ETHKL24 | Panel | Taking Crypto Finance Mainstream

okay so what's this panel about well this is all about bringing you guys to the mainstream it's about taking crypto Finance to the masses so for this we have crishet from one safe Aaron Tang from luno uh my good friend fad from hogen Capital Jack Chan from token eyes and moderated by my fellow MC from next door and also the CEO of Phil liquid Arthur th [Music] [Applause] [Music] come [Applause] [Music] [Applause] sorry guys just give us a second while we set up the chairs [Music] all right R I think this is definitely going to be the most structure uh panel because we are sitting according to where the location is of our face but it's putting uh crypto aside somebody just bought me this chugi and I have to say it's the best milk tea I've ever tried so in case if you are wondering I'm not the ambassadors of chagi but uh this is the first time trying it so I think you guys should really grab it in case so you you haven't tried it so apparently it's really good yeah arur you're hired so anyway does you really have an engagement as with the crowd who is the first time attending a crypto event the very first time ever all right ladies and Gentlemen please give us a big round of applause to our very first timer and to our intern to our International guest uh Salat datang uh to Malaysia truly Asia uh and that's what I always believe Malaysia is gu The Pinnacles of what Asia is so of course um uh well the only reason why I'm asking because well we are talking about uh and Diving very deep into this panel discussion taking crypto Finance mainstream and we're going to talk about Us's adoption and of course there's no other better way got to have like four distinguished speakers uh from a different as a vertical uh we have real assets we have digital asset as manager we have a regulated as a local exchange and also we have payment as well and myself as a liquid staking protocol so I think um uh I'm just going to PLU the brain but very quickly uh is taking crypto into Finance mainstream um primarily we're here right a very critical juncture where the line between traditional finance and uh the rapidly evolving of the world of cryptocurrencies is currently blurring essentially what we're going to dive very deep in what was Sim Niche Once Upon a Time it's now Paving its way or inching its way towards a mainstream institutional interest and a shift is how we perceive each other assets as a whole so today with this uh panelist and speakers we're going to really dwell as very deep as into understanding what's really necessary to make crypto Finance that's not a speculative space but essentially it's a functional part it's of a Global Financial systems got that we all want to be in so uh as I mentioned got it's all from different verticals so without further Ado let's just dive in right now very quickly uh because of the interest of time um so uh this 30 seconds a what is your day-to-day life like yeah I know this is very impromptu question actually oh day-to-day life um let me see wake up think crypto have lunch still think crypto you think you have a family maybe not um then uh make sure you summarize the day for the team um but long story short I mean I I really wish that at some point in time in the future that we will have you know blockchain technology not crypto itself be adopted just like how we are using the internet today you know SSL way back when and now it's like blockchain we're just going to use it that's that's that's a dream uh by the way he haven't introduced himself so that's Jack from tokenized as a without the I it's right tokenized without the I so it's spelled with a Y it's a real asset tokenization as a service platform yes next uh hi everyone my name is vad I'm from Helen capital and uh we are Malaysia's first U fund manager that can invest into crypto that's licensed by the Securities Commission uh so so yeah that's pretty much what I do from day to day I'm actually not a crypto guy that's not my background I am from the asset management side so I've been an asset manager for a total of 17 years now uh and it's been a whirlwind of the past 17 months diving and learning uh a lot about uh cryptos and stuff so it it's it's great to be at this event um it's a big learning opportunity for me actually yeah and I was just being told you're also a musician as well uh yeah yeah I'm Moonlight on the not of course the man requires no further introduction hi hi thanks Arthur uh my name is Aaron I'm the general manager for luno in Asia Pacific uh the question was uh what's my day to day like so I wake up in the morning check coin gecko for the latest uh crypto prices and then I go to work and then uh The Regulators will tell me what they want to see on the uh license crypto exchange and then uh I'll tell my team what The Regulators want and we'll try to find a way to make it work work uh and then we'll repeat that process every day yeah amazing uh I'm Chris I'm the CEO of one safe onesafe is a crypto-friendly bank account for web 3 companies uh my dayto day is mostly just working with banks um trying to figure out how we can allow for the transactions to flow smoothly for payments to move smoothly and then talking to a lot of web 3 companies understanding their pain points around the financial space and figuring out how we can kind of solutionize that for them cool there you go okay so this is set the context right that uh which is coherent the title of this um so starting off recre in your point of view what exactly do you think are the driving factor to be adopting this uh you know million billion dollars billion a million billion users into the crypto finance ministry and how exactly your project it's contributing to this Factor yeah and I think that's a really interesting question because everybody always asks like oh how do we get more crypto adoption um and I think we were actually just talking about this eron and solutions and Technology get adopted when it solves a very big pain Point um and the first use case of crypto was on a website called Silk Road and everybody was using Bitcoin because there was this big problem that you couldn't use like a regular bank account to buy these illegal paraphernalia it became a really bad PR issue for crypto but there was this really big problem and so there was so many people using it so so um when you look at crypto and you find out where the problems are um that's where you're going to see the most adoption and if we can start solving bigger problems and more painful problems I think that's how we're going to get the adoption uh let me just give one last example um one of the biggest use cases for crypto right now is stable coins in countries that don't use stable coins I mean that doesn't that can't hold us dollars so for example like Malaysia or Indonesia or the Philippines whereas in the US nobody needs to use US dollar stable coin because that's just the regular currency so I think really the pain point of what we can solve is really what will drive adoption over to you erand yeah I think I think Chris just pointed out something really really important um when I look back at the history of stable coins right um I think in the beginning it was like people were saying that uh Bitcoin is going to take over the world it's going to become the the one currency and then after that stable coin started coming out and then you started realizing that people actually wanted access to US Dollars and so on so so jumping onto Chris's uh Point here it's not that um it's not that you know we're in crypto for the sake of crypto right we're in crypto because crypto solves a problem and the the one problem that a lot of people in developing countries face uh you know whether it's in Malaysia or outside people are concerned about currency devaluation so I think that's uh just a really really great example of how crypto is solving problems and how we're going to get to like Millions and billions of users is um yeah we we're going to solve real problems and I think we'll speak a little more a little bit more about like what that might mean in terms of like regulation and a little bit of centralization and oversight and so on but I guess that's for a later question cool I'm going to step into asking digital assets fund manager uh and primarily it's a very new narrative in Malaysia uh and I think just for the benefit as of everyone as in Malaysia in know hogen Capital has been around now just that's over the last one 17 months 17 months okay yeah I like the Precision of it um so we're just going to dive in a bit as of also tapping on as understanding the institutional interest you know and I think that's something very interesting what do you think that where you know primarily we always talk about like institutional adoption and that's where it will attract the retails coming in what do you think um you know from hin capitals right now that is actually holding back as from this big institution players to be coming in plain and simple they are scared uh chicken chicken scared really because it's a new asset class for them they they have no uh ways of uh looking at it they don't know how to make uh odds and ends of it and yet at the same time they complain that there's not enough uh diversification there's more money coming in from let's just say pension uh everybody is forced to pay pension in Malaysia for example so that asset size is growing all the time and they're looking for new assets um bonds are expensive as hell uh just to give you some some order uh of where the pricing is nowadays uh a plantation company uh raises money at the level of what a AAA company used to do like your kazana or tanaga and all that you know so but they obviously not the credit risk is obviously not that but this shows that that is so much money chasing very few assets and they're talking about diversification so they try go they try all these other things and uh what's really funny is that it's not a new asset class is it it's been around for a really long time now and it's not even a small asset class if they think that's the problem you're talking about one trillion just in Bitcoin alone right uh and it has enough track record where you can look back and actually run some of this uh good old calculations that uh CFA people like to do Mars uh efficient Frontier and all that stuff and actually if you look at those numbers uh and don't just look at us right galaxy right about this coin shares writes about this uh Bitcoin is a much better diversifier of a 60/40 portfolio than gold is you know so I just think they just need to get over this mental hump uh who are the decision makers at institutions I don't mean to be agist I'm also getting on an age um but a lot of these guys are at least 50 60 70 years old you're talking Malaysian in institutions right that is really the average age of these guys who are making decisions and what is the first thing when you think about when uh when some proposes digital assets they say oh is it U is this real I canot can I invest in it I cannot touch it that that's still the level of the conversations that we're having whereas in the retail space is completely different right luno has done extremely well in Malaysia they've done a great job of providing access in a way that's regulated and so you know people can feel like they have a safety net of sorts somebody uh in their Corner saying like this is a safe way to do it uh but yeah it's funny that um institutional guys who are supposed to be the smart ones are the ones who are lagging severely behind so they need to Buck up but that's the trend and characteristics of how the Malaysian ecosystem is but it's very different you know internationally absolutely it's very different just look at um okay Black Rock you kind of expected right they make an ETF for everything so it was bound to happen um but Franklin Templeton really old school uh asset manager you know uh Mark mobus appears on on CNBC every other day basically talking about oh I got to go for this or this one is to be expensive pees or whatever emerging markets and um they finally changed their tune right the global allocation now includes 1 to 2% of Bitcoin so even those guys are starting to do it you know so I think U I don't know I I feel a little bit sad for the Malaysian space uh for the time being in terms of institutional adoption but uh that's what we're here for we need to keep uh knocking on the door until it opens well I'm a former Z Franklin templeton's Investment advisor so when I left the time they were all younger folks coming in and I'm oh okay that's going to change the whole Narrative of primarily how Frankl tampon is yeah and probably maybe it's this are the younger Generations that's making the decision right now now we're going to move on is got the real asset uh and Jack uh and of course I had you know incredible conversations with him earlier on um I think when it comes as go to real world asset you know I think it's probably one of those narrative one of those narrative and vertical that where it can really adopt like you know huge amount of users but of course we understand security compliance legal it's going to take a long journey to really have that kind of adoption now how do you really Envision as tokenized assets as just within the space as real world assets primarily the coist in with traditional Financial product and by coexisting then hence that's what we are talking about you know having that use adoption coming in right um I think there's a lot of misnomers out there around real world asset organization um sometimes I don't even want to use the word tokenization or real world assets assets are assets they are real world they are in the real world right and then also tokenization I mean that's like you're basically migrating data from like a private Enterprise out to the public Ledger like a public blockchain um sometimes private block blockchain that you can think about as a intranet then there's others that's like the public blockchain is like internet right so that's basically what tokenization is now there is a huge there is um a way that it can coexist but I think it's about like once you define a an asset and how how do you represent that asset today in the traditional Finance world it's like if it's a restaurant we were talking about it earlier or like if it's a coffee bean how do you define that asset how do you have legal claim on that asset so tokenization is also a form of legal claim on that asset can they both coexist yes and no a claim is only a very um it's a one-way claim from a particular representation it could be either a legal document that's digitized or a token can it move all of a sudden to the Token yes you can migrate slowly even the same Coffee Bean and then when I say coffee bean it's not the Coffee Bean on a tree you got you have to Define what a coffee bean is yes is it like the 50 kilo bag in a warehouse somewhere yes and that is that comparable to another 50 kilo bag in Colombia for example so those are some of the definitions you need to put in place once it's put in place then you can have a legal claim on that and then you can begin the tokenization about adoption I think there's a lot of Education that's needed because for any IT project I I I I mean it this is the most boring Enterprise set that I've am excited about right so for an IT project to migrate anything and do any work it requires effort cost right companies will ask that why do I even need to do this lift right this effort this engineering in lift it's exp expensive what am I going to save so we have to educate about like once you move over to a blockchain and tokenize that then can you save on the middleman can you save on capital efficiencies right if your stock of coffee beans is stuck there you have spent money buying those coffee beans and they're stuck there what if that can be tokenized and made liquid and somebody else can buy the stock of your coffee bean and then be able to free you up of your Capital so you can reinvest in other things or maybe even buy more coffee beans so adoption starts with you know how do we educate the Enterprises about the benefits of tokenization then after that we go into like the business and compliance side of things and then later on then we talk about technology which which is where where I come from so it's really weird that I when I come into this space it's like it's all about you know bringing in the understanding of what real asset tokenization is and then techn comes last is usually the easiest I hate to say it but yeah it's a legal and product construct is the hardest taking advantage as got the sunking cost asset and those underutilized asset is greatest advantage in the web three ecosystem yeah right definitely yeah yeah sorry if I could uh just add to maybe like um a liance view of of of what's actually happening in Malaysia I think it was this week right you were there SC by the uh chairman of the the Securities Commission of Malaysia announced uh that they're actually pushing for a tokenization of not real world asset but like financial asset uh they're going to do a bond issurance by kazana uh Malaysia which is uh Malaysia's Sovereign wealth fund so I'm I'm I'm glad to see that there's a top down push because I think in Malaysia usually it does take a top down push to get these things started yeah just thought yeah thought i' share with that as well yeah yeah tokenization of private funds is also a really good product Mark Market fit today Beyond US Treasury bonds right so yeah definitely all right we're going to switch uh gears we're going to go back to payment like a Chris uh of course payment you know exchange of course plays like a very instrumental rol like the really take cryptos to mainstream now uh but of course one of the biggest issues like if it's going to be for the non crypto native it's primarily to also understand us about you know Security in itself now in point of view how exactly do you really see for payment platforms to be changing its whole security compliance issue rapidly you know or evolving in the next couple of years um to essentially really bring on board as more users I think the uh security and compliance thing is somewhat interesting for a few reasons I think the ethos of crypto isn't ever about like anonymizing things it's more about opening access to more people it's making things available to people without throwing up so many barriers right the whole idea of decentralization is the fact that anybody can now open an account and anybody can build on what is basically something that's open source so I think like this idea of like security and compliance the main thing is how do we protect because of this like bad PR issue um the idea of people using it for like illicit illegal transactions but that's something that happens across the world right like anytime there's new technology like with the rise of email people started SC sending scam emails with the rise of dating apps now there's dating scams right like it's just it's just something that you have to you have to do with any new technology with compliance you're going to have to find ways to protect people the security side as well is just we have to I guess abstract all the complications away and allow people to use it like they're they're familiar with and I think that would really help kind of allow us to jump over this this curve um and and get really wide adoption cool we're going to go to luno you know I will tell you a very interesting story about Luna for the longest time ever I've been trying to empower educate um my my parents primarily my my senior folks that I'm actually not as in the trafficking business because they would never understand as about crypto but very interesting when luno started as advertising on billboards and that's when where my parents say that they now relating crypto to luno because they are seeing uh lunos appearing on billboards and this only happened postco only in the last two years that now they Rectify that I'm actually in a legal business for the very first time ever because of luno and that was how luno had played such a pivotal role in reshaping the thought of a non web native so Kudos and that eron for just putting you know and and promoting Luna across all Billboards and now eing Paving my way through easier for my parents to understand but I would love to really understand uh luno as being the first regulated local crypto exchange what and of course the pressure is there you know and that's I was has been told the six exchange is coming up there will be more exchanges coming up but I just want to understand more how is luno playing a very different role in educating the consumers users out there the 90% of the local folks fellow Malaysians to understand that you know crypto is the way to go yeah thanks Arthur I think um it it all comes down to the vision so Luna's Vision uh when I first joined or at least my personal Vision was like Malaysia needs a safe way to to get uh people into crypto and out of crypto into into funds so that was like my personal mission now um that you know it it of course it requires a little bit of I don't want to say selling out but it requires a little bit of compromise right because crypto today you see the crypto today it's not 100% decentralized anymore right we have crypto fund managers we have crypto exchanges which are licensed which have compliance and so on so I mean the the the reason that I got into crypto was because I wanted to help uh Malaysians get a a really safe and easy way um I think the the the the the question that you mentioned like you know what what is our role um I think the the first thing that we had to do is basically help to legitimize the asset class so back then six seven years ago most people will say oh is crypto scam is crypto is it even real right right what what is saying uh but I think today most Malaysian retail people have understood that you know crypto is is just an asset but it's in the digital realm so just back to your early question first thing is to legitimize it and I think now we are trying to work together with players like hogen to move into the institutional space so it's like repeating the process but instead of our parents now we are reaching out to the board of directors of say uh I don't know a public listed company and so on and it is really really hard because honestly you can have like one supporter you can have five supporters in the company but one chairman of the board says no the whole deal goes off right so I think there's so much work for us to do moving forward and I think now uh probably you know it gets a little bit more with more support because that's a really a collaborative support you know that that you're not luno is the not the only one like that it's in the ecosystem yeah yeah so we actually have a Association now it's called the assoc Malaysian digital asset platform Association uh all the regulated crypto exchanges are part of that Association and we collaborate on uh common areas right common areas of interest for example let's say uh we are facing banking challenges so we'll go together as an association or for example we are facing issue with uh I don't know uh scams and so on and we want to run a public awareness program so I think it's really nice to see that the industry is growing and we also working together with players like hogen nice very interesting now I want to now move into one of the very big Hot Topic about the ETF and of course this is primarily over to you for you know um the Outlook of ETF now the way how I see is ETF now essentially I think down you know like couple years down the road it's like I think probably every network is have its own ETF you know and even at token 2049 I was asking oh is a country is regulating ETF and it seems like there are many jurisdiction and countries that accepting ETF and promoting ETF now what is your outlook on ETF and do you see ETF as a primary gway for the users adoptions are going to be getting in because I mean this year is not so much of the Hing this year is really about the E TI bringing this influx of liquidity to the market uh yeah absolutely so the 60 billion in terms of the Bitcoin ETFs in the US is a very very good start um I think some of the more tepid expectations was like 50 or 40 and actually most of it was within the first few months wasn't it so it actually sped up a lot and then it kind of slowed down a little bit uh maybe there was a little bit of a reality check in terms of um uh what the Haring really means I a lot of people are probably trading this for the first time and they think that it's just all the way up and uh they think it's a it's a nice little staircase to the moon but uh real life doesn't really work like that and uh there's a lot of uh uh frictions uh with miners particularly right in terms of having to recalibrate how they get supply out back into the market are they profitable or not do they need to upgrade so um it hasn't really been that neat staircase that everyone's expecting so I think this is the reality of the ETF that I really want to nail down easy in Easy out that's the reality so if some people think there's going to be some kind of financial crisis next year I I don't particularly think that's uh going to be true because I think the FED is starting to cut interest rates uh in a timely manner unless something really goes out of whack but if it does happen what do you think is going to happen to the ETF then right it's it's going to flow out and it's also very clear that um for uh this uh the nent investors that um they're pretty much focused on bitcoin I think that goes some way to explain the uh growing Bitcoin dominance and the fact that eth didn't really quite pick up to the tune uh that uh Bitcoin did right it's kind of uh it just shows that these guys are already still trying to wrap their heads around Bitcoin before they even get around okay what is ethereum and all of that but I I personally think ethereum is a very very great project uh and if everybody could um once these guys move past the investment case and actually think about the utility how it's a world supercomputer and really all the action is happening on ethereum especially if a lot of these guys are moving into decentralized Finance all this kind of stuff it's only going to push more and more people to ethereum so I do think there is a bull long-term case for that people more and more people are going to use this Tech so I have no doubts about that but in terms of short-term Outlook uh it's dicey it's dicey yeah you're not saying this because we're if care right the outflows of etherum is really very high every time the market takes a dumps like you'll see the outflows etherum it's like oh it's Skyrocket uh I mean the the numbers are there right uh Tong was putting out the numbers on the screen just now in some in some facets it's really very very dominant and it's uh really where the the party of web 3 is in ethereum yeah okay um I think that would be the last question for you is Jack you know we will not touch so much as on the real assets but we talk about tokenization of assets and of course you know which is relevant to the real world say for example like real estate and art and how exactly do you see that the real world asset tokenization it plays a very very crucial role in democratizing the access to the traditional world I think it still boils down to you know the claim of the asset right so how do you have a legal representation of a piece of art um yes it could be fractionalized it could be enabling access but if you don't have that legal construct properly set out I mean those are some of the challenges that is securitizing like a piece of art is like the hardest thing to do real estate is almost the same thing so I think the challenges right now is actually around user experience as well so if there uh even like you know luno created a really good user experience from malians uh to and folks in the region to access a wallet right how about accessing assets can that be put into a wallet for example so user experience and educating on that is a huge challenge if we go you know past that then it's about um then compliance how can we then be compliant you know be having am qic AML all put in place so that you know we can actually hop past that to be able to gain adoption towards uh towards enabling access so the technology will enable access but then there a lot of regulations around it that needs to be set up first and be ready for it and it really good to hear that U Malaysia is um really at the Forefront of Regulation and want to want to help this adoption so to boost Malaysia and the regions around countries around this region to to the next level yep we have the two ogs over here so got to shape so reshaping so Malaysia so got the crypto space all right so in 30 seconds for each and every one of you the final questions would be how exactly do your envision the crypto Finance space as to be evolving in the next 5 to 10 years and what are the trends should we be watching for right now uh starting again from uh Jack itself and just you you don't mind because uh I I really dig what uh Jack is doing because you know top down we've already had the announcement so I personally think uh I'm not going to go 5 years 10 years I'm going to go what is the key to probably unlocking the institutions if you're trying to S if if you're trying to tell them hey Mark says you should have 1% uh Bitcoin in your in your balance sheet they're probably not going to listen right the they're still too scared but what if we said uh yeah you know kazana is now tokenizing a bond you can invest in this way now and you cut your settlement time from T plus2 to T plus1 or even t plus 0 instant settlement exactly right so it's improving a system you don't have to rely on Old banking rails called rentas and Swift and whatever that take forever for you to transfer money so I think once they start to get used to that and they see the usage of the the the usefulness of the tech then they'll start to see oh yeah it this is going to be the future we we've got to start investing in this yeah that's it for me absolutely yeah Aaron I think I can go into too much specifics but I think one Trend that is inescapable is basically the traditional finance and crypto sort of converging a bit uh I've it's always been my belief that you know for crypto to take to become mainstream to to become uh accessible to like not just Millions but hundreds of millions of billions it has to look a little bit more like traditional finance and traditional Finance has to look a little bit more like crypto because that's where you're going to learn uh the new and Innovative things so do look for more convergence as opposed to like things breaking apart that's a very regulated script yeah and Chris yourself sure I'll I'll give a I'll give a hot take um I think right now one of the big issues with crypto is um we haven't reached what is known as a Tipping Point um in network effects like if everybody is using crypto then it's much easier for you to onboard onto crypto right if everybody already uses WhatsApp then I'm just going to go on WhatsApp I'm not going to open up telegram because everybody's already on it so once we can reach to the Tipping Point I think everything regular Finance whatever it won't there won't be such distinction it will actually all be web 3 because you want to consider is web 3 and crypto a more Superior form of what we're using today and I really do believe so it's kind of like us taking the step from I guess paper currency versus coins or whatever right so if we do believe that um web 3 and and we can see kind of the benefits of it um is more Superior than our current Financial kind of constructs today then slowly once we hit the Tipping Point and everybody gets moved over everybody all Finance all everything will be just in crypto and we won't call it crypto anymore we'll just call it US dollars or or whatever like Malaysian ring in in tokenized form yeah I think um maybe just to have a couple more points is product Market fit for stable coin is is here right we're looking for phase two of product Market fit can we make it more liquid I think another thing that excites me quite a bit is the technology behind it where we can see convergence of deepin and rwa for example like deepin as in there'll be devices and whatnot that's monitoring crop fields and seeing how healthy they are how much water they're getting what the soil levels uh soil nutrient levels are and how they're growing and then to rwa as well then you can tokenize a particular piece of like farmland and then this convergence of deepin like fi liquid is doing and whatnot uh with rwa that could be something really interesting we'll see more and more convergence of Technologies around this including wallet Integrations and you know from the fund side of things and regulation it's all going to converge and that's what excites in the next 5 to 10 years ladies and gentlemen big round of applause as to Jack F Aaron and cre as taking crypto mainstream thank you so much Jens and thank you so much for being here with us thank you ladies and gentlemen a round of applause for the moderator Arthur as well come on great job guys