Crypto Exchanges, Same Same but Different

Transcript

so there is hopefully one more energy or one more attention span of an hour so that we can discuss the same topic we had last year as well same same but different crypto exchanges and uh not only crypto exchanges because we have NASDAQ here as well and um so much happened since since the last crypto Valley Conference in terms of exchanges a lot of turbulent events so we are going to discuss now what is what changed and how can we focus and build a better infrastructure how can we how can we build back better basically please introduce yourself and tell us a few

sentences about your company uh my name is Olga feldmeier I'm a board chairman and co-founder of smart velor yes there are still co-founders at work I don't know if it's a good sign so I run smart velori's board chairman and smart velor is a digital asset exchange the only European listed on NASDAQ um yeah I just stopped there and passed to Alistair thank you I'm Alistair McAlpine I'm basically based in Stockholm I'm British but I have two passports so that's nice and I represent the NASDAQ Market technology team in Europe so I do sales and account

management for all of our customers from free trade trade post-trade settlement risk management surveillance thank you very much Samia hi everyone I'm Samia bayu I'm the head of OTC landing at Kraken I'm covering mainly the Emir region so you know Kraken is one of the largest most trustworthy exchanges and one of the oldest as well U.S exchange and where you trade spot market and many other products thank you thanks so much yeah Will Harvey based in London I'm part of the institutional Business Development and sales team uh joined the company two and a half years ago always been exchanges

in previous life whereas at CME Group both in London and Hong Kong um so bullish exchange is a regulated centralized exchange that combines a traditional Central limit order book and an automated Market maker in our order book to provide liquidity we also have underlying liquidity pools where users can become a liquidity provider and add liquidity via automated Market maker for yield Mercy last but not least hi everyone my name is Patrick I'm leading the business development team at bittrex Global and based in Zurich um yeah bittrex Global um was as well one of the old OG

exchanges we are focusing on sport trading um yeah thanks so much so um I think the next question it goes to Samaya and Patrick if you if you would like to chime in do we need 200 300 500 of exchanges who do it all or we need exchanges that are specialized in derivatives or in options or what what is your take here and uh what what are you trying to become the best in well I think even the concept of exchange that's a bit misleading right because in a lot of cases like if you look at what smart velor is doing via

technology platform right and within this technology platforms there's like retail business and it's yeah exchange is kind of the word it's investment platform right people of different types come and just buy or they trade right but we are also you know the platform business in the way that we specifically provide white label technology for investment in digital assets to fintech and Banks right so we integrate on the back end with traditional or fintech companies and enables their customers to invest in digital assets and that's what we're trying to become basically you know not just give it to the banks who are like super resource rich and can pay

100 million for another uh product shelf extension but also give it to fintech to near a broker to near trading platforms right and we do it in a super cheap way it doesn't cost anything we integrate in two weeks and their customers can trade can you share a few reference clients you work together with lucascopy for instance yeah exactly it's it's a good example and it's a Swiss bank and why it's a big deal because the bank is finma regulates it and I think you guys all know what this means right and what we've done was uh took a copy we integrated our systems through APA API on the back end that means that when the

customer of the bank looks at you know their assets they see their Fiat on the bank accounts they see the stable coins and crypto that they hold on smart velourses it's integrated with you and this is how I think you know the crypto assets will find the way into the traditional Finance thanks so much Samia so at Kraken Securities at the Forefront it really is our number one because it's so important for clients to trust us um since 2011 we've never been hacked um I think really is something that we are really pushing that we have some of the largest cyber security teams in the

world globally making sure the clients assets are safe 24 7. and also the most important thing for us is also to provide the seamless seamless service in terms of trading liquidity fast efficient cheaper as well not much slippage so that's this is more of the Forefront and also when we look at that we then see the appetite from institutional clients so we have offered derivatives on the OTC desk for example and where we offer liquidity on that in that front as well so much Patrick yes as well for us I mean security is the top priority for us we have never

been hacked either since 2000 2014 since we exist so knock on what I don't have any vote but yeah let's hope it stays that way and we invest a lot in in forsec as well as well very important for us is regulation we regulated in Liechtenstein very close to to here and as well in Bermuda where we have proper regulatory Clarity what you actually can do as a crypto exchange at what you can't um so what we can do is actually spot trading that's what we offer to our customer in a safe and secure way um I think it was a to your back back to

your point Amy about where should you focus I think in the last couple of years what you saw is every crypto exchange tried to be a One-Stop shop they wanted to have it all we didn't do that we really focused on sport I think we have around 650 markets that are that are available for customers um and yeah we just try to keep it simple safe and secure simple so save cure I love the alliteration here and looking forward to the invite to your 10 years anniversary party I have two questions or two to ask to the audience please

um think think of a question what you would like to address to the panel here and please be mindful and and help us not bang the door when you leave because it's really disturbing that would be very kind thank you well the next question goes to to you Alistair NASDAQ has been around for over 50 years you are primarily a tech company providing um quite some crypto exchanges we can mention maybe a few and um curious here to to understand that what is your digital asset offering today and primarily why do institutions come to NASDAQ

yeah I mean it's a good point I mean NASDAQ is a technology company right I mean we we have been around since 1971 in terms of offering the the electronic trading I mean that's what NASDAQ stands for North American Securities dealers automated quoting so even some of my colleagues didn't know that um but I mean we built the company based on sort of three pillars right it's liquidity is transparency and it's integrity that's how we structure the organization that's how we deliver it so by liquidity what I mean is we run markets in North America in in the nordics but we also Supply technology to other exchanges so 130 customers worldwide in terms of transparency this is basically about connecting the

investors with the corporates so it's all of the market data is the ESG it's indices its data and then the third part really is the Integrity so we basically have a very large anti-financial crime business which provides such surveillance solutions to about two and a half thousand Banks and we also you know offer AML and antique basically anti-financial crime I mean it's a four trillion dollar issue that the financial services have to deal with it's not just crypto right um so in terms of digital assets that's part of our kind of expanding our offering within the market so we this is a relatively new announcement from our side but you know fundamentally the goal

of the digital assets business is to advance broader institutional adoption of digital assets and you know in you know there's a at the moment we're basically pending regulatory approval but the solution is a proprietary custody solution regulated by nydfs in New York and it's basically going to provide liquidity and executions for institutions so I think that's kind of you know it's custody is liquidity but it's Integrity as well so all of the tech that we sell to our customers it's the same Tech that we're going to be running on this platform and you know our goal is to basically have best-in-class custody with hot and cold wallets Best in Class custody

I think that's something where we all aim for and and they are curious to learn more about that offering what once it's implemented if it's HSM based are you going to primarily cater to your existing clients already who don't have yet exposure in the digital asset space um and I think now it's a good time to take a question from the audience and then just to shake things a bit up um who is who closed the door gently and has a question take those first [Music] I will repeat the question I feel like

this touch base a bit on on my first question so you're asking that an exchange should be only an exchange or should should offer other services as well so we actually what comes to mind is is for instance the example of sefu right like binance has um has a a certified custody arm as in a regulated custody arm but uh yeah like who who in the panel has a has a strong take on this and wants to tell you I think it's good to start with a customer what does a customer needs right they just want to invest and you know now we have the strange situation that we have like here's crypto and here's the stocks and and

bonds and it's actual right it's a super shitty experience because I is a customer and I need several accounts right I just want to invest in tech companies right and this is what we're seeing you know this is where kind of like crypto will merge with with traditional finance that you know Neo broker and trade-in platforms adult digital assets right revolut etoro you can trade digital assets right Robinhood and and this is obviously you know for us the best forward we're gonna merge and that's going to be one space thanks for the question we will take more and the next one is addressed to Will from me bullish has been around nearly two years now your trading volume

is over 200 billion you are a bit different than other exchanges in terms of you're not working with traditional market makers however you have your uh internally built amm can you tell us more yeah yeah thanks for the question so the title of the the panel really fits bullish very well same same but different um so we have a lot of the uh traditional features of a regulated institutional Focus exchange kyc AML best practices low latency connectivity API connectivity a high throughput matching engine the way in which we think about our technology and providing liquidity differs from a lot of traditional centralized exchanges so as mentioned we have our own in-house

automated Market maker so we have taken the liquidity pool technology and amm Technology off chain and in a centralized venue you so users institutional users as that's who we focus on when they are on board to The Exchange they can trade post-traditional Central limit orders or they can also become a liquidity provider so that would be they go into the design Market let's say Bitcoin dollar they would choose the range in which they want to provide liquidity choose the spread and then the amm uses a constant product algorithm to Post building offers based on that spread now the amm only updates its price when it's traded again so there's no external Oracle or pricing reference so it's a unique source of liquidity and independent price to Discovery and then those LPs they get

part of the trading fees so it's a yield aspect as well and that's all built within the central limit order book so we kind of we have some of the similar features but we kind of think about things a little bit differently so what percentage of your clients use the amm versus the vast majority I would say over 95 of the volume is taker volume against the amm um so the amm is is very liquid very tight spreads our fees are one bit Taker and zero maker so we we're open for people to post traditional Market making orders in the central middle of the book however the amm is our in-house Market maker so we don't build incentives like you would on traditional centralized

exchange with a month like rebates or monthly incentives yeah it's one it's one set of fees for everyone super by the way dear panelists if you have a question or two to each other I'm very much up for yeah for if you would like to address the question too to one or the other we can do that um otherwise I will um I will address the next one to Ola Patrick and will and um since the last TVC we did talk about this today in another panel that that so much change happened and that's why I love this industry because change is constant and um well we have to build back better we have to

gain back the trust how how do we do this where is your focus as um the board chairwoman of Smart Level or and and um the other colleagues how how do you see this yeah well you know guys our timing was absolutely lucky because we did something really crazy we decided that we will become a nasdaqlisted company in 2021 the reason we decided that because we kind of like thought look there are so many great exchanges offshore you don't even know who runs them and people put millions of dollars there

and it seems to bother nobody that they can disappear tomorrow and we said this cannot be the future so let's go we already regulated we've been the first exchange here on the ground um been regulated in Liechtenstein and in Switzerland uh in 2018-19 so he said how can we improve the trust even fuzzer how about if we submit our self-voluntarily to the strict guidelines and Rule Book of NASDAQ quarterly financial statements for half a year audited financial statements independent board transparency

Market abuse regulation all of this they're like you know guidelines and requirements very long and we're gonna do this we're gonna execute that it's gonna cost a lot of money a lot of work but we're gonna show to the market how crypto exchanges can be run and we've done it was super difficult almost impossible but we've done it and we've done it in February 2022 we had our IPO on NASDAQ first North and then half a year later FTS happened boom right and I think this was like a pivotal moment for us to show no not

crypto all crypto is great not everybody is just like you know taking customers away instead of companies that you know go to to very big Mile and depth to provide to investors and customers full transparency trust and security so that's our answer thanks so much so not 2031 But but so much earlier great too Patrick will who who wants to share his books I can jump in here I mean I was here last year as well um on a panel with Emmy and I remember right after it I went to

to Texas to another conference and that's when Celsius happened and so yeah we definitely had a roller coaster in 2022 um got a little bit more gray hairs as well amazing memes were made the memes uh the mean Factory went crazy too and yeah I mean like what what happened since then I mean especially I think during 2022 there were still quite a lot of activity as well from institutionals um liquidity was still there and I think the really the knife in the back um for crypto came with FDX since then

um trust is lost I would say if you look at the seven seven day moving average of volume it's at around what 10 million 10 billion or so um it's a third of what it was in 2022 so yeah there definitely was um all that all these events led to a bear Market that didn't really need needed to happen I would say um but it as well put you know some pressure on Regulators which I think is a good thing so they take it more seriously now they trying to get regulation through and putting them into place

um and as well I think the the whole crypto infrastructure is going to mature we were talking about you know an exchange an exchange is a custodian at the same time um I think we're probably going to see that going more to the traditional way I mean I was in track 5 before crypto and when I started in crypto I was like how is it possible as an exchange can it be a custodian and a and an exchange at the same time right I think we are moving into the right direction sometimes you know like every Market every not every in immature Market has to go through such basis I think it was a pretty bad one I agree and a lot of people lost

their monies their life savings but sometimes that happens in the early stages and what comes out of it hopefully it's going to be it's going to be better for the future for all of us yeah we feel big in the earlier days and then yeah then that we will not feel big anymore hopefully yeah I mean so we've always been institutional focused and building a compliant transparent exchange that fits an institution's best needs post FTX what we definitely saw from clients was an influx of exchange due diligence questionnaires so really trying to understand the counterparty risk of an Institutional client parking assets on

your exchange which is obviously a big risk post FTX so the ability for the exchange to provide your risk policies your kyc AML your cyber security your cus how your custody assets it's important to be able to share those to make institutional clients feel comfortable and then as we build exchanges we're getting more Trad five firms coming into the space you need to build institutional features whether that's fix API low latency connectivity deferred settlement credit lines Perpetual con contracts which are more Capital efficient but you just have to look to cater to the to these institutions much more now than you did past thanks so much will who has a question Andy please ladies and gents this is Andy from widen

I will I will hand you the mic thank you Amy um according to coinmark cap there are about 650 exchanges right now crypto exchanges um there's one huge elephant in the room it's binance they're 10 times bigger than everybody else um how safe is finance at the moment do you have a view on that and what would happen if you know something happened to binance like it did to FTX so if the you know this this cluster risk that we have with Finance turns into a

[Laughter] ER Anthony is the is carrying out the animal from the busher I don't know what what is the saying here uh who wants to respond this to this one I don't want to comment on finance and how safe it is but um it would definitely be negative for the industry and liquidity if the same thing happened to binance as it did to FTX I don't think any of us wish for that yes we wish for liquidity be spread across not loads of exchanges but maybe shared more equally but yeah it would it would definitely be negative any other takes or uh or we can take another question from the audience Guido

you need to shout I can't I can't throw you the mic to prevents we'll get like five years ago I was some

consensus like let's create Union you know of exchanges let's put the rules let's do it guys anybody it's just not happening but we don't need that we don't need that there are guys like NASDAQ they have rules just go Leicester it's not expensive just comply with a rule book you know like it's all out there we don't need to reinvent the will just nobody wants it that's the simple answer any other take or can can I go on with my ah shantanu I think I can pass the mic to you hi thanks I'm chantoni surprise I'm a

corporate lawyer based in the U.S so clearly the U.S as we know has taken a very aggressive stance against uh the space in some ways we've seen some of the exchanges of Kraken coinbase some of them sort of saying that we're they're going to set up abroad and maybe Target non-us customers the problem is from the U.S customer base uh and bittrex I think recently went bankrupt after uh being sued by the SEC so the number of U.S exchanges focused on U.S customers is shrinking yet there's still an audience out there it's not good for the US customer to have fewer exchanges so what happens to this space do we just have sort of two industries we have a non-us industry and we have a shrinking U.S industry and what happens what happens I think we just keep

expanding it's not something you know black or white we keep the um dialogue with um with the Regulators with the SEC us outside the U.S because we need to cater for all clients globally as much as we can even though we're a U.S company where but we're definitely Global because it's borderless for us um you know whether it's complicated or not the key here is transparency where it's all about communication and and keeping the dialogue that's key for us we can't really predict what's going to happen but what we can do is just listening to clients what their the need is the appetite and this is how we create products it's not by creating products on the other other side it's

really it's the client's appetite and then when we're looking at that then we discuss it with regulators and see what where it fits and how we can do it safe and safe environment for clients super I have a question to each of you let's make it like a quick one so from left to right what is the the main Revenue driver of your exchange if you would like to share volumes or what's the most popular product [Laughter] well you know as I said we have two businesses we have retail business you know which is just for retail users mostly here in Switzerland and in Germany uh that's just trade and fees right and unfortunately volume trading

volumes are down Revenue sit down that's not going to be amazing year I'm afraid uh but on the other side you know we have this B2B business with banks and um you know there are interesting cases coming up I used to joke do you guys know what is the biggest Bitcoin ATM network in the world anybody in which country could it be and how big it is any ideas well you know it's it's kind of like a funny story do you guys know that um here in Switzerland you can buy

Bitcoin at the as the bear it's a National Railway ticket machines you know that anybody know that you can buy Bitcoin where you buy the ticket right you get the paper wallet printed out yeah so smart will work together with Partners we play We power this ATM network right how amazing is that in which country you have 1 500 machines selling Bitcoin at every train station but that's not your main Revenue driver no but what I'm saying is B2B is going to lead the way right because there are 10 000 financial institutions in fintechs in Europe ten thousand if you

say 10 of them is going to dub digital Assets in this way or another in the next two three years we're talking about thousands of customers right and this is I think the way for our industry to grow and for us personally um strategy we focus on super thank you Alistair yeah that's why I have my piece of paper because I was trying to say how can I quickly give you some numbers yeah I mean look everyone's familiar with NASDAQ is the deepest pool of liquidity for technology listed companies in the world we have phenomenal data products um I mean from the top down we have 3.5 billion dollars in in revenues of which 2 million are what we call Ari annual

recurring revenues um within the division that I take care of we have 130 customers worldwide to use our technology so Regulators Clearing Houses uh Banks um you name it I mean it's we're spread out across 50 countries but you know you know we we have to handle huge amounts of data at the exchange and just to kind of give you an idea you know in a pre-pandemic we were processing about 30 billion messages daily and by by the end of the the pandemic that it got to 85 billion just messages daily so but we have to plan for the future so we're looking at you know volumes which are going to hit 180 200 billion dollars a billion messages a day so obviously what's key

for us is you know we need to use cloud and cloud cloud is a journey that we've been on for almost a decade and based and that's the key driver where we're going forward so you may have caught that we we recently moved one of our markets into into the cloud in North America MRX so that was driving a partnership with Amazon using their latest Outpost technology so that we can essentially use very fast on-prem equipment but offering hybrid connectivity Solutions using extensibility through the through the Amazon Cloud so I mean fundamentally for us you know in the long term cloud and data and then ultimately AI will basically become the critical enable enabling factors for us and and that's essentially the way we see where we see

the growth but in the meantime we've got to build stuff that's scalable it's got to be resilient it's got to be accessible and that's why the cloud kind of comes in because it takes things away from just one point location and makes it globally available but at the same time we're laser focused on capacity and performance capacity and performance I like that Samia so I'll try to be quick and it's oops where we're actually the lead um crypto liquidity providers for Euro pairs in Europe and we um for the trading volume um in 2022 we ended with 250 billion uh trading volume

um that that's obviously a bit low compared to the year before but we're in line with that for this year and we have over 10 million clients um that was the main product for us is really spot trading which we keep on you know working on expanding and really progressing on that for example in q1 we we did a bunch of updates and we've actually reduced 75 percent of slippage as well for the liquidity and the trading which has been great for clients because having something fast and reliable is key for us for clients thanks so much yeah I mean for us it's it's yeah spot trading volume so ADV this year is 470 million and in our spot pairs uh for

those who don't know what ADV is sorry average daily volume um and we are the third biggest uh Bitcoin volume exchange for spots in the world um and as as we look to the future we are looking at at the moment we just spot but like things like margin Perpetual contracts options and then the exciting thing about amm technology and liquidity pools is you can work with any assets as as the two pairs in that and the amms are able to use that algorithm to provide liquidity in a number of different markets so yeah that's what we're looking at super sounds great that's right that looks like um we have like a spot exchange round table here we are as well focusing on

sport as I already said it's probably as well or it is our biggest Revenue driver we have different business lines as well we have lending and we have OTC we are going to have derivatives very soon um yeah staking obviously as well another is that you're working together with some of the infrastructures taking infrastructure providers or how how is taking uh Global is thinking about so it's I would say it's probably half off uh we as well have our own notes um where we run on our own staking but yeah we as well have uh third party

vendors that we work with super as next I have a more personal question to you Samia and you really built a career in private banking and family office how do you find working in crypto versus these days what is really appealing to you in in our industry I mean it's it's really a night and day um I I kind of lived both of you see the crisis 2009 and also the crisis last year but in terms of what the preference of what I have noticed it's really being a crypto it's um efficiency fast-paced creativity the progress is there having been on the buy side and the sell side

and private Banks you can see that it's stagnating less less facing the clients the needs as well opening an account can take two months changing paperwork because the client filled in in Black Ink and then he's signing blue ink everything gets canceled so a lot of things to be you know to be changed there and also the clients um you know they really appreciate the services 24 7. and so speed is very important for them I've had a lot of clients ultra high net worth family office is telling me why can't Kraken add stocks and can we do other products and making into so you know it's um I think the service is key and also the fact that it's uh borderless and decentralized it was very

appealing for me having covered the Middle Eastern clients in my career seeing what happened in Lebanon and Egypt the Arab the spring and the and default of Lebanon and having clients you know losing their assets and the banks that's a major wake-up call for these clients who are all now putting their a part of their asset allocation in crypto and it's very much valued thanks so much for sharing your take and your experience Aleister um you guys announced last year in September your digital asset offering what's what's next what's on the road map what is what you can share with us yeah I mean it's it's pretty pretty exciting things I mean I think if you've got to look at it from

I mean people would say we are traded by my headshot probably shows more of that but the person who was responsible for hiring the person who hired the person to take the head shoulders being fired and one space and stuff which is me um but I think like from a from a digital assets point of view I mean there's two things like we've got a mission and a goal right so the mission is long-term sustainable scalable institutional adoption of digital assets right I'm not not going to say crypto it's about institutional grade Solutions with end-to-end trust reliability scalability right so again back to how we're structured in terms of we provide

liquidity we provide Integrity we provide transparency to to markets so the goal really is we want to solve the technology technology pain points using trusted and resilient infrastructure and we feel that NASDAQ has a natural place in this environment as we grow so you know in terms of driving the digital assets agenda going forward you know one one key area you know for example to give you an example is carbon carbon removal right we have made a majority investment in a company called pure.earth and they they have a registry for for to that can basically demonstrate that you know this amount of CO2 has

been removed from from the atmosphere and obviously those carbon credits can be traded in a secondary Market the you know what so what we're gonna what we're doing is using DLT as a common registry using standard protocols and this is It's all about sustainable goals it's about helping companies reduce their carbon footprint and and this is the type of adoption that we see going forward is broader application of Technology not just cryptocurrencies thank you so much for for sharing good tasting glasses by the way the next question is uh to Olga and Patrick and we can't we can't uh leave this panel without talking about

Mika last week someone from the U.S actually corrected me I was I was saying Micah all the time and he's like I think it's pronounced Mika yeah it is especially if someone from the US corrects you um so what is your take I mean is it really such a breakthrough um milestone for us here in Europe that we that will have Mika or how do you see this all but I'm sure you have a strong opinion on it it's amazing it's a dream come true right I've been waiting for this like I'm in crypto for 10 years now hard to believe but the last five years I was waiting for Mika now it's here and

I tell you why there are two reasons first of all look today we are regulated in Liechtenstein right and with my beautiful colic uh Zoe here we were trying to run like campaigns you know Google campaigns this or that we cannot do it we cannot you know even switch the Google ads for Germany right we cannot do anything because we regulate it in one country now with one legislation we are open to 500 million consumers in 30 countries guys like I mean what else like how much better does it get right so that's you know this pan-european regulation and this is I think where we

can be very proud of what we achieved right looking at the show and you know this choke point too what's going on in U.S guys here in Europe let's just acknowledge this for a moment let's be proud of what we achieved as an industry and what our politicians achieved for us right now we're leading the way once in history very unique moment let's enjoy it and the reason uh two I I really excited about it is also you know how digital assets are related right so there is a new categories this you know crypto assets and it creates it legalizes what we do right so yes it's not security but it's not just some token

it's a way to participate in a company right and it's you know it's now very clear what it is right and we have a right to offer this assets and trade and there is no still questions oh maybe we are all criminals because we are trading Securities so this Clarity is a big breakthrough and for example for us that means like look we were always like super regulation and everything by the rule so we only listed Blue Chips right if you look at smart velor we have only big tokens why because we were afraid of getting into other assets which you know might be Securities or whatever now with this regulatory Clarity yes we're moving forward we're gonna offer new segment new listings in Q3 we're going to open

this product segment and product service so it's it's amazing like I'm still so happy it's finally happening I love your optimism especially that you know it will be 2024 maybe it will be delayed maybe it has a few surprises to it but we will see we will see um Patrick yeah it's definitely good thing to have Clarity on regulation I think the other question from from the audience was um about the US what is the SEC doing um in the U.S you clearly have a lack of transparency and Clarity on regulation and I think the European Union is trying to solve that by Mika and as well for an exchange right it was

for the last couple of years it was kind of a scavenger hunt because you had to find a regime which has a proper framework that you can work with where you can get regulated I remember we started out in the US and then when we separated the business we started with a license in Malta then we moved to Liechtenstein we as well have now a license in Bermuda so-called data license so you always have to have like kind of a hedge right so to basically diversify the risk you have against a government and the legislation so with Mikko you basically

get the regulation for Europe which is clear for everyone um which which is going to be amazing so we are in Liechtenstein the good thing for us is much of what is coming in Mikka is already available in the blockchain act in Liechtenstein so we were basically for the last almost four years we have been compliant with what Mika is going to come so for us operationally it's going to be an easy lift to actually comply with Mika um obviously the some smaller tweaks that we have to do as well um but yeah it's definitely a huge

achievement I think other regions are going to follow soon and really look at crypto as a new asset class rather than a putting crypto into a already existing one super I was optimistic about this so um who will win when we when we look at traditional players like NASDAQ who built a legacy and comes into crypto and has a strong offering or we have of course the crypto native exchanges where where is the marketer where like how how will this shape out who who wins will this is a question you yeah so I mean I think there's space for both but

I think the crypto native exchanges will win for the under the trading of the underlying asset there is a number of good traditional exchanges that have um Futures products for example and they are a great form of price Discovery and a great exposure to the price of Bitcoin however at the end of the day you are still uh buying or trading a cash settle index with no underlying exposure to the asset class or technology whereas crypto native exchanges have really built to it so whether that's custing the asset staking having liquidity pools amm technology they're really embracing it whereas I feel like crypto uh Nate traditional exchanges are really focused on their traditional infrastructure

thanks do you agree no I agree I mean you you grew incredibly fast right in the last two years and I think that's Testament to a number of things I think is Testament to how fast the industry is moving I think it's Testament to how accessible and available technology is I mean in some senses the pandemic meant that you could tap global resources and very talented people very quickly um the way everything's moving in terms of web 3 defy this phenomenal amount of innovation that's taking place in that space but um you know it's not for me to comment who I think would be successful or not because you know ultimately

you know nasdaq's view is we you know we want to be a trusted Financial systems and services provider so actually we're happy to sell matching engines to you we're happy to sell Market surveillance systems to people because ultimately you know the the technology that we built is built on those three pillars right it's it's based on very high performance it's built on a pedigree of 30 years of Building Systems but we have 130 customers worldwide who use our technology so in terms of crypto and traditional Finance I think your your point is correct I mean there are certain bmoths in the world that have adapted and chosen very specific niches and done incredibly well

um but in you know in the long run there will be a gradual and I'm stealing from your last question but you know there will be a kind of a gradual uh cons not consolidation but you know the the digital and the traditional worlds will eventually start to to come closer and closer together but the only way that that's going to happen is by having reputable marketplaces with the right kind of Regulation and to allow you know the traditional Financial Market infrastructure to to to to come along with that so I mean I was at a conference last week in Prague where they where we had a it was more for CSD said Central Securities depository and I

was pleasantly surprised at actually how much discussion there was on blockchain I mean they have different names for it's either digitization or DLT or blockchain it's not necessarily about the native underlying protocols the the the the cryptocurrencies but there's an absolute recognition of the fact that markets will move to Shorter settlement times they will move to longer trading Windows there will be more interoperability and better standards but that's where regulation is key right and the best proof is we are already sitting at the same stage like look crypto guys yeah plaster guys five years ago this would be unimaginable right it's gorgeous there is one last question

uh between you and your Toblerone and uh a real quick one um so there there is a trend that there are more and more crypto exchanges whether it be a consolidation in the market or what is the future of crypto exchanges I think I think um diversification is key for clients um so there could be consolidation because if the clients are you know making their choices and going where it suits them best but I think the way it evolves is that it's the exchange that would put trust and security at the Forefront they would get more of that consolidation because of the um trust from the the clients I think as well

from an Institutional angle generally liquidity is King in a lot of forms so there's a lot of crypto exchanges however there's very few that have decent liquidity or a unique source of liquidity and a lot of the institutions I think will move to there especially if it's a regulated Exchange yeah I mean look at the traditional exchange industry right I mean you go back 10 15 years you had life you had naisy you had you know there is a natural consolidation of markets because of the assets that are traded there the what the participants want and I think that's healthy but also because of adoption right because all of these guys like think about it guys cbdc's National currencies

will be tokenized every bank will need a technology to to be able to transact right they can either build it themselves or they can you know take your technology or buy companies right and and think about how how much money it costs six Swiss stock exchange to build their stuff like 150 million how much it cost a company like smart velor to build this stuff it's just more efficient we like clean we work hard and we are faster and cheaper to build it so of course for them like buy or build there will be a lot of acquisitions I think it's not necessarily only on which one is more expensive to build I think if you look at a traditional exchange they have to follow all the

procedures right and the barrier of entry into crypto just to create an exchange is very low because so far most of or a lot of these exchanges they didn't follow any protocol they didn't do any sock 2 type of certification they didn't get like any license anything so the cost base was very low right so that's why you have so many exchanges these days and I think with the shift in regulation and all that what we are seeing now you're obviously going to see a kind of a consolidate consolidation at some point thank you so much dear audience put your hands together for this phenomenal panel thank you so much