WEBVTT 00:00:05.840 --> 00:00:08.339 Welcome back ladies and gentlemen to the all 00:00:08.339 --> 00:00:11.039 in crypto podcast. I am your host Rupert and 00:00:11.039 --> 00:00:15.000 today I am delighted to be announcing Graham 00:00:15.000 --> 00:00:18.519 Rodford once again the founder of our checks 00:00:18.519 --> 00:00:21.539 and of course current CEO welcome on board Graham. 00:00:21.579 --> 00:00:23.899 How are you? I'm great. Thanks. Thanks for having 00:00:23.899 --> 00:00:27.379 me back The pleasure is all mine as always This 00:00:27.379 --> 00:00:29.059 is the third time having you on the show and 00:00:29.059 --> 00:00:31.679 we absolutely had to reach out on the back end 00:00:31.679 --> 00:00:33.880 of the announcement that dropped Monday where 00:00:33.880 --> 00:00:36.640 Archax in collaboration with Aberdeen and Lloyd 00:00:36.640 --> 00:00:41.420 Banking Group announced a first ever use of digital 00:00:41.420 --> 00:00:44.100 assets under the financial market. So we're going 00:00:44.100 --> 00:00:46.280 to get into that. Before we do, Graham, could 00:00:46.280 --> 00:00:48.299 you just give us a recap for my audience that 00:00:48.299 --> 00:00:50.320 haven't heard of Archax before? Or this might 00:00:50.320 --> 00:00:53.119 be their first time coming across you and your 00:00:53.119 --> 00:00:54.759 company. Could you give us a recap in regards 00:00:54.759 --> 00:00:58.640 to what it is you guys do? Sure, yeah, we're 00:00:58.640 --> 00:01:00.759 basically from financial services background. 00:01:00.840 --> 00:01:04.099 We've been around since 2018. We set up our checks 00:01:04.099 --> 00:01:06.659 with a view that everything was moving on chain. 00:01:06.700 --> 00:01:09.739 So not just crypto currencies, but all traditional 00:01:09.739 --> 00:01:12.500 financial assets, equity, debt, funds, whatever 00:01:12.500 --> 00:01:15.769 it may be. It was quite a big call seven years 00:01:15.769 --> 00:01:18.230 ago. Some people thought it would happen. Some 00:01:18.230 --> 00:01:20.810 people weren't so sure, but obviously now everything's 00:01:20.810 --> 00:01:23.290 moving in that direction with RWA being one of 00:01:23.290 --> 00:01:25.849 the key terms for everyone out there. To back 00:01:25.849 --> 00:01:28.969 this in 2018, we went to the FCA in the UK, the 00:01:28.969 --> 00:01:32.040 Financial Services Regulator. and got the UK's 00:01:32.040 --> 00:01:35.180 first digital securities exchange, custody broker, 00:01:36.280 --> 00:01:38.260 and crypto asset registration. So what that means 00:01:38.260 --> 00:01:41.500 is in the UK, if anyone wants to do anything 00:01:41.500 --> 00:01:42.939 with securities, we can do it. If they want to 00:01:42.939 --> 00:01:44.400 do anything with crypto, we can do it. And if 00:01:44.400 --> 00:01:46.159 they want to do anything with digital securities, 00:01:46.579 --> 00:01:48.879 that's really our sweet spot, bringing all traditional 00:01:48.879 --> 00:01:51.840 financial assets on chain. I've always sort of 00:01:51.840 --> 00:01:56.370 praised Artax as a pioneer in the kind of digitization 00:01:56.370 --> 00:01:59.310 of financial instruments and the markets more 00:01:59.310 --> 00:02:02.409 broadly. You guys really were certainly the first 00:02:02.409 --> 00:02:06.090 to gain regulations under the FCA, our kind of 00:02:06.090 --> 00:02:09.729 watchdog here, our equivalent of the SEC in America. 00:02:09.870 --> 00:02:12.770 You guys literally were the first and obviously 00:02:12.770 --> 00:02:15.229 were very early on what now is becoming a very 00:02:15.229 --> 00:02:17.669 obvious trend, but perhaps wasn't back then. 00:02:17.689 --> 00:02:19.530 And we'll get into the reasons into why all of 00:02:19.530 --> 00:02:21.990 this is happening. I want to dive into what was 00:02:21.990 --> 00:02:24.509 announced on the 14th of July, which was Monday, 00:02:24.509 --> 00:02:27.250 just a few days ago, where Archax announced that 00:02:27.250 --> 00:02:31.030 with Lloyds Banking Group, Aberdeen, and of course, 00:02:31.250 --> 00:02:35.210 Archax, they had done the UK's first use of digital 00:02:35.210 --> 00:02:39.370 assets with utilizing Aberdeen's money market 00:02:39.370 --> 00:02:41.990 funds that have been tokenized and tokenized 00:02:41.990 --> 00:02:45.530 UK gilts as collateral for foreign exchange trades 00:02:45.530 --> 00:02:48.590 between Aberdeen and Lloyds. Let's get into this. 00:02:48.629 --> 00:02:50.590 Let's give an overview of it. And then we're 00:02:50.590 --> 00:02:52.650 going to talk about why this is all so significant. 00:02:53.169 --> 00:02:55.650 Sure. I guess, you know, there's a number of 00:02:55.650 --> 00:02:59.689 building blocks to get to any of these and people 00:02:59.689 --> 00:03:02.069 are starting building RWA as I mentioned. So, 00:03:02.150 --> 00:03:05.650 you know, for your audience, I guess, yeah, any 00:03:05.650 --> 00:03:09.050 real world asset that really people don't think 00:03:09.050 --> 00:03:11.650 of as crypto and is tokenized, people categorize 00:03:11.650 --> 00:03:16.639 as RWA and specifically Archax talks often about 00:03:16.639 --> 00:03:19.379 regulated securities, so equities, debts and 00:03:19.379 --> 00:03:21.659 funds and bring them on chain. And Aberdeen invested 00:03:21.659 --> 00:03:26.879 in us in 2022. They led our Series A and we tokenized 00:03:26.879 --> 00:03:28.460 their money market funds. And we've done that 00:03:28.460 --> 00:03:31.060 for a number of other large financial institutions 00:03:31.060 --> 00:03:35.759 as well. So we have all of those available already. 00:03:36.300 --> 00:03:37.860 So, you know, Aberdeen, Blackrock, Fidelity, 00:03:38.080 --> 00:03:41.219 State Street, Boney, I'm sure I'm missing some, 00:03:41.360 --> 00:03:43.580 Bailey Gifford, League in general, they're all 00:03:43.580 --> 00:03:46.139 available. and we have them available but the 00:03:46.139 --> 00:03:49.400 kind of the kind of the I guess the everyone 00:03:49.400 --> 00:03:51.919 knows this is the future and everyone knows in 00:03:51.919 --> 00:03:54.939 the future there'll be a lot of use cases but 00:03:54.939 --> 00:03:56.879 up until now if you were a treasurer sitting 00:03:56.879 --> 00:03:59.500 in a corporate and you had access to a money 00:03:59.500 --> 00:04:02.180 market fund from a traditional bank why would 00:04:02.180 --> 00:04:05.080 you buy the digital variant so companies like 00:04:05.080 --> 00:04:07.099 our checks are saying well look you know we're 00:04:06.889 --> 00:04:09.810 trying to negotiate the best prices for you or 00:04:09.810 --> 00:04:12.229 try and maybe reduce the minimums, but it's been 00:04:12.229 --> 00:04:15.469 quite hard for us to find other use cases. And 00:04:15.469 --> 00:04:17.709 we're starting to see some of those utilities 00:04:17.709 --> 00:04:19.370 come around. So people are starting to talk about 00:04:19.370 --> 00:04:22.170 24 seven being able to swap in and out of money 00:04:22.170 --> 00:04:24.949 market funds for stable coins. But one of the 00:04:24.949 --> 00:04:28.329 other interesting use cases is collateral. So 00:04:28.329 --> 00:04:31.329 our tech spotted this, I guess, I mean, some 00:04:31.329 --> 00:04:34.339 time ago now, maybe even a year ago. we started 00:04:34.339 --> 00:04:37.000 working more formally on our Nest product. And 00:04:37.000 --> 00:04:40.680 the idea of Nest is that any of our clients can 00:04:40.680 --> 00:04:44.040 transfer anything to anyone at any time. So, 00:04:44.100 --> 00:04:47.240 you know, if you held tokenized Vodafone and 00:04:47.240 --> 00:04:49.100 you wanted to send it to someone as collateral, 00:04:49.399 --> 00:04:51.620 then you could do that. If you had a money market 00:04:51.620 --> 00:04:53.500 fund and you want to pay one of our other clients 00:04:53.500 --> 00:04:54.939 for something, you could do that. So this general 00:04:54.939 --> 00:04:57.680 concept that everyone should be able to use their 00:04:57.680 --> 00:05:00.040 securities for anything. That's the idea. And 00:05:00.040 --> 00:05:02.500 then of course, in traditional financial markets 00:05:02.500 --> 00:05:05.519 all day long, financial institutions are sending 00:05:05.519 --> 00:05:07.399 things backwards and forwards to each other. 00:05:07.660 --> 00:05:12.740 It tends to be cash or what's referred to often 00:05:12.740 --> 00:05:16.279 as higher quality liquid assets, which generally 00:05:16.279 --> 00:05:19.800 means government treasuries, easily exchangeable 00:05:19.800 --> 00:05:22.879 instruments. But really, unless regulation dictates, 00:05:23.019 --> 00:05:25.660 there's no reason. anyone can't accept anything. 00:05:25.899 --> 00:05:27.860 And that includes cryptocurrencies. I see a world 00:05:27.860 --> 00:05:30.040 in the future where people might accept Bitcoin 00:05:30.040 --> 00:05:32.720 to satisfy a bank margin call as long as it's 00:05:32.720 --> 00:05:34.439 allowed under their agreement. So that's kind 00:05:34.439 --> 00:05:37.120 of the premise of what we had in place. And we 00:05:37.120 --> 00:05:39.439 approached a lot of financial institutions for 00:05:39.439 --> 00:05:42.500 Nest. We actually have about 20 institutions. 00:05:42.889 --> 00:05:45.870 Working with us on this some of them observing 00:05:45.870 --> 00:05:48.050 some of them interested in feeding into it some 00:05:48.050 --> 00:05:51.870 of them just listening and But specifically Lloyd's 00:05:51.870 --> 00:05:53.589 Aberdeen and a couple of others. I can't announce 00:05:53.589 --> 00:05:57.250 yet they said, look, we actually want to do something. 00:05:57.490 --> 00:06:00.610 And a lot of the space is built around POCs and 00:06:00.610 --> 00:06:02.529 wireframes, but what we've actually got here 00:06:02.529 --> 00:06:05.610 is a live product. This wasn't one transaction. 00:06:05.829 --> 00:06:07.750 Lloyd's and Aberdeen have actually, I can't really 00:06:07.750 --> 00:06:09.170 get into details of what's happening between 00:06:09.170 --> 00:06:11.189 them, obviously, but there is a relationship 00:06:11.189 --> 00:06:13.730 between them. One has to post margin to the other 00:06:13.730 --> 00:06:16.509 one. There's a margin call and they used it to 00:06:16.509 --> 00:06:18.649 prove this works and they continue to use it 00:06:18.649 --> 00:06:21.680 to this day. So we have, you know, I think daily 00:06:21.680 --> 00:06:24.279 transactions going through at the moment on chain, 00:06:25.120 --> 00:06:30.399 which is a great use case. So it's possible in 00:06:30.399 --> 00:06:32.620 the future that these money market funds can 00:06:32.620 --> 00:06:36.519 be used. And so why do asset managers like it? 00:06:36.519 --> 00:06:39.120 Because in the past, if someone held a money 00:06:39.120 --> 00:06:41.199 market fund, they held a money market fund. And 00:06:41.199 --> 00:06:43.000 if they needed to satisfy a margin obligation, 00:06:43.060 --> 00:06:45.339 they had to sell it, which reduces AUM in the 00:06:45.339 --> 00:06:48.800 asset manager. If the asset manager's money market 00:06:48.800 --> 00:06:51.000 fund can be used for more things, there's more 00:06:51.000 --> 00:06:53.100 chance of people holding it. And obviously, the 00:06:53.100 --> 00:06:55.540 world's talking a lot about stablecoins at the 00:06:55.540 --> 00:06:59.420 moment. And really, Tether and USDC are still 00:06:59.420 --> 00:07:02.779 dominating that. But around the periphery, you're 00:07:02.779 --> 00:07:05.959 seeing all of these kind of yield generating 00:07:05.959 --> 00:07:09.819 treasury stroke money market fund plays occurring. 00:07:09.920 --> 00:07:13.639 And if they can become as frictionless as the 00:07:13.639 --> 00:07:15.000 existing stablecoins, then we're going to have 00:07:15.000 --> 00:07:16.720 an interesting world where things like money 00:07:16.720 --> 00:07:19.649 market funds can start to be used. I mean, we 00:07:19.649 --> 00:07:21.610 announced a while ago on our tax already, we're 00:07:21.610 --> 00:07:23.529 capable of exchanging money market funds for 00:07:23.529 --> 00:07:26.089 Bitcoin. We can literally run securities against 00:07:26.089 --> 00:07:29.189 unregulated instrument pairs. So there are kind 00:07:29.189 --> 00:07:31.089 of futures in that direction, I guess, where 00:07:31.089 --> 00:07:32.529 these asset managers are saying, okay, we've 00:07:32.529 --> 00:07:33.870 gone from having an instrument, which wasn't 00:07:33.870 --> 00:07:36.490 very useful for much other than having it as 00:07:36.490 --> 00:07:38.209 an investment. And suddenly you're going to be 00:07:38.209 --> 00:07:42.029 able to use it for a lot of purposes. The ramifications 00:07:42.029 --> 00:07:45.740 to all this are just unbelievable. Obviously, 00:07:45.800 --> 00:07:48.920 you'd mentioned that this is the UK first live 00:07:48.920 --> 00:07:54.720 usage in this manner of using guilts and using 00:07:54.720 --> 00:07:57.259 money market funds as collateral, tokenized guilts 00:07:57.259 --> 00:08:00.180 and money markets funds as collateral. But that 00:08:00.180 --> 00:08:03.639 will evolve into this internet of value where 00:08:03.639 --> 00:08:06.259 actually value can be swapped for value. It doesn't 00:08:06.259 --> 00:08:09.889 need to be the way that it's been done traditionally 00:08:09.889 --> 00:08:11.870 with cash or with other things where you need 00:08:11.870 --> 00:08:13.310 to liquidate something to actually make the exchange. 00:08:13.550 --> 00:08:17.290 And that just opens up a whole new world of financial 00:08:17.290 --> 00:08:19.949 activity. And this is why, again, we always applaud 00:08:19.949 --> 00:08:22.449 Archax for being really a pioneer in seeing this. 00:08:22.670 --> 00:08:24.810 I think the first time I interviewed you, you 00:08:24.810 --> 00:08:26.589 actually mentioned that you were very excited 00:08:26.589 --> 00:08:29.689 about the possibilities of using a money market 00:08:29.689 --> 00:08:32.690 fund actually as cash because it kind of meant, 00:08:32.889 --> 00:08:34.529 well, you could get the yield on it, but you 00:08:34.529 --> 00:08:36.190 could also get the kind of liquidity that you 00:08:36.190 --> 00:08:39.519 would get with cash. It's very, very exciting 00:08:39.519 --> 00:08:41.580 all of this. And I just want to touch on what 00:08:41.580 --> 00:08:42.879 you mentioned there. Do you see a world where 00:08:42.879 --> 00:08:44.820 actually outside of money market funds? And of 00:08:44.820 --> 00:08:46.460 course, it's very obvious that they're going 00:08:46.460 --> 00:08:48.240 to be used to do this. You guys are already doing 00:08:48.240 --> 00:08:51.360 it along with Aberdeen and Lloyd's. Do you see 00:08:51.360 --> 00:08:54.120 a world where you could use securities like stocks 00:08:54.120 --> 00:08:57.220 to settle in this kind of a manner? I mean, there's 00:08:57.220 --> 00:08:59.620 a whole perhaps different ball game that you're 00:08:59.620 --> 00:09:02.379 playing there, but are we moving to this world 00:09:02.379 --> 00:09:04.220 where you could literally hold anything instead 00:09:04.220 --> 00:09:08.440 of kind of cash? and use it to pay for things 00:09:08.440 --> 00:09:11.539 directly or to settle things like the FX market, 00:09:11.539 --> 00:09:13.200 which is huge in the UK. We can get onto that 00:09:13.200 --> 00:09:18.360 in a second. Your point about the exchange of 00:09:18.360 --> 00:09:22.019 value is the right one. If everyone knew the 00:09:22.019 --> 00:09:24.659 price of everything at all times and knew that 00:09:24.659 --> 00:09:27.779 it was easily transferable and had liquidity, 00:09:28.240 --> 00:09:31.039 then in theory, why would you not accept it? 00:09:31.059 --> 00:09:33.860 I think the challenge is that, and this challenge 00:09:33.860 --> 00:09:38.299 exists for Bitcoin, as well, you know, it's difficult 00:09:38.299 --> 00:09:41.220 transacting in something with a fluctuating value. 00:09:41.799 --> 00:09:44.360 Now, some of us that are kind of believers in 00:09:44.360 --> 00:09:45.879 digital, we don't really care because we're like, 00:09:45.980 --> 00:09:47.759 it's going up in the long term. So of course, 00:09:47.759 --> 00:09:49.740 I'll just take it and hold it. But if you're 00:09:49.740 --> 00:09:51.659 running a business and you know, you're operating 00:09:51.659 --> 00:09:54.659 on small margins, you can't, you can't transact 00:09:54.659 --> 00:09:57.139 with something that moves around, you know, even 00:09:57.139 --> 00:09:59.220 one, two percent a day could be a problem. But, 00:09:59.399 --> 00:10:01.059 you know, we've seen things flip around five, 00:10:01.100 --> 00:10:03.960 10 percent quite easily in a day in the crypto 00:10:03.960 --> 00:10:07.690 market. So That's why we're seeing a lot of stable 00:10:07.690 --> 00:10:11.490 coin interest, a lot of money market fund interest. 00:10:11.590 --> 00:10:14.529 These things are priced at one. You want to do 00:10:14.529 --> 00:10:17.669 a transaction for $1 ,000. You transact with 00:10:17.669 --> 00:10:19.649 1 ,000 of them. You know you can more or less 00:10:19.649 --> 00:10:22.789 get 1 ,000 of them from someone else. So that's 00:10:22.789 --> 00:10:25.110 why people are in that direction. But from a 00:10:25.110 --> 00:10:27.730 technical and regulatory point of view, I mean, 00:10:28.009 --> 00:10:29.669 unless sometimes regulation stipulates what you 00:10:29.669 --> 00:10:31.889 can use as margin. If you ignore that, there's 00:10:31.889 --> 00:10:34.149 no reason that, you know, if I come around your 00:10:34.149 --> 00:10:37.029 house and offer to buy your car and you're willing 00:10:37.029 --> 00:10:40.009 to accept Nvidia shares, then that can happen. 00:10:40.330 --> 00:10:44.230 And there's loads of tax and stamp duty and transfer 00:10:44.230 --> 00:10:47.210 issues that exist around that. But just theoretically, 00:10:47.210 --> 00:10:49.009 if you've got a transferable instrument, then 00:10:49.009 --> 00:10:51.250 yeah, you can use it to pay for anything. It's 00:10:51.250 --> 00:10:52.730 very interesting. I think this came out of Silicon 00:10:52.730 --> 00:10:55.330 Valley as an idea back in the nineties. And it's 00:10:55.330 --> 00:10:58.809 amazing how well it's progressed towards that. 00:10:58.909 --> 00:11:02.970 you know, this kind of new monetary world. I 00:11:02.970 --> 00:11:05.269 think, you know, if you look at the implementation 00:11:05.269 --> 00:11:07.830 of ISO 20022 standards and things like this, 00:11:07.870 --> 00:11:09.950 more broadly talking about the financial world 00:11:09.950 --> 00:11:12.789 at large and the kind of inner workings of it 00:11:12.789 --> 00:11:15.789 or the standards that accompany it, I think there's 00:11:15.789 --> 00:11:19.830 definitely a push towards a kind of new monetary 00:11:19.830 --> 00:11:23.230 regime that isn't perhaps new in the sense that 00:11:23.230 --> 00:11:25.549 you have new instruments, but instruments that 00:11:25.549 --> 00:11:27.809 take a different form and can be used and utilized 00:11:27.809 --> 00:11:29.639 in a different manner. I think there's a huge 00:11:29.639 --> 00:11:31.820 unlock coming for the world that at the heart 00:11:31.820 --> 00:11:35.500 of it is DLT technology. Yeah, it's massive. 00:11:35.639 --> 00:11:37.340 I mean, it kind of exists already a little bit 00:11:37.340 --> 00:11:39.440 with currencies, right? I don't know, you've 00:11:39.440 --> 00:11:43.539 got your MasterCard visa, you go wherever, you 00:11:43.539 --> 00:11:45.659 can spend multiple things and it all consolidates 00:11:45.659 --> 00:11:49.299 it back for you. So I think these... you know 00:11:49.299 --> 00:11:51.639 that that being able to convert from one to another 00:11:51.639 --> 00:11:53.340 you know that's where someone like our tax would 00:11:53.340 --> 00:11:55.679 come in we'd sit in the background someone transacts 00:11:55.679 --> 00:11:57.259 because really most people want to get it back 00:11:57.259 --> 00:12:00.740 to their base their base currency so you know 00:12:00.740 --> 00:12:03.480 i think um Yeah, to be honest with you, I suspect 00:12:03.480 --> 00:12:05.620 it's a long while off before those sorts of things 00:12:05.620 --> 00:12:08.179 happen. Yes. But the reality is when you start 00:12:08.179 --> 00:12:10.919 looking at it, you do start saying, well, I don't 00:12:10.919 --> 00:12:12.559 know what your bank, obviously, I don't know 00:12:12.559 --> 00:12:14.600 what your bank pays you, but what are we getting? 00:12:15.000 --> 00:12:17.399 1%, 2 % maybe in a current account, and you're 00:12:17.399 --> 00:12:19.440 sitting there going, well, base rates are like 00:12:19.440 --> 00:12:22.970 4%, 5%. That makes no sense. But as individuals, 00:12:23.450 --> 00:12:25.129 as long as you're a professional in our tracks, 00:12:25.190 --> 00:12:27.129 you could hold a money market funds. Now, if 00:12:27.129 --> 00:12:29.629 you had a token that you could spend in the exact 00:12:29.629 --> 00:12:32.950 same way as cash and be getting four or 5 % and 00:12:32.950 --> 00:12:35.070 you're protected from banking solvency because 00:12:35.070 --> 00:12:37.850 you hold an asset and not cash, suddenly you've 00:12:37.850 --> 00:12:39.789 got a more protected asset, the shield generating 00:12:39.789 --> 00:12:42.769 that you could spend in the same way. Why would 00:12:42.769 --> 00:12:45.049 you have cash in a bank? So there's some, you 00:12:45.049 --> 00:12:48.360 know, there's There's an interesting move happening 00:12:48.360 --> 00:12:50.440 in financial markets. Banks are now moving quite 00:12:50.440 --> 00:12:53.580 quickly in this direction, so I'm sure that they'll 00:12:53.580 --> 00:12:56.600 adapt, but the financial market in 20 years' 00:12:56.639 --> 00:12:57.720 time is going to look a lot different to what 00:12:57.720 --> 00:13:00.080 it does now. Yeah, and people need to understand 00:13:00.080 --> 00:13:01.740 that as an opportunity, I think, and look at 00:13:01.740 --> 00:13:04.039 what's going to play a role in that world, what's 00:13:04.039 --> 00:13:06.620 going to get value or become more valuable because 00:13:06.620 --> 00:13:10.000 of its role in that world. There's a lot more... 00:13:10.730 --> 00:13:13.129 Going on, I think a lot of crypto people kind 00:13:13.129 --> 00:13:15.590 of get into the financial markets through coming 00:13:15.590 --> 00:13:17.830 into crypto and then they kind of have to understand 00:13:17.830 --> 00:13:19.590 a little bit about how the financial markets 00:13:19.590 --> 00:13:24.129 work. And it's very interesting the kind of joining 00:13:24.129 --> 00:13:25.590 of these and the unlock that they ultimately 00:13:25.590 --> 00:13:28.190 bring. I want to go back a little bit and sort 00:13:28.190 --> 00:13:31.450 of simplify for people why things are getting 00:13:31.450 --> 00:13:35.860 tokenized. And what the kind of unlock is with 00:13:35.860 --> 00:13:38.940 bringing things on chain in opposition to how 00:13:38.940 --> 00:13:42.080 the kind of fragmented financial system works 00:13:42.080 --> 00:13:45.259 at the moment? Why are banks like Lloyd's? Why 00:13:45.259 --> 00:13:49.759 are corporations like Aberdeen, why are they 00:13:49.759 --> 00:13:51.919 tokenizing and doing this? What's the unlock 00:13:51.919 --> 00:13:55.500 that this technology is bringing? I always find 00:13:55.500 --> 00:13:58.279 the money market fund one is probably the easiest 00:13:58.279 --> 00:14:01.559 example. So in the company I used to work at, 00:14:01.600 --> 00:14:03.960 Like on a Friday, you'd often say to yourself, 00:14:04.659 --> 00:14:06.379 okay, you know, we're in cash at the moment. 00:14:06.600 --> 00:14:09.940 Do we want to buy a money market fund which takes 00:14:09.940 --> 00:14:12.679 away from the bank risk but gets rid of all your 00:14:12.679 --> 00:14:14.600 flexibility? Or do we want to hold cash and have 00:14:14.600 --> 00:14:18.679 the bank risk but have more flexibility? And 00:14:18.679 --> 00:14:21.419 then the issue with holding a money market fund 00:14:21.419 --> 00:14:24.659 is usually they trade once a day, Monday to Friday. 00:14:25.279 --> 00:14:27.899 So, you know, if I held the Aberdeen Money Market 00:14:27.899 --> 00:14:29.919 Fund in my brokerage account, I log in, I can 00:14:29.919 --> 00:14:32.360 see it. That's great. I can't do anything with 00:14:32.360 --> 00:14:35.980 it. And if on Saturday afternoon, I want to buy 00:14:35.980 --> 00:14:39.559 Bitcoin, so on Monday, I have to contact Aberdeen, 00:14:39.580 --> 00:14:42.019 say I want to redeem, maybe I get my money Monday, 00:14:42.379 --> 00:14:45.460 then I have to convert it into a stable coin, 00:14:45.500 --> 00:14:47.980 and then I need to go buy Bitcoin or I find a 00:14:47.980 --> 00:14:49.259 fee on round. But the problem is, it's going 00:14:49.259 --> 00:14:52.519 to be like 20, 48 hours since I want to do the 00:14:52.519 --> 00:14:55.440 trade. So with a tokenized money market fund, 00:14:56.080 --> 00:14:58.690 you've now got something that's transferable 00:14:58.690 --> 00:15:01.350 and you can transact on a Saturday. I mean you 00:15:01.350 --> 00:15:03.210 theoretically could have recreated this with 00:15:03.210 --> 00:15:05.529 traditional instruments anyway but no one really 00:15:05.529 --> 00:15:08.269 did. So you know somewhere like Archax these 00:15:08.269 --> 00:15:10.370 things are priced at one if you've got a buyer 00:15:10.370 --> 00:15:13.720 and a seller and you can transfer value. Pretty 00:15:13.720 --> 00:15:16.419 much for free as we talked about on chain Then 00:15:16.419 --> 00:15:17.899 you've got the ability to get in and out of these 00:15:17.899 --> 00:15:20.220 assets and then where it becomes really interesting 00:15:20.220 --> 00:15:22.960 is in this And there's a lot of people looking 00:15:22.960 --> 00:15:25.919 at this now and this like crossover between stable 00:15:25.919 --> 00:15:30.659 coins and money market funds. So Let's say Circle 00:15:30.659 --> 00:15:35.019 or RL USD or tell it doesn't really matter Those 00:15:35.019 --> 00:15:37.919 those guys take cash they issue tokens and they 00:15:37.919 --> 00:15:41.279 put that cash into things like money market funds 00:15:41.279 --> 00:15:45.169 now They don't need to take your cash and invest 00:15:45.169 --> 00:15:46.970 in a money market fund if you just send them 00:15:46.970 --> 00:15:49.990 a money market fund. So Saturday afternoon, you've 00:15:49.990 --> 00:15:52.389 got 100 grams worth of Aberdeen money market 00:15:52.389 --> 00:15:54.850 fund, you want to buy Bitcoin, you send it to 00:15:54.850 --> 00:15:56.730 Tether in a smart contract, it instantly gives 00:15:56.730 --> 00:15:59.129 you 100 ,000 Tether and away you go. You can 00:15:59.129 --> 00:16:00.789 go and transact. They don't care because you've 00:16:00.789 --> 00:16:03.149 given them the reserves. You've got your stablecoin 00:16:03.149 --> 00:16:05.870 and it all happens outside of traditional market 00:16:05.870 --> 00:16:08.049 hours. So it's not that the instrument doesn't 00:16:08.049 --> 00:16:10.669 change. I think in the early days of crypto and 00:16:10.669 --> 00:16:12.769 RWA, there's a lot of conversation around what 00:16:12.769 --> 00:16:14.549 are these assets? How do we regulate them? They're 00:16:14.549 --> 00:16:17.370 the same assets, but the utility and the functions 00:16:17.370 --> 00:16:19.950 around them are changing. And that's what makes 00:16:19.950 --> 00:16:22.149 them more valuable than their analog counterparts. 00:16:22.549 --> 00:16:25.210 The same exposure, the same costs, the same return, 00:16:25.870 --> 00:16:29.629 massive increase in utility. Yeah. And I guess 00:16:29.629 --> 00:16:32.429 a lowering in costs to enable all of this. I 00:16:32.429 --> 00:16:35.889 mean, in some ways it wasn't possible. You know, 00:16:35.970 --> 00:16:38.379 one thing I've... Certainly understood in regards 00:16:38.379 --> 00:16:40.740 across border payments was just how fragmented 00:16:40.740 --> 00:16:43.500 those systems are And I think when you kind of 00:16:43.500 --> 00:16:47.279 unify everything on it, you know using DLT It 00:16:47.279 --> 00:16:50.500 really unlocks this kind of more globalized world 00:16:50.500 --> 00:16:53.679 Where assets I think there's a major benefit 00:16:53.679 --> 00:16:58.039 for assets for people? You know you look at I 00:16:58.039 --> 00:16:59.779 mean for example, there's two billion people 00:16:59.779 --> 00:17:02.000 roughly out there that don't have access to banking 00:17:02.000 --> 00:17:05.240 services that will with this technology and potentially 00:17:05.240 --> 00:17:08.119 somebody around the world somewhere will be able 00:17:08.119 --> 00:17:12.420 to actually gain access to or indirectly perhaps 00:17:12.420 --> 00:17:13.839 to money market funds through something like 00:17:13.839 --> 00:17:16.140 Tether or whatever it may be. There's this major, 00:17:16.180 --> 00:17:21.019 major thing taking place. And I also think, and 00:17:21.019 --> 00:17:23.259 this is one thing that I think about, when we're 00:17:23.259 --> 00:17:25.119 talking about money market funds, typically, 00:17:25.440 --> 00:17:27.039 or when we're talking about guilds, government 00:17:27.039 --> 00:17:29.859 bonds, I think a lot of people are questioning 00:17:29.859 --> 00:17:35.299 right now the... I want to say value of these 00:17:35.299 --> 00:17:37.500 instruments, certainly with kind of monetary 00:17:37.500 --> 00:17:40.619 systems going in the manner that they are, you 00:17:40.619 --> 00:17:42.700 know, debt seems to be ever increasing and people 00:17:42.700 --> 00:17:44.640 are kind of questioning the value of these and 00:17:44.640 --> 00:17:47.220 the stability of the bond markets. We saw that, 00:17:47.220 --> 00:17:50.059 for example, in the US with Moody's rating or 00:17:50.059 --> 00:17:55.140 downgrading of US debt. What ramifications do 00:17:55.140 --> 00:17:58.369 you think? because it's almost in government's 00:17:58.369 --> 00:18:00.589 best interests or central bank's best interests 00:18:00.589 --> 00:18:02.970 for this technology to be adopted so that the 00:18:02.970 --> 00:18:06.829 kind of bedrock of the financial system can really 00:18:06.829 --> 00:18:09.670 remain there and that there isn't this shift 00:18:09.670 --> 00:18:13.650 to other things as it continues to proliferate. 00:18:16.349 --> 00:18:19.250 Do you think it's beneficial? Do you think governments 00:18:19.250 --> 00:18:22.720 and central banks and the financial system should 00:18:22.720 --> 00:18:24.839 adopt this technology because it provides or 00:18:24.839 --> 00:18:28.599 introduces another buyer to government debt and 00:18:28.599 --> 00:18:31.539 sovereign debt? Yeah, I'm generally in favor 00:18:31.539 --> 00:18:36.220 of efficiency and I generally don't like it when 00:18:36.220 --> 00:18:39.660 we try and regulate to reduce the benefits of 00:18:39.660 --> 00:18:41.480 technology and efficiency. So I think some of 00:18:41.480 --> 00:18:44.569 the ways that regulation has been put in place 00:18:44.569 --> 00:18:47.170 across the world is kind of protecting banks, 00:18:47.349 --> 00:18:50.009 I think, across Meeker, it's protecting Europe. 00:18:50.750 --> 00:18:52.589 So, you know, I mean, one of the things I've 00:18:52.589 --> 00:18:54.869 been chatting to a few of the guys lately about 00:18:54.869 --> 00:18:56.890 is like, look, you know, there was there was 00:18:56.890 --> 00:18:59.930 there used to be one Nvidia traded by financial 00:18:59.930 --> 00:19:03.789 services and one US dollar. Now, last count, 00:19:04.150 --> 00:19:08.049 I counted like 280. US dollar stable coins. And 00:19:08.049 --> 00:19:10.849 then you've got like, I mean, our checks can 00:19:10.849 --> 00:19:13.289 tokenize Nvidia and I know that like Robin Hood, 00:19:13.369 --> 00:19:15.230 Kraken and others have announced it recently. 00:19:15.650 --> 00:19:17.809 They're all on different chains. You've got everyone 00:19:17.809 --> 00:19:21.029 launching varieties, some direct, some synthetic, 00:19:21.930 --> 00:19:24.349 some natively digital, some mirror on different 00:19:24.349 --> 00:19:26.609 chains settling with multiple different stable 00:19:26.609 --> 00:19:29.259 coins. like we're supposed to be making the world 00:19:29.259 --> 00:19:31.579 easier. And in some respects, we're making it 00:19:31.579 --> 00:19:34.220 a bit more complicated. So I think the technology 00:19:34.220 --> 00:19:37.119 needs to be embraced. I think regulation should 00:19:37.119 --> 00:19:39.220 be put in place carefully. I'm not sure we're 00:19:39.220 --> 00:19:40.700 going to see all of the efficiencies that we 00:19:40.700 --> 00:19:42.720 want to see because of the ways that government 00:19:42.720 --> 00:19:44.339 are adopting it. However, yesterday in the UK, 00:19:44.559 --> 00:19:49.069 there was the mansion house speech. And we doubled 00:19:49.069 --> 00:19:50.829 down on our focus on digit. And for those that 00:19:50.829 --> 00:19:54.529 don't know, that's the UK's digital guilt, which 00:19:54.529 --> 00:19:56.769 is being put in place. So that's something we're 00:19:56.769 --> 00:20:01.450 really interested in because whilst that may 00:20:01.450 --> 00:20:04.549 have been downgraded in certain countries, still 00:20:04.549 --> 00:20:06.750 getting debt issued by the UK is kind of considered 00:20:06.750 --> 00:20:08.710 a bit risk -free and getting that on chain is 00:20:08.710 --> 00:20:10.930 quite useful. So I think we're both in agreement 00:20:10.930 --> 00:20:12.750 that the things that should tokenise will be 00:20:12.750 --> 00:20:16.329 tokenised. In regards to sort of UK money markets. 00:20:16.599 --> 00:20:18.420 What kind of a size of market that is? I know 00:20:18.420 --> 00:20:21.039 in the US, money markets probably right now sit 00:20:21.039 --> 00:20:25.319 at about $7 .8 trillion. How big is the UK money 00:20:25.319 --> 00:20:28.619 market market? Oh, I'm not sure. Definitely not 00:20:28.619 --> 00:20:33.059 as big. It's smaller. One of the things in the 00:20:33.059 --> 00:20:36.400 speech yesterday actually was all about the UK 00:20:36.400 --> 00:20:39.680 investing. We see this in our checks in the countries 00:20:39.680 --> 00:20:43.289 like the US. individuals like investing, they 00:20:43.289 --> 00:20:45.109 think of it as part of their savings. In the 00:20:45.109 --> 00:20:48.150 UK, we're much more bank savings account, post 00:20:48.150 --> 00:20:50.890 office, term deposit, split your money around. 00:20:51.309 --> 00:20:53.170 And so we're trying to encourage people in the 00:20:53.170 --> 00:20:57.390 UK to invest more than save more. I don't know 00:20:57.390 --> 00:21:00.390 what it is, but it will be a fraction of the 00:21:00.390 --> 00:21:04.150 US market, I'm sure. And it will be more than 00:21:04.150 --> 00:21:07.230 the per capita adjustment. I'm pretty sure it 00:21:07.230 --> 00:21:09.269 will be larger. And also, obviously, dollar is 00:21:09.470 --> 00:21:11.250 kind of the investment currency of the world 00:21:11.250 --> 00:21:13.869 so anyone in financial services who's hedging 00:21:13.869 --> 00:21:15.890 their portfolio put it there but we've got you 00:21:15.890 --> 00:21:18.630 know we've got money market funds in euros pounds 00:21:18.630 --> 00:21:22.509 and dollars and we see interest in all three 00:21:22.509 --> 00:21:26.650 of those actually some companies can only hold 00:21:26.650 --> 00:21:29.890 so they regulated that they have to hold their 00:21:29.890 --> 00:21:31.950 clients money in certain places and they can 00:21:31.950 --> 00:21:33.890 only hold it in certain types of money market 00:21:33.890 --> 00:21:35.869 funds those that only have government instruments 00:21:35.869 --> 00:21:39.079 so A lot of those companies are underserved by 00:21:39.079 --> 00:21:40.720 banks and are coming to speak to people like 00:21:40.720 --> 00:21:44.319 us to get exposure to the instruments. Where 00:21:44.319 --> 00:21:46.119 do you think we are in regards to the tokenization 00:21:46.119 --> 00:21:48.299 of everything? You guys are, tokenization of 00:21:48.299 --> 00:21:50.660 everything, not the right statement, but the 00:21:50.660 --> 00:21:53.519 tokenization of financial instruments. Where 00:21:53.519 --> 00:21:55.220 do you think we are in regards to that? This, 00:21:55.220 --> 00:21:59.079 of course, was the UK's first live use case of 00:21:59.079 --> 00:22:02.059 digital assets. Obviously, we're right at the 00:22:02.059 --> 00:22:09.369 start. What's in store for us? Not so long ago, 00:22:09.549 --> 00:22:11.369 we announced with Bailey Gifford, we did the 00:22:11.369 --> 00:22:13.609 first natively digital tokenization of a fund 00:22:13.609 --> 00:22:16.930 in the UK. We're doing this collateral transaction. 00:22:17.710 --> 00:22:20.589 But the difference here, we've been around seven 00:22:20.589 --> 00:22:23.690 and a bit years now, but the difference now is, 00:22:23.849 --> 00:22:25.190 yeah, this Lloyd's and Aberdeen transaction, 00:22:25.269 --> 00:22:27.990 that required them onboarding us as a counterpart 00:22:27.990 --> 00:22:30.349 to work with them. And the same with Bailey Gifford 00:22:30.349 --> 00:22:33.299 as well. You know, this is no longer just our 00:22:33.299 --> 00:22:36.299 checks and any other FinTech stroke startup in 00:22:36.299 --> 00:22:38.160 the space talking about this happening. All of 00:22:38.160 --> 00:22:41.160 the all of the big guys now agree this is happening. 00:22:41.240 --> 00:22:43.779 They're starting to adjust their processes for 00:22:43.779 --> 00:22:46.500 it. So I mean, to answer your question, I thought 00:22:46.500 --> 00:22:48.319 we'd be a lot further on than we are now. But 00:22:48.319 --> 00:22:51.359 that was just obviously founder optimism without 00:22:51.359 --> 00:22:54.359 which we might be here. But but with with somewhere 00:22:54.359 --> 00:22:56.839 along that journey, I mean, regulation is being 00:22:56.839 --> 00:22:58.819 put in place across every major jurisdiction 00:22:58.819 --> 00:23:02.299 in the world. um black rocks bitcoin etf which 00:23:02.299 --> 00:23:04.619 i think is fascinating was like i think the one 00:23:04.619 --> 00:23:06.000 i checked the other day and it's more than that 00:23:06.000 --> 00:23:09.319 now i'm sure was 83 billion the fastest ever 00:23:09.319 --> 00:23:11.859 to get to that level in 300 odd days and five 00:23:11.859 --> 00:23:14.420 times quicker than any other, the 20th biggest 00:23:14.420 --> 00:23:16.920 ETF now. So now you've got people interested. 00:23:17.119 --> 00:23:19.000 You've got insane demand for these products as 00:23:19.000 --> 00:23:21.359 shown by all the Bitcoin treasury stuff, people 00:23:21.359 --> 00:23:23.099 learning about it all the time. You've got a 00:23:23.099 --> 00:23:25.779 young generation that seems way more fascinated 00:23:25.779 --> 00:23:27.839 in digital assets than they ever were in traditional 00:23:27.839 --> 00:23:30.359 securities. You've got banks and institutions 00:23:30.359 --> 00:23:32.240 now playing catch up to make sure they don't 00:23:32.240 --> 00:23:34.240 get disrupted and the regulation being put in 00:23:34.240 --> 00:23:36.519 place. So slowly you've got like all of these 00:23:36.519 --> 00:23:39.980 foundational blocks. that are being put in place 00:23:39.980 --> 00:23:42.299 which frankly we were missing for the first four 00:23:42.299 --> 00:23:44.460 or five years of our existence and you know we 00:23:44.460 --> 00:23:46.119 were talking about the benefits but it was quite 00:23:46.119 --> 00:23:49.079 hard to demonstrate but now you're starting to 00:23:49.079 --> 00:23:51.720 get used cases like Nest where people are seeing 00:23:51.720 --> 00:23:54.460 real value, savings in cost, faster processing, 00:23:54.579 --> 00:23:58.740 more efficiencies. In the next three to five 00:23:58.740 --> 00:24:00.839 years we're going to see meaningful shifts and 00:24:00.839 --> 00:24:03.359 it only takes someone like DTC or Euroclear. 00:24:03.960 --> 00:24:05.720 to announce that they're going fully digital 00:24:05.720 --> 00:24:07.640 and that's it. Most of the world's assets are 00:24:07.640 --> 00:24:11.099 moving on chain. I know that they did their collateral 00:24:11.099 --> 00:24:14.220 experiment and I watched Andoni talk about, I've 00:24:14.220 --> 00:24:15.640 also looked into a number of patents that they 00:24:15.640 --> 00:24:18.920 filed where they talk about all this, but I know 00:24:18.920 --> 00:24:21.900 he mentioned the kind of enabling, doesn't mean 00:24:21.900 --> 00:24:25.779 it's going to happen, of the $90 trillion plus 00:24:25.779 --> 00:24:29.700 that DTCC have actually been able to become on 00:24:29.700 --> 00:24:32.720 chain. And when you look at who DTCC are, I mean, 00:24:32.740 --> 00:24:37.380 you couldn't kind of get more evidence that the 00:24:37.380 --> 00:24:39.519 world, the financial markets are moving on chain. 00:24:40.339 --> 00:24:41.779 I suppose the only thing you really need to see 00:24:41.779 --> 00:24:43.240 is it actually happening. I know that was a proof 00:24:43.240 --> 00:24:45.279 of concept, whereas the unique thing about what 00:24:45.279 --> 00:24:47.140 you guys are doing or certainly did with this 00:24:47.140 --> 00:24:50.059 and have done previously is this is live. And 00:24:50.059 --> 00:24:52.559 the UK market is huge. I mean, the UK financial 00:24:52.559 --> 00:24:55.200 markets are one of the reasons that we are who 00:24:55.200 --> 00:24:58.700 we are in the global stage. I mean, UK FX trades 00:24:58.700 --> 00:25:01.579 and interest rate derivatives. account for about 00:25:01.579 --> 00:25:04.640 half of global activity. It's about $5 .4 trillion 00:25:04.640 --> 00:25:10.660 daily. And this was used, this kind of initiative 00:25:10.660 --> 00:25:13.500 that you guys conducted was used for that. So 00:25:13.500 --> 00:25:16.799 there's a big market that you guys are kind of 00:25:16.799 --> 00:25:19.000 unlocking. And what do you think? The UK has 00:25:19.000 --> 00:25:21.279 came out and said they want to be the kind of 00:25:21.279 --> 00:25:23.980 digital hub of the world. How do you think that's 00:25:23.980 --> 00:25:26.759 going? I know the FCA recently just allowed ETNs. 00:25:28.619 --> 00:25:31.059 I haven't got it over the line yet, but you're 00:25:31.059 --> 00:25:32.960 right. It looks like it's heading in that direction. 00:25:35.240 --> 00:25:38.460 I don't want to say talk is cheap, but everyone 00:25:38.460 --> 00:25:41.619 says, right, it's easy for a nation leader to 00:25:41.619 --> 00:25:43.480 come out and go, we want to be the senator of 00:25:43.480 --> 00:25:46.200 the world. That's great. I can tell you 10 things 00:25:46.200 --> 00:25:48.059 that you could fix with a regulation right now 00:25:48.059 --> 00:25:50.339 that would make that more likely to come true. 00:25:50.759 --> 00:25:53.099 And anytime I email anyone about it, it takes 00:25:53.099 --> 00:25:59.839 six months to two years for it to change. I know 00:25:59.839 --> 00:26:01.319 there's due process and everything, but this 00:26:01.319 --> 00:26:03.400 market is moving quickly, and those that move 00:26:03.400 --> 00:26:07.000 fast are going to win it. The US is moving rapidly. 00:26:08.400 --> 00:26:10.400 There's a top -down approach there. Whether or 00:26:10.400 --> 00:26:12.039 not it will all get through, who knows, but there's 00:26:12.039 --> 00:26:13.859 definitely good momentum in the US. You're right. 00:26:13.920 --> 00:26:16.980 In the UK, listings on our exchanges, people 00:26:16.980 --> 00:26:19.420 trading here, it's been going downhill for a 00:26:19.420 --> 00:26:22.319 while. We want to make sure that we're still 00:26:22.319 --> 00:26:23.940 one of the centers of the financial universe. 00:26:24.500 --> 00:26:26.480 given that I think every instrument's moving 00:26:26.480 --> 00:26:28.940 on chain, it's a great opportunity for us to 00:26:28.940 --> 00:26:34.660 do that. For an example, if you're a UK broker 00:26:34.660 --> 00:26:37.799 like Winter Floods and you've been trading Vodafone 00:26:37.799 --> 00:26:40.319 and Aberdeen Money Market Funds your whole life, 00:26:40.740 --> 00:26:43.960 you can't sell our taxes tokenized Vodafone or 00:26:43.960 --> 00:26:46.000 tokenized Money Market Funds unless you're on 00:26:46.000 --> 00:26:48.220 the crypto asset register. It makes no sense 00:26:48.220 --> 00:26:49.539 that the same instrument, they're on different 00:26:49.539 --> 00:26:51.400 technologies. If it's on a spreadsheet or a database, 00:26:51.930 --> 00:26:53.609 we don't make them apply for something else. 00:26:53.890 --> 00:26:56.190 So why do we do it for digital? Now, there might 00:26:56.190 --> 00:26:57.990 be some little tweaks that you want to do to 00:26:57.990 --> 00:27:00.309 their permissions, but making them go through 00:27:00.309 --> 00:27:04.089 what is like a best, a six month process, but 00:27:04.089 --> 00:27:06.609 more likely a two year process where the failure 00:27:06.609 --> 00:27:10.210 rate has been, I think, 60 to 80%. Why are they 00:27:10.210 --> 00:27:13.160 going to do that? So as a result, Artax can create 00:27:13.160 --> 00:27:15.319 a load of digital securities right now, but we 00:27:15.319 --> 00:27:18.259 don't make use of the UK's brokerage distribution. 00:27:18.420 --> 00:27:21.559 So that's one they've talked about where they 00:27:21.559 --> 00:27:23.519 really should just say, if you're already regulated, 00:27:23.980 --> 00:27:25.920 tick this box, prove these two things and away 00:27:25.920 --> 00:27:28.000 you go. Rather than say, you know what, you have 00:27:28.000 --> 00:27:30.160 to go through the same process as if you were 00:27:30.160 --> 00:27:33.640 a crypto exchange. Like the ETP band that make 00:27:33.640 --> 00:27:36.160 any sense at all either I can go and trade on 00:27:36.160 --> 00:27:38.339 Uniswap, but I can't buy BlackRock's Bitcoin 00:27:38.339 --> 00:27:43.599 ETP. It doesn't make any sense. You're probably 00:27:43.599 --> 00:27:45.460 paying more fees. You're paying more spread. 00:27:45.559 --> 00:27:47.259 You've got fewer disclosures. You're taking more 00:27:47.259 --> 00:27:49.460 risk. You're not dealing with a regulated instrument. 00:27:49.559 --> 00:27:51.779 You can't put it in your SIP or ISA, but I'm 00:27:51.779 --> 00:27:53.240 not allowed to trade it because it was caught 00:27:53.240 --> 00:27:57.000 up in the derivatives ban. Both of those things 00:27:57.000 --> 00:28:00.440 are quick solutions for any nation saying we 00:28:00.440 --> 00:28:05.220 want to be the global digital center. I know 00:28:05.220 --> 00:28:07.000 we're trying and I know that we're doing stuff, 00:28:07.259 --> 00:28:09.990 but we should... there's some things we should, 00:28:10.269 --> 00:28:13.009 we could do so much quicker and make the UK like 00:28:13.009 --> 00:28:16.009 genuinely an innovation hub. Yeah, and I think 00:28:16.009 --> 00:28:18.190 we should. I think you're totally right there. 00:28:18.190 --> 00:28:21.349 You know, it would make sense. Even myself, crypto 00:28:21.349 --> 00:28:23.910 sort of natives can be quite hostile towards 00:28:23.910 --> 00:28:28.630 EPS ETFs and ETNs here in the UK. And actually, 00:28:28.910 --> 00:28:30.490 there's no reason for them to be so if you want 00:28:30.490 --> 00:28:32.410 to self custody things, you've got every right 00:28:32.410 --> 00:28:34.250 to do so. You know, there's lots of things that 00:28:34.250 --> 00:28:36.609 people shouldn't do that they do or should do 00:28:36.609 --> 00:28:41.140 and they don't. But actually, if you allow for 00:28:41.140 --> 00:28:43.160 exchange traded products, whatever they may be, 00:28:43.960 --> 00:28:45.960 you're absolutely right. You can save fees. You 00:28:45.960 --> 00:28:47.160 don't have to worry about custody and things 00:28:47.160 --> 00:28:49.180 like this. You can put them in your ISA, which 00:28:49.180 --> 00:28:51.180 is going to give you tax benefits or whatever 00:28:51.180 --> 00:28:55.940 else. There's a whole list of things that people 00:28:55.940 --> 00:28:58.559 can benefit from. And you mentioned something 00:28:58.559 --> 00:29:00.660 a while ago that I want to come back to. And 00:29:00.660 --> 00:29:04.700 that was perhaps a wealth transfer towards a 00:29:04.700 --> 00:29:08.759 crypto native audience. If you look at the majority 00:29:08.759 --> 00:29:11.059 of wealth in the world out there, it typically 00:29:11.059 --> 00:29:13.220 sits with older people. We're talking probably 00:29:13.220 --> 00:29:17.099 the richest demographic has got to be 65 years 00:29:17.099 --> 00:29:20.819 and older, right? A lot of them aren't in crypto 00:29:20.819 --> 00:29:24.500 yet, probably because of, for example, here in 00:29:24.500 --> 00:29:26.400 the UK, you couldn't buy ETNs. You couldn't put 00:29:26.400 --> 00:29:28.259 things in your eyes, so you could buy an exchange, 00:29:28.299 --> 00:29:31.119 but you couldn't do it this way. Do you think 00:29:31.119 --> 00:29:34.099 more broadly about the adoption of crypto down 00:29:34.099 --> 00:29:37.059 the line when wealth trickles down to what is 00:29:37.059 --> 00:29:42.839 going to be a native demographic, a generation, 00:29:42.839 --> 00:29:45.079 if you will, that has grown up with iPads or 00:29:45.079 --> 00:29:47.660 things like this. I'm very blessed that I got 00:29:47.660 --> 00:29:51.400 to see the introduction of things like mobile 00:29:51.400 --> 00:29:54.319 phones into the internet. I saw all that take 00:29:54.319 --> 00:29:56.859 place. Whereas people nowadays, if you were born 00:29:56.859 --> 00:30:00.119 2000s onwards, you grew up with an iPad glued 00:30:00.119 --> 00:30:03.430 to your face. investing is kind of similar in 00:30:03.430 --> 00:30:06.690 the sense that people will be more familiar with 00:30:06.690 --> 00:30:09.029 assets like crypto that's very well positioned 00:30:09.029 --> 00:30:10.890 to kind of capitalize on that wealth transfer. 00:30:11.950 --> 00:30:15.529 Yeah, one of the most pronounced things I noticed 00:30:15.529 --> 00:30:18.309 in the first two years of doing our checks full 00:30:18.309 --> 00:30:22.950 -time was that, you know, I mean, there's a lot 00:30:22.950 --> 00:30:25.029 of people that don't really know what they're 00:30:25.029 --> 00:30:26.430 talking about when they talk about investment, 00:30:26.430 --> 00:30:29.210 but there's also some people who have no background 00:30:29.210 --> 00:30:33.109 in investing and just and they tend to be young 00:30:33.109 --> 00:30:36.049 and they're really good at analyzing the market 00:30:36.049 --> 00:30:38.589 and the value and where it comes from. Obviously 00:30:38.589 --> 00:30:41.349 there's those people chilling their wares. But 00:30:41.349 --> 00:30:44.130 there's actually a lot of people that are interested 00:30:44.130 --> 00:30:49.349 in investing and never in 20 years of hedge funds 00:30:49.349 --> 00:30:53.109 did I ever log on to Twitter and see 50 people. 00:30:53.369 --> 00:30:55.329 I know there are already groups on maybe the 00:30:55.329 --> 00:30:57.710 big tech stocks and some people doing penny shares 00:30:57.710 --> 00:30:59.690 or whatever, but it's not like... just not the 00:30:59.690 --> 00:31:03.410 same level of interest and yeah I don't know 00:31:03.410 --> 00:31:06.190 if there'll be a generational shift because you 00:31:06.190 --> 00:31:07.849 know there's been a lot of money made but there's 00:31:07.849 --> 00:31:09.809 been a lot of money lost too I mean if you look 00:31:09.809 --> 00:31:12.130 at coin gecko or anything if you look at the 00:31:12.130 --> 00:31:16.369 charts for the last whatever 10 years seven eight 00:31:16.369 --> 00:31:18.630 years maybe I don't know coin gecko has been 00:31:18.630 --> 00:31:20.430 around a long coin market cap before that I think 00:31:20.430 --> 00:31:23.029 but anyway if you go through any of them what 00:31:23.029 --> 00:31:25.190 you'll see is that like the utility tokens that 00:31:25.190 --> 00:31:27.759 were there at the top fade away over time so 00:31:27.759 --> 00:31:30.259 people make money in those movements but you 00:31:30.259 --> 00:31:32.460 know there's a bit of a there's a bit of a zero 00:31:32.460 --> 00:31:34.559 -sum game in a way because for everyone that 00:31:34.559 --> 00:31:36.359 made money there's probably a bag holder somewhere 00:31:36.359 --> 00:31:39.819 that sat on them it never went back to its peaks 00:31:39.819 --> 00:31:44.380 and the same with meme coins and NFTs but when 00:31:44.380 --> 00:31:46.819 you when you do look at the charts you'll see 00:31:46.819 --> 00:31:49.259 that the layer ones the strong layer ones are 00:31:49.259 --> 00:31:52.460 there and they're strong the stable coins are 00:31:52.460 --> 00:31:54.680 there and then there's a few exceptions like 00:31:54.680 --> 00:31:57.200 Arve is one that I've always just thought was 00:31:57.200 --> 00:31:59.900 a like a platform that actually did something 00:31:59.900 --> 00:32:02.859 and had a use case and I've had a reason and 00:32:02.859 --> 00:32:05.519 obviously like Uniswap's done pretty well as 00:32:05.519 --> 00:32:08.059 well and then Hyperliquid now like there's some 00:32:08.059 --> 00:32:10.559 market infrastructure plays coming in there anyway 00:32:10.559 --> 00:32:13.730 my point is I don't I think there's a big survivorship 00:32:13.730 --> 00:32:15.170 bias in the space. The people that are still 00:32:15.170 --> 00:32:17.309 here talk about their gains, but there's a lot 00:32:17.309 --> 00:32:19.869 of bodies along the way as well. A hell of a 00:32:19.869 --> 00:32:22.509 lot. I obviously got in pretty much right at 00:32:22.509 --> 00:32:25.950 the top as an investor in 2017. Didn't go too 00:32:25.950 --> 00:32:28.130 well for me and it was a painful few years, but 00:32:28.130 --> 00:32:30.730 it was well worth it to be here where I am today. 00:32:31.210 --> 00:32:32.970 So there's trials and tribulations. I mean, I 00:32:32.970 --> 00:32:35.369 guess if you look at - Yeah, you make money or 00:32:35.369 --> 00:32:37.369 you pay for an education is kind of the way to 00:32:37.369 --> 00:32:39.569 think about it. Absolutely. I've done both. And 00:32:39.569 --> 00:32:41.359 I think - But then again, if you look at like 00:32:41.359 --> 00:32:43.000 the internet with the internet stocks and things 00:32:43.000 --> 00:32:44.519 like that, there was kind of a similar thing. 00:32:44.519 --> 00:32:46.359 And the ones that have real staying power like 00:32:46.359 --> 00:32:48.420 Amazon and things like that, that are fundamentally 00:32:48.420 --> 00:32:53.140 useful, they kind of shine. And that's going 00:32:53.140 --> 00:32:56.480 to bring me really perfectly onto something else 00:32:56.480 --> 00:33:00.099 that I want to ask you. Now this initiative was 00:33:00.099 --> 00:33:02.940 done on Hedera Hashgraph. Now I know you guys 00:33:02.940 --> 00:33:05.099 have a great relationship with Hedera Hashgraph. 00:33:05.180 --> 00:33:10.470 As you do many other DLTs out there. Why was 00:33:10.470 --> 00:33:12.250 this done on Hedera Hashgraph? Was it just a 00:33:12.250 --> 00:33:14.670 case that obviously Aberdeen or a governing council 00:33:14.670 --> 00:33:16.950 member, you know, why did this take place on 00:33:16.950 --> 00:33:18.950 Hedera Hashgraph? So what are my favourite projects 00:33:18.950 --> 00:33:20.329 out there? And I'm always interested to find 00:33:20.329 --> 00:33:23.089 out why people are using it. Yeah, so we like 00:33:23.089 --> 00:33:27.769 those guys, obviously. And Nest, our collateral 00:33:27.769 --> 00:33:30.710 product, is actually available on... We're going 00:33:30.710 --> 00:33:32.750 to announce another new chain relationship soon, 00:33:32.769 --> 00:33:35.509 but... all of the others that we have, Ripple, 00:33:35.730 --> 00:33:38.930 Ethereum, Polygon, Arbitrum, Solana, like it's 00:33:38.930 --> 00:33:41.609 available on all of them. So we can do tokenized 00:33:41.609 --> 00:33:44.609 security transactions between parties on any 00:33:44.609 --> 00:33:48.690 of them. And without naming particular parties, 00:33:49.289 --> 00:33:51.269 and not necessarily one of the ones in the press 00:33:51.269 --> 00:33:54.670 release, but some people are uncomfortable on 00:33:54.670 --> 00:33:56.470 some chains and some people are more comfortable 00:33:56.470 --> 00:34:00.450 on other chains. And I don't really have a view 00:34:00.450 --> 00:34:05.089 yet, but In theory, nodes on certain networks 00:34:05.089 --> 00:34:07.750 can be run by people in any jurisdiction. And 00:34:07.750 --> 00:34:09.489 that can be a problem for these institutions 00:34:09.489 --> 00:34:12.829 because if they send me a security and it pays 00:34:12.829 --> 00:34:15.030 gas fees and that gas fee goes to a sanctioned 00:34:15.030 --> 00:34:17.309 jurisdiction, it can be argued that they're sending 00:34:17.309 --> 00:34:20.349 money to that jurisdiction. So Hedera, the way 00:34:20.349 --> 00:34:23.489 that they're structured is that you sign up to, 00:34:23.610 --> 00:34:24.869 I can't remember the name of it, but let's call 00:34:24.869 --> 00:34:27.070 it a node operating framework. And if you're 00:34:27.070 --> 00:34:28.610 part of their council, then you're not in one 00:34:28.610 --> 00:34:33.710 of those jurisdictions. So it's a... infrastructureally 00:34:33.710 --> 00:34:37.550 works well for them. And from a cost and operational 00:34:37.550 --> 00:34:39.849 point of view, it's obviously we work with them 00:34:39.849 --> 00:34:42.010 and Aberdeen is on the council. So there's a 00:34:42.010 --> 00:34:44.670 lot of good stuff as well. We didn't choose that 00:34:44.670 --> 00:34:47.349 chain, particularly in this case, it was more 00:34:47.349 --> 00:34:51.070 driven by participants. Yeah. And I think that's 00:34:51.070 --> 00:34:52.989 the beautiful thing about Archax is you guys 00:34:52.989 --> 00:34:55.090 work, for example, with Algorand, Arbitrum, Ethereum. 00:34:55.639 --> 00:34:58.519 you know, Hadira, Polygon Solana, Stella, XDC, 00:34:58.880 --> 00:35:03.539 obviously XRP. Yeah, XDC, we did some test transactions 00:35:03.539 --> 00:35:09.320 as well. Yeah, your point's right. We are friends. 00:35:09.800 --> 00:35:13.099 We try not to too much be involved in the kind 00:35:13.099 --> 00:35:15.940 of our chain is better than your chain. We're 00:35:15.940 --> 00:35:21.409 just trying to get people I kind of think of 00:35:21.409 --> 00:35:25.449 the chains as countries, right? And in those 00:35:25.449 --> 00:35:27.570 countries, they have like different theme parks 00:35:27.570 --> 00:35:29.789 or things you can do in them. And to go to that 00:35:29.789 --> 00:35:32.570 country, you need the currency. And people want 00:35:32.570 --> 00:35:34.809 to travel, and they want to go and do one thing 00:35:34.809 --> 00:35:36.309 in that country, then they want to visit another 00:35:36.309 --> 00:35:37.949 country for something else. So if I give someone 00:35:37.949 --> 00:35:40.730 the Aberdeen tokenized money market fund, and 00:35:40.730 --> 00:35:43.130 I give it to them on Hedera, Well, that's great. 00:35:43.150 --> 00:35:45.309 They can use that on Nest on Hedera, but let's 00:35:45.309 --> 00:35:48.309 say Aave launch on Polygon and they allow borrower 00:35:48.309 --> 00:35:50.170 lending against happening money. I want people 00:35:50.170 --> 00:35:53.210 to be able to bridge it over and be able to go 00:35:53.210 --> 00:35:55.389 and play with the apps that are on that chain. 00:35:55.570 --> 00:35:58.829 So that's kind of the world we're trying to create. 00:35:58.989 --> 00:36:00.690 Hopefully over time, it will be a little bit 00:36:00.690 --> 00:36:03.590 more obfuscated, but you know, there's a lot 00:36:03.590 --> 00:36:05.610 of good people building a lot of different chains. 00:36:05.630 --> 00:36:07.090 And when you go out, a chain is better than your 00:36:07.090 --> 00:36:09.750 chain. You're kind of throwing away all the good 00:36:09.750 --> 00:36:11.690 stuff that's taking place in those other communities. 00:36:12.190 --> 00:36:13.789 Yeah, I absolutely agree. I think there's trade 00:36:13.789 --> 00:36:15.789 -offs. I think some chains do things better than 00:36:15.789 --> 00:36:18.409 others. Some things do worse than others. We 00:36:18.409 --> 00:36:20.409 like Hedera for a number of reasons, but it's 00:36:20.409 --> 00:36:24.230 not for everyone. We like the fact that, of course, 00:36:24.389 --> 00:36:26.650 this was done on Hedera, but not exclusive to. 00:36:27.030 --> 00:36:29.030 You mentioned your Nest project. So for example, 00:36:29.289 --> 00:36:34.230 theoretically, this could take place on XRP, 00:36:34.269 --> 00:36:37.010 for example. It's not specific to Hedera. It's 00:36:37.010 --> 00:36:39.329 just Hedera work. in charge of obviously conducting 00:36:39.329 --> 00:36:44.130 this or the chain that was chosen to conduct 00:36:44.130 --> 00:36:47.409 this on... Yeah, exactly. If someone came to 00:36:47.409 --> 00:36:50.369 me today and said, oh, can we buy your BlackRock 00:36:50.369 --> 00:36:53.369 Money Market Fund on XRPL? Then I would say, 00:36:53.489 --> 00:36:55.829 yes, that's fine. And if they said, we want to 00:36:55.829 --> 00:36:57.929 send it here, then that's fine as well. When 00:36:57.929 --> 00:36:59.449 it got to the other side, if that person said, 00:36:59.929 --> 00:37:01.750 when we receive it, we want to flip it over here, 00:37:01.889 --> 00:37:04.809 well, that's okay too. In the same way, USDC 00:37:04.809 --> 00:37:09.550 is like multi -chain. That's kind of how I think 00:37:09.550 --> 00:37:13.170 about it. It's just a kind of a record of ownership. 00:37:13.590 --> 00:37:15.510 And when they're on multiple chains, you're just 00:37:15.510 --> 00:37:17.710 bringing them all together for this consolidated 00:37:17.710 --> 00:37:19.989 record of ownership. That's kind of the way that 00:37:19.989 --> 00:37:22.809 Circle do that. I think that's the best way of 00:37:22.809 --> 00:37:24.670 thinking about it. They've made their currency 00:37:24.670 --> 00:37:27.230 available to a number of communities, and that's 00:37:27.230 --> 00:37:29.110 a good way of being. And of course, you can work 00:37:29.110 --> 00:37:31.110 with chains and get development and support them 00:37:31.110 --> 00:37:33.789 more. And we do that. We have some closer relationships 00:37:33.789 --> 00:37:38.619 than others. But we're just trying to give institutions 00:37:38.619 --> 00:37:41.599 what they want. Yeah, I love that approach. I 00:37:41.599 --> 00:37:44.159 truly do. So Graham, you mentioned that you've 00:37:44.159 --> 00:37:46.320 got a number of things in the pipelines that 00:37:46.320 --> 00:37:48.079 you can't talk about. When do you think you will 00:37:48.079 --> 00:37:49.420 be able to talk about those? Are we looking at 00:37:49.420 --> 00:37:51.199 this year? I mean, you guys are an extremely 00:37:51.199 --> 00:37:52.940 busy company. I don't want any names or anything 00:37:52.940 --> 00:37:55.340 like that. Not that I'd get them anyway, but 00:37:55.340 --> 00:38:02.159 what are we looking at? So we've got an announcement 00:38:02.159 --> 00:38:05.929 that's similar to nest coming up. So not collateral, 00:38:05.969 --> 00:38:08.389 but a different use case. And that's going to 00:38:08.389 --> 00:38:10.230 be pretty exciting. And we've got another chain 00:38:10.230 --> 00:38:12.670 relationship that we're really proud of. You 00:38:12.670 --> 00:38:14.469 know, we didn't go into this announcement, but 00:38:14.469 --> 00:38:17.489 we'll be announced that soon. We've just signed 00:38:17.489 --> 00:38:21.050 a letter of intent to buy a German company that's 00:38:21.050 --> 00:38:23.969 going to add a bit of something to the group. 00:38:24.349 --> 00:38:26.369 So that could be pretty cool as well. So yeah, 00:38:26.369 --> 00:38:28.429 there's a few, I mean, you know, if we pick this 00:38:28.429 --> 00:38:30.610 up in a month's time, I can probably chat for 00:38:30.610 --> 00:38:33.730 all of them. But we're, you know, we're You know, 00:38:33.730 --> 00:38:35.170 there's a lot going on in this space. You kind 00:38:35.170 --> 00:38:37.730 of have to be pretty nimble and move around. 00:38:37.889 --> 00:38:40.289 There's not tons of money flying into RWA right 00:38:40.289 --> 00:38:42.489 now. So you need to be in the exciting projects 00:38:42.489 --> 00:38:45.230 and embedding yourself into the traditional financial 00:38:45.230 --> 00:38:47.769 system so that when things start moving, they 00:38:47.769 --> 00:38:51.289 know where to turn to. Graham, it's always an 00:38:51.289 --> 00:38:53.889 absolute pleasure having you on. Absolutely massive 00:38:53.889 --> 00:38:55.570 congratulations for what you guys are doing. 00:38:55.630 --> 00:38:57.449 Like I say, you guys have been around for a long 00:38:57.449 --> 00:39:01.900 time. The first FCA regulated... company to do 00:39:01.900 --> 00:39:04.500 what it is you're doing. Real pioneers. We absolutely 00:39:04.500 --> 00:39:06.000 love having you on and hopefully we can have 00:39:06.000 --> 00:39:07.880 you on in a month's time to talk to us about 00:39:07.880 --> 00:39:10.099 what you guys are up to again. Thank you very 00:39:10.099 --> 00:39:12.199 much, Graham. It's always a pleasure. Yeah, it's 00:39:12.199 --> 00:39:13.139 been great. Thanks for having me.