Who Controls the Gateway to Onchain Capital Markets? | EBC12

[music] It's a pleasure to be here. Um, so I think we have four amazing speakers here. Um, they will introduce themselves. I think that's that's maybe a little bit unusual, but we will kick it off basically with a with a quick introductory round. Uh, so my name is Maxmillian.

I'm from the German Savings Banks. uh sometimes maybe a little bit overlooked institution but it's one of the largest banking organizations within Europe actually but maybe due to its regional nature and like focus on Germany not not always as present on international stages um but we have four amazing speakers here and as said maybe like start with introducing yourself and also I would like to tackle the question a little bit first because when I when I saw the the key question who controls the gateway to onchain capital markets I also thought to myself so like what what is actually the gateway uh with respect to to onchain capital markets is there like a single gateway and to be honest I think it's probably like multi-layered and not not even like necessarily something technical I think it can also be something like trust maybe as we heard before um so but I would like to have your um perspective on that so maybe introduce yourself uh the organization you're representing here and what is the the key gateway or maybe the the key gateways uh which you look to on onchain capital markets maybe

great thanks Mark Great to be here. So I'm Zoronito Scalova, the head of financial crime prevention at Zodiac Custody. Zodiac Custody is a digital asset custodian for institutional and clients. Um we are operational since 2020 and uh pretty much uh grew from uh the backing of um standard charted as part of their ventures arm and I and I can see that we you know we are operational in different jurisdictions in the EU. We have dual regulation in the UK, Middle East, APAC.

So pretty much being you know able to provide the breath and depth that our clients is institution clients need. In terms of what is the key gateway to onin capital markets I would say again that word has been repeated many times trusted infrastructure. So what Zodia has built is you know that infrastructure that trusted infrastructure that's been you know tested in a you know in a regulatory framework that fits for purpose in the EU, the UK and the rest of the world that then enables our our uh clients financial institutions to plug in and access capital markets.

Yeah. Welcome everybody and

try to match that.

Yeah. [laughter] Yeah. Glad to be here. My name is Chris Beck. Uh I'm the founder of Tradeas and since our merger with brother Shutgard Digital, the coco of Brotherhood Digital um with Brother Stuttgart um and for those of you who don't know us um we're part of Brotherhood Group which is actually the sixth largest exchange group in Europe.

It's been around for 160 years. Obviously the digital business is not as old. We've been around for six years both on the Traia side and brother Stutkat has been active on the digital side for a bit longer. [snorts] um as a combined entity now we really try to offer the entire value chain for institutional clients to access digital assets. What does that actually mean?

Um Tradea started as a liquidity provider and market maker. So that is what we still do today. We have Berserk digital custody as our custody solution. Uh we offer tokenization services and we also offer staking with boring lending uh soon to be launched and this is really also how we try to tackle this market. I think the development we're seeing on institutional side in Europe is that there is definitely a trend going towards one-stop shops and providers that can operate at scale and really offer harmonized services out of one hand.

Uh this was a big uh um reason for the merger that we did and I think when we talk about who controls the gateway uh definitely my answer will be increasingly infrastructure providers that are trusted that operate in a regul regulated environment but that can cover the entire value chain. So it makes it seamless and easy and can provide an institutional grade offering for their clients.

Hello everyone, I'm Mark C of Liz. Liz is a unified stock market. So we are French regulated entity. We are a stock exchange. We are CSD.

We also handle the only inition deposit token in Europe right now. And we did the first tokenized IPO worldwide in LE in April and still the only uh natively tokenized equity worldwide. Uh so we bring kind of innovation to capital market to make um issuance and trading more efficient less costly to bring some new issuer into this world. Uh we are 247 markets with instant DVP that's also new for listic equity and we just did a take over on the Swedish uh stock market spotlight to create with new uh technology which is stockation try to create and to solve European fragmentation and to create a European stock exchange to bring liquidity to European issuer uh and to connect investor from all around Europe. And for us about gateway to anch capital market for us is create value for sure creating value for investor and that's what we want by bringing efficiency we make capital market an easier access to issure less costly more digitalized and same for investor without with solving the barrier we think we can be the gateway to onchain capital market.

Yeah, thanks. Uh, good afternoon everyone. Uh, Mos Rocket. I'm part of the digital asset team. I look after uh for BNY.

I look after Europe and the Middle East from a digital asset strategy. So, so really uh this question probably just asked I mean what I think I gaway of course we're thinking about from our perspective is more on the institutional side. How do our clients access uh digital asset market but really more broadly uh the whole market? I think what is worth uh uh setting maybe just putting this on into context before I I go to the detail on how I think about it or how do we think about it. If you look at today what's happening in the market, we're seeing uh more adoption is taking place.

Uh clients are moving from experimentation to to to the adoption capital market are moving always on uh and and the clients are expecting immediacy, certainty of settlement as they look at uh moving assets. Uh and at the same time also the regulation are evolving. uh there are different pockets where things are happening but there's a big growth for example uh uh uh and demand on the areas related for example to cash and all thing digital cash and the reason I'm calling this this out and there are different version of this is just was an example of different version of of cash and then when clients are looking at this are really asking the question how do we access all of those can you help me have that seamless experience between that traditional market infrastructure the traditional infrastructure and the digital infrastructure. So accessibility is important but also they are looking at players to work with them that they already used to them. They are trusted that they are not and and they have the same resiliency and the same uh way of things they are used to operating in traditional way as they look accessing the market and that's where the like bus is looking at enabling that whole market infrastructure.

Okay, perfect. Let's maybe like follow up on that a little bit like the I think you already talked a little bit about about the state of onchain capital markets at the moment and maybe I would also be interested in in that from from some of the other market participants. So how's it for Ber Stoutgart for example you just had the merger I see it also as a sign of like Berserkgard of kind of like doubling down on its digital assets initiatives. So like what's what's your perspective like what's different today in onchain capital markets than maybe two or three years ago? Yeah, like I said at the beginning, I think what we see is really the need for consolidation of players, right?

The market is still and even two years ago even more so quite fragmented, right? And I think that level of fragmentation is not sustainable if you really want to have adoption and integration at scale, right? So, um I think Europe has actually uh laid the groundwork with the with the regulatory framework that is there, right? Right. And now the next step is really creating some meaningful European champions and players that can operate at scale.

Big reason for the merger, right? And again, the trend we're seeing and that's very different from two years ago. I think two years ago, people that were early movers and usually those companies maybe weren't as large as institutions we're seeing getting into the space now. They were content with choosing multiple providers for multiple different services. So they had a custodian, maybe they had an MS system, they had a liquidity provider, they had um um other services from from other players.

But I think the trend now is to say, okay, if we really want to grow and not have, let's say, a puzzle that we need to piece together every time, we want to expand on our offering, we want to select a few strategic partners that we can work with in the long term to unlock um additional cases. And I think that sort of uh longer term view of and and and coherent strategy of what you want to do in digital assets is is what we're increasingly seeing with some of the larger players now getting into the space and regulation and and the harmonization there was a big part of it that was really accelerating that development. You

you mentioned the issue of fragmentation. Are we talking about like one uh onchain capital market or like is it rather like a fragmented system like maybe also the the others if you want. Yeah, I think maybe just from a liquidity standpoint because of course trading is our background there. You you still see it, right? When you when you look today where liquidity is located in crypto, it is fragmented across multiple different venues and we're not only talking about exchanges, we're talking about OTC liquidity providers, right?

So in order to really offer meaningful liquidity and seamless liquidity to your clients, it took us years to really build a network in the background to have a network of clients, a network of exchanges, a network of other liquidity providers uh to be able to offer, you know, larger size tickets uh big order sizes and in order to handle this be there for our clients in stressful market situations because I think that's important too. And I think there we're still seeing a lot of that fragmentation. it's slowly beginning to to centralize, which is funny because decentralization of course is one of the major topics of crypto, but I do believe in terms of liquidity um some centralization needs to happen and we're slowly seeing that trend and that's one of the big challenges that we've been trying to solve for for years, but maybe I'll let the others talk about some of the other

Yeah, please. I think like also liquidity is some sort of like maybe the the first gateway we can kind of like double click on and I would be interested in in the other like market participants. Maybe Mark, you want to follow up on that? Yeah, on fragmentation I think that current capital market in Europe is very fragmented. That's one of the major European Union problem and that's the big difference with the US we have only one CSD the TCC one CCP in Europe we have a lot of CSD like each country have this CSD and they are not well that well connected together that create fragmentation that's what we don't have like a real unified capital market in Europe and that failed the CMU and that's the goal of SIU same vegan investment union for the European Commission European Parliament and we have to I think onchain capital market had a way to unify this capital market which are not to solve fragmentation because fragmentation is very hard to solve with like legacy that we already have but the thing is we are rebuilding the legacy we are rebuilding the market infrastructure so it's the only moment where we can together solve fragmentation and so that's mean that we have to think on a way to have a onchain capital market connecting all the CSD in Europe to make sure we can have the share liquidity because the more we connect capital market the more liquidity we have and that's very important and I think that we have a very short window to solve it but that's the moment

yeah if I may uh to add and maybe uh challenge a little bit that uh so so one side absolutely interoperability is key uh we we want to look at and when I say Interoperability is across board one interoperability between different digital assets issued on different blockchain being internal external public consortium etc because one you don't want to recreate the silos that we already have today in some shape or form. So basically you try to solve for something and then create a new problems. uh so so interoperability is key and importantly that's linked to the question you were asking uh as a secondary which is liquidity because the last thing also you want is to bifurcate that liquidity uh but then just uh uh in addition or or or one part of what you've uh uh what Mark just mentioned I think there are also element today of capital market that are functioning well and operating well and those we don't necessarily need to recreate what I want to see is how can we ensure that we have the best of today's model and then augment, connect and integrate. So tomorrow we have that onchain 24 by7 capital market that everybody's looking at versus of recreating everything because there are things do not necessarily need to be recreated for sure. And if I may add to that point, so from a regular standpoint, so with Mika's introduction and certain, you know, some of the biggest exchanges, you know, pulling out and saying we're not applying for a Mika license mean that then a lot of, you know, institutional here could not really, you know, benefit from the depth of the liquidity that you know these exchanges could offer.

So of course that, you know, has a massive impact on the price and the accessibility and like you know exist strategies. So and make it driving for example the fact that order books could not be shared between entities and all the you know the control that you need to have in place to evidence that. So regulation has the capacity and the capability to you know kind of kill some of that liquidity or enable it. As much as it's a bit of counterintuitive because you think it's market market led, it's like market participate. But if it comes from the you know top down and it filters down into the actual operations and what you can run then this is where you know the thresholds that we need to and the hurdles we need to pass as an industry.

Yeah, maybe regulation is a is a good kind of like um kind of like bridge to the next uh gateway which which I had in mind which would be the issue of trust. I feel like that was also like the the key point of the of the previous talk. Um and maybe like let's let's double click a little bit of on trust um as as one of the the gateways. Um would you say that's like a particular issues for for custodians or is that like something which affects the market as a as a whole like what maybe as like the the trust layer and how is that built ultimately uh within your company and like also the other ones.

I'm thinking generally from the point of view of institutions trusting crypto or hearing crypto there is already that mistrust. So you're just trying everything possible out there to tell them and to explain and educate them that you know actually this is a very legit asset class. It's more about also the infrastructure and it's just a rapper or new plumbing in itself. So that's the first hurdle. But when you actually Zodia has you know a very unique and kind of privileged position because being you know part of you know grown out of the bank where banking is part of your DNA then the conversations are easier compared to somebody like you know digital custodian that is completely native and not backed by you know one of the biggest banks in the world.

So regulation then it is an extra layer of trust because then you know that the moment you receive your license by the you know some of the most respect respectable regulators for example the FCA in the UK the CSSF in in Luxembourg etc. It does you know uh it does serve as testament of how robust system and controls you've built because before getting that license you know you're going through that very you know uh deep uh detailed scrutiny and you know very excruciating questions and and and you don't know that you know on the other side of an institutions they do get that comfort that you know you've you've gone and you've you know got your license and you've you know proactively working to be even more compliant because in the UK we still don't have the um you know the crypto regulation the way that you have it here in the in the EU. So that is in the making and it's like you know the application process open. So you know a lot of uh you know the compliance team is working very hard to get everything you know in place and to evidence that we're you know there but um you know when already the financial institutions that are operating globally here in the e in the EU in the US etc. they come to us and they're asking us you know where's your UK license and you explain you know it's coming etc etc so regulation is definitely you know another you know proof of trust that uh at least you know everything uh is um I wouldn't say squeaky clean because I haven't seen an organization that I worked for and I worked for some of the biggest like black rockck Deutsche Bank etc uh this not to promote them and um and it's never squeaky clean and I think when it comes to my personal buying to blockchain was exactly seeing how much of that you know the middle office that you're having you know the back office all the you know reconciliations back and forth the data errors the data breakage and how much of that's being removed by you know tokenization or blockchain as a technology

yeah maybe just to compl complement [clears throat] that and and add a little bit of additional color so I think first for institution trust and resilience I maybe add that piece is really fundamental uh because if they want to partic participate in the in this ecosystem and in this market they c certainly looking at the same standards that they already used to on the traditional side of things. uh and certainly when they are looking also at their counterparties they want to ensure that they have the relevant risk management strong controls compliance all of that uh is in place so they are comfortable to participate in that ecosystem and certainly [clears throat] we as BNY is is certainly looking at that I mean our name at it is trust and and that's what we are expanding or extending to the to to this whole market and then naturally from there we start building in other additional layers that start to enable and help these clients build the comfort and how to participate in this ecosystem. Certainly on the other side the regulation uh it's a good call out. uh it is still evolving in different places but having said that even the regulator themselves I mean even the regulations themselves are evolving in a different piece depend of which shifts of the asset classes that's also why it's important uh to when we speak to clients and to the ecosystem as well to really help them better understand what we are trying to solve here and what is each use case and under which regulation operate and whether that mechanism today and the risk are exactly the same on each of the asset class as an example tokconize assets that has a different backing one to one in one shape or form. It's a different risk than a completely digital native assets like a crypto issued on a blockchain that doesn't have a backing of a security or cash etc.

So all of those are also important as you look at helping uh the market and participants build that trust but also from an institutional the first thing they're going to look at uh also one how seamless my experience and is it the same level of risk and if there is an additional risk how can I ensure that the relevant risk controls framework etc are augmented to ensure that I'm comfortable to participate in this ecosystem

maybe if I can add something um trust is very important for capital markets always based on stress but stress is not that easy to obtain in the new world because everything is very complicated as you mentioned there is a few way to tokenize an asset you can natively tokenize it that mean it's only exist in the tokenized form uh you can have like digital twin if you're inventory you can also have like CFD derivative layer and you know it confuse everybody because it's hard because every market infrastruure will code that tokenized equity but there is nothing to compare are so trust is hardly given if we don't understand how they operate. So that's why like license is very important because that show that okay that's under in a good way but also um trust need to be built with time with uh the quality of issuer like the shareholder maybe of your market infraure and so you need a lot of different stone to build the trust that is well needed and without trust you cannot have an efficient market that's not possible so yeah for me trust is like the absolute mandatory to have liquidity But trust is very hard to obtain.

Do you think incumbents banks have like a natural advantage in in that case because like they're established they have the trusted customer relationship is is does that make it harder for challengers in in that case to kind of like enter that market

100%. That's why at least we have like three banks in our capable like BNP and BPI friends and because they are trusted company and where we create oursel we were not so they are helping us also creating trust in list and that's very important for us.

Yeah. Yeah. I I think I'm just going to add if I may one thing here. It's it's absolutely uh clients also looking there are a long history of established relation and uh with clients and that they are looking for that next level of participation but also I think it's it's it's on us uh uh especially big player and other players who want to continue to work in the ecosystem they need to also evolve as as they build their capabilities. So just of course because we have that trust already there and because uh we have established relationship it doesn't mean we would win that next game.

we certainly need to be continuously evolving, innovating and moving forward. So actually that client continue to have that trust and doesn't do do not move somewhere else.

And to bring that point sorry just because also banks I mean think about it like you know the excruciating level of scrutiny that they're subject to by various regulators not even one sometimes like multiple in one jurisdiction. So that is why I also think like a lot of other institutions and retail clients as well are having that trust because they know that you know the likelihood of them doing it wrong is is quite minimal not impossible because I still remember you know graduating straight after the financial crisis so let's not you know just uh speculate with trust it has to be earned even if it's like you know na industry more or less but still there is enough you know to go and do the due diligence process and really understand and and see what kind of you know partners uh you know the custodian arena the financial institution is dealing with and I think we're still small enough of industry to really know more or less you know who's legit in the business and really take our word for it. Yeah, maybe maybe just to add a point on on on trust as it relates to to trading of course um here I think also trust plays a massive role and and the problem with trust is it takes a long time to build yes but it also you can lose it very fast right um and I think here it really really helps if you can point to some operational stability and shown that you've handled in the past stressful situations so we indirectly serve 30 million retail customers with our pricing and to be honest when we talk to some of the larger players being able to show that even in you know moments like when FTX went bust or even October 10th of of last year um we were able to be operating normally right our uptime was there we're still quoting prices uh how do you handle your risk management how do you handle operational risk of being live 24/7 because I think these are usually questions that for players moving into the space are extremely uncomfortable because it's new they're not set up for it right and I think this uh these are the aspects that every institution should look at before they move in and you need trusted gatekeepers, right? You can move you can remove some intermediaries with DT, but there will always be room and and the need for some trusted gatekeepers who can solve for those issues. All right, fantastic.

So, let's maybe have a look at a little bit at more like let's say technical um like um gateways. So, I think we we touched a lot on on trust as like a more intangible maybe also gateway, but um also with with respect maybe to to the settlement. Um, so would you say that the that the cash lag is a gateway um for for onchain capital markets? So like who's in control of the of the cash and maybe also like which kind of cash ultimately it is um has a has a gateway to to onchain capital markets. I see some nodding there.

So maybe you want to like jump on the question immediately. It's a gateway but is not the easy part because you know we operate like at least instant DVP stock market that mean that the order need to be preound that's something that changed because like if you go through another on any other stock exchange in Europe you are in T plus2 or next coming T+1 so the cash need to transit before the order in list which normally come after the execution and that change everything so yeah cash is a gateway but it need to be adapt to new model and instant DVB 24/7 need a lot of change to actor and so they need to adapt this gateway but the sooner they adapt those gateway to make able to preont to have instant clash cash transiting uh there will be huge liquidity coming in

yeah so so if I may uh first couple of things uh just to define I think for us when we look at digital cash We're really talking about multiple things, not just traditional uh uh cash. So, so we're scalling out it's uh uh the way we define at least uh digital cash is really a mix of whether tokenized uh deposits, stable coins, CBDC's but also uh tokenized funds as well as uh tokenized money fund or tokenized treasuries. All of those who that operates fields look like cash is digital cash. So the first cash in itself is evolving and there will be a place for each one of those for different use case. It depend what we're trying to solve for and why we are uh bringing what we're bringing to the market to solve for what.

So one side of it is absolutely what digital version of cash would you like to have a DVP settlement for to enable that 24 by7 settlement. Uh is it a stable coin or a CD CBDC or potentially a tokenized deposit? Each one has its own place depend what you are looking for, where are you playing. For example, if you are a BNY that you are sitting in a massive uh uh client base, but also uh different type of uh assets that are already sitting and only traded within the clients of BNY, you could very much look at a tokenized asset on one version and a tokenized deposit settling that on the spot and ensuring that everything is moving. There's also how you connect that to the to the external ecosystem through whether that is through a stable coin or a different version of that.

that is also uh a different uh uh way but but importantly first uh playing in this uh market is really more about first looking at the use case and what you're enabling and each one of those then it becomes for what you're solving for as in if it's a if it's a crossborder story is different than a DVB story and all of this is part of bringing that capital market to be always on because to solve for the different problems that are there as in if I are a corporate a a corporate or a treasurer, you're looking at not bur bifurcating your liquidity and moving it in across different part of of your your your your uh across the aisle and in across of your entities in different part of the world. You really might just looking at cash for one single reason versus the other versions. Now yes there are there there are problems that we all need to solve for which is the connectivity the interoperability and how this onchain experience versus offchain will look like. Uh so that is all to say is there isn't really one area that you may want to control or looking at. It's really a whole ecosystem that needs to look to come together to solve for uh and cash is one of those.

One is settlement but it is just beyond that as well. And if I may add to it so from the point of like you know zodia so it's also very important to know you know if you cannot build those rails to make sure that you can really partner with the right people that are with the right company that is the enabling clients because I see cuz like the way we see custody is like you're an enabler and later like earlier on somebody from the panel is a previous speaker said like you know custody is that glue layer I think that's very static I think you know it has to be you know in this day and age we have to be a lot more agile Well, so to me, I would call it the greasing layer, ensuring that all the wheels are spinning and if you cannot do that per se, but then you're plugged in, you know, you're connected to the right into the right into the ecosystem with the right players.

So, do do you think there's going to be like uh like also in the future um several different forms of digital money like next to each other? So we will like always have like stable coins, tokenized deposits and wholesale CBDC maybe on like onchain capital markets just for different use cases.

So 100% and and I think Mo alluded to this. I think uh you have to really differentiate uh pick a corporate that is operating globally and maybe just wants to have treasury efficiencies and moving basically capital from from their individual bank accounts from country to country. And we obviously from a from a trading lens perspective look at it. And to be honest, for us, I don't really care if we're talking about a CBDC or or privately issued stable coin. We need liquidity in in the stable coin.

We need our clients to be able to accept it and willing to trade in it. And that's really the defining factor, right? And um you mentioned an interesting part regarding um instant settlement. Uh I think what people sometimes forget from a technical perspective that might sound very efficient but from a cost of capital perspective this is extremely inefficient. So as a market maker when people ask me oh do you look forward to instant settlement I can tell you I'm definitely not looking forward to it and I think it's pretty impractable in in reality for us to operate that way because the netting cycles or the settlement cycles that we have in place allow us to net um allow us to obviously move a lot more trading flow with less working capital.

But what uh would change obviously with with stable coins and we see that already in our trading operations is that the settlement speed on T+1 can be reduced heavily or you can have flexible way more flexible settlement cycles but you can say once I hit a certain risk threshold I want to initiate the settlement cycle with my counterpart and that is actually great use case preunding every trade not a great use case for a market maker. If I can jump on that maybe maybe technical if we go deeper on that but I I think that of course if you just remove more um like nothing without changing the way like actor operate it will be hard for them but for me instant settlement come with the fact that those actor may have access to instant placement like minute interest rate and that change all the way they will operate and I see like in that model the CCP to be not inside the settlement But outside like making is the preunding like more as a credit preunding institution. So I think it will reshape as we see capital market. So instance settlement only without nothing change it not creating value but if everything change and adapt through that it's really creating that's my guess

and you will have already like uh some some some uh mechanism to look at investing and generating yield by the second or by the minute and already some of the tokenized money fund already evolving in that direction yes we might not necessarily be there across board but I guess that is the direction of travel so start to help your block some of that cash you spoke about to generate that uh that that yield on top of your uh invest in reality you want like all the different type of digital uh money just to be working for you as in for the client so as you mentioned like uh Christopher you know preunding and all that so ideally the client would want to have like you know the assets with the custodian and then you know war earn rewards you whilst taking and not you know um dispersing assets with different players so I think that's like you a very strong point.

Fantastic. So, I think we we covered at least in my opinion the the the key gateways. Um the question we haven't covered so far yet is the question of control. And maybe I'm not even sure if control is the is the right word because I'm not sure if like there is an a single entity uh which which is able to control ultimately that that one particular gateway. Um but I would be interested in in your perspective.

Um so um what does it take to to actually like have control over like certain gateways which we mentioned um or at least like what are kind of like capabilities maybe a company has to have in order to um kind of like also maybe exercise economic value or like extract economic value um out of those future onchain capital markets. Do you want to start? when I hear singularity and blockchain, I think they're not compatible and I think there is a point of uh you know us avoiding that and dispersing that you know uh one key player that can just fail the system as I mentioned like you know the the latest financial crisis we do know that's a key risk which we do not want so I think only when it comes to the point of uh you know regulators and and and making sure that whoever is you know being a big like identified as the biggest player that there is you know for the scrutiny And you know even regulation is already requesting for that you know multi-custodial um um um kind of like framework instead of just going to one custodian because again you would like to you know as regulator you'd like to minimize any potential um you know risk that would be detrimental to the investors and to the clients. So yeah, I don't think we will be seeing consolidations again we will like you know the more the industry matures and uh clearly you know certain banks will be either you know building the infrastructure themselves so they'll be coming to you know for example the zodia solutions that would be you know that we have the infrastructure we can advise how is done etc etc and they can piggy bank let's say on something that's been tried and tested and regulated environment but we will be seeing that consolation to extent but I think it would be healthy not to have one or two [laughter] major players as gatekeepers.

Yeah, I fully agree that it's going to be multi-layer approach, right? And I think the the institutions maybe or the players are going to control that gateway will have to have um a fully comprehensive seamless offering, right? I think there's so much potential in terms of technology that is still being underutilized or not utilized whatsoever. I think if we really want to have that transition from traditional financial markets into onchain capital markets, we need to work on obviously uh you know being able to put your capital to work on an onchain world, right? So uh be able to post it as collateral etc.

And there's very smart people working on on various different projects but I think the market is still relatively small, right? When you look at I think the total market cap of RWAs not counting stable coins we're looking at something like 36 billion as of today that number is five-folded over the last couple of years which is great but it's still a tiny fraction of the traditional financial market at 16 trillion right so at the very very beginning of that and I think uh the the players or the institutions that want to control the gateway um really need to have a seamless comprehensive offering because um if it stays scattered right the way it is maybe today and it's a little less scattered than maybe 5 years ago or 2 years ago, it's going to be really really hard to unlock the full potential. So, we're going to see or continue to see consolidation. That's my guess. But at the same time, I agree with you.

Um hopefully we're not going to see one or two players controlling everything. I think there's definitely room for innovative uh uh players and companies to have their use case and and that comprehensive offering for their clients.

Yeah. So, so in my view we see that there is a few gateway different kind of gateway but for me the major onchain capital market are like the uh one underling the registry of the asset that are tokenized. So there's two kind of asset as you mentioned like there is the settlement asset. So we can see ECB as a gateway and a very important role with the CBDC because with the CBDC it can bring like institutional into capital market. We can also see like issuer of stable coin like deposit token under like as like institution who control this kind of gateway for the cash settlement but also I see the CSD on the uh asset size as the one having control into that perspective because it's under very important part which is the registry of the financial instrument like even if on so that's for me the like the two kind of actor that have control it to this gateway.

Yeah, thanks. I guess uh this has been quite said on on different ways, but ultimately the way we see it there, it's going to be an ecosystem that will continue to evolve. You will have the banks, the custodians, the digital natives, the uh different market infrastructures uh and all the uh new companies that some of the companies that are continue to popping up and where uh activities are taking place and adoption is is is is happening or some some pockets of adoption. I think ultimately it's not just about uh it's about how this whole ecosystem will operate together. Uh yes, I mentioned earlier uh or we mentioned earlier the importance of having relationship because that give you an edge uh maybe as as an institution player but then importantly is to continue to develop these capabilities to be able to connect with that ecosystem in a seamless way and across and to help the whole market as you look at this onchain capital market across the whole investment life cycle because certainly issuance is one custody is one but with the one we didn't speak about it and it's very very very important is a collateral but that's maybe for the next uh session given we are out of time.

Okay, thank you very much. I think we we managed to cover the questions to both the side of the the gateways as well as the control question. So, thank you very much. I think it was a great panel with you and yeah, we are out of time. Thank you.

Thank you.

Thank you. [applause]

Fabulous.