End State: What Will Bringing Wall St. Onchain Look Like? | DAS London 2025 | Day 3 | Institutional
Summary
Market Outlook: The discussion emphasized the transformative potential of bringing Wall Street onchain, highlighting the efficiency gains from instant settlement and 24/7 trading.
Investment Themes: Key themes included the democratization of access to private markets through blockchain, enabling fractional ownership and increased liquidity.
Company Insights: Companies like Hamilton Lane, Commamino Finance, Ledger, and 50T were highlighted for their roles in advancing blockchain adoption in institutional finance.
Technological Innovation: The panelists discussed the need for technological advancements, particularly in tokenization and the integration of real-world assets (RWAs) onchain.
Regulatory Challenges: Regulatory clarity was identified as a major hurdle for widespread adoption, with a call for more native onchain use cases to drive regulatory acceptance.
Future Prospects: The potential for AI to automate financial advice and the importance of creating seamless, user-friendly blockchain experiences were highlighted as future growth areas.
Infrastructure Readiness: While the infrastructure for onchain finance is developing, there is a need for more integration with traditional financial systems to facilitate adoption.
Key Takeaways: The panel concluded that the integration of blockchain in finance is a journey, with significant opportunities for innovation and efficiency gains, but it requires time, regulatory support, and technological maturity.
Transcript
Good afternoon. Thank you all for staying close to the end. We're not the last panel, but we are close. Um, save the best for close to last, we'll say. Um, I'm really excited to talk about what the onchain Wall Street landscape is going to look like. I want to start with an intro from everyone. Victor, do you want to kick us off and we'll go down the line? >> Hi. Um, Victor Jung, head of digital asset at Hamilton Lane. We are a 950 billion plus uh AUMUA uh listed in NASDAQ solely focusing on private markets as private equity, real estate, infrastructure and private credit. Uh and what we do is uh make uh private funds uh cheaper, better, faster through the use of uh blockchain. >> Hey, Arun Krishna Kumar uh I lead institutional growth at Commamino Finance. We are the largest lender on the Solana protocol, Solana blockchain. Uh we've got over $5 billion worth of um assets uh supplied on chain and about 70% of the lending market share on um on Salana. So that's us. Look forward to the conversation. >> I'm Sebastian Bedau. I run uh institutional at Ledger. So Ledger is the global leader in hardware wallets, but we also have a B2B platform that I run. uh we secure 20% of the world's crypto uh Ledger and we're looking to do a lot more especially like building our product for the next wave what we're going to be talking about uh the Wall Street guys coming on chain and and and and when they're going to be new needing to secure their assets >> and Randy Little um I'm a partner with uh 50T I to my knowledge it's the only digital assetonly growth equity fund in the space uh we've got about 2 billion under management 24 uh companies in the portfol folio. We're on the board of 11, so we tend to be a little bit more active. Um, we're obviously highly interested in the intersection of kind of Wall Street and in crypto. That's kind of the interest, a lot of the interest of our LPs. Uh, so spend a lot of time thinking about stable coins, RWAs, and how kind of most of the money in the world makes its way into the web 3 space and how the rest of the world can leverage this technology. >> It's exactly what we're going to be talking about right now. >> That's perfect. Um, I don't typically do this, but I am going to tell the audience kind of every question that I'm going to ask. When we were uh prepping for this panel, we kind of came up with a a general framework. So, three main topics. First, why should Wall Street go on chain? Second, why is it taking so long? And third, what will it look like? So, let's go ahead and kick off with number one, why should Wall Street go on chain? What should use cases look like? What is the interest? Um, did you want to start? >> Sure. There's I would say one of the things that people generally jumps to right away is the 247 trading. Um, that's that's revolutionary in in some asset classes, not all. Um, but there's I think the other more profound changes um are just around the the instant finality. I mean, there's massive capital inefficiency based off of T+1, T+2 settlement. Um, that creates credit risk. it adds to the risk of everything that happens. So if you can remove that, you're removing a bunch of steps in the process. Um and also just the ability to fungeibly use capital again, uh this can be sort of replicated with a prime broker. That's the whole idea of that whole space. But if you can do that natively programmatically, that adds another layer of of huge efficiency. Um, so it's it's something that I think will we'll get into how long it'll take, but uh it's something that I think will transform the capital markets like it's already started to transform the payment space. Um, that's I I would say that's on the leading edge. Um, but I think as all assets come unchain, which is one of the the thesis for our fund, um, we're going to see a huge acceleration of of the liquidity and velocity of capital. I'd say that um it's about also obviously all this but um also about innovation right at one point or another when you look at all the waves of innovations that have happened over the past 20 30 years we could probably go back you know technology wins right it doesn't have to be and and and I won't say which one because you know it might be which chain etc etc but at the end of the day if you build something that is faster that is cheaper etc and also knowing that the rails that exist today have been built a long long time ago and there hasn't been that much innovation in the financial space right like I think it was Warren Buffett who said that the last innovation was the ATM right uh so there's a big wave of innovation and so it's kind of you know in everyone's interest to you know leverage it and use it and I think that that's that's what I that that's why Wall Street should go because innovation means new ways of doing things and and better ways of doing things >> okay how long have we got we've got 35 minutes for the Y right uh so I I'll give you I'll start with a practical example So, we had a massive liquidation not so long ago on chain. Um, and a lot of my old position really got killed. Uh, Bitcoin held relatively okay, but the RWA positions I had on chain really saved my day. I was able to uh really cover for some of the some of the more riskier closer to liquidation positions that I had on chain. So, that's a practical example of how RWS could be a really good diversification strategy if you're going to be in in the crypto land. Uh but going back to say 2008 for instance, imagine an onchain balance sheet for all the banks. You could really sense test um instant solveny of a counterparty uh before transacting with them when you have a serious liquidity crisis in the market. So right from starting from that kind of macro view to how a user can really diversify their portfolio on on the crypto side, it it has multiple different use cases. You can talk about democratization of access to some of the assets that would normally be normally not be accessible to some of the users. Uh you can talk about fractionalization of ownership. So there's so many different kind of philosophical ideas, but those are the two broadstrokes, the two end of the ends of the spectrum. There's so many different use cases in between. >> How do you think Wall Street's currently thinking about tokenization and and RWAS? >> Just AUM, additional AUM to keep it simple for them. For most of them, it's basically additional AUM. For some visionaries, one of them is right just right to me uh right of me here uh on stage. uh there's there's a lot more than just traditional AM for people like Vic. Um uh but I I I think there is like uh it's generally that because for them that's revenues, right? So >> yeah, Victor, why should Wall Street go on? >> So I'm I'm strictly speaking in the um context of private markets. So let's make it more tangible because we're entering the latter part of the days. Uh can you imagine your life today without uh Uber, right? Imagine that you got to go into this like smelly, you know, uncomfortable caps only. That's the only option you have. Go to Paris, the grumpy taxi drivers. That's the only option you have. Imagine how life would that be. Uh a life with no Airbnb, a life with no Netflix. You got to go to movie theaters to watch or, you know, pirate them. Um I call this an email that takes three days to land in your inbox. That's private markets. It's a market that has not been accessible for the broader audience. And I call them retail. in retail. We can talk about the core ultr try net worth high net worth mass affluent and and and m and popups um generated for 50 years prior markets has not been accessible to them. So you still have to like think about a Netflix where every time you want to watch a movie or a series you have to log in put your credentials the card numbers. This is the current state of affairs for private markets. Uh with blockchain you can make it cheaper better faster. So you can as everyone mentioned you can fractionalize typically it's 10 million minimum commitment. You can fractionalize up to 1,000 even $1. Um on the better side uh there's no liquidity on private markets. uh this could enable and unlock additional liquidity and the faster I mean stock markets for us already operate in a very efficient way. Um we are still dealing with emails and faxes shockingly enough but this is an institutional um asset class. Now we see blockchain uh being able to disrupt the entire uh ecosystem from operations to subscription process pre-populated KYCL uh and and there's a lot of cost efficiencies and um this will help in the adoption especially when uh 90% of companies with more than 100 million um dollars of revenue are private and the mass affluent and the the retail cannot access to it. We believe that blockchain would unlock all of that together with the regulators uh to participate in a high growth uh asset class um um for for for the time being. >> Yeah. One thing I would add is just another practical example you made me think of was what figures done in the in the heliloc mortgage space. I mean that's a very practical example of what can be done with blockchain. I mean they ostensibly they started as a fintech that delivered a better um better user experience to get a loan. In the US sometimes it can take a month or two months to get a heliloc. If anyone's been through the the traditional process it's quite terrible. They they use blockchain to lower the cost. The cost of underwriting is I think it's 60 to 70% lower than than traditional means and they can go from application to funding in about a week's time as opposed to you know a month or two months. And people don't talk about it, but this is probably the only asset class in where it has been disrupted by blockchain. 10 to 15% of the home equity loans are issued by figure if I'm not wrong. No, that's that's exactly right. So, and but but the point is is that the users have no idea that blockchain is even involved at all. But they've done the work to originate loans through a whole network of providers to put things on blockchain rails, make it easy to diligence. Um there's not redundant diligence processes that exist uh in the traditional market. And then they all they also were able to get the capital market takeout done getting Goldman JP Morgan and the big mortgage players to actually buy blockchain based loans. So that putting that all together is difficult but it's been a transformative user experience and I I just love that example as a way to use blockchain in real life. >> Sorry go ahead. I was I was just going to add to that thinking that you down the line when you're looking at IPOs etc that are being done you have to file hundreds and hundreds of pages and all of those could be like smart contracts right like so that's not the case yet but like looking forward like there's so many use cases where you could just simplify everything and have everything on chain and transparent for everyone to see so >> no I was just going to say Mike Agny will be very pleased that we giving him a lot of ad time here on the stage but um the the the thing the thing I really love about what figur managed to achieve they've been very quiet about how they've managed to tokenize uh the $17 billion worth of assets, real world assets. Um, and I don't think any other asset class has been kind of tokenized to that scale and they are growing at several hundreds of millions of dollars onchain per month. So the pace at which they are able to uh bring assets on chain is is also mind-blowing. So effectively they have the entire process of onboarding assets uh nailed. So that's just a case study in my opinion of how you scale an onchain economy for a specific asset class, create liquidity and and from there then start thinking about D5 utility. Uh that's that's clearly a amazing case study that uh there's lots to learn from. >> Okay. So we know the use cases, we've touched on the efficiencies that can happen, how it can be improved. We've touched a little bit on this on on infrastructure. Why is it taking so long? What's what's the hold up? I guess >> did you want to start Sebastian? >> I mean I think part of it there might be a little bit of PTSD from some of the things that they've seen in the past. So I think you know obviously and and and I think that goes for again like every technological revolution. The incumbents are usually the last ones to you know put their feet in the water. They're a little bit you know maybe because they don't need it as much. So you see innovation from new entrance, new players and then people that have been in the space they kind of like look at it. Obviously the fact that the industry is incredibly regulated also has a big impact on you know because even though we're seeing the genius hack etc that's not everything you know like there's still you know if you talk to some of the really large banks they'll tell you that you know they're willing to do some things but not everything yet because like they don't have clear you know view as to what it is that they can do and cannot do that will come but that'll take some time so regulation is another piece um and then I think the other thing is money because right now they're making a lot of money with what they're doing. And so the idea is like how are they going to make money in that new world, right? So I think that that's a big part of it and what's going to drive them coming into the space is you know them finding ways. So I mean Black Rockck's been very successful like doing ETFs etc. But that's I mean is it really you know a a onchain uh product? It's kind of like using an old product and into the space but they found a way. I think that also will drive a lot of adoption and that's why it's taking some time because they haven't really found the sweet spot some of them anyway. >> Yeah. So that the answer to that really involves thinking through the RWA stack. So I was just trying out the RWA stack on Sauna like a few days ago for something else. But if you think about the number of activities that is involved in picking up an asset and taking it on chain of course tokenization is just the start of the journey. Even to get there, you've got to have transfer agents lined up. You've got to have all the regulatory rappers. Um, and of course, you also need to make sure that the token mechanics that you're using is is uh is is kind of viable for D5 consumption. Um, so that's the upstream and then you also if you're going to go D5 distribution like if you're going to use a platform like Commamino, um, the ideal form at this stage is going permissionless. So there is a there is a bit of legal compliance um and tech operational angle to that. So that has to be built in. Um and then you have to think about price feeds, proof of reserves. Um and once you have lined all this infrastructure element out then you start thinking about liquidity. Who is going to be the first investor to take the asset on chain? Who is going to be the investor who is going to be providing lending opportunities for this asset when it's used as collateral on chain? And who's going to provide DEX liquidity? how are you going to incentivize the whole launch? So tokenizing an asset is just the starting point. It's it's not the the end stage. It's just the starting point. And if you really want to prove that an asset has actually got legs on D5, there is so much more involved and it is a journey. And lot of this lot of these actors or a lot of these capabilities the word capabilities along the stack is still being built right as as as and and and it's that's the fun thing here. You're actually living through this massive transformation of financial services and you're being part of it. History is happening here. Um and it takes time. It's a journey. >> Victor, how are you thinking about the >> Yes. Uh I think first to give some stats uh back in 1991 um the use of uh cloud services was approximately you know 3%. Uh after 30 years you would think okay um everybody's using cloud. actually cloud from what I see from the latest research reports is approximately under 60%. Uh and that's shocking right so it these takes >> and it's the same with e-commerce right like you think e-commerce is everything it's not right like e-commerce is still much larger than e-commerce 20 years >> so here I I give it to a I blame it first on a time factor that is a common denominator if you um if you start spying on everybody's phone calls uh the the common uh expression is I have no time I'm busy right we're sacrificing time with our kids uh with our partners and everything just uh you know to to to get more work done even sleep so I say That's that's that's one which is very important. It has nothing to do with technology. Um second I blame the engineers. Uh a lot of engineers here they talk about cubern needs and layer one layer two proof of war proof. Look when I use Apple Pay I don't give a about what's the seven steps behind is it cheaper better faster then I'll pay for it. Right. So engineers and narrative it's it's another problem. Right. They get too technical. The TPS look the end user >> that's not in the audience. >> Yes. and spoken like a true product. Ironically, engineers are the smartest. >> I didn't know that storytelling was a talent until I arrived in the in the D5 ecosystem because no one could tell could tell a simple story because all you have is 30 seconds elevated speech, right? Everybody's ADHD. Um, we can't stay focused for over over two seconds in the same uh uh user interface. So, narrative is one thing. You can blame also the regulators, the lawyers, etc., etc. But I think it's the narrative and last but not least also uh a little bit of complacency when we don't have time. Why uh private markets for every you know uh bank and private wealth they're having the best years of their lives. Crazy AU and crazy inflows. Um when it comes to private equity and private bank everything is about raising money and deploying right uh operational I don't care. In order for me to do blockchain I have to open a book that I've never opened up after um my master's or undergrad. uh it's very difficult to reuse your brain and and and take extra time uh at night and enroll in MIT Oxford courses for a blockchain that is not worth very much and uh you need to compete with guys that are trying to sell you an a a pixel at a JPEG at one ETH right this is how life life is changing um it takes time and um their lives right now when you're at like mid-40s plus you're not incentivized to halt operations use extra time uh risk your uh marriage and your sleep and do something that will um hinder uh your bonus payments etc. I think it's a mix of everything but um you know just to make it a bit controversial engineers I blame you guys you guys are smart figure it out and second will be you know just just human behavior incentives >> what do you think Randy I that's hard to top but >> no we'll see what I can do um but um I think that we're it's it's still so nent I mean right now about if you set aside stable coins it's a little over $30 billion of rwas on chain I mean compared to hundreds of trillions of dollars of actual assets So it's tiny tiny a lot of it is kind of money market funds which I think is a good first step but I think the real value comes when other assets come on chain and a lot of these are not digitally native natively issued which is critical a lot of it is traditional assets go into an SPV you tokenize the SPV which creates its own set of inefficiencies so for example if you tokenize equities that way what do you do with corporate actions what do you do with voting um so I think that there's a lot of maturation that needs to happen I think some of it is there's been lack of regulatory clarity to say the least in the US. I think it's becoming more clear. It's not perfectly clear that will need to happen. But then I would just draw one other example. When you think about the the time it took to electronify the capital markets, it really started in the late 80s and ramped up in the '90s. Today we've reached about 90% electronic markets. Some markets like fixed income are still only 60% um uh electronic. It took equities even which are well suited for electronification at least 10 to 15 years to get to 50% electronified. And I would say that blockchain enabling the capital markets is a much bigger change. It's a more impactful change. But if you think about rewiring the operating system of the way capital markets works, it's much is a much bigger change than changing how orders are handled, orders are matched. This is like the backend back office processes that are being fundamentally changed. So, I think it'll happen um within that sort of time frame because just the the pace of the pace of change is is just ramped up. But I think it'll be huge when it happens, but it's going to take time. And I think I just pick up on one thing that Sebastian said. I think transparency is another wonderful example of all this. And I think it's great for to save operational costs, especially when you get into more complex structured products, CLOS's, things like that. It adds a lot of efficiency. But um I think a lot of the larger capital markets players are making tons of money on the opacity. That's one of the reasons why a lot of the markets a lot of the traditional huge markets like derivatives and fixed income are are much much slower to electronify because the banks have benefited from sitting in the middle of the market. The markets are opaque and they make tons of money with that. So if you then take that away and say let's make that all transparent let's make everyone equal that is not good for banks. Um so they have they have all the connectivity they have the distribution they eventually they will be forced to come around just like they have with electronic trading but they will drag their feet. So that that's another I would say more less obvious friction. One one thing I'll add is uh to say something positive on on on the moves from like the traditional players is that they and and this is something that I've been surprised about in the discussions that I've had with them in the past couple of years is that it's not they're just sitting idle and not doing anything about it, right? Like they all have plans and teams and very brilliant teams that are like ready to do big things. to your point, you know, it's going to take time, but it's like it's not like they're just waiting and saying, "Well, we'll put this and we we'll look at this when it's ready or when we have the regulation." They're they're they're ready like not fully ready, but they're like getting ready for it. And I think that's an important thing to take into cons consideration. >> What about from an infrastructure perspective? Is is the infrastructure there? What are the what challenges exist still? Well, so I'll I'll I'll I'll speak obviously uh from from from my standpoint which is really around security and and making sure that you know one of when I was talking about the PSD uh aspect you know a big part of it is can this be secure right now like the ETF for example is really easy because it's not really onchain is like you know it's basically a product that you know you're you're doing it the old the old fashioned way like how are you willing to hold Bitcoin on your B balance sheet and if you do that what are you going to do with it right like how do you secure it etc and I think that That's um one of the things where you need the tools and and they have to be um obviously you know the gold standard in terms of of uh security. I think they have to be very close to what they're using today. Uh so you know for example like we use HSM technology which is something that is being used by traditional custodians. So when we talk to them about about doing it for Bitcoin or for ETH etc etc they understand because it's like the setup that they already have. So you're talking the same language kind of um in a way. Um so on the security aspect I think that's what we're trying to do right like build something similar to what they they've been using so that they don't you know need to relearn everything. So from my standpoint that's that's more important >> and I think I mean I think I mean to to carry on to Sebastian's point I think that ultimately banks are going to choose you know a lot of the value chain that they're going to want to insource and control. I think that will be that'll certainly go to custody. That's something that's very comfortable for banks. They have the brand, the reputation, the balance sheet. So, that would suggest that they're going to want to um they're going to want to use custody technology. So, that would be like a ledger enterprise or a Fireblocks versus outsource that to another uh digital asset custodian today. I mean, I think they they'll have other sorts of clients, but I think that banks will want to have that and control it as they build products on top of it. just to add uh we we we looking at it very much from a traffic perspective um but there's also a defi angle here which is the defi um platforms out there they'll also have to start embracing some of the um the standards that trfy have set for themselves uh those rules and regulations have been there for a reason um and personally for me one of the things I'm deeply proud about commamino is not just today I'm not saying this just to shill the platform but even back in the day like 2 years ago just after FTX whenever there used to be a liquidation event in the market the CEO used to come out and talk about how their the liquidation engines have performed very publicly most other platforms D5 platforms back then they would be shilling um the the yields that they able to produce but the moment there is a liquidation event they would shut up whereas this this organization would shout out about how riskmanaged they have been. And even today, this across chains, across lending platforms, we are the only ones that offer a realtime risk dashboard looking at risk metrics across 12 different dimensions. You can check you can go to risk.coam. Finance and see it live. The reason I say that is not because uh Kamino does it alone, but that's the culture we have to have in the on the D5 side. As Vic said, trady do not have to compete with NFT holders and NFD regions. There there is a there is a space for that. ABS absolutely but there's got to be a space where people can transact on chain safely and feel comfortable doing that. And that's a journey. It's a cultural shift. Um it's a it's a of course as a from a legal and compliance perspective there's quite a lot a lot needs to be clarified and there's got to be a lot of work done there. But also from a tri defy standpoint, we've got to embrace some of those aspects. >> Well, and and I think, you know, once you get through the regulatory clarity, I mean, I think that what will happen with DeFi is it will become the back office for a lot of what's what's happening because there there's a huge number of activities that banks do that you do not need an office tower of people to manage. There's there's many use cases that could be handled programmatically on chain, transparency, cheaply, instantly. And I think that will migrate there. We already see it in kind of the borrow lend marketplaces where like if you want to borrow against your Bitcoin, it's, you know, if you go to a centralized party, it's 10% plus on a it's 5 6%. So it's way more capital efficient. Like you couldn't even get wholesale funding against Bitcoin, you know, less than 7 8%. I think that'll probably come down over time. >> Free on Camino cheap shell. >> That's what I'm saying. So, I I think that we'll see more relationships like Coinbase, Morpho, I think Robin Hood just announced something like that. But I think for the average user, that's how they'll touch DeFi. It'll kind of disappear into the background. There will always be the more crypto forward retail people that are looking for the the newest things. It's going to go to the the web interface, but the average person like I always think about my mom or dad who are are they going to go to like the Camino dashboard? Probably not. But they would if JP Morgan had a Camino market on through their Chase app, they probably would use it and they wouldn't even know it, right? >> Victor, how are you thinking about infrastructure? >> Whether the infrastructure is ready again another, you know, just to make it a bit more fun, uh, as long as we have 90 year olds, 80 year olds and 10 years old. Um, the infrastructure would never be like harmonized or standardized because a 90 80 year old will never use a MetaMask or a Phantom wallet, right? They will they like the trust factor. They like uh the relationship manager, financial adviser. Now there's a life story where a um um a a a bank owned by a family. It's a private bank um very successful. They've decided to take this path of staying class. So no digital just you know um Napa Valley you know um Basat um events and you know really like for the VVIPs. Now all of a sudden um they start asking their clients, hey um your son and daughter they um why are they not showing up recently and this is to the point to say that infrastructure is not ready yet but it would change. Uh and the answer was um they say you suck right and they're like um beg your pardon. Um they say that you suck because first you don't have an app. Number two, you don't have any crypto solutions and uh they just um hate uh going to these uh wine parties and uh it's a waste of time. They are doing everything with their app and the fact that you don't have one for them is a waste of time. You're too expensive. uh and this ties with this uh one of the most uh most recent powerful uh research um analysis that has been conducted in where we're living in the biggest greatest generational wealth transfer that the um human history has ever seen. Now, 81% of the um recipients answered and stated that as soon as they inherit their assets from their parents, the first thing that they're going to do is fire um their financial advisor. Why? The first wallet that they had was a Revolute or was an app-based account. Now think about you ask them and ask them to go and open up a bank account in a you know retail high street you have to wait few hours and paperwork they get shocked right so for them the risk of of of embracing the old infrastructure they would never do that you know they everything has to be instant like they need to have everything in one place again ADHD is is a is is not even a disease these days it's is it's like oxygen I mean It's everything has to be atomic. So the infrastructure with these users uh who take for granted all of this digital atomic set on transparency etc etc. I think all of the custodians they will adapt to it. Heck and we can this is a good segue for the last question is and I'm sure Ledger would love it like at some point everything will be on a self-custodial base, right? Um and people may not know but that's that's where I think the new generation will kick in and every company has to have a a strategy for the future now for the 90 87 year old but also for the what's come what's next to come >> I think I mean what's interesting is that it's a cultural shift that's very wide that goes beyond finance I mean finance obviously that what we're talking about it's a great example and your revolute example is on point like all of my kids have revolute accounts and they will never go to my bank and I would and and I'm and if I could I would do the same because when I when I use Revolute for me it's so much better than any other app that I've seen and it has crypto like built in right like you buy Bitcoin and Revolute with like you know one swipe but the cultural shift I think goes beyond in the sense that it's the same kind of thing that you used to you know give your health to like your doctor and like you wouldn't see your blood results etc etc it's like oh he's taking care of it for me and your financial advisor is taking care of your money I think we're at a and and and I will get the news from like CBS because I trust it, etc. And then that trust is like gone because you're realizing that you can learn on your own and you can know on your own. And so you want to know about your health, you want to like know about your finance, you want to know about your news on your own. And I think it's that's the cultural shift that's happening. That's really big. >> One more funny anecdote. It's it's slightly off topic, but just on the whole point that we're making with Revolute, my 18-year-old when when she has cash, she's like, I think that that feels like fake money. She doesn't believe it's real money until it's on an app. >> That's that's that She's like, "It's easy to spend because it feels fake." It's like, well, it is a little bit >> Bill. I agree. It's >> It is a little bit. Yeah, >> it is a good segue into our our last question, though. So, you know, we covered the use cases. We covered why it's taking so long. What will it look like when Wall Street is onboarded on chain? Um, we'll we'll say, I guess, what are you most excited about in in the RWA space? Maybe we can start with you, Arun. For me, I think it'll be aligned with what the new generation is all about, instant gratification, right? So, from T plus2, we'll have T in terms of settlement. So, uh it's not going to be we send money somewhere and they have to wait a couple of couple of days. We we do a transaction and for it to settle, we wait some time. So, that's kind of and it it it unlocks a lot of capital efficiencies, right? So, that's I think that's a that's the kind of the gist of where we're heading with uh heading. uh but I I would like to be in a place where I can sell a part of my grove mangrove in in India and buy a part of Buckingham Palace here right so that's the level of tokenization that we should be aiming for irrespective of the liquidity profile of assets irrespective of where the assets are what the what the form of the asset is um but um but on a on a more grounded basis I would like to get to hundred billion dollars of TVL on commamino >> Victor So, what do you think? Where are we headed? >> Um, everything will be money, everything will be cash, everything will become a payment method. So, in concrete, RWA is real assets. Sometime I call it the real worst asset because it's so hard to tokenize. But, um, uh, that's already happening. Uh, next in line would be NBA. Uh, stands for non-bankable assets. So um music royalties uh art um sports everything that is non-bankable uh in where everything will be represented as a as a payment method. So everything will be money and this will be like internet you know capital markets internet money and uh it's it's a pure democratization to to to the max. It's atomic, transparent, and um it will be hopefully uh more trustworthy and um uh it will grow the entire pie size. Great innovation. >> Ladies and gentlemen, thank you so much for attending. I'm sorry to tell you that the >> So, I I agree with with all of that. I would just say one of the other themes that I think is really interesting is the prospect for um AI and the agentic economy. It's one of the focus areas for for our next fund. But if you think about once you have RWAS everything's instantly settlement you have stable coins I I think there's a huge um amount of latitude on once all that infrastructure is in place I think that there will be agents that will act on people's behalfs that will replace at least part of what financial adviserss do today I don't think humans will come out of financial advice given the emotional piece to it but there's a lot that could be automated riskmanaged probably much more optimally than is is done today and having all of the assets on chain in a programmatic way is the first step to doing that. I still think that's that's a few years off. Um, but I think that's something that will certainly emerge over the next 3 four years given the rate of change that we're seeing across crypto and AI. And that that's something that I'm actually super excited about. I I'll totally second you on that and the fact that actually there's this very strong link between the two because right now, you know, if I want to give an agent access to my bank account, it would be next to impossible. But if I want to give him access to a wallet, whether I put a little bit of crypto and then have it have the agent do things with it, it can, right? And people have done experiments with it like have agents make money for them, etc. So that is a use case that exists today, right? That probably will get democratized, etc. But I I fully agree with you on that. Uh I I like this idea of thinking that because I think it's part of the ethos of uh the industry at the beginning is that it's going to be fully global that there's going to be like interoperability across like the different chains and access to like the different markets which you know is really important as well because you know we we've talked a lot when people used to ask you know what is the use case well the use case is that there's two billion people that you know are unbanked in the world right so giving access to all of that and I mean I like your idea of like the growth in India is also like a way to like, you know, bring in a lot of people that currently like don't have access and maybe to like level the playing field a little bit like to give them access to things that they don't have access to today. Um, and then, you know, I love this idea of keeping so we're talking about transparency but also privacy uh because those things are human rights. They're really really important. Um, and uh and and I think that in this new world like people will have be able to have both, right? like transparency on like where the transactions are, but if you want to keep, you know, remain private, you'll be able to like keep that privacy. I think that's really important as well. >> So, Sebastian, I think it was you that mentioned the institutions are there. They're ready. They're thinking about this. We've talked about the infrastructure. Victor, you said the infrastructure is there. I mean, what's the next catalyst for driving Wall Street adoption? Victor, did you do you have >> engineers? No, >> regulations. >> Yeah, regulations. >> Regulation >> and more use cases scale. No PC's but real real native uh yesterday somebody mentioned like no more replica you know like has to be native onchain uh use cases that have really proven to be um cheaper, better, faster without twisting the story. It has to be just so self-evident just like Apple Pay. Yeah. >> And I think like corporate adoption is an important thing as well. I think that you know when we talk about the genius act and we talked about stables uh what we should be seeing is uh people that are not in crypto space today going into it. So I'm thinking always of Amazon because if I you know clearly saving two three billion dollars in credit card fees by issuing like an Amazon coin and then giving you an incentive to use it instead of using dollars I think is huge and that I think will also like spearhead and and then maybe like them having some of their treasury in Bitcoin right like we at Ledger we have a big part of our treasury in in Bitcoin and I think that more and more corporates will do that as well and I think that they're the clients of like the bigger banks if they start moving towards crypto they will also force the overall ecosystem to like adopt So I think that that could be something that would move the needle in some ways. >> We only have a couple minutes left. I I want to give everyone an opportunity to answer this last question. So we'll say five years out. What are you most excited about when it comes to Wall Street on chain? Are you ready, Randy? Do you want to start? We'll go down. >> Five years out. Um well like I said I I think there'll be a lot more going on with um with AI but I mean I I think that from a from the perspective of the capital markets infrastructure like I said I think it's going to take 10 to 15 years to really re rewire most asset classes and have it actually have the scale and liquidity that that we see today. Um so 5 years from now I think we'll be partially along that way. I mean, you see most of the studies that are out today project I think it's 15 to 20 trillion of assets on chain by around 2030. I mean, that's probably correct plus or minus 10 trillion. Again, if you think about that in the scale of all assets, which is hundreds of trillions of dollars, there will still be a lot more to go. But I think that even with that amount on chain, there's a lot of these use cases that we're talking about will be able to come to life. Um but you know obviously there there will be more more to come in terms of the the liquidity perspective of it. >> What I'm excited about is for the industry to grow up uh as a whole and and and that I hope that you know we put in the rearview mirror a lot of the negative things that have happened in the past and I think a lot of it goes to having very strong foundations security being obviously one of the key ones. So what I hope to see in five years is obviously all the inflows etc etc but like in a space where we're not talking about scandals and this and that or you know deeps etc but like of like well this is here to stay. I think that that's really important. >> So that those inefficiencies are where where money is made but uh from my from my perspective I want to be in a place where we don't talk about blockchains >> protocols we don't talk about TCP IP when we use our internet any anymore. So we've got to get to that place as soon as possible and I've seen technologies particularly payment technologies in India scale massively. So I I was in a in a matter of 5 years I went from paying in cash and a taxi driver turning around and said no I don't accept cash that is not too far away if we use stable coin as rails and there's so much that could that could exponentially drive the growth for us. I think that's what uh be awesome. >> Safe best for last. Um I'm sure a lot of uh we see a lot of young and not uh less young audience. So a lot of you have missed the u internet uh the.com uh bubble or opportunity. A lot of you also have missed the um COVID RNA uh train probably. Um what excites me the most is the blockchain. Uh and AI look everybody talks AI. I don't know how many really understand but blockchain is real. Uh it's more immediate. Um you can do good make money. Um so socially, commercially it's it's um it's an opportunity for you to stay in whatever you do uh representing here finance but it's applicable everywhere. So um uh my asset class 50% from um for this to be democratized by retail but also by the um by the digital natives. So that's what excites me the most. >> Great. Thank you all so much. Thank you for joining us.
End State: What Will Bringing Wall St. Onchain Look Like? | DAS London 2025 | Day 3 | Institutional
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Transcript
Good afternoon. Thank you all for staying close to the end. We're not the last panel, but we are close. Um, save the best for close to last, we'll say. Um, I'm really excited to talk about what the onchain Wall Street landscape is going to look like. I want to start with an intro from everyone. Victor, do you want to kick us off and we'll go down the line? >> Hi. Um, Victor Jung, head of digital asset at Hamilton Lane. We are a 950 billion plus uh AUMUA uh listed in NASDAQ solely focusing on private markets as private equity, real estate, infrastructure and private credit. Uh and what we do is uh make uh private funds uh cheaper, better, faster through the use of uh blockchain. >> Hey, Arun Krishna Kumar uh I lead institutional growth at Commamino Finance. We are the largest lender on the Solana protocol, Solana blockchain. Uh we've got over $5 billion worth of um assets uh supplied on chain and about 70% of the lending market share on um on Salana. So that's us. Look forward to the conversation. >> I'm Sebastian Bedau. I run uh institutional at Ledger. So Ledger is the global leader in hardware wallets, but we also have a B2B platform that I run. uh we secure 20% of the world's crypto uh Ledger and we're looking to do a lot more especially like building our product for the next wave what we're going to be talking about uh the Wall Street guys coming on chain and and and and when they're going to be new needing to secure their assets >> and Randy Little um I'm a partner with uh 50T I to my knowledge it's the only digital assetonly growth equity fund in the space uh we've got about 2 billion under management 24 uh companies in the portfol folio. We're on the board of 11, so we tend to be a little bit more active. Um, we're obviously highly interested in the intersection of kind of Wall Street and in crypto. That's kind of the interest, a lot of the interest of our LPs. Uh, so spend a lot of time thinking about stable coins, RWAs, and how kind of most of the money in the world makes its way into the web 3 space and how the rest of the world can leverage this technology. >> It's exactly what we're going to be talking about right now. >> That's perfect. Um, I don't typically do this, but I am going to tell the audience kind of every question that I'm going to ask. When we were uh prepping for this panel, we kind of came up with a a general framework. So, three main topics. First, why should Wall Street go on chain? Second, why is it taking so long? And third, what will it look like? So, let's go ahead and kick off with number one, why should Wall Street go on chain? What should use cases look like? What is the interest? Um, did you want to start? >> Sure. There's I would say one of the things that people generally jumps to right away is the 247 trading. Um, that's that's revolutionary in in some asset classes, not all. Um, but there's I think the other more profound changes um are just around the the instant finality. I mean, there's massive capital inefficiency based off of T+1, T+2 settlement. Um, that creates credit risk. it adds to the risk of everything that happens. So if you can remove that, you're removing a bunch of steps in the process. Um and also just the ability to fungeibly use capital again, uh this can be sort of replicated with a prime broker. That's the whole idea of that whole space. But if you can do that natively programmatically, that adds another layer of of huge efficiency. Um, so it's it's something that I think will we'll get into how long it'll take, but uh it's something that I think will transform the capital markets like it's already started to transform the payment space. Um, that's I I would say that's on the leading edge. Um, but I think as all assets come unchain, which is one of the the thesis for our fund, um, we're going to see a huge acceleration of of the liquidity and velocity of capital. I'd say that um it's about also obviously all this but um also about innovation right at one point or another when you look at all the waves of innovations that have happened over the past 20 30 years we could probably go back you know technology wins right it doesn't have to be and and and I won't say which one because you know it might be which chain etc etc but at the end of the day if you build something that is faster that is cheaper etc and also knowing that the rails that exist today have been built a long long time ago and there hasn't been that much innovation in the financial space right like I think it was Warren Buffett who said that the last innovation was the ATM right uh so there's a big wave of innovation and so it's kind of you know in everyone's interest to you know leverage it and use it and I think that that's that's what I that that's why Wall Street should go because innovation means new ways of doing things and and better ways of doing things >> okay how long have we got we've got 35 minutes for the Y right uh so I I'll give you I'll start with a practical example So, we had a massive liquidation not so long ago on chain. Um, and a lot of my old position really got killed. Uh, Bitcoin held relatively okay, but the RWA positions I had on chain really saved my day. I was able to uh really cover for some of the some of the more riskier closer to liquidation positions that I had on chain. So, that's a practical example of how RWS could be a really good diversification strategy if you're going to be in in the crypto land. Uh but going back to say 2008 for instance, imagine an onchain balance sheet for all the banks. You could really sense test um instant solveny of a counterparty uh before transacting with them when you have a serious liquidity crisis in the market. So right from starting from that kind of macro view to how a user can really diversify their portfolio on on the crypto side, it it has multiple different use cases. You can talk about democratization of access to some of the assets that would normally be normally not be accessible to some of the users. Uh you can talk about fractionalization of ownership. So there's so many different kind of philosophical ideas, but those are the two broadstrokes, the two end of the ends of the spectrum. There's so many different use cases in between. >> How do you think Wall Street's currently thinking about tokenization and and RWAS? >> Just AUM, additional AUM to keep it simple for them. For most of them, it's basically additional AUM. For some visionaries, one of them is right just right to me uh right of me here uh on stage. uh there's there's a lot more than just traditional AM for people like Vic. Um uh but I I I think there is like uh it's generally that because for them that's revenues, right? So >> yeah, Victor, why should Wall Street go on? >> So I'm I'm strictly speaking in the um context of private markets. So let's make it more tangible because we're entering the latter part of the days. Uh can you imagine your life today without uh Uber, right? Imagine that you got to go into this like smelly, you know, uncomfortable caps only. That's the only option you have. Go to Paris, the grumpy taxi drivers. That's the only option you have. Imagine how life would that be. Uh a life with no Airbnb, a life with no Netflix. You got to go to movie theaters to watch or, you know, pirate them. Um I call this an email that takes three days to land in your inbox. That's private markets. It's a market that has not been accessible for the broader audience. And I call them retail. in retail. We can talk about the core ultr try net worth high net worth mass affluent and and and m and popups um generated for 50 years prior markets has not been accessible to them. So you still have to like think about a Netflix where every time you want to watch a movie or a series you have to log in put your credentials the card numbers. This is the current state of affairs for private markets. Uh with blockchain you can make it cheaper better faster. So you can as everyone mentioned you can fractionalize typically it's 10 million minimum commitment. You can fractionalize up to 1,000 even $1. Um on the better side uh there's no liquidity on private markets. uh this could enable and unlock additional liquidity and the faster I mean stock markets for us already operate in a very efficient way. Um we are still dealing with emails and faxes shockingly enough but this is an institutional um asset class. Now we see blockchain uh being able to disrupt the entire uh ecosystem from operations to subscription process pre-populated KYCL uh and and there's a lot of cost efficiencies and um this will help in the adoption especially when uh 90% of companies with more than 100 million um dollars of revenue are private and the mass affluent and the the retail cannot access to it. We believe that blockchain would unlock all of that together with the regulators uh to participate in a high growth uh asset class um um for for for the time being. >> Yeah. One thing I would add is just another practical example you made me think of was what figures done in the in the heliloc mortgage space. I mean that's a very practical example of what can be done with blockchain. I mean they ostensibly they started as a fintech that delivered a better um better user experience to get a loan. In the US sometimes it can take a month or two months to get a heliloc. If anyone's been through the the traditional process it's quite terrible. They they use blockchain to lower the cost. The cost of underwriting is I think it's 60 to 70% lower than than traditional means and they can go from application to funding in about a week's time as opposed to you know a month or two months. And people don't talk about it, but this is probably the only asset class in where it has been disrupted by blockchain. 10 to 15% of the home equity loans are issued by figure if I'm not wrong. No, that's that's exactly right. So, and but but the point is is that the users have no idea that blockchain is even involved at all. But they've done the work to originate loans through a whole network of providers to put things on blockchain rails, make it easy to diligence. Um there's not redundant diligence processes that exist uh in the traditional market. And then they all they also were able to get the capital market takeout done getting Goldman JP Morgan and the big mortgage players to actually buy blockchain based loans. So that putting that all together is difficult but it's been a transformative user experience and I I just love that example as a way to use blockchain in real life. >> Sorry go ahead. I was I was just going to add to that thinking that you down the line when you're looking at IPOs etc that are being done you have to file hundreds and hundreds of pages and all of those could be like smart contracts right like so that's not the case yet but like looking forward like there's so many use cases where you could just simplify everything and have everything on chain and transparent for everyone to see so >> no I was just going to say Mike Agny will be very pleased that we giving him a lot of ad time here on the stage but um the the the thing the thing I really love about what figur managed to achieve they've been very quiet about how they've managed to tokenize uh the $17 billion worth of assets, real world assets. Um, and I don't think any other asset class has been kind of tokenized to that scale and they are growing at several hundreds of millions of dollars onchain per month. So the pace at which they are able to uh bring assets on chain is is also mind-blowing. So effectively they have the entire process of onboarding assets uh nailed. So that's just a case study in my opinion of how you scale an onchain economy for a specific asset class, create liquidity and and from there then start thinking about D5 utility. Uh that's that's clearly a amazing case study that uh there's lots to learn from. >> Okay. So we know the use cases, we've touched on the efficiencies that can happen, how it can be improved. We've touched a little bit on this on on infrastructure. Why is it taking so long? What's what's the hold up? I guess >> did you want to start Sebastian? >> I mean I think part of it there might be a little bit of PTSD from some of the things that they've seen in the past. So I think you know obviously and and and I think that goes for again like every technological revolution. The incumbents are usually the last ones to you know put their feet in the water. They're a little bit you know maybe because they don't need it as much. So you see innovation from new entrance, new players and then people that have been in the space they kind of like look at it. Obviously the fact that the industry is incredibly regulated also has a big impact on you know because even though we're seeing the genius hack etc that's not everything you know like there's still you know if you talk to some of the really large banks they'll tell you that you know they're willing to do some things but not everything yet because like they don't have clear you know view as to what it is that they can do and cannot do that will come but that'll take some time so regulation is another piece um and then I think the other thing is money because right now they're making a lot of money with what they're doing. And so the idea is like how are they going to make money in that new world, right? So I think that that's a big part of it and what's going to drive them coming into the space is you know them finding ways. So I mean Black Rockck's been very successful like doing ETFs etc. But that's I mean is it really you know a a onchain uh product? It's kind of like using an old product and into the space but they found a way. I think that also will drive a lot of adoption and that's why it's taking some time because they haven't really found the sweet spot some of them anyway. >> Yeah. So that the answer to that really involves thinking through the RWA stack. So I was just trying out the RWA stack on Sauna like a few days ago for something else. But if you think about the number of activities that is involved in picking up an asset and taking it on chain of course tokenization is just the start of the journey. Even to get there, you've got to have transfer agents lined up. You've got to have all the regulatory rappers. Um, and of course, you also need to make sure that the token mechanics that you're using is is uh is is kind of viable for D5 consumption. Um, so that's the upstream and then you also if you're going to go D5 distribution like if you're going to use a platform like Commamino, um, the ideal form at this stage is going permissionless. So there is a there is a bit of legal compliance um and tech operational angle to that. So that has to be built in. Um and then you have to think about price feeds, proof of reserves. Um and once you have lined all this infrastructure element out then you start thinking about liquidity. Who is going to be the first investor to take the asset on chain? Who is going to be the investor who is going to be providing lending opportunities for this asset when it's used as collateral on chain? And who's going to provide DEX liquidity? how are you going to incentivize the whole launch? So tokenizing an asset is just the starting point. It's it's not the the end stage. It's just the starting point. And if you really want to prove that an asset has actually got legs on D5, there is so much more involved and it is a journey. And lot of this lot of these actors or a lot of these capabilities the word capabilities along the stack is still being built right as as as and and and it's that's the fun thing here. You're actually living through this massive transformation of financial services and you're being part of it. History is happening here. Um and it takes time. It's a journey. >> Victor, how are you thinking about the >> Yes. Uh I think first to give some stats uh back in 1991 um the use of uh cloud services was approximately you know 3%. Uh after 30 years you would think okay um everybody's using cloud. actually cloud from what I see from the latest research reports is approximately under 60%. Uh and that's shocking right so it these takes >> and it's the same with e-commerce right like you think e-commerce is everything it's not right like e-commerce is still much larger than e-commerce 20 years >> so here I I give it to a I blame it first on a time factor that is a common denominator if you um if you start spying on everybody's phone calls uh the the common uh expression is I have no time I'm busy right we're sacrificing time with our kids uh with our partners and everything just uh you know to to to get more work done even sleep so I say That's that's that's one which is very important. It has nothing to do with technology. Um second I blame the engineers. Uh a lot of engineers here they talk about cubern needs and layer one layer two proof of war proof. Look when I use Apple Pay I don't give a about what's the seven steps behind is it cheaper better faster then I'll pay for it. Right. So engineers and narrative it's it's another problem. Right. They get too technical. The TPS look the end user >> that's not in the audience. >> Yes. and spoken like a true product. Ironically, engineers are the smartest. >> I didn't know that storytelling was a talent until I arrived in the in the D5 ecosystem because no one could tell could tell a simple story because all you have is 30 seconds elevated speech, right? Everybody's ADHD. Um, we can't stay focused for over over two seconds in the same uh uh user interface. So, narrative is one thing. You can blame also the regulators, the lawyers, etc., etc. But I think it's the narrative and last but not least also uh a little bit of complacency when we don't have time. Why uh private markets for every you know uh bank and private wealth they're having the best years of their lives. Crazy AU and crazy inflows. Um when it comes to private equity and private bank everything is about raising money and deploying right uh operational I don't care. In order for me to do blockchain I have to open a book that I've never opened up after um my master's or undergrad. uh it's very difficult to reuse your brain and and and take extra time uh at night and enroll in MIT Oxford courses for a blockchain that is not worth very much and uh you need to compete with guys that are trying to sell you an a a pixel at a JPEG at one ETH right this is how life life is changing um it takes time and um their lives right now when you're at like mid-40s plus you're not incentivized to halt operations use extra time uh risk your uh marriage and your sleep and do something that will um hinder uh your bonus payments etc. I think it's a mix of everything but um you know just to make it a bit controversial engineers I blame you guys you guys are smart figure it out and second will be you know just just human behavior incentives >> what do you think Randy I that's hard to top but >> no we'll see what I can do um but um I think that we're it's it's still so nent I mean right now about if you set aside stable coins it's a little over $30 billion of rwas on chain I mean compared to hundreds of trillions of dollars of actual assets So it's tiny tiny a lot of it is kind of money market funds which I think is a good first step but I think the real value comes when other assets come on chain and a lot of these are not digitally native natively issued which is critical a lot of it is traditional assets go into an SPV you tokenize the SPV which creates its own set of inefficiencies so for example if you tokenize equities that way what do you do with corporate actions what do you do with voting um so I think that there's a lot of maturation that needs to happen I think some of it is there's been lack of regulatory clarity to say the least in the US. I think it's becoming more clear. It's not perfectly clear that will need to happen. But then I would just draw one other example. When you think about the the time it took to electronify the capital markets, it really started in the late 80s and ramped up in the '90s. Today we've reached about 90% electronic markets. Some markets like fixed income are still only 60% um uh electronic. It took equities even which are well suited for electronification at least 10 to 15 years to get to 50% electronified. And I would say that blockchain enabling the capital markets is a much bigger change. It's a more impactful change. But if you think about rewiring the operating system of the way capital markets works, it's much is a much bigger change than changing how orders are handled, orders are matched. This is like the backend back office processes that are being fundamentally changed. So, I think it'll happen um within that sort of time frame because just the the pace of the pace of change is is just ramped up. But I think it'll be huge when it happens, but it's going to take time. And I think I just pick up on one thing that Sebastian said. I think transparency is another wonderful example of all this. And I think it's great for to save operational costs, especially when you get into more complex structured products, CLOS's, things like that. It adds a lot of efficiency. But um I think a lot of the larger capital markets players are making tons of money on the opacity. That's one of the reasons why a lot of the markets a lot of the traditional huge markets like derivatives and fixed income are are much much slower to electronify because the banks have benefited from sitting in the middle of the market. The markets are opaque and they make tons of money with that. So if you then take that away and say let's make that all transparent let's make everyone equal that is not good for banks. Um so they have they have all the connectivity they have the distribution they eventually they will be forced to come around just like they have with electronic trading but they will drag their feet. So that that's another I would say more less obvious friction. One one thing I'll add is uh to say something positive on on on the moves from like the traditional players is that they and and this is something that I've been surprised about in the discussions that I've had with them in the past couple of years is that it's not they're just sitting idle and not doing anything about it, right? Like they all have plans and teams and very brilliant teams that are like ready to do big things. to your point, you know, it's going to take time, but it's like it's not like they're just waiting and saying, "Well, we'll put this and we we'll look at this when it's ready or when we have the regulation." They're they're they're ready like not fully ready, but they're like getting ready for it. And I think that's an important thing to take into cons consideration. >> What about from an infrastructure perspective? Is is the infrastructure there? What are the what challenges exist still? Well, so I'll I'll I'll I'll speak obviously uh from from from my standpoint which is really around security and and making sure that you know one of when I was talking about the PSD uh aspect you know a big part of it is can this be secure right now like the ETF for example is really easy because it's not really onchain is like you know it's basically a product that you know you're you're doing it the old the old fashioned way like how are you willing to hold Bitcoin on your B balance sheet and if you do that what are you going to do with it right like how do you secure it etc and I think that That's um one of the things where you need the tools and and they have to be um obviously you know the gold standard in terms of of uh security. I think they have to be very close to what they're using today. Uh so you know for example like we use HSM technology which is something that is being used by traditional custodians. So when we talk to them about about doing it for Bitcoin or for ETH etc etc they understand because it's like the setup that they already have. So you're talking the same language kind of um in a way. Um so on the security aspect I think that's what we're trying to do right like build something similar to what they they've been using so that they don't you know need to relearn everything. So from my standpoint that's that's more important >> and I think I mean I think I mean to to carry on to Sebastian's point I think that ultimately banks are going to choose you know a lot of the value chain that they're going to want to insource and control. I think that will be that'll certainly go to custody. That's something that's very comfortable for banks. They have the brand, the reputation, the balance sheet. So, that would suggest that they're going to want to um they're going to want to use custody technology. So, that would be like a ledger enterprise or a Fireblocks versus outsource that to another uh digital asset custodian today. I mean, I think they they'll have other sorts of clients, but I think that banks will want to have that and control it as they build products on top of it. just to add uh we we we looking at it very much from a traffic perspective um but there's also a defi angle here which is the defi um platforms out there they'll also have to start embracing some of the um the standards that trfy have set for themselves uh those rules and regulations have been there for a reason um and personally for me one of the things I'm deeply proud about commamino is not just today I'm not saying this just to shill the platform but even back in the day like 2 years ago just after FTX whenever there used to be a liquidation event in the market the CEO used to come out and talk about how their the liquidation engines have performed very publicly most other platforms D5 platforms back then they would be shilling um the the yields that they able to produce but the moment there is a liquidation event they would shut up whereas this this organization would shout out about how riskmanaged they have been. And even today, this across chains, across lending platforms, we are the only ones that offer a realtime risk dashboard looking at risk metrics across 12 different dimensions. You can check you can go to risk.coam. Finance and see it live. The reason I say that is not because uh Kamino does it alone, but that's the culture we have to have in the on the D5 side. As Vic said, trady do not have to compete with NFT holders and NFD regions. There there is a there is a space for that. ABS absolutely but there's got to be a space where people can transact on chain safely and feel comfortable doing that. And that's a journey. It's a cultural shift. Um it's a it's a of course as a from a legal and compliance perspective there's quite a lot a lot needs to be clarified and there's got to be a lot of work done there. But also from a tri defy standpoint, we've got to embrace some of those aspects. >> Well, and and I think, you know, once you get through the regulatory clarity, I mean, I think that what will happen with DeFi is it will become the back office for a lot of what's what's happening because there there's a huge number of activities that banks do that you do not need an office tower of people to manage. There's there's many use cases that could be handled programmatically on chain, transparency, cheaply, instantly. And I think that will migrate there. We already see it in kind of the borrow lend marketplaces where like if you want to borrow against your Bitcoin, it's, you know, if you go to a centralized party, it's 10% plus on a it's 5 6%. So it's way more capital efficient. Like you couldn't even get wholesale funding against Bitcoin, you know, less than 7 8%. I think that'll probably come down over time. >> Free on Camino cheap shell. >> That's what I'm saying. So, I I think that we'll see more relationships like Coinbase, Morpho, I think Robin Hood just announced something like that. But I think for the average user, that's how they'll touch DeFi. It'll kind of disappear into the background. There will always be the more crypto forward retail people that are looking for the the newest things. It's going to go to the the web interface, but the average person like I always think about my mom or dad who are are they going to go to like the Camino dashboard? Probably not. But they would if JP Morgan had a Camino market on through their Chase app, they probably would use it and they wouldn't even know it, right? >> Victor, how are you thinking about infrastructure? >> Whether the infrastructure is ready again another, you know, just to make it a bit more fun, uh, as long as we have 90 year olds, 80 year olds and 10 years old. Um, the infrastructure would never be like harmonized or standardized because a 90 80 year old will never use a MetaMask or a Phantom wallet, right? They will they like the trust factor. They like uh the relationship manager, financial adviser. Now there's a life story where a um um a a a bank owned by a family. It's a private bank um very successful. They've decided to take this path of staying class. So no digital just you know um Napa Valley you know um Basat um events and you know really like for the VVIPs. Now all of a sudden um they start asking their clients, hey um your son and daughter they um why are they not showing up recently and this is to the point to say that infrastructure is not ready yet but it would change. Uh and the answer was um they say you suck right and they're like um beg your pardon. Um they say that you suck because first you don't have an app. Number two, you don't have any crypto solutions and uh they just um hate uh going to these uh wine parties and uh it's a waste of time. They are doing everything with their app and the fact that you don't have one for them is a waste of time. You're too expensive. uh and this ties with this uh one of the most uh most recent powerful uh research um analysis that has been conducted in where we're living in the biggest greatest generational wealth transfer that the um human history has ever seen. Now, 81% of the um recipients answered and stated that as soon as they inherit their assets from their parents, the first thing that they're going to do is fire um their financial advisor. Why? The first wallet that they had was a Revolute or was an app-based account. Now think about you ask them and ask them to go and open up a bank account in a you know retail high street you have to wait few hours and paperwork they get shocked right so for them the risk of of of embracing the old infrastructure they would never do that you know they everything has to be instant like they need to have everything in one place again ADHD is is a is is not even a disease these days it's is it's like oxygen I mean It's everything has to be atomic. So the infrastructure with these users uh who take for granted all of this digital atomic set on transparency etc etc. I think all of the custodians they will adapt to it. Heck and we can this is a good segue for the last question is and I'm sure Ledger would love it like at some point everything will be on a self-custodial base, right? Um and people may not know but that's that's where I think the new generation will kick in and every company has to have a a strategy for the future now for the 90 87 year old but also for the what's come what's next to come >> I think I mean what's interesting is that it's a cultural shift that's very wide that goes beyond finance I mean finance obviously that what we're talking about it's a great example and your revolute example is on point like all of my kids have revolute accounts and they will never go to my bank and I would and and I'm and if I could I would do the same because when I when I use Revolute for me it's so much better than any other app that I've seen and it has crypto like built in right like you buy Bitcoin and Revolute with like you know one swipe but the cultural shift I think goes beyond in the sense that it's the same kind of thing that you used to you know give your health to like your doctor and like you wouldn't see your blood results etc etc it's like oh he's taking care of it for me and your financial advisor is taking care of your money I think we're at a and and and I will get the news from like CBS because I trust it, etc. And then that trust is like gone because you're realizing that you can learn on your own and you can know on your own. And so you want to know about your health, you want to like know about your finance, you want to know about your news on your own. And I think it's that's the cultural shift that's happening. That's really big. >> One more funny anecdote. It's it's slightly off topic, but just on the whole point that we're making with Revolute, my 18-year-old when when she has cash, she's like, I think that that feels like fake money. She doesn't believe it's real money until it's on an app. >> That's that's that She's like, "It's easy to spend because it feels fake." It's like, well, it is a little bit >> Bill. I agree. It's >> It is a little bit. Yeah, >> it is a good segue into our our last question, though. So, you know, we covered the use cases. We covered why it's taking so long. What will it look like when Wall Street is onboarded on chain? Um, we'll we'll say, I guess, what are you most excited about in in the RWA space? Maybe we can start with you, Arun. For me, I think it'll be aligned with what the new generation is all about, instant gratification, right? So, from T plus2, we'll have T in terms of settlement. So, uh it's not going to be we send money somewhere and they have to wait a couple of couple of days. We we do a transaction and for it to settle, we wait some time. So, that's kind of and it it it unlocks a lot of capital efficiencies, right? So, that's I think that's a that's the kind of the gist of where we're heading with uh heading. uh but I I would like to be in a place where I can sell a part of my grove mangrove in in India and buy a part of Buckingham Palace here right so that's the level of tokenization that we should be aiming for irrespective of the liquidity profile of assets irrespective of where the assets are what the what the form of the asset is um but um but on a on a more grounded basis I would like to get to hundred billion dollars of TVL on commamino >> Victor So, what do you think? Where are we headed? >> Um, everything will be money, everything will be cash, everything will become a payment method. So, in concrete, RWA is real assets. Sometime I call it the real worst asset because it's so hard to tokenize. But, um, uh, that's already happening. Uh, next in line would be NBA. Uh, stands for non-bankable assets. So um music royalties uh art um sports everything that is non-bankable uh in where everything will be represented as a as a payment method. So everything will be money and this will be like internet you know capital markets internet money and uh it's it's a pure democratization to to to the max. It's atomic, transparent, and um it will be hopefully uh more trustworthy and um uh it will grow the entire pie size. Great innovation. >> Ladies and gentlemen, thank you so much for attending. I'm sorry to tell you that the >> So, I I agree with with all of that. I would just say one of the other themes that I think is really interesting is the prospect for um AI and the agentic economy. It's one of the focus areas for for our next fund. But if you think about once you have RWAS everything's instantly settlement you have stable coins I I think there's a huge um amount of latitude on once all that infrastructure is in place I think that there will be agents that will act on people's behalfs that will replace at least part of what financial adviserss do today I don't think humans will come out of financial advice given the emotional piece to it but there's a lot that could be automated riskmanaged probably much more optimally than is is done today and having all of the assets on chain in a programmatic way is the first step to doing that. I still think that's that's a few years off. Um, but I think that's something that will certainly emerge over the next 3 four years given the rate of change that we're seeing across crypto and AI. And that that's something that I'm actually super excited about. I I'll totally second you on that and the fact that actually there's this very strong link between the two because right now, you know, if I want to give an agent access to my bank account, it would be next to impossible. But if I want to give him access to a wallet, whether I put a little bit of crypto and then have it have the agent do things with it, it can, right? And people have done experiments with it like have agents make money for them, etc. So that is a use case that exists today, right? That probably will get democratized, etc. But I I fully agree with you on that. Uh I I like this idea of thinking that because I think it's part of the ethos of uh the industry at the beginning is that it's going to be fully global that there's going to be like interoperability across like the different chains and access to like the different markets which you know is really important as well because you know we we've talked a lot when people used to ask you know what is the use case well the use case is that there's two billion people that you know are unbanked in the world right so giving access to all of that and I mean I like your idea of like the growth in India is also like a way to like, you know, bring in a lot of people that currently like don't have access and maybe to like level the playing field a little bit like to give them access to things that they don't have access to today. Um, and then, you know, I love this idea of keeping so we're talking about transparency but also privacy uh because those things are human rights. They're really really important. Um, and uh and and I think that in this new world like people will have be able to have both, right? like transparency on like where the transactions are, but if you want to keep, you know, remain private, you'll be able to like keep that privacy. I think that's really important as well. >> So, Sebastian, I think it was you that mentioned the institutions are there. They're ready. They're thinking about this. We've talked about the infrastructure. Victor, you said the infrastructure is there. I mean, what's the next catalyst for driving Wall Street adoption? Victor, did you do you have >> engineers? No, >> regulations. >> Yeah, regulations. >> Regulation >> and more use cases scale. No PC's but real real native uh yesterday somebody mentioned like no more replica you know like has to be native onchain uh use cases that have really proven to be um cheaper, better, faster without twisting the story. It has to be just so self-evident just like Apple Pay. Yeah. >> And I think like corporate adoption is an important thing as well. I think that you know when we talk about the genius act and we talked about stables uh what we should be seeing is uh people that are not in crypto space today going into it. So I'm thinking always of Amazon because if I you know clearly saving two three billion dollars in credit card fees by issuing like an Amazon coin and then giving you an incentive to use it instead of using dollars I think is huge and that I think will also like spearhead and and then maybe like them having some of their treasury in Bitcoin right like we at Ledger we have a big part of our treasury in in Bitcoin and I think that more and more corporates will do that as well and I think that they're the clients of like the bigger banks if they start moving towards crypto they will also force the overall ecosystem to like adopt So I think that that could be something that would move the needle in some ways. >> We only have a couple minutes left. I I want to give everyone an opportunity to answer this last question. So we'll say five years out. What are you most excited about when it comes to Wall Street on chain? Are you ready, Randy? Do you want to start? We'll go down. >> Five years out. Um well like I said I I think there'll be a lot more going on with um with AI but I mean I I think that from a from the perspective of the capital markets infrastructure like I said I think it's going to take 10 to 15 years to really re rewire most asset classes and have it actually have the scale and liquidity that that we see today. Um so 5 years from now I think we'll be partially along that way. I mean, you see most of the studies that are out today project I think it's 15 to 20 trillion of assets on chain by around 2030. I mean, that's probably correct plus or minus 10 trillion. Again, if you think about that in the scale of all assets, which is hundreds of trillions of dollars, there will still be a lot more to go. But I think that even with that amount on chain, there's a lot of these use cases that we're talking about will be able to come to life. Um but you know obviously there there will be more more to come in terms of the the liquidity perspective of it. >> What I'm excited about is for the industry to grow up uh as a whole and and and that I hope that you know we put in the rearview mirror a lot of the negative things that have happened in the past and I think a lot of it goes to having very strong foundations security being obviously one of the key ones. So what I hope to see in five years is obviously all the inflows etc etc but like in a space where we're not talking about scandals and this and that or you know deeps etc but like of like well this is here to stay. I think that that's really important. >> So that those inefficiencies are where where money is made but uh from my from my perspective I want to be in a place where we don't talk about blockchains >> protocols we don't talk about TCP IP when we use our internet any anymore. So we've got to get to that place as soon as possible and I've seen technologies particularly payment technologies in India scale massively. So I I was in a in a matter of 5 years I went from paying in cash and a taxi driver turning around and said no I don't accept cash that is not too far away if we use stable coin as rails and there's so much that could that could exponentially drive the growth for us. I think that's what uh be awesome. >> Safe best for last. Um I'm sure a lot of uh we see a lot of young and not uh less young audience. So a lot of you have missed the u internet uh the.com uh bubble or opportunity. A lot of you also have missed the um COVID RNA uh train probably. Um what excites me the most is the blockchain. Uh and AI look everybody talks AI. I don't know how many really understand but blockchain is real. Uh it's more immediate. Um you can do good make money. Um so socially, commercially it's it's um it's an opportunity for you to stay in whatever you do uh representing here finance but it's applicable everywhere. So um uh my asset class 50% from um for this to be democratized by retail but also by the um by the digital natives. So that's what excites me the most. >> Great. Thank you all so much. Thank you for joining us.