From Regulated Stablecoins to DeFi : Bridging Institutional Finance and Ethereum

Transcript

Good morning to everyone. I'm Jamar Tanger. I'm the uh chief investment officer of Sust, which is the digital asset subsidiary of S General Group and I'm also responsible at Sustain General level for digital asset development. I'm happy to be with you today. Thank you to the ETHCC for welcoming me. Um I have a a short uh a short period of time here to uh just share some thoughts with you on uh what we are doing at Sust in the digital asset space and more precisely on what is our road map at Sust forge

for the coming months and what we are trying to achieve in this fast evolving ecosystem which is crypto assets but also on what we are uh developing with our more traditional client and in the tribe space and what we intend to do in that space uh with them leveraging again what blockchain technology and crypto assets could uh could bring us. So basically that's the idea for today. Uh we'll spare some time at the end for a few questions. I think we'll have a few minutes for that. So please feel free to to ask question at the end if you if we have some. Um so as of today sust for as I said the digital asset arm of the

sustal group. Um and among the different activities we are developing in the crypto space. Uh we have notably decided almost two years ago uh to engage in some developments to issue stable coins. Uh currently we are issuing two stable coins um under Mika uh a euro and a USD stable coin. The euro convertible and the USD convertible and making these stable coins reference notably for the European market is a top priority for us. It's a strategic commitment of the group and we feel uh there is a place in the market for such a well- reggulated

robust offer from a banking group from a tier one bank uh to fulfill the needs we see not only coming from the crypto ecosystem as you know the market is highly concentrated today. uh we feel there is a need talking to our clients in the crypto space for robust alternatives and we think it's legitimate for a banking group like so general which has a strong DNA rooted in innovation but also capital market uh I think we we believe we are legitimate in that space and our intention is to accelerate in the space and to establish these two stable coins and notably the

euro stable coin as a reference for the crypto ecosystem in Europe and possibly beyond Europe. But we think it's a it's a strategic priority for clients, for us, but it's also a very strong need for the EU to have a European reference issuer which is deeply rooted here locally in the market and not leave this market to uh large players which are coming outside of the Euroeconomical area. So again the strategic priority for us is to build the momentum and to establish this stable coin in the market uh to secure uh a strategic positioning in the space.

So the the two stable coin the euro and USD convertible we we have created them we have developed them basically to fulfill uh three type of needs to accommodate three use cases we see as very important for the different clients we are talking to again either in the crypto ecosystem or uh trafi clients. So obviously the first use case we are targeting is within the crypto ecosystem. As you know stable coins are uh key to ensure that clients can enramp and offramp from the crypto ecosystem but also to secure trades and serve as a pivotal asset in any trading pairs which

is ced on trading exchanges. So there is high volumes which are being channeled here and being part of a banking group uh we can also accommodate for very smooth on and off front with our clients. I don't know if it's of public knowledge but as of today on our two stable coins and notably the euran uh we offer instantaneous 24 conversion free of charge in between euro and our stable coin the eurov uh with no integration no IT developments even no API to be called uh for any client who subscribes with us on the primary market meaning being a direct market participant with us being

onboarded by us. Um any wire transfer, any cash which is sent on a pre-agreed cash accounts which do not need by the way to be a sustainable cash account, we instantly mint on a wallet which has been predesigned the corresponding amount of euro CV and same the other way around. As soon as there is a transfer, an incoming transfer of euro CV on a predesinated wallet, we instantly burn this stable coin and deliver 24/7 instantaneously free of charge the same amount in euro on a predetermined cash account. And this is a feature we see as highly valuable for the crypto ecosystem. And as we know there are

long-standing difficulties for the crypto ecosystem to deal with traditional cash with them or for the clients and we think it's a complete offer. So that's the first use case we see as ASKI. The second one um is where is with our corporate clients andmemes who are willing increasingly to rely on stable coin for crossber payments. Uh we know that cash transfers using stable coins are much more efficient than the current offers of banks. You know when you do correspondent banking operations you suffer delays and cost uh developing the so-called stable coins sandwich model where we leverage uh a banking

entity in Europe and a banking entity elsewhere in the world but triggering crossber payments in between with stable coin is of high value for corporate and theme clients and we see more and more traction to that regard. The third use case where we see a nice momentum being built is with our capital market activities and the financial institutions we are dealing with for traditional capital market activities. Here there are strong developments which are being made to rely on stable coin to improve collateral management and margin calls. As you know uh collateral is a a key topic among financial institutions.

We constantly move collateral from one institution to another. We constantly uh call margins to secure trades. We do operate in between us. There is high efficiency gains to be secured by relying on a on a stable coin such as the Euro convertible which we see today as probably the safest stable coin in the market. well secured, well regulated with a collateral which is very transparent. We do publish every day on our website the collateral and the outstanding amount of the stable coin. It's obviously certified. All the smart contracts are audited. It's all public. It's open source. So we have

tried to to be at the highest standards of the crypto industry and even even above. uh as I said those stable coins are issued under the Mika framework but as a matter of fact we are operating them at a banking grade level which is even higher than the key requirements of Mika and again beyond the crypto ecosystem for trafi clients we think it's a must have to foster adoption of these stable coins for use cases which are beyond the traditional use cases we see in crypto markets So what is our road map for the months to come? Uh with this again main idea to foster the adoption of the stable coins.

I would say it's twofold. One in the crypto ecosystem and one part in the trafi uh environment within the crypto ecosystem. Uh first we are continuing to deploy our stable coin on different blockchains. Today we are operating these two stable coins on Ethereum, Solena, Stellar and XRPL from from Ledger. We are going to issue them on at least one additional blockchain before the end of the year to accommodate for different use cases and investor preference in this field. So that's one one area of development. We are also expanding the distribution

network of the convertible with already a few crypto exchanges and brokers who are referencing the two stable coins just to name a few last year uh in the last quarter. Uh we have signed referencing agreement with bullish bit ponder. Uh we also last months of the year closed the partnership with bit vavu bit to me and there are more to come. We have a pipeline of approximately one exchange per month which will be uh listing our stable coins for the rest of the year. So to dramatically increase the availability of this stable coin on the market. Um last but not least which are very

exciting developments for us. Uh we will also push this stable coin within the defy ecosystem. As some of you may have noticed, we have started to partners with player in the field to make this table available on unis swap, 1 in and entities like this. But we're also opening vaults on moro to uh grow a lending and borrowing market on these stable coins and there are more defy ecosystems and protocols uh with whom we're also in talk to make this stable coin available through them.

Last but not least, in the tradefy space, which is uh the long-term strategic goal we are pursuing, we believe stable coins have a superior value proposal to uh traditional capital market activities. And just to name two examples of what we are doing here. Uh we are currently referencing our stable coins with Dolber and Clearstream. As you may know, these are very key financial market infrastructures in Europe who are organizing flows on traditional securities and other type of uh of assets for capital market. Toward the end of the year, beginning of next year, clients will have the ability to settle this security transactions using

our stable coin again to seek for efficiency and maximum uh speed and reducing the cost of their transactions. What we are also doing is working for instance with the swift network. Swift is a very key infrastructure to organize money transfer globally. Uh there are developments being made with swift to make sure that we'll have um over the medium term meaning toward next year the availability for any client who is relying on swift to trigger transactions and money flow in stable coins and with euro and USDCV and we believe this should massively accelerate within the

trai space the adoption of our stable coin. So that's just a few examples of what we are doing. It's a lot of work beneath the scene. It's a hard long-standing work. Results are starting to show off. We see that the volumes are increasing. The trading volumes are increasing. We believe there will be a massive acceleration of this trend toward the end of the year, beginning next year with a true adoption within the trade space of this first asset which is coming from the crypto industry which is a stable coin. So, I stop here just to to keep my time under control.

Happy to take a few questions if you have some. Thank you. Um wondering how you're thinking about yield. I'm sure you're following the discussion on the Clarity Act in the US where there's a big discussion on allowing yield or not because it's a bit of a conflict of interest with banks. Um, on the other hand, obviously would make it much more attractive for retail users in the crypto space if there was a built-in yield. So, wondering what your thoughts on this are.

>> Yeah, sure. It's a it's a key topic and yes, following these discussions in in the US, but it's also a topic here in Europe. Um as you know may know there are early discussions at the EU commissions potentially to revisit Mika and this is one of the key key point which is being discussed with the commission. Um it's a clear need from the investors. Um so as you may know currently under Mika it's prohibited for a stable coin issuer to pay yield to the holders of the stable coin based on the interest which are generated at the reserved assets. So I think the solution for that because I mean it's not a question to to know or not if end user should be entitled to receive interest

on their positioning. I mean it's it's very obvious and it's a very legitimate need from any asset owner to get return you know for for the time decay uh on that. I think the solution won't come from uh just allowing stable coin issuers to share um the interest. I think uh just as for traditional cash when you deposit your cash in a bank account, it's not this cash which generates the returns but it's the bank which decides to give you every day an additional interest. I think notably uh leveraging the DeFi ecosystem and to be honest that's also why uh we are very keen to make developments and to um to

to make our stable coins available in the lending and borrowing uh protocols we see in defies. I think the solution will come from this end to develop this market and make sure we have yield solutions which are available to investors. Thank you. Do we have other questions? >> Okay, no other questions then.

>> Thank you. Enjoy your lunch.