Projects
![]()
No projects found
Investors
New
DAO Treasuries
DATs
Lend / Borrow APRs
Chains
Categories
Spaces
Real World Assets, Global Liquidity, Tokenizing the World, Stablecoins
Recorded: April 11, 2025 Duration: 1:02:40Space Recording
Short Summary
The conversation highlighted the rapid evolution of tokenization in the crypto space, with significant trends emerging around stablecoins, partnerships, and project launches. Key discussions included the introduction of yield-bearing stablecoins, the impact of regulatory clarity on market growth, and the increasing institutional interest in tokenized assets, signaling a transformative phase for capital markets.
Full Transcription
Thank you. Music so Thank you. all right what's going on, everybody?
Welcome to Wolf.
Welcome to another RWA space.
Super excited to get into this conversation.
You don't want to let the other speakers know that we have just begun.
If you guys could help me out, if you guys love RWA as much as we do,
please do retweet the space.
Bottom right corner, a little purple pill.
Easiest way to let people know that the space has begun.
Space is notorious for not letting people know.
So I'm going to shoot those messages over.
Excited to get into this conversation.
Shout out to everyone who comes through right now.
So far, I see Colin, Onino, Archive.
I see Ray up in here.
Good to see y'all.
Excited to get into this conversation.
What's going on, Mr. Ray?
Yo, GM, GMK, doing absolutely phenomenal. A little take in the back. I heard you say
a purple pill. How about the orange pill? I thought that's what we were all about here.
Definitely with Bitcoin, I guess being the original real world asset. I mean, you got
to have something to mine the thing, which isn't the real world. So either way, no one's ever shown
me a fake world asset, which is a joke I will continue to make until the day I die. But point being,
that's what we're here to talk about today, these very real world assets. And it has been
a phenomenal week. Oh, man, let me tell you, every week is a good week for tokenization.
Seems like it's only speeding up every time I write the newsletter, which by the way,
as you may know, I'm the head of research over at RWA world,
you can find us at rwa.world. And if you click that little subscribe to newsletter button, you will get in your inbox every Friday morning at eight o'clock sharp and under 1000 words,
your finger on the pulse of what's happening in tokenized assets. So great opportunity there to
just keep a finger on the pulse, like I said, of what's going on. And this week, there was a big
focus on stable coins, they are stable, but what's going on. And this week, there was a big focus on stable coins.
They are stable, but they've been let out of the stable because they are running wild.
So crazy cool stuff happening with stable coins, primarily in the United States.
The SEC had a trading roundtable with Uniswap and Coinbase, bringing them in with a nice
warm welcome under the umbrella.
And recently, the SEC, despite in addition to inviting Uniswap and Coinbase for a talk,
they actually ruled that a lot of stable coins are not securities, but there's still some great
area about how yield factors into the equation. And we actually have someone on the panel today,
a perfect person to speak to this. Colin, I know you are doing some amazing work over there at
Prof Labs. Great to have you on the panel as always, my friend. Great to see you again.
I know you guys, well, I can't say you guys, there's some separation there, but I know
the Provenance ecosystem recently was, was a figure specifically, was granted approval to
register the first compliant yield-bearing stablecoin. Let me know if I'm off base there,
but curious, since you guys have been through the ringer and I've been talking to the SEC
about this kind of stuff, assumingly at length, would love to get your take on that yeah absolutely thanks ray thanks for having me everyone
happy to be back so yeah you nailed it so figure uh was able to get the first ever uh as you said
registration of a yield bearing stable point so it is a security it is an S1 filed security. You can go look at the filing on on Edgar if you're so inclined.
You know, provenance, the the chain is is all over the filing and how the how the token behaves.
It is. I mean, this is all public, right? It is filed under the 40X, 40X registered product.
And it is under the 40X. There four different um instruments that you can file and the
the one that uh figure was able to get approved is what's known as a face value certificate
um these have not been used in many many years uh because they they behave a little bit like
bearer instruments and that they are in fact peer-to-peer transferable. This is really significant because in 1982, under what was called TEFRA,
which was a tax reformation act that Congress passed,
we did away with the use of bearer instruments for securities purposes
under the name of anti-money laundering and the ability to move these things around freely.
So this is actually a really, really big development, just broadly speaking, in the crypto world. As long as
wallets have been whitelisted with an attestation that proves they have done KYC and AML,
the certificates are peer-to-peer transferable, which is really quite something. And so,
yeah, it was a very arduous and long process. It took a figure north of two years to get everything approved.
But this is absolutely critical because right now,
figure's writing anywhere from $650 to $700 million of private credit
onto the Provenance blockchain every month.
It's very, very active.
It's almost entirely HELOC's, home equity lines of credit.
And so each loan is an NFT, and then they can either bundle them into a securitization or just warehouse them and package them and sell them directly.
Now, today, when KKR or Apollo or others come and buy $20, $30, $50 million worth of these loans every month, they don't use USDC or USDT or any other instrument on chain.
Reason being is that even briefly, even for a few hours, even for a couple of days,
when you are using USDC, you are effectively granting Circle an unsecured loan. That's a
problem for large institutions. They do not want to do that, even for admittedly a very short window.
So by having a stable coin that is a registered product
that has all of the necessary securities protections,
you know, the risk arrow is cleanly pointed
at Figure Certificate Corporation,
which is the issuer of YLDS,
the yield bearing stable coin,
we can actually bring all of the activity on chain
because, you know, large institutions
should, in our opinion, should have much more confidence in using, you know, this stable
coin because it does not represent something risky for them.
And this, of course, is huge.
I made this comment yesterday, right?
It's important to remember that the entirety of capital markets grew up around paper, and that included paper money for settlement.
So DVP and having a custodian and or a Brinks or some sort of armed guard to move cash around, that became a critical part of the flow in the transference and issuance and purchase and sale of securities.
of securities. By having an SEC registered product, we can now fully bring the process
on chain, including settlement, including the actual purchase. And there's one final point
here I'll mention that I feel like many others perhaps miss or gloss over, which is that part
of this process includes a UCC, the Uniform Commercial Code, a UCC Section 8 filing that
actually perfects the asset ownership.
So what this means is that if there was a bankruptcy, if there was some sort of a problem,
the UCC file, you can point to the UCC filing and say, no, no, no, see, I own this outright.
Lock, stock, and barrel, it's mine. There's no question. If UCC filings had been made for all
of the FTX holders, there would not have been a need for bankruptcy court, right? Because it's very clear who owns what, there is no question about preference in terms of repayment,
and you know, who, who, who held what at the time of the collapse, and you know, all of that. So
really quite revolutionary stuff happening. And we believe that this is this is this is the sort
of thing that our industry needs to be thinking about, which is material rubber meets the road,
that our industry needs to be thinking about,
which is material rubber meets the road,
you know, developments that allow us
to actually bring the entirety of capital markets
and the transactions on chain.
Fantastic stuff there, Colin.
That's a aspect that really is very, you know,
institutional centric.
And I think many folks who are maybe in the audience
listening or listening to the recording maybe don't think too often about really is very institutional centric. And I think many folks who are maybe in the audience listening
or listening to the recording maybe don't think too often about unless they are working with
large financial institutions that even just for a brief window of time, that unsecured loan
to Circle, despite how well capitalized they are and how ubiquitous their stable coin is,
ultimately is a matter of risk. And that's going to keep any
kind of compliance officer or risk officer up at night. So having this kind of compliant
architecture makes a lot of sense and then kind of fitting these Legos into the correct
portion of the landscape to kind of build the foundation that we need for these institutions
to be comfortable is really how we see this kind of inflow of volume. So really fascinating stuff and love the stuff you guys are working on over at FIGURE, over
at Provenance, just being really the leading tokenization entity currently.
Anytime you go on to our friends dashboard over at RWXYZ, you see this giant segment
that stands alone.
That's FIGURE's portion of the chart for sure.
So always great to hear what you guys are up to.
Well, and just to put it into perspective,
Figur alone is doing about the size of the tokenized treasury market every quarter in terms of real world assets ledger on chain.
So it's quite material and it's awesome because one of the things that I love about our space
and about all the activity picking up is that we got to actually do it.
And when you do it, again, you get that rubber meets the road sort of practicality of, okay,
what do we actually have to do here in order for this to be legitimate? Creating a token standard
that is restricted, that could represent a security or a non-security financial product,
it's actually really pretty easy. The so what, the part that matters is, okay, well, now what
happens, right?
How do we perfect ownership?
How do we then use it as collateral in a lending scenario, right? And that's a big part of what Figure Markets is working on, which is cross-collateralization opportunities.
If you hold Bitcoin, if you hold tokenized equities, you can get a loan and then push that cash out into a new position.
If you've got liquidity needs,
life happens, whatever, you get sick, kid broke your arm, whatever it is, you're really, really,
really critical just to start to examine what does this actually mean and how could it evolve
in the future? I'm a big believer that we are currently in the second epoch of DeFi.
The first one was, well, what can we do?
And we had the Lunas, we had all these different things.
The second one is, okay, well, now what should we do?
How can this behave?
And what makes sense in terms of consumer protection when balanced against sovereignty and the right to transact?
Really, really fascinating time.
It's incredibly exciting.
A hundred percent.
Definitely echo that sentiment. It reminds me of the old quote, just because you can do
something doesn't mean you should do something. But ultimately, figuring out how to do something
correctly is how we expand and grow the industry. And speaking of expansion, we have our friend
Archex with us today. They're doing some phenomenal stuff in terms of being a regulated exchange,
facilitating digital asset trading, including RWAs.
And you guys recently had a purchase of a FINRA regulated broker dealer to start offering
some tokenized assets here in the US.
So super exciting stuff.
Awesome to have you with us.
We'd love to hear what you guys have been up to.
Yeah, great to be here today.
Thanks for inviting me along.
It's Simon Barnby here from ArchAx. Actually, just back from Paris Blockchain Week back in here today. Thanks for inviting me along. It's Simon Barnby here from Archex.
Actually, just back from Paris Blockchain Week back in London today, having spent the week in Paris for Blockchain Week, which was, you know, bigger than ever.
I mean, it's amazing how large that conference has become.
And it spawned so many side events, both during the daytimes and obviously in the evenings too. I mean,
Paris in the springtime when the sun is shining is a wonderful place to be. But there was so much
going on. It was super exciting, super interesting. A lot of buzz around real world assets,
a lot of buzz around stablecoins, a lot of buzz around AI. You know,
lots going on, a very exciting place to be.
And for us, it's really interesting because, you know, we are or have been established here in the UK.
We're FC regulated as an exchange, a broker and custodian for digital assets.
So we can pretty much cover everything from traditional assets all the way through to crypto, pure crypto and regulated tokenized assets as well. And indeed, we've been expanding
our regulatory moat around the world. The EU is an obvious place to be. We know when
Brexit happened, sadly, we lost our ability to market ourselves and do business in Europe
proactively. But tail end of last year, we acquired a broker dealer there in
Spain, actually. It's going through change of control, probably a month or two to go before
that comes through. But that reopens the EU market for us to be able to provide our products and
services there. The entity actually has a couple of permissions we don't have in the UK, so it expands the regulation that we have in place.
One is for derivatives, so we'll be able to look at the derivative side of things.
And two, they have a permission called trading on their own account, which basically means we could run market making out of there.
And that's really interesting because, you know, if you look at the crypto space, there are loads of crypto market makers.
You know, you almost bought for choice, but not many of them are regulated. So not many of them can get involved in regulated, tokenized,
real world assets. And for traditional markets, you know, it's probably, you know, it's a step
for them to get involved in that side of things too. So being able to look at sort of market,
make regulated market making for digital assets will be exciting too. And then most recently,
the US. I mean, funnily enough, years ago, we had permissions underway for ourselves
to get a broker-dealer license in the US. But for so long, there was so much uncertainty in
that market that we kind of put it on the back burner. But Trump coming in or finding out that Trump would be coming in at the tail end of last year
and all the noises he made about changing the regulatory landscape and the changes that have started happening
mean the US has really opened up again.
And I think everyone in this business around the world needs a US strategy, as did we.
And pleased to say, yeah, we acquired a broker dealer in the US,
announced it about a month ago, I guess.
And again, it's going through change of control, which has to be done.
But once that's complete later this year, again,
we'll be able to offer our products and services there too.
I mean, our focus just on the product and service side, I mean, you know,
we have crypto, we have a crypto market, crypto OTC desk and the like, but our real focus is really tokenized real world assets.
That's kind of we see what Colin was saying, building on what he said, that's really the future tokenizing real world assets, 24-7 markets, borrow and lend in the sort of using the DeFi model, it's all hugely exciting. You know, we have partnerships with Aberdeen, BlackRock, Fidelity,
State Street, Bailey Gifford, Bank of New York, and others,
and working with them on tokenized real-world assets.
I mean, the focus has probably been money market funds initially.
It was an obvious use case.
And, you know, you end up with a yield-bearing instrument in token form
that you can move around, move value around with.
So it becomes really interesting as an alternative to stable coins.
A bit different to a stable coin, really. You're not using it for payment as such, maybe, but just moving value around.
But then, yeah, then borrow lending 24-7 securities lending using token technology.
It's all hugely exciting. So, yeah, Archchex really on the cusp of something big.
We believe in this market generally, you know, we think we're well positioned, exciting.
And, you know, we believe our institutional regulated approach is key. And, you know,
it's exciting to see the progress everyone's making, Figment. You know, the story is fantastic,
or we were just hearing earlier, but no, pleased to be here. Thank you.
Absolutely, Graham, always great to have you with us and phenomenal stuff you guys are doing
at Archex. I, for one, as an American, am very excited that you guys are entering this market
competition. And, you know, in these early days, coopetition really, as we all learn from one
another, is what makes the world go round. It's part of the reason I'm so excited about these
spaces and these conversations is I feel like I learned something from, I learned something every time from the folks such as yourself who are actually
building out front in terms of tokenization and bringing these assets on chain. So phenomenal
stuff. And talking about building out front, we have our friends over at Onino with us
as well. Fantastic to have you guys with us. I don't think we've actually had you up here
before. So welcome, welcome. Super um to kick the tires on tokenization
uh with you i know you guys recently had a mainnet launch which is an absolutely massive step so
congratulations uh to onino for kicking out that mainnet on april 1st i've been rocking and rolling
for 10 11 days now how time flies would love to get your take on the state of tokenization
uh stable coins and what mainnet means for the future of the onino platform
yes welcome everyone thanks for having us and also i would say good morning to everyone uh
across the big pond i'm in the space from germany so for me it's midday and also kind of that brings
me to onino itself so we are also kind of an infrastructure layer
for tokenization, focusing on compliance
and on kind of building all the technical rails
for anyone to use it simply.
On our main focus is the central European market,
which kind of, of course, we all have parallels,
but also some intricate differences
in terms of how regulation is applied um and kind
of to give my take on the tokenization it's i believe we are right now as colin already put it
in one of the most interesting phases in terms of not only adoption of blockchain but also the
evolution of the whole space where we kind of have reached a place of maturity
where it's not only about building for the sake of building,
but building something and having a good go-to-market aligned with it,
whether it might be on the user level or the institutional level.
And one key aspect there is, of course, compliance and using your product
or your tokenized asset in a way that while adhering to all the regulation,
you can create something that is actually worthwhile and that is actually bringing benefits
rather than just existing on a ledger at the end of the day.
So what we see, and we're mainly focused on the German, Swiss and the Austrian market is that the interest for tokenization
is picking up at a pace that we almost can't comprehend right now. Everyone sees that there
are so many things going on. Everyone sees that also in the US, a lot of things are happening
and they want to actually be part of it and the yeah i always say the technical challenges behind
the organization are not the biggest the challenges are on the one hand the educational side which is
still a huge uh factor and then also the compliance side so i don't know our main
net launch was a step forward for us um we also recently before the launch we integrated what we call
a crypto securities registry so it's essentially a registry that fully licensed um that allows us to
issue and also distribute uh tokenized securities and put actual securities from funds for any kind
of debt um or equity on chain and with that we and our mainnet we combine this
and take the next step forward to also now soon issue our own platforms so far we've only kind of
um worked with institutions that used our platform as white label as our license was missing but with that point we are now one step forward to taking big steps
in terms of tokenizing the central european market but as i said the challenges for combining
compliance with usability that actually creates value rather than not only theoretically but
actually create value are still huge challenges on the road ahead.
And challenges that we all have together,
every single one person in the space,
and challenges that can indeed be conquered together,
as all of us have kind of the same roadblocks ahead of us
from a term of adoption.
Fantastic, Quentin. And I love what you said there in term of adoption. Fantastic points. And then, you know, love what you said there in
terms of that, we're, we definitely are in one of the most interesting times, you know, as you
echoed and Colin said, in terms of tokenization, and also really appreciate the sentiment that,
you know, we're all kind of doing this together, since it's a brand new era for this technology,
and ultimately, iron sharpens iron. And while there may be disagreements in terms of how
to approach the market, and while there may be opacity
in certain jurisdictions, and of course, naturally,
being that it's new technology, opacity
towards how to regulate this technology,
ultimately, these open conversations
are what allow us to move things forward,
as well as some of the awesome work you guys are doing
over at Onino with actually bringing these assets on chain
and offering a tangible example of, hey, this is how we do it. This is how it works. So this
is maybe how ultimately we should regulate it or ultimately do it in a more streamlined way that
keeps compliance first and foremost. So fantastic to have you with us. Awesome stuff you guys are
working on. Congratulations again on the mainnet launch, really big step. And in terms of compliance,
their launch, really big step. And in terms of compliance, speaking of the United States and
stable coins, which has been such a hot topic recently, there was a great article talking about
how the gold standard is back and stable coins really need to reimagine what backing means. And
that gold standard terminology kind of caught my eye because Kyrzegstan recently, Kyrzegstan is a
central Asian country.
It's one of those four that are kind of in the middle of one of the stands. They launched a
gold-backed stablecoin instead of a CBDC. So they now have a gold backing to a nationally issued
stablecoin, which is super interesting. Naturally, there's a big diversity of opinion as to whether
CBDCs are the way to go. Certain US states have banned them. Trump talked about banning them outright.
But now Keir's extent has kind of taken a unique approach
of backing a stable coin with gold
rather than using a CBDC.
And our friend Ryan here,
he's doing some phenomenal stuff
with actually tokenizing gold.
So Ryan, I'd absolutely thought of you
when I was putting this in the RWA World Newsletter.
One, great to have you with us, my friend.
I would love to get your take on this gold-backed stable coin
and just gold coming on chain in general. Yeah, Ray, great to have you with us, my friend. I would love to get your take on this gold-backed stable coin and just gold coming on chain in general.
Ray, good morning.
Good morning to everyone.
So, I wasn't even planning on attending as a speaker this morning.
I was just jumping in to listen to everybody's good feedback.
So, gold, gold, gold, gold.
Tis the topic of the hot topic of the week.
So at stable, let me just get into what we're doing really, really quick.
I'll be brief and then tell you what I see in the future.
But it really boils down to the future, really boils down to whether or not gold can maintain.
Because if gold drops like a rock,
when the instability comes, then I'm not sure if it's the greatest decision to make. But I'm
bullish. I'm certainly bullish. So what we're doing is we're taking gold and silver on chain,
just like a Kinesis or a Tether Gold or a Paxos does. but we're focusing on the states and physical delivery. So it's not just physical
delivery, but we're focusing on the states and physical delivery for the beginning. So that if
folks do want to take physical possession of their gold, they can do so. And if they want to keep it
digital and transfer it intercontinentally amongst peers, If they want to buy and sell, they can do that on
our platform. And we feel like the future of stable coins should be based in an asset other
than USD. Now, we're all fans of USD. It's been a stable coin that's allowed us to maneuver the
market, to off-board risk, to jump into something stable for a moment.
But the dollar dropped a full percentage point yesterday.
And so there could be trouble on the horizon.
And backing your assets with USD may not be the smartest move in the future.
And so we're betting on gold and we're betting on metals
to be the future of our stable, stable coins.
Not 100% and then fantastic points there. That's kind of gets to the heart of,
you know, I opened up the space with a comment about Bitcoin being maybe the
original real world asset, right? That has a fixed supply. You know,
people have to work, that's the proof of work to get this stuff out of the
computer. Similarly, you can't just really print gold. I guess technically you can with kind of
super fancy chemistry that's well beyond my pay grade, but the energy inputs too much relative
to the cost of the gold. So definitely a strong backing. And as we move into kind of more uncertain
times, I guess you would say, regarding the fiat currency regime and where technology is going, kind of have an old faithful as a backing, you could say, gold as a backing
of currency is kind of a return to basics that I think for a lot of people makes a lot
of sense.
It's something you can touch, taste, smell, and feel.
Maybe don't taste it too much, but point being, it's there.
And as long as it's got utility, which we're trying to bring it on chain to add the utility to it with a tap to pay or the ability to, again, transfer amongst your peers.
But gold, the problem with gold is it's just not that.
It's a store of wealth.
But in 2025, what's it good for?
So you've got to digitize it.
Those two worlds have got to come together.
100%. We were having a great conversation yesterday as well. And I think to reference that
conversation, Colin mentioned the origins of brokerage, the idea that it's like, hey,
I'm going to town. Oh, cool. Well, here's a hundred bucks. Can you get me some supplies?
You know, that physicality has largely been disintermediated thanks to this kind of technology.
So gold, definitely having that level of disintermediation thanks to this kind of technology. So gold definitely having that level
of disintermediation and coming on chain is a natural progression, I believe, for just the era
that we're in. I want to shift it back a little bit, though, speaking of backing of assets to
kind of the stablecoin conversation writ large. We have our friend John here. John has done,
for those who don't know, just phenomenal work with the state of Wyoming and their stablecoin, 102% backing, just amazing stuff. And John, we were just talking about,
before you joined, how the SEC recently confirmed certain stablecoins are not securities. There's
still a bit of a gray area in terms of the yield factor and how that factors into the equation.
But we'd love to get your thoughts and your take on what this means, because I know you've done a
ton of work with Wyoming and their stablecoin and with the federal government now kind of cozying up to the idea.
Where are we in terms of stable coin adoption?
We're at the starting gates for stable coin adoption.
I think we're going to see an explosion of stables moving across the space.
But I also think we may see a consolidation for these payment stables because of the requirements for backing. I don't think that the days of the mom and pop
stablecoin issuer are long for this world. We're going to see major enterprise, major balance
sheets moving into that space and kind of crowding it out. But going back to the conversation about gold, you know, we can move
anything across the blockchain. We can back it with any asset that we want. What really becomes
important is that you have a regulatorily compliant vehicle for that in the stable
that's moving across. So, you know, you mentioned gold, but there's silver, there's uranium,
there's cattle, there's oil and gas.
There's any number of different assets that can back the value of a stable, depending on what kind of a scheme you implement.
And I think we're going to see a diversity of those.
So I think the days of necessarily requiring that a stable be backed by a given state's issued assets like treasuries, that's not a given.
We're going to see, I think, a lot of different flavors of this moving forward, which is going
to be really, really interesting. The other thing that was interesting that came out yesterday was
the guidance on crypto asset disclosures, which included filing an S1 for these token projects. And notably, possibly one of the
most interesting pieces of it was the inclusion of the source code for the smart contracts that
govern those assets. And so this is a huge shift in the space from describing crypto as this monolith
to really understanding what does it do,
right? So our regulators are now asking the question, okay, this is an asset. I get it.
It's on the blockchain, but that doesn't tell me anything. What is it? What's backing this asset?
Is it USD, right? If it is, in what capacity? Are these 30-day, 60-day, 90-day, 10-year dated treasuries? How are you managing that?
Who is your manager? Who has the authority to make decisions over the constitution of those
underlying assets and the backing? How is this functionally operating? What is the actual source
code that's allowing somebody to interact with this? Who gets to change that source code?
code that's allowing somebody to interact with this? Who gets to change that source code?
And so we're entering into a really nuanced world right now. And I think the net effect of all of
this is crypto projects. And I put this tweet out earlier today, crypto projects are not going to
meet regulations by necessity. They're going to far exceed these regulations. And my hope is that we end up on the
other side of this with the most transparent investment opportunities that exist in any
market globally. And that transparency is the mother of liquidity, of capital flows,
where investors prefer the optionality and the transparency that they get
in the crypto space. And so if the thesis holds, we will see massive capital flows to companies in
our space that are using these stables to transact that have incredibly transparent
businesses where the reporting standards are kind of laughable in comparison
to what's available on chain.
And that's the big, bold vision for where we're going.
Stables are critical to that because if you don't have stables, then you don't have provable
transactions, verifiable, authenticatable transactions.
And so that's where I think the net sum of this week is pointing, which is really exciting
and something that I'm really engaged with at Hashfire. This is the type of stuff that I'm
working on. How do we bring entire businesses on chain so that we can avail ourselves to all
this technology that we've been building for a decade here? Phenomenal stuff, John, and amazing stuff that you're
working on, man. I know you've been blazing a trail with Hashfire, working with Wyoming.
And so I know very few people who are as well-versed on stablecoins and the future of them
than yourself. And you said something very interesting there, stablecoins being backed by
anything and everything, not just treasuries. You mentioned cattle.
It kind of made me chuckle there because if a coin is backed by a cow, does that make it proof of stake?
Can it be anything but proof of stake if it's backed by cows?
Time will sell.
That's brilliant wordsmithing there.
My hack goes off to you, my friend.
This is why I joined these spaces.
That's just excellent.
That's just excellent work.
That's high quality crypto punnery, and I appreciate it.
Well, I appreciate your appreciation, definitely.
And I'd just be happy to redeem a coin for a stake.
Honestly, when rubber meets the road, word smithing aside, that would be really cool to be like, hey, this one's particularly backed by like, you know, half a cow.
Put it in my freezer.
Good to go.
So the future is bright.
And speaking of bright, there are so many things coming on chain, it can be hard to keep up. So just want to give a pause and say everyone if you hear my voice, whether it's on the recording, whether you're here live with us, definitely follow all the speakers on stage. These are the folks who are building asset tokenization. They're doing it in public, just like John was saying with transparency.
And speaking of bright, there are so many things coming on chain.
It can be hard to keep up.
And these are the folks who you want to have on your timeline to see what they're up to and learn, hey, this is what's actually happening when rubber meets the road as assets come on chain.
So, you know, definitely give them a follow.
They're doing fantastic work.
And just to keep the conversation rolling, talking about tokenized private credit, Colin, you said something very interesting earlier in the space, the volume of private credit that, you know, specifically figure is, excuse me, that Providence is seeing on its chain,
BitGo and Republic are now partnering to expand access to private credit. There's a protocol
called KASU, K-A-S-U, that is doing some very interesting stuff with accounting firms and law
firms and tokenizing some of those accounts receivables to have some very, very juicy and
well-established APY from, you know, tier one markets, well-established firms.
So seeing this kind of private credit opportunity come online and basically blow out of the water
what Terra Luna was offering 20% for some nice hot air and it might be here tomorrow. It might not.
Spoiler alert, it was not. Colin, I would love to get your thoughts in terms of what this means.
Is private credit coming on chain and how that's going to kind of redefine capital markets through potential ease of access and more.
Absolutely. It's a great question. And I feel like I can kind of piggyback on something that
John said, right? Like capital is like water running down a hill, right? It's going to seek
the easiest path. And I think we've seen this very, very cleanly because the growth that I've seen in the tokenized RWA space largely has been the instruments that are the most flexible, right?
Private credit is still a financial product, but it's not a security, at least the way that we're mostly thinking about it.
Obviously, if you bundle loans and securitize them, then of course, it's a security. But private credit, as we know today, right,
it's a financial product that's not a security. That means it's more flexible than a security,
because it's not subject to the Securities Exchange Act of 1934, and all of the ensuing
regulation that came after that, right? And so capital is the flows of capital on chain, right?
And so capital is the flows of capital on chain, right?
We're very, I think we're very clearly seeing that, you know, capital seeks the best, you
know, the best return, the best products.
And but it also does it, it seeks that flexibility.
And so, you know, the fastest growth that we've seen, right?
One of our clients and Dr. Murphy was on yesterday,
Dr. Bob Murphy, Infineo, they are bringing life insurance policies on chain, right? And with,
if I can, yesterday, I actually thought Dr. Murphy was quite modest. What Infineo is doing is
absolutely revolutionary for the life insurance industry across the board. It's really quite
something. And, you know, life insurance policies are assets that have real value. They're certainly financial products,
but they're not securities. And so Infineo has loaded $550 million worth of tokenized life
insurance policies onto the Provenance blockchain since August. I believe it makes it the fastest
growing asset class on chain ever, which is amazing. It's really, really cool to be
a part of and to get to see, right? But this begs the larger question, which brings us back to the
regulation conversation, right? We need clearer standards so that we can operate, right? The
instruments that have had the most flexibility and the most growth, that's where the capital flows,
right? You know, is it a
security? Is it not? Is it an investment contract? What does the token represent? Are there token
holder rights? All these questions we've been debating for years and years, right? Didn't
really need to debate those on the private credit side. And so that's the explosion that we've seen,
right? And, you know, evolution, not revolution, right? As much as I love the idea of all home
titles on chain and,
you know, whatever, we're not going to go county by county, 3,000 plus counties in the US
and get that all standardized. But as far as, you know, treasuries go, as far as private credit
goes, we really have a pretty solid operating playbook. And that allows us to then go innovate,
right? And bring bilateral settlement on chain and all these other things so i think a really important lesson we can take away is is that you know the flexibility is something the market wants
right and if this is an opportunity to revisit some of the regulations that i think were important
as at least some of them when you know when we lived in a paper-based world and when we had to
have brokers to intermediate from a physical perspective because we weren't there we weren't
in new york we weren't you know most cities like 100 years ago, most cities had their own stock exchanges
because no one could talk to anyone. There was a San Francisco stock exchange. Salt Lake City had
one. You know, you needed the physical proximity, right? Well, now that the Internet's here, we
don't need that anymore, right? It's really quite something. So we have a chance now to kind of
revisit these laws and really like
the spirit of the law in terms of investor protection and disclosures, right? Gap is
critically important because it allows me to compare Microsoft to Apple in an apples to apples
way, no pun intended. And so really, I think we can take an important lesson away, which is that
capital is going to flow to the instruments that are most appealing. And I think a huge part of that appeal is certainly the flexibility. Private credit has
no lockup. Once you buy it, you can sell it the next day. If you're buying a 506C private
investment, okay, well, you get a 12-month seasoning period if you're a US-based investor.
Things like that, we now have a chance, I think think, to revisit and really, I joke with people,
people ask me what I do. I say, well, we're rebuilding the stock market and this time
we're going to get it right. Man, I believe that. And it's fucking awesome to be a part of.
I love it, man. Absolutely. Evolution, not a revolution in capital markets. I love that quote.
I mean, honestly, to revolve means to move around and who wants to
spin in circles. I feel like traditional markets have been doing that for long enough. And an
evolution is obviously to progress in some way. And evolution doesn't have a clear path. It's not
like, oh, monkeys are going to become humans. That is the straight path. That's what has to happen.
It is a response to external stimuli that ultimately guides that path. And that I think
is exactly what we're seeing with tokenization in response to kind of external stimuli and demand that merits this kind of
evolution in market structure that we're seeing. And speaking of evolution, oh yeah, Sean, what's
up? Colin, maybe you could double click because I think this is the crux of what we're doing,
like all of us in the RW space. We're really trying to understand how to cure the ailments of private credit
within the image of public markets without the inefficiencies and the cost of public markets.
I mean, that's really the ballgame, right? Most of all the most valuable data in the world
is private data. All the most valuable assets in the world in aggregate are in private markets and private credit.
And there's better yield there sometimes, oftentimes, right?
And the question is, you know, what do we have to do in the RWA space to unlock the value of private credit and private markets?
What can we learn from public markets? And then
how do we increase the efficiency and decrease the cost of execution and increase liquidity
inside of private markets? That's really the whole game. And that's the work that you guys
are doing at Provenance. It's the work that I've been working on for over half a decade now. That's
the idea behind joining the Wyoming Stable a decade now. That's the idea behind
joining the Wyoming Stable Token Commission. That's the whole thing. So maybe you could touch
on that really quick. Like what is, you know, in a 30 second TLDR, what does that look like for you?
Oh man, it's such a great question. Yeah. So, I mean, you know, I think that really first and
foremost, this, you know, it does, it comes down to regulation, right? Like we hear this one repeated and it drives me crazy. I want to be super clear that we didn't have blockchain is not the reason why securities were not fractionally available.
do not make assets, public or private, more fractionally available. That's not a thing.
That's a myth. I've seen the systems inside of brokers. What it was, there was two variables.
It was commercial one, and then there was sort of an operational one. The commercial one is that
all brokers have to clear KYC and AML for you. So they don't want to pay, and that costs them
money, right? They have to run a check against OFAC. They have to make sure you're not a terrorist.
They have to, you know, blah, blah, blah. There is a, that eats into the investment that you are going to make with them.
In other words, that's a form of cost of capital for a broker.
They don't want to run a KYC check if you're only interested in investing, you know, $20
because the cost of capital there, if they're running a really high grade KYC check, it
can get as much as $2, $3 per head.
That's a 10, if your minimum investment is $20, it's a 10% cost
of cash, 10% rake. That's nuts. So brokers, I mean, you can go today, go to schwab.com.
You can buy stock slices. You can buy $5 of Apple. Fractionally available shares, that was a problem
that really came down to, again, the commercial constant and the operational one was just that in a paper-based system, brokers didn't want to record that Colin owns 0.2786 shares of
Microsoft, right? So this is one of the things I think is really important to remember where the
rubber meets the road, right? Which is blockchains simply represent an evolution of database technology.
That's great.
But whether the record of your security is printed on a pink piece of paper, a traditional
database today, or a blue piece of paper, a blockchain today, the regulations still
apply, right?
We don't negate regulation by creating new technology, which means when we have the new
tech, we need to revisit the
regulations with the regulators, right? Investor disclosures and investor protections and record
keeping, that all came out of the 1929 market collapse. People were running around pointing
fingers, hey, where's my shares? Who has this? Who has that? Okay, we should probably standardize
this, right? And you had the Securities Act of 1933, which created the SEC.
And then you had the Securities Exchange Act of 1934, which was the first and most sweeping
regulation to be passed where public markets and the stock market is concerned.
So when we go look at that, part of the reason for custody in the very first place was that
there were physical paper certificates that needed to be parked in a vault somewhere.
We don't need that today.
Blockchains are an amazing database for ledgering ownership data, right?
So now all of a sudden, like when you actually look at the ICA 34,
it doesn't say you need to have a custodian.
It does not say that.
It says you need to establish a control location over the security in case of loss or death or as achievement or divorce and reassignment. There's, you know,
there's, there's all these different things you have to satisfy. That is exceptionally easy
with a controlled token standard on a blockchain. Like it's awesome. I'm getting all fired up.
It's really, really cool. And so when we start to understand the spirit of the law,
then we can revisit with the regulators. Okay. well, the purpose of this was clean record keeping. I have a much
better way of doing that today than we had before when we had paper certificates or just traditional
digital databases, right? And so to put a fine point on it, this was longer than 30 seconds,
so I'm sorry, right? I think that we have an obligation in one understanding what those regulations look like and the purpose for why they were written.
And then, OK, cool. Now that I get the purpose, here's how this new technology completely reframes new paradigm, you know, redesigns how we approach it.
Right. So that's I don't know if that's a great answer to your question, but that's maybe how I'll where I'll leave it.
I don't know if that's a great answer to your question, but that's maybe where I'll leave it.
That's an awesome lens, man.
I really appreciate that perspective and completely, completely echo the sentiments.
That's the ballgame for us, right?
Like we have a better ledger than ever.
And now it's what can we do with it?
And we're at the early stages of it in RWA.
For me, the big thing is, you know know once we get this stuff down and this becomes
the norm then it's really a question of okay how do we tie together all the lunch tables in the
high school cafeteria so that liquidity flows across all these different chains nobody should
care what chain you're on right we need to have all of these assets flow chain to chain with
standards and the opportunity here for anybody
listening out there in Web3 space is for thoughtful, well-meaning founders to get together
with people like Colin and me and say, okay, we're just going to start making standards here,
make those standards public, allow anybody to operate through these standards,
allow things like trade finance, private credit, LP investments,
allow these things to be standardized so that liquidity can flow to them. And the exchanges that then facilitate this will just emerge. They will just pop up like mushrooms out of the ground.
And then I think five years from now, we're looking at a world where you're flipping out
of your LP interest in 123 Main Street in Cincinnati
into 123 Main Street in New York into a life insurance policy into a trust.
And it's all seamless.
That's the goal.
That's where we want to go.
But we've got to really kind of lock arms here to get there.
I completely agree.
And one example I love to give people, right, is take markets off the
table for a minute. Just think about tech broadly. Do your customers come and ask you whether your
app is built on Azure or Google Cloud or AWS? They don't care. What they want is for the products to
work, right? And so I completely agree, John, with your sentiment, right? Interoperability is a huge
component of this as we stitch together liquidity pools and options for collateralization across chains.
Blockchain is just databases, right?
I think people overhype them.
Now they have unique characteristics, but it's just a way to write information down.
But when the ledger is shared, all of a know, the database exercise and who owns what and the
ability to collateralize and to borrow and lend becomes very, very interesting, right? But at the
end of the day, yeah, this, I think broadly, one of if not the biggest problem that we have right
now is that of UI. Like, older generations are not learning MetaMask. I think it's cool. I write
my C phrase down, I feel like a spy.
I'm like, this is awesome, right?
But that's not the point, right?
When we're talking about how we get the technology adopted,
user interfaces, user experience, flows and onboarding, right?
That all matters.
And then to your point, certainly,
how we bring liquidity from different sources
and how we stitch all that together
in this new global markets paradigm.
100%. These are such salient points, exactly where we're trying to go with these evolutions
in capital markets. I love the idea of abstraction and making it more simple for folks. I was asked
to do some data visualization recently, and I'm like, oh, this will be easy. Oh, no. Oh, no, it's not easy at all. What is this code? Oh, no, there's code. It just kind of is
a testament to just how far we've come in terms of the simplicity of things. Funny point is that
many younger generations apparently in the workplace, they're expected to be immensely
tech savvy, but some Zoomers can't even open a zip file because they grew up on iPads and there's
no zip files there. So very interesting kind of paradigm shift we're seeing in terms of the level of abstraction and
tokenization. And definitely in terms of access, I know centralized exchanges are one benefit,
one of the benefits they offer rather is that you don't have to deal with that level of abstraction.
There is a custodian there to kind of make things as easy as possible and then to cross
chain swapping and some of the complexities there are less apparent and less salient. And so I'd love to get Graham's
take on this from Archex. I know you guys are working with some huge names like Fidelity. They
have a USD money market fund that you guys tokenized. I would love to get your thoughts
on kind of the conversation we've had thus far and where tokenization is going in your eyes.
Sure. Yeah, it's actually Simon here. Graham couldn't make it.
But from an Archex perspective, yeah, we are working with some of the sort of largest names
in the traditional financial institutions world. And a couple of points, though, to pick up on.
I mean, I completely agree that at the end of the day, blockchain is just a new technology.
You know, that's it's just a better way or a different way of doing things, which not only improves how individual instruments are handled, but
also allows you to innovate and do things in different ways. And, and, you know, I think
it's important that it that it gets seen like that. At the end of the day, a security is
a security and it's regulated as such, regardless of how the record of ownership is held. But
but equally, you know, blockchain is new technology. And I totally agree that when we stop talking about the technology in the same way, we don't care about what email protocol we use when we send emails around.
When we stop thinking about the technology that, you know, then it's won and then we've succeeded.
And, you know, that time will come. But that time hasn't come yet.
And, you know, we have to we have to allow regulators time to catch up with this and regulate it appropriately. And
you know, the wall of money sits with institutions. And again, success will be
judged when that institutional wall of money gets involved. And for them to get involved,
they need to get to grips with it and their internal compliance and legal teams need to,
and they have to be sure the regulators regulate in the right way. So there's a journey to go on,
but the vision is totally amazing.
I mean, you only have to look at, you know, other industries.
I mean, for example, like the music business.
I mean, we all used to buy vinyl, then it was CDs,
then we downloaded music, now we stream it.
You know, music stays the same.
Okay, genres come and go, but the way technology has changed,
the way we consume it and the way we consume it,
and the way we pay for it is transformational. And look at films, look what Netflix has done to the
way we consume TV and film. And technology can change everything, and maybe the financial
market's time is coming. And I think institutions will get involved for a variety of reasons. I
mean, they are getting involved already. I mean, we've gone from the days of proof of concepts to real world projects around tokenized real world assets, which is fantastic.
I think in the post-trade space, which is hugely inefficient in traditional financial markets, again, regulations need to evolve, which they will.
And when they do, you know, the blockchain sort of technology will really transform.
It will disintermediate, it'll improve efficiencies,
one record of ownership that everyone can see, get rid of reconciliations. You know,
there's a huge benefit to come for financial markets institutions, which will allow them
to get involved. I think two things I'll say that we do need, or a couple of things. One,
you know, distribution and liquidity. There's tons of stuff being tokenized. It's all about
building distribution networks and generating liquidity, particularly for secondary markets now.
Regulation, we've touched on that a bit already. But the thing I would say is not only do we need consistent regulation, we need clarity as well.
We need regulatory clarity and we need regulatory consistency around the world. Otherwise, you know, it can get quite complicated as you try and navigate the global regulated world
in the digital space,
which is what financial institutions have to do.
And the final thing I'll say is I think we need education
because there is still, you know,
people need to understand that it is,
you know, this is just new technology.
Okay, there's some innovation to learn about,
but, you know, a lot of people have a blinkered view
of what blockchain is, tokenization is, what crypto is, you know, a lot of people have a blinkered view of what blockchain is,
tokenization is, what crypto is, you know, it's better than it used to be. But there's still education that needs to take place. Funnily enough, I was out having, you know, my background is
TradFi. And I was out having lunch with someone from the TradFi world recently. And he said to me,
Simon, you know, I know what hi-fi is, I know what Wi-Fi is, what the fuck is DeFi? And you know,
that, you know, you know, it is, you know, the-fi is. I know what Wi-Fi is. What the fuck is DeFi? And, you know, it is the bleeding edge of technology and what is happening.
You know, it takes time for that to filter through.
Regulators have to catch up with what it is.
Institutions have to catch up with what it is.
But the exciting thing is, and Colin said this, John said this, you know, we're making progress.
We're seeing real momentum building.
We're seeing real institutions get involved, regulators get involved, momentum is building,
and there's, you know, exciting times not too far ahead, I really do believe.
100%, an excellent, excellent takes there. I mean, you know, regulatory clarity is one side
of the coin, absolutely, and education is just something that's's just needs to be underlined as heavily as we possibly can.
I mean, it's one thing to teach people to use Betamask and try to get users on chain through jumping through these illustrious hoops that we have available.
But ultimately, educating folks on the benefits and then having thoughtful regulation around this sort of thing from folks in the traditional capital markets who now understand the comparative benefits that can be endowed from using this technology
is a huge piece of the puzzle. And Simon, yes. Thank you, sir. I was an American. What can I
say? I hear a sultry British voice. I'm like, hey, I think I know that guy. It's part of our quirk.
What can I say? But no, fantastic takes. I would love to, and man, we're really coming up on time here.
Just phenomenal conversation.
I want to give the last take to our friends over at Onino.
I know we've been having a phenomenal conversation.
I know you have some thoughts for sure, no doubt, on what we've discussed thus far in
terms of where we're going with regulation, education, with tokenized assets.
And I'd love to hear ultimately from Onino's perspective with your um you know recently launched mainnet um where you guys see this entire thing going
well of course we're optimistic i have to say that um and and i want to touch upon more like
the institutional side of things because i fully agree like with the perspective of private credit being more flexible capital flowing um
kind of the the roadway is easiest just as water is but i see any one of us that is working in the
tokenization space kind of as an inherent um value in educating anyone they know anyone can they talk with of which many are regulators and
many are institutions um for them to know why it is important to jump onto the bank wagon and this
is one of the big things we're doing at donino one of our main focus points is working with banks as
maybe some of you know banks are on one hand, they are really hard to work with because
they first go to the compliance and the compliance tends to have the kind of they want to paint
everything red that they can't see so that they can't lose the job.
And once you've gone through the compliance, you basically have to talk with the people
that tend to not understand the new technology you're offering them. But we have to bring them on board.
And there are a few main caveats that we have to consider.
And I see these where we, when I look back at four years ago
and look at how our conversations with banks are right now,
it's completely different.
Four years ago, blockchain was still a hoax
and no one was considering blockchain as something worthwhile.
Blockchain was always kind of still having the image it's a solution to a problem that is not there yet.
But nowadays, it's more like I always try to explain blockchain in a way that, yes, it is a ledger.
At the end of the day, it basically is just a worldwide core banking system of which any bank currently operates one at huge cost
and on the other hand you can look at blockchain as a database and the ledger and the core banking
system that basically is operating autonomously and if you take that and think one step further
where i see a big thing and a big thing we are doing by onboarding institutions in terms
of banks is they have huge problems in terms of capital deployment capital deployment in terms of
they can't issue too many loans at the end of the day there's been regulation that has gotten much
much stricter with Basel 2 Basel 3 where where they basically kind of have to cover any loans
they issue sometimes up to four times.
And this is something they currently, it's really how it's done, at least in Germany.
I don't know how it's done in the US, but currently their solution is either they don't
give out any loans to small and medium-sized enterprises that really need it, or they
syndicate that loan.
And in terms of syndication
there are actually banks that are doing this via excel and anyone knows uh excel might not be the
best tool for it and it might not be the easiest tool and now we take this and kind of just
translate that into space of web 3 where we see of the possibilities to fully automate syndicated
loans or any kind of loan that the traditional financial institution would be giving and the where we see the possibilities to fully automate syndicated loans
or any kind of loan that the traditional financial institution would be giving.
And the same goes for any kind of investment in traditional institution would be giving.
And now the wheel starts rolling where you really can start to dream of something
that goes even bigger than just tokenizing real world assets.
It is really a paradigm shift in the traditional financial world.
Just like you put it, John, in terms of when Spotify came out with the new algorithms
and how you can basically add a fraction of the storage space, listen to any song.
It completely changed the music industry.
No one is buying an analog plate anymore or they are starting now again but
you know what i mean and the same will happen for the financial institutions and i believe we are
closer to that than ever um and everything any one of us does here in terms of adhering to
regulatory standards while focusing on the value and the value lies within utility as mentioned before and the actual outcome for the
user rather than who cares if i want to have a wallet i control my own seed phrase really the
average person does not care about it they just care about what's in it for me um and this is the
shift that we had in web3 and this is the shift that is actually catching attention. And that's also why so many people
are jumping onto the bandwagon
and why we see that tokenization
can only grow from here on.
I love it.
Phenomenal points and I agree wholeheartedly.
Last quip I want to make is the fact
that things do seem to kind of come around like that.
I have a record player behind me
and my kids love it.
They love to see the record go around like, oh, it makes music.
This is so cool.
I think one day we'll see someone issue artisan securities that only have the
actual physical security certificate, right? Sorry, it's not on chain.
It's artisan made in house sort of thing.
And before you know it,
we are back to having a stock exchange
in every single city we see around us
and we're back to ground zero again.
Only because it's chic and cool, right?
It'll be a niche sort of thing.
But phenomenal conversation,
phenomenal takes.
Again, if you can hear my voice
live or on the recording,
definitely give the folks here on stage a follow.
They've been so generous with their time,
their insights,
and they're the folks making tokenization happen out front in real time. And it's always a
great conversation, I have to say. I love hosting these spaces. I want to give a shout out to our
friends over at Wolf Crypto for being so generous with their platform and their reach, allowing us
to kind of amplify the message of tokenization and just bring folks together who are making it
a reality for capital markets.
I've been your host, Ray Buckton, the head of research at rwa.world.
You can check us out at rwa.world.
Subscribe to our newsletter, Under a Thousand Words, every Friday morning, 8 a.m.
You too can have your finger on the pulse of what's happening with RWAs.
So with that said, I wish everyone an amazing weekend ahead.
Thank you so much for attending, and we look forward to seeing you all
here next time. Have a good one.
