Banks leading the path of tokenization?

Transcript

[Music] thank you hi everyone I'm Claire comeija and I'm the chief Innovation officer Association can I ask you to stand up just a little bit stand up to get the flood the blood going and flowing thank you who's walking in bunks here nobody me or you at least we are three thank you you can sit down so today the title of my presentation is Banks leading the passive tokenization why is it important for us so we're going to go through an overview of what banks are doing worldwide you know then I'm going to explain why is it important

what's happening when is it going to happen um and you know give few examples of what we are doing in society so that's just a little bit about me so I've been working at the city general for the past five years but before you know I've been a transforming organization and large financial services for more than 17 years so I didn't choose like David to live and do my startups I decided to stay and keep transforming the main organization so is that just an overview of what banks are doing worldwide so that's the way we when we think about digital assets uh how do we categorize them when we work in Banks that's one definition I'm sure we can find minis but most of

my peers do align with this definition so in the field of cryptocurrencies you know generally for from a risk-based perspective most of the banks don't operate this type of you know assets and transactions so very rarely do you see Banks across the world to do this type of uh to propose this type of assets as part of their offering the the one that you start seeing in Banks is where it starts from the red to the blue uh it's around settlement coins so is there a stable coin where we can see some activities so in society General we backed the first the first French table coin called the Le uh providing account services to them we

are working actively on world sale and Retail cbdc's and that's the case of most of the bunks worldwide so in France for example the Bondo France have issued as part of the pilot regime World Sales cdbc that we are using as part of a summer for models and you can see this replicated across several banks in the world and much of the banks are involved in retail cbc's project and in Europe more specifically we do have a working group at the ECB which is defining and working together into what can it entertain when it comes to utility tokens there is a large interest from Banks but not so many applications and use cases so we are still waiting to see that

security tokens that's where we are the most active at the moment and where you see the most of business model and application and use cases that are live and non-fungible tokens you know it's basically most experimenting from a banking Point of View around the nfts or metaverse areas so this joined a little bit David's presentation where you can see that you know the last three in blue are basically where we see you know fiat currency utility and security sorry red and the true blue in the middle as where we see most of the activities at the moment and I will come back to that but you know of course we share a little bit David Vision maybe that's on the same time frame but we share David Vision on

the fact that there is a market there so why is it important for banks when we talk about tokenization the tokenization is basically the digital representation of an asset and it's right through a digital form and you have two types of tokenization you have two types of token you know that exist you have the asset-backed tokens where the token is referred elsewhere and you have the native token where the token is basically the security or an as a representation itself and almost everything in the world can be tokenized from Financial assets to physical world

and that's from part of what we call the Webster economy and when we think about that obviously bugs will want to be in this type of emerging ecosystem so this raises interest about how the Webster economy work is working what can represent and as we are presenting the financial assets of the real economy today we obviously want to be present in the Webster economy and what it can then take and so that's why bunks are present in these areas you know and investing in it so what is happening exactly when we talk about this token there are

different type of use cases the first type of use case is basically just a replication of WhatsApp turning in the financial World such as for example today we provide custody of UI sets from a from a banking perspective so in the digital world we can provide digital custody of your assets so they're just a basic translation and some things that you can do cheaper better faster than the traditional work today so is that the first thing you can do the second thing you can do is you can have more radical use case and here we can think about the payment world so you can do atomic settlement you can do cross-border payments using the infrastructure of the blockchain and the

tokens that you know are using to it in order to operate transactions that take several days several months and almost do them instantly so that's more radical profound transformation of the offering and services that we have today and the last one is basically we can radically reinvent the value chain that go from primary Market to post trade and that's the type of rock that I will go more in detail we've started to do with Forge or subsidiary associated general to basically leverage the blockchain technology and the security token through the World Sales cdbc provided backbend to France to basically reinvent

fully a new business model that don't work with the same economics that the value chain that we see today and that's much more radical in terms of what we rethink and just to give you an idea I noticed a few you know are not working in Banks but I mentioned I've been doing you know digital transformation for a little while now and even published at MIT around it and for me you know it reminds me the transformation of payments that started about 15 years ago you know it's 15 years ago we started to see this fintechs you know this emerging fintech which we are very small the stripes of this world the at the end of this world and basically when you look 15 years later of course they have grown I've took them they've managed to reinvent

part of the value chain monetize differently and deliver Services differently but in order to go further we can see that you need the global ecosystem to evolve around it we need the e-commerce to take up we need customer to buy more online so we need a full shift of our economies in order to make that happen I need the same thing for me in blockchain and it's the same thing for me in tokenization is at the end of the day what's going to lead it is the customer adoption the market which is there and the technology solution we are building today they are valid there are some use cases David was mentioning we are you know at the beginning of the curve we can see that there are some use cases that are there but for the new

business model to really validate themselves it will take the full customer shift around it so how can this happen clearly we did consistency in the regulation and the local regulation so today you know there are different uh position of regulators and there are working groups you know and initiatives but there is not a single way that we see the regulation worldwide we can see some movement in the U.S some bizarre movement in Asia some other movement in Europe in Europe you can see local initiative and regulation so all of that need to be clearer in order to achieve an industrial capability

we need more standards and more collaborations across the batch and last you know for us it will take a long journey you know so David was showing his graph where you can see it was more in 2030 so first we think it's even a little bit longer in order to do this transformation so it will take time it will need alignment on the regulation and the standards and it will take you know the full ecosystem of you know Financial Services players startups investors Regulators in order to make that happen so why do I think banks are well positioned in tokenization clearly we can say you know banks are

still catching up with web 2 you know they are still trying to digitalize their offerings and still trying to better to deliver better experience leveraging digital yes but this is coming to maturity in most of our banks most of our geographies societary is present in Europe Africa Asia and U.S states most of the most of the digital sales digital acquisition are now coming to maturity and the supervision and management is also coming to maturity so it's actually a good timing in order to to look at a different Horizon and to be part also of this Webster transformation the way we are doing it is we are learning by doing and experimenting on public blockchain on different type of

blockchain collaborating with other banks with other actors around doing that currently we have the subsidiary Forge running the cast challenge or open source Network where they have Source you know different startups that can help to access and provide different services for the security tokens which are on the forge platform and we are doing that with startups not just by ourselves and this but at least you know this is a complex world and I do believe you know bunks people that Master Finance practices and regulation are the best position in order to really lead the password tokenization but that will open a lot of opportunities and a lot of new markets you know that are going to come

here so I didn't want you to leave without giving you some concrete applications of what we are doing associated general I mentioned or subsidiary societal Forge it was part of an internal startup call so in societal we launched about 60 startup in 2019 when I took my job and the leading one you know the one we found most distributes were forged and what's very interesting about 4G is they were all coming from different Horizon the guy didn't know each other before when he was in security one was in I.T one was a commercial in the asset management arm and one was working in Capital Market and actually at the beginning was two different teams and

they came together and said there is really something there and it was put under the sponsorship of the CEO of the Investment Bank that just became our CEO couple of months ago associative General Forge you know now have been implemented for four years in Social it's a very uh you know mature platform we have operated about 25 security tokens transactions I will describe one in a minute we have two different products and we have about 15 clients from Asset Management to financial institution that are using the platform uh regularly when operation that we did through societal Forge was what we call Project Mercure in the industry so it was a

transaction commission by the eib so there was an issuer they operated the transaction through societational Forge platform there are three book Runners which were associated general Goldman Sachs and santanders that basically sold to the investor leveraging the cast Open Source model as I was mentioning and just to give you an ID of the level of description you know when you are talking about the eib which is an institution and quite a conservative institution the level of disruption of them operating a you know this type of transaction and a digital token is probably the same than the poop dancing with Paris Hilton mm-hmm so that was just to give you an Insight

on what we are why do I believe banks are well positioned to lead the past to the secondization like David we think you know it's coming and we are at the beginning of this curve uh and these are the way very concretely that we are delivering that thank you very much [Applause]