or or other business plans where the the pain point is the actual moving of the money uh we please come and talk to us afterwards because we we potentially have a way for you to do it directly on the blockchain which means you know nearly instantaneous and you know transparent immutable etc etc um so that's from me at this point I'm going to hand over to Dave our CTO uh to walk you through a few more slides and then and then I'll come back later I think all that's quite a big question I'm not hugely familiar with these slides so you're going to have to bear with me but actually if we go if we if we do stick on how does it actually work the one of the things I like about the model we've come up with is it's very very simple um anyone who has done any solidity development at all will be very familiar with a solidity token um or the ethereum token as Nick uh pointed out rolling out your beloved unicorn token is probably the first thing you're going to do if you come across solidity um or ethereum more generally we are very much stuck to that Paradigm the token that we are issuing onto the ethereum blockchain is just using the standard ethereum token interface there is no I'll be honest I'm I'm going to stand here openly as the CTO say there's no technical genius going on here what's really interesting is kind of the operational component factored with the ethereum token covered by that regulatory umbrella so what we do is we let's say you want a 100 digital pounds worth of uh of these tokens you essentially send us100 we're a regulated financial institution you can wire it to us in a you know potentially a range of forms we're looking to put a payment Gateway in so you can just it on your credit card if that's what you were looking to do and we would hold that money in what's known as a client segregated bank account so this is like an FCA reg oversight they give their oversight to these client segregated accounts that really means that if we go bankrupt we can't touch that money nor can an administrator it means that money is safe and would get re you know delivered out to people you know were we to go bankrupt um the idea is that you send us the money once we can acknowledge receipt of those funds we will issue the tokens to wherever you have which whatever address you have requested they be sent to we need to perform some kind of some background checks on you some you know some kyc know your client checks again from a regulatory point of view to know who you are but once that's done you've got these tokens and you can do what you like with them they are as we see them essentially digital Bank notes they behave exactly like a bank note there's almost no difference apart from the fact that you can now interact programmatically with your bank note which is pretty cool we are and I'm normally careful how many people I say this to because it it can start to raise some other concerns we are essentially acting like a Central Bank in fact we we essentially are behaving like a central bank um it has some implications you know I'm not sure how you'd value a central bank for example but um you know it's the fact that it is you know has regulator your oversight is a thing that you know we really consider to actually be the very powerful thing and we have a number of clients who are interested in using this who who wouldn't use it if there wasn't that regulatory backing to it so that's very important to us um I originally got interested in this because my background is uh banking for my sins um yeah keep the booze to a minimum please um we we we really got into this because like Nick said you can't get away from the blockchain in the financial technology space right now nor would you want to um the current model for if you actually take a foreign currency transaction for us is pretty much someone comes to us with their Sterling they say I want to make a Euro payment but I don't have a Euro bank account nor do I have any way of getting hold of2 million Euros so they come to us we take the Sterling we go to the bank or the street or the FX Marketplace and we do a foreign currency transaction it'll take two days for that to settle and to move actually those final that Euro payment on to the final pay this has got a number of risks it's two days for the paye to send us the money and two days for us to get the paye the beneficiary the final beneficiary their money that's two days of credit risk as I see it that's two days too long for someone to go bankrupt and for the money to just never arrive so what we would be able to do if there were National currencies on the blockchain is for someone to say hey look I've got some digital Sterling already you'd hope they have it already you'd hope that this stuff was kind of in circulation and being used and we say okay fine we'll use a Smart contract to act almost like an escrow two parties can simply put their you know put their Sterling in one side there Euro in the other side and can just exchange instantaneous settlement no settlement risk no credit risk um and it's instantaneous which is pretty nice everyone gets their money straight away brilliant so additional benefits though specifically of actual the national currencies on the blockchain or the Fiat currencies on the blockchain are things like this that Nick talked about one of the first things that came up for the British government when they were looking at the use of blockchain Technologies was conservative government how do we cover making sure people can't spend their benefit money on things they shouldn't be spending it on um so this is a pretty interesting way of being able to do this this means that if you were to take this National currency um and you were to you know to wrap it in various smart contracts you can start to do some very powerful things with it you can if you want to and if that's deemed appropriate you can control where the money is spent um not to mention all of the other interesting things you can do with it um if anyone's familiar with foreign currency markets people regularly want to buy or sell money based on sorts of triggers you could use Oracle eyes or something else to you know to trigger events that occur um and move money based on the back of those events there's all sorts of cool things you can do so right and this is the point actually like I said there's no technical genius going on here I'm taking your money I'm giving you some tokens and I'm giving you the promise backed by the FCA that when you want your money back I'll give it to you back and that money is safe whilst we hold it there's nothing revolutionary going on there but finding someone who is prepared to do that who understands the banking sector who understands the ethereum world and has enough kind of ability to interact with the Regulators or the background to interact with the Regulators those things have not yet been combined um there are certain competitors out there to products like this but none of them have regulatory oversight probably one of the most significant companies is based in Panama sounds like great for them but probably not so great for me so um I'm going to try and kind of rattle through here but you know real money on the blockchain it provides you know all sorts of benefits I mean here we're talking about providing p a private sector alternative in a regulated fashion um Regulators an alternative for apis exactly I mean this is this is one thing trying like as Nick mentioned actually trying to get Banks it's very easy to find an API where someone's going to be prepared to FX and hedge your FX Market risk it's very diff different finding a bank that's actually going to be prepared to settle those currencies um extraordinarily difficult to settle say garan or Kenyan Schilling for example you could start doing that with this with you know considerably greater ease with considerably greater protection again removing that credit risk which is often a concern in those areas um Internet of Things microtransactions it enables microtransactions in a way that you know has just not been done before um you can do microtransactions with any cryptocurrency I guess but it's not backed by a central bank it's not a real currency it's not necessarily something that anybody outside of this room for example would want to carry around with them let's be honest in my mind could take some heat for this not everybody wants to carry Bitcoin around people want people like Sterling the public at at large they they like their pound sterling they want to keep their pound sterling I like the idea that we could bring it to them in another fashion they're going to have the money in their bank account the in their pocket and maybe the national currency on their phone foreign exchange on the blockchain something you can do off the back of this again automated via Smart contracts but I won't necessarily dwell on that too much but again it makes the remittance Market particularly interesting transfer wise claim to be able to peer-to-peer match all of your effects you would no longer need transfer wise to peer-to-peer match your effects if you want to exchange money with someone you would just be able to instantaneously it you no longer need to give up that 1% fee Nick all yours man sure thank thank you Dave uh so I mean if if if you've heard what you know if you've been listening and you're sort of trying to draw comparisons like oh are they a little bit like like this one company or this one company uh we we think we're a little bit like each one of the companies listed there uh with some uh and with each one of them in comparison we have some differentiating factors again being onshore regulated on a public blockchain uh and and and what you see on the other side of the slide is the market size the current Global you know Market size for the payments industry I mean it's it's it's huge 650 billion pounds per day I mean it's it's you know we're just a drop in the ocean most most big companies you read about is just a drop in that big ocean so it's a huge space with a lot of uh uh you know opportunities for for multiple players um you know this this is so going back to our our business model we've come from sort of conventional uh effects to to effects done by apis and we do believe the future is uh effects on the blockchain uh I mean we'll see in the next two to three years if it doesn't materialize then we'll have to substitute FX on the blockchain with something else but for for the moment we're quite bullish um we we think we're the right people to do this because we have an established uh uh you know an operating and growing uh Financial business and because we regulate it uh and and we'd like to think that we're the center of uh the center of the universe yeah everybody thinks the center of the universe but U yeah so I mean if if you're interested in our company history uh I mean this is public information we've put it on here for everybody to get an idea of when the company was uh registered you can see this on company's house you can change check our license information on the uh the the the register of uh the FCA um and you can see we we by the way something I forgot to mention we received a grant from innovate UK which is an agency of the British government responsible for uh innovation and we're developing an fx settlement prototype using blockchain technology and we're planning to start commercializing it in January 2017 which is U that point uh our wonderful uh management team and if you want to get in touch that's our information so I think at this point we will open to Q&A we're going to pass this microphone and we have another microphone at the front so I'm not sure Nicole do you want to run up the stairs with the microphone or how how are we going to do this yeah hi um yeah my I'm just in front um my name is zif um so I had a couple of question so the first thing uh was a question on whether if you were providing the currency or you're essentially enabling the network of onboard market makers which are providing currency um and second thing is how do you guys make money so okay we're very much in testing phase with the fat currency on the blockchain so any partners that we're partner with with right now we're not making any money we have we have an existing FX business that makes plenty of money um this is the start is us an R&D project for us which is now getting increasingly serious and we would look to commercialize in the future but right now we're not um in terms of your first question the aim really is to allow anybody to put their hands on the fear currency not anyone in particular the idea is that if you it really is I do I I keep coming back to this concept of these Bank notes if you if you leave some digital Sterling with us or if you sorry if you leave some real Sterling with us or some real Euro with us we will give you the Corr responding one toone value in the digital tokens with the promise that we will exchange them back if You' like to do so in the future um what you then do with those tokens entirely up to you very similar to the bank note really once they're in the wild they're in the wild um does that does that kind of corresponding value to to what to corresponding value to the pound so economically the reason you have to retain a full reserve and so absolutely everything we can't do anything with that money price pardon your Exchange price oh we don't no sorry you don't need an exchange price I'm saying if you give me5 I will give you tokens worth5 and like the central bank if I'm going to hold your 5 in reserve your tokens now have value of5 in the same way that historically you would give your gold to the central bank they would issue you with a note that you can carry around and you can spend and you can return for your gold at a point in time it's just that here you would Peg it one to one uh and it's the four Reserve that allows us to hopefully retain that value hope they there's always a small chance that they trade at a premium but we'll see have to multiple parties accep yes yes that's we are under no illusions that unless lots of people want this and it doesn't work very well sorry um how available is the currency at the moment the the token it's not at all available at the moment we um we launch in uh this month uh we're actually our first partners are in the room Alysa somewhere kicking around oh hey guys um we're working with these guys first as our um as our kind of our first Partners um it's not out in the P it's not out to the public yet it will be on the public blockchain but the as I said we need to kyc and get checks off with various Regulators with who we would work with first so so can I just check I understand then so are you saying that for example FX market makers could be clients of yours and use your bank account facilities to make a market and therefore enable effectively same day or instantaneous yeah so now I'm at risk of people throwing things at me my my background prior to this I spent seven years at Goldman Sachs um there's absolutely no reason why you couldn't load Goldman's up with a bunch of the stuff load JP Morgan load maybe the other 10 kind of leading FX banks on the street up with this and from an interbank settlement point of view they just settle between themselves using this stuff instantaneously so yes from a market making point of view you could you could do this at which point it really might start trading at a premium because of the lack of credit risk you can arguably discount but I'm not sure I really understand the credit risk side of things when you put the pounds that you receive in a bank account which bank account are you putting it in and and then you say it's segregated and that you're working with the regulator does that mean they're backing it and guaranteeing it or what I mean isn't there still a risk of the bank's liquidity which I mean can you can you share information on custody risk so okay so the credit risk I'm really talking about is current existing credit risk if you do you and I do an fx trade right now for example we agree on the price of euro dollar I'm going to give you some euros you're going to give give me some dollars but there's not actually an expectation for me to deliver you those Euros or you to deliver me those dollars until two days time which means we can have agreed a rate the markets can be moving against me or in my favor and in two days time you can phone me like sorry Dave don't got at which point I'm out and I've potentially exposed myself to two days worth of volatility in the market and I could make a very significant loss or a very significant gain that's the credit risk I'm talking about I'm talking about my exposure to you once we've done the FX in the context of the bank that where we hold the money yes our clients people who use this product they are exposed to that bank and the bank will be regulated there will be protection you know from the bank um under standard FCA regulation but let's be honest if we put all of our money with Leman brothers and they completely vanish it's going to take a few years for administrators to to sort that all out um so there is you know there is an element there what we would love to be able to do is store our money with a central bank and the bank of England are talking about potentially opening up bank accounts but we think they're a little way away from that hopefully if we got to Market with something like this it might kick them into gear a little bit Nick you can take a few I get some yes hi my name's Daniel um so my question is if I if I'm interested in the remittances market right and I I don't really perhaps you can expand a bit on that if if I wanted to set myself up as a as a competitor to Western Union right so I would get money in for people who want to send to their granny in Colombia uh in some Village in the middle of nowhere how do I work how would someone like that work with you in this would you like to take that sure go on that if you like so let's start with do you want do you want to do the effects or do you just want to send the money I just you know no one cares about how the money what happens is they just care that the money that the money comes in and it ends up with their granny right so what would I do you know in that use case as as someone who's basically in effect just setting themselves up as a money changing business or something receiving some money and trying to put it somewhere in another for your specific scenario your grand would have to want digital currency right or you know you would need you would need a model which could emerge in the future where she could then exchange that money locally for cash for example you would imagine that that was that was probably going to be a service cash machine is essentially how that would work um and we do have Partners who are interested in rolling out cash machines for this so let's envisage a scenario where you know maybe your granny lives in the US you've got some us dollar and you can give it to us we'll give you digital dollars you immediately and instantaneously just move it to her address so her ethereum address I'm talking about there at which point she could exchange it an ATM for cash one for one um does that kind of yeah that makes sense but then in what way is it different from me say buying a loot of Bitcoin and sending her the Bitcoin um it's not apart from the fact that bitcoin price could change bit in 48 hours or however however long it takes to get there uh it it totally depends on whether you from in that context it's no different from Bitcoin apart from the fact that one of them is Bitcoin and one of them is pound sterling or US dollar and there are some differences there with one being a central bank backed currency and one of them being a standard cryptocurrency um yeah have I heard of tether was that yeah te tether dollars so if if you trade on ponic you can use tethers as a settlement mechanism it's conceptually very similar uh I'm not aware if they hold reserves and and how they hold them and what they regulate if they regulate or if they're onshore offshore I don't know so I can't comment but yeah conceptually it's very similar yes but what I'm saying is I don't know how that Peg is enforced whether they're using some some uh complex technical algorithms or whether they're holding full Reserve whether that Reserve is in a segregated status in which country so I don't know yeah um my name is Daniel too so um my question is about how you operate all this thing let's say uh you've said that you have a segregate account for every customer and more or less you have two balances one on the account and another one in uh in tokens on Smart contracts let's and the transfers and tokens are settled quickly on the blockchain but the transfers and accounts are not so quick so how do you manage to do uh to ensure that these balances are synchronized and another question is let's say I receive a money on your uh system and um so I've got the settlement on the blockchain so I've got some money on my balance and tokens but imediately I would like to get money from the account itself but you didn't settled it yet so how you handle this situ to so so that's a let's let's take the first one um actually let's take the second one your if the money has not actually physically reached us yet then yes you are limited there is a a kind of a a loose idea here that's maybe a little bit hopeful that you know when you want your digital currency you're you are in the long term people will keep their digital currency and that's what will be used so yes if you when you send us the money there could well be a 24-hour delay and you sending us the money you won't get your tokens until we've got the money um and when you want your money back it could take us 24 hours for you to get you you know the cash into your bank account um in that case it's you know there is some settlement delay yes definitely again the implicit assumption here is that you want those tokens because you're going to keep them for a period of time um does that does that make sense yeah okay so so in terms of the first one in what we're really interested in is it again like releasing the bank notes into the wild what we care about is making sure that the total number of tokens in circulation matches the total amount on the bank account and that's actually very easy check to do you can simply inspect the blockchain to see how many tokens there are in existence the tokens can't be destroyed apart from by us um so they're out there they are in circulation and you just check that the balance in the bank account matches the balance on the blockchain U one more question just you just said that you will not receive your tokens until we've got the money on the account does it mean it's the settlement still really connected to money on the account yes it is and actually that's very significant for the F so it means that my balance on tokens will not be changed until you've got money on my segregated account so it's at the same time for settlement right yes and we're not claiming I mean this is this is very important part for the FX we're not claiming that right now as soon as you put these tokens there that we can solve the FX problem for a for anybody immediately it only works if the both parties are interested in having the digital tokens and retaining the digital tokens settlement of the tokens is instantaneous and if people want those tokens and they can be used for other things then there's value you know which is why we're working with ATM providers we're working with gate payment gateways we're working with merchants who would potentially accept them so that they become a commonplace currency that is is used across the board but if you want to say do an fx transaction and you've got to wire me the Sterling we wait until we've got it we issue you the tokens you convert it for some euros and then we wait to settle those Euros that's not really going to spad anything up for you does that that make sense yes thanks I mean Ju Just to out for my side so we're working on the assumption that in the future central banks will willingly want to issue digital currency on a blockchain either their own blockchain or the ethereum blockchain or some other blockchain so so in the future a lot of these things will be just natively possible but until then we would like to be able to to take care of this in the private sector and hopefully do it right with with support from everybody so so we we you know we have a long-term Vision uh but I mean there's still a long way until we get there yeah uh probably one more question to get to the botton of that sorry uh let's say if I receive money in the tokens you mean I will not be able to use it until like in with delay two days no no so so in theory once you have the tokens you know we're working with Merchants who want to accept the token as as a means of payment uh we're working with uh you know existing cryptocurrency payment gateways where in addition to their 20 crypto they want to add a stable coin like ours as as an additional option so I mean we we have to build out the whole ecosystem because it's just not there at the moment uh so in the future hopefully you will get your tokens and be able to spend them right away or or or or send them to a Smart contract for to do something yeah once you've got your tokens you can do anything you like with them if you can find someone that's prepared to take them as payment you can spend them why you a token cryptocurrency it could be a cryptocurrency but it uses the ethereum token interface because it's a common programmable interface that solidity developers are experienced with hey guys so talking about this from a trading perspective so say for example you know um say for example all the streets on the bank sign up to this sorry all the banks on the street sign up to this um they each have digital Sterling euro dollar Yen for example they all train trade between themselves so the exchange rates will essentially be defined OTC okay um they'll trade with each other and eventually as it starts becoming more prominent within the market eventually exchanges will start coming up to determine exchange rates between your digital currency how do you ensure parity between the digital equivalent um of the currency and the actual physical real currency because for example I could come to you and I could say give me1 and I want1 worth of uh digital Sterling but for example it's trading at £86 on an exchange for example how do you ensure their parity so FX is all OTC across the board um there's it's that full Reserve concept so economically there's there's the concept of a a partial Reserve or a full Reserve um what the full Reserve does is means that if you've got your tokens um you can exchange them back for the full amount so let's say you find someone you're able to buy them for 88 p on the pound then that's like the world's greatest Arbitrage opportunity because you're to want to I highly recommend you go out and you just buy as many of those guys as you possibly can because you can exchange them for you know considerably more worth when you come back to us and get your money back so that's what stops it happening the market just stops it from happening anybody that's prepared to sell you them at a discount is a real idiot um the really interesting one is going to happen is if they trade at a premium are they more valuable than normal pounds because you can interact with them programmatically my inclination is probably not um but it's possible so that's what keeps them pegged basically the full reserve the fact that you know at all times you can come back for your money and they were will be exchanged for that amount in the same way that the bank of England retains the value of the pound okay quick questions how how about this um let's say um you got 10 million worth of coins in circulation um someone sends a million pound to buy a million pound worth of your tokens the bank records that money because it was forly transferred to you won't you have a um a credit risk of like a million pound hole in your book and your currency is unbalanced by that time so in that situation you're talking about the money hits our bank account we've got the million pounds we issue the tokens but the bank issues a recall Rec yeah right at that point we go into negotiation with the bank we can also pull those tokens back if we really want to like we have as the issuer like I said we act like a central bank that Tok been you pull it back from another third party there exchanged it so that's a very good point so at this point we need tools to track you know what's going on and how to pull this back but that's exactly why the FCA is involved that's exactly the same model as I wire you some euros you wire me some Sterling and then someone recalls it that actually just doesn't happen when you're talking about million pounds happen Bitcoin sorry no it doesn't no that wouldn't happen with Bitcoin um because well it's Bitcoin um in this specific scenario though there are regulatory agreements in place to handle those kind of situations in exactly the same way as if I wire you the corresponding amount of Euros you wire me the Sterling and then the bank like makes a recall but actually in the kind of banking infrastructure we're talking about that doesn't happen like One Bank can't just recall from a bank account a million pounds um they would have the compliance officer can freeze it sorry the compliance officer can freeze it precisely yeah precisely they can freeze anything they like at any time they like if they don't like whatever it's and actually in this specific scenario the FCA would be pretty pissed with us if we didn't freeze it so sorry be unbalance so here's a really interesting one I'll be interested in hearing people's thoughts about this afterwards but there's absolutely nothing to say right now that we couldn't freeze the assets but that's an interesting question do you people like the fact that we're backed by a regulator and the regulator might say freeze the assets freeze freeze the million pounds freeze the assets I want to know what's going on or someone gets wind a government gets wind that they may be moving to someone on a sanctions list free the assets here's all you know legal stuff to say you need to do that I'm not sure how I feel about that um and that's you know something that's that's out there and that's something actually we're still discussing with Regulators is that something that we have to put in is that a regulatory requirement or not CU I was thinking like in this in a situation if you got companies using your money and a company has that money in their possession and they're using that and it suddenly gets free you record it you oh yeah massive problems massive problems we are acutely aware of that so the FCA yeah so I I I think that that's an excellent discussion you guys should move it to the pub later on uh because I do want to get a few more questions I still see quite a quite a few hands uh yeah I mean it's sort of On a related topic but it seems to me that you're issuing a digital representation of Pound Sterling you're effectively issuing a security really and uh you know one of the reasons that we've been in Bitcoin and these sorts of things is that Bitcoin is not a regulated instrument and the FCA has just said you know Bitcoin whatever go for your life don't we don't care it's outside of our parameters as soon as you do this you're effectively crossing a live wire and and I think it's a very dangerous regulatory territory for you so I mean you do realize you're going into the whole area of issuing Securities to retail investors and and all the all this sort of thing um I think I think it's extremely dangerous have you have you considered all that so we are we are we're very much B2B so we don't we don't deal directly with consumers some of our partners may have may may have consumers and they have to manage those relationships and we we work very closely with the FCA and they do want to understand every step of the way what of the risks how is the ultimate consumer protected Etc uh so the but yeah the point is that's why we're working very direct closely with the regulator we're not trying to do this behind their backs or or or in a offshore unregulated environment uh the other thing is because I you know I think uh I'm I'm a big fan of Bitcoin by the way I have Bitcoin on my my phone I think it has its uses but in terms of mass adoption I I've given lectures on bitcoin two years ago three years ago four years ago go to various audiences and some of the questions that always come up is well who's this backed by which government is backing this you know what uh how how is this regulated you know what if the exchange runs away with my money who guarantees the exchange rate Etc so we we're trying to you know I mean Bitcoin is great I I don't have a problem with it I I use it I recommend it to people but it has some uh let's say Niche applications in in in my view and what we're trying to do here is to issue you mentioned the word security from a regulatory perspective what we're trying to do is called E money which is a different regime it's actually the same money that's in your PayPal account an e money license yeah same principle that's the that's another analogy I like to draw and it's the PayPal analogy hi BL P um one of the announcements that was made at Devcon in Shanghai recently was by santand who seemed to be doing something quite similar to this I'm afraid I wasn't there so if anyone can help me understand is what you're doing the same or if so if not what are the differences so according to the media reports it's very similar I don't know how far they are in terms of pilots in terms of Partners uh I'm not sure because there was uh there was an announcement at Defcon where the company doing it was regulated out of Panama so I'm not sure if that's the same one or if that's a different one I'm this the santand scenario my understanding is that what they've done is if you imagine the reserve is obviously quite key to this and you can obviously tell by the number of questions around it what santand have done is they have an internal pool of money and if you want to wire money to someone else at santand right now that's going to be a pretty that's actually going to be a surprising laboriously surprisingly laborious process for them um they've actually almost done like internal um internal netting so that all of the money is kind of s in a central pot and then when if you want to money wire money to someone else at santand there you can do it and it's done on the blockchain so it's kind of a similar system but it's private in the context of Sande that's my understanding of it please jump in if okay one more question thank you uh just one quick question about kyc um do people who deposit and withdraw money are they the only people who have to be kyc in your system or do any does any recipient of the token have to be kyc and one more question can anyone become kyc if I live in Nigeria say will he kyc me or are there limits to that as well thank you um only those interacting with us need to be kyc so if you want tokens or you want to retrieve tokens they're the only points of kyc required um same is with your bank again back to cash if for in order to open the bank account they're going to kyc check you once you pull your cash out of your bank account and do it you like with it um and there are no fees whoa whoa whoa whoa whoa there are no fees right now so can we can we just take take this afterwards you can talk to them they'll be here so got other presentations too we already kyc check people all over the world including Nigeria so that's just part of our regular business model that we do doing FX so