Private Markets Onchain: Tokenizing Private Equity, Private Credit and Real Assets | EBC12

Perfectly. Thank you for the introduction and thank you to everyone who came at such an early hour. So, today we will discuss tokenization, tokenization of real assets (RWA), and in particular assets (RWA), and in particular , private markets. I took a quick look at the data this morning. We currently have about $40 billion in tokenized real assets.

But I think it's more interesting to look inside: what exactly is happening between these asset classes? And while Treasuries, especially US, and commodities still dominate market cap size, we are seeing some of the fastest growing categories being private markets. So this will be the subject of our discussion today. And we have some great guests to discuss it. On the one hand, we have the heads of the largest European banks that are already implementing tokenization initiatives, and we will be able to learn more about the challenges they face along the way.

And on the other hand way. And on the other hand , we have a leading global investor in this field who is evaluating the value of tokenization and how to capture this market every day. So I'm really excited to learn more about all of this. Maybe we can do a quick introduction. I'll start with myself.

So, I'm Jeroen. I lead the EMEA region at LayerZero Labs. For those who don't know, LayerZero Labs who don't know, LayerZero Labs is a leading blockchain blockchain interoperability protocol. We connect over 160 networks and process around $10–15 billion in cross-chain transfers every month. But, of course, today we are talking about our speakers, and I will start with you, Antonino.

Antonino, you lead development and business at Peak Alpha's brokerage division. It would be interesting to learn more about your role and where you are on the journey to digital assets. Thank you for inviting me. In fact, I am the head of operations and development of the brokerage division of PKO Bank. And yes, we have been researching blockchain technology for about 5 years.

We started with the tokenization of art. We linked pieces of digital art to a credit card. We were the first universal bank in the world to do this. So that was the beginning of our story. And now we are watching what is happening in the market, and Poland is not part of the eurozone.

However, um, when we look at the European Union landscape, there are so many initiatives that we are already involved in in the Kivalis consortium. And I'm also involved in some, um, industry projects in Poland. So, we are trying to respond as best we can to this revolution that we are seeing in the financial infrastructure sector. Surprisingly. Great, very interesting to learn more about this .

Hmm, maybe Sumi is next. So, you are on the side of investors you are on the side of investors . It's really interesting to learn what your role is as a partner at Draper, and, um, yeah, what your thesis is on this whole area. Yes, of course. Um, so Sumi is one of the partners at Draper Dragon.

I started in the cryptosphere as a founder, actually in the tokenization space, before tokenization really became a big deal in 2020-2021. So I learned a lot about the general thesis of improving financial markets and increasing their efficiency. I worked at a bank before, both at the consumer and investment levels. And it's very inefficient in most aspects, at least where, you know, transfer agents and asset movement work asset movement work . So, um, that's why I'm interested in looking into this issue now and going through the stages of tokenization.

Wonderful, wonderful. And now Martin, last but not least , um, your role is Digital Asset Transition Manager at Rabobank . We, we talked about it. I don't think this role existed 12 months ago. So it's also really interesting to learn more about what the role is and how you see it developing in the future.

Yes, thank you very much. So, my name is Mart van de Nuland. I actually work at Rabobank as a transition manager. That sounds like a very broad role, and in fact it is indeed a very broad role. Um, I used to work for a consulting firm consulting firm .

I was hired by Rabobank to do an assessment on regulation, future regulation, microregulation. Um, yes, there were no products in scope, but we said you should pay a lot of attention to this regulation because many of your customers probably interact with all kinds of cryptoasset providers. So this is definitely a market you should pay attention to. And then we saw an acceleration across Europe. Many banks are entering this space are entering this space .

At Rabobank, we already had a strong technological base. We have had a blockchain team for about 8 years. Which was mostly a real innovative project. So that's why I came here 12 months ago, to support the bank and help them move into the digital asset sector, turning it from an " turning it from an " innovation platform," you could say, into a more serious business serious business opportunity. So, this basically involves developing a strategy all the way down to the board level all the way down to the board level .

Then I support policy formulation as well as positioning development. But at the heart of all this is a the heart of all this is a large amount of training for the entire bank, at all levels. After all, it is difficult to train such a large bank quickly enough to have time to join the race in the digital asset ecosystem. Perfectly. So now that we've introduced ourselves, let's get down to business.

I think we should take advantage of the fact that there are real practitioners here who have actually done this—not just, as Martin said, within the scope of innovation, but actually launched projects and brought some of these products to market. And maybe Martin, we'll start with Rabobank. It seems you have already done some work on tokenization, but that was for deposits and other assets within assets within EU sandboxes. So I would like to know more about what exactly you did there, as well as what conclusions you drew and what surprises you encountered along the way. Yes, we participated in the European blockchain sandbox along with several other partners.

It's really a whole ecosystem, including the regulator including the regulator , where you start developing proposals. We worked together with Asset Blocks, another custodian, and regulators, and it was really new for everyone. But all of this was limited to the framework of a "sandbox", which allowed for many discussions with the regulator. Do we need to make choice A or B? And since everything was new for most of the parties involved.

We learned a lot : how to manage a custodian to manage a custodian , how to think through internal policies, what the regulator thinks about it . So it was an experience for everyone, as well as an understanding of what your role could be in this ecosystem in this ecosystem . We finished this, it seems, quite a while ago, at least a year ago. And recently, we also issued a tokenized bond together with another Dutch bank. No coupon, just a one-year bond, very easy and simple, just to try.

But the problem is that the monetary part of the transaction is not yet online. So, it all starts with determining what policies you need, which legal compliance and risk professionals to bring in, and do they have the necessary expertise? This is, in fact, pioneering in everything, but it is becoming more and more serious and helps us understand what fundamental principles are needed to take the step from pilot projects to real production? Okay, that's interesting. Maybe, Antonino, this resonates with you?

Have you encountered anything like this, or what have you seen to really incorporate such themes into your work? You've talked about asset tokenization and other initiatives you're implementing, so what operational aspects do you think are important that others might not be aware of from the outside? From an operational perspective, I believe that blockchain technology itself is not a problem, as there are many excellent, high-quality providers on the market right now. But on the other hand, when you already have this technology, it needs to be implemented, and here the main challenge becomes integration with banking systems. And here's another step: first you need to coordinate everything, and then learn how to do it and train your teams.

This is a very big challenge because you have to go through almost all departments of the bank: starting with IT, then legal, compliance, KYC, AML, anti- fraud, in fact everything. It is very difficult at first to explain to everyone that blockchain technology blockchain technology is not just crypto assets or some rumors they have heard about, but also a very important infrastructure. So it was a big challenge for us, but I think we've already passed that stage and we've succeeded. We are now at a stage where I see interest in blockchain technology growing within our bank. It is very important to have the support of sponsors within the bank, because often the idea of ​​blockchain comes from experts who follow this technology, and convincing the board is convincing the board is also quite a difficult task.

So we are at a stage where we hope to provide our clients with new blockchain services as well as tokenized products next year. However, there is one more step left—the legal environment. In fact, we don't have this in Poland yet, so we haven't implemented the MiCA regulation yet. But here I also see that it is very important to communicate with the supervisory authorities so that they understand that we are talking about infrastructure, and trust in crypto assets is still very low. So I think there are a lot of lessons to learn, and yes, these are the biggest challenges we face right now.

Okay, maybe Sami, let's look at you—with Draper Dragon, I understand you invested in Centrifuge, which has already tokenized various private markets and private lending funds. It seems you also recently launched a fund with the Cardano Foundation, so it's interesting to hear from your investments and portfolio where you see development, whether there are things from the banks side that you're close to or whether there are others that are moving at different speeds, that's very interesting. Certainly. It's exciting, we're participating in a panel with banks, and if we were to come back in 2020-2021, it would be impossible. In terms of where we think the market is heading, there are several phases of tokenization, and we are currently in the “wrapped” asset phase.

I think about 80% of the market is in the era of introducing a chain or asset to the blockchain. It's about 300 billion, and if you exclude stablecoins, it's much less, so I think we're still in the early stages, and there will be many more winners. The most interesting part The most interesting part is that it goes beyond “wrapping” and presentation, as it only improves performance, but what can you actually do with a tokenized asset and why should banks care? It's more about composability, connecting to the broader DeFi ecosystem, and using a true blockchain platform to drive productivity, generate revenue, and integrate all of that into banks, because the banking layer can be the distribution layer. And essentially, if the regulatory paths become clear and things start to take shape, we could see banks start to use this on-chain revenue and resources, which we are gradually seeing from players like Centrifuge, Open Trade, and Figure with their lending.

We are gradually seeing winners emerge, but I believe we are in the later stages of compounding, and that will be the most interesting part for us as investors and bankers alike. Now, perhaps to support this point, I completely agree with you . I think the fact that we tokenize something so that it's on the blockchain, maybe minify it for easier access— for easier access— that's one thing, that's great, but of course, that's just the tip of the iceberg of what can be achieved, right? So what do you think is stopping us from simply tokenizing an asset to creating its true compositeness? Is this technology?

Is this regulation? Is it simply the maturity level of the different participants? I'm also very interested in hearing your thoughts on this. Yes, I think that technologically we are well ahead of our time. I believe we understand how DeFi can actually work.

I think the regulatory environment itself is becoming a bottleneck. It's not entirely clear to the developers and people who are building these tokenized platforms or opportunities for DeFi opportunities for DeFi returns, and banks can't fully engage because they have to ask the question, "Can I do this?" And if developers and banks are thinking, "Can I do this? Is this legal?" There is no clear path, so we need the same clear path as in current banking systems.

So I think once this is unlocked, we can move significantly more assets onto the blockchain, get banks to use these primitives, and enable composability. That's right. Maybe to develop this from a banking perspective, right, Martin? You mentioned that you are thinking about your technology stack technology stack , about how you can move tokenized private market assets to the blockchain. Given your experience participating in many such discussions, what do you think should be left under your own control, and where is it better to build partnerships to build partnerships ?

It may be worth taking certain things out of the bank's control or, say, not including them in its own technology stack. I am also very interested in learning more about this. Yes, I really think that as a bank you generally have to think about what role you want to play. What role do you want to play in the ecosystem? Do you want to work directly with clients?

Do you want to master technology master technology ? Do you want to be a custodian? So you see different models. Here, for example, is neobanking in the Netherlands in partnership with Bunk. They don't need technology.

They don't need regulations, but they can offer it to their clients, which makes a lot of sense to them. They are very quick to offer this to their customers. At Rabobank, we look at our role in the ecosystem a little differently. We want to protect our clients' assets as much as possible and be responsible for them . Therefore, we are building an asset storage system on our own or, at least or, at least , collaborating with a technology partner, but keeping the storage under our control.

You can go even further and develop a complete storage infrastructure within the company. So it all depends on the bank's strengths, how you want to use them, and what role you want to play in the ecosystem. But for us at Rabobank, it is important that the custody functions remain with us, the bank, and not with a third party. Yes, that makes sense. You want to justify your trust as a large institution.

Maybe, Antonino, on your part—is there something that is close to you and also interesting to know: we discussed transferring assets to the blockchain, but what about distribution, how do you scale this process, I would really like to know. Yes. In general, when we talk about the private market and blockchain technology, I think it's worth separating these two concepts. The first is a private market on the blockchain. Here, as in the traditional capital market, we are seeing growth.

We are seeing growing interest from institutional clients, and that is one aspect. And if you look at real assets (RWA) on the blockchain, they are also growing very quickly . This is one point, and perhaps because of my negative experience in Poland, I believe that we should not interfere with this regulation. Especially regulations that do not correspond to the essence of blockchain technology. This is another step where we must try to explain to the authorities in each country that we always try to protect the client, but we should believe that the client is also capable of thinking a little.

Compliance is important, cybersecurity is important cybersecurity is important , but it's worth allowing customers to have at least a little bit of an appetite for risk. This is the first aspect, and I really hope that regulations, particularly in Poland, will be open to new products. Second point: when we talk about the private market, I mean the traditional private market. And is it worth transferring this traditional private market to blockchain? In my opinion, now is not the right time for this.

I think it's only natural that we started tokenization from the public market, as faster settlements and liquidity are needed there. This is a completely different nature of the market. And as for the traditional private market, I think it might be worth waiting a bit there. Of course, the network market— when you release something on a private blockchain private blockchain —is a different story, but when it comes to the traditional market, I think we should start with the public one. The public sector is our first step, and then, I think, in the future we will consider other stages.

Okay, interesting. So it seems you mean that the private sector is on the way, but maybe it's not the first priority. That's right. Which, to me, is reflected in many trends where stocks and other instruments are first moving to blockchain. Maybe on your part—we in Europe think a lot about MiCA and what's happening here, but there's a global space, and we're lucky that you're a global investor.

I'm curious to know where, in your opinion, especially when it comes to private blockchain markets, the most significant developments in the world are taking place. What specific jurisdictions or players come to mind? When it comes to jurisdictions, I don't think there is a winner, and there are certain issues that arise anywhere in the world. So, I think this is all still in development. Unfortunately, due to the lack of clear legislation in the past, there was much more fraud in the States.

But, of course, MiCA and other initiatives in Europe are moving forward. However, overall, question marks still remain, and that is what we hope to address. And I believe that education is of paramount importance. We need to educate legislators and politicians so that they understand what this means, take small steps, explain how it increases productivity and speed, which will eventually lead to clear regulation when assets can be tokenized, transferred to the blockchain, and connected to banks. So, I think we're not there yet, but we're seeing a race between jurisdictions working on this, and some developers are just breaking down barriers to make it work.

That's the beauty of startups: you just do the work and overcome problems as they arise. And it seems to me that we are seeing a certain race between countries, as well as their legislators, etc. It would be interesting to look “under the hood look “under the hood ” of your investment activities: to what extent do you build your investment thesis based on regulation and jurisdictions where, in your opinion, changes are happening faster? Are you more focused on choosing specific markets or do you think we will eventually get there and are you looking at the future without getting too attached to where the jurisdiction is today? Certainly.

I think regulation is important because we need to make sure that we are compliant and not breaking the law, but look at prediction markets—it's a huge "gray area huge "gray area ," like Polymarket or Kalshi. It's not always clear what will happen next, but there is an understanding of the direction of development, and in terms of regulation and tokenization, I see many signals that we will get there. It's not a question of "if," but "when." I think if you had asked me about this six or seven years ago, the answer would have been: " the answer would have been: " Who knows if it's even possible." So, we have already passed the doubt stage, it is only a matter of time, and this is where we can bet on the next stages: connecting these assets, increasing their performance, and using them for something more than just presentation just presentation .

So we try to focus on the later stages, not the early ones. Of course. And another point I would like to raise—you mentioned it, Martin, I'll start with you, but others can chime in as well— chime in as well— is what you said about the monetary component in these transactions, right? We will not be able to fully bring these tools online and provide a full experience without a monetary component. What do you think it takes to unlock this?

Also, it seems you are part of the Key Value consortium. How do you think such stablecoin consortia among institutional players can help bring monetary value to the network and ultimately advance the tokenized asset market? I think this is a very valid question. Well, I'm used to calling it digital money, because digital money, because of course we have the Kivalis stablecoin and other stablecoins, but there are also wholesale CBDCs. Tokenized deposits, there are so many digital money movements, so many developments.

I don't think it's possible to say who will be the undisputed winner. I think many banks are pinning their hopes on Kivalis. But I believe that you shouldn't bet on just one horse. Don't put all your eggs in one basket. So just make sure just make sure you have choices, develop in all these different forms of money.

Maybe it will depend on the use case, but I think yes, we will need several different forms for different purposes. So I would say it's better to be prepared and lay all the foundations to respond quickly when it comes and when it's needed. But right now the focus is on tokenization, but once we figure that out , we'll move on to how to implement the next phase, which will have a much bigger impact—namely, the monetary aspect. I am excited that the Kivalis stablecoin will hopefully be operational soon. You are biased, of course , but is there anything else to add regarding the cash side?

Maybe I'll add something about stablecoins, since we're debating a lot about whether they will become a mainstream payment instrument. Yes, we really need them for securities to provide a "delivery versus payment" mechanism. However, I see that there are so many ways now, even in Europe, where we can make payments very quickly. So I think it will be very interesting to see in the future whether these stablecoins become the main payment method or not. And I think they are really needed for securities, but for payments—we are, of course, members of Kivalis are, of course, members of Kivalis .

But I see this as another opportunity as another opportunity , because as a universal bank we have to be compatible with all the payment methods that our customers need. So that's another topic: when we talk about stablecoins, we need them for DVP, but for payments there are a lot of ways now, and I think in a few years we'll see what becomes the main thing for our retail customers. Okay, great. I would like to conclude by looking a little into the future, and perhaps taking 2030 as a specific time horizon. Sami, speaking about your portfolio and investments, where do you see the biggest potential in 2030 in the context of RWA tokenization, especially in private markets?

What stage do you think we will be at? It is very interesting to hear your opinion. Yes, I think that in 2030 the winners won't even understand what blockchain or crypto is. I think all this will fade into the background, and the infrastructure will work in the background. I think the most important thing is the value proposition it creates.

You won't even fully realize it's crypto. This is exactly what we are seeing now—the market is gradually maturing gradually maturing , traditional finance is merging with DeFi, and in the end it will just be finance. Therefore, I believe that this, as well as the "rails" themselves ( as the "rails" themselves ( infrastructure), are the most important. I think this is where we have made the right bets so far—on the infrastructure, not on the asset itself. So, how do we bring these tokenized assets to the network?

How can we crush them? Players like Mogul, who are involved in real estate fragmentation—you don't even know it's blockchain, even though it's actually what runs on it. Same with Centrifuge, Open Trade and some others. So, I think we're seeing the infrastructure become a reality, and the use of specific crypto specific crypto jargon is decreasing. I think it's just finances in general.

So, crypto will succeed when it disappears from the radar. Antonino, what about you? As a bank, what asset class do you think will be the biggest in terms of tokenization by 2030? I think we should think about infrastructure first. I hope that by 2030 we will have already transferred our infrastructure to blockchain.

This is the first priority, and then we will decide which assets to place there. Because if we are ready for distributed ledger technology (DLT), we can easily move everything there. Yes? However, one interesting possibility is stock splits. This is quite an interesting product for our retail customers who can't afford, for example, full Apple shares or something like that.

And blockchain technology answers this need in a very accessible way. So this is exactly the type of product that I see us being able to provide to our retail customers in the future. But, as I said, the main thing now is infrastructure. I think most universal banks in Europe are currently working on implementing new technologies into their systems. At least, we should do that.

And if we ensure such interoperability between banks, we can think about our other products. Because we need interoperability within banks to have a secondary market and give customers different payment rights, etc. So, infrastructure is number one. And then we can tokenize anything we want. And everything that is legal, of course.

OK. So, you get the infrastructure and then you go after the money. Martin, maybe we can summarize with you. We started with your role as a digital asset transition manager. 2030, will this role still exist?

Will you lose your job or will it change, and how? Yes, that's a valid comment. In fact, my goal is to In fact, my goal is to become useless by then . That is, so that we complete this transition. So that this is no longer a transition.

This should become part of normal operations normal operations , because now we are laying the foundation and building the right infrastructure. And, as Antonina says, you need to go after money where there are the best offers. But my goal is to just integrate it into all business lines so they can make it part of their regular work, instead of having a separate team trying to train the entire bank. I hope entire bank. I hope everyone will know what to do by then.

Perfectly. So we sincerely thank the speakers for sharing their thoughts. I would like to give the audience another minute for questions if there is anything you would like to discuss in more detail. This means that everything was very clear. So thank you very much Martin, thank you very much Antonina, thank you very much Sammis.

Please address the speakers after we conclude, and thank you for being with us this morning.