Further Network Summit

Good morning everyone and welcome. So good to see so many familiar faces back here. My name is Gary Shankman, venture partner at Further. And on behalf of all of the participants here today, it is my great pleasure to welcome you back to the third annual Further Network Summit brought to you together with our partners at Brevinhard and Coinbase. Today's program is going to bring together founders, institutions, and policy makers building the future of finance.

On behalf of the entire further team, it is our pleasure to welcome you in Abu Dhabi. With that, it is my honor to begin our program. Please join me in welcoming Besal al- Hamadi, managing partner at Further. Good morning everyone. Welcome to the further network summit 2025 and welcome to Abu Dhabi.

Everyone take a moment and look around this room. You are sitting among the people who are building the future of finance. We have regulators like ADGM, sovereign wealth funds like ADQ, founders, and some of the sharpest minds in capital markets today. All in one place at one time in one city. That doesn't happen by coincidence.

It happens by design. This year's theme of the above finance week is engineering the capital network. This is more than a slogan. It reflects with this what the city has been intentionally building and that further we've always believed that capital is necessary but not sufficient. The real catalyst for growth is human capital and by being builders.

So let's briefly look at this capital network. We have built a community where the best minds come to build. And when you pair that talent with access to partners, access to capital, the growth opportunities are tremendous. To show you what I mean, I want to share three quick stories from our own portfolio. First, let's talk about SOT and the speed at which it was established its position in the market.

This is the company that was established here in Abu Dhabi in partnership with Revanh Howard and received its uh regulatory license out of the BMA got its lead investment from Galaxy Digital which is a publicly listed company on NASDAQ and services clients worldwide and all this happened within one year. The second example we have is a company called Fuse. And Fuse has been a great success story uh not just locally but regionally. It started off with us and the founders having coffee at a cafe called Jones the Grocerer and we believed in the team and in their vision to create digital assets infrastructure for the region. They have expanded to Turkey and they service clients all across Mina and I can say today that they have become a regional champion that is powering the next generation of fintexs and banks proving that this region can build deep tech infrastructure that rivals global players.

Thirdly, our partnership with ReIQ, which is something that we're extremely proud of. We recently announced a $100 million fund that was co-created with ReIQ to service global institutional investors seeking regulated uh seeking regulated compliant exposure to digital assets. This partnership unifies the strengths of two key global financial hubs. The institutional depth of North America and the agility and forward thinking framework of the Middle East. Together, we're creating products designed for global demand.

And these are three examples of companies or partnerships that were created out of Abu Dhabi that we're very proud of and we're here for your ideas and we welcome your participation in our journey. So, how did we do it? Let me explain by giving you our market perspective, show you where we plan to invest and how we're going to invest. Since we launched our platform in 2022, we've been seeing major developments in areas like stable coins, theization of financial assets, and the automation of workflows in finance. We believe that blockchains and AI models will continue to be the foundational enablers for the decade to come.

For example, new data infrastructure will create unified data sets that is going to harmonize areas such as custody, trading, credit, and compliance. And AI models will transform that data into actionable insights, powering real time underwriting, predictive trading, and personalized wealth management. Just as cloud infra infrastructure was a catalyst for the previous generation of fintex, we believe that data and AI will become the connective tissue for areas like programmable finance, tokenization, and the official and grade digital assets market. But as always, there are challenges. Financial data is still fragmented across banks, fintexs and blockchains.

Traditional and decentralized finance are converging. However, there are structural gaps. The first gap is around data fragmentation. There is no single source of truth. For example, in the October 10th crash two months ago, more than $19 billion in leveraged cryp crypto positions were liquidated in hours because exchanges, oracles, and protocols could not agree on price, value or margin thresholds.

Secondly, traditional markets operate on T+1 or longer. Still today, blockchain promises 24/7, but the two are not yet synced. In that same October crash, thin liquidity and delayed withdrawals amplified volatility in the market. The third challenge is data mobility. The movement of assets, collateral, and value across jurisdictions remain constrained.

Tokenization promises autonomic settlement and cross rail mobility, but legacy frameworks and custody models remain barriers. These issues aren't fatal. They're simply the blockers preventing a truly unified financial infrastructure from scaling. Now, this brings us to the opportunities, and this is extremely important for the institutional investors here in the room. These failures create massive opportunities.

We believe data will become the fabric of finance and AI will process this data into real-time insights and interoper interoperability will become the standard and intelligent agents will reshape financial decision making from underwriting to treasury management. The layers of fixed trust and coordination of data will unlock the next wave of value that define the winners of the next decade. Taking all these things into into consideration, I invite you to ask for our investor deck after the summit to learn more about our investment strategy. So where will we invest? Based on our view of how financial infrastructure is going to evolve, we've identified our highest conviction areas.

First, autonomous financial intelligence. AI agents will be used for reconciliation, reporting, settlement, counterparty risk, and collateral management. Secondly, just in time liquidity networks. Hybrid networks will connect banks with onchain liquidity pools for instant access to funds, eliminating the need for costly preunding across regions. The third area that we're excited about is tokenized capital.

Banks will eventually recognize tokenized assets as collateral to lend against with real-time verification, reduced operational risk, and more efficient capital deployment. Those are some themes that we're very excited about. And now I'd like to take you through how we're going to invest. Our multi strategy platform captures value at every single stage by integrating venture for early signals and asymmetric returns, liquid assets for flexible capital access and specialized funds for deep exposure into emerging verticals that we have high conviction in. By blending these approaches, we provide a diversified high conviction gateway to the future of finance.

Now, most of our capital goes goes towards our venture strategy, backing founders from the idea stage. Let me show you what this looks like in practice by looking at some of our current portfolio. You'll see here that we're able to translate ideas to into into real companies, solving real problems, and scaling them across regions. We are building the next generation market infrastructure by investing across the value chain of finance. By working with founders, we get visibility into the gaps and we get to work with them to solve them with opportunities enabling to create a portfolio that defines how assets are originated, moved and secured.

That's why our venture strategy is key. Not only do we offer these services to market, but we always also leverage them to power our own liquid strategies. Ensuring that our infrastructure is battle tested. We launched our liquid fund to give our investors exposure to liquidity and crypto without taking the risk of crypto and to give them uh access to liquidity terms that are diverse from uh venture. We also plan to provide support to our ventures in the form of working capital to provide them with the liquidity they need to achieve early traction.

Lastly, our fund strategy backs emerging managers who have a niche focus in verticals that are emerging yet promising that we have high conviction in. In conclusion, I want to leave you with one clear message. The future of financial infrastructure is not something we're waiting for. It's something that we're actually building here and now in Abu Dhabi with our global partners. Everything we've shared today, the market shifts, the opportunities, the investable themes, and the progress of our portfolio point to a simple truth.

This region is no longer following the global finance system. We are reshaping it. At further, we remain committed to doing exactly what our name promises, pushing further. We will continue to incubate bold ideas, scale companies and work on technologies that will define the next generation of finance. But we cannot do this alone and we would like to work with the community to make sure that we achieve this unified vision.

So walk across the hall, learn more about our companies, our products, and see firsthand what is being built. The future of finance is happening here in this room in the city and we're glad that you're part of it. Thank you and let's continue to build the capital network together. Thank you Fesol. And now a real treat, a keynote with one of the clearest micro voices in Bitcoin and monetary evolution, Michael Sailor, founder and executive chairman of strategy.

Uh thank you for allowing me here today. Um I would like to present a vision of the future. Um there's a digital transformation of our capital markets, a digital transformation of our money markets, our banking system, our equity markets, our credit markets, all a foot right now. And uh here is the vision that I offer you. Digital treasury companies utilizing digital capital to create digital credit to power highpowered digital money.

And uh all of this has become clear in the year 2025. I don't think it was clear before this year, but it's I think the most exciting thing going on in the financial markets. So let's start with the first uh idea. Digital capital. Well, there's equity capital, there's real estate capital, there's commodity capital, we call it gold, there's art as capital.

Capital is just a store of value. It's economic wealth. Satoshi created an an ability to create something of value stored in cyberspace and called it Bitcoin. Bitcoin is digital capital. Now what makes Bitcoin digital capital?

Well, we start with the US government. The president of the United States is the Bitcoin president. He wants to make the US the crypto capital of the world. He wants to lead in digital assets. Uh two years ago, there was one member of the cabinet of the Biden administration that believed in Bitcoin.

Gary Gendler was a Bitcoin maximalist. Everybody else in the administration didn't know what crypto was, didn't like it, didn't know what Bitcoin was. Right now, the head of the FBI, the head of the National Intelligence Agency, the head of of, you know, Robert F. Kennedy who runs Medicare and Medicaid, the head of the Federal Home Association, FHS, Bill Py, all of them believe in Bitcoin. uh as well as Kelly Laughler and of course the major financial regulators Scott Bessett the secretary of the treasury u Paul Atkins the head of the SEC the incoming head of the CFTC you have 12 cabinet members including the vice president of the United States JD Vance who may very well be the president of the United States in 2028 and 2032 so here you see an array of regulators in the United States they've all embraced the idea Bitcoin is dig digital capital banks have embraced it.

We actually see in the past six months JP Morgan, Morgan Stanley, Wells Fargo, PNC Bank, Bank of America, Maril Lynch, Charles Schwab, uh Wells Fargo, all of these are embracing Bitcoin in one shape or form. Uh some of them, City and Schwab have explicitly announced they will custody crypto assets. they will extend credit against Bitcoin in the first half of 2026. Um 12 months ago, none of this existed. So there's been an extraordinary sea change in banking.

Uh Wall Street's embraced Bitcoin is digital capital. The most successful ETF in the world in the history of the world is Black Rockck's IBIT. Uh extraordinary growth just in a in a matter of less than 24 months. Public companies have embraced this as digital capital. My company was the first public company to capitalize with Bitcoin.

Then there were 10. Then there were 20. A year ago there were 60. Six months ago there were 120. Today there are more than 200 public companies.

What makes Bitcoin digital capital? It is the most powerful crypto network in the world. Powerful in what way you say? It's powered by 24 gigawatts of energy. That's 24 full-on nuclear reactors.

So, it's the most powerful electrically. It's powered by more than a thousand exaash. That's more computer power than all the computer servers in Azure or AWS, if they were all hijacked, could generate. It's a wall of digital energy. So, it's got computer power backing it.

It's backed by political power. 700 million crypto enthusiasts, 30% of the voters in the United States. You will pry this from their cold dead fingers. It's backed by economic power. My company has has invested nearly $49 billion to buy 3%.

Overall, more than $1.2 2 trillion dollar of real money has been deposited in the bank of Bitcoin. It's a lot of capital. So all told this network is something on the order of a hundred times more powerful than a than the comparable store of value network. So that is the basis for this digital economy.

Now what is my company? Well, my company is the first and the biggest digital treasury company. What is a digital treasury company? Well, a company that raises capital via issuance of securities, buys digital capital, Bitcoin, and then issues credit instruments against it. And what you can see here is as of last week, we had about 650,000 Bitcoin, 3.

1% of the network. At 5:00 today, we'll announce our latest Bitcoin purchase. and this number will dramatically increase. Um we have in essence uh about we've created the fifth largest treasury in the S&P 500. Um the only company on this chart you see that actually accumulates capital or keeps it is Berkshire Hathway.

All the other well-run companies that you know of big tech, big banks have a policy to surrender capital. They buy their stock back and they dividend out their capital. We are accumulating capital and and we expect to be the second largest holder of treasury assets in the next 12 to 24 months. We expect to be the largest holder of treasury assets in 4 to 8 years in the world. Now what explains this this chart?

What this chart tells you is over the last five years, the average return on money markets or or shortdated treasury instruments is 3%. Every public company in the world is capitalized on money markets. They all use shortdated treasuries. This chart tells you the cost of capital is the S&P index. It's 14%.

Gold barely keeps up with it. So gold and the S&P over the last five years set the cost to capital about 14 to 15%. If you're invested in treasuries, then you're running a negative real yield of minus 12%. You're destroying 12% of your treasury. If for shareholders, that's why a well-run company capitalized on money markets has to surrender its capital.

But if you were to recapitalize on a digital capital asset, Bitcoin, you would be returning 47% a year over that same time frame. And so what you can see here is that is that the assets that companies can use, money markets don't work. Real estate underperforms. For the most part, gold was the best idea in the 19th century, but nobody wants to capitalize on gold in the 21st century. uh you cannot legally capitalize on a securities portfolio because the SEC uh because of the investment company act of 1940.

You can't do it. And so that means Bitcoin is unique. My company has funded using cost of credit and equity in the 6 to 12% range and we've invested in something appreciated 47% and that's how you outperform Bitcoin and get to 65%. We have raised we're the largest issuer of convertible bonds in the world. We're the largest issuer of equity in the world.

Um we've now raised about $30 billion of equity in the past uh 12 months, a little bit more than 12 months. Um we've added 60 uh billion dollars in shareholder equity in 14 months. So you wouldn't have heard of us 14 months ago, but we're moving very rapidly right now. and and we're now rotating to invent an entirely new asset class called digital credit. And I'll explain that in a second.

Our company exists to generate uh Bitcoin yield. If if you buy uh a share of an ETF, you get a 100,000 Satoshi's a share forever. If you buy a share of our company, you would have gone from 56,000 Satoshi's to 83,000 to 84 to 91 to 158 to 197. We are accreing Bitcoin per share through our capital markets or our credit issuance activity every year, every quarter. The company has about $60 billion worth of hard reserves in uh in Bitcoin.

Um we have a we have about 74 years worth of dividends. If Bitcoin appreciates 0% a year year the um the hurdle rate for us is 1.36%. If Bitcoin appreciates more than 1.36% we can pay our dividends forever and create more equity value for the common stock.

If we issue credit instruments equal to 1.36% of our Bitcoin, we can we can increase our Bitcoin holdings forever while paying the dividends with Bitcoin. And so that 1.36% is an important hurdle. The company recently just added about $1.

5 billion of US dollar reserves. That gives us about 21 months worth of cash that we could use to pay our dividends if we didn't want to access the capital markets. So, the way to think about our company is we're issuing credit. We've got about $8 billion of digital credit outstanding and it pays about a 10% dividend. We uh have about $800 million dividend obligation a year.

We fund it by selling equity at a premium to the underlying asset when the equity capital markets give us that premium. That has generally been the case. Below that uh one times NAV, we would actually just sell highly appreciated the Bitcoin or we would just sell Bitcoin derivatives in order to fund that. And of course, the 1.4% is really the cruise speed.

If Bitcoin appreciates more than 10% then our common equity outperforms Bitcoin. And so that's escape velocity. Um stall speed is a bitcoin falls 20% a year for the next decade. Every single year we will have assets equal to our liabilities. Think of it as uh the first digital credit vehicle, right?

We're powering the vehicle either in the derivatives market which is 100 billion a day or in the uh commodities market selling the bitcoin or in the equity capital markets. Our equity is about $4 billion a day of liquidity. We need about $2 million a day to fund the dividend. So, it's a dimminimous amount. It's anywhere from six basis points to a fraction of a basis point of those markets.

The thing about uh digital credit that's interesting is it's completely transparent. If you go to our website, we have our credit model published. It updates every 15 seconds. You can plug in any price of Bitcoin, your volatility forecast, your uh ARR forecast. It will spit out the statistical risk of being under collolateralized and it's literally updating in real time.

It's transparent, homogeneous. Um the conclusion, by the way, is if you believe that Bitcoin is going to appreciate like the S&P index, all of this credit is investment grade. The market values it as double distressed debt like we're going out of business even though we're five to 10x over collateralized. And so this is a and of course this is what you would expect in a emerging market that's only a few months old. Five years from now, three years from now, I think that these credit spreads will adjust rationally.

But right now there's extraordinary opportunity for credit investors. If you understand crypto assets, we're the first company in the space to get a credit rating from the S&P. It's a very weak B rating, but what it does is it triples the size of the addressable market for our credit instruments. And we got that rating even in the face of the Basel Accords valuing Bitcoin as worth zero. So, we have $60 billion of something that we could sell into the market in a few days that's valued at zero.

At some point, if the market values it at more than zero, you'll think our credit rating and our credit uh spreads will improve. Now, the big idea here is capital versus credit. You have a five-year-old kid. You give them a million dollars worth of real estate in the middle of Abu Dhabi and you say hold this for 30 years child and one day it will be extremely valuable or in 20 years you can borrow against it. There are no cash flows.

If you want to create cash flows, you need to create a company, get a construction loan, build a building, market the building, rent out the building, and you'll have cash flows. Not easy for a five-year-old child. That is capital. Credit. Credit is here child.

I have a credit instrument. It pays you $10,000 a month forever starting this month. What do I have to do? Nothing. Okay.

Some people want the credit and you can see why. Credit is immediate gratification and easy. But but the but actually you'll make more money with the capital. The capital opportunity is 40% a year or 30% a year. The credit is only 10%.

But it turns out the world is built on capital. Manhattan is built on granite. It runs on credit and you have to have both of them. So what our company does is we convert the digital capital into the credit. We create the currency in dollars or euros.

We strip the risk by overcolateralizing it five or 10x. We damp the volatility by making it senior and by managing at the market shelf registrations and adjusting up and down the dividends. We distill a yield. We'll give you 10%. And then we compress the duration.

You don't have to wait 10 years. You're going to get the money this month, right? And and of course, how do you do that? You need a company. you need a lot of equity capital to buffer that uh that uh capital volatility.

And so if you drill into our credit offerings, we have a convertible preferred offering. It it pays you a dividend of 8% at par forever and it gives you a conversion rate. And so if you want a mixture of of uh equity upside, principal protection, and dividend, then you would buy this instrument. It's four and a half times over collateralized. It has an effective yield of 9%.

But if you adjust it for the equity component and the tax advantages, it's actually adjusted yield of 18%. We have an instrument called Strife. It's senior. It pays 10% dividend at par. It trades above par.

Uh it has cumulative rights, corporate governance rights, and penalty provisions. If we ever miss it, think of it as investment grade digital credit. the effective yield is 9%. It's nearly eight times over collateralized. You can see if if you compare it to mortgage back securities or any kind of municipal bonds or corporates, it pays you double even uh on an effective basis.

Um we created the same instrument, stripped the cumulative rate off it, we made it junior and we took out the penalty provisions so it actually trades more like a junk bond. It added 350 basis points of credit spread. So that pays 12 a.5%. If you trust the company and you just like cash flow, you would buy this.

If you semi trust the company and you want to make sure that we never ever ever do this thing, uh, strip that dividend, you would buy this one. And then if you're a European investor, you would buy the European version of STRF, which is called stream. STRE. It's a 100 euro par value, 10% dividend yield at par in euros. Uh we just brought that public about a month ago.

Um and then finally we created a treasury instrument like a shortdated one-mon bill like a digital bill. And the idea here is we adjust the dividend every month in order to keep this thing stable at par value 100. We call that stretch stc. Stretch is highowered shortdated treasury credit and it's about 6x 5 1/2x over collateralized. It pays 10.

75% at par. The goal is to compete with the money markets. Now it is it is more volatile than a money market. So it's a it's you know if a money market was pure kerosene, this is like diesel. It's a little bit uh a little bit more industrial strength.

But let's talk about what what that does. I describe capital and credit. So, we brought this instrument out at 90. It's traded up to about 98. We have adjusted up the dividend to get it to par.

This is the most successful preferred stock in this century. Um it was the largest IPO of 2025. Morgan Stanley did it for about for two billion521 million. Um it uh it had $600 million of retail demand in two days. It trades more than hundred million a day.

On August 1st, if you had bought $100 of stretch, you would have added uh $9 in capital gains and collected $3.70 in dividends. If you had bought a $100 of Bitcoin, you'd be down $23. Capital versus credit. The truth is, if your time horizon is four years, you should buy the Bitcoin.

Bitcoin is probably going to return 30% a year for the next 20 years in my opinion. But if your time horizon is 4 days, four weeks, four months, or four years, or you're riskadverse or retiree or fixed income credit investor, you should buy the credit. and you're going to get a very steady much less volatile return. So the big idea is digital credit powered by digital capital. We that business didn't exist in January.

It's now8 billion, right? So this is actually exploding. The average credit, you can see the trading here. This is 23400 million a day of trading of these credit instruments. You can buy them on Robin Hood.

You can buy them on any uh NASDAQ available broker dealer app. The average preferred stock is over the counter, trades $100,000 a day with 3% bid ass spreads and it's illquid. The public preferred stock is normally trading a million a day. Our early uh digital credit instruments, our first ones traded 30x that, 30, 40 million a day. Stretch trades a 100x that 130 million a day.

So this is a different thing. And why? I mean this is a this is a bank account kind of semi-tokenized and tokenized in a tradey way. Uh that gives you 10%. And there are a couple of other benefits.

The other benefit is if you live in New York City, it's 10% tax-free. You don't pay city tax. You don't pay state tax. You don't pay federal tax. So not an important thing if you live in the UAE, but if you're a citizen of a country where you pay tax, this is all tax deferred because it is a return of capital.

One of the unique characteristics of a treasury company is if you fund with capital and and then you let capital appreciate and then you use the capital to pay the dividend, it's all tax deferred. It's a return of capital dividend. This is a very special thing. The result of this is that we're able to accrete Bitcoin per share. If we sell 5% or 10% of our capital as credit every year, we're creating a five or 10 or 15% yield.

Therefore, we're doubling the Bitcoin per share every seven years. If you're a Bitcoin maximalist and you want to outperform the ETF and you're willing to accept the risk of digital credit instruments and a company like ours, you would do it this way and buy the common equity. The common equity will be more volatile, of course, but it's also higher performance. So, what's the big idea with digital credit? Well, you've got mortgage credit, you've got consumer credit, you've got corporate credit.

Digital credit is built on Bitcoin. It's an appreciating asset, not a depreciating data center, not a depreciating product. It's transparent, homogeneous, continuous. Traditional risk is uh opaque, heterogeneous, and discreet. You don't know you have a problem with 10,000 mortgagebacked securities in California until there's a fire or an earthquake, then there's a problem.

Um, it's built on preferred equity. Equity is an asset. debt, deposits or liabilities. We're using we're using equity to create the credit, not debt to create the credit. And then the equity is perpetual.

We're borrowing the money forever to invest it forever. Right? The biggest problem in finance is I borrow short and I lend long, right? I have overnight deposits and 30-year mortgages. Well, we're actually much we prefer to pay 10% forever and invest it forever in the crypto economy in Bitcoin than then pay 5% for five years and have to refinance in five years.

It's much less risky. It's much more robust and powerful. And because we do that, because we're offering a perpetual preferred instrument, we'll pay you a 10% dividend yield at par forever. We can put a shelf registration on it. we can take it public and we can sell it to the general retail population.

The public wants a if you're a fixed income investor, you don't want 5% with 200 pages of covenants. You want 10% forever without a tax load. And so we've created a better instrument for the public fixed income investor. And then we can create a shelf registration where we're selling this instrument into the market. 10 million a day, 20 million a day, 50 million a day, a 100red million a day.

You've probably never seen anybody sell liquid bonds 27 million an hour and then do it 200 days in a row. We can do that. That's the innovation here. And when we do that, when you buy $500 million of this credit, we create the backend collateral the same day. So within five days, if you put a billion into this, we create the backend collateral.

change our change our equity balances. And if you gave me a billion to create uh mortgage back real estate in New York City, I can't create a billion dollars of buildings in a week, but I can create a billion dollars of digital credit and collateral in a week. And so this is a much faster cycle. And of course, when you do it with a company that has negative earnings and profit, then it becomes tax deferred. In essence, a Bitcoin treasury model is we raise capital tax deferred.

We generate operating operating income tax deferred. We pay dividends that are tax deferred. Again, not important in UAE. But here's what's important. Every investor in London, Paris, New York, San Francisco, LA, and Miami is going to want this.

And because they're going to want this, this will trade hundreds of millions or billions a day. and you will benefit because there's so much demand in the rest of the world that does have to pay tax. So, think of us as a digital credit factory. We're swapping US dollar yield for Bitcoin yield and we're doing it forever without the credit risk of a normal swap. We can do it in euros.

In theory, we could do it in yen or any real currency. The benefit of return of of capital dividends is you get 64% more cash flow over 10 years. It's like real money. And um if you break this down against the world macro landscape, STRC has a 10.8% effective yield.

Private credit is 7.6. Investment grade credit is 4.7. Your money markets are four.

The banks will pay you nothing. If you're a taxpayer, it's like 17%. If you're a taxpayer in New York City, it's like a bank account that pays you 22%. If you live in Europe and you buy Stream, it's 12%. Junk bonds in Europe pay you 5%.

We're giving you something four or 5x over collateralized. Those junk bonds don't have collateral. If you believe in the crypto economy, if you if you embrace Bitcoin as digital capital, you can see you're getting paid double or triple for something which is one tenth to 1/100th as risky and it's more liquid. If you live in Vienna or Brussels, it's a bank account that pays you 27%. So in the big idea is that digital credit is superior to conventional credit.

Why? Conventional credit is built on mortgages. It's built on corporations. It's built on sovereign debt. It's built on depreciating assets.

We're building on digital capital. My forecast is Bitcoin appreciates about 29% a year for the next 20 years. Then it appreciates 50% faster than the S&P. Everything I've shown you today would work perfectly fine if you capitalized the company on the S&P index. it wouldn't be quite as compelling, but the Investment Company Act of 1940 keeps you from doing it.

You needed a digital commodity, not a security to do what I'm describing here. And so digital credit is pretty compelling for an investor that doesn't pay taxes, but if you do pay taxes, you can see it's off the charts. And and so where does this end? The future is high-powered money. What is the What is the perfect product?

The perfect product is a bank account that pays you 8 to 10% with no volatility in your currency. Who wants that? Everybody wants that. How do you do it? You need digital technology, digital assets, digital capital, digital credit.

If you take those digital credit instruments, if you're a bank, you can create a digital savings account by layering digital credit with 20% US currency and a little bit of a reserve buffer. You can create a money coin, which is a stable coin, 80% stretch, 20% currencies, a buffer, or you could create a digital fund. Uh that is the same thing. 80% credit, 20% cash, a 10% buffer. What would you have created?

You'll create something that pays you 8% with zero VA. What's the sharp ratio on that? 10, 100? You know, it's it's it's the premium over the risk-free rate. So, with that, um, I would like to thank you for your time and just say this is probably the most exciting time in the history of digital assets and and you're in the right place.

Thank you, Michael. The vast majority of leaders here today are in the asset management business, and the very instruments we trade, custody, and settle on are transforming beneath us. Leading the conversation on liquid market strategies in digital assets. Please welcome Ashawi, founder and CEO of Ke Trading. I think we're here.

We're going to go very far with each other. Yeah.

Okay.

Good. All right. Okay. Well, good morning everyone. Um, I'd like to thank you for joining us today.

So, um, we're going to be discussing liquid strategies and market access and digital assets specifically. So, we've got an incredible Can is it is it working?

Yeah. Can you hear me? Is everyone like are we good? Okay,

beautiful. So, like I was saying, we're going to be discussing liquid strategies. Um, you know, market access. We have a, you know, a star aligned like panelist uh here. um you know overall institutions are obviously no longer just entering the space just for direct trading right so their needs have evolved uh they're looking for structural products they're looking for ETPs manage accounts yield strategies derivatives you name it um our goal today is to try to understand with our panelists uh how institutional access is really changing and how liquid strategies are adapting to a 247 market structure um so today uh we've got Busha Darwaza uh joining us she's the managing director uh on the principal trading team at Galaxy Digital.

Uh Pascal Sanjong uh president and CEO of 3IIQ and Anthony Basilei uh president of Coinbase Asset Management. Welcome guys.

Thank you.

Thank you.

All right. So I'd like to start with you Bush. Um with institutions re-entering digital assets through structured products um and managed solutions like how does that change the opportunity set for active managers? Uh good morning everyone. Thanks for having me.

Excited to be here and see a lot of familiar faces. Uh I apologize a little bit for my voice. Um great question. I think um having more institutionals coming into the space, VITPS and rappers is actually introducing a lot of liquidity and way more flow than we expected. Uh which means what?

Means beta is becoming much more commoditized in liquid assets and active managers have to do a little bit more work. More flow means more pockets of money. And as the beta becomes more commoditized on the alpha side, active managers have to do a little bit more work on basis on liquid venues arbitrage. And as that pull of a capital expands, you're basically alpha opportunities are expanding. So it's a very very exciting time for us having a lot of these institutions coming in with their own risk frameworks or their own regulatory frameworks coming in expanding that pool of capital and what liquidity means in liquid assets means more opportunities for liquid assets.

Beautiful. I mean Pascal I want to move over to you and um you know this kind of really dives into your experience, right? Canada has definitely listed, you know, and lived with list of Bitcoin and Ether products much longer than any other market. Um, I want to understand like from your point of view, what allocator behavior uh have you observed uh that other regions are only now beginning to kind of experience?

Yeah, thanks. It really was uh two two parts to that story. So, Canada being their early adopters. I would I wouldn't say regulators are the innovators innovators but they're not afraid to try stuff and of course 3aq worked with the regulators all the way since 2017. So ETFs were first of course uh in Canada.

ETH you know was born Vitalic out out of Toronto and all of a sudden you start seeing some institutions some pensions come in on the venture side uh testing things out. Now of course uh post FTX that kind of you know took a little bit of a step back and the rest of the world really took a lead including the US and and and the Middle East here. But what you're going to see now in 2026 is the institutions in Canada are ready to step back up um and come in and liquid on the liquid side. uh the banks are about to step up and activate crypto services, custody services, and also allocations. So, I think 2026 uh you're going to see Canada take another step forward in uh institutional allocations and we're very excited about it.

That sounds pretty exciting. Anthony, like since we're talking about shifts, uh Coinbase has had an incredible year uh in 2025. Um and I'd love to get your views on, you know, describe um you know, what's the tipping point for institutional adopters like as of this year? Um you know, are they you are you seeing shifts around how the allocators are kind of you know interacting with Coinbase asset management what are they looking for uh as of now

so we we're still really focused on top of funnel um right now we have we have a global platform we operate in 100 countries at Coinbase and Coinbase asset management we're operating in the United States and offshore uh serving different types of clients that range from family offices to you know sovereigns the the the question for most people is still around this idea of getting off zero. And I I wrote a paper earlier this year. It's titled get off zero. And the purpose of it is we explore five different ways, five different portfolio construction methods that include equities, it includes derivatives, it includes ETFs or ETPs that are rappers for how investors should think about it. And the premise of this idea of get off zero is a lot of investors get hung up on thinking that they have to start out with this high octane active alpha conversation when there's a lot of access on the beta side.

You know, I think she said it well. So you've got beta and you've got active. If you're in a daily liquid vehicle, of which there are many different types from ETPs to separate accounts, generally that's going to be a beta instrument. And if you're taking on a little bit of maturity risk, if you're in a lockup vehicle, something like a private fund or even tokenized products, those are generally going to be more active or more alphaentric uh ways to get exposure. But but the the message is clear from our perspective, which is we uh the the global offering of infrastructure and strategies is now one where investors can navigate the entire thing, but they probably shouldn't spend too much time if they haven't made an allocation yet.

Our view is generally get your beta on, get your Bitcoin on, have Bitcoin solve that monetary debasement problem that is in your portfolio that really isn't solved by anything else, and then start looking at the alpha and start looking at the outperformance across the portfolio. And so we build our strategies that allow us to kind of navigate both of those spectrums depending on where the clients are.

I think that makes a lot of sense. Bush, I want to go back to you. um you know when we talk about liquid strategies now that we're moving towards a little bit you know further away from tradable tokens to you know tradable real world asset like collateral um how's that going to affect liquid strategies in general from your point of view

I come from a traditional finance uh in the rate space uh imagine my world used to be t plus2 and now we're talking continuous collateral How dream

could that be? It's a dream. Look, I really enjoyed market open and closed times. It's very good for my health.

But we are very very fast uh moving basically into a space of 247 collateral. I see a lot of my colleagues in this space. It's going to be fun trading these things 247. Um so being able to take collateral collateralize it sorry tokenize it think of treasuries repo how we're margining you're changing that whole business and that balance sheet management itself becomes your trade that's your edge that is your alpha itself. So take that bring in more institutions with one a proper integration in workflow.

So they need to understand that into their workflow. You need the proper rails for that which we're moving towards. And lastly, regulatory clarity for us to take all of that together, package it, and offer it to anyone on the institutional side. And here you go. You have your dream package of tokenized anything collateral that lets you trade and settle instantaneously and you came from a T plus two world.

We're at T+1. That's been already a huge uh improvement. So when you take a step back, liquid assets are not don't talk about them as an asset anymore. We're talking about a new infrastructure that's going to be basically the layer of basically finance and I think that's a very exciting time to be looking at these things

and do we think with that violent shift like is the infrastructure in place are we ready

not yet so there's the infrastructure there's the workflow integration and lastly regulatory clarity check those three boxes and all of us are moving into the right direction but we're not there yet

beautiful all All right. Well, speaking of liquid strategies in general, uh, Pascal, I'm really excited to get a chance to one learn a little bit more about like Third IIQ's like recently launched fund uh, with Further Ventures. Uh, that's pretty exciting, the multistrap fund. Um, and you know, I think it's uh, it's important for the audience to kind of like start understanding from your perspective what really drove that move. Um, you know, from from

I'll take a little bit of a different views. I agree on the tokenization front uh the three check boxes aren't there yet but on the uh institutional office side uh they have they definitely have turned a corner and I would say that our point of view is a little different than Coinbase in terms of how we want to get institutions into the space to get off zero does not have to be a start with beta you could do one or one or the other but the story really started three years ago actually it was was in the region here we were expanding our business and FTX blew up and um at that point you know the whole institutional uh world of crypto was was at a standstill. You had emerging managers who uh really couldn't find a time of day to speak with anyone because they're like, you're dealing with crypto, don't want to touch it. And on the institutional front, you know, a lot of teams had been built to explore their first allocations. Some had allocated and all of a sudden allocators didn't know where to start uh and and the and the raw talent didn't know how to connect with them.

And so, just like we did with the ETFs back in 2017 where we built the first regulated framework globally, well, we got to work and we did the same thing. And we said for institutions to truly come there needs to be an institutional platform that allows these two worlds to come together. Institutional capital. So what does it mean to check all those boxes and how do we give a home for all the amazing talent that comes in? So the 3Q manage account platform was born.

Um and it was a lot of work but at that point uh you know understanding that the check boxes were there the final step was user interface and access. And this is what this partnership really means a lot because further as uh Fasil and the team mentioned have invested in the ecosystem in many different ways. Uh and this is the first true fund built on an institutional grade platform that's going to give access to both people who have adopted in the space. So there's actually portable alpha. So if you have Bitcoin or other types of crypto looking for an institutional home to make it work, this funds for you.

If you're an allocator who does not want to enter through the beta but wants to enter through the alpha in an institutional way, this product is also for you. So this is groundbreaking much more than just you know the portfolio but how uh the two teams have come together to build something that right now checks those boxes. So we're excited for 2026.

Beautiful. Well, as someone who has dedicated their life to build infrastructure for the past two years for for crypto derivatives, I can't help but um maybe lean a little bit more into understanding like from what are some of the challenges that you've dealt with as you were building that platform, right? I think it's a very interesting thing where you guys are taking this platform.

So, so again, three accuses an asset manager, but to be able to get, you know, a product to market, you need to get the parties to talk to each other. So, I'll take a step back. It's kind of in our DNA to get ETFs launched, you know, eight, you know, seven years ago. um you needed to get bank accounts, you need to get custodians, tradefi and and crypto custodians talking to each other. You needed to get all of those parties to realize the opportunity.

The same thing for the institutional market. So we got to work with prime brokers, with banks, with custodians and and really fundamentally gave them the framework to what today has become a norm of triparty agreements in the space that did not exist three years ago and that has been pioneered with the work that 3Q did with all these different counterparties. today that risk management is at the benchmark of of what's you're seeing the growth in alpha strategy started with that. So that's step one and then the other one is understanding how to speak the language. So how do you do transparency?

How do you do risk management frameworks? How do you do the different dashboards and institutional portfolios and speak the institutional language on due diligence because if not the money is not going to come in.

Makes a lot of sense. Um Anthony I let me ask you since we're talking about platforms right Coinbase asset management obviously building effectively a business on you know the rails for the new financial system and I would love to understand um from your side um what are the biggest opportunities and how institutions you know want to access crypto as of now since all the shifts that have happened over this year um is it you know is it SMAs is it ETPs is it derivatives um is it all the above is it defi like where are you seeing some of those shifts the the rapper is a little bit less important because depending on who what type of institution you are and your your tax obligations or your liquidity needs, the rappers are there and they're coming and you know 3Q certainly pioneered the ETPs. Um what what I think people need to really focus on is the uh something said digital collateral. Bitcoin is a digital commodity. It's mined and then it's transferred around the world instantaneously and it's used as collateral.

It's not frozen. It's not put on boats, right? You're not paying taxes or tariffs to move it across jurisdictions, right? It's digital collateral. It moves from wallet to wallet instantaneously.

And there there are now over $2 trillion worth of Bitcoin uh collateral in the market that is held by retail and institutional investors. They're using that digital collateral to express different forms of risk. Most of the market participants just hold passive beta. They want Bitcoin to do a job and that's to help them diversify their overall portfolio returns. The market of users who get more sophisticated behind that.

This is where alpha comes in and uh this concept of portable alpha is possible. So roughly 60 to 70% of all of crypto is bitcoin, ethereum and stable coins. three assets and those three assets within this new technology have legal clarity and they have product market fit. Okay. When you get beyond those three assets, you're starting to deal with more venture-like type of returns and new and novel technologies.

So most of the market is on Bitcoin, Ethereum, smart contract layers, and stable coins. And so then we think about this and we say if you if you know you have a really deep rich robust market of of of just use Bitcoin. Bitcoin trades 80 to 100 billion dollars a day across spot markets futures this product called perpetuals which trades offshore and other derivative instruments. So it's 80 to$100 billion a day. So it's a massively deep and rich market that's held by uh by hundreds of millions of different retail and institutional customers.

So then you go okay knowing that there's a really deep rich market of this collateral pool. It's instantly transferable. It's very cheap and easy to move around and and the market of institutional players love it as collateral. They would much rather take Bitcoin just like they would over treasuries instead of like equities or maybe even private market shares. You can lend money against it.

So there's this growing market of credit people who are lending money against Bitcoin for various things. So there's this really interesting carry trade that happens where if I can borrow at X and I can reinvest against my collateral of Bitcoin and I can reinvest at Y and I can uh capture a higher spread or higher funding rate and you are able to do that in a lot of different markets now. Uh then that's where the alpha comes in right using this collateral strategically. So the question becomes to answer your your original one was which rapper do I want to put that in? Right?

You can't really do that with ETFs at least not today. you can buy an ETF and now you can go to JP Morgan and get a get a line against it and do the same trade. And that's happening too. That wasn't possible two years ago. Um, so we're seeing investors come from different parts of the market.

They might say, I really like holding the underlying digital collateral in a separate account and then having you port over that this idea of a carry trade, right? or they might go I'd rather go into a fund and let you manage everything because in a fund I can connect multiple parts of the infrastructure different counterparties to my fund and I can capture more opportunities for alpha. So a lot of it is uh it depends but it's really understanding where it starts kind of goes back to when I talk about the first thing most investors should do is is get this core Bitcoin position on then depending on if you choose an ETF or you choose hold spot it unlocks different opportunities from there. So is it fair to say that they're graduating faster now? Less interested in exposure, more interested in actually talking strategy and like give us strategies

100%. I think the the the conversation starts with understand why you're here, right? When the purpose of Bitcoin, which it it has a really specific thing, really purpose, then go how do you outperform, how do you build alpha, and you can choose to go in an alpha product or a beta product, right? But I really I spent a lot of time with investors on that first that first conversation. if you if I could jump in on on this one a little bit too.

Um, so the the for more institutional capital to come in, you know, getting them off zero for Bitcoin is still I mean, Michael and the team are doing a great job there, but the fundamentally I don't I don't think it's a it's a winning proposition. Um, I think we need to have ways to solve their immediate needs. And so getting them to understand that there's a whole new world uh of liquidity in digital assets and and relying it back to what happened when the internet plugged into the traditional system and how it it transformed sort of alpha opportunities and liquid opportunities um is happening again. And so when you talk to me, you know, external manager selectors and CIOS of large pensions and others, you know, they don't necessarily want to be sold on the on the Bitcoin story. Some do and then they're looking for different ways to access or to unlock it.

But others just want to be to say where's the next big pocket of opportunity uh because they're looking for alpha. And we were just having a a recent uh pension conversation in Canada, very large pension. And it's like not interested about Bitcoin just yet, but tell me where I could find alpha because that's what where my team is is interested in. And when you explain that story, then they don't need to take a view on on on the underlying. They just need to take the view on are the counterparties institutional?

Does it meet my two diligence requirements? and uh is this where I'm going to find you know my next source of return. So we have to take both approaches for the industry to grow.

I think that makes a lot of sense. I each one of you guys at some point had to put some you know a trader hat on right like running your businesses your units. I I I think it's important to for each one of you to tell us more about like how you view you know what is the most like underpriced risk today within these liquid strategies like you know across um the the entire market like infrastructure microsstructure is it liquidity is it you know operational integrity is it counterparty sort of you know uh u concentration what is it from your point of view because I'm pretty sure each one of you has a very different view depending on the role so maybe we'll start with you sure

I can take that And the trader hat is on every day. Sadly,

I can imagine.

I need a break. Uh I think the most underpriced risk is in the liquid asset space is I would encompass it as the liquidity architecture. A lot of us are assuming that liquidity is very mobile. Uh you assume that you can move your Bitcoin from venue one to venue two very easily. uh and we can go down the risk curve.

Um that's not the case.

Um two there is a lot for long and not for long but that's not a seamless 100% you know

statement to make that liquidity is mobile and liquid assets. two liquidity providers are very correlated. Uh a lot of the bigger asset managers and the bigger institutional players by virtue of trust or by virtue of you know your auditor asks you to kind of custody with specific providers are using basically very similar liquidity providers which means that the next liquidity crunch is not going to be necessarily an asset linked liquidity crunch. will likely be the architecture itself of concentration in certain kind of venues and trading. And the last part is execution itself.

You're facing latency. You're facing network congestions a lot of the times on DeFi. So I think that liquidity part you can split in different layers of liquidity uh issues that all of us are working on. But we're getting there. I would say the liquidity mirage in the longtail and we saw it in October.

Yeah. Uh if you're you know a family office or or prop trading I mean you could manage that and you could see the order books but if you're an institution looking to deploy uh the right now there's a huge bifurcation and I think October you know the October event allow us to see that. We're going to stick to highly liquid blue chips. there's a lot of of of of you know good returns that could be had there in in uh risk in a low risk return environment the longtail even though liquid we would still consider that uh venture so understand what you're investing in you you know understand the technology but I would not be running basis trades or highly liquid you know volatile strategies on on on long tail just because the order book or the spreads look tight

so liquidity depth right is a big deal Anthony there there's there's always risks in innovative and disruptive technology. You know, the stuff on the horizon right now, digital asset treasuries are going to go through uh M&A consolidation period. So, I think that's u both something to be uh aware of, but also there's an opportunity there for a lot of investors to think about, you know, ways to participate uh in that market. Um maybe distressed, you know, acquisition funds would be really interesting for that. I think um we've already seen a a pretty massive clearing of leverage and liquidity in the crypto ecosystem on October 10th.

$20 billion were you know were wiped out in a day. Uh it was more than you know was lost in FTX and other markets but the market broadly held up pretty well. Bitcoin fell 10% on that event and you know now we're roughly where we were around October 10th in terms of Bitcoin. Um, altcoins certainly at the long tail where there's there's they struggle generally to have liquidity were have suffered quite a bit. Um, but overall I think the thing we keep seeing is decentralized finance is very robust.

The technology is amazing. The innovation that's happening inside decentralized finance is is also incredible and you know we're exploring a lot of ways to be able to integrate as are many other digital asset managers. As we talk about this new toolkit, you know, you've got centralized finance, which is CFI as we call it, you know, traditional exchanges, traditional custodians, traditional triparty arrangements with market makers and brokers uh that handle equities and crypto and structured products. You also have this entire new environment on decentralized finance rails. And uh what we're seeing through multiple multiple cycles is that uh des DeFi has held up very well and you know it liquidates users when they need to be liquidated, right?

you don't see any unsecured credit in that space. And uh this keeps the actors in that space very honest because to Pascal's point, you know, like you have to understand what you're buying, you have to understand what you're doing in that space if you're going to put risk there. Uh but there's a lot of opportunity in this new infrastructure. So, um I think those are probably the the you know, three areas that are biggest on my mind. Are you guys seeing sort of a lot more interest in taking on some of the risk that DeFi inherently has always sort of held for a lot of these like institutions over the past three years?

I know we talked about regulatory change, but I think we're still also a little bit far off from real regulatory change like for DeFi specifically, especially with everything that's been happening over the past like couple of months, the conversations. I'd love to get your thoughts and maybe I'll start with you Anthony again just sort of where does DeFi sort of fall into the world of institutional liquid strategies in the next like five years

in the US and outside the US it's it's completely different story so inside the US registered investment advisors you know it's a little bit of a gray area in terms of how how and if they access DeFi outside the US depending on jurisdictions including here um you know if you have the right regulatory structure you can access DeFi the uh the way that I would frame it from an investor's lens is um they generally today aren't that excited if you approach them and say we're going to do everything in DeFi because you know there's a lot of new education that has to come with that technology rail but they're increasingly now interested in where is their alpha if you're using decentralized finance rails as part of a broader strategy. So if you position it uh in a way where it's not uh the majority of your strategy, it's a controllable and manageable part of your portfolio, but it can deliver enough excess return relative to what you can do in CFI. You know, then I'm seeing investors as actually very interested in understanding more about that architecture and that technology. And I'll give an example. Um so we're incubating a strategy.

This isn't with client money. This is with our own um proprietary capital. uh where we are lending stable coins against tokenized real world assets in DeFi. So you know there's a platform called a they've launched a market a lending market for tokenized credit funds and other things like treasuries and AAA clo funds. Um and uh so a user can post those tokenized funds as collateral and they can borrow stable coins against it.

And we can uh enter that market and lend stable coins and capture a yield. And our collateral we know is a it's a fund structure that we're familiar with. We understand what's inside of it and it's a regulated instrument. So those are the kinds of market structure advancements that are happening that allow us to capture a a diversified source of return something that isn't really connected traditional markets. So the toony's point the technology functions very well and it's been battle tested over multiple cycles.

liquidity is not there yet because of the access you know institutions you know true institutional capital still does not know how to access and scale and be particularly because the pipes and plumbing are so different wallet management right in other words you're who is the true custodian who is the regulated entity that you know governs all this stuff is very complex um so what we're seeing now is the uh institutional consultants are trying to figure out how to diligence these counterparties so they're asking the right questions uh the emerging managers are testing so are we. Uh so I would say in the next three to four years maybe faster but you will have the you know the integration of those two at scale until then you're going to have a lot of education and battle testing to be done with the institutional consultants and a lot of uh more liquidity depth for the emerging managers to be able to accept volume because right now if you throw big money at it the strategy disappears.

Makes sense for sure. which parts

like what what are you what are your views and Galaxy's views on like you know DeFi being a a you know is it ever going to be a core part of institutional liquid strategies within that space or do you think it's going to be a peril forever?

It is a great part on the rails of the space. We also invest in a lot of startups in that space. Uh we spend a lot of time as a team working with the protocols in the space as well. It's great learning experiences as you guys mentioned a lot of a great learning ground for us investing ground for us. We're very excited about the DeFi space.

Beautiful. All right. Well, I'm uh I would like to wrap it up with one final question for each of you guys to sort of give us your thoughts. So, um I have several here, but I really want to pick this one because I think it's uh it's pretty good. Um so I I want to know from your point of view for you know the next year 2026 with everything that has happened this year what is the most you know underpriced industry change um that is coming in into next year that most people are just simply not aware of yet?

Um I think in 2024 everyone was talking about well the new administration regulatory shifts that's people are are not pricing that enough. What do you think that is into next year? to to me it's uh dual-sided cross margin lending. Uh I think we kind of are well alluding to it. So you're seeing more and more real world tokenized assets being treated as underlying collateral by crypto custodians to then be mirrored to do portable alpha strategy.

So it's not just about you know the you know the uh the money market funds but you'll be able to see others. So all the crypto custodians are are getting ready for that. But on the flip side, you know, Bitcoin being activated as collateral to then redeploy uh into whatever else you'd want, right? And I think we're going to start seeing other types of digital assets being recognized on that. So to me, it's the it's the dualsided all of a sudden unlocks capital on both sides.

And once you could, you know, especially at the institutional level, once you know that you could invest and margin in a safe secured way, um they that's usually when they come in.

Anthony,

I think there's there's two things. The first is stable coins. Um we we announced a few months ago a partnership with Apollo where we're working with them to create stable coin credit strategies and I the way that market structure is forming is basically that the consumer application layer which serves billions of people who are using those applications for payments are going to very rapidly evolve integrate stable coins and then eventually integrate different versions of consumer finance. Borrowing and lending is already in our app. If you hold Bitcoin, you can borrow stables against it instantly with two clicks of a button.

So that's the thing that's going to come to billions of people over the next, you know, 12 to 24 months. And uh on top of that, there's a proliferation of new stable coins, especially in the United States through the Genius Act, which was passed where you're going to see uh we expect hundreds of new major uh players to come in and launch their own stable coins. So, we think there's going to be a battle for market share in the stable coin space, which is going to create a lot of really interesting opportunity and and for us, we think it's going to be an opportunity around credit and finding a a differentiated and diversified source of return that it doesn't give you the volatility and the exposure to Bitcoin or to crypto beta. Uh it's a credit instrument. So you know the evolution of your traditional credit strategies uh this is another way for us to express credit risk uh for you but it's all connected to web 3 rails.

So I think that's the first one. Stable coin is going to be really big. The the second is AI and this is AIdriven trading strategies. Um, so you're going to see and you're already seeing a lot of uh testing for this in terms of both crypto and and AI working symbiotically together because you have permissionless instantly transferable smart contract driven technology that can be used in the programs of AI for u for agents. So this this concept of being able to program your trade strategies, use AI to help you solve really complex things, it's going to be a really big theme over the course of 2026.

Thank you, Bush.

And as a legacy rates trader, I think um the most exciting thing for me right now is uh introducing tokenized treasuries as collateral. So teing up literally what Pascal and Anthony are saying, we're talking collateral margining

and credit products, bring to the space tokenized treasuries, one of the most liquid assets in the world that the biggest institutions in the world know very well. tokenize that, be able to post that as collateral on great rails, very clear regulations. You want the space and liquid assets don't become just a product or an asset itself. We're talking about a new infrastructure for finance and that's what I'm most excited about. I don't know if it's a 2026 business, but

we'll see.

Time goes fast.

Well, thank you guys. Um, and thank you for uh, you know, giving us time. Thank you.

Appreciate it. Thank you.

Thank Thank you panelists. All right, up next, an inside look at institutional market behavior in digital assets with Chris Rainer Cook of Brevinard Digital and Brett Tal of Coinbase Institutional, moderated by none other than Rachel Pe of ThreeIQ. Okay, thank you so much for joining us this morning. We're going to be continuing some of the discussions that we've already had thus far, but taking a little bit of a step back and starting with the bigger picture. So people have been saying for a while that the institutions are coming into digital assets and that hasn't actually been entirely true until recently with and we heard from we heard from Michael Sailor in his opening keynote that there are a number of ways to look at this when you look at institutions coming into digital assets.

You've got the regulatory piece and the governments you've got the financial institutions and then you've actually got the capital allocation perspective. So I'd like to start this discussion with the bigger picture and looking at regulation and maybe we start with you Chris. What sort of an impact did the Genius Act have in the US and are there any other pieces of regulation that you think have been important recently?

Yeah, thanks very much. Super excited to be here. I think you got to put your microphone first. So in terms of regulation, this year's been a big year for regulation. As Rachel said, there's been a lot of discussions around institutions coming and they have but I think for for many in the space it's been less than people had hoped for this year with Genius Act brought a number of different things it brought regulation direction which was lacking in the space particularly in the US prior to this there was regulation by enforcement and the stable coin act the genius act gives direction which enables people to build in the space also worth highlighting when we think about this genius act that this was passed with bipartisan support by both houses.

I think that's really important. It's something that comes up a lot in conversations I have with investors and allocators outside of the US. And since this act was passed in the summer, we've seen a number of headlines particularly around banks, banks coming into the space, doing more in the space. We've seen two large banks, Morgan Stanley and Bank of America, for example, talking about allocations, specific allocations, not just to Bitcoin, but to blockchain more broadly. And we've seen a number of corporates talk about launching stable coins.

So, this has been big regulation. is significant and we've seen it have a meaningful impact on institutions involvement, investment and build in the space through the lens of investors. This certainty and this regulatory clarity means that you can see more long-term capital come to the space.

Ex want to go a bit further into some of the movement that we've seen on the banking side, but a question for you Brett on the regulatory side. So one thing about Coinbase is that you were one of the first regulated players in the market with the clearer regulation and new entrance coming into the market. How is that affecting the regulatory moat that you have built?

Well, the moat's getting bigger, which is awesome, but I I actually want to add a little bit about Chris's response. So, the Genius Act, while kind of seemingly boring, uh, a little bit, just stable coins, you know, by itself, has been the single biggest catalyst this year of Chris touched on it, but I want to like amplify the point. It's been the single biggest catalyst for all the institutions that have yet to participate to actually reassemble boardrooms, digital people, crypto people, and and and sort of demand, hey, what are we doing in the space? And so you can't underestimate the significance of the Genius Act. From that moment, I've been absolutely overwhelmed with banks, financial institutions, brokers, financial players of all types that are trying to figure out how to do we buy or build or partner.

And what's happened in the past couple years is that the infrastructure that we've built, we're now having our Amazon to AWS moment. We've launched something called crypto as a service. And so as these banks and boardrooms and financial players and brokers are all saying, "Hey, the biggest significant thing we can see of the future landscape forming to accept digital accept crypto into the mainstream is this genius act. We all need to be prepared for stable coins. Now, how do we prepare ourselves?

Do we buy or do we build?" And so most of the boardrooms are concluding very very quickly that it's really a it's not a build because it's hard and we've been at it for a long time. So it's really a partner and it's it's a partner with Coinbase. It's a partner with infrastructure players to participate. So don't miss the moment.

It's not really so much about the minutia of the Genius Act and what it says, but it's more about the catalyst that it's the call to action. It's done more like who cares about Bitcoin price right now. It's the beginning of another two to threeyear planning session on how to be active in digital. So that's important. Don't miss it.

With respect to the digital mode, Rachel, that you asked about, I went from regulated finance and there was one place I could go, arguably more now, but one place that really wanted to opt into to regulation. And so all you need to do I've I lived and worked in London for 12 years. Has anyone actually looked at Mika? I mean, the thing's like this big, right? Um, only Europe can do a phenomenal job of being like anti-competitive by actually writing a set of rules um that is so enormous where the threshold is is sometimes perceived as insurmountable, but we're there.

And so, the regulatory mode's going up. I like it. Um, I don't want another phase in my life where I have to explain that I thought, you know, FTX was a, uh, we saw the warning signs, didn't lose a dollar, and, you know, buyer beware. I hate that world. I want to live in a world where we're in the UAE, we're in Abu Dhabi, we've got a big regulatory mode.

The standard for others to compete in the space is is is very high. And because it's high, people can people, firms, sovereign wealth funds, players can follow BlackRock into the space with confidence that they're not going to lose their investors money. They're going to get things done correctly. So the regulatory moat is super important for me with the full scale of what we're trying to achieve.

Excellent. So let's stay on that regulatory point before we move on to some of the specific strategies and looking at the banks specifically. obviously very heavily regulated in almost all countries of the world. A lot of people have been saying Brett that the recent alliances of Coinbase with the likes of JP Morgan, Chase, PNC Bank with this watershed moment I guess for the the bank adoption side. Can you talk us a little bit through that and what do you think some of the catalysts will be as a result?

Okay, so everyone who's been sort of eyeing this space saw this sort of, you know, Coinbase SEC thing unfold in the United States. You saw what was a frigid, freezing, terrible environment for players like Coinbase to to try and scale. Um, everything that the banks wanted to do was stymied by the OC and the SEC. So three years ago, we had a whole number of announcements that were coming to the marketplace and like Black Rockck who who continued to make a bold move in a kind of anti-crypto world and filed their ETF application ultimately got it approved. Individually, the banks tried to also do the same, but because the regulator had a strangle hold on each one of them independently, they could stop it.

So, if you remember what was going on about anti-banking and what's since come out, it was very difficult for Coinbase and banks and financial institutions to come together and partner and launch products. Okay. So, fast forward, we have an entirely different regulatory backdrop. In fact, it's gone from anti to super pro. So in this window, a bunch of the institutions that had a big head start in evaluating crypto have kind of blown the dust off what their plans were and put things into fast action.

So imagine a world where JP Morgan was g being given kind of a wink and a nod if not like a you know an elbow or you know probably being given some guidance that says don't bank crypto right to go from that to announcing and this is like your hold your seats moment we've got JP Morgan deposits that are on base okay wow we went from don't bank Coinbase to bank Coinbase to partner with Coinbase to allow for JP Morgan deposits to arguably compete with its own core deposits, its own blockchains. And so that's a great example and there's more to come by the way in the space this week. Some big announcements coming about partnerships. And so it's super significant. So what's happening?

I think big picture I think the likes of JP Morgan and others also have their own ability. They have big teams. They could build themselves. They could choose to do that. But right now they're actually choosing to actually participate in the crypto ecosystem and they're using the infrastructure we built.

So it's the beginning of like the testing of the AWS infrastructure to actually launch things that make sense for their clients. And so the the single biggest thing I want you to remember about this is it's not so much the repeal of anti-competitive legislation. That's a big part of it. But the thing that's been a constant through the past couple years as the regulatory environment's gone up and down is actually the demand for clients, right? The the the demand for better, faster infrastructure.

We'll get to tokenization later, but it's a good good example of that consistent demand which is actually bringing these things to life.

Yeah. So taking that demand from clients piece and maybe let's put that into demand from investors and what we're seeing in that space. So we've got much clearer regulation, much greater adoption and integration from financial markets participants. What does that lead to or where are we in the capital allocation cycle? And I know Chris, you've been in the space for a while.

How have you seen investor appetite evolve?

So investor appetite has has increased this year and some of that has been a big function of some of the regulatory clarity that we've seen. But zooming out for a moment, we're still very early in this technology cycle. And I think about cycles really through a number of phases. The first is this focus on the underlying tech. You then typically get a runup in terms of enthusiasm for the space.

You'll see a price correction. We clearly saw that um within our space in 22 and we saw that also within.com in the early 2000s. And then you see the enterprise phase. So for me, the fact that we're still early with the institutional adoption is a big opportunity set because it means we're still early in terms of the cycle and it means that when you couple the regulation with being early, you get the potential well primed for outsiz returns over the coming decades.

And at this point as well, we're seeing a broader set of opportunities. This space has opportunities not just in tokens but also in equities whether it's private or public and this broad approach at this early point of the cycle means for institutions coming in now they still have a great opportunity set with asymmetric return.

Can I just say if you're listening to Chris and you're in the audience and you're hearing it's still early and that makes you think that you don't have to do something you're late. Okay, you're really, really late. So, you got to get going on this thing or you're going to miss the next chapter.

Excellent sales plug. Thank you so much there, Brett. And so, let's talk a little bit about that. We did hear some various strategies from our excellent opening paddle panel. This is talking about liquid strategies and market access.

So, maybe we start with you on this one, Chris, then we go to Brett. How do you think about the investment universe? It is large, it is broad, it is diverse. How does Brevin Howard look at the thesis?

So Brevin Howard very early identified the fact that digital assets is not a trade. It's not a narrow strategy. It's a broad transition in technology. And when you think about technology change, you need to have a broad approach. And that covers both private markets and public markets.

And the reason why that's important is because when you get technology change, you see a cruel at the enterprise level at a company level. And so you need to have an early exposure to private. Private gives you outside type returns, but also gives you good insight into what into into what's happening in the space. What is the innovation? What's being built?

So it's a very important kind of first phase. But private covers growth of course and late stage. And we've seen over the last year that each of those different phases offers great opportunities for investors. And on the public side, there's a number of different trading strategies that can be deployed. But high level, this space is changing.

This is a multi-deade space where it's changing. And therefore the approach at Brevin is to have riskmanaged diversification across both public and private markets to give outside return for long-term investors with a medium-term investment horizon.

And so we've spoken about so that's all about like investing in digital assets whether that's venture or the cryptocurrencies themselves. What about investing using digital assets? And I know we've um the opening panel spoke on tokenization as well, but apart from the Coinbase asset management side, I'd love to hear like more broadly where we are in the tokenization stage and then what you're doing at Coinbase Institutional.

Yeah, I I think there's just like a fun fact. So Chris and I work together at Coinbase and we started developing these strategies together and meeting client demands on a one-off basis. And Chris was in many ways the architect of the Breven Howard strategy. Now, he was trying at it first, you know, at Coinbase, we had a nent asset manager and then we were overwhelmed with demand and Chris saw the opportunity to scale faster at Brevin and I'd like to take some credit for their skills. Um, your question was about uh liquid strategies and

and the tokenization

and tokenization. Okay, so there's two things in there. Okay, let's talk about liquid strategies first. Uh, liquid strategies is kind of like um I would say getting investors into the space still excited about the long-term investment opportunity in principally Bitcoin and ETH and maybe a couple liquid strategies. What's what investors are telling me now is that they're ready to make increasingly larger either first or secondary allocations to the space.

And if they're going to do it, they want some yield. because they don't want all of their capital to be trapped. And so, you know, we've launched the Bitcoin yield fund at CBAM. Chris has um you know, I think an emerging set of strategies that develop yield. The DATs, I think, you know, that have come to the market.

We didn't talk about that yet, but they all have these treasuries that have accumulated a lot of of crypto. I don't think they have a super well articulated strategy yet for most of them on actually how to generate some yield from assets. So again, if I instead of pushing to the room what I'd like to push, listening to investors in terms of what they're saying, what they want, they want liquid strategies and they want liquid strategies with yield. So that's one bucket. Um the other thing that's happening is is tokenization.

And so um in my very long career before joining crypto, I spent you know more than 20 years uh being the head of structuring in different asset classes. And I just want to like zoom out on tokenization because I I feel like the whole conversation gets get it gets pulled in a thousand different directions because everyone has their own sort of problem they're trying to solve. So I I I'll give you my own narrative on on tokenization as someone who transformed asset class. I'll give you example. Um when I was living in London, we had an emerging asset class.

It was called high yield. You probably all are allocate the high yield now. it wasn't really credit wasn't in an asset class you know by itself is first investment grade then high yield then these things called leverage loans so one way to get investors into this space that the you know high yield had these characteristics loans they're paying you know to settle that took a long time to accumulate they had special covenants specific characteristics they were illquid and so we did a securization of these things and we trunched the capital structure and sold the higher high risk pieces to those that wanted it and the lower risk pieces to others. So securization was a way to take an ill illquid asset class and transform it into something that was long-term investable and divide its risk profile into sort of high-risisk and low risk. What happened there was the emergence of a whole um asset management business where all these different firms were then managing high yield loans and they started managing billions then tens of billions and then some of the places even have more.

Okay, so that's that chapter. I want you to recall that chapter and like think about crypto as it thinks about tokenization. There's a lot of narratives, but I'll give you the one that I I think is the most compelling. The most compelling one at the moment are asset managers like Brevin, like Apollo, like others that are mentioned. They've already had a lot of scale and success in terms of attracting big checks, you know, 500 million, a billion, that sort of thing, but they've not been able to really tap the broader marketplace.

So how is it that an asset manager can have private credit, private equity, different types of um uh assets that they manage and make them more generally available either. So Black Rockck talks about making its ETFs available for Europeans. Um all the asset managers are looking for new ways to continue to grow their AUM. to tokenization for me as a former securization head that helped asset managers grow it seems to me like the most compelling case and so I think there's safety in saying okay what are the things that you do really well what do you want to achieve where do you want to offer these things geographically to what demographic and then let's do some matching you know my my list of incomings on tokenization is like a mile long I have hedge fund GPS I've got like everyone wants to do something in tokenization but in my humble view. If you're not solving a big problem that's centered on what investors want to do, then you're spinning your wheels on a lot of different things.

So, in a nutshell, that's what I think about tokenization.

Well, that's a good point, right? Because it's like who is your audience? And if you look at someone like Brevan with all at the institutional and investor level, I mean, yes, you can tokenize, you open yourself up to a retail market. Is that a market you want to attract? Is it a market you need to attract?

Maybe get the views from Brevin on that one. building on Brett's point about tokenization. There's a lot of stories around it and there's a there's really the point around distribution and raising capital and then there's a problems that you're also solving. Thinking about it as an investor um zooming out for a moment on tokenization for me it's two stories. The first is institutions which is about efficiency.

The second is retail which is about access. So thinking about retail first, tokenization and taking stable coins is a great example of that enables retail to access remittances. A stable store of value for countries particularly in emerging markets where there's high levels of inflation and also gives access to those that are unbanked. And it's quite easy I think sometimes to overlook the fact that in many developing countries you can have an unbanked percentage of the population above 50%. So this is another angle at which tokenization solves real problems and a firm like Brevan thinks about these as investment.

So we think about these opportunities on the retail side in investing both in public and private markets to access the unlock that that provides. On the institutional side, building on Brett's point about large asset managers using tokenization. Tokenization is a distribution theme, but it also has efficiencies. And so when you have a world where you have more assets tokenized, you you increase transparency, you reduce risks and therefore you you can increase the balance sheet usage which again provides more efficiencies as well. So I we see it at breman really through those two lenses.

One is access for retail and the second is for institutions in terms of efficiency. you know, since we're sitting in Abu Dhabi, um, when I think about again the things that make sense to me, like the compelling investor-driven demand, I think through like I imagine a world where the Abu Dhabi sovereign wealth funds have amassed um, trophy assets, you know, the they get offered the best stuff in the world with the best terms, the best risk characteristics. Um, and I wonder if one day they would consider the possibility of tokenizing one of those portfolios and making that available to investors that have yet had an opportunity to participate. I'm just kind of like wetting your appetite. You know what I'm saying?

Well, do you know that's a really interesting point because I remember speaking to a large sovereign wealth fund about the benefits of tokenization and they were like, you know, and I was saying you can it's more accessible, you can trade faster, lower fees. And they're like, "We sit on XXX billion. We can negotiate our own fees. We don't trade every day. We don't need the liquidity.

We can access whatever a deal in the world we can." But then they said, "Oh, but maybe we could tokenize our assets." So, I'm saying it might not actually be that that far in the future. It would be very interesting for everyone or all retail investors to actually be able to access those kind of opportunities.

Rachel, you can see the future.

I can. Thank you. Uh, so what's interesting though is that I feel like we've been, you know, at these conferences, we're talking about DeFi, we're talking about Treadfi. When will we just be talking about finance? Like how far when do we actually see those two truly converge?

And maybe I start with you on this one, Chris.

These two areas of finance will tr truly converge when it's seamless. thinking about those two legs. First of all, in traditional finance, we've talked about it on this panel and there'll be other panels as well over the coming days. We'll talk about the regulatory component, but also the fact that large institutions are building and moving very quickly in the space. And so, we're seeing convergence really from that side.

On the decentralized finance side, we're seeing again big improvement. We're seeing improvement in terms of governance. we're seeing improvement in terms of regulation and we're also seeing improvement in terms of liquidity. So these um three areas start to mirror what we're seeing in traditional finance. And so we're seeing a convergence.

What I think investors and what I think users of these products will demand is they want to see a safer, faster, more transparent ecosystem. And the true success of any technology of course is when users of the technology don't aren't aware of what's happening below the surface. And so when we finally see these two converge and I think it's sooner rather than later investors won't know necessarily whether it's operating in traditional finance rails or whether it's operating in decentralized rails. I can I add y

okay so we get asked that question and that was a very good answer by the way very impressed um I want to give you like the question was when is the convergence going to happen between crypto and tradi traditional finance answer the answer is it's already happened and I want to take you through two examples of where it's already happened okay everyone knows about ETFs coming to in the states, you know about that. ETFs have been around for a while, but ETF is literally the product that is the melding of crypto and tradi. Think about how it works. Okay, you have traditional like go for distribution. You've got examples Morgan Stanley brokers now offering IBIT, okay?

through the normal channel that they buy every other stock or mutual fund or whatever it is they buy through their financial advisor, right? They come and they say, "Would you like to subscribe to IBIT?" Investor says, "Yes, I do." Okay, what happens there? It's like normal.

They just says like, "Hey, you don't do that." And then I guess I'll have to take cash out of my investment account and pay for the thing. On the on the asset management side, Black Rockck has now received an order that says, "We want to subscribe to this thing." And so then you've got people that create the shares, okay? And Black Rockck now doesn't have the money yet, right?

Because they just have an order that came in, but they have to go buy some crypto. So that's the moment that Black Rockck begins to say, I look at my Aladdin system. Coinbase is integrated. How do I go get some money to go buy Bitcoin? Right?

And so that's the money that Coinbase advances some money in advance of Black Rockck receiving funds because they're getting a T+1. Coinbase goes out at the direction of Black Rockck and we go buy Bitcoin. We then settle that Bitcoin and then we say back to them in the same day, this is the average price that you bought Bitcoin and then it gets reported back through all the normal channels and someone says I now own a Bitcoin. Okay, that is literally the fusion. Okay, from an operational you don't like people don't go through the details.

That is the fusion of the old world and the new world working together seamlessly. Don't forget from the onset of ETFs, have you ever heard of a problem? I don't want to jinx myself. There's never been, look, we have well, we've got 90% market share, which is kind of cool, but there's never been a problem, okay, with respect to that whole operational process. And that's because we took, you know, years and years and years to make sure that it was it was seamless.

So that's example one. Example two is stable coins. Like look at stable coins. You know, you just got what is it? What is a stable coin?

It's a it's a tokenized asset that represents, you know, a dollar in most cases sitting in either reserves as prescribed by the new regulation or a bank deposit. Okay. So someone says,"I want to buy, you know, USDC." Okay. Okay.

So I'm going to send some fiat old school. I'm going to receive one token of USDC. What does it represent? It's a dollar sitting in US dollar back reserves. And now I can take this token and I can go do things in the cryp in the crypto ecosystem.

I can go buy Bitcoin. I can I can do, you know, all the things that all the panels have have talked about before. So that literally is the fusion of the of the two worlds. The third thing that's happening right now is the tokenization of of stocks. You're going to have some more announcements coming up and all of a sudden to Chris's point when things really happen, it's it's not, you know, someone doesn't feel like it's a web three world.

So better, faster, cheaper, it's all happening. So don't I I would just encourage the audience like this question. It's the it's the right question. When is it going to happen? And I'm telling you, it's happening and it's happening at a faster and faster rate, pay attention.

It's it's like if you if you don't have the ability in the next year to forget crypto, forget Bitcoin, forget ETH, okay? If you don't as an organization have the ability to actually buy a digital asset, a crypto asset, a tokenized asset, okay? You don't have the ability to buy it and store it, you're behind. So, you you got to get going.

It's interesting actually what you say. But when you think of that tokenized world, it really is in a a few parts like we we have the cryptocurrencies, we have the stable coins which are obviously tokenized assets, the tokenized money, and then you have everything else which we're looking at. So the capital markets and the real world assets. And I think since the UAE came on with its stable coin regulation in Abu Dhabi, we've really seen a shift change from the banks here because now that they actually have to custody stable coins, they have to think about minting. they have to think about the technology behind and then offering wealth management products is kind of that next step I think in the evolution.

We do just have a few minutes left. So, so your point is we we are already here with this convergence. Lots of things have been happening. What do you think are some of the roadblocks that do still exist given that we've been discuss discussing these great improvements that have been made over the last year? What do you think are some of the roadblocks that still exist before more people come on board from the institutional side?

Chris,

I think maybe starting first of all just with stable coins. You we've had the act. I think we need some more detailed regulation around it, but we've got great guidance. when stable coins can be held on banks balance sheets with a reasonable RWA waiting. I think that's that's going to be an important uh unlock for those banks because at this point if banks want to use stable coins they want to use them for payments.

You want to use them to settle tokenized products. And when you just take a zoom out and think prior to Genius, the AUM for stable coins was around 250 billion, which shows us great product market fit. Building on Brett's point, you know, the banks were already thinking about and primed ready to move into the space. And so just thinking through the US and using some of the numbers that have been used by um market commentators, this number is likely to be close to two trillion over the coming years, which is a huge unlock. And with that unlock of stable coin usage will also unlock more tokenized product because for tokenized product to settle and to be able to use it to use it as collateral you need stable coins and you need large financial institutions to be able to use them freely.

Well, listen to hammer Chris Chris's point stable coins have averaged an annual growth rate of 65%. Okay, 65% in the past couple years, exceeding 305 billion. And to Chris's point again, if you extrapolate forward, by 2028, that's going to be 1.8 trillion.

But is that sustainable though? 65%.

Hell yeah. It's tiny.

Okay.

And in the grand scheme of things, it's like nothing. When you talk about money, money supply, I mean, the numbers are phenomenal.

So 1.8, you know trillion is not is by no means um too big to handle but remember the significance of genius let me come back to that point right you've got you've got the secretary of the US treasury Scott Besson himself talking about the growth of stable coins the secretary of the treasury is saying like I'm going to have pass regulation I'm going to help bring digital and crypto into the ecosystem and I see the emergence of stable coins which by the way can be a great marginal buyer of US treasuries. Okay, so it fits for the US. Okay, get on board. You you you got to get on board.

Um, so it doesn't take it's it's a little bit if I zoom out talking to people about Bitcoin and ETH is a harder conversation. So your question was around barriers. So a barrier would be if you're not invested in it and you don't believe in the investment thesis. Okay, fine. Let's toss it out the window.

Let's just talk about the financial disruption part. Okay. So, do you believe there will be financial disruption? This is your investment thesis. Do you think there will be financial disruption of the existing markets by crypto rails?

Okay, answer like I gave you the answer. The answer is it's already happened in ETFs. It's happening at an increasingly faster rate in in stable coins. It's going to happen with the most actively traded thing we have which is going to be, you know, single stocks in in the United States. And then the the characteristics just to give you some sense of of of how the investment community is thinking about this.

So it used to be that if you go back to Bitcoin, it used to be the case that Bitcoin was an outlier from a volatility perspective. It's too small from a market size perspective and it was too correlated to the S&P. So past couple months, Bitcoin's correlation to the S&P has been.3. Okay.

Gold is usually between 0.1 and 04. So from a correlation perspective, it's broken this kind of one to oneish uh perspective. Okay, that's data point one. Data point two, uh the average daily volume, okay, of Bitcoin has been um 34 billion a day.

ETH has been 22 billion a day. Nvidia has been um 36 billion a day. So now you've got like a massively liquid asset that's proven its liquidity through a bunch of sort of peaks and valleys. super important because you think about can I get in, can I get out, can I minimize transaction okay so I've talked about uh market cap market cap three trillion bitcoin by itself 1.7 trillion ETH roughly 350 billion okay so from a from a characteristic standpoint um this this asset class from a sharp ratio standpoint this asset class looks really good so now take a a c an asset allocation of 1 2 3 4%.

You add this now non-correlated assets or lesser correlated assets into your portfolio, your sharp ratio goes up. Right? So these are all these arguments uh the barrier was these correlations not not big enough too volatile outlier they're all going away one by one and at the same time the techn is coming upstream the US now is back in you know there this region was in the front and still is in the front in terms of inviting asset classes in but the entire regulatory landscape globally now is saying we want this thing to be embedded in the asset class So really my my my biggest barrier right now is actually imparting this message to everyone to say I'm not selling you Bitcoin. I'm not selling you ETH. Do your own homework.

Okay? Either it's the technology story or it's the investment story. But the technology story has been the one that we've been talking about for a long time as an industry and it hasn't really materialized in the way that we want. Did it really find its like killer use case? Well, we have.

It's stable coins. Okay. So now it's here. you you you got to get going.

Well, that's amazing. We are out of time, but I always like to end on a call to action. So, thank you so much for that. And please join me in thanking Thanking Chris Renook and Brett Tes.

Thank you.

Thank you. All right. Thank you lady and gentlemen for our final panel for this uh morning. You know regulation is no longer a back office concern. It now shapes product design, custody models and crossber market rails.

To lead our next session on regulatory clarity, please welcome Isabella Tisen Houston, general counsel and partner at Further Thank you very much, Gary. Hello everyone. Very happy to be here to discuss settlements. Why are we discussing settlements? Well, it really is the most important part of a transactions life cycle.

if we don't have a settlement, we don't have a transaction. So, it's uh very important to get it right. And from our perspective at Further, we are serious about helping build the next generation of capital markets and infrastructure. Um, and settlements truly impact everybody who participates on the market. And as I was preparing for this panel, it occurred to me that there's a bit of a misconception uh in crypto between how we think things should work out uh including transactions and settlements and how they work out still today in actuality.

The misconception being we wish for everything to be instantaneous and very fast because this is what the blockchain technology enables for. Um but at the same time there's still a fair amount of friction when it comes to onboarding to a platform filing necessary documentation of course compliance which is very important. And once you get into the system then yes you can get the benefit of uh speed and instant settlement uh but the friction is very much frontloaded and some of it is backloaded as well around settlement which we'll be discussing. Whereas if we compare to the traditional uh finance, the friction tends to be more evenly spread out and even more so I think we are much more used to dealing with it because we've had um a long um time to practice how to deal with it. So that's my intro.

I would like to welcome our panelists. Matthew is the CEO at Vara. Vara is Dubai based virtual asset regulator. Thank you for joining us. We also have Tom from Coinbase.

Tom is VP of international policy and he's bringing the institutional view and the market participant view on the topic as well. And we have Gabriella. Uh really great to have you here. Gabriella is representing ADGM as the head of ecosystem development. Uh she has other important functions as well.

ADGM is our local um Abu Dhabi based financial services regulator. So I will start with you Matthew if you could start by providing VA's perspective on settlements on transactions more broadly and given that digital assets enable for a truly global market and crossber transacting.

All right well look thanks for inviting me. It's a it's a pleasure to be here. Um so look I I'll I'll kind of give you a bar as broad perspective on on the topic. I wish I had you know the answer the blueprint uh for this to fix everything. I don't think we do at this point.

Um but Far's mindset Vara's philosophy from the start has been um explicitly about global crossber interoperability. So we've always designed our um our frameworks to be as uh to be as clear and uh in line with global standards as possible to sort of anticipate this challenge that that that we're seeing now. But the reality is we also see that fragmentation in in in regulation is likely to persist. I mean let's be honest not every not even everybody agrees that instant settlement is a good thing. I'm not saying that's my point of view, but there are there are alternative perspectives out there, fairly credible ones that suggest that instant settlement might not actually be a good thing.

And you know, we don't even have or or or we're seeing divergence in things like stable coin rules across major major jurisdictions. So this this fragmentation that that that we're seeing, I think a it's um it's inevitable. I think we're at an early kind of regulatory maturity globally, but I think we see it as likely to be quite persistent over time. And so VAR really has two jobs at the moment. The first is to create absolute clarity locally so that our entities are able to base themselves here, be clear about what they can and can't do, uh, you know, and have that legal certainty within this market.

um but also to make sure that whatever rules that we design are able to be interoperable with global standards and things like custody or AML or um transfer finality. Those are the types of things we think about when we're building our rules so that they are actually interoperable with um global jurisdictions as well. And the way that we do that um and I've I've sort of mentioned this before, but there's probably three components to our regulation that are of uh of note in this case. One is the fact that we are an activity- based regulator. So we focus very very exclusively on the activity and not on the product.

The product changes significantly. It also is the source of friction um for you know for for much of this kind of global interoperability as as we see at the moment. Um the second is this uh home host logic. So we um we're very clear about what what people can do within our jurisdiction. We're also very happy for people to serve as clients in other jurisdictions so long as they also obey by the rules in those jurisdictions as well.

So we've never, you know, we've we've never um had a problem with that. Uh uh but we do insist on on on those benchmarks. And the final one really is this kind of concept of uh regulatory cooperation. And I think that the the first step towards this interoperability has to be um deep supervisory collaboration between regulators with consistent information sharing uh and as consistent as possible outcomes for regulated entities and that's something that we've sought to do over uh over the course of our uh over the course of our existence. So I'd frame it as that.

I think fragmentation is likely to persist but clarity at home um interoperability by design they're the ways that we uh that we frame this at VAR.

Excellent. Uh Tom I know that Coinbase is very much positioning itself as the settlement infra structure. What are your views on where we are with settlement today? what blockchain enables for and how do you safeguard against any counterparty risks? How do you make sure that everything works as intended?

Uh great question. Uh it's it's great to be here. So look, first off, why are we why are we talking about settlement? Um I think the previous panel mentioned it. We have stable coins now.

So we've tokenized cash and that works and that's growing. Um but we're now realizing rather than just transforming payments with kind of tokenized cash using stable coins actually now what we can do is we can bring real world financial assets um so you know not just money market funds and fixed income instruments um but also kind of more kind of classic debt securities and equity securities and we can bring them on chain uh and effectively obviously then you can have the trading and you can have the settlement all on one ledger. So look, we think that DT and blockchain can very much be the operating system of of future markets. Um, but when we talk about this, and I think Matthew's right, we're still on a journey. So at Coinbase, we have a very ambitious vision for where we think this can go.

So when we look at today's market structure, for example, something like equities or we see a very intermediated market structure with lots of friction. um we see settlement that takes kind of not hours or seconds but sometimes days um and if you do that on a Friday you have to wait until till the Monday um so lots of different actors all taking economics out of the transaction um I remember sitting with a CEO of a stock exchange who said actually there's 14 different agents that will all kind of you know hit a trade and so when we think about tokenization there's a spectrum of how much disintermediation you could bring kind of into that as I said our view is that actually we can go quite far. Uh and when you think about something like Ethereum, Ethereum effectively has been this always on settlement layer 24/7 365 for almost a decade. Um and I don't think Ethereum has made a mistake or had any outage at the protocol level. I think in 2016 there was the the Dow fork etc.

but that was more governance related. So effectively we we do have the technology for this DVP. Um, and I think that's incredibly powerful. Um, the question is how do we get from today's market structure where effectively we have CSDs, we have brokers, we have custodians, we have clearing houses to that kind of vision. Um, and I think Matthew, you mentioned it.

There are a bunch of folks who say, well, why do we want to go so fast? And so, I think the common three or four issues that I hear about about settlement using blockchain is is one is kind of an efficiency point around netting. So if we go a bit slower then you can net stuff down and that's better from a efficiency of liquidity kind of perspective. So I think that's legitimate and I think we have to think about that how when we use blockchains can we have some form of settlement layer that allows us to kind of like net so that we don't tie up liquidity. Um there's another question around legal kind of settlement finality.

So what do we when is a trade that settles DVP on a blockchain atomistically like legally when is that kind of like final? Um and I think different regulators uh I think in Switzerland they've done that in statute and they've said when it's included in a block so when the transactions in a block then it's legally final. In the EU in a DT pilot regime they're thinking about along similar lines but you probably do need to have a legal definition of kind of like settlement finality. The other question that gets thrown at me a lot is um but what about you know other technical issues? Don't blockchains fork uh isn't that isn't that a problem for settlement in that you can fork something and then undo it and then go back.

Um and when I think about that I don't I don't think there's a history of forks that have really undone transactions. So there's kind of forks which move you into a different direction, incorporate new technology. Um, but right now using Ethereum for example, if you've got proof of stake and you've got slashing, I mean it is economically prohibitive to effectively fork, redo a transaction and then find a majority of validators to validate for that. So I look, I think we're all struggling with how do we get from where we are today to tomorrow's market structure. I think with settlement, there are some legitimate questions that are being asked.

Um, but we do think that there's a there's a pathway to get there and there are ways in which we can really harness the benefits of this transformational technology not just for payments but for capital markets as well.

Excellent. Thank you. So I'm hearing Tom that we can expect T plus zero. Is that correct? Gabriella if you would like to comment from ADGM's perspective on transactions the crossber nature of digital asset market and I also know that you have background from NASDAQ uh so curious to hear your views on market data harmonization how could we get to this level of uh information

so first of all I just want to te tell everybody Everybody who's here, welcome to ADGM. I hope you're having a great time. Uh, so welcome to W Finance Week and thank you to our sponsors and our and everyone who's here. So settlements, big questions. So like Matthew mentioned earlier, you know, is speed is the fastest settlement pro possible actually the better thing?

And you obviously Tommy obje went a lot more in detail on those questions. But when you look at it from a regulatory perspective, right? Sometimes a little bit of friction is actually good when things take time. That means when things go wrong, you can sometimes stop them in their track. And so the idea of instant settlement, getting everything done as quickly as possible can actually sometimes not be in for the benefit of people as a whole.

It can be for the benefit of individual transactions, yes, but as a public good, it may not actually be that good. And so, we have to sit down and we have to think about these questions specifically when we look at how quickly we want things to happen. Where are there stop gap measures? Where are there points where we can notice that a transaction shouldn't be taking place? That something is potentially going wrong.

And how can we put in measures that will essentially stop these transactions in their tracks. If we had do have instant settlement, then once something happens, poof, it's done. It's settled. It's final. And so that is fundamentally one of the big questions about instantaneous instantaneousness.

Then another thing that I wanted to mention about when it comes to just global settlements is that obviously everybody wants to trade with the world. They want to trade with the world and they want to trade 247, right? So that means that they want teams rolling. They need to make sure that they have rolling teams that can actually be catching all this information continuously and be able to tell when things potentially are not going the way they would expect them to. And at the moment though some companies are trying to you know make that happen with multiple teams across the world.

It does mean that trade is going towards a how can I say just a rolling basis of continuous activity and that is going to require an enormous amount of upskilling across companies but also from a regulatory standpoint in order to continuously oversee data and all this information and ensure that it is accurate across the board. And so I can say this, us as regulators, and I'm sure I can say it on behalf of Matt to you, though I don't want to, you know, say words in your put words in your mouth, is that we are learning continuously and we're constantly looking at how our technology can be made better in order to deal with being in a zone and being a regulator that essentially regulates firms that trade continuously and across the world.

Thank you very much. as a as an interim conclusion, I would say that if we figure out settlements and therefore we figure out the transaction life cycle, what then happens is the more we tokenize assets, the more transaction life cycle becomes embedded within the asset itself. So if you tokenize something, you put it on blockchain, it will have continuous embedded transaction within the asset life cycle itself. So that really excites me and I would like to bridge into tokenization on this note as well. Uh because obviously the more we tokenize um different assets, the more we'll have this embedded effective settlement as well.

So I would ask you Matthew on Vara's views and plans when it comes to tokenization. How do we bridge any gaps uh globally and how do we lay the foundation for truly global digital asset market?

Yeah. Okay. Um so look it's I I guess I guess the theme is is is similar, right? What what we've found out and I'll talk a little bit about VAR's um tokenization activities in a moment, but what we've found out doing this is that the the issuance the tokenization is the easy piece, right? is the the the interoperability, the the difference in token standards, the the the lack of a kind of global digital identity is really where this this falls down when you're talking about global consistency and global tradability.

But what what we've done at VAR and and as you can imagine tokenization is a is a is a very um important innovation for us uh as a regulator and for for the market as a whole. We we've introduced some uh clear regulations in our issuance framework around um something we're calling an ARVA, an asset reference ver virtual asset um which is the the bedrock the the foundation for our um tokenization um tokenization ecosystem if you like. Um and what that really does again activity based risk based it sets very clear um uh path for for for issuance um uh and for the platforms themselves. Um it uh sets very clear disclosure and things like reserve requirements for those those types of assets. Um and it also uh uh really focuses in on things like CL, you know, asset segregation, uh property rights, those types of uh those types of aspects which again are really really important when you're talking about the concept of of tokenization.

So, so that's the starting point that that's the framework. That's how we've approached the problem. What we've then gone and done is um really doubled down on um what we're calling regulatory enablement pilots. And we think this is quite important to you know prove concepts uh refine rules uh and demonstrate to the market that this uh this activity can be done in a in a controlled and um risk riskmanaged way. So there are probably you know the best example of that I can I can tell you about is is the real estate tokenization pilot that we um uh sort of um went on that journey with the Dubai land department.

Um the idea behind that was really to to prove that we could tokenize and fractionalize title deeds of residential built property um and uh allow uh a you know a substantial number of of clients to go in and and actually purchase and own fractional components of of the of that real estate. So that that's what we did. That was that was phase one and and you know that that was a a pretty successful pilot. Um I forget the actual number of investors. I think it was over a thousand investors.

Um what was interesting was that about 70% of those investors had never um never invested in or never bought a property in Dubai before which um reinforced at least the land department's view that the the ability to tokenize and fractionalize actually opens up new market and new liquidity into into real estate. Um but we were also able to uh provide um uh uh dividend or yield on those properties directly to those investors as well. And so this this was one example of sort of proving that concept. Stage two is really about solving some of the longerterm challenges around secondary market and uh liquidity um which are both going to be very very important if you want to attract uh institutional investors into that uh you know into that asset category. So that's ongoing at the moment and we and and we've looked at other regulatory pilots as well on things like funds.

So we're we're about to or I think the one that's been approved already to be tokenized um commodities and uh uh gold or silver as well. So we we're we we go through this pilot this uh and and I think um Gabriella mentioned it quite nicely this kind of learning I guess um with with our industry to just understand and and build out and scale up this this tokenization ecosystem uh in a kind of careful um but progressive way. So that's how we that's how we look at it. That's how we approach the the subject from our perspective.

Thank you. So I really look forward to tokenized equities. I wonder how far are we from this becoming into a reality. Uh Gabriella, I would ask you to add ADGM's view on the organization in general. You don't have to get into equity.

I'm just I'm I'm stealing your mic at this moment because I'm sure you have a lot to say about it. I know it. I I already know it. But what I do want to say is that we are particularly excited about native tokenization. So that's really the crux of what we're we're into.

So when you're when you do a desk when you do a job like I do, you see a lot of things pass by your desk and a lot of interesting business models and a lot of questionable business models as well. And over the years, we've seen quite a bit of interest in real world asset tokenization. And there's quite a bit of a fine line, I say fine line, but it's probably more of a, you know, deepening gap between business models that are really just jumping on this concept of becoming just an additional intermediary, right? building out a platform, charging additional fees, wrapping some form of, you know, real world asset into a wrapper that can then be somewhat fractionalized and then they manage to make a cut every single time they refractionalize it or they unwrap it. And you look at these business models and you think, are you solving for your own profit or are you solving for the industry?

What are you solving for really? And so over the years, we've become increasingly more, I guess, I mean, I'll use it. We're just more excited about native tokenization where there is a structure in place that essentially allows it to be with the ethos of what blockchain is and what decent humanation and what decentralized finance was always meant to be. And so we're always looking at ways to actually prop that up and prop these sort of business models up uh and these platforms up all the while doing it in a way that can give some form of regulatory clarity to those investors that will be utilizing them. But I'm going to I'm going to just tell and give it back to Tom because I know you want to talk about this.

Should I should I jump in? Um, no, no, that's a that's a great segue because that gives me an opportunity to talk about what Coinbase has been doing in ADGM. Um, so for the last two years, we've had um a project called Diamond, which is effective of a tokenization platform for real world assets. So, as Isabelle really nicely set out, effectively the three different types of model for tokenization we're seeing in the market is one this kind of SPV type model where you kind of buy the assets and then you issue some kind of instrument that gives you the economic exposure. So that's kind of one thing which isn't kind of very new.

Then you have another form of tokenization where effectively there's an existing security and you immobilize it and then you create a digital twin and then that digital twin can start moving as a token on a blockchain. But what I think is the end point which is really interesting is when you have the digitally native issuance itself. Um and that's what we've been doing with um Coinbase tokenize uh formerly known as project diamond for the last couple of years in ADGM. uh we've now applied for a full license and we do see this being the infrastructure effectively in the operating system of onchain capital markets as we've moved forward. So we have uh we've issued and matured about 250 notes uh people can come in they can create their onchain digital securities and we think this is diversifying the market um this is creating new interesting kind of like opportunities and we will I think hopefully move into equities as the as the next step.

So um that I don't think we're very far away from. Um I mean there are there are markets like the US for example that are really embracing now. I think the UAE is still in the lead I want to say but the US is moving very fast now. Um, and the innovation exemption that we may see from the SEC very soon, I think will allow companies to come to market with some very ambitious projects around tokenizing not just kind of loan notes and things like that, but also um, equity capital securities. But, um, we're very excited about what we've built here.

Um, we also announced um, a relationship with Apollo to um, tokenize some of their private credit. And I think that's the point Matthew was making which is so exciting. tokenization also allows for fractionalization which is democratizing access to these different asset classes which is which is massive. So yeah, we're very excited about what we're doing um in ADGM. Watch this space.

Thank you Tom. I do have to press you on your last point in terms of uh Coinbase's plans uh in the Emirates. If you could share a bit how you view this region.

Happy to. Um, I feel like I'm sitting appropriately here between VAR and and ADGM. Um, some of you have seen Coinbase bought Darabit, which is the world's largest options uh crypto options business in uh under VAR's control in in Dubai. Um, so we're very excited to be u partnering with Derit and growing that platform. Uh, and obviously as I just described, we have the the tokenized platform in in ADGM.

So, I mean, we are just very um excited and energized by this region. you have there's so much innovation that's possible but my job takes me around the world talking to regulators. This place is quite rare in the way that they engage and partner with businesses and they recognize that we can't design a zero failure regime if we're going to have growth and we're going to have innovation like we've got to work together and move forward and that is not necessarily the case in all the markets that we operate in. So yeah we're very excited to be doing very interesting cool things in Dubai um but also here in Abu Dhabi and ADGM. Well, I think it doesn't help that I think Matthew and I were both originally practitioners, right?

Yep.

We we we came from industry. We're not career regulators.

Definitely not. What a good answer that was.

Excellent. So, since the topic of this panel is also touching upon regulatory clarity and Matthew, you mentioned uh that regulators have to work together. I agree uh on that point. If we want for a truly global market, we have to take care of any gaps across borders. How do you, Matthew and Gabriella, feel free to comment as well.

How do you achieve this kind of uniform truly global regulatory framework?

Okay. Um,

we don't not yet.

Yeah, I' I'd agree with that. I think um, look, it's a journey, right? I think that, you know, I I I don't think one single crypto global rulebook is on the cards in the near future. I I do think a global framework of some description is realistic. Um but it's going to be it's going to be staged and I think it will look something like you know stage one being aligning on global minimum standards around things like AML uh around things like custody uh and um settlement finality th those types of things but but with local licensing.

Um and I think that's kind of where we are now for the for the most part. I think stage two is a bit more um uh around uh mutual recognition and as I said before you very strong supervisory cooperation supervisory baselines across jurisdictions and that will allow you know certain services to be um mutually available in different jurisdictions and I think phase and that I think that's a number of years away um and then I think phase three really is this kind of this this holy grail of, you know, passporting between between jurisdictions. But it really all relies on uh a kind of convergence of of global regulators coming together uh and agreeing on some of these uh some of these challenges that we're all talking about today.

I think we're all doing our part to keep doing that. I think we're all doing our part to minimize regulatory arbitrage essentially across the world, but fundamentally there will always be jurisdictional specificities. um it can you know and I'm not just saying that as you know ADGM versus VAR I just mean it as a global level you look at countries you look at cultures you look at risk appetite you look at choices and those will sub those will persist at least for now they will persist for the next hundred years or so but if we can work together to minimize regulatory arbitrage that does you know that can eventually become a systemic risk I think that's where we're going to put our efforts to

Can I just add one thing I I agree with everything you've said. I think if this year was the year of stable coins though, I think next year is the year of DeFi. And I do think for regulators um around the world, that's a hard conversation. It's a really hard conversation. So um I think we've all got to work together and think about accountability structures in a world in which you're kind of disintermediating or reducing some of the functions that are currently being uh addressed by regulation by certain actors in in the chain.

I think DeFi is a topic around which we really need to foster some kind of global kind of basic supervisory convergence.

Yeah. And what would be so this is your chance Tom. What would be Coinbase's expectation to the regulators in terms of frameworks in terms of uh taking care of any gaps? What's your message?

Look, we've always said um focus on the centralized actors first. Uh and I think Matthew made the point nicely. I mean, you see around the world, everyone's got to stage one, which is kind of tax, AML, custody, centralized actors, that type of thing. Now, we're moving into um stable coins, get that done, and then it's tokenization and DeFi at the next steps. Um but I think let's get everybody to that basic common minimum standard.

Focus on the on and off ramps, the Coinbases of this world. Um and then let's address together cautiously and thoughtfully DeFi recognizing that there are new risks potentially that present themselves but huge opportunity. Um so let's let's do that together. I think that would be our that would be our approach.

Excellent. So we are closed on uh time. As a final remark, my conclusion just listening to our distinguished panelists would be first we need to sort out settlement. Therefore, we also need to sort out the transaction life cycle and if we sort out tokenization of assets as well. through all of those uh exercises, we will hopefully sort out a truly global market with the speed and finality of transacting.

So, thank you very much. Thank you to the panelists.

Thank you.

Pleasure to have you here.

Thanks for having us.

Thank you.

Hopefully everyone had a productive break. To kick off our second half, it is my distinct pleasure to welcome Brian Armstrong, CEO of Coinbase, to the stage for a conversation with managing partner Pesh Hamadi. Hi everyone, this is a great uh room, great audience. Uh thank you all for joining us at the further network summit. We're honored to have Brian be here with us today to talk to us talk to us about what he has built and what he's going to focus on in the coming years.

So uh thank you for Brian for taking the time.

Thank you for having me. I appreciate it.

So Brian, uh when was the last time that came to that you came to the UAE?

Um it's been a little while. I think I was here last a couple of years ago and came by this fintech conference as well. So, it's been great to see UAE accelerating its progress in the world as a leader on technology and science and pro business environment that I think is going to create just tons of e economic prosperity. So, it's very aligned with the mission of Coinbase, which is to increase economic freedom in the world and I'm a big believer in that as a foundation for a necessary requirement for all progress in civilization. So, huge fan of the UAE.

That's great. Yeah, I I I think we've observed over the past few years, DOE has progressively changed quite a bit. A year feels like a much longer period of time when you look at the progress and uh we're very happy to have you here with us.

Yeah, accelerating progress. Uh there's actually a whole field of study called progress studies about how countries can accelerate progress on, you know, deregulation, free markets, sound money, uh private property rights. It's very aligned with the ethos of crypto. So,

absolutely. Uh so, how about we start with a story? Uh, everyone likes a good story. Uh, tell us how did Coinbase start?

Yeah, well, Coinbase started back in 2012. And, you know, I studied computer science and economics in school. I always wanted to try to use technology to create something useful in the world, but I didn't know what that would be. And for many years, I I was kind of lost. I was trying different jobs.

I was living abroad. I was uh learning and investing in different things, but I didn't know where I was going. And uh in 2010, I happened to read the Bitcoin white paper written by Satoshi Nakamoto, this anonymous person. I just read it on the internet one night when I was uh home visiting my parents. And something clicked in my mind when I read that.

I had enough of a background with the computer science and economics degree to recognize some potential in it. And it was describing how the world could have something kind of like the internet that was global and decentralized, but instead of for moving information around, it was for moving value. And that really resonated with me. I couldn't stop thinking about it. I reread that paper several times over the coming months.

And I started going to early Bitcoin meetups that were in San Francisco at that time. And those were very strange uh events. I will say around 2011, there was a mix of kind of computer science PhDs and complet and like anarchists and completely crazy people showing up to learn about Bitcoin. Um it was kind of like the the Chaos Computer Club, the very early days of um PCs being built like in the 1980s. And um I couldn't stop thinking about it for about 6 months.

And when when that happens, I kind of can't help myself. I had to start working on a prototype. And so nights and weekends on my laptop, I'd start to hack and write some of the code to put together what would become an early prototype of Coinbase. And I applied to an incubator called Y Combinator. They were the first people to write me a check for 150K USD.

And that's what convinced me to quit my job and actually try and go build this as a real company. I I I think if they had not given me that seed money, I don't think I would have done it because I was I was unsure about this idea. You know, a lot of people I talked to about it, they told me, "Ah, it sounds kind of crazy. I don't think that would ever work." And so I wasn't really very sure of myself and when when someone believed in me and gave me that 150k check, it gave me the confidence to quit and really go for it.

Amazing. That's a great great uh story. Um and so so today you've built Coinbase into one of the most global crypto platforms in the world. When you look at the international expansion uh how do you think about uh that for next 5 years? Where where is the growth for you?

Yeah well of course we started in the US and then we realized at a certain point that this was important to have global reach and so we launched in Europe. We started going to more countries. We had to develop a playbook for how to make international expansion work. It's it's tricky in each market to find a local bank partner, get a local license, have local team to make sure the product is well translated and supports local payment methods and identity verification. And we've now have a playbook where we can typically launch in a new country and then within say two years uh cover our costs of that investment and start to grow from there.

Now, our regulated products, which for those of you who don't know, Coinbase serves consumers with our retail app. We serve institutions and governments with our our institutional product, Coinbase Prime. We even serve developers with our crypto infrastructure product called Coinbase Developer Platform. Um, these are each regulated financial service products, which we launch country by country. And it's easier to do that in major markets where there's clear rules on the books and enough of an of an economy that it's worth the investment.

There's a long tale of other countries that I think are better served by self-custodial wallets and that's what we've now launched with um the base app which is our self-custodial wallet that allows us to access 100 plus other countries because self-custodial wallets are not treated like regul regulated financial service businesses uh because they never take possession of customer funds. So you can launch those globally, kind of more like a messaging app like WhatsApp. And so um actually December 17th, we have a big product event coming up in San Francisco, but people can tune into the live stream and we'll be announcing a whole ton of things about more asset classes coming on chain, but also this base app and it'll be a very exciting event. Excellent. Actually, I saw your tweet saying stay tuned for December 17th.

I took a screenshot out of from it and said I'm going to ask you a question today. Anything that you can tell the audience about that, which you just did.

Yeah. Yeah, it'd be great for people to turn tune in. I mean, one of the things themes we'll be talking about there is the everything exchange and every asset class is coming on chain. So, people traditionally think of Coinbase for a place to trade crypto assets, but now that every asset class like you know stocks and prediction markets and stable coins, everything are being everything's being tokenized. Um, we think that all of these are going to be running on crypto rails and that'll be an exciting opportunity on December 17th.

Talk more about that.

That's great. Awesome. Uh yesterday we uh sat down with the chairman of ADGM and had you know quick chat. Um so that kind of sparked the question uh based on your interactions and what you've seen this week. What makes Abu Dhabi and ADGM stand out as a place to build and scale the next generation of onchain markets?

Yeah. Well, ADGM has really been a leader, I think, in embracing getting clear rules on the books to create a trusted environment where lots of ideas can be tried, but also allowing market risk to be taken, right? You know, we want to make sure we eliminate things like fraud risk, certain kinds of uh risk, but we don't want to eliminate market risk. Market risk is where lots of startups can be tried, some of them are going to fail. You have to allow that to happen to have real innovation happen.

And I think ADGM has done a good job of creating that environment. For instance, they've created a regulatory sandbox where startups can can get going without, you know, super high legal fees and overhead. Um so those ideas can be tried within the sandbox and then as they grow they'll they can graduate beyond that. Um they've been very good about putting out um you know policy papers around DeFi for instance and clarifying that the innovation potential of that is there. there are certain um regulated versions of DeFi which might be more useful in for institutions for instance.

So they've been a real great leader on that front and I would say just zooming out um this is what's so great about the UAE is that it's leaning into science and technology and business as a way to get economic development and prosperity for everyone. And unfortunately we don't see that everywhere in the world. You know there are certain regions of the world that are more skeptical on business now. they they regulate to the point of just unnecessary amounts of fines and bureaucracy. Um, and even in the US, you know, it's frustrating to see uh the the new mayor just got elected in New York, you know, and he's said he wants to quote seize the means of production, which is kind of straight out of the communist manu manifesto with Karl Marx.

And so even the US um is vulnerable to I think some of these uh Marxist ideas. And so the mission of Coinbase is to increase economic freedom in the world. That's the opposite of Mar Marxism. We want we want free markets um to be a tool to lift everyone up and create prosperity and jobs and growth. And the UAE is just such a I think philosophically aligned to that that it makes us want to build more here,

right? And uh um and um and if something is built here out of ADGM on crypto rails, how easy can it scale across borders when compared to uh traditional finance? Yeah. So that's the beauty of crypto rails is that they're global by default and they settle instantly. So you know if you look at traditional payment methods whether it's credit cards or wire transfers or you know they if you look at sort of across three different mentions like what what is the speed what is the cost and what is the global reach right um like credit cards are quite fast but they're expensive 2 to 3% for the merchant.

wire transfers are have great global reach, but they're they're pretty slow and and they're expensive. And so I I always kind of say crypto rails are the only ones that are that check all three boxes. They're fast, cheap, and they're global. And for instance, you can send a stable coin on base today for less than 1 cent US anywhere in the world in less than 1 second, right? That's a big deal.

That's never been possible before. And so as more of these asset classes get tokenized, um it means it democratizes access. It means everybody in the world can participate, it means that uh settlement risk is just eliminated as an as a category of risk because these all these assets are real time settled. You don't have to wait, you know, t plus 2 days or t plus 3 days to wait to see if the counterparty actually is going to show up with the funds. It's everything is real time settled, right?

And it gets rid of a lot of the operational overhead or burden to manage these different types of products in the world um with back office and lots of legal fees and um paperwork and it's like anyone in the world can access it um instant no settlement risk and it gets rid of all these bureaucracy. So we think that every asset class is going to come on chain and get tokenized. So just on that note um you've said that tokenization is core to modernizing capital markets. Um how does that um how does that change the speed and reach of potential expansion of financial products?

Yeah. So I mean tokenization is a is a really big deal. So for anybody who's doesn't know I mean really all that means tokenization what what does it mean? It says you have some kind of asset whether that's a dollar or a share of stock or interest in a fund and you create a token that represents that asset one to one right now the reason you do that is all the things I just mentioned it's broad broad global reach democratized access you know instant settlement um less overhead from legal and operational and we've seen enormous success for instance with stable coins now you know hundreds of billions of dollars of stable coins it's growing massively year-over-year. Um, we're now seeing that with tokenization of equities.

And most recently, we're now seeing this with tokenization of, uh, funds from the big, you know, asset managers out there. Uh, whether it's Larry Frink at at Black Rockck or, uh, you know, Mark Rowan at Apollo, they're they're kind of saying, "We want to tokenize every one of our funds." And what's really exciting is that I think Coinbase is the best positioned company in the world to provide tokenization services. We have the technology to do it as the largest crypto custodian in the world that we know of. Um we have expertise doing this with stable coins and other assets.

And then we have a large we have about half a trillion dollars of assets from our customers who want to invest in these these uh tokenized funds. And so and and basically market those products to our customers. And so we actually have a number of initiatives um even here in the Middle East in the UAE that are in the tokenization space. Um, you know, we're doing work here with with JP Morgan, Mubadla, um, you know, Brevin Howard, and so for anybody who is interested in tokeniz tokenization of their assets, I'd suggest come and talk to us.

Yep. Absolutely. And, um, like Brian said, we're we're working on a couple of projects together and we're hoping to tokenize one of the first, uh, start funds, uh, here in the region. Um, and this is thanks to the partnership between Kaio, uh, between Coinbase, um, and our collective portfolios. So, we're quite excited about that.

Yeah. What's great is we can actually not only provide tokenization services, but we also put our own balance sheet to work and and are investing in these funds oursel with Mubata. So, it's been a great partnership and we'd love to do more of them.

Yeah. So just on that note uh because in the past years whenever I go to convince someone to consider the idea of tokenizing a fund um they get lost in all the crypto jargon.

So if you're going to sell the idea to imagine firm how you sell it how do you sell it? What features of of tokition would you focus on to convince them to say yes?

Yeah. Well I mean many of them are already opting into this and want to do it. So in many ways we don't have to sell them. But I think the key value prop for anybody who might still be skeptical is that

uh we can just create more demand for your for your assets, right? I mean, it's just very simple to put those tokenized assets in front of huge pools of capital all over the world and they're just you'll have even more demand. It's why actually, you know, Scott Besson, the Treasury Secretary in the US, he's very excited about stable coins, which is a form of tokenization of the dollar, right? Why why is he doing that? It's he likes crypto, but the real reason is that he wants to create more demand for US treasuries, right?

And he knows that stable coins are a huge driver of um US treasuries. And so it just when you tokenize something, you create more demand for it. That's that's the simple answer.

Exactly. This is what I've learned is just to keep the you know pitch simple and stupid. Um and yeah, that that's how it can work. um on on uh DeFi. Uh so so so D5 is often seen as something that's still nent and experimental.

Uh what has to happen for it to become trusted uh to to happen to become a trusted global settlement uh at a scale?

Yeah. Well, DeFi is very exciting. It's allowing new types of financial services to be built. And actually in the Coinbase app, we've built something we call the DeFi mullet, which is just a very simple, like if you want to get a loan um or do an a trade um it's very simple to do in our app. Now, it's being powered by DeFi underneath, but you don't need to worry about that.

It's just giving you, you know, better rates on a loan or access to more assets that you want to trade. And so I think DeFi is going to continue to spread in these retail apps now that it's become easier to use for the average person. In the institutional world, they're also adopting DeFi. And sometimes institutions have slightly different requirements where they want to uh trade only with other trusted counterparties and um they want to operate sometimes in a pool uh where everybody else is KYCed or has certain uh compliance requirements. And so there are versions of DeFi, what some people call like verified DeFi or KYC DeFi.

I think as long as these are optin and optional um where institutions want to participate, I think that's fine. And then we should also preserve the broader version of DeFi that's truly open and permissionless for anyone in the world.

Got it. Um let's also touch on base. So um what's happening with Bass? What's a feature that you think people should look forward to?

Yeah. Well, for those who don't know, BAS is a layer 2. It's a blockchain. It's a layer 2 blockchain built on top of Ethereum. Um, it's now the largest layer 2.

It's growing really fast. This is our effort. We incubated it at Coinbase and it's decentralizing over time, so anybody can participate and build on it and and participate in the economics of it. Um, the reason we did that is to just grow the utility and the scale of blockchains. So base is how you get to that fast and cheap and global you know piece that I talked about where the transactions are anywhere in the world under one second under one cent.

So with these layers too, blockchains have just gotten much more scalable. And we're also launching a something we call the base app, which is built on top of the base chain. And uh this is what I mentioned that we'll be sharing more about at the December 17th product event. But um it's a self-custodial wallet, which means we can launch it in over 100 countries from day one. And it's um has much lower friction onboarding.

It doesn't have a big KYC process because it's not a regulated financial service. doesn't take possession of customer funds. You're in full control of your own funds. And it allows us to have the latest um financial services just built all there. And so it's really kind of like an everything app.

Um it does payments, trading, there's a third party app ecosystem. There's even a decentralized social network where every post is its own coin. You know, content creators who want to get paid from their fans um can just get paid directly. So it really flips the business model on its head of social media where in most of the traditional social media apps, 90% plus of the economics really flows to the platform and 10% goes to the creators. This flips that on its head.

90% plus of the economics is going to content creators. Um and 10% to the platform or less. So it's exciting.

Got it. So December 17th will be a big day and looking to forward to hearing more about that.

Yeah. Um, when you talk about bringing more of the world's GBDP on chain, what does that actually look like for a business or institution that's operating across multiple countries or regions?

Yeah. So, actually, one of the one of the things we try to track at Coinbase to see if we're having a real impact from our mission of increasing economic freedom in the world is what percentage of global GDP actually does run on crypto rails today. Um, I don't know if anyone has a guess, but and it's hard it's hard to estimate, but our our best estimates are that it's about 1 half of 1% of global GDP. Now, that doesn't sound like very much, but I think over the next 10 years or so, we have a chance to get that to 10%, maybe 20%. You know, it's it reminds me of actually the early internet.

If you if you go back to the year like 2000, only about half of 1% of global GDP was running on the internet um with e-commerce and everything. And today, it's over 20%. So, similar to the internet driving more and more of GDP, I think more and more GDP will flow over crypto rails and a lot of this comes down to payments for goods and services, right? Um, a lot of the a lot of GDP is actually B2B payments that are crossborder. It's people paying for uh vendors, uh, inventory, uh, employees and contractors overseas.

You know, you can imagine the proverbial uh factory or or store that is sourcing different parts and inventory from different countries around the world. That's all B2B payments. It's a massive category. Uh businesses are underserved by this because those payments are slow and expensive and have high FX fees. And so we're seeing uh stable coins now being adopted by businesses in that sector.

And we have great products for them with um you know, Coinbase Business and Coinbase Prime. Um, we're allowing them now to do stablecoin payments cross border all over the world.

Incredible. That's amazing. And which regions do you see moving fastest right now in building real onchain market infrastructure? And why is the UEE so well positioned in that race

or not?

Yeah. No, I think the UAE is actually very well positioned. Um, so the last administration in the US was actually very hostile to crypto and that was a huge detriment. we saw about 40% of um crypto jobs in the US and then it went down to maybe 19%. This new administration in the US has been incred it's a total sea change.

It's been incredibly positive on crypto and I think 2025 is the year where actually we're going to look back on it as the moment crypto finally got regulatory clarity because uh legislation started to get passed in the US both for stable coins and um we're very close hopefully on market structure legislation as well. At the same time, we've seen um countries like UAE uh lean I mean not just this year, this has been for many years now just lean into the opportunity on crypto and be very forward thinking with with ADGM and and FAR and and others. Um you know conversely there are some countries in the world it's getting harder and harder to find a country that's like really skeptical on crypto I would say but there there are a few lagards. Um, you know, one other thing I just want to say that I like about the UAE is that you're really embracing special economic zones. You know, um, both, you know, in Dubai, I think you were mentioning there's some for like the film industry and media and there's a financial uh, economic zone and, you know, some of the most prosperous regions in the world, whether it's Shenzhen and China or, you know, Hong Kong or Singapore, like these are these are special economic zones.

And I'm actually a big fan of special economic zones. I think we should see more of them maybe. um you know maybe we can work together on one in the UAE or maybe there should be more of them in the US. There's a company we invested in called uh Prospera actually that creates special economic zones and helps govern them in a way that can create prosperity and I think we that's a great example of how you can drive innovation and forward progress.

Excellent. Yeah, I think that's something that has built for the past few decades and so far it's worked worked well for us as a model.

Mhm.

Excellent. Um any questions from the audience? anything that I just want to ask Brian while while he's on stage. Yes.

Yeah. Go ahead. So, so I mean just for the for the audience uh the question was um what's the time for stable coins in the global south and specifically to Coinbase? Yeah. So, you know, I mentioned earlier that our custodial products like the Coinbase app and our institutional products um those are rolling out kind of in the major markets um where the regulatory environment is most clear but actually at the base app is self-custodial.

So, I think the best way we can serve those markets in the global south is with self-custodial wallets and we have a much more international approach with that. Uh so, I think for Africa that's a great example. um in India actually we we made a major investment in coin DCX which is the leading exchange there as well. So we're excited to work with them.

Thank you Brian. Any other questions from the audience? Yes.

Yeah. The question is about our acquisition of Darabit. So, Darabit is the largest options exchange for crypto and they're actually based right here in the UAE. So, with that, that was the largest acquisition in in crypto uh multi-billion dollar acquisition and it gives us a strong presence here now in the UAE for our our international derivatives hub is is really based here now. So, um it also gave us a chance to bring together every type of trading into one unified platform.

So, Darabit is the leader in options. Uh we also have spot and futures and perpetual futures. So those can all now be traded or they're being integrated into one uni, you know, unified trading platform which we think our advanced traders have a lot of demand for. So yeah, very excited about that acquisition. It was also a creative, you know, from a public company point of view and the market really liked it.

Yes. Yes, the question is about flat coins as opposed to stable coins. So, for those of you who don't know, stable coins are really backed by a dollar or other fiat currency in a bank account um or holding short-term treasuries. And I think they're a very important innovation. But there is one limitation to those which is that stable coins are still subject to inflation.

Right? If there's I mean really democracies around the world are trying to figure out how to curtail deficit spending and debasement of the currency really. And you know when if there's too much debasement this is where people go to Bitcoin um in times of uncertainty. Um but there's another concept out there which is very innovative called flat coins. Um I don't know if you work on flatcoins but um you know what they do is they actually are pegged to CPI.

Um so they actually maintain their purchasing power. So you if you imagine you know you let's say you could buy um I don't know a Big Mac for $1 just hypothetically today. Well in 10 10 years from now one unit of that flatcoin would still buy one Big Mac. Right? There's kind of the Big Mac index that economists talk about.

Um, and so these are typically done algorithm. There's different ways you can build it. It's algorithmic about how it maintains its purchasing power, but it's arguably a better way uh to build a currency. If you want to have a consistent medium of exchange um or unit of account or you're trying to create long-term contracts, you'd almost really rather that it maintained its purchasing power or you know maybe purchasing power plus 2% or 2 to 3%. But you want to make sure you're they could be more resistant to inflation risk or overprinting risk, right?

And so there's a there's a flatcoin that actually Coinbased Ventures um in invested in that's called um Spot. Uh it's created by a company called Ampleforth, which I think is very one of the most exciting ones out there. There's there's probably others as well, but um that could be an interesting trend to track on the horizon.

Yes. Uh, can you repeat the question? You asked about global liquidity

crunch,

the low hanging fruit with DeFi. So, are you referring to in crypto or the broader macro environment?

Oh, yeah. Yeah, you know, I don't track the broader markets as much as crypto. So, um I'm not sure I have a great answer for you, but I do think just DeFi will provide more liquidity in these in these situations. So, that's mostly what we're focused on is building out the onchain financial system and hopefully that can provide a help to that problem.

Maybe the question will be asked next next session. Go on. If I was not the CEO of Coinbase, what would I do? Um, well, you know, I'm just very passionate about building companies and using science technology to improve the world, right? So, there's there's actually a uh like a biotech company that I co-ounded in the longevity space.

Um, and as an investor, I'm helping them out. Um, you know, I'm interested in uh reproductive technology. I've invested in a handful of companies in that area. Um, since I think there's already like I think if you you could really look at like what are the most important technology trends that are going to change the world in the next 10 10 20 years, right? I think AI and crypto are certainly two of the biggest ones.

Um, in terms of how we're going to merge with AI, you probably need brain machine interfaces to get to um the merge or full full upload, right? I think we need more and cheaper energy to power the future. uh that's been true over mo most of history. So like fusion energy these things are very important um space and then I think as we're building the digital life stack with AI we also need to build the biological life stack and I think we need to all kind of take control of our evolution right um our the bio stack doesn't change very quickly like we're still all running the same biological stack that we our human ancestors had 100 thousand years ago and you evolution by natural selection is kind of a crude algorithm. It's really just trying to keep us alive long enough to reproduce, but it doesn't optimize for things like happiness or productivity or other goals that you might want to have in life.

And so I actually think that we're going to take control of our own evolution in the next 10 years. Um and there's a variety of technologies that are used for that like um you know gene therapies uh pre-implantation genetic testing with IVF embryo editing um just I just invested in a company doing that actually. So and then ultimately the biostack and the AI stack are may they may merge someday with brain machine interfaces. So I think that all these things are important. By the way, there's a whole interesting intersection between AI and crypto.

How AI agents are increasingly going to go do more commerce in the world. Some people call this agentic commerce. And Coinbase has developed some novel uh tools and protocols around that like X42, which has gotten a lot of traction lately and the ability for any AI agent to have its own crypto wallet with stable coins. So yeah, I I I'm if I wasn't the CU of Coinbase, I would be building more companies in science and technology and um sorry. Yeah, I I don't know.

For some reason, I always felt like I maybe I'd want to like produce a film or something like as I don't know what it would be on though. Yeah.

Go ahead. I was going to ask, hey Brian, um, how does Coinbase differentiate itself with our competitors, um, with all the innovation that we're seeing in the space?

Yeah. Well, and thank you for being somehow the only person who managed to find a microphone in the audience. Great. Um, I think Coinbase differentiates by being the most trusted brand in crypto and building products that are easy to use for everyone, even if you don't fully understand crypto. And so most trusted, easiest to use, that's been our differentiator.

That, by the way, having the most trusted brand in crypto means that people feel more comfortable storing crypto with us. We're storing more crypto by far than any other company in the world. And we find that when they store their assets with us, they're more likely to use products with us, whether that's trading or payments or lending, um, staking, financing, all all of the above. And so we think of this as our core strategy of really be the most trusted, accumulate more assets, connect more products into those assets, and then you know that preserves like better margins and we invest that back into being the trust most trusted brand again, accumulating more assets. So it's a it's a positive flywheel and uh that's how we try to differentiate.

Last question and then we're going out of time. So uh you as you have before sorry go ahead go ahead ask uh what are the like net new products do you think will be enabled by tokenizing traditional assets like stocks or privates

the net net new assets from tokenization so well I think um there's the ones we've already seen right stable coins equities these new every fund being tokenized I guess the next big one I think would be capital formation being uh revolutionized here where you know when anybody wants to raise money whether you're a tech startup you're doing a real estate development you're launching a film um you should be able to issue shares on chain like instead of having a cap table you're going to have a a coin table you're going to go into Coinbase into your account and press the raise money button and you'll be able to put out your your pitch pitch to the world. We can market it to all of our customers who are looking for interesting products to invest in and hopefully you can just accumulate capital into that enterprise um you know in a much more efficient way. Right? In the in traditional finance sometimes the fees like if you're if you have a real estate development project and you're trying to raise a bunch of money with one of the traditional big banks, they'll take like 11% fees to market that to their customers. It should all be done for at least onetenth of that if not 100th of that, right?

And I think capital formation is going to be a big category. We recently acquired uh two companies. One is called Echko which was the largest private fundrais on chain and another one's called liquify which was building onchain onchain capital or um cap table management. We're now in the process of integrating those so that every business can just have a raise money button and uh get back to building.

Well, one more question from the taco store. So, and then we're gonna end it there. I was just going to ask, do you see digital asset trust companies making a comeback or do we just have that as a phase? Are we going to see that 2.0 in the future or?

Yeah, I mean digital asset treasury companies like you know Micro Strategy I think really pioneered this and kicked it off and Michael Sailor deserves a ton of credit for that and I think that it makes sense to have a handful of those. Um it was a little bit of a arbitrage play I would say uh for a period of time where institutions maybe in their in their bylaws they could invest in public companies but they couldn't invest in crypto directly. That's now being changed with the Bitcoin ETFs um and things like that. It also gave them access to other products that were just available to public companies. So is it useful to have a handful of these or maybe one or two for the major assets?

Probably. Do we need hundreds of them? I I don't think so. Um, I my guess is that that was a bit of a spike and it'll come back to more of a small handful that make sense longer term.

Well, thank you Brian and I remember when we last spoke probably in September uh three months ago, we spoke about co-hosting this summit together and I'm glad that we're able to do this together and put on this whole program for the audience. So, thank you again, Brian. Appreciate it.

Thank you so much. All right, thank you gentlemen. Next we have a discussion with one of the industry's most experienced macro hedge fund leaders Alan Howard in conversation with further chairman Nabil Muskery. You're going to be in that.

Close one.

Yeah, close.

Wow. It's uh first of all, it's amazing to see just how many people are in the audience. We are at overflow and the doors are still open. So Allan, you're probably speaking to the entire plenary of the finance week at this point. Um, look, it's a distinct pleasure to have the opportunity to have a chat with Allan.

Uh, we've been friends for some time. Um, we've been a collaborating partner as well. I've gotten to know both you and the firm. And what I'd like to do over the course of this conversation is allow you to share some of the insights that you've developed through your history as a obviously well- reggarded macro trader, but most importantly also as a leader in the digital asset space. So, one thing I think to help set the stage for those that are not immediately familiar with Brevin Howard, uh, other than those in the real estate in Abu Dhabi, who we call it the the Breven effect, not the Howard effect, by the way, unfortunately, um, you have differentiated the firm through risk management.

It's actually one of the almost contrarian things when you think about hedge funds. Can you talk a little bit about both that as a background but then maybe also elaborate on how that would be relevant as you have evolved into digital assets where it's quite often volatile.

Thank you. And it's amazing being here. I was here two years ago the the further event at the Rosewoods which is nowhere near as many people as we have here. So it shows what's happening in Abu Dhabi.

Absolutely. Um as you said um Brevin Howard was started as a hedge fund has really now become an alternative asset manager where we are multi-manager multifund focusing primarily on macro across all the asset classes and involved in digital which I'll touch on in a minute and from the beginning risk management was key to us because and Aaron Landy the CEO today was the risk manager for 20 years so that shows is what I think of that and why risk management is so important. If you want to be in the hedge fund business for a long time you really it's if you start having a couple of very bad years very negative it puts you in a very hard position a within investors high water marks and reputation. So we always decided from the beginning to build it in a clever risk management way where we would never need a bailout or never be in a position where we were down so much money in a year that we couldn't make it back. And that means from that point of view and compound returns instead of being more up and down shall we say and that was shown because in 2008 and 2020 which are the two main crisis we've had in the last 20 years we performed very well.

In '08, what happened is that once per Sterns um failed, it was clear to me that this was not the end of the story. And between then and Leman's in September 2020, we reduce risk as much as possible, primarily counterparty risk. The issue there was counterparty risk as much as trading size risk. So being aware of that counterparty risk when Lemons went down we didn't have any counterparty issues and that put us in a much stronger position to trade the rest of the year on the front foot as opposed to the back foot. Similarly going into uh the co covid if you living living in Europe you could see what was happening it just hadn't reached the markets yet uh global markets and um again we prepared for that by really thinking through what would be the what would be the what would be the effect of that on different asset classes and not all asset classes moved um the way people expected um nor some moved violently others didn't move much at all u So again there it was really making sure that our stress testing and everything to do that we could see was going to be okay and again the same thing happened.

So we we look at risk management and spend a lot of time on it stress testing positions thinking about liquidity thinking about all those all the all the things outside the box historical events that can help us for the future. Now coming to digital assets, we set up Brevin Digital as a fund um five years ago and the idea behind the fund was to be agnostic to which asset class in this in the ecosystem it's invested in, which part of the of the ecosystem, but it was to get institutional money in to raise money from institutions as opposed to from retail. To do that we have we use the same risk systems that we use in the traditional financial uh sphere and and just adapt them to digital same everything else the same so that we could easily transport the ideas we've learned the last 20 years in trading into digital clearly it's extremely volatile asset um but in so we have to think about what leverage or not we're willing to use in in the marketplace and how much money to be in private versus public in that fund to reduce that volatility as much as possible. But the reality is institutions trust us in that space because they know that we have a riskmanagement brand and uh and over time if institutions do come involved more which has been very slow at the moment um they will come to us. So that's how that's really a key to get institutions in.

So I'm going to push you on I think a comment you made at a previous finance week forum where you suggested that because of your risk management controls for a given period you've never had more than a call it singledigit loss on a month basis right can I push you to say without having to mark tom market in some of those digital assets do you see that same sort of banding in terms of your exposure and the potentially the the pricing moves that would happen in digital assets because that's a No, that that doesn't apply to digital assets more than all that.

That would be nice.

So, in all our other funds, yes, we we've tried to ensure that and so far we've never had uh a month or a year where we done more than a small number uh and say no no no year more than uh less than 5% and that's very different than traditional markets. In digital markets, that's not feasible. Of course, not course. Um but we still have to ensure that the volatility is not um is in line with what institutions expect. And I don't think it's possible to do that in in digital to be what we just said without that those sort of losses.

No,

we're going to put some big marks on Chris over as your CIO for the digital business. But talk a little bit about that ethos because you mentioned the elevation of Aaron from a chief risk officer to now becoming the CEO. So clearly that's not only a point around talent development internally, but it's also probably a signal I think around the focus that maybe the firm has. Well, the firm has got uh the whole point of that was to make it clear to external people that we are an alternative asset manager, right?

There is no key man risk. The risk is the traders, the people managing the money. I don't manage any money anymore. And the and and that's the whole that that is really how we see things. Now, regarding talent, that is the key to our success.

We have to spend I spend a lot of my time actually on that area thinking about talent because as an as an asset manager and as and as a multi-manager um that talent is the key for our growth and it happens in a few ways. One mentoring certain traders. So I try and mentor five to 10 traders thinking about what what did I think were important um over for trading for so long. what are the key issues that I've learned and can I impart impart them on to certain traders and that um takes up a lot of effort and but I only do it really with those traders who are the A-level traders we have and try and get them to A+ I think that small difference moving a trader from A to A+ can really lead to exponential returns and so I work with a few of those if they don't make it they don't make it and I enjoy that though and it really going through them and it's not just um how they look at trades, it's also how they spend their time outside trading. Are they healthy?

Um etc., etc. So, it's a it's a whole approach to trading like a sports person. It's not just the actual bit they doing, what is what are they doing outside work, what how are they thinking about the markets, um sleep, everything, everything to get them in the best performance possible, best position possible to perform at the peak of their their ability. That's one area.

A second area is hiring graduates or analysts coming into the firm. This year we had 25,000 applicants for 50 summer interns.

Wow.

And how do you what do you do with that? And so we've devised our own tests and we're we're optimizing them over time to look for certain characteristics which we think will be join help us join us and work well with us in terms of uh culture and ability and we'll adapt that over time those tests. Um um that's a long process one bunch of tests second bunch of tests interviews traded game etc because uh we want to hire um top quality. I would add that I and Aaron think that young people joining us is the lifeblood of the firm and this cohort who went of 18 to 25 year olds are so smart and they went especially living in co what do they do in covid that's important to know how they use their time this group is so smart so we are infusing the company with as many young people and uh therefore those older people of my age have to up their game they have to they have to adapt to the marketplace and their technology these technologies available so it's It's a mixture of people with domain knowledge um or and experience and younger people and that's the culture that BH has always been around but even more so now with this new cohort so that's what we're doing. So I would say that certainly from an internal talent development, you've talked about the process.

Um Breban made global headlines back in May of this year when the market responded to the news that you tapped Carlos Hernandez of JP Morgan fame out of retirement, but you named him as the executive chairman. And I'm just curious like help me understand and help maybe the audience understand a little bit about that thought process and potentially what that signal is sending to the market the region. Obviously, Carlos is a well-known individual here, but but help me understand that

as well, I've known Carlos for 25 years and he spent 37 years at JP Morgan doing absolutely everything uh managing all the areas and we can discuss that a bit later. So, his experience of global finance is second to none at one of the biggest banks working right under the CEO Jamie Diamond. So clearly the that experience is something we don't have and we can't buy and it's been an tremendous addition and I've enjoyed every minute since he's joined us uh six months ago. But what does it signal? It signals a few things.

First of all, he's extremely strong in this region. In 2019 in the in the whole region coming here knowing many people here but it's an example in 2019 he went 19 times to Saudi Arabia as he did the Aramco deal. No 19 times in a year. So he understands all the players in this region understands the thinking and given that breard has most of our money managed here than any other area it's a great addition to us from in terms of region expansion here and more doing more in Abu Dhabi and so that's one key issue but it it does more than that it it's it continues this what we started a few years ago with Aaron becoming the CEO or becoming a alternative asset manager and thinking how to grow the size the firm in a correct and stable manner while always thinking about performance. And then we we we did the a transaction with Lunate um which is the beginning of that process of bringing in a strategic investor um to be a be a part owner including longerterm LP money.

They've committed you know long-term LP money which is very helpful in the macro markets in trading in our trading funds as well as a distribution of uh products under the lenate umbrella. Um so over time you know Carlos will help me help us develop more strategic investments globally also helping me on things outside Bre Howard which are on the digital side where we have built some companies outside um BH um which are not asset management and his his knowledge of that area is also extremely valuable to me and we've done a few things there which we'll discuss in a minute uh in a couple of minutes that it really signals to the marketplace that BH is moving on no key man as I mentioned and with great leadership. So if I were to take you back in time, I I recall you would come and visit Abu Laby. I think you made a commitment in terms of activating Brevin Howard's presence here well before there was any expectation of let's call it reciprocity, right? Um the commitment for both moving key talent, um activating a regulated presence.

Again, we heard the news of Carlos's hiring in May. you made headlines again in late August as you mentioned when Lunette took a strategic stake in the firm. They call it a strategic partnership, right? So more than just being an investor. Um and you alluded to the ability for that then to create more of a presence, right?

That they have a an additional backing and support. How do you see Abu Dhabi evolving within your global mandate as this new alternative manager? So I think the what the what what AGM and Abu Dhabi done so clever is by thinking through the fact that it's not just about traditional markets it's about the digital markets as well and uh his excellency Ahmed Jazim Alzabi was very clear with me when I met him a few years ago about the vision um of progressive regulation thinking about innovation and thinking about digital as well as traditional markets and that I think is one of the big advantages for ADGM by um by thinking through that. The second thing is his highness Muhammad bin Zed and his strategic vision for the whole region is second to none and situations or decisions such as the Abra being the first country to do the Abrahamic Accords are an indication of how open for business this country is and that's a key message to anyone who wants to manage money here or do anything doesn't have to be an asset management.

Sure. Um, so I think that um the combination of traditional and digital assets, this is a great place to do those two things and that's why we're excited to do more here. We have about 150 people now here. Uh we have a waiting list so we're going to take some more office space at some point and we want to invest more in digital companies that start here because a regulator understands the importance of those companies. I think Brian is mentioning that not every not all others understand the digital but this this one does and therefore that's another key decision factor why we love being here.

So you're probably most well known as being a macro trader. I mean that's really where you began I think your career. It's instinctively how you look at markets and opportunities. Um you had in the past talked about Abu Dhabi being at advantage as a trading venue straddling Asian markets, western markets and really from a time zone perspective creating a lot of visibility across these global trends. I wonder if you think about it from a macro factor and I'm going to put this out as saying it's the middle of macro, right?

Abu Dhabi at this epicenter both from geopolitical economic blocks we see this happening h how do you see that is there not just a Abu Dhabi is a gateway to the wider region but more Abu Dhabi is a gateway to this global liquidity because it's at the central location of this macro

I think that's absolutely correct it's it's we we came the time zone and the middle macro as you say but over time the middle macro clearly the world is bipolar or multipolar and being right in the middle here is the key. You know, a third of the world is only a few hours away from here. Two3s away, twothirds of the world's only eight hours away from here. So being here is a fantastic location and it's for the ADGM Abu Dhabi to take advantage of that situation. And middle macro is exactly right.

So you know we are we are a global firm. We're not one country or the other. We have people in the US in in UK and Geneva and in um Asia. And as I said, most of our trade, a large portion of our trading is done here or the majority. We still do a lot in all the other areas as well.

But um being here is a great it's a great advantage for Abu Dhabi and let's see if they I'm sure they'll take advantage of it.

So I'm going to ask you to put your macro hat on but also expand in the current interest rate environment which obviously whether you're in the digital side and traditional finance side we're all watching um how this is moving now. And you talk a little bit about dollar exposure and increasingly when you look at a dollar. I was in a meeting over the Milin conference and it was ascribed as essentially becoming purely viewed through the lens of being a debt instrument. Meaning that it's relevant as a reserve currency but people have almost lost the connotation that cash had as a settlement mechanism for the buying and selling of goods and services. How do you think about sort of the future of payments?

And specifically what I'm curious about is what do you see the role of digital? We heard Brian's take on it, but I'm maybe even I can get Carlos to weigh in because I I wonder if do you mind if we tap you?

Sorry to steal your thunder here, Alan, but uh he

Well, he he must understand Carlos managed payments for JP Morgan for many years. Well, we can switch chairs if that's not

and therefore um he understands it better than anyone from the traditional side or banking side. What's going on in payments and as you said cash settlement or debt versus payments are not the same thing.

Correct.

And I think we should let let's uh Carlos make a few comments on payment.

Yeah, sure. Uh delighted to and u you know I know Brian actually I'm the one who made the decision for him to go uh no bank wanted to do dollar payments for Coinbase. So it was uh JP Morgan was my decision at that time and then obviously work with IPO very successful what they done. I do think we are going to a phase with web three payments will be the way of the future right is proliferation of stable coins which uh stable coins are private networks. The question is how do you make them to interoperate across the different uh jurisdictions and all that and I do believe that the way of the payments of the future is going to be adding both KYC and compliance on chained simultaneously which makes it harder on digital assets because of the latency of the activity.

Uh I remind people that JP Morgan today sends every day about 12 trillion dollars every day and it's not in bags. It's not in you know trucks or anything. It's all wires but it only happens you know a couple of times a day fed wires on web three you can do it 247. The question is how do you bring the latenc the the KYC and all that and to me that's where the world is going. I think with the Genius Act in the US, you will have a huge proliferation of um stable coins.

I think every regulator in the world wants to be part of it but on their own terms and I think that's where adding the and this is where Brian was making the comments today uh uh the total global GDP digital ass is only 1%. So it's only upside but it has to be done with the right proper regulatory framework to get every big institution every regulator to be part of it.

So I'm just curious as a follow-up to that. You know you talked about the Genius Act and obviously you know during the Trump administration's effort to leverage tariff policy to affect sort of trade balance. A lot of the commentary came back was saying counterparty risk because of the treasury exposure when you're talking about large counterparty sovereign entities maybe EU China and the view increasingly that a large part of these digital wallets are holding stable coins that are backed ultimately by US Treasury. So in a way you're muting the effect that it has at a true GTG level because there's a growing base of stable coins. The comment though is that they're looking for yield.

All right. They don't just want to be sitting captive in a cold wallet. So, can I connect the thought around payment? And I get that from a settlement. But how do we get to digital yield?

How do we bridge one to the other? I

I I think you know what, Nil, that is just a matter of time because if you say, well, the stable coins, you need to have dollar assets or treasuries, short-term maturities to have them. Now it doesn't make sense that the US is paying interest rates of three months when the holders stable coins don't pay anything to the holders. Now in the US when they did the genius act were very worried about the banking system that all those deposits will come out to buy stable coins. So this was like a phase one to go down uh phase two. That's why all to me uh having all these onchain all these you know uh KYC AML surveillance compliance will accelerate all these that in the next few years it's going to be very difficult to see any dollar bills or euro bills anywhere it's all going to be the way the banking system is today where people will get yields you will have one coin in whatever it is issue whatever bank or company and the question is how do you operate it and settle it and custody.

This is where Brian has done a lot uh to facilitate that, but I think that's a matter of time in my view.

Got it. So maybe turning back to you, Alan, as you heard from Brian and I think what Carlos is alluding to as well, there almost seems to be this sense of inevitability around the tokenization of these real world assets. We continue to hear use cases. In many instances, these are aspirational. We've yet to see it occur at scale.

If anything, we we almost hear it. This is a sandbox the regulators allowing us to do or we're charting to do it with this sovereign. Where is the inflection point? At what point do you again you've seen industry move now a lot. When do we start using this as an expectation not a promise and and what are the ingredients necessary to get to a world where real world assets are systematically traded because private markets are as efficient as public markets are today?

I I I I want you to give me the playbook. So, as you said, Brian was pretty clear about where he thinks things are going

and um mentioned stable coins as well as Carid. I think this first with stable coins, Scott Bessant as a Treasury Secretary understands crypto extremely well and has done an incredible job um as Treasury Secretary from my vantage and um has stated that he believes stable coins can get up to three trillion or so, two three trillion within the next five years. And and I think it's not just uh for issuing T bills to help on the debt side. I think it's because the Genius Act really is a key moment to um allow uh a new infrastructure for the markets, not just um the debt being uh T bill of T bill issuance at the front end. Um, so I think the the genius act really is key in terms of if we get to those sort of volumes and change in market infrastructure.

And you also saw last week an article in the economist by Larry Frink and Rob Goldstein from BlackRock talking about tokenization which they've been doing for quite a while but this was the first time I'd seen them publish a joint article um talking specifically about tokenization in this way uh publicly and they've done videos and talks um talking about how the way they see the world of the future. Obviously from their point of view as an alternative as an asset manager who issues issues um funds clearly the more that goes on change the more the more efficient that will be and cutting out middle person. So really your qu so I think that's the direction we're going if stable coins really do increase then I think that will lead to many more people uh in entities moving some of those monies into more tokenized assets. That's number one. Back back to back to your question about what are the issues?

Well, I think Colossus mentioned some of those. It's to do with KYC identity and liquidity. There is no liquidity yet at the moment on secondary funds. Um now we we outside BH has have built a uh with further

have built a tokenization platform called Kyio which is just for funds.

Um and we have a few funds on that platform today. BH Hamilton Lane

Nimura has a fund on it and the idea there is to um tokenize funds for the same reason that we believe it's going to come. I don't know when that inflection point but I think it's much closer it's ever been and my bet will be it will be in the next couple years but who knows.

So you mentioned lack of liquidity is you almost need to have a certain amount of participation before you're really creating any rationalization because today secondary is largely illquid. there's a significant discount when you start talking about moving some of these custodied positions, especially if you're an LP and a private credit or a private equity fund. There's very few mechanisms to potentially monetize that or give you a spin from your perspective and obviously, you know, you're managing assets, but let's open it up as an ecosystem question. Regulator has a role, market participants have a role. You mentioned Kyio, that's a it's it's going to lead the way with funds.

Do you think that from a liquidity standpoint we need more institutional participants or more DeFi participants? And I'm I'm being a bit provocative because it's a very different constituency and I I'm happy to hear a very different answer from your colleagues.

I think we need more everyone involved and and the institutions are not yet coming into the to the digital space like they thought they would at this point. I thought that many more institutions would come in by this point and that's not been correct. I do believe that 2022 and what happened with FTX put them off for quite a while. Now we'll see when they come back with this administration. The last administration was not so positive on digital assets.

This one uh you know debanking people and others. This one is more positive and much more positive. So we'll see if institutions do start to come back. But listening to what Brian was saying, there's a huge amount of institutions calling speaking to Coinbase as much as possible and um so I think they're coming. I don't know the pace but they're definitely coming now as they come in.

Clearly that's one area of the two you mentioned.

Defi is obviously if the um another important area but we don't do that in BH um because of the regulation side

right

so we'll see where it goes

now. Do you believe from the KYC AML side there's a maturation which naturally happens within the DeFi community or is it become again somewhat fragmented where we're chasing liquidity pools where we can find that because if you listen to the FSR they were here in the morning talking about or even VA they clearly want to protect investors right and look ultimately there are qualified investors many of them in the retail they may not have the same level of sophistication and the issue going full circle to where we started risk management, the inherent perspective volatility of digital assets. What's the responsibility a firm like yours has who's now grown to about 35 billion or so, right? A segment of that is going to be BHD, but you're going to grow that much more.

What role do you play and and how do we help?

Well, there are different players, but we're definitely on the size of the regulators side. Okay.

And there's no we can't and you know, I think that's it's a very fair question. It's always been the idea behind digital from the beginning. Where where where is it? You know, I I can have both hats, but from a point of view of a of um of an investor with sorry, of a manager of money for for investors, we are on the regulated side and we're always going to be that way. Um and it will never be any way different.

But outside the regulated industry is a different story.

Sure.

For people.

Sure.

So, yeah. Well, look, we were going to be very tough on Allan because he essentially refused to take any questions, but I've saved five minutes for audience questions. I will protect any very scandalous ones that come your way, Alan. But would anyone like to ask Allan a question on a wide range of topics? It's to you now.

You can just stand up and then

about NFTs as well.

I I will leave the stage for that. Then you can uh you can you can be on there. I I think we had someone in the back who was saying, but um it's a little bit bright here.

Yeah, go ahead.

The question was your outlook on macro

big picture.

Yeah.

Well, first we well first of all I don't trade anymore. So really the way BH manages money is as every every in um uh manager we have on the system has his own views. So I don't really have any strong views on that on that topic.

That that's that's an easy one to dodge then.

Sorry.

I I I could have fallen on that sword very easily. He doesn't do anything anymore. No. Let me let me ask something that if if you are comfortable. You mentioned the Abrahamic Accords.

I I know because I spent time with you and getting to know you. A big part of your reason to come here also was because you felt from a value standpoint, it was the right signal. And I'm not talking about let's step out of the finance world. Let's step out of from a philanthropy from a from a from a humanity perspective. Can you talk a little bit about what Abu Dhabi means to you?

And I I know you've been a almost an ambassador for us.

Yeah. So when I came here a few years ago is it's um what I what I love about Abu Dhabi is it's also the culture and the humanity and we discussed that if you go to Louv you when um three three and a half years ago they had a huge exhibition of impressionist paintings where they where they linked up with the muse douls and the muse doce lent them 150 paintings which they had don't think they lent before ever and it was an indication that this place once is is is booming in culture as well. And when I went to visit the Abrahamic family house, it was it was it was fascinating because my friend was the architect who who won the who won the competition to do it and he showed me the mocks. I thought, well, this is there's nowhere in the world that has these three um buildings and religions in the same park. I've got to go and see it.

And when you go there, uh it's an incredible feeling when you realize how um Abu Dhabi wants to bring everyone together. And as a mini example, you go to the car park there and there in the car park they have all three languages of English, Arabic and Hebrew on all the sides. It's an indication of the detail that's done and how um welcoming they are to everybody and open for business. So for for myself coming here was not only a rational rational and a logical move. It was an emotional move as well

and it was all together. That's why we're here for we're going to be here for the long run and completely committed. So clearly as you now look forward I I think you shared with us at one point the presence today you need to get more office space to grow if your team continues to perform. What is the size of Brevin Howard in this market let's call it by 2030. Well, depends on the depends how much AI allows us to reduce staff over time, but uh I I don't know the number of people, but hopefully not so many, but um um I think we're going to end up having many many more people here because we want to end up at the end of the day to be the main hedge fund alternative asset manager for this region.

Got it.

That's what our plan is. And to do that, this is our base. Um so over time more and more people come here and as an example of that when after I met uh his exha few few years ago within three or four months yes we had 15 people here but then straight away Aaron as the CEO decided to bring over um everyone that wanted to come and visit. So we did a big visit for all employees of BH and about a hundred came in a couple of different times uh to show them what we felt was the future uh for BH and our commitment and that really started the ball internally of people understanding our commitment for the future. Yes, it's not just another office for us.

It's everything and we'll we'll get more people here over time and outside BH all the companies that we build in in digital there's a small number they're all located here.

So look I think we

regulated here etc.

That's why we're clearly excited about your growing presence. I we want to thank you for your partnership right you've been a great friend to the firm at further but I think importantly you've been an exemplar of being a manager who's come into Abu Dhabi um provided both an opportunity to engage and again that the the the kind of quality of management that you've brought here I think is reflective um if you were to leave some advice as a final words to your audience what would they be

yeah I think the main advice is what which is what we did we came here without any expectations. I I we decided within the first three day after I got back, I said to Aaron, "We're going there straight away. Tell everybody." And that's the way it is. This is an incredible place and you should come here and with the long-term commitment and understanding that if you have good products with whatever it is you're trying to build over time, you'll get to know you'll be part of the part of the group or part of the part of the part of the country.

And um you'll if you if it's raising AUM, you'll get raising AUM. We had no money from this region before we came here or very minimal. But you shouldn't come with expectations. You have to show commitment. Believe it in your heart.

This is the place to be. And over time you'll meet people because there's so many different pots of capital here as well. Um that um you you may end up may or may not end up doing something and we didn't we didn't have that expectation.

But I would like to make a plug for digital assets if possible. um that that is one incredible area and um which was not discussed and I do think one of the one of the things that um has died a death in the market so to speak is digital but I feel that there is a link just like there's a link between traditional markets and um digital assets I think over time you'll see digital digital art becoming more involved in contemporary art

you heard it from Alan first I think we are past time I apologize one Quick question. Go ahead, please. You're very popular, Alan. So,

we're being told no questions. Okay. Can everyone

Okay. That's a good one for offline. We we we'll take that separate everyone. Thank Allan for participating.

And remember ladies and gentlemen, our speakers are not allowed to make forward-looking statements. All right. Thank you very much, gentlemen. Now we turn to one of the most interesting topics in digital assets, yield, not only as speculation, but as a structural utility. Leading this panel is Jordi Alexander, founder and CEO of Seleni Capital.

Heat. Heat. All right, let's kick off. This is one of my favorite topics, yield. I initially was in a different panel, but when I saw there was a yield panel, I demanded to be replaced onto the yield panel.

So, appreciate that. Um, let's do a quick round of intros, guys. Uh, so hi everybody. Great to be here. Uh, my name's Henen Orser.

I'm founder and CEO of Soder Insure. Uh, we were incubated by Further Ventures and WebN. Um, and, uh, really launched, uh, in 2024 to become operational. Prior to that, I was the uh first CEO of VAR uh the virtual asset regulatory authority down the road in Dubai. I helped them launch in 2023.

Um and before that I was president and acting CEO of Komainu um an institutional grade custodian that we spun out of Namora uh in partnership with Coin Shares and Ledger uh when I was a senior executive at Namora. It's great to be here.

Hey everybody, great to be here. I'm Olivia Dong. I'm the COO for Caillou. We are a fund tokenization platform. Uh we backed by Fever Venture, Laser Digital, Breven Award.

Uh we tokenize alternative assets close to 300 million of AUM to date. I'm also with Laser Digital where we invest into early stage company in the space. Great to be here.

Awesome. My name is Andrew Gibb. I am the CEO of Twinstake. Uh Twinstake is an institutional staking provider. um been around about four years now uh providing staking across 18 proof ofstake chains.

Uh currently have around 4 billion of uh client funds and um the segments that we really operate in purely institutional. Um we've created a niche in the ETF issuer space, asset manager space, hedge fund space, also servicing some large VCs and foundations as well. Prior to Twin Stake, my background is really in traditional finance. So I was 10 years at JP Morgan.

Hi everybody. Uh my name is Matthew, co-founder and COO of Gravity. Uh it's about JRvT. Uh we are a perpetual decentralized exchange. Uh to date, you know, we have uh I think with Purpex season uh just uh recently started.

I think we have uh gotten a lot of traction. Uh today we have about 50 mil in TVL. Uh we have about 250 mil in open interest and uh average uh trading volume of about 800 mil to 1.4. 24 billion uh dollars a day.

Um for us, we're very happy to be here. I think we have one of the further port codes. Um and I think we're very uh happy to create a product that is uh for for yield, right? So we do believe in creating uh and becoming the best yield product uh within the DeFi space. Um so we're very happy to be here on the panel today.

Awesome. Yeah, I mean I've been in crypto a long time and yield is something that really came up around 2020, right? Around like DeFi summer, we started having, you know, the retail mania around yield. You have all these uh food coins. I don't know if anyone was trading the food coins like you had like yams and wasabis and different different kind of coins.

Um people quickly realized that, you know, most of those coins are worthless. But this concept of people looking for yield on their underlying assets, you know, you have digital assets, you're holding them, whether they're stable coins, whether they're Bitcoin, ETH, you're holding these assets. If they're not productive assets, um, at some point, people start getting creative, sometimes too creative. We did see some big blowups in the history of crypto, you know, like Luna and and some of these things. And it's very cool to be here with you guys now in Abu Dhabi because we've developed the industry to the extent that it is professional enough now.

and other gentlemen up on stage, they are in a completely different segment of yield um in in DeFi and there's maybe a couple more segments that are even you know uh we'll get into but I'd love to maybe start with like the vanilla. So maybe um this is one to understand like forever stake and and you know that business just kind of what are the the basic kind of challenges and opportunities basically I guess you said 18 proof ofstake chain so these this yield is risk-f free yield this is we're getting to like the zero risk is it zero risk or is it almost zero

nothing zero risk nothing zero risk but it's essentially the risk-free rate of the industry right so I think as you mentioned we've got different gentlemen on this on this panel that you know cover pretty much the risk curve of yield But it starts with staking. So if you really kind of take it back to first principles of what staking is, you're essentially locking up your capital for a period of time and that depends on the underlying rules of the protocol. Can be dynamic, can be fixed, but you're locking it up. You're securing the blockchain and if you do a good job at that, you're rewarded with more tokens and that's your yield. So like you said, if you are invested in uh a particular uh digital asset, you really should be thinking about staking.

Otherwise, you're immediately bleeding to inflation.

Yeah,

it is the equivalent of the risk-free rate. The considerations and risks are very well known. It's not a zero risk. We can talk about slashing when people think about the downside risk of of staking. You can lose your principle.

That's where insurers like sorry soda come into play. Um but it's reasonably well known. So at twin stake, it was the first thing we had to do was how do we protect the client principle. So security is always number one. Then it's how do we deliver market leading returns on those staked assets.

So we've done an incredible job over the last four years. We're top of the market in terms of performance. We've got a you know incredible track record on on on the downside as well. No security incidents and that's really where it fundamentally starts for institutional yield.

Yeah. So if you are holding a proof ofstake asset like Ethereum, Salana and you know a lot of other chains it is kind of uh it's like holding dollars without getting the treasury yield. it just, you know, you're slowly getting chipped away. Um, and and Hansen, so, uh, you're working on the insurance side, bringing insurance into these protocols. You were kind of describing how there's some yield to be had for providing that, um, that capital can be six to 8%.

How does that kind of tie into, you know, the rest of the ecosystem?

Yeah. So, so post 2022 there's um been an obvious need for regulatory framework um and and clarity and we and we've seen that evolve in in various jurisdictions with of course the UAE and places like Bermuda uh leading the pack on that coming coming out of the crypto winter of 22 23 um what were the killer apps for um crypto it was obviously uh the proliferation of stable coins And then Bitcoin proving itself resilient um and as a store of of value as central banks debaseed their currencies. as we've gotten this um proliferation of of regulatory frameworks, people getting licenses have uh been required to get insurance products and that's why we launched this insurance company um because every viral lency and um every regulated financial institution needs some sort of insurance and with our our our strategic partnerships and capital stack um here out of Abu Dhabi and London and New York um we have a whole manner of portfolio companies that that need insurance product. Um, ironically being here in the capital of capital, um, what I think Bitcoin is now proving is that it is a store of capital. Um, so that if you have dollars and you put them in the bank, um, you can, uh, earn interest from the bank committing that capital and if they do it well, you get return on your dollars.

Um, there lots of people looking for yield on Bitcoin right now,

right? I mean, Bitcoin has zero native yield as opposed to the proof ofstake chains that have, you know, something inbuilt. You're starting with zero.

Yep. Risk-free rate.

So, you got to figure out you have a valuable asset, you can use it as collateral. And if you're if you're sitting on a billion dollars worth of Bitcoin and you're expecting to hold it for the next 10 years, um if there is a way to keep it in qualified custody and safe and people love insurance and reinsurance returns, if we can underwrite effectively using that Bitcoin as regulatory capital for crime and specy policies or DNO, we underwrite in Bitcoin, we receive premiums in Bitcoin, we pay claims in Bitcoin. And if the premiums are more than the claims, uh the the the people who provided Bitcoin as capital get a healthy return on their Bitcoin. And that that's very powerful with how much uh in the environment where that's diversified against the other sort of major ways people are trying to get yield.

I mean there's there's huge demand like you said there's so many billions of Bitcoin sitting. It has this property gold doesn't have which is that you can actually verify where it is and you can securely move it around easily. you don't have to have it in vaults that nobody knows, you know, what's inside the vault. Um, of course, you know, in the past we've seen people go too far where, you know, last cycle they were lending out to trading firms that were taking way too much risk and just trying to get yield on that. That that didn't work.

So, I think we're learning a lot of lessons. Um, Olivia, I want to come to you because you guys are not taking risk. you're in essence offering things that are in the traditional world like funds, private credit, things that have, you know, stood the test of time um and that people here are very familiar with and you're kind of bringing easier access. What is that going to look like you think in like the next three to five years?

Yeah. And I think the the main reason we focus on that is um driven by the genius act and the stable coin act in a way. have a lot more fiat coming on chain and those investors holding those digital dollar are they not going to want to invest into analog product nor are they necessarily going to be comfortable with you know some of the pure crypto yield given you know various risk associated to this so what they want is um digital product that they are comfortable with and that's where we're coming we offer traditional funds relatively hard to access funds so hedge fund reven for example or the private credit fund from lane we're going to announce tomorrow with So well fund that we're working with them to tokenize one of their strategies. So very hard to access product that we're bringing on chain and um the beauty of this is that not only it's easier to access it cheaper. Obviously it's more transparent.

We're going to enable composibility. So you're going to be able to use those tokens representing those funds into boland protocol for example and get the loan on the back of this. And so this loop uh of more stable coin, more fiat becoming digital, looking for more kind of digital product is going to be a a tremendous virtual virtual circle for for Kyo.

Let let's explain this loop a little bit because it took me a while, you know, when I first was hearing about, you know, these kind of loops. Basically, I'm subscribing to a fund or could be a money market fund, you know, something that has some yield, private credit, and I'm getting, you know, 8% on it. In essence, instead of just getting a bank statement that says, you know, you have this much in the fund like you do in web two, now you're getting a token that actually is like, you know, is it a barrier asset? Like, you know, whoever owns this token owns this underlying instrument. And in essence, now you can borrow against it.

And if you want to what this looping is you borrow against this you take dollars for 4% you know whatever is like the market rate for that and then you buy more of the fund for 8% and you have this arbitrage this 4 to 8% and then you can kind of obviously if the thing ever explodes then then that there's a risk. So you were telling me that you don't want to loop too much if you're doing it institutionally there is something to capture.

We we don't provide the looping you know we enable the looping uh through the composibility of the token. Uh so we tokenize on Ethereum, we bridge with gateways across 10 different chains and then those tokens you can use in um Camino and Solana. You can use on Havizon and to your point loop it as many time as you want depending on your risk appetite. It's like today if you want a loan against your money market fund unless you are with a large private bank is going to be hard for you to get it. Here with a beauty of kind of defy you can get uh this borrow uh this margin loan.

You can loop it to your point depending on your risk level and that's why tokenization I think is so attractive. It's not just cheaper and easier to access those type of product is the composability that you get on the back of this.

Yeah, absolutely. Um let me come to you Matthew. I mean your category is quite interesting. So you you you guys are doing uh like a decentralized exchange and in essence like there are all these trading strategies that can be done on a decentralized exchange. I mean, you know, we've seen things explode like Hyperlquid, which is now like a 30 billion product, which is kind of insane.

Um, and it just allows anyone to run strategies and put capital. What does that landscape look like?

Yeah. No, I think um the landscape itself is actually very very interesting because there's two types of players within the space, right? There's institutional player as well as the retail player. But in light of this, there are also two types of actions. There's P passive yield and there's active yield, right?

And that's where vaults come into play. And actually, this is what's great about the blockchain and great about crypto is that it's a great equalizer, right? It allows users to come in uh and have the same type of uh activity, exposure and uh opportunities as uh other venues. So, in the very same way for us at Gravity, what we have done is we have created um a youth uh flywheel of which we pay all makers uh negative maker fee rebate. So even as a retail coming in when you trade you are also able to uh get paid to trade.

Now why does this matter as well is the fact that um in addition to that we are also giving all users 10% uh yield for any uh deposits that they put within the gravity trading sub account. Uh and why is this great? Because this points it all back to the aspect of of your question, Jordi, which is vaults, right? For us today, we have we have uh gravity liquidity provider vault, which is a marketmaking vault. It gives out about 30% APY uh at a 7.

6 shop ratio. Now, why is this good? It's good because this allows retail users to come in to invest in the vault without needing, you know, like a minimum ticket size. For example, in in traditional finance to invest into a millennium strategy, you need to be a high net worth individual. You need to have access to to you know some of the RMs.

They have to choose you to say, "Hey, I want to take your money." But in in in DeFi, the vault is there and if there's capacity for um the institutions to take your uh your investment, you're able to do so. Uh for us at gravity we have created uh a platform whereby multiple you uh institutions can come in create their vaults uh offer their vaults and allow retail users to come in to invest into the vault 30% APY uh APR with 7.6 six sharp ratio in just a traditional sense very very difficult for you to get access to this but in gravity and on defy on chain this is a non-inflationary type of vault it is a market-making type of vault it's something that you know is really investment grade that retail users or institutions can come in to invest as well

I think sorry if

yeah please go ahead

what's interesting is we mentioned about the kind of risk curve and where institutions sit if we just focus on institution and put retail aside for a Second, I think what's interesting to me is it still feels that we're quite early from an institutional perspective of going down that risk curve. We have some incredible solutions in crypto. I think they're very elegant and you can start to move down it in a structured way, but it still feels that the the kind of volume that we want in the space is still quite early on and and down the risk curve, which is what we're seeing from from the core staking product is when we speak to them about the other alternatives and and we say, "Right, core staking will get you two and a half to 3% on ETH, maybe up to 10% if you're lucky on Salana. But you have all these solutions uh you know you've got liquid staking restaking liquid restaking and you can sort of increase your yield in that sense but there's still a touch of trepidation around D5 from an institutional perspective that I think just needs a little bit more time and and and history to come through.

Absolutely. Um I love the word vault. You know when we deal with digital assets sometimes these words like coins you know obviously these are just zeros and ones and it's just this concept that we take from our physical world of a coin and we just you know there's some accounting being done within the the code that keeps track of it and we just call them coins and now we call them vaults now you put the coins in the vault. So um another thing that's uh you were telling me Hansen is uh we have these lending markets like a for example that are now trying to become you know FDIC almost um insuring their users to can you tell us a little bit about this like new um idea that they're they're starting to push out. Yeah.

And I I I think A announced publicly that they're working on an insurance pool um where every user uh in a will be insured up to a million dollars uh certainly on their stable coins. Um and and the way we think about it is that you know just as there's FDIC uh insurance in the in the US where every depositor is insured up to $250,000. um you need some sort of pool or safety net so that every saver doesn't have to do deep credit work on the depository institution that they're going to work with. Well, it's it's unfair to think that every potential user of a DeFi borrowing lending protocol should have to do a deep dive on the tech infrastructure. So to the extent we can establish insurance pools where sophisticated investors who have a lot of money um do need to do their own work um and understand the risks they're taking.

If we do want to get broader adoption from retail um we need to have pools like that where people you know are insured up to a million dollars or 10 bitcoin or or some something along those those lines. And I think that that uh encourages broader adoption. And then it's of course always like the the chicken and the egg or the horse before the cart. If people feel the deposits are safe, there's going to be less of a chance of a runoff.

I mean, that's how insurance adds value to the world. You have people that, you know, they want to use something like a they want to get the yield. they don't exactly understand the the tail risk and they can't do the due diligence themselves but somebody else who's done it can come in and just you know take a little bit of the of the yield and you know make them risk-free in essence insure them so that's something that I think is a wonderful kind of building block we only have um eight minutes left I want to do some rapid fire questions uh Olivier like what do you think about tokenizing these like real estate yields and stuff like this I mean we've talked about private credit money markets those obviously make sense there's always talk especially in this region and in Dubai around tokenizing real estate and maybe yield of real estate. Is that something that you think is it's going to work or

I think it it's going to work but it's hard um to do it globally. You know each uh local jurisdiction has its own rules around real estate. So if you want to build a global platform which is what we're focusing on at Kaio you want to select an asset class that can help you scale globally. So we start with funds alternative assets. It's you know trillions of kind of a dollar that you can bring on chain in a relatively you know processed type of way.

You don't need to replicate in each jurisdiction beyond distribution of course whereas real estate is harder even in the US you know state by state the law varies. So it's hard to do it at scale in this region they do a ton of work. It's a well kind of designed ecosystem for this but you want to bring what you're doing here into Europe it's very hard

and then bringing to the US even harder. So I think you know I like the asset class but I think it's going to take time before it reach you know the scalability that you're going to see more in alternative assets initially.

Mhm. And Andrew I mean when you talk about the proof ofstake ecosystem I would say you know a few years ago there were a lot of proof ofstake chains that looked like you know they were going to keep growing and a lot of them haven't you know

don't ask me how many are going to survive if that's

what's that

don't ask me how many are going to survive if that's where you're going.

Are you seeing interest in like new ones? I mean, we've seen something like Monad launch, some of these kind of newer chains. Are the new ones still looking interesting for demand side?

We've seen uh fewer launches this year than last. And I think that's somewhat expected because I joke, but like you can't have an infinite amount of L1's and L2s. I think the ones that do come out have to come out with a particular value prop. They have to be very, very specific. And I think if they do, then there's space.

I think what we've seen enough of is general purpose L1 launches

and kind of get your view on these like digital asset treasuries. I mean, you know, this has been one of the stories of 2025 in digital assets. You've had people trying to copy Michael Sailor and we've had Tom Lee be pretty successful at some point. Um, are these digital asset treasuries, are they staking the yield? Uh, are they are they generating yield or like are they coming to, you know, firms like yours?

like what are they doing?

They are uh you mentioned strategy earlier. Uh I think they're slightly less sophisticated obviously they're they're newer entrance. So at the moment kind of coming to market deploying on the asset and then staking that asset which is a a reasonable thing to do. I think my view on DATs is that they're they could be a complimentary product to other uh uh products that we have such as ETFs. Nice entry point for people into crypto.

uh we're already seeing that they're coming with mixed success. So I think to me when you talk about mixed success it means that there it's kind of right for consolidation. You will have particular winners and then those that aren't will probably get wrapped up. But I think it's a it's a good solution and there's definitely space for them.

Yeah. Um and Matt, I mean we talked a little bit before about prediction markets. I know that's something that you know you're you're starting to look at and we've seen the the ridiculous raises. I mean, I don't know if you guys have seen the Poly Market and Khi raises. It's like 11 billion 12 like they keep getting billion dollar checks in into what just is like a DeFi.

It's it's like an app on Polygon or something. And suddenly it's it's worth more than the entire chain, you know, times the multiple. I don't know exactly what's going on, but clearly these things are are very popular. And I think some of it's sports betting, some of it's the political, you know, interest people have. Um may may maybe you can tell us kind of how how you're seeing the that category.

Yeah. Uh for sure I I think for us I mean you look at the concept of prediction markets it's just very very interesting because every sort of category you can start like uh take a position on right uh and there are obviously some people that do uh take a lot more information uh and have some form of asymmetric uh you know edge against others. So I think that's also where I lead it back to vaults is a lot of use uh institutions or you know more uh users with a better edge they can start hosting their own vaults that invest into predation markets um and I don't even think that's where uh I guess that's where a large portion of the pie is but I think as we actually see more products uh start getting listed on chain is not only just prediction markets but eventually FX commodities equities once you have all these sort of products s and verticals in play the o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o opportunity for yield just becomes tremendous. Um yield b b b b b b b b b b b b b b b b b b b b b b b b b b b b b b b b b b b b b b b basically can be found in anywhere where there is some form of value transfer be it on the active side of an institution that's doing either a traditional 2 and20 model for their vault or just the user that's just investing into the vault. Um I yeah so I think prediction market just makes it e like the world uh it just increases the amount of opportunity that you have and like you said you know it can be sports betting it can be weather you know it can be all all these sort of silly things or even you know which which which uh which change might be last you know which which will last into the future.

So it's interesting because like even something like prediction markets which sounds like you're just betting on things there is a yield component in the sense of like there's like an almost risk-free yield where you have a lot of these markets that have kind of settled like you know there might be an election and you know all the polls are showing it's like 80% 20% of the vote. So it's basically done and the prediction market can't settle until the actual event happens. So what you have is you have a period it could be like weeks where people in essence are you know just wanting to get their profit out. So it might be trading at 95% even though the real percentage is 100%. Like it's a certainty

but there's a 5% yield because it's just the time value of money while you have to sit there and wait for you know the event to conclude

while somebody else might be willing to take that

and the gambler just wants to take their wins and go to the next game.

Yeah. But I think it's also quite interesting because prediction markets doesn't have to be settled on one subject right it can be you know the election but the election is al like there are also many fundamental cascading uh dependencies to the election so people can counter hedge and you can create some form of you know structured product around this whole thing.

Yeah. Um we only have time for one more question. I did want to talk on restaking. Andrew we I know like you you've looked at this concept of restaking. So like you guys do the very you know proper institutional staking this is inbuilt in the code and then there's this concept of reststaking that you know appeared and you can even do it with things like bitcoin and USD not just proof ofstake assets.

Um I think that always needed demand like somebody needs to take that stake and use it to secure something. Is that category still interesting institutionally you think or how is it looking? uh it it's still quite early in in the institutional restaking space. So restaking is the concept of shared security. So if you're providing validated services on Ether, you can then do it on certain ABS's or middleares as well.

So you literally utilizing the security of one blockchain to secure another. So it's a nice and elegant concept and we saw a big uptick, a lot of excitement in the industry um a couple of years ago now when it first came out. But what we have seen is that as I mentioned these things from an institutional perspective still take a lot of time. So with restaking it comes with additional risks and so you can get the uptick in yield but you have to accept the risk at the same time. So which has meant that you know at the moment I would say it's um predominantly retail uh in that space.

uh separately if you look at something like Bitcoin staking. We can talk a lot more than 30 seconds about Bitcoin staking. Um but that's kind of struggled from an institutional perspective to really kick off. But it doesn't mean that that's always going to be the way because I do believe that they're both very elegant solutions. I think it needs a little bit more time, a little bit more history for institutions to get comfortable going down the risk curve.

Awesome. Yeah, Hansen, Olivier, Andrew, and Matt, it's been a pleasure. We're out of time. Thank you guys.

Thanks, Jordy. What are the other for the socials? Thank you so much, gentlemen. Behind every userfacing interface is a stack of pipes, nodes, settlement layers, compliance rails, and infrastructure. To walk us through the technical and regulatory foundations of next generation markets is managing partner of further smati.

Hello.

Great.

Yours. Um so today we're going to tackle the topic of next generation institution infrastructure. And with us we have starting on my uh on my left Julian CEO of uh Zodiac Custody Standard Chartered Bank institutional digital asset custodian. Uh ClariS co-founder and CEO of DFNS. Uh leading a MPC wallet as a service platform powering secure programmable digital asset infrastructure.

uh Nurup CEO and co-founder of Bridgeport, a platform enabling real-time compliant settlement and transfer of tokenized assets and Ash, founder and CEO of Kemet trading, a next generation digital asset trading and liquidity platform built for institutions. Um maybe just to set the the scene and the background um would love to go back and see the latest trends over the last 12 and or 18 months uh in each of the verticals as you represent each one of you the the full stack of the institutional infrastructure and maybe starting with you Julian uh Kos has always been viewed as a foundation for in for institutional uh adoption from your vantage point what has changed in the last 12 to 18 months that has finally pushed institutional adoption for digital assets.

So I think the answer to this is uh multifaceted um as you'd probably expect. So clearly regulation has been uh key in a number of jurisdictions uh also who's been in the white house has changed a lot of the dynamics globally. Um and then I think what you've got is um you know adoption that is moving out of the innovators and earlier adopters and going into the mass market and everyone says when is this going to happen when is institutions going to do it I don't think you ever get that single moment a single date that you go this is when it did happen you can argue black rocks ETF is a very good example and probably a very public one but what we're finding is that most institution and banks banks are looking at digital assets and I think what's important is what do we mean by that? Some of our clients don't care about crypto. What they care about is stable coins or they care about tokenization of real world assets.

So for me I think what we're seeing and what we have seen over the last few months or 12 months or so is is really the conversation changing to not if this is going to happen but how do we respond? how do we work with this technology and how do we ensure that we can deliver this for our customers.

So I think with that backdrop maybe moving to Claris uh obviously you you are running one of the fastest growing wallet infrastructure uh platform uh today. Um looking at the last 12 to 18 months what are some of the use cases? We talked about stable coin tokenization of real assets. what are some of the asks from your clients uh in terms of use cases and enablements on on the wallet side?

Yeah, of course I always say it's been a year and a half that it's finally fun to do our business. Um when we started building defense, we built an API first platform for traditional finance industry, right? So what we designed was a platform to enable any fintech banks to start building use cases on top of our infrastructure. were not the use case were really behind the behind the scenes. And just to come back to your previous question and to answer the the one you're asking me, uh I think what also happened last year is that we saw one company Stripe Bank bridge for over a billion signifying to entire to the entire finance industry that blockchain mattered.

Right. And I I really like how you position it, Julian, because at the end of the day, what we have in common is that we're leveraging blockchain technology, but for an industry that is not crypto, that is not stable coin. The industry is finance, right? So our market is the finance market and little by little use case after use case. The finance industry is adding to its back end blockchain technology and a way to secure and safely transact on this technology to make processes more efficient to start offering new product to their clients to build programmable finance with programmable money.

Uh and obviously one of the killer use case that we've seen uh uh growing fast over the past 18 months is everything related to stable coins. So today we do about four to five billion of volume per month and I would say about 70% is stable coin related right so it's a lot of volume on use cases that are cross border cross border with obviously USD uh USDC USDT on the other side of the leg right so very much um focus on the dollar economy we also do quite a bit of remittance uh global payroll is growing a bit and over the past month have been super excited to see traditional institutions actually looking at treasury management solution. How do we you know on both side of the Atlantic so not only when you're looking at uh uh uh USD stable coins how do you actually leverage stable coin at large to enable your corporate clients to have a more efficient use of their resources and this is this is amazing because at the end of day when you unlocking treasury use case you actually need yield products you it's convergence of everything that we've been building for the past five to 10 years that is being solved uh and and and given and abstracted away to to their clients. I guess moving up the stack uh nerup um you know custody and wallet infrastructure are essential but institutions um struggle as well with a core issue about uh capital inefficiency and uh and funding um from from you know bridgeport is obviously trying to tackle that from your uh point of view what are the biggest barrier today for institutions trying to to trade across multiple venues

yeah I'd say the issue issues aren't just today. It's been prevalent in crypto since the beginning, right? Because of uh inaccessibility to crypto, its illquidity. What uh happened was uh exchanges were created and exchanges required preunding to be the own one and only method by which customers can get access to crypto. As the that uh industry grew, so did the exchanges, so did retail.

But that one simple process of preunding remained in place. And for all of its faults, it worked until it doesn't. And we've had many instances where it hasn't worked. And each time it's a wakeup call. It's a catalyst for something better.

But unfortunately, crypto has small uh as as as a very uh limited memory. And we go back to um we go back to the preunding method, right? And the reason why we started Bridgeport came out of a a simple uh pain point. Uh my co-founders and I all come from FX and fixed income. And in the first runup uh in to to crypto in uh 2017 when Bitcoin was going up to $20,000 for those who were around at that time, the banks had an insatiable appetite to get into crypto.

Like the mania was more uh more palpable than it is now. So we built a spot crypto exchange back in 2017 and we spent about a year connecting into Fidelity as a custodian and I realized right then and there that for us to have a multi-custodial model we can't be spending all these resources as an exchange. So unfortunately we didn't get to go live with that platform for various reasons. It was a crypto winter CME came and bought all the platform. So we did a stint at CME of focused on uh crypto futures at that point and I saw the pain points that those uh same trading firms that were trading futures were experiencing in the spot market.

So if you think about the issues that preunding brings about its credit risk, it's uh its low ROI, its opportunity cost, all of that can be uh encapsulated as capital inefficiency essentially, right? So, I was speaking to a trading firm just today outside over there who's preunding 200 million on up to 10 different exchanges. When they're not trading on any one of those exchanges at any particular point, that's dead capital, right? That's opportunity cost. That's they're putting themselves uh to credit risk for for no apparent reason.

And that's what we're looking to build. So, for those who aren't aware, Bridgeport is middleware for off exchange settlement. So, we connect exchanges to custodians. Um so trading firms can hold their assets at a uh regulated and secure custodian and use Bridgeport to allocate credit balances uh or risk limits on various exchanges. And what's stopping the what's stopping institutions from uh evolving into a model that doesn't require them to preund uh is a lot of those barriers have been really been taken away in the last um year or so.

Right? So we've had regulations as Julian mentioned and Clarice alluded to specifically in the US with the with the with the imminent passing of the clarity act which requires um where the core tenant is which requires the exchange to segregate their assets from the customer assets. That's one step removed from third party custody and off exchange settlement. So over the coming years, we are going to see a better path for institutional adoption and that's just not a prediction for my part. It's just going to happen.

Uh where where how how is crypto going to go from the place it's at now to 100x to what FX is, right? That's going to happen because the asset managers, the capital allocators, the hedge funds that are all in this space today, they're going to allocate some portion of their assets into crypto and they're not going to preund. That's that like that is a given. So we need better infrastructure, we need regulations, we need better processes to enable uh those asset managers and asset allocators to participate in crypto and I think that's what the entire panel here is really building and gunning for.

Makes sense. Um maybe moving to the top of the stack with you Ash on the trading side. Um what are the biggest structural changes institutions want to see in derivative and liquidity before they scale up? We talked about you know adoption and you know push you know having uh you know volumes similar to what you have in other markets like FX. What do you see today are the the pain points uh for that adoption.

I I think the excuse me I think the pain points have you know um more or less remained the same for the past like many years. there still isn't a true prime broker in the space. Uh there still isn't true like cross margining around the space. um that in itself introduces like massive capital inefficiency and everything else that all my colleagues here like we're we're talking about just makes the problem even you know bigger right so um the fragmentation around liquidity the fragmentation around like collateral um all that stuff makes things just very hard for a lot of the institutions to kind of like come in and start really sort of providing you know uh uh deeper liquidity to the space and and really getting uh uh involved um some of the shifts that we've seen though um is also the fact that like while the vast majority of options have remained to be traded like OTC we're seeing a lot of of that volume also starting to shift uh with on-screen liquidity right like infrastructure is definitely getting better from a trading perspective not just what Kemma provides but also like to be fair other providers as well are getting better um and in turn that just is getting these institutions to be feeling more comfortable moving bigger and bigger volume um onto order books um I think in general like from my point of view that this this one thing that really needs to be solved for is a true prime broker in the space like a big enough balance sheet. Um we saw Coinbase acquired there earlier this year uh Ripple um going for Hidden Road.

It's clear that like you know there's definitely people that are very aware of this being a massive hurdle in front of institutions and I'm very excited to see what you know some of that approach going to yield uh into like next year

makes a lot of sense but you mentioned prime brokers and other missing pieces in in the stack today. Maybe looking at the future in the next five years, are we do you see the stack replicating what is in trfy today or do you see really truly developing something that is unique to blockchain and how do you see that that change? Maybe starting from you Ash and then we can hear this from other panelists.

I I don't think the term blockchain is really going to be super relevant in the next like 5 to 10 years. I think better user experience is just going to kind of remove that barrier altogether and everyone's just going to look at the financial rails as it's just one large financial system. Some of it might be running completely on chain, some of it might not, but it shouldn't matter if it's super sort of inter like operable and people are not feeling the friction that much. Um I think the less we sort of stress on words like you know tokenized or um web 3 or digital whatever

the more people are going to start looking at this ecosystem just like one big whole like new financial system that engulfs everything right from

bluechip native like crypto like you know Bitcoin Ethereum all the way to you know tokenized uh u equities if if that's even going to make sense like at some point it's not going to be tokenized equities it's just going to equities as it is but it happens to just move more efficiently and just faster and just super global and it's instantaneous right uh that's kind of where the world I think is is heading to and I think all infrastructure not just us as technology providers uh not just custodians right or settlement layers or wallet providers but also exchanges right and and everyone that is like involved in that entire stack are all going to be building towards like that one unified worldview which is you know trade anything anytime, anywhere, right? And it shouldn't matter how you're approaching that uh um problem altogether. So,

but uh maybe just to follow up on that one, there are some unique features that you know, blockchain, you know, I've talked about settlement layers and all of that enable uh you know maybe to double click on that question are we still going to need all the layers of the stack that you see in TRFI or is you know the T+1 settlement uh you know the market capital efficiency etc. does it drive you know some innovation and significant changes in that stack? I think oh

yeah sorry yeah I think the vast majority is going to you know shift to the new world but

like you know there are people still using faxes today right like it still exists to some extent like you know what I mean like I think there's always going to be like bubbles

across the globe that are just

still very reliant on specific workflows

but I think what this technology sort of promises in terms of you know financial market openness and you know being able to access anything from anywhere is a little bit too hard to kind of resist. Um I don't have an answer about like is everything going to be powered by some L1 at some point.

Yeah.

Um and I don't think people really care. Uh I think what matters the most is like who's going to be able to offer you know the most exposure to you know financial instruments uh through the best distribution mechanism ever possible. Whether that is through a hybrid of you know some different place together or it's like one single protocol that somehow delivers on that miracle um I don't think it really matters for the consumer both in terms of institutions as well as retail right I think all people really care about is can I now you know do much more than I used to be able to do before this technology definitely promises that um where we end up has to be that sort of end goal how we get There is going to be a a variety of different answers by a variety of different people. Right.

Amazing. Nuk, would you like to

Yeah, look, I I agree with Ash here. It's uh I think at some point we're not going to call it onchain and offchain. It's just going to be finances mentioned, right?

Uh I'm reminded of uh but I don't think the entire gamut of trading will move towards one direction necessarily. There's still going to be some holdouts like the to give you an example in in Tradfire interest rate swaps is still not electronified whereas FX was like 30 years ago. Uh in swaps they've tried again and again for 12 years or 15 years and uh for whatever reason there traders still call up brokers right and get prices right instead of putting that on putting that on the screen. So there are particular reasons for that and in the same way there might be reasons why not everything needs to go onchain. And I agree here it's it's uh uh at some point uh that's just a evolution of technology that finance has adopted right going back 200 years when uh when the stock market was held under an elm tree on Wall Street to 100 years ago when that evolved into a ticket tape and then Swift in the 70s and then uh we saw electronification in the '9s and now cloud-based technology and now we're seeing onchain right this what finance has done it didn't invent the technology.

Finance adopted what was uh what was invented at that time for its benefit. And I see that happening here as well. We're not talking about uh blockchain for finance. We're talking about efficiency and we're talking about access, right? And blockchain or in some capacity will offer that not just for crypto as Ash mentioned.

It could be it's going to be for equities, it's going to be for FX, for whatever asset class you want to trade. This is the technology that will be used as the market evolves. Like right now we talk like internally in the company we talk about onchain strategy and offchain strategy. We're facilitating both sets of um uh both both protocols if you will and at some point that's going to converge and we're just going to have one strategy which is just going to be it's going to be on chain. It's perhaps going to be multiple onchains for different for different reasons.

Equities could be on one chain. FX on something else, right? That's hard to predict. But what's easier is that it it is eventually going to converge into one point and we'll just be talking about that technology rather than uh what's going to happen uh and where.

Amazing. And I guess you know picking on that you know seems that we are moving into or the industry is is solving for the T+1 settlement. Um maybe with you ClariS um you know in a T+1 environment how does defense or DFNS building wallet infrastructure that can operate in that you know T+1 in terms of like security and regulation and

authentification ju just to follow up as well on what was said um I mean at core banks business asset managers business is trust right and what's around trust is stability so Even though the technology we're using is efficient, even though there's, you know, new opportunities in in terms of bringing assets to new clients and and bring new asset class to to finance to traditional finance as we know it. It has to happen in certain framework that doesn't disrupt the stability. That's the core of their of its business. So I also don't think that overnight everything will become on chain. I think that some actually uh uh things should stay off chain at least for a while and if you try to put all your compliance on chain it's going to cost you a lot and that's probably not the best way to sell your use case at first right uh but yes there will be there will be convergence on our sides what we're really trying to do is make sure that we build a platform that can adapt to the constraint of those traditional players meaning that regulation is a constraint right so when you operate in Abu Dhabi when you operate in Hong Kong when you operate in Turkey regulator is telling you this is how you should operate you should have at all time 95% of cer 5% of hot you your clot should be on local jurisdiction right so all these constraints we want to make them ours so our clients so custodians so banks can start building their services on top of of us so for us how do we solve TZ right is by building a platform that is modern enough to be global, right?

To be able to equip a bank that operates in the US, in Hong Kong and in Turkey in the same time. So, it's by providing that flexibility and that modularity is by understanding the constraint of our clients. They operate and they've been operated the same way for the past or it's evolving but in very stringent uh uh constraints for the past 10 years. We need to adapt to these constraints. we don't need to come and you know change the world and say that's the new technology you should put within within your system.

So it it's all about you know that modularity and that authentification that sorry and that um uh um that moderity and that flexibility sorry that will enable our clients to actually build the use case their needs within the constraints they have. So T0 is solved by you know making sure that settlement can happen fast right it's it's solved by making sure that you can uh unlock wallets and you provide visibility to your cl to your to your clients on you know when funds are coming in. It's it's solved by many features, but we're building in in into providing that auditability and that uh um and that ability to actually achieve a specific use case.

Amazing. And maybe just uh from your vantage point Julian, how do you see uh regulation given you have operations across different jurisdiction, how do you see regulation evolving and uh you know enabling those use cases from a from a bank perspective?

I think when we look at um regulation and financial services, it's doesn't really move at the pace that obviously crypto regulation is going. And what I mean by that is once payment regulation was developed, designed, implemented, it hasn't changed very much over the last 10 years or so. What we're seeing in uh digital assets and particularly in crypto is various jurisdictions creating a range of regulations that are better than other jurisdictions. And you know, Zodia was created in Singapore and we got moved to the UK probably about six years ago because the perception was the FCA was going to be better. That didn't prove correct, did it?

Um, we've just bought tungsten in Abu Dhabi because this is a great region to be in. But I think what is happening is that regulators are

almost trying to out trump each other in terms of what and how they they should go about uh regulating this sector. And I think that creates huge opportunities, you know, regulatory arbitrage for one, but it also then will hurt some clients who are only in one region, aren't aren't aren't global. Um, if I may take two seconds on the conversation we've just had. I think what is interesting when we look at T0 and things like that is it's not just about the technology. It is about the processes and the people that if you are going to uh settle in real time then have you got your compliance team working 247 are they in all the right jurisdictions have you got all the compliance have you got all the tool sets and the implementation of that and I think the implications of what we've been talking about for the last 30 minutes is if you're a bank you have got to do an awful lot of work in your back office it is not just about what you do in custody or about how you integrate with middleware or how you integrate with exchanges.

It is fundamentally your banking system is going to change and I'm not sure most banks fully understand that investment and requirement which then creates an opportunity for new incumbents to come in.

Amazing. We have I think three minutes to wrap up. I would like just to do a quick fire round. Uh you know one question we go across across the the board. I mean if in one sentence what are you most excited about for 2026 for you know Zodia or for the industry in general?

Uh what are we most excited about? Um stable coins we've already mentioned. I think that is going to become less of a conversation about blockchain and stable coins and just we're doing payments a lot faster and a lot cheaper. Um, I think more real world use cases for the technology I think is where this is interesting and I think we're going to see a lot of things. Um, I often say and this is a bit of a tongue and cheek here, but we're building things that Zodia we didn't know existed at the beginning of this year.

It is moving incredibly quickly and we don't see that slowing down.

Amazing Claris.

Um, banking adoptions um for sure. I think this is this is um absolutely key if we want to start creating the network we need and the the environments we need to start scaling these use cases. So we've been partnering up recently with with IBM in order to make sure that uh uh banks adopt this technology faster and we're super excited to see across the world whether it's payment where it's bananal crypto in Europe quite a bit trading in Asia a lot of uh interesting projects being built. Yeah,

Europe,

what am I excited about? I'm really excited about regulations. I never thought I'd say that, but more the better. Uh I I want I want like I want something equivalent of uh like the DoddFrank in every country, right? Like uh that that and specifically I want uh segregation of assets for exchanges.

Exchanges have a huge opportunity here to grow their business and scale beyond just cryptonative firms into the asset managers and hedge funds and obviously we stand to benefit as well at Bridgeport right because the exchanges needs to segregate assets they need to connect into custodians that's where we come in today we announced a partnership with Anchorage and over the coming weeks we're going to be announcing uh more partnerships with uh custodians exchanges and we're going to be live in a few weeks and I'm seeing what a difference this is going to make already because we've been uh getting so much inbound from asset managers and market makers and hedge funds that don't want to preund anymore. So that's a testament to how crypto is maturing and that's thanks partly to market forces as well as regulations and everything uh the panel here is doing and all the investors are doing right. So yeah excited by what's to come for the next year

and maybe Ash if you want to wrap us up. I know. I got to I I'm excited about everything they're excited about.

Okay. Amazing. Well, thank you guys for your time. Appreciate it. Um Ash, Naris, and Julian, thank you so much.

Thank you very much. All right. Thank you, lady and gentlemen. Next, two executives who represent the bridge between traditional markets and digital execution. Please welcome to the stage Don Wilson of DRW and Cumberland, joined by Yoslhov of NJ.

So, welcome everybody. Thank you for uh for joining us. I have the the opportunity and the the honor to be on stage here with Don Wilson. Uh Don of course is a very famous uh person in our industry. Build a very very successful strong um company that also has evolved itself and um continuously innovated itself during its journey and therefore very happy to have this fireside with you.

Don,

welcome.

Great to be here. Thank you.

Yeah.

Uh you started the company in 1992. Like I said, you've you've built different parts of the business. Uh perhaps for the audience, it's interesting to understand a bit your journey. Why did you build the company? The company is called DRW, which are your initials.

I also understand now that your email is DRW. So, it is really your company and you embody it. So, it would be interesting to hear your story.

Yeah. So, so um going you know way way back um when I went to I went to University of Chicago for undergrad and all I knew when I went there was that I enjoyed using math to solve problems and I was you fairly good at it. Um and uh it really it was uh during college that I uh met somebody who was uh doing working on his post-docctorate in physics and on the side he was kind of building models to trade FX and I thought now that is cool because he's getting real-time feedback on whether his models are any good or not.

Yeah. And so I said, you know, that's what I want to do. And of course in Chicago, um, you know, at the time there were three or four vibrant trading floors and I said, you know, I want to go I want to do that. Um, I was backed by a small company that in 1989 said, here's $100,000. Uh, good luck.

I went in the EUR dollar option pit, which is three-month LIBOR options. So the short end of the US interest rate curve and during the day I stood in the pit and at night I uh wrote all my own models, all my own risk software, um fiddled around with all sorts of volatility surface tools and um then I'd go down the next day and see if any of it worked.

Okay. So, and then in 1992 I kind of and by the way my my uh acronym on the floor was DRW.

Okay.

Um and uh so in 1992 I had earned a little you know generated a little bit of capital and and so I took that and started DRW.

Very cool story and you've evolved it in many different parts of your business now. Um so you are uh actually actively engaged in the traditional market in the crypto market and digital asset market. Perhaps you can give give us a little bit of a state of play. How do you see those markets?

Yeah. So so um you know today the firm is about is about 2200 people. We provide liquidity across uh most liquid asset classes. Um and you know both high frequency but also risk-taking um you know energy commodities uh um power interest rates equities etc etc. Um now in the digital asset space this is something that you know in 2012 some of the guys who worked for me were um excited about Bitcoin and we started having these discussions about Bitcoin and is this interesting why is it interesting um you know ultimately I came to the conclusion that one this is interesting um that you know there's some small chance that a majority of people in the world might eventually uh decide that this is digital gold.

Um I didn't place a high probability on that but some um and you know the other thing that I thought was this technology this ability to move value instantaneously without an intermediary is super powerful. And if you could apply that to tra traditional finance, that would be an opportunity to really uh make markets far more resilient uh efficient uh you know make the the business of operating a a risk-taking trading firm far easier. And and so we did multiple things at the time. In 2014, we started Cumberland,

which is our uh digital asset uh arm where we, you know, started off providing liquidity in in Bitcoin and then expanded to um to a bunch of of crypto assets. Um and uh uh we also started a company called Digital Asset Holdings and and Yuval Ruse who's the CEO came out of DRW along with Eric Sariniki who's another uh co-founder there to to launch the company and the goal there was to build a blockchain that was um compatible with what you need to trade financial markets. Um so they they architected something called the Canton network which is um uh live today and and doing some really amazing things.

Yeah, I think it's really successful as we speak with a lot of opportunities. Um so you run all kinds of asset classes. There is a lot of discussion about we have a traditional world and there is a digital asset world. Is there going to be a full transition or not or only partially? How is that transition going to happen?

Um what are the big biggest advantages? You talked already about a bit about this, but how you how do you see this this uh this play out? Are we going to completely go all the way to everything on DT tokenized um smart contracts or will there be still a traditional market and a digital market? How do you see this this evolving?

Yeah. So, so first of all, I am always guilty of thinking that things will move faster than they do. Um, so I thought that the trading pits in Chicago would disappear far faster than they did. um you know and and so here's a space where uh recently I said you know I think that in the next 5 years uh most liquid uh securities

will be onchain

um now then I was surprised to see last week chairman Atkins said that uh that's going to happen within two years so uh you know there's uh somebody Trump has accelerated things a bit.

Yeah. Yeah. Exactly.

Great.

Um but but you know that um uh I I think that the benefits that you get once you can figure out how to safely put things on chain are really significant.

Um you can obviously trade them more efficiently. Um but you can move them more efficiently and you can lend them more efficiently. And so, you know, one of the things that everybody has agreed on is that markets are going to go to either 245 or 247.

And right now it's very, you know, moving collateral is quite slow. Um, and it's impossible to do outside of uh, you know, business hours. And so, if you want to move markets to 247, you have to be able to move collateral in real time. That's just a prerequisite. Of course, you know, we have lots of experience with that in the in the crypto space, but in, you know, traditional markets, that's an important

friction. Yeah. Um and and so um you know the then on the lending side um if you let's say that you own um a stock that's hard to borrow um you know just getting uh you know collecting some of the benefit of that is very hard to do right now. And so if it's in tokenized form, maybe you even lend it into a DeFi protocol. Um, you know, that's going to become a big opportunity for asset owners.

Um, so yeah, there are a lot of reasons why these things should move on chain, but there are also a lot of impediments, right? I mean, the the traditional finance moves slowly for a reason. Mhm.

Uh u you know, if you break something, it's uh right now things work pretty well, right? It's not like anything's broken.

Um and so, you know, it will it will uh I I I do think it will happen in the next five years. Hopefully, it happens in the next two years, but but

see. Well, as you know, I build um the first regulated digital asset exchange in Switzerland in um we started in 2018. I thought we build it and then things will migrate. But there's a lot of friction in the system. Uh there are people who of course um see that the current market is efficient, but there are also people who want to protect their revenue streams.

There's technology investments. What do you think are the biggest frictions in making this transition and how how can how can we overcome those frictions

here? I mean the devil's in the details in making this stuff happen.

Yeah.

And I think there have been a lot of kind of highlevel pronouncements of you know a tokenized world is better. Um and but you have to actually figure out the details. And so, you know, one of the things that we've seen happen is there have been some experiments with uh assets being, you know, kind of tokens being issued on chain, you know, like a share of Tesla issued on chain.

Um, but actually, if you look at it, it's an SPV that's based in some offshore jurisdiction that has issued a token on chain saying this is a share of Tesla. Well, really it's a swap with that offshore SPV which hopefully has gone out and bought the share of Tesla and I'm not saying they haven't but that process introduces intermediary risk. Um there's no need to take on nobody's willing to take on uh well nobody here any traditional anybody who's concerned about risk and and is you know has a keen eye for risk is not going to take on incremental intermediary risk to get an asset on chain. The benefits of being onchain just don't warrant that incremental risk. And so that's an example of an impediment that historically has existed.

Now that can get fixed, right? And and that's, you know, one of the reasons that I'm excited about what's happening in the Canton network space is um that you you know, if you take so so there was a Bloomberg article from a a couple months ago where uh the DTCC took a Treasury security that they customized. It was our treasury. uh they they moved it from their traditional database onto the Canton ch network. So now it's in tokenized form.

There's no incremental intermediary risk. It's not in an offshore SPV. It's held at FIC which is the DTCC fixed income subsidiary that you know often custodies fixed income treasuries. By the way, the Bank of New York also has those capabilities and and they're also uh you know, they just invested in in uh the company that created uh the Canton network. So, they're also looking at it.

So, anyway, they they moved this treasury from their database onto the Canton network. We then on a Saturday morning lent that treasury out in exchange for USDC and then on Saturday afternoon. So we did a re onchain repo.

Yeah.

All with a smart contract simultaneous uh you know atomic settlement. We had multiple prime brokers involved in the transaction. On Saturday afternoon we reversed the repo. So we did an intraday repo on chain on a Saturday with uh without any incremental intermediary risk. And that right there is really, you know, proves that this is possible and it's going to be possible with equities, with corporate bonds, m municipal bonds and I think that that will uh you know that's what it takes to unlock the floodgates to move this forward.

If if you have the same finality legal construct and all these kind of things and then on top of that the advantages of having it on chain then it starts making more and more sense and then the adoption will start start to get quicker.

Exactly right. Yeah.

Yeah. Um, next to uh digital assets uh you're also you mentioned mathemat mathematician technology uh part of what your company's doing trading taking risks is that still done by humans in the future or will just a couple of agents be running your books and you sit there and make money without employing any people?

Yeah. So, so that's something that I spend a lot of time thinking about. Um, and and we're doing some really uh really interesting things in the AI space. um you know using using different types of machine learning and AI to uh you know to capture alpha um and and in some instances some really iterative uh processes where you know kind of human to AI iterative feedback in training the model and uh and and building it out. So I I don't envision a world where humans are out of the loop.

Um I do envision for some for some trades I think you can you know build the algorithm and and make sure that you know it's properly riskmanaged and and

uh but but I think there will be other trades where there's you know it's really more of kind of a human machine interaction that that unlocks better better decision- making processes.

Yeah. And you mentioned earlier that in traditional finance things go slow for a reason. If we go all the way to the other side of the spectrum where 247 everything is uh on the blockchain and moves immediately and it's steered by AI.

Is that going to be a totally different risk profile

from a systemic risk or

I I don't think so. I I think that um you know the same risk management principles apply you here. Sure. I mean the one thing that changes is the the collateral movement

Yeah.

becomes far more critical when you when you move onchain and 24/7.

Yeah. And and that's something, you know, on October 10th in the in the crypto meltdown, there were some uh you know, there were some things that broke. And I think it kind of uh highlighted some processes that are used on crypto exchanges that should definitely not be adopted in traditional finance. I wrote a kind of long

uh thread on X about it. um and and you know where I highlighted some of this. So but but I mean the the you do have to figure out how to address these issues uh when you move it to 247. So it does tweak the risk management but I don't think that it's really the AI decision-making process that changes it. It's more the uh the continuous trading aspect and the continuous collateral movement aspect that that is the bigger change

because everything is is immediate. Everything's immediate and and you know if you're under collolateralized

then uh you know the clearing house needs to take action

and you know whereas in the in the kind of old rails you know the the farmer gets a margin call and he has three days to send the money right that may not be how it works in the new rails and yet the farmer still needs to focus on farming and so you know maybe there's a the the FCM And you know the other part is this uh you know this move into onchain is is um is going to open up all sorts of new opportunities to uh to do things more efficiently. It's going to open up new trading opportunities. it already is

um new forms of of financing trades. Um so yeah, it's it's uh it's a super exciting time.

Uh and and in this transition that we discussed now a couple of times, we talked about the um the existing finance products. How do you see the the other real world assets or other assets that could be coming on chain? Is that something you guys are looking at? and expanding more and more into.

So here I I think that there are opportunities for lots of things to move on chain. Um I mean I mean by the way the one one thing I didn't talk about that much is is privacy.

Um when you move things onchain in some instances you don't care if every the whole world sees that you just bought a digital cat. Maybe you want the whole world to know that you bought this digital cat and now you're displaying it on your, you know, Apple watch face.

Um, but in other cases, for instance, if you own a lot of a stock and you start selling the stock, uh, you don't want to broadcast to the world that that's the case because t what will tend to happen is the market will anticipate that you'll continue to sell. Um and so you know that's another reason that I think things have been a little bit slow. So when you think about you know this broader question of what else uh could go on chain uh you know again it's it's well do you want things on a chain where everything's viewable or on a more private chain. That's one of the reasons that we really like the Canton network is because it has configurable privacy as opposed to most L1's that don't. Um, but you know, you could certainly put uh real estate titles on chain that would probably make uh uh financing more efficient.

Mhm.

Um, you could put slower moving assets on chain. you know, already uh uh I Capital has put um all of their private equity funds on top of Canton. That's an example of a slower moving asset that still benefits tremendously in the back office processes around um uh having the assets on chain. Uh you know, there people don't necessarily probably don't want to broadcast to the world how much of a given private equity fund they own. And so the privacy there was super important in their selection of the Canton network for that.

Um so yeah I I think that there's a a a lot of opportunity to uh to move to move lots of assets on chain but again you know I think it's the most liquid assets that move the most

that are going to benefit the most from this onchain movement.

Yeah. You mentioned uh digital assets a couple of times. There are different models of of onchain uh the more the more democratic all the way out to the to the right and more privacy or um uh whatever the different dam dimensions are. How do you how do you see this world? And uh of course you will be u quite insight you have a lot of insight in uh what's going going on in the digital asset network with the way they run privacy but perhaps you can give us a broader perspective on the technology and the different models that are there.

Uh

yeah so so um obviously if if something is on top of Ethereum or Salana then every time the asset moves the whole world can see it. Yeah.

And I think there's a lot of I mean people have gotten very comfortable with the fact that if you own a bunch of Bitcoin and you move it onto exchange, the price is going to sell off. Um and uh you have to kind of manage things accordingly. Um so now if you put traditional assets on chain, you're going to have that same characteristic. But at the same time, you know, for I think one thing that people are super excited about is is kind of the gamification of the space. You look at hyperlquid and you can see uh you know the entire history of every wallet's transactions

uh the positions it's holding um etc etc you know same thing on on poly market I mean people are looking at the uh transactions of different accounts and you know recently there was a uh an account that seemed to be very good at predicting what would happen at Google. Um,

okay.

And you know, I think the consensus was, "Oh, this is probably somebody who works at Google." Um, and and and it was kind of funny because some people said, "Oh, well, that's a good thing. uh this person who is using insider information at Google to transact on Poly Market is making the market more efficient and bringing truth to the world more efficiently. Now I think other people might argue that they're committing fraud. They're using uh

inside information

inside information to trade. Um but anyway uh it's uh you know the there are there are very different models you know on the on the Canton network. Uh the way it works is that the the two parties well you can actually create different levels of privacy for different use cases. You could create a completely open transparent uh uh uh exchange uh or you know market on the on Canton and say everybody can see every transaction. Uh everybody can see what everybody holds etc etc.

Or you could say you know what actually if a trade happens we want the whole world to see the price of the trade and the quantity. uh but we're not going nobody's going to know the buyer or the seller and uh and maybe the issuer of the asset also gets to see the asset movements and can see where all of the assets are that they've issued at any point in time. And so that would be you know obviously if you launched poly market with that uh you know kind of more you know with that lower level of transparency then only poly market would have been able to see that oh there's somebody who seems to have a lot of information asymmetry at Google and maybe that would be uh you know maybe the world would be worse off in that case

but it might be horses for courses and having a platform in which you um decide or determine the level of uh of transparency or uh or access to information is is the way to go.

Yeah, 100%. I mean, I think that configurable uh transparency that's the way that traditional markets function uh for different market use cases. You want to you want different levels of transparency. And so, you know, there's no reason to to think that the world should change as you go from traditional rails to onchain.

Do you have a prediction, by the way, where Bitcoin will be in 12 months?

Uh, I'm not I'm not big on making price predictions.

Oh, I thought we're going to get a scoop here.

Good. Um, I see we're uh we're we're running out of time a little bit here. Um, is there perhaps um a view or um uh a type of wisdom from you as a su successful entrepreneur and somebody be operating in very successful in different markets uh that we could all learn from some sort of wisdom or insight that could uh could help us moving forward with the exception then perhaps of a of a prediction of where Bitcoin is going to be. Well, here I I I mean by the the the big picture is this. We this is a very exciting time to be alive, to be in the world, to be in this space.

And uh you know, so my advice is embrace it, learn about it, experiment with it. uh and you know good things will happen if you if you if you do that.

Thank you. Thank you very much. I think uh for me it was quite insightful to hear your experiences, your different views on the the market side, the technology side, the data side that we discussed uh and even I have learned a lot through this uh through this uh fireside chat. I hope that also for the audience it was uh was of interest. I really would like to thank you Don Wilson to spend the time with us and to share your insight.

Thank you very much.

Thank you. Thank you gentlemen. Finally, we zoom into the most fundamental business case for digital assets. How value moves, how it clears, and how settlement accelerates. Leading our final panel of the day is Muhammad Bashk.

Welcome everyone.

Hello. Is this on? All right, I'll use this mic then. Welcome everyone. Well, we're as we've uh heard today from probably all the panels in the fireside uh chats, we are witnessing one of the most fundamental transformations in financial infrastructure in generations.

The question isn't whether assets and value are going to move on chain. We see that already happening today. The real question is how fast, who builds the rails, and what the infrastructure is going to look like at the end of the day. Today's panel brings together three companies who are actively building the future of payments and settlement. They're not building incrementally better versions of what exists.

They're building what comes next. I'd like to welcome my panelists and we'll start with a round of introductions. Hi everyone. Uh my name is Mo. I'm the C and co-founder of Fuse.

Fuse is a um uh crypto as a service platform. We enable banks, fintexs uh and other companies uh to launch secure regulated uh crypto products including solutions in wealth and solutions in um stable coin payments. Thank you for having me.

Yeah, good day everyone. Uh my name is Jerome Fory. I'm the founder and CEO at Immersive. We're a regulated entity, a principal member of Mastercard and we have a global platform that enables crypto companies to um have their own branded Mastercard. We support and actually invented onchain non-custodial payment flows and also custodial payment flows.

So a lot of the top web3 wallets, D5 protocols and exchanges use our platform to issue their own branded cards.

Hi, I'm Sivani. I'm the CEO and co-founder of Pave Bank. uh we are a corporate institutional bank at the intersection of digital assets and traditional finance. So we provide everything from what you'd expect from a traditional bank and also along with custody OTC desk FX to companies in the digital asset space from exchanges, stable coins, payment companies, crypto hedge funds, uh market makers, uh to also more traditional businesses that want to have a bank grade counterparty with whom they deal with. Um thank you for having me.

Wonderful. Well, Jerome, uh let's start with you. Uh in our conversation earlier, you described payments as going through a Nokia moment, right? Where the current systems are more like fax machines. They're digital by name, but they completely lack the functionality and the user experience.

Could you tell us a little how immersive is building for this new world and how you see the traditional institutions and defy converging when it comes to payments?

Yeah, look, I I think a lot of people think of payments today as as electronic. The reality is the core payment infrastructure, even the ones that Visa and Muscard have, they were developed in in the 70s. The original programs came out in the 50s, but the same technology that was developed in the 70s is being used to process payments today. So, they're like a fax machine or a plain old telephone system. Yes, they're electronic, but they're not an iPhone.

They're not driven by APIs. They're not driven by by data. They're not driven by apps. What we're starting to see is the building blocks coming together. So before the iPhone, you had the iPod.

Before that, the CD. The CD digitized. And we're seeing that now with money. You know, money is getting digitized. It's getting tokenized or it's getting created natively on chain.

We're starting to see um you know digital identities, true digital identities and so self-s sovereign identities, digital currency. And then the last bit I think is going to be digital payments. When I think of digital payments, the point of sale will be the epicenter. You know, we're seeing this now in e-commerce. 40% of Shopify's um sorry of Stripe's revenue or just under comes from Shopify.

You know, these applications are going to be the core um uh part of the payment experience. And the reason for that is they've got the data. You know, you're going to get the skew data. It's not just going to be a card number and an expiry date. It's going to be your digital identity provided in a privacy first way.

You're going to have personalized payment experiences, personalized rewards, and it's going to go from digital identity to digital currency to this open payments infrastructure that's designed for apps, APIs and data to move seamlessly across entire ecosystems. So summarize uh you know working really on bridging kind of the infrastructure old and new. Do you see yourself um competing with the incumbents?

Uh 100%. You know the incumbents in our world are banks you know but banks aren't innovative. Uh they're not developing onchain protocols. You know, historically, if um an airline wanted a co-branded card that would work with a bank, but you know, when you've got a large exchange, often they can't even get a bank account. The bank's not going to be developing protocol.

So, in our world, there is no bank needed. There is no fiat. We're regulated to the same standards as the banks, but we were the first in the world to settle with Mastercard using crypto, USDC specifically. And so, we can move a lot faster. We can do everything on chain.

A bank process was 12 to 18 months for one country. You know, we just launched with BitG and Binance. 30 countries, six to seven weeks. So, banks, I don't we compete with them, but they can't really compete in our space.

I think Salem might have a word to say about that. You know,

not all banks.

Um, but you know, we mentioned earlier the majority of assets and and and value is going to move on chain. financial market infrastructure is going to is going to look very different. You've built a bank on that belief, right? Um to serve as digital asset firms around the world. Uh tell us more a little bit about Pave Bank and what a fully onchain financial institution actually looks like in practice.

Okay. So, first thing I'll do is just take a step back, right? Like what was the thesis that we started this with? There's two thesis points. The first thesis is that all money value assets are going to go onchain.

And I think I don't think anyone in this room or I hope at least disagrees with that statement. Um, now when that happens, it's not just about moving money. It's not going to be about just solving the payment problem. Money is becoming programmable, non-f fungeible, and composable. This is going to fundamentally change what financial services looks like.

And and so if you think about an institution, all we do arguably is arbitrate counterparty risk. That's it. Now that has traditionally been done in a qualitative way through a license and a balance sheet. Now we're moving to for that to become codified by going onchain. So by putting smart contracts through regulated means uh onto money or value or assets.

And this will then change the financial system. So when we came the way we built our tech stack, we said you know what I agree a lot of old banks are are they're very slow. They don't move. It's going to be very challenging to be able to adapt when you think of the very nature the core technology is changing. This is not like the fintech boom in 2009 101 when you could put an API orchestration layer on top of your core.

This is the main core that's changing this time. So we built it from scratch. Secondly, we said okay we will if you look at okay everyone has this thing oh banks are slow banks are terrible do you want to be licensed like a bank fine okay okay it has its challenges but why have regulators and I don't want to speak on behalf of any regulators in case there are any in the room but I'm why do why has crypto always been the pariah right without now the conversation is institutional today the conversation is about being regulated but in the past the conversation was very much around meme coins and people being rubbed and more importantly around value moving out without um monetary sovereignty being retained by countries and when monetary sovereignty needs to be controlled again regulators and when they implement monetary policy they look at the credentially supervised institutions to implement it right so with these two thesis points we decided to become a bank and we decided to build from scratch and uh we are very niche in what we do uh we only bank institutions and corporates We only give them the products to licensed institutions to be able to move seamlessly between digital assets and traditional finance. So whether it's um no corporate treasury allowing stable coins to autocolateralize. But the next phase of this is saying okay how do we fully enable and automate the minting process?

How do we autocolateralize in T bills or maybe even tokenized securities that are already there today. Um the next step will be you know privacy and zero knowledge policy. I think Canton's created a lot of buzz the last few days and um I think this is a great way uh that we see the institution going on to uh going on chain with privacy at its heart. So these are the main things that we do of course along with everything you want from a bank and custody and and and OTC desk etc. and back toback in those FX loads but um we're here to power the industry not to uh not to compete we compete with the old banks too.

And when you think about kind of the stable coin rails and how money flows, how do you see this new version of a correspondent banking happening? Look, two things. Regulators do not want money moving out without control, right? And whether we like it or not, there will be controls that being put in place via the correspondent banking network. Countries do not want money moving out without it touching their credentially supervised institutions.

So I see it evolving for sure. I see it changing. I see that the conversation around dollarization is just beginning to happen in these circles. Um it will become a more prominent conversation in the next uh I would say 12 months. Um because you know this will become and regulators are already discussing this and we're hearing the whispers already.

So look I think that it will change. I think that the direct clearers of currencies will continue to have a role to play and a more active role to play. So the more banks that are able to participate and uh have onchain value um you know they they will be the ones using stable coins and that's how we see it and that's the conversations we're having as well.

Wonderful. Uh recently stable coin payments has been one of the hottest trends globally. Mo you've been a first in the region when building fully regulated digital assets as a service stack for for other financial institutions. You have licenses from VA, from Central Bank, in the EU, Turkey, Canada, and hopefully more to come. Um, what needs is Q solving for with with these licenses both domestically and internationally?

And uh, how do you see the stable coin payments space evolve in the next three to five years?

Yeah, so we've seen it uh evolve uh, very very quickly, right? So, um, what happened was about uh, towards the end of last year, we went out, we met a lot of our potential customers. We met banks, fintexs, uh traditional um companies and many of them had said the same thing that the Seama region so uh central eastern Europe, Middle East and Africa has so much intra regional um intra regional flows. There's almost one $ 1.5 trillion dollars of value that flows across this part of the world.

Everyone wants to say in dollar or in a proxy dollar but nobody wants to work on Swift. And so that's when we realized that there's something here. And so uh we went out we did some more you know um digging and and one of the interesting things we found was that UAE has not only positioned itself as a hub for tourism and all the other great stuff that it does but there's really a trade for it's really a hub for a trade. So there's so much flow from Hong Kong, Singapore into this market and then back out and many of these companies are already informally using um stablecoin. So the new um infrastructure that we've been um uh uh very busy um deploying in uh 2025 is really allow uh um uh enabling our bank and our fintech customers to actually launch um uh B2B T2B stable coin payments.

So giving every single business customer a seamless fiat account in multiple currencies, a seamless um stable coin account and really letting them move value um across. And uh what um the way that we really think about uh a stable coin today is almost that connectivity uh tissue that uh connects a um a local payment system, a domestic payment system here and then let's say a domestic payment system in um uh India. And so both sides have very strong domestic rails, but that crossber rail is where things um often, you know, get, you know, stuck. Uh and and so uh what we're really trying to do right now is that solve for that across all the corridors that matter to this market and then expand out. Um yeah, wonderful.

I think you you mentioned something really important which is kind of that um that messaging that happens between the different uh uh payment platforms. you know the global financial system I think is converging now on a single data language um ISO 222 right it's helping define how uh how the messaging needs to be done for instructions uh in the payment uh system uh we've seen swift recently that's now fully adopted this standard um a few weeks ago they've now uh kind of switched off the old system and now they're fully based on this messaging system. Um, and it's really going to enable stable coin payments to potentially be initiated in the same way that traditional payments are made. I think uh, Salem, if we if we start with you, maybe um, you know, as a bank, you've probably gone through this uh, transition. What does it mean in terms of technical interoperability and compliance?

I knew you'd give me the technical question.

Um, I I knew you'd give me the technical question. Um, okay. So firstly for any banks in the room this was the most painful transition ever. um because it was so patchwork. Um but just for context, it's like been like 25 years they've been trying to do this, right?

So it's not like an overnight thing, right? So it took a bloody long time. Um the view ISO 222 messaging as an enrichment of the messaging platform. That's it. Nothing more, nothing less.

the payload changes uh and you can add more things into it in the context of this conversation right I think two things one as we start seeing standards being put in place around how regul large volume regulated stable coin movements will happen this is exactly the I would say perhaps some of the backbone of how that messaging will be translated between some of the banks that can handle it and some of the banks that can't handle have their own custody or can't read a smart contract. Um and at the same time um if we look at programmable standards that are coming in place as well um be it you know LC rules or um a smart contract um it could potentially go in the payload. I would say it's one part of the puzzle. I don't think this solves the entire problem to be honest with you.

Yeah. Do you think this is going to make it more or less competitive for stable coins if you know you have your same messaging you're you know different choice of rail ultimately to to settle and maybe any any of the other panelists as well if they have a view

look stable coins the flows are much larger and they're going to continue staying this way like it's like a patchwork over onchain uh movements and I think that that's the direction of travel that it should be the more interoperability that we have I think the better it is for us I mean we deal with correspondents all day every day and if they can if they get more transparency can move payments faster we're very happy uh on stable coin payments but yeah

so you know like the way that I think about it is that um right now stable coin payments are not where they need they need to be I think that uh crypto investing we've hit that uh maturity curve right you can invest you can buy you can hold but in crypto payments we're not at the moment where we can all celebrate and say we're finally there today with stable coin payments is that it's still money in and money out and there's a stable coin rail. So I think these kinds of things might solve for the immediate need but I think all of us on on stage can probably uh um agree with the fact that we really want to get to a place where the customer does a crossber payment on chain but the value stays on chain and then everything that you were talking about around uh tokenized assets holding funds on chain in tokens and using that purely on chain that's what really stable coin solves for because then you can move it around so much easier

and mo this is probably a good segue to to to you. You've been seeing this in in developing and uh and developed uh economies for why people adopt. What are the main drivers for for for why they adopt? What's what's holding them back from like fully staying on chain?

Yeah, I I think that there isn't enough uh of a circular economy um on chain yet. Actually a lot of the demand that we're getting is from markets with very high you know um inflation where uh there's a lot of uh fintech apps who now want to enable um stable coins. Uh and so what happening is that the crypto infrastructure economy is actually enabling the traditional fintech um landscape as well which is opening up brand new you know um use use cases and stuff. So we have seen uh examples of companies who do uh um a remittances on chain uh fintech apps in uh Nigeria who have a stable coin wallet and all these things are starting to come about but that's because there's a real need for it um and people are just buying stables in all these markets only to hedge their domestic um currencies in more mature markets where the currency is a lot more stable. I I think that um in like these markets many businesses or many consumers are are are really still trying to understand the value of moving to a fully digital dollar

right and if um we just move down the value chain all the way down to the users and the interface uh Jerome um with web three wallets right uh as they're growing in adoption and acting as that primary interface with many of the consumers especially ones conducting obviously crypto transactions You know, they obviously allow you to self custody. They allowed you to to now increasingly spend straight from the card, right? Or straight from your wallet directly into into some kind of card infrastructure. What are the key frictions do you do still need to be solved to really kind of propagate that? Um, and do you see that self- custody is going to extend beyond just the cryptonatives?

Yeah, look, so in the card space um self-custody adoption would be around um less than 50% of custodial. So the custodial experience is still superior to the self-custodial one and I'll dive into that a little bit um deeper. I think there's a broader challenge with self- custody if you look at adoption. So a number of our partners would advertise they have 200 you know 100 200 million users. The reality is that active users and we're moving from monthly active users now to daily active users is probably 10% of that number if not less.

So one of the main reasons a lot of these wallets want to come and get cards is actually to increase the daily engagement. A person under the age of 25, they will check their banking app seven to 10 times a day. And so that's what a big driver is for these wallets to have their own branded cards to enable users to spend out of their wallet or out of a onchain protocol. I think at the moment there's been a number of stable coin solutions and the key friction points are are this um KYC you know so we see a big difference. So in Brazil to do KYC a user just takes a selfie we send that to the government and it gets validated very simple.

In markets like the UK, it's a oneplus 1 independent address verification. You need to do PEP checks, sanction checks, nature and purpose, all this,

you know, um, on boarding, you lose a lot of people, probably 50% of people that start for a card that complete the KYC process. So, I think when we have onchain verified trusted credentials, people sharing, and we're getting to the first phase now of that. you know, we can share via APIs and tokens and and that type of thing. That's going to remove a whole point of friction. The next thing that's challenging for self-custody cards um and users is they often have different assets on different chains and so they need to often bridge an asset from you know Ethereum is where a lot of them have their asset but Ethereum is not very good for real-time payments because it's expensive, it's slow, etc.

So then they have to convert that asset, bridge it to an L2 or similar to be able to spend. That's a point of friction. Um and then the third thing which I think um is an interesting one is a lot of people that have crypto see it as something that's appreciating in value and if they convert it into a stable coin, the way that tax um treats I guess crypto assets typically there's capital gains tax on that. So I think what we're going to start seeing next year and this is where the big thing is you you got 500 billion in D5 TVL you got 300 billion give or take stable coin market cap in the future what we're going to see is much more you know frictionless on boarding we're going to see products that enable users to spend any asset on any chain basically by you know clicking a button or not clicking anything at all and then the other bit I think is they're going to be able to use their assets as collateral so they won't even need to spend their crypto. They won't see that they have a stable coin.

They'll use it as credit, as collateral in a DeFi way. They'll earn potentially yield on it. They'll pay it off at the end of the month using, you know, some sort of stable coin or similar. And they won't have the capital gains tax that they experience today. So, that's what I think 2026 you'll see a massive uptake of DeFi based uh payment cards for web 3 users.

Wonderful. Great. So I think most of the companies that we've heard from today uh at the further network summit they have u either existing operations here in the UAE or they're actively uh growing their presence. I think there's no doubt and I I may be a little biased, but there's no doubt that the UAE has definitely struck the right balance between allowing regulatory um and and and and business environment being, you know, uh being very conductive for people to to do business here. Uh but also kind of helping uh building local champions and and driving driving innovation as well.

Um love to start with uh with you, Mo. out of the three panelists, you're you're the one who's built from the UAE serving global markets. Uh what have been some some of the advantages from building uh from the UAE? Uh what are some of the challenges also that uh that you face and what advice do you have for people uh building from the UAE?

Yeah, I think having a great relationship first of all with you know um our further uh that has definitely helped us from the start who have um uh really backed us from the initial concept. We just had a couple of uh slides. Uh I think number one the um uh regulatory licensing here has been uh super super clear. Uh there are many regulators here. It can get you know um fragmented uh at you know times but uh it it like does give you all the possible gambits around uh digital assets, crypto tokenization, all that kind of stuff.

So I think that's number one. Number two is that the talent here, the talent pool has gotten much much better. There's a lot of um uh dry powder. there's a lot of uh investor appetite and the uh risky appetite to really take big big bets on this space. Uh and I think uh number four which is the point that I talked about earlier is that there is there's almost a trillion dollar of business flow that goes in and out of this country.

These companies trade across the region. Everybody's looking for solutions for smarter better treasury management and Cable Coin really solves for that. So this is a great build, great place to build a company that starts here but then exports quality solutions out.

Wonderful. Um and maybe to the two other panelists um would love to know would love to hear you know what makes the UAE an attractive place to to operate from and what can the UAE do to maintain its lead uh as a as a global financial hub especially for for payment space.

Jerome maybe. Um, a we deal with 20 plus regulators around the world, so we know them pretty well. And ADGM is our favorite regulator. And I'll explain why. Um, I think I look at regulators, um, and I compare them to sort of traditional mechanics that new combustion engines.

And then you have, um, you know, if I had a Tesla, I wouldn't take it to a a traditional mechanic. They'd open up the bonnet and ask me where my motor was. You know, you take it to a specialist EV. And that's the same with digital assets. You know, it's it's a yes, they're both cars, but they're very different.

And the specific example I say is I remember when I submitted my commercial business case to ADGM and they looked at our protocol and so we invented self custody on chain payments and everything was cryptonative. Um the first question I got back from Brian was does your protocol support ERC 4337 and if it doesn't do you plan to because it delivers a better user experience. Now I can categorically tell you when I deal with the you know central bank of Ireland or you know other regulators around the world no one has asked me that question. So one they have very competent skilled people that understand the space. The next thing that is very very different here is the engagement.

You know, a lot of these policy makers and regulators around the world, they try and reduce their risk by having, you know, we produce these thousandpage documents that we pay top law firms thousands of dollars an hour to submit. No one reads it. No one understands it. Actually doesn't do very much for understanding risk or mitigating risk. Here ADGM, they have the the monthly meetups.

They get to know you as a person. They have a very open door. You have whiteboard sessions. They understand what you're doing. um they can give you feedback and advice around things you haven't thought about.

you know they've been doing this now I think you know if you look at Mika and then before that kind of VA adj was the first to do the crypto regulation I think 2014 so very mature very experienced very competent very engaging um you know that's what I would say from a regulatory perspective and and why UAE but I also agree with the multiple regulators can get a little bit challenging particularly in payments because you got the central bank of UAE then you've got ADGM and you got bar and navigating that can be um a little we're paying for.

So,

I'm not going to announce any favorites and regulators, but um what I will say is that ADGM is clearly understands like they've been shown to understand our business and that goes a long way. Um when you're going to get licensed, you want to create that understanding because it then creates that level of assurance on both sides. Um I would say two other points. It's always hard to go, you know, why you may be third on the one answering this question because I totally agree with my colleagues here. Like, so one talent, but more than just talent, you have energy.

Everybody here is driven. They're hungry. They want to do something. Uh and that for us is something that we look for. When you're trying to build an a team, you have to go where the pool is uh and try and do that.

So that's that's one reason why we're actively building up our teams here and our offices here. Number two, um it comes down to credibility and the institutional view of how the world views uh the UAE uh and Abu Dhabi specifically. And so we're really excited about that as well. The last point just conscious of time on the macro piece which is really important. If you believe we're going into a multi-olar world then there will be certain places that win.

And if you look just slightly east of here and you look at 3-fifths of the world's population, they trust their money to be in the UAE. Uh and that for us says that in the next 25 years, this is going to be the place that you know you want to be, you have to be uh to grow your business. Wonderful. Well, thank you all and thank you very much to my fellow panelists uh who are actively building the future of payments, not just incremental improvements on on what exists today. So, thank you very much to all of you and thank you for joining us today.

Thank you very much gentlemen. And now to close our program, it is my pleasure to welcome further chairman Nabila Muskery back on stage. We're fine. It's I've never met. Um so first of all, thank all of you who are still in our audience here.

It's been an amazing but also very long day. Um I always joke with Fasil that when I'm asked to do closing remarks, I gauge the efficacy of the program by how many people are still in their seats. I think we've done well. We could do better. So the bar is going to be set higher.

thanks for continuing to stick with us. The other thing is they always keep me last partly because it's the opportunity where they know I can thank the team for all their hard work. I get to see it in action on a day like today, but I get to witness it on an ongoing basis when I've been privileged to serve as the chairman of further ventures. So the very first people I would like to thank are the team of further for putting together an amazing program yet again. So please recognition for their efforts.

You know I was I was told when the program was shared and the quality of the speakers that further ventures through its partnership with Coinbase and with Brevin Howard were able to attract. I was told that this is the main portion of the finance week Monday program and I tried to assure them no no this is in fact the further network summit but we're very proud of the quality of the speakers that participated today and I think it's a reflection of the fact that the conversation that we're now leading at the intersection of finance digital future powered by AI I think is where most of us want to spend our time and the fact that we had such important leaders from the community coming to speak to our plenary today. Again, I want to thank them, but I also want to draw it to the fact that this is the power of Abu Dhabi to be a convening point and in particular further ventures is at the epicenter of what we hope is a growing global community of partnerships. I think that the leadership that Fasil Hammadi who has been a friend to me but more importantly I think a great leader to the organization of further ventures his ability to look past a lot of these opportunities and see long-term partnership is really what has differentiated the role that further has to the ecosystem. You talk about the regulator we don't think of this in a monolithic abstract way.

We know the individuals there. When you talk about our companies and our portfolios, he intimately knows the founders. The investment committee that we undertake, it's a deliberation of valuesdriven investing. How do we as stewards of this capital best deploy it on the behalf of our LPs, not just for return, but as an enabler to a broader set of growing opportunities that can be activated both from Abu Dhabi and have a global reach. We are at the precipice of launching our second vintage of fund on the venture side.

You're going to hear much more about that in the coming months. We talked a little bit about our liquid strategy as well. But I think you can look at the quality of our portfolio from the very first vintaging that you have a sense of the type of investments we will continue to make. And we were very proud with the recognition that many of those portfolio companies, some of whom you got to experience on the stage, some of whom you might have seen in our networking area, the founders as well as the team that they've built, I think are again a reflection of the quality of the further ethos that we're instilling within our venture portfolio. What I would only ask you to end with is saying how can you who spent the day with us take from here something that better equips you in your own individual mandates or missions.

And so I'm going to give you an opportunity to just raise your hand and say like did you have an opportunity to learn something new having spent the day with us? I would love to see the hands up. I'm going to point out there was a one that was last. If you did not raise your hand, you're going to have a unique opportunity, which I don't normally do. You can ask me a question and I will answer that question unvarnished to the best of my ability.

But if everything has been addressed and there's no prevailing question left, I'm going to release you to the bullpen of the finance week and you can go on to your afternoons. So one round of question if somebody wants it otherwise you are free to conclude the further network summit and return to your important duties. It's a countdown clock. Six five I know you have all your questions done. Thank you so much for spending the time with us.

I think we're going to invite you back again next year. It's going to be an even better venue and a better hopefully uh set of assemblage. I actually had the information from Gary who was coordinating a lot of this of the capacity that we could include in the room. We were overs subscribed by over 1,500 registrants. So count yourselves among the lucky few especially those that stayed the day with us.

Our hope is that those who could not participate will have an opportunity to engage with us and engage with you because you will have taken I hope many of the learnings away with you. Now thank you again. Thank you to the team. Thank you to Faith on the leadership and inshallah we'll see you again next year. Thank you.