Luka Müller: Sygnum Bank & MME Legal – Crypto Regulations & Institutional Investors #501

Transcript

welcome to epicenter the show which talks about the Technologies projects and people driving decentralization and the blockchain revolution I am Frederica ants and today I'm speaking with Luca Miller who is the founding partner of mme a Swiss law firm with extensive web 3 experience and the co-founder of Signum Bank a crypto forward Bank headquartered in Switzerland and Singapore Luca thank you so much for joining us again thank you for the recap I looked into our records and Brian and I last spoke with you four years ago and so this was in 2019.

and just to give like a little bit of background um about you so you co-founded the Swiss Law Firm mme which helped set up the ethereum foundation and structure the ethereum token sale um along with with several other high-profile icos like Cosmos and tezos um you also more recently um but not all that recently founded a crypto native bank called Signum with headquarters in Switzerland Singapore so obviously in this ecosystem four years uh uh like uh 24 years in real life um and lots of things have happened um how has your work at mme and Signum changed over

um over the last couple of years I would say in the beginning it was uh it was an understanding of how the Eco how this new ecosystem and is will work and uh what what legal challenges and regularly Regulatory and also tax challenges um are triggered by these new way of issuing uh decentralization uh and all these elements of of these new ecosystems so that was let's say in the beginning it was a lot of learning uh testing as well and and understanding uh and what I must say is I have never been disappointed by the technology it

worked and uh even if you have read the the original white paper the promises were kept so that was the good thing what we learned is that in the course of the development you have seen a lot of intermediaries entering into this space and uh which was actually against the original thinking of decentralization but already in the early days we saw that there is a need of a trusted digital Gateway or digital or The Trusted Gateway access gateway to the DLT I know that some of the hardcore decentralization believers

uh they would object um yes of course this does not mean that we want to centralize the technology that it means that some centralization in the Gateway functionality to the technology is needed and coming back to your question first we were involved a lot into the let's say layer one and some of the Layer Two basic infrastructure questions and the work has now shifted a bit more to the legal and Regulatory questions regarding the Gateway functionalities intermediation functionalities platform functionalities interface functionalities to this

technology I think this is a really nice segue to Signum and so maybe let's talk about because most listeners won't be customers of yours right so basically can you walk us through what services Signum currently offers and towards users typically are in the early days of the ekit crypto DLT adoption we saw that the banks were quite reluctant to get to Grant access to a Fiat Gateway and uh then we thought you know we should change that and that was the reason that was the originally the original Genesis thought which we had when we uh decided to set up Signum as a digital asset Bank and what uh we saw is what I just

referred before you know we saw we need to Grant a let's say for an adoption of this technology and the features of these this technology you need to we need to create construct program a trusted access a digital access to the technology that means you know trusted custody trusted transactions trusted exchanges price settings and that was needed and we made the bets you know we originally we made a bet and we saw okay two beds actually three bets one is that um it needs to have a license you know this is an activity which is a typical a

typical licensed activity and that actually that was the reason why we went for a bank the highest standard you can actually have as a license secondly we saw in the adoption and development two jurisdictions which were spearheading the whole development this is and was um at that time Switzerland and Singapore we saw that the US is not regulating so without the regulation it's not you don't have the necessary legal satanity so we concentrated on these two jurisdictions and so we had a license to two jurisdictions focus and then you need to have an excellent team and we have an excellent team at Signum

setting up setting up all the necessary infrastructure to provide this trusted access to the digital asset world so coming to the services which we provide we provide a Fiat Gateway we provide custody Solutions we provide tokenization Solutions exchanges brokerage so the typical functions you need that you can have a secure a very secure access to the digital to the DLT world okay so I can um have a regular account with you guys that I load with Swiss Francs or Euros or USD probably yes

um and I can natively buy buy things do you have have your own exchange or how so basically say I I say look I'm here now I want to buy I don't know binance tokens um can I buy them on on your exchange or what do I do first of all I mean you need to be a qualified investor it's a qualified because we we're not actually offer serving for retail this has a specific purpose that's the first hurdle you have to climb secondly um we have a we have some we have quite clear criteria on the tokens which we list on our offering uh and it's not actually some of the

tokens we all we list because we actually um I I must say the limitation is not always the quality the limitation is also the technology we cannot actually um provide a Secure Storage for all the tokens which which we would like to do so there is a bit a limit we start with the major ones so um yes you can transfer Fiat to your account once it's open and you can actually buy uh via our Gateway whatever token we have listed and keep it in keep it in custody in our bank we are not running an exchange we work with broker

so we but we actually get the best price for you when we buy the tokens for you transparently open as and really on a professional basis okay but this is odd this is all manual brokerage I mean manual yes to a certain extent it is not a D5 exchange which is running fully automatically no it's not but it is quite quite quite um optimized why did you make the decision to not offer to retail but only to businesses two reasons one is a regulatory reason our banking license at them which for which we applied is limited

um uh that not a license actually our organization internal under the license is limited for for um qualified investors because if we actually would have applied also for uh or enlarged our organization also for the retail this would have been a complete other organizational setup because you would need to actually cover much more demand much more transactions and for us um we decided to to limit our offering for the qualified which made it a little bit easier in the license process and on the other hand it is also easier in the technology which we had to set up um at the beginning I would say we

improved our technology our platform dramatically in the past and there were discussions uh whether or not we would open our our services also for the retail but at the moment it's out of discussion if in the future we decide otherwise we don't know at the moment we keep our we keep it as it is uh we have any a lot of clients to serve at the moment so it's it's it was a good decision that we kept it like this at a bit for us from the beginning okay um you very diplomatically kind of uh it didn't go anywhere that I can actually buy binance tokens as um as a customer of your your bank but let's say I want to buy it here which I'm sure I can

actually buy and when you actually do stuff with it for me so can can I ask you to also stake it of course okay and do you do this in-house or do you Outsource it half half we have some of the infrastructure we have in-house some of the infrastructure we have outsourced okay and do you only do vanilla staking or do you you also um kind of go dgen bank and try to generate interest say if I hold stables in my account can I ask you to put it on for me or something no we don't do that okay so it's just staking it's just taking we are working on Services let's say on on adding also D5 services to our for our clients but at the moment it's

not possible and we are in a constant in a constant communication with our Regulators to find ways how we can connect to D5 services to D5 functionalities in a banking environment so and you see here this is a productive interaction with The Regulators you know we we it's step by step you know the also the d5s are getting better and better we are improving our services and I hope once in the future it will be possible that we as a bank can connect directly with device at the moment it's not possible okay um you said a moment ago that you have a lot of customers at the moment which I assume is also partially um caused by the FDX demise that we saw

last year and the entailing demise of a number of C5 venues that kind of culminated in silvergates bankruptcy right so basically um a lot of web 3 native uh companies all of a sudden we're out of a banking partner so I assume that kind of brought you a lot of business right Yes actually we have a decent number of clients we have a quite a big pipeline of clients it's a prospector to be correct yes the the F takes and other um into platforms they brought us a lot of interest that's correct please keep in mind we cannot onboard us clients so some of these clients they

don't have a base yet because we simply can't do it we excluded the US space for the moment as a client base so yes many of the many we got a lot of inflow because of these events which happened in 2022 and also 2023 can you share your thoughts on kind of what happened and what went wrong with FTX and kind of uh the The Dominoes that kind of uh kept falling afterwards yeah you see that's the reason why we went for the license you know you see if you go the intermediary way you keep you hold clients assets and you have to

protect these assets the best way you can you cannot mingle these assets with your own assets you you have to separate them from your balance sheet risks and this is what we did you know and from the beginning as from the Inception and we had to because it was it would have constitutes too much as capital costs if we had it in our balance sheet so so we had a segregated secure protected way under our banking license and that was exactly the right thing to do and it is also in in the DNA of decentralization so it's it's not um if you if you if you run a Gateway for for um the users the clients they want to be sure that their assets are kept in Secure segregated in accounts in

addresses which on which there is a clear control and not mingled up with the balance sheet risks and I think this is what triggered also the activities at the moment in the US you know they have seen at the front door you know they are exchange is very successfully operating exchanges you know and I wouldn't say that there were criminals or stealing but they just did not have a proper setup I know it's bad for him to kind of call competitors or former competitors out on their behavior but you would actually stand by um the fact that the FTX crew were not criminals I mean he was talking to a lawyer you

know for me a criminal is a criminal once he or she is convicted to be external you know actually that's and this is a really basic principle people tend to forget that you know it's and it's I have seen so many and that was a former public prosecutor so I know it's so many discussions about you know this guy or she is a criminal and you know this is just not knowing all the details of the fact because if you're a criminal you need to have it proven and it the facts are must be okay yeah I mean I I'm I'm that's why I said you know I'm very reluctant to actually qualify somebody criminal yeah what I can say from let's say from the outside is that the organization the risk management their technical setup was not the proper way to do it oh yeah absolutely this is what

I could say from the outside about it from the outside what we can also say is that the FDX crew SPF most of all um actually permanently card for more regulation um and regulation at all um how do you kind of make these puzzle pieces fit together in your mind I don't know I mean I've I I I I don't know if he if he really called for regulation but I I think if he had he was right uh at the moment what we have is regulation by enforcement and um I would wish that the U.S would take the lead in regulation and not in enforcement you know and that would be

tremendously helpful for the whole ecosystem I think it's fair to say that kind of in the broader public um the perception of crypto kind of took a beating in the FDX Quake um if you go to crypto Twitter um this perception is much more nuanced right so basically um they're basically C5 gets most of the Flack and um uh people are quick to point out that actually none of the major D5 protocols went down because you don't have to trust right so basically if you have intermediaries who kind of who uh cassidying your funds or in charge of your funds you you have to trust them right while kind of being

active in D5 you kind of you primarily have to trust yourself and your own processes as well as kind of um the fact that the D5 Protocols are properly audited you have these narratives in any way kind of um affected Signum as well so I know I understand that you are a major beneficiary from kind of uh I mean kind of being one of the last trusted uh one of uh one of the last trusted intermediaries standing obviously this is kind of like a major um bonus but um have have you also gotten flag from the other side exactly yes of course of course and I think the technology decentralization Community is absolutely right and and

that's what I always when I've been asked you know say you know it's the amazing thing is that the technology so far has not disappointed me at all I mean the technology is working properly you trust the art you can trust in certain codes you can and also the D files are working properly so what you've seen in the past is a failure of the human interface you know whether they are at programming or whether these interface is involved in custody and brokerage and whatsoever intermediation and what our goal is and what we our vision is at Signum is that we want to replicate this technology with our

interface that we want to be as trustful as the protocols running you know and this is this is our goal which we want to achieve because um and and also in the broader public if the broader public is talking about crypto very often they don't refer to the technology very often that they refer to the people trading and dealing and custody and stealing crypto you know so yes this this again wave of negative perception I have actually suffered under many waves of negative perception in since I'm working in the crypto space and it always makes me quite angry because it is so often that let's say these the advantages and the the radical

futures of these this technology gets forgotten the very first Domino that kind of got the entire dominoes kind of tumbling um was of course a teraduna right so I mean that was perfectly defy in the sense that basically everything was out in the open and basically it was basically everything worked exactly as specified by the protocol um but this still came tumbling down right so basically even if kind of I mean it wasn't it wasn't that the protocol was under specified or whatever basically other smart contracts to act as anticipated and it was kind of just

um the economic behavior that was differing from kind of what the founders had envisaged do you think kind of customers need to need protection from these kinds of risks as well every program has its limits you know and if I have so many features there are so many kinds of different d5s and they were they were very ambitious to actually program a a algorithmic stable coin they actually and I don't know if it works or not but it was really difficult to do that and and um we will see in the future failures of programs inevitable

this happens you know the challenge is with these um pro programs being deployed running you know self on a self-execution basis Unstoppable you know is that once out out so it's very difficult so even if you would say we need to protect the investors it's quite difficult because you know an investor if if he she wants she can access even without an interface and so yes that's one of these are the challenges and I think the community needs to actually in a way self-regulate that they can actually increase the the standards of programs the standard of functionalities and also expectations

how they function uh in on on a very under very high load and I think the protection must come from the intermediaries so if they list such a token they need to be absolutely clear in the uh in the risk assessment and in the risk declaration for their users and clients so I think and this is what has to be done you know so if if if a platform is listing uh this uh let's say a very revolutionary algorithmic defy they need to be absolutely aware of the risks and I think at the beginning you know in the early stage of crypto everybody knew

about all these risks and nevertheless they invested because it was it they took the risk and I think you know it's it's also something which is very easy to say you know after collapse a lot of people say I I knew it you know but before you know it they people hype all these projects and and uh we we had them on the show like um two or three weeks after they launched and they very clearly caught them out and said look if if there's no way basically if the bottom flies out there's nothing to break the fall and they were they said oh we respectively disagree so there were lots of people who did actually call them out on because the economics were blatantly unsound but basically people were still

happy to kind of roll with it because you know number go up so uh yeah yeah you see that's but that's and and tell them they knew the risk you know and that's some of the risks and yeah but this is one thing that's why I said you know it's not only um a standard on the on the Gateway it's also a standard and also a quality discussions on the level two level one that's of course um this has to be happen as well maybe let's um kind of shift gear a little bit and look into the future right so basically there's another Majors with crypto bank called sepa and they recently expanded to Hong Kong um how do you see the Apec trajectory in the crypto business because I mean you

also you're based in Switzerland and Singapore so um I assume that was a very deliberate decision um how do you see that Region's importance I would say this Apec region has a very pragmatic access to new technology that was one of the reasons you know the very pragmatic and I think this is the Asian style not too complicated not not to make it too complicated to see the the economic Advantage behind it and then try to find Sound Solutions and I think uh that was one of the reasons why we have chosen to go to or focus on this jurisdictional region it came to me a

bit as a surprise that I saw Hong Kong is back in the game they were very active you know many years ago then we had the Chinese ban now it seems to be a more an ambiguous way what they are dealing this Chinese I I can't read them actually what they what they have in mind but it seems to me on a first interpretation that they are opening again you know they are I mean they are clever I mean they are really clever and it's maybe this is another this is another advantage of this region people there they are really clever I think they have bright brains uh as I said pragmatic and they have this also investment Gene which is more open than for example we

Swiss we are still very conservative traditional and I wouldn't say not too Dynamic but this region is very dynamic yeah Switzerland still gets um a lot of uh game in the crypto sphere right so basically in terms of you know legal popular destinations for um you know you know choosing your jurisdiction for your project um why would you say that is I think the Swiss are very good we are very good in execution we have very good execution and that means you know once we haven't I mean we did not invent uh DLT it came from

other areas but we have seen the advantages and what we as I said because we are very good at execution we studied profoundly and we see what we can do where are the risks and we deal with it in a very and wheat and also we dealt with it you know at the very early stage of the development and I think this was the advantage which we just did not ignore it or pushed it away or let it let's grow in a in a jungle we addressed the topics very very early we addressed to risks very very early and this actually created a very fruitful basis or working relationship between the projects their advisors The Regulators

to authorities and and created trust as well and I think this ground is fruitful ground with the history which we have already now because with every year and every day you know you increase um your experience in this field the experience and the know-how and not only from the advisor or let's say project type but also from the from the adity the know-how and the experience of the regulators and and administration you have to deal with give an example having 2014 when we had to deal with the um with tax authorities you know it was absolutely brand new for them now if you

talk with the tax authorities for example in Zug you know they know how it works they know they what what the mechanics behind it and it's easy to talk with them because you actually uh talk with them on the same level so I would say pragmatic very good in execution which means we dig into the details look at it and execute it with the long-standing and increasing education experience which we had in Switzerland made us a really good jurisdiction for this new technology okay yeah I mean as a Founder I can tell you that this is not the case everywhere right so basically it's actually the case almost nowhere um that you can openly discuss things with the regulators and um tax

authorities and so on and they will actually sit down at a table with you and kind of try to come up with an answer so I'm quite I mean you can hear that I'm from from the neighbor in the north right so basically here they tell you nothing like literally nothing it's crazy maybe maybe I jump in here you know this is a fundamental difference of the of uh society and political culture and it starts with our tax declaration there is the base of trust so the government trusts every citizen that the citizen is declaring her his tax correctly so this is this Baseline of trust

that the authorities don't think that you want to cheat them and I think this is the same approach if you address or if you interact with the authorities when we interact with the authorities we don't want to cheat them and the authorities don't see us as somebody who wants to cheat them so I think this Baseline of trust is one of the recipes why we can openly discuss because it is this base layer of trust which actually which helps both sides do you think there's a um different understanding of kind of who this data is and whom it serves in Switzerland and

compared to Germany what is the reason behind why we trust our authorities and why the authorities trust us because I think we have a common goal we think the government is ours we think the state is ours we have to protect so it's not actually we want to go for a short-term Advantage it is we feel responsible and I think um every Swiss thinks I own a part of Switzerland and I'm responsible so for my soil and and for my country and I think this is another a bit more different attitude it's also the way how we can vote and how we can um interact you know we have this direct

democratical systems which is very unique maybe this is also a part of our government citizen relationship DNA which we have which is different in Germany yeah yeah it's very much much more top down so um yeah I agree um so um Switzerland used to be a famed privacy preserving jurisdiction and this has kind of changed um over the last couple of years so where do you think Switzerland stands um in the AML kyc uh Spectrum in terms of uh you know right right of privacy yeah I mean there are two really conflicting interests you have you're

mentioning here you know on one hand you know you have this com and it's very difficult to handle these different um let's say interests on one hand you have the interest to protect your infrastructure from criminals from Criminal money and that you have the highest standard in AML kyc anti-terrorism financing and all these regulations which are correct and we have to have there no compromise and the highest standard we had to open um we had to be much more transparent due to these um enforcement of all that or or in enactment of all these uh tax treaties and tax information treaties which we had since many years already

which I think is a good thing it's a good thing it's good it actually it creates the same um play field for everybody and uh that's a good development I think hiding untaxed money is not a sustainable business uh concept and that's correct and that's good and I think it was a huge Advantage for Switzerland on the other hand you know privacy is getting more and more an issue it's too dangerous if you know if it's everything is too transparent and I even for myself you know I I think you know what if I must say since three weeks you know I'm using Instagram because we are launching a new campaign and they said now Luca you have to actually use Instagram as well and if I search something you know I'm

amazed what I get as as ads you know so somebody's reading me you know of course I know I knew that but if you see it so visibly you know you get a little bit the thread of of your privacy and I think protection of privacy also in the context of DLT actually because we have transactions and transparency you know it's this will be a major major um a challenge in the future and I think we have there is it is a human a basic human need and and and and wish for privacy and we should protect that uh I agree 100 I think um it may be more of a cultural War than the technological

right because in in terms of Technology we can build a lot of privacy preserving technology but kind of in the last say 10 20 years in the public perception this idea that you inherently have a human right to privacy it's kind of been eroded away right so basically people don't really view it the same way anymore as they did say um in the 80s or so and I mean even even things that are done in the realm of AML kyc and so on it's somewhat new right so basically having bank accounts that uh pretty transparent and kind of variable electronically and so on this didn't

used to be the case right so basically kind of things were kind of like in paper forms and siled Away in different banks and so on and um do you think this is something that kind of we need to rise up against politically um because I think it's not a technological problem I think I mean I understand why people why why both um companies kind of uh mine this data and I understand why um the state once the State of Mind especially uh relating to financials and money laundering and terrorism financing and so on but do you think we kind of need to reset this expectation that this

is fair game there are many initiatives you know data protection laws have been increasingly tougher in the past and I think that's a good development a very good development I think we cannot delegate our need for privacy to the government we can't do that the government has its own interests you know and and and has other interests to pursue like AML kyc uh and uh has to balance it as well but I think we as a human being beings it's up to us to say okay now stop this is now too much and we are lacking a little bit behind now I think it's we are in a period of we let it go we let it we let it happen

and and it's it's it will be tolerate we tolerate it at the moment we tolerate a lot of let's say of non-privacy treatment with us and if it gets too much or something happened maybe then then there is a need created to to actually object to this erosion as you said which I fully agree it is an erosion of our privacy about privacy you know and and then we have to stand up again and say guys I mean this is not too much we want to have our privacy reinstalled again because we regard privacy as a human right do you think by kind of going along with it for too long we will kind of forfeit

um that that's what I meant you know maybe it is a period of Tolerance you know if we had other we had our things we were discussing about climate changes with discussed about you know what whatever the war now it went a little bit out of focus and you know it's it's also our it's our fault as well because if if we decide very often if you decide okay do I want to protect my privacy or do I want to use now this new application you decide for the application forget about the privacy and you're on you're on Instagram now um but not active I'm a passive he's like I I can't even download things but that's actually I could like that it's it's it I I've just tried out uh because we we run a campaign on

Instagram and I I want to see how it works maybe let's kind of go from like a depressing topic to depressing topic so um the us so you you kind of referred earlier to the years as kind of a culture of um regulation by enforcement um and it does actually seem like the US is on an anti-crypto Crusade what what do you make of this I don't know if it's the culture of the US uh to actually uh rather enforce and regulate I don't know in crypto it is the case that now they the way is that the U.S authorities are

enforcing rather than regulating I there are many speculations why it is like this there is a uh a fight between the institutions which of the institutions shall be responsible for what uh the the SEC has to enforce a very old concept I mean it's not their fault that and again you know this is you see how a regulation kicks in you know they have to apply what is available and If you have an old concept you have an old concept and and and if it had been clear that the old concept would cover the some of the tokens they had probably started with enforcement much earlier but it shows clearly that it is a dilemma you know they it's not clear the situation

again another reason why it should be clarified by either policy paper or a regulation I think the authorities in the U.S started with these Enforcement Act activities so late because it takes also time to prepare and and and resources to go to to do all these enforcement activities to proceed with all this enforcement activities and I think they had been triggered to really start with I wouldn't say Crusade but with all these activities because they had a really a failure like FDX at their front door but I hope this will go this will pass you know it and I'm very confident

that it will pass it's just for me it is a little bit frustrating to see that the questions are the same questions which they which we deal now which already were on the table 10 years ago so it's that's that's a little bit frustrating you know this why waiting so long and creating this uncertainty but why do you think they're going after companies that kind of in my view are really Goody Two-Shoes and kind of ask about regulation how to behave like multiple times like for instance coinbase right so in my view coinbase is not a bad actor no not at all yeah yeah I don't know simply I don't know I mean there must be some policy decision a

regulator would not do that without the clear let's say internal policy what they want to achieve with it I don't I I can't read them definitely I can tell you what kind of the crypto Twitter take on this is and the crypto Twitter take is that kind of the US are a nation kind of in uh decline um and basically the parties themselves are failing and kind of the democratic party kind of um needed a a topic that um a decent number of people could rally behind um kind of to make them look strong um and they settled on crypto because uh our politicians are like 75 plus and uh

they have never actually don't really see the benefit in web 3 and tokenization and and so on you know because they are without wanting to be ageless because they're old and it's just a different it's just different generation and this kind of seemed like a topic that they could bash because it's you know only a minority of people who are who actually feel strongly about this and and they can do this to make themselves look strong and active in yeah I mean obviously this is very simplistic but do you think there's something to it my first reaction when I saw all these um claims being filed in court my first reaction was what amount of

money being wasted at the moment I mean just can you imagine what these claims costs I would say they are to billions you know for what exactly the potential that one part is losing are the other one not that we get some clarity I would say and that's that was actually is is painful you know this really lost and and and and waste of resources if these resources all these brilliant lawyers working on both sides you know on the uh on the on the claimant at the defendant side would actually

put their heads together work for a very um very concisive good regulation that would be a right investment of funds you know and that would be actually putting the us back to the leader of Regulation rather than the leader of enforcement and yes to a certain extent if you start actually you have already lost if you go to the enforcement path so I feel I feel a bit sorry for the situation as it is in the U.S I really feel sorry for the whole industry and the global industry let's kind of switch unpleasant topics

again so obviously I mean this kind of brings us to the EU right so basically the EU kind of came up with this Mika regulation so markets in crypto assets how how do you see that much better much better I think I think this is um I mean you can always discuss about you know the content of a regulation whether or not it's two actually it's two it's too um restrictive or not clear enough but at least we have a bone to to Bone a piece of meat we can work on you know at least you know and I embrace it I I think it's good what they did it's good I mean I'm not happy

with everything which is in there definitely not but uh and I'm I was also not happy with all the related interpretation of our Finn mine 2018 when they made the token classification I was not entirely happy with all the classification but at least you had an orientation and in this new area in this new area which we are you know orientation is is really important is really important I agree that you set some Stones which are very difficult to carry away later on once we see there there were they were placed at the wrong place I I agree with you but at least they're there at us they serve and as an orientation so overall I embrace and I think it's a positive development which

are in in the European Union okay that's that's good to hear Luca maybe let's look let's kind of move away from regulation for a second so um you've been in uh web3 for a long time do you use any crypto products you know personally of course I'm a big fan of these Theory I'm a big ethereum Staker ah super nice so you run your own notes or you delegate I'm I'm delegating actually um I don't have the time to run my own notes super nice and do you um do you also partake in D5 not actively and here I must confess you know I'm not a Trader investor in in a way that I'm not this trading guy I I

I'm in the D5 space and I'm into advising big diva D5 projects because I'm genuinely interested in in how it works what are the impacts but I personally I'm not invested in T5 okay and um I think you kind of you bring us to like the Crux of the matter all right so basically currently um you say you're not a Trader so basically a lot of it is still very speculative so there's very little actual usage of the underlying projects right so how do you see the broader adoption I mean you've been in crypto for what 10 years right so what's what's missing to kind of make people not just

see this as a speculative asset but to actually use the products that crypto can in principle Supply them with I always was although a prophet I actually profited from this hype I was always very suspicious with this all this hype and trading and and activity around crypto because I saw it come that this would actually be could have the potential of a backfire I would say the layer ones they they need to be we still uh more efficient you know and secure we see already with ethereum yes there is a community using it and and it will be a

protocol layer which will be used uh definitely and and here it is a new way to invest and to participate in an infrastructure um and this is what ethereum is is actually a yes creating a new world of interacting with your infrastructure you use you know you can and I think that's an interesting mistaking and and using this uh ethereum tokens and on on the application Level you know what I thought that I think this was my my one of my um pets which I was completely wrong I thought

that the DLT technology could be very radical in the traditional Finance sector and I was first you know I was involved in a shared in a token project tokenizing shares because it was for me obvious that if you have shares you know and you have a smart contract running your um your shareholder register you could pay out dividends directly you can exercise your voting rights via your share token that would be a radical and would be really radical and it would be very very um efficient to to interact now you as a shareholder with your own Camp company and we invested very early in in in in

in tokenizing of shares but you know is as long as the whole ecosystem is not adopting to this new technology and if you're alone there you know it's very difficult so I think in the traditional in in the traditional finance using the new this new technology stack it's uh it's it's still we have to wait for these kind of solutions they're coming they're coming they're slowly getting into it uh I think but it needs more time for the adoption than we think than we thought that the originally um but it will come I'm sure it will come now for some kind of easy applications the um the the nfts showed us a way how

it could do on the collectible art side you know that this functionality that you can own something your own IP and to transfer it that actually it's interesting I have not seen many projects using it now in the traditional space what you see now it's in the some of the big brands are using it uh as as first use cases this will come as well this has also known let's say an own functionality in a known sector which will come and it's about to come and the rest is is still very early you know and and as you know Frederica it's very difficult sometimes to interact with some of these defies because you know the interface is really for height is for techies not for the for the product

so I think the the adoption is also bad you know how the usability and the interaction with it yeah I think that's that's a fair assessment kind of using a lot of the things and I think maybe that is also the way that it should be for now because a lot of them are very experimental and I I wouldn't want to sucker anyone kind of into using them without kind of knowing what exactly let's kind of look at um the uh other innovators in this space uh the states what are your thoughts on cbdc yeah cptc is a tech from a technical point of view it's not a challenge I mean you could do that oh no it's not definitely not I mean you could do that

it's it's political I mean it's it's it's radical it's it's actually thinking through it's it's Reinventing our traditional banking system you know if you as a user could sit directly on the balance sheet of the National Bank that's a game changer so I think uh I think uh and also I'm privacy as well I mean it's it's if if if you have the ambition to replace cash with cbdc you have to solve the Privacy issue you know and that's I mean cash is cash I do I'm you know I'm sitting also on the board of oral firstly which is the money

printer in Switzerland um partly owned by the Swiss National Bank you know and we were discussing very often we're discussing about you know the challenges of the banknotes being out of the market because everybody's using technology but if you see worldwide more banknotes are being printed you know it's just that there is again what we refer to what we discussed later on you know there is a need or a let's say a basic human need for privacy and that's why cash I mean a part also some of the areas in the world that don't have a banking system so they anyhow would need to have um cash but there is a need and there is also wish for cash you know and so if you actually enter into the cptc retail

space you you need to solve this you know if you want to have something functionally similar to a to Cache you need to solve the Privacy issue but anyhow what I said before it's a political question no it's it's how you set the new games with the banks and the International Banks it has not been sold yet yeah absolutely you know I was recently at a meeting where um the delegate from the European Central Bank um German guy uh the guy who's in in charge of the technology side um he said um that if they actually um do a retail cptc they will kind of Institute a limit um for uh users or you know citizens

kind of hoard money with the central bank because they are afraid of destabilizing the uh the regular banking sector because people would say look there's I'm not getting interest anyways I might as well just hold my savings with the National Bank at least there I don't actually have any risks do you see that as a I mean with Switzerland you know being a pretty banking heavy country do you think there's a battle coming uh between kind of like the commercial Bank sector and the citizens or the state I mean you referred exactly the topic

which I meant this political part you know and I think in the Switzerland we would have J we would need to change the law you know in order to be able to is to um issue a cbdc because this would need probably a new Legal Foundation to what extent the National Bank can now offering banking services as well this is my my guess so at the moment I think there is it is not on the political agenda in Switzerland to issue a retail cptc what are the current trends that kind of excite you they make that that make you kind of like happy to be in this space that kind of get you up in the morning

say I'm super happy I'm working in the space because we can make that and that happen first of all I mean what they did in ethereum with all these new releases this makes me really confident that we have a very good layer ones you know serving the community and I see a lot of very good layer 2 projects as well in a very innovative good initiatives uh very active a very very steady Community still very active you know it's it and a lot of positive energy is flowing into it although you have this constant Hammer of negative news and and perception you know and it also happens to me now I have so many good projects but if I open LinkedIn if I opened every

day I get a negative news you know I even think you know we should stop with all this negative news because we get frustrated over time you know if we read it every day but nevertheless you know I see I see a lot of positive energy yes it may be the younger generation has not the same patience as as the older ones maybe we have to but my message is you know my message is don't give up you know don't give up really it's it's all with all these negative news believe it and it's a good thing you know the technology this technology has a lot of very very good efficient free features which helps us have helps every citizen so we should actually work for

this and that this is which uh makes me which motivates me every morning to get up and getting involved in all these topics but as I said you know I must say I must very often sometimes I get if I see another wave of negative news rolling over us you know it's getting it gets online it can get on your nerves definitely if you could wish for one thing well you know the rest of the year what would you like to happen this year for crypto if there would be a note from the U.S government and say guys now next year we actually issue a regulation a crypto regulation that will be really helpful and that they would be enlightening my

day perfect yeah I think it's not often we kind of wish for regulation but obviously kind of having regulatory Clarity regular Clarity yes so so important yeah so yeah absolutely fantastic so your word and Gary's here let's see whether we can make this happen thank you for coming on again thank you Frederica it was very nice pleasant to talk to you