Fireside Chat: Vincent Chok - TOKEN2049 Singapore 2023

so guys welcome welcome to this other exciting session uh we're gonna have a lot of fun today uh with Vincent talking about the whole world of what's happening in the custody world but also on the stable coin side as well uh we have 15 minutes so I cannot promise you when I cover everything but I promise you it's going to be interesting and exciting from that perspective and today today with us we have Vincent chalk who's a group uh CEO of First digital one thing by the way you may not know about Vincent is he only he owns a shares in a Napa Valley Winery where he makes the board ape wines so if you're interested on board ape wines give give a shout out to uh first digital Vincent before we kick off today the panel can you share with us in a minute what is first digital what does it do and to put everything to put everybody up to speed well they're just first digital where uh registered licensed custodian qualified custodian based in Hong Kong and essentially we custody assets that's it we're you know title holders we um help our clients Safe Keep but at the same time we're also you know we feel that we are sort of a bridge a key infrastructure component to bridging to a web 3 world so first digital is is not only a a traditional custodian but we also work a lot in the web three efficiently I want to cover that as well how you guys bridging but also I want to kick off about the big the big development recently you guys launched a stablecoin uh fdusd right uh it's been Gathering a lot of noise and attention can you maybe share with our audience how big is a stable coin and what do you think is the the contribution error That's Unique selling points compared not only to the tethers of this world but usdc and others well we launched uh fdusd in June just a few months ago now we've grown I think our market cap is uh almost 400 million and as of yesterday the trading volume was over 500 million so it's it's taking it's really going well I think that we can see fdusd growing to a substantial amount that can really Challenge and I think we're number nine now in the market cap for after USD and the difference is we Lee we are getting a lot of support from the Hong Kong government we see that they're promoting um there is going to be a stablecoin licensing uh regime coming next year we feel that we're sort of the Forefront of getting that license and I and and of course hkmas pushing Banks we're talking about tier One banks that help crypto so as a we we always turn The Coin we're like a near Bank but we do use Banks as our treasury so it's important that now these Banks and I think it's about focusing on not concentrating the risk in one particular Bank as what we're seeing in the U.S so that's kind of the uniqueness of uh fde it's interesting I would say with what you mentioned I think for Hong Kong that actually one of the few central banks that is actively coming up with a regime around which like this plays in your in your favor and what is the vision of it I mean you mentioned before you want to be the bridge with web3 what role can actually stable coins play in the brother web free ecosystem I don't think really web3 will be able to exist without three things one of course is uh uh blockchain second is AI and the third is digital currency so this is going to be a very key component in building that infrastructure so that we can really achieve a web 3 world so by being you know a stablecoin reserve provider we think that digital assets because there's a very big as you know there's a lot of governments around building their own cbdc's but stablecoin is also a very important component people always ask are you worried about the cbdcs compared to the stable coin but I think they need to coexist I mean and do you think current stable coin providers right have done a good enough job when it comes to reserves transparency I mean to be fair there's been a lot of good efforts from to be fair like from tether to circled really to try to provide this transparency but you think they've gone they've provided what the market requires or no I don't think it's ever enough yeah I think it's people's really you know a stable coin is a reserve we're basically an equivalent to the Federal Reserve in a way where holding people's assets and as a trust company as a trustee that's the most important thing is showing transparency where is the money invested how is it held who has the controls who has the power so we have to build you know we have to really look at all the internal controls policies it's not just about the reserves yeah so it's about taking counterparty risks Banks who's the bank how much does that bank have what is there because it's also about managing your balance sheet Banks just have one balance sheet but the trust we operate a client balance sheet and so there's also what happens if the company is insolvent where's the asset goes yeah those are the overall pictures that we need to look at when we custody any assets and where the jurisdiction is as well it's interesting because obviously with silvergate and signature debt played a role obviously with some of the other stable coins you mentioned a couple of times the Hong Kong trust legislation maybe for the for a benefit can you be shared with us what benefits for crypto companies or stable coin providers does the Hong Kong trust regime provide that could be useful for a crypto ecosystem well I mentioned about the double the two balance sheets how if anything happens to the Trust Company in solvent all the assets are protected by the government that's one thing that's really important to know as well as the government's support towards the digital asset industry and we see of course why we're so bullish on Hong Kong because the government's pushing us to use the banks four licensing stable coins and who are the banks hkma will be The Regulators of course all of the members that will be holding our reserves will be their members so it's going to be them overseeing making sure that we don't do anything wrong making sure the stable coin all of the money is invested properly through that infrastructure the Hong Kong Financial infrastructure right that's that's a very big key and as well is that there's no Capital controls in Hong Kong we know money can move freely we uh we hold you know over 22 different foreign currencies so we can actually Act create different stable coins with other currencies as well right you're right because it's the peg is actually a basket of currency yeah good point and actually from the Central Bank were you surprised I mean personally when I saw the HK may come up with legislation around stablecoin I found actually very interesting I mean from your perspective as a licensed firm what's reviewing can you share with us some of like how is this licensing regime is going to work for stable coins with the hkma well you're gonna have to one of the of course requirements is that we need to have a local Hong Kong asset manager you're gonna need to use Banks so it's basically the whole ecosystem will be Hong Kong right so that they can keep an eye on what's Happening yeah exactly so that's a big requirement of course we still have to comply with all of our AML kyc uh laws requirements for compliance yeah yeah it's it's I want to talk about Hong Kong in a second as well but before that like we talked about the stable coin I would also talk about the custody business yeah yeah what what is when you look about the future custody industry has evolved tremendously last couple years when you look at the future of the custody industry let me actually let's look at the next five years forget the vast future when you think about the custodian of the future in the next five years how is the industry going to look at token 2049 in 2028 I think custody is all it's a word that's been thrown around a lot in the crypto space five years ago it was a you know nobody really had true custody but then there's a lot of great companies that built that for us our custody is more focused on the Law's compliance of holding those particular assets it's the compliance basically succession what happens to the assets if something happens to the beneficiary so in web 3 we feel that this is an important component when people will tokenize assets like real estate so we've tokenized Fine Art we've even tokenized warrants shares people don't even understand the things that you can tokenize but those tokens are representations of benefit benefit ownership of those assets so when you're trading these tokens in metaverse when you're moving tokens from wallet to wallet you're actually trading The Beneficial rights to the underlying asset so as a custodian you got to keep that asset safe for us you know we work with our treasuries for our Fiat as a bank for example our treasury for crypto is fire blocks Ledger you know traditional the the big guys but we also use our treasury for physical gold that we also act as a stable coin for sitting in Brinks for example physical gold and art we sit in brings as well as uh Securities so we hold our Securities in Brokers like Morgan Stanley so that's how we look at the custody business overall it's not just okay well we have a very good proprietary wallet yeah I'm a custodian well how do you treat that asset yeah you're right what if the assets it's borderless but is that really borderless because when you go to Dubai when you go to Indonesia now it becomes this is Islamic laws Sharia compliance when you're in UK is common law civil law in China so how do you deal with all those different laws it's interesting I think it's a good point you mention of the cut you will need to be multi-asset class but actually not on crypto actually literally for people some of the underlying assets if we believe that the industry the rule will become moved towards a tokenization one thing that will address quickly as well is on Hong Kong uh I mean we're here in Singapore uh you know I've known me for many years Vincent uh we've seen the rise of uh Hong Kong as a crypto Hub some more difficult times and now it seems to be Hong Kong is sexy again what's your view on what is happening on the ground that could be useful for our audience today well the big thing is really the support we're seeing you know when Paul uh he he came up at the Hong Kong finte week and said that we want to make Hong Kong a web 3 hub like this is from the Finance Minister like in Hong Kong and we have the we can just see the advancement it's kind of not just sitting ducks like the old Administration yeah so they're moving now they're doing a lot of promotions they're going you know they're talking to the industries the experts they're bringing conferences so it's it's really exciting again to see that uh it's coming back like you said you know make make Hong Kong great again well here we go so before I move on to my fire round of question uh Vincent one last question I mean when you look at the year ahead the next 12 months what is exciting you and what is like putting you a bit you're a bit more cautious about well just the advancement of this industry I think there's uh a lot of really good players now we see that uh it's it's being more taken seriously yeah but what scares me is the US um you know Biden's infrastructure bill is coming and inside that there's just a lot of scary stuff I mean we can spend another hour just talking about that but essentially they're sort of growth in one sense but being suppressed in another by so it really especially in the US yeah yeah yeah and but of course that's in a way influencing a lot of companies that are not in the U.S yeah yeah I think that's also you're seeing the move towards uh correct the Asia and the Middle East as well so Vincent I'm here on my my best friend the Bell is here uh to keep us honest and we're gonna go through a couple of fire rounds of questions hope you're ready oh yeah whatever Vincent uh what is the one thing that amazed you the most about this conference so far just the organization is so it's first class Alex and the guys would be happy to hear this your favorite thing about Singapore chicken rice chicken rice here we go to be fair what's your favorite thing about living in Hong Kong the hiking trails it's amazing what you can do when you're locked down in covet you just mentioned the U.S Regulators Gary genzer calls you and invites you for lunch what do you tell them thanks but no thanks [Music] let's see he comes to you for a meeting what do you actually tell him in person um I'm out of town um CZ calls you and he's asking for your advice on what to do with all the fun on binance what do you tell CZ let me get a bottle of wine first talking about wine I know you're a big whiskey fan favorite type of whiskey that doesn't get the attention it deserves the brand or the the yeah that's called the brand and then we'll go to the location well I like hibiki hibiki yeah it's really hard to get but it's a really good you own uh your big the winery business again favorite type of wine cap solve really yeah yeah interesting yeah uh SPF forget cesino SBF gives you a call what is the one thing you can you would say to SPF get a good lawyer [Music] okay if you have to be a you have to be a better man Satoshi who is he she or they if you if you have to take a bet I think Satoshi is an AI that was created a long time ago is just coming out to right now uh many people are in the room actually are trying to learn more about crypto many people are new what is the one resource or book or asset you recommend they read to learn more about crypto well you gotta read your book Henry no I appreciate that ready to go and the Vincent chalk the group CEO of First digital Vincent my traditional question I'm going to end it with a panel with this one Vincent you can have lunch or dinner with one person lunch or dinner with one person Dead or Alive who would you have lunch or dinner with Elon Musk why is that I think he's really interesting it's just I like the thickest brains and see what crazy things he's thinking of next quite impressive actually yeah ladies and gentlemen a big out of Applause prevention talk thank you very much enjoy the rest of your day thank you [Applause]