Swiss Blockchain Community Panel / Luzius Meisser, Alexander Brunner, Sheraz Ahmed

Transcript

foreign [Music] thank you everybody for joining on Sunday afternoon for the last day of the ethereum conference just uh short words to myself as well I'm a co-founder and vice president of the Swiss nft Association but also representing being crypto or crypto Media Company for which this conference has partnered up to do organic Outreach uh yes so all of you as we heard you're heavily involved in the crypto ecosystem with various projects your advisors or your founded companies yourself could each of you give a quick intro of what you want

to focus on and what your uh what you have done in the past can be starting yes so uh you've heard me before I make it short so I'm involved with Bitcoin Swiss uh Bitcoin Association Switzerland with uh with oxyart which is a company that tokenizes shares of stress companies and with the Swiss blockchain Federation and as a PhD at University of Zurich great thanks a lot Alex what about you uh it's great to say the next it is really literally one of the ogs it's been around since 2013. if you check YouTube videos of Bitcoin Association of the good old days uh I wasn't there until a bit later but it's worth watching so he is seeing everything and I think my myself I'm a bit in the same vein because I've I've

been working in finance but I've been a member of parliament for 70 years here in Switzerland I've been in the Army for 16 years a very Swiss thing and nowadays I'm working with different startups I'm also president of home of blockchain or swiss which is uh promoting the Swiss ecosystem abroad and I guess by by listing all of that it shows that I'm quite quite old uh not you're much younger than I am and I think my my big thing is and my big passion is is policy and that sounds not very sexy maybe to some of you but hopefully I can elaborate why I do think that policy and Technologies are not only Bitcoin or crypto but other Technologies AI is really key and it will shape the future of how we live if we don't pay attention it might not be such a good good feature

so that's why I'm here great then definitely we can go into the policy as well what about you um yeah fantastic maybe complementing uh Alexandra there bringing a little bit of the use to the panel potentially uh um having been involved in the crypto Valley ecosystem now for the past six seven years I held various different roles but two that I hold at the moment so being the co-executive director of the crypto body Association we also a lot of events webinars networking activities so any education that you're looking for crypto rally Association is there always to help and I'm also the managing partner Stone Partners one of the leading 360 degree service providers in Europe where we help essentially companies to scale and enter into the web 3 space so yeah I'm looking forward to speaking more about the blockchain ecosystem in Switzerland awesome yeah

let's kick it off with the first question so what are Switzerland USPS for the blockchain ecosystem what differentiates it to the global market we have some good advantages and some disadvantages but one of the main advantages where we should make much more marketing about is we have really solid laws for the storage of crypto assets so if you store crypto assets with Bitcoin Swiss for example and we do it right and we know how to do it then you have direct legal a direct legal claim onto your Bitcoins and other crypto assets so regardless of what happens with us the Bitcoins are used so the law basically says

not your keys still your Bitcoins and this is definitely not the countries for example if you store Bitcoins with coinbase and coinbase goes bankrupt and the irss coinbase still owes us taxes then maybe IRS will get your Bitcoins to to get the tax liability who knows it's unclear but in Switzerland we have cleared that I think this is a very important advantage that we have and that we don't use leverage enough okay so we have a clear policy in the country and then Alex you were saying that you're promoting Switzerland also abroad what would you say actually it's talking about my own book we're going to publish and you know loot since we're going to publish the first digital asset custody report and Bitcoin spaces in it as well and I think custody is at the

origination of everything else that will follow if you cannot Safe Keep Your crypto everything else doesn't make sense and we just you know we found out the hard way with the FDX and coinbase as well and Switzerland really has an advantage and it's still a calm complicated issues and again coming back also you know Lucius has been instrumental in dwarfed in drafting this DLT law and the Cost Cuts to be so you know a lot about that and it's a very good example how policy creates a new ecosystem so sometimes in this in this community you know people say regulation is bad we don't want that but here it's a clear example if you have good policy and a good framework certainty of law then you can create adoption so I do think Switzerland has been very good in adjusting the

framework but also a regulator that has been you know listening to the community I mean you remember I remember well when the Ico guidelines came out that was in early 2018 and the Swiss regulator back then he went on a road show he went to Chino he went to Geneva to tsuk and explained that to the community I haven't heard of any other regulator in the world who has ever left their off offices to meet you know in the US that the regulator will send you a letter saying you provide by Friday and if you're not you go go to jail so the Swiss ecosystem has always been at arm's length and I think it's a cultural aspect but it's also the way Switzerland from a very Grassroots Federal level works and it has been a good fit with blockchain technology so far

yeah fantastic I think to add on to that I think it is really this level of stability that you get in Switzerland um the ability for um your you as an entrepreneur to be able to grow your business here without maybe the laws changing every other day without there being let's say one body that can just one day to another just change everything within the environment and if you look at let's say one of the fables of jean-la Fontaine you know it's slow and steady does win the race you know if you look at the hair and the Tortoise I do believe that Switzerland has had some years of Advance on uh some other countries having like had ethereum been founded here and a lot of let's say the early days but I think that

Switzerland has always kind of taken their time to set up the various laws to build the ecosystem and it's never gone too far ahead of itself whereas you look at other countries back in the day be it let's say Malta or be it other regions that have really tried to fast forward a lot of Switzerland that took a lot of its time to build up and the fact that we've been advancing slowly but surely as I think created a lot of its accumulated success so far and the Lucius you were mentioning also maybe some negative drawbacks what what would something be in that area yes so one of the strengths of this system is a principle-based legal system so that the law is much less detailed or is supposed to be much less detailed than in other

countries and that gives more freedom for the executive and for uh judges and for for Scholars to create the right interpretation of the law and this Freedom can be used for good and for bad and what I see a little is finma tends to interpret it on the more restrictive side so and they so there's one thing that we also criticize from this blockchain Federation for example say if the Swiss bank issues a stable coin then they essentially need to identify every single single holder so that they basically enforce the white listing and I think this is very destructive because a stable coin in

order to survive needs to be freely transferable maybe you can do a blacklisting like that in half in the theater or so this this I think might be a good solution but you need to build it on the premise that the users are good and the users should be able to really use it before and not have to register in advance with a centralized entity because then you destroy the advantage of the blockchain technology again and I think here there's a lot of work to be done but another risk of course is that we we don't actually have that much freedom and political willpower to deviate from International Norms so Switzerland for and I think that this is a good strategy overall Switzerland

always as we need International Norms all the countries need to adhere to the same standards and this helps us as a small country to survive if everyone adheres to the law and common standards then we are protected from the power play of big countries to a certain degree but that means that we as a strategy always Implement all the international regulations very quickly even though if they are nonsense and we have seen some nonsense rules recently coming for example from the parcel committee which is very crypto hostile so they created Capital requirements like completely it cannot be justified with mathematical risk models they say for example a bank can have at most a crypt exposure of at most one percent

of its tier one Capital which is complete nonsense so the all the tier one capital of all U.S banks together is 2 000 billion one percent of that is 20 billion so essentially they say on all the balance sheets of all the American Banks together there can be at most 20 billion of crypto otherwise it's too risky and this is I don't know it's just it's a political attack against crypto because obviously they don't like it and now we have this difficult situation that there is adverse malevolent loss coming in or standards coming in and we have this Clash of policies on one hand we should have the rule of law we should have Freedom we

should be freedom of economic freedom to do business in whatever way you like as long as it's in compliance with all the the good uh with the with the reasonable regulation and other hand we have this principle to implement all the international standards and there's a big Clash here and I'm afraid that our government will simply say we implement the international standards even if they are completely stupid and uh maybe YouTube are you the companies that you're working with are you creating regulations or are you in contact with the government to oppose these regulations that will be set in place that will be negative for crypto does this block Federation as working groups that is in contact with the red

the regulator and the bank for the international settlement as well but I think maybe just to take one one step back because the panelists blockchain and I know I think that there's a lot that is applying to crypto and what what I have been seeing in recent uh weeks or months I think you if you talk about blockchain blockchain is a foundational technology that allows different use cases crypto was the first one Bitcoin and it has many ethereum and all that so there's a lot of built on that but what I have been seeing and wherever Switzerland at least is I think quiet at the Forefront is when it comes to tokenization of real world assets and I mean your company do that as well option out with SME shares or with digital bonds and and the Swiss National Bank is is gearing up for a

first Live cbdc Trial for for digital bonds so there's a lot and that's simply it's a different regulatory framework and you can also see that in the ubcu has this new Mika guideline which is about crypto so anything that sort of you know Bitcoin and ethereum dorsche coin all those things and in my feet and I'll make amendments for real world assets so if you're going to transact Bonds on the blockchain there's different sets of rare Regulatory and I think thirdly and maybe Cheryl has also more to say about that everything that says web web 3 uh you know nfts creative economy that's again a completely different ecosystem that doesn't have the same challenge challenges I think it really depends on what sector you you

look at and I think historically Switzerland with its Financial Center has a lot of touch touch points with the the crypto side of things and with Bitcoin and Association all that but I hope that Switzerland can sort of reach out and not only be strong in there but also when it comes to documentation of real world assets have been recently lugan or the city of Lugano created the first digital Bond so there's a lot of experiments as well and also in the web three space and maybe it's just one one negative thing about the Swiss ecosystem and it's it's a conundrum in the whole developing in death world or a software development world you don't need to be anywhere actually to develop Tech anymore another thing what we've been seeing here sort of the thriving startup ecosystem it's probably not in

Switzerland we have some interesting startups because of the living costs here I mean people are developing in Asia is very strong even us is very strong you got Eastern Europe is very strong so I think as we've seen in other sectors like developing a thriving startup ecosystem with developers and entrepreneurs I'm not sure if Switzerland is the strongest here and you know there's room for improvement definitely yeah and I think speaking towards some more of the challenges of Switzerland I mean I'm definitely a big Swiss Maxi when I go abroad but we have to be neutral sometimes and kind of evaluate some of the critical points I think the main one for me is access access on let's say the HR perspective the the people a little bit to to what Alexandra was saying and

then kind of let's say that the capital side where we all know that Switzerland is quite an expensive country as well so without the appropriate uh funding let's say be it in a a seed stage private sale Etc it is quite hard for some entities to be able to come to Switzerland to be able to incorporate or even to kind of let's say start shop the same goes I think with uh the human side of things if you have a big team it's very hard to bring a lot of your team members here be it for let's say Visa problems I mean I know that we're going to discuss a little bit about other jurisdictions as well like Dubai and the likes but I think that's definitely one difficult cruelty as well where we do say that's what somebody's open to the world but it is difficult as well to

access that for some individuals around the world as well so yeah the people side of uh of Switzerland can be a little bit difficult at times and then also let's say the fact that Switzerland is an expensive country but then when you look at Value I think it does provide the value for that expense that you're paying for but it's not always at the the access of everyone how do you see it with the global Dynamics so us is cracking down more or less on crypto and then also in Europe other countries are coming up like Germany for example there's a lot of things happening there France as well and you mentioned Eastern Europe but also in in Asian countries how do you see the Dynamics evolving now with us being more regulated or fear of us being more regulated I think

literally with Mika and also what's happening in in Germany you know car phase now doing digital bonds so the Germans have really caught up to this opportunity of creating I mean they've been they have this digital's web for peer because it's whatever to translate into English so they and they were sort of falling suit of what what Switzerland has been doing and it's a bigger market so they're driving that and then you've got other countries I was recently in Serbia and they also have a new blockchain or crypto which was very interesting because in that law I didn't read it entirely but coming coming back to what what Luther says you know Switzerland has a principle-based approach and the serbians uh decided they're going to write the content table of the white paper into the law so in

the law it says exactly what the white paper needs to look look like and I think you know when we have this discussions I mean the legal framework is key but there's different aspects there's the HR as back there's the compliances the tax aspect Switzerland sort of has a bit of a lead because we have more experience but we're sort of bumping in the same issues we have often you know we're we're a small country the Home Market isn't that big so if bigger markets come online like churn term you know the UK now trying to be more crypto friendly let's see so we we we're still in in the race and I think like everywhere else Switzerland has to sort of think about where where where are our strength where can we focus on where can we have a lead and where maybe other countries such as

more attractive you know and I think this is still in development yeah definitely and just to bounce on that point uh I think Switzerland is one close to now uh I think come close to a decade that's one of the most Innovative country in the world and I think that that really happens at the Grassroots side of things but then we do face a certain brain drain when it comes to the fundraising if you're going for a series a it's much easier to do so out of Switzerland be it in in the Americas or in other regions of the world and I do believe that maybe we can counteract that now with some of the things happening in those areas that due to let's say the regulatory Frameworks of Switzerland Europe uh as a whole we can bring back some of let's say that brain

that kind of went to maybe the Silicon Valley or other areas of the world and bring it back uh to uh to this region so I definitely believe that it is your it's time time to shine uh now yeah for example um the post Finance is now offering to their customers that they can buy Bitcoin or ethereum with the partnership with Signum do you see this as a positive development or will this draw more and more people to use blockchain technology yeah definitely this is very positive so it gives makes crypto more accessible of course it means that companies like Bitcoin service need to think about where can they still add value if everyone already has crypto with their own bags but there's plenty of opportunities especially in D5 where we can be pioneers and and offer access

and do you think this will drive the Swiss ecosystem forward if we look at at it from a competitive state for example inside of Europe yes it certainly will drive adoption it could also help for crypto being used as a payment currency which is I think this was the original idea behind Bitcoin peer-to-peer Cash System yeah but it's it's not used that much for payments it's mostly used for defy which is also fine but it's not there's still a lot of untapped potential for payments did you want to add anything on that um yeah I mean regarding the retail side I think it is it is great or at least I hope it is you know if you go outside of uh this kind of let's say room or to

something maybe an echo chamber sometimes you go out and get get your train you speak to anyone about crypto they're gonna have a negative connotation towards it at least most people they might say it's scammy they might say I'm not too sure if I trust it Etc so I think and I hope that uh post finance and the bodies around there are bringing out educational programs around that offering because just being able to buy an asset and it depends on how you look at be it ethereum or Bitcoin but just being able to buy an asset class that is a volatile um is is important to be able to have the certain education of understanding the risk assessment of what you're buying into um so that we don't end up getting into a new let's say bull run where retail is

buying in heavily again and uh then it goes down and they kind of say well I was able to buy this at post Finance this is a scam Etc so then being able to understand what they're actually getting into I think is very important um but ultimately it is it is good that there is that there is that access yeah you were talking about a good point there education so to educate also the masses or the individuals um are you yourself working on this with the CVA or storm for example uh definitely within the cryptoide association I think that is the the ethos uh of the association is to be able to bring further Integrity to uh to the space we have started an international expansion as well uh due to the pandemic uh being doing a lot of

webinars a lot of events online um we do see it as being quite important we have work in groups that are able to accommodate to the niches of uh let's say the blockchain world be it from a regulatory standpoint investor working group cyber security Etc so we always do try to be as inclusive as possible um but I think you know we've been going on about education for the past let's say seven years that I've been involved in the space I think it always is quite difficult uh to be able to to grasp for various individuals I think it has been difficult for us to be able to give that certain level of Education a lot of individuals are asking me sometimes okay but when is uh blockchain going to have its chat GPT moment and then I kind of

refer to bitcoin I was like well look it has all this access it has done some of that but I think we we still need to be able to provide that certain tangible use cases potentially and that education through maybe different means maybe post Finance is a meme there where uh they you associate cryptocurrencies with a trusted brand already and that kind of helps to for individuals to kind of lower maybe their God and be like okay maybe this is something that I should start exploring and then potentially there are other ways such as let's say the University of Zurich a lot of things that they're doing and and the likes and on a national level Alex for example you recently joined uh the Smart City Board to help out with that development in Zurich correct so is that a hint of

what's going to happen in the future actually does the Smart City engagement is because I'm working with AI companies as well confusingly uh so uh smart uh the the cities in that sense have no crypto policy or blockchain policy yet but but maybe just zooming out again only your only question because I think the international comparison is interesting and where I think post post Finance is really a strong signal of how Switzerland has been approaching the topic the Swiss government and the Swiss regulator say it's back going to you know the Ico guidelines even before I think the fintech FEMA opened a fintech desk in 2015. it's not only for crypto but they had a fintech that's a haters new developments happening we want to

understand and the Swiss regulator always had approach we're going to give we're gonna give licenses if you adhere to the rules so in Switzerland if you think about it we have crypto Banks we have crypto Swiss riches to crypto funds we have Brokers you can have the depositories or custodians you have a lot of different licenses type and approach always has been in Switzerland those are the rules you can even have a discussion where we happen to discuss you know a big concerts at the not so successful discussion for if the regulator about the banking license but at least there is discussion going going on and I think that was always the strength of Switzerland if you compare it with the US where even nowadays the two Regulators SCC and cfde cftc are still discussing or arguing who's in

charge obviously that doesn't make for a good framework or if you compare it with Singapore which has had this discussion before Singapore hat is in Singapore when they came up with regulation they said oh we understand Bitcoin is payment so we're going to give payment licenses so they only gave out payment license these sort of cross-border payments and they haven't given any banking license they haven't been given any any fund license and what you have seen is now with three arrows and some other accidents you know if you're as a regulator don't let Innovation happen then it might happen it might still happen but not in a good way and I think and that's also maybe it's looking at the negative side again I mean if if post Finance hopefully you know I've known no doubs with Signum they have a

very robust setup but coming back to what share says obviously the moment there's a big Fallout there's political action if you don't believe me just look at what happened with crazy Swiss you know they just had a session this week so I think the risk from a regular or from a policy side is how much regulation do you let happen and saying basically those are the rules if you want to play according and we give your license uh how much prosecution or or sort of prevention you want to do and what do you do in the case if something goes really bad you know touching wood I think there's nothing there has been a massive Fallout so far in Switzerland but I do I do believe one has to be careful when one sets up you know the

proposed Finance I know they've been working at for more than three years in different configurations so on one hand you can say hey it has taken so so long this is no good for Innovation on the other hand you know if something then goes wrong and post-finance is sort of semi-government owned that would send a really bad signal so I'm just trying again you know a bit of my policy angle where you have to balance those two two sides where where the community wants to go fast and maybe from a political voice sometimes you're going to say you've got to be be more more careful I do think up to now it can be debated that Switzerland has struck quite a good balance not not always also when it comes to travel rules you know there's sometimes a bit an overreach but you

know let's let's see and I think last but not least I think with Mika coming into place and other countries coming online this will create again more competitive pressure and will make it also more acceptable in a broad term so one of the positive things I think this year despite what happened with f takes I haven't heard anyone saying crypto should be banned anymore I think everyone sort of has accepted that it's here to stay but we need to keep working on on the frame the frame framework so I think you know overall it's pulse it's positive but regulation and policy obviously slows things down that's the idea of policy but it's not liked by everyone and getting that balance right and maybe

also I think you're more active in the Middle East I've never been to get a lot of requests I mean Dubai at the moment seems the the place to go when you want to go fast I don't know maybe that's an interesting topic I was you know even I struggle with you know is that Twitter is that bad I don't know do you yeah it is a difficult one and I I will definitely touch upon that and just to to close what you were saying before and if you look at like the way in which Switzerland as as adopted crypto I think it's really been kind of let's say a top down right and let's say the down being let's say the retail and I'm very happy again that they are getting to that point but I do believe that we've missed a little bit of a layer there whereby we

work with a lot of innovative companies uh startups Etc and it is still very hard today for startups to get a crypto bank account we do parade seba Sigma murky Etc but we all do know that they do have certain Capital requirements and it is quite difficult for young startups to get bank accounts with them so I would have seen it as being much more um helpful or even fruitful for the ecosystem if post Finance would have said you know what we're opening accounts for startups that might not have significant funding if they pass the appropriate due diligence they can get access to bank accounts and some might say that's actually today it is possible but we have seen that that it

is a big struggle and so potentially with um small to medium-sized businesses being able to open crypto uh bank accounts in an easier way or in a more democratized way um it would allow then for the retail audiences to be able to then use their digital assets crypto assets within be it online or uh in in in a retail format so maybe that layer in my opinion could uh could have been filled a little bit better but potentially my colleagues here have have something to add on that front yes there's often very basic thing that are not easy or if if one of the founders is an American passport also very hard to get the bank accounts is things like that that should be

fundamentally it's basic infrastructure for the country and it's it's interesting still very complicated do very basic things and this is a long-term problem also when you when I talk I talk to someone with a prokito project say one of the problems is at least 50 of the brain Cycles go into legal matters when you do a crypto project and he says it's way more maybe 80 percent and this is bad this means that 80 of the resources are essentially wasted they are not used for creating something they're just used to navigate the legal system and only 20 percent or I'm not that pessimistic maybe 50 goes into actually

building a useful product and and uh this should this shows that there is still a lot of potential to make better laws to make and This concerns everyone this does not only concern crypto so there's many areas that are over regulated where every step feels like walking in a carpet where you are held backed by a lot of uh rules and regulations and and interestingly it's not only government regulation it's also within large companies that's why large companies cannot really innovate like Google or Facebook they struggle with Innovation they have to acquire Innovation because they are so large they have so many internal rules and regulations that it's very hard to move freely

so with the aspects of innovation and regulation would you what would you propose is it better to innovate or to understand the regulation and then safely start your company so for so there's two angles one is the macro angle as a country we should make it as easy as possible to create a company because Innovation comes from the small entities not from the big ones so there should be as free as possible to to create things and to focus on product development and so on and for a company if you create a startup you cannot get around having a holistic View and ideally you have someone who in the same brain unifies the legal the economic and the technical perspective

of course this is the ideal case and in practice you need to distribute often but it's it it adds a lot of complexity that you have to cover all three angles and you can have the best technical product if you have no clue about the economics or the legal angle then you have a problem so you need all three and with what you mentioned before that the credits was collapsed recently and other banks in the United States and then before that crypto entities like FTX Circle and so on um I mean that's kind of an indicator that there would be more regulation rather than less to prevent these things from happening how do you see that Outlook in Switzerland will it cause Ripple effects what happens to credit Swiss

maybe not for crypto or blockchain directly but clearly the financial system has now a good name no one likes Bankers you know I'm not sure crypto people are more like than Bankers or not but it's sort of I think the problem uh with finances I once asked Mark brands in the former CEO of finma why do we need regulation in finance he gave a very clever answer he said it's very easy to run away with other people's money and it's true you know we've seen it with FTX unfortunately it is true and sort of I think one of the challenges of blockchain but it's not only blockchain like I said I mentioned I'm also active in Ai and I think AI goes very much in

the same bucket if something goes wrong at those systems because there's so such scale and such Speed The Fallout can be really bad and whenever there's a big Fallout and that sort of anonymously across the world whenever is a big full Fallout politicians will jump up and say this is bad we need to regulate we need to kill it we need to stop it you know a credit Swiss you know we see live here I've seen it with um if you Google it the monetary Authority after the three arrows uh disaster they came up we're gonna explain why we still like crypto but in what way because they've been very open and positive before about crypto and now the reality is to whatever I'm talking to people there

they've they're really tightening the screws so the challenge when it comes to Innovation is you want to let it happen and grope is you can't always regulate beforehand but sometimes it's very hard to know what's happening at the same time you need to prevent really big fallouts that is impacting a lot of people so some a lot of companies have been adopting sandboxes you know they're known in UK in in Singapore those damn Switzerland sort of the fintech license but I think we haven't been that strong so I would like if I had a wish we could see more sandboxes where we're saying you know we contain it you can play around and we watch it and it we we we learn and last but not least one point I'd like to make you

know is often to what I stated before when you have conferences like these people say Regulators are bad regulation is bad it's kills Innovation we need to but on one hand you have this Fallout problem the other thing I was at oscd blockchain policy Forum last October and it was IMF it's fatf Australia World Bank oecd was there and they literally said we don't understand it we literally don't know what's going on and it's very hard to put police for us so you have you know when it comes to education it's not over education after you users it's really hard and the reason it was at the panel with the film about nfts people asked what is an nft and female said we don't know

nft is a word so they're gonna what they do is you have to present the white paper they read the white paper and then they come to conclusion you have a discussion with them but it's actually very hard to understand and sometimes when you talk to crypto people the lingo is a bit bewildering you know it's not always that clear when you look at you know I I I have a long long list of fun of funny quotes for people talk about that so I think you need to sort of strike a balance being also educating uh the record the regulator with the regulator the end of the day has the responsibility or should have responsibility to protect the wider Society from Big fallouts while allowing you know Innovation obviously when you start up the only thing you think about

is innovation I want to go to market you don't think about Society but coming back you know AI it's not the topic here but I think what is happening in AI at the moment is it's a seminal moment in Tech and then you humankind and it's very hard to understand aim for politician you had contact with politicians in Burn how many understand blockchain you know most people don't understand blockchain so when when there is this mistrust obviously the natural reaction is you want to stop this we don't understand it you know and and I think it's it's about us it's for all of us we need to find a balance in society of agreeing what kind of innovation we want and that's very hard I don't know that was a long long answer to yours but I'm really I can tell you know I'm sort

of passionate about it and and that you're in the room it's your future it also means that you have to innovate responsibly so you have to make sure that what you do is actually useful and not just taking away someone else's money and this is uh I think this is also how we win the hearts and minds of the public if we can deliver actual value and not just another way to rip someone off and uh so as a small example when I designed the Franklin coin system I I made sure that the economic equilibrium is in a state where about the third of all Franken coins in circulation are in reserve which is a lot this is much more than the 10 tier

one Capital that the banks have today so it it is much higher more safe Capital requirement that I have kind of built in of course there could be a competitive recess I copy the whole protocol and have a different requirement but this uh I think it's something that we should strive for to make sure that what we do delivers value and then we can also win on the public and the regulatory front because it's very easy to attack crypto if it's mostly used for ransomware and yeah let's zoom in also onto the country level so we have different hot spots for the blockchain ecosystem in Switzerland so like two Zurich is coming up Geneva is also quite active uh maybe she has what's going on in Geneva and

how do you see it different um yeah okay I mean I have a little bit of a controversial kind of one one to this point and I I hope let's say the panelists will maybe give given another uh side of the coin um is that I believe you know a Common Thread of innovation is kind of uh stay foolish stay hungry right and crypto's been around or blockchain within Switzerland has been around for quite some time and if we look at let's say the the foundational layers uh of where things came came to be be it in let's say the Zug area I I do believe that maybe let's say zerg's region has become not complacent but they they have a lot of requests they are very well known now and I think they are less hungry than they may be once

once were and I think that can be a good thing as well because it's allowed other areas of Switzerland to expand Viet of course let's say by proxy Zurich but also Lugano with the plan B Forum we've always had let's say with the Bitcoin Maxes and now actually Geneva as well and um of course to a certain extent I'm biased because I come from let's say that region but I do believe that the the French speaking person has not maybe have gone so much uh attention on that front and it's something that I'm very much looking forward to to building up because um within Geneva there is a very important uh industry with many different important industries from let's say the NGO perspective sort of watchmaking there's uh a lot of large Enterprises

Etc and I do believe that if we can create uh more consensus around let's say Switzerland as a whole and not just let's say the crypto Valley being known as Zug but let's say the crypto Valley being the whole of Switzerland then she as well bridging let's say Lichtenstein within that I think it's going to create a lot of prosperous outcomes and uh yeah very much looking forward to to building building that out some more and what about you too do you have a favorite city or a specific stereotype or preference or how do you see it in Switzerland within Switzerland yeah within Switzerland oh it it it tells us a bit worrying I've been involved with a few companies who

want to come to Switzerland obviously first they're they don't know everyone knows two so that's always popping up so I think that's the de facto setting for anyone and then I mean Lucerne has been trying very hard to track com companies surikash Advantage I mean some of the crypto companies are here or blockchain companies because it's just the best place to to live not everyone wants to live in Su I mean digino now has this tether supporting issue with with this co-working space so there and I think at the end of the day what are coming back to what I said initially it's a beaut about Switzerland is this Grassroots approach that is very much it's a decentralized very much like the blockchain idea and if you think about it you know and if the cantons I mean the city if an example the city of

Lugano issued this digital Bond it was actually the city of Lugano who also started Plan B it was not even the Canton it was the city so the beauty about Switzerland is that every Canton can try out and if something sticks than other counter and the candles will come and try to cop copy it now tsuki is now active but now for example Geneva the kind of Geneva Now isn't in discussion and so a lot of them are now waking up to that to that fact and again even in Swift in Switzerland you got different tax regimes you got really different you know rents or even even when it comes to to visas you know it's very hard in Zurich I don't know I have no concrete experience but maybe you go to another Canton and then there's different Visa quotas so again it's a very Dynamic

situation but it can also be a bit bewildering to foreign to four foreigners we say use their coaches too you know if you go to Dubai or to say in Singapore it it's it's basically one one city but I think this is in this plural pluralism Switzerland can test different concepts and um has a very good reputation but I still remember it's a bit of funny story when when Plan B announced uh last year they're gonna go go ahead they had a meeting with the Canton of Suk the finance department and there was a lot of media reception about this plan B it literally made it in global headlines and and one of the headlines was now you can pay uh with Bitcoin at McDonald's and then I had to listen for over 10

minutes that you know two obviously you can do that much longer you can pay taxes so two goes really pissed that Lugano got this got this uh got this you know pop-up of publicity and I even had to tell them well uh you know that lucious piece of Bitcoin Swiss you can even pay with your credit cards in Bitcoin through through the terminals you can do that already I bought a bicycle helmet last year as a publicity stunt but and anyhow so it sometimes when you look at the cantons this is a good dynamic in Switzerland because if someone pops up and does something successful it literally can piss off other candles and they start then moving ahead and I think it's overall still a positive uh dynamic because if something then takes root they become more vocal and hopefully coming back to the

National and National politics also then tell their you know representative hey you know we need to look into that we can't just kill it and I think coming back what I said before no one now saying we want to kill Bitcoin and also another one of the few positive things out of the yes what I'm seeing you see literally adopt when it comes big financial institution from exchanges NASDAQ is working on tokenization programs you got the Big Wall Street firms coming it's not always you know fully forced adoption but I think it has reached a level where everyone thinks it's not going to go away it's not going to get killed I do believe that Americans as they've always done they will sort out they'll put a few people in jail for the rest of the life and make it very public but they'll catch up again and I think again I'm

really enthusiastic at the moment because Europe with Mika that's coming for us next year has decided to create the frame framework and if you look back at his story historically the Swiss Financial Center always had the challenge how to access the European market and actually we've done quite quite well the banks are still around well one one less one less but uh but but but overall we've done and I hope that this is a skill that Swiss have we're actually very good in making Bridges and Building Bridges and Singapore is another point in all the among the top 10 financial institutions in Singapore six are Swiss you know so we actually it's our strength because we are small we need to build Bridges we need to go abroad and I think this

spirit it gives us an advantage overall despite all the neck and then the negative things that it says so we'll I'm still positive it's a good location to store very nice and taking everything as a whole what we talked about we talked about some negative and then also a lot of positive points um what's your feeling Lucius are you more bearish bullish I am very bullish I'm optimistic I see a lot of value being created so that's what I criticized before that maybe we should focus more of value but there is value and once I was in a panel with the German policy maker said there's no value in blockchain there's uh it's only financial applications these icos and these things but there is value in financial applications so maybe

we don't use blockchain to do some Logistics because there's always friction when you connect it to real world but being able to finance things is essential for an economy to thrive and if we have innovation in financing projects through Peter through tokenized assets through defy through a completely decentralized organizations that there's so much Innovation out there unisop has now more trading volume than coinbase I've seen and it can compare Stock Exchange which is crazy so there's a lot of value being created a lot of economic activity and this makes me very hopeful yeah I think bouncing on what this is and Alexander was saying I think uh due

to the competition but the healthy competition of Switzerland um and due to let's say that many sandbox that it does create I'm very bullish for for Switzerland as a whole uh very bullish for for crypto as well as we've seen this year um I think we have learned uh from some of our our mistakes um and I think it's going to be it's going to be really great a great year ahead uh quite bullish right did you want to add anything Alex or you're awesome if he's ever been not not polish since I know it's been bullish but I think there's a lot happening beneath and coming back to what I said don't look just at crypto I think crypto is always the bubbly the spec lady sometimes the unsavory bit of the whole system but the tokenization of assets I

give you a very an example of a company I'm involved in the one of the biggest markets in the world is the capital markets for for bonds this is where governance and and states and cities refinance and this Market is still nowadays a so-called OTC market over the counter there's no Central settlement system and why is that a problem because last time in 20078 we have the financial crisis it literally took the banks weeks to figure out what kind of counterparty positions they have so this is a very old system you know I do believe in payment I know you mentioned that payment sort of works nowadays but there are massive markets out there that run on Legacy infrastructure and if blockchain just enables better transparency from a risk point of view this is actually good for society and

the company I'm involved in it's a Luxembourg base or Portuguese and they now have a lot of traction by Rare Regulators because The Regulators saying we're afraid because interest rates are now going up if 2007 8 happens again the same disaster will happen we literally don't know what the counterparty positions are so I think that's a very positive thing and on a very fundamental point of view I've been in in in this space for seven years I think the best thing is that I see all those people here listening to talk with me talking about monetary policy Capital markets technology policy regulation I I've been recenting event I said I think The Regulators in the Bank of international sales as element and Augustine Carson should be happy that so many young

people now think about the financial system again this it's not this abstract thing that happens you know that Banks do we should all be involved because it has real world implications and how how we live so on that I have to be bullish and it's great because visit exists and I always as I've said that before in another education if the bank of an International Cinema or ohcd if you presented back in 2008 the Bitcoin buy paper to them they would have said no we don't want that you know they would never said yes to that this idea but it happened and it's out there and because of that they now have to respond and I think this is overall a good trend for society so it's it's out of the box let's have a discussion about it and we

can have different views and different countries will have different applications or rules and that's a good a Google thing you know I believe in competition overall and this is what is happening this is excellent I think people sometimes don't think it's much more efficient if you centralize if everyone decides in one point in Brussels for all of Europe or in in f80f or all of the world but this is not good if you have a regulatory monoculture then you cannot innovate anymore then you can never figure out if there would be maybe different rules that would enable for more growth more Innovation so it's very very important especially for a sector that is Young to enable different approaches and to allow

different approaches and that's also one of the reasons why I think it's harmful when the bank of England as a settlement tries too early to create binding rules for all countries at the same time because then we we lose this Innovative power and thank you very much gentlemen uh we'll take last minutes to also take some questions from the audience but first off thank you very much for your great answers and for the amazing panel thank you thank you give some Round of Applause to the panel at this point [Applause] then we have some time for a few

questions uh all the way on the top we have one I see there's it's a very decentralized seating order yeah thank you very much for the very interesting uh conversation and discussion I'm a I'm a PhD student at the high school and I'm studying the adoption in one of the papers that I'm writing I'm studying the adoption of DLT Technologies and what sort of what I find career like interesting is that um corporate adoption of distributed Ledges it's sort of I feel

like lagging maybe a bit behind and I see a strong case with uh immutability of transactions and the transparency why we don't see a move of Corporations trying to maybe have their accounting on chain and I was wondering uh why why are this thanks um yeah I can give like the Enterprise side of things as we've worked with quite quite a few um and I think they just struggle uh to be able to get things through their internal processes in time for it still to be relevant um this space moves very very quickly and you need to be able to adapt quite

quickly to to the markets you mentioned uh kind of let's say putting accounting on chain but if you look at other sides of of DLT let's say blockchain uh being able to have use cases such as say the nft side of things the metaverse side Etc I know that a lot of companies want to get things through they hire various firms for strategies try to work things out but by the time they have the approval uh actually it becomes a little bit irrelevant so I know that there are a lot of firms that have or actually most firms I believe let's say within the S P 500 or the likes have had at one point a blockchain based product project in the works and are still probably working on it or just decided look this

is a bit too complicated for us to innovate we might just let's say acquire a firm that has been able to successfully do it and then integrate it into our processes but that's the perspective that I've had so good did you want to add anything next question next question thank you so much amazing panel um the best one for me on the past three days um curious because I haven't really heard this during this three days Network States and hashtag decentralized Switzerland like best practices shared on maybe digital citizenship level something like that

any conversations in the ecosystem around that Network States thank you I I could try one angle maybe Lucius can add up but I think it all is centering and one of the biggest problems you're seeing in D5 in in general when you want digital adoption on a decentralized fashion is identity and once you dig into that I mean in Switzerland we had a vote about an Eid and that didn't was not approved and we're working now on iteration number two and I think to me this is one of the key one of the most interesting bits of this entire blockchain discussion is happening when it comes to identities if you want to whatever you want to do online you need to make sure whoever is voting or taking decisions is the person she is or or he

is so and I think there's you know there's certain knowledge proof that different startups trying to tackle that and I interest interesting I had a panel on the web in January and it's a big question for refugees for the UN the UN is really desperate to trying to figure out how do you create identity on online so I I think we're very beginning we have to crack the identity bit and it's the one of them those fascinating sectors I think personally because it really is about humans and digital identities how do you merge that and not only for us here but for refugees people without passports highly fascinating so I think we're early early stage in that but interesting thank you do we have time for one more

good okay thank you um so I was wondering recently the New York attorney general talked about ethereum maybe or hinted at it being called a security so you know talking about Switzerland wanting to support Innovation and taking kind of care of the mass and the risks many people feel like in U.S it's not that way it's kind of like the regulation and the government against Innovation and blockchain and all the other topics like what are your thoughts on that and is Switzerland different than us in that

sense or um yeah like what are your thoughts and also what are the risks of ethereum becoming a security for the whole blockchain ecosystem so if that would happen that would be devastating because Securities are completely differently regulated from currencies which is kind of a strange thing but it's like that in the law so if something is a currency it's easy to transfer it's easy to create the company that trades it if something is a security then you need a whole exchange which is very tough very hard regulated you need a lot of capital it's almost impossible to do it as a startup so this is and this is I actually

bad regulation because there's no good place to put crypto in there crypto often like the ethereum token is not a pure currency so three so I agree with that it is a turn channel it's not it's it hasn't serves the investment purpose but if you just say it's a security then you destroy its value or a lot of the potential because it doesn't fit in there as well and the European Union did actually something quite good I'm often very critical of them but I think it's good with the maker regulation it's a statement to say it's something different it's not a security it's not a currency it's something in between with new modes of Investments and financing and Switzerland of course is is now in a spot where we need to decide to be more

copied to be copied Americans or the European Union and traditionally uh it's not sometimes we copy the U.S sometimes the European Union I would guess that we would cite more with the European Union because our legal system is more similar to that but we don't have this legal framework of Mika so it's a I would be very surprised if they would suddenly say Eder is a security but the other tokens are more at risk I think just speaking back it's one of the biggest conundrum out there what is a coin because if you look at it from a very you know non-tech perspective it's just code it's algorithm and a coin can be all sorts of

things I mean I've seen coins they have they can they can do staking they can pay interest you can voting governance you can do anything and and agree if you buy an Apple share it's an Apple share tomorrow it's in a week as an Apple share it's not going to come and be a US dollar or become some something else but in the coin anything can can be programmed Switzerland at least has an Ico guideline where the government or the regulator is trying to figure out what it is and Mika now creates this virtual Asset definition but it's the same problem and then Serbia as well they have different categories I think everyone is struggling with what what it is and and the US is is I mean I think they only agree that Bitcoin is is is not a security the CSC and the cftc and

for everything else even the two rev The Regulators they fight about what it is but I understand because a coin technically I mean ethereum can be a lot of different things you know from nft to utility token to security and payment it can be all of that the question is how do you label it and I think that's the most fascinating aspect for yeah no okay I was just going to say I think the approaches are are different between let's say the US and Switzerland Switzerland has always been open uh to communicating uh with uh with the public uh through let's say non-action letters being able to communicate directly with finma and be like hey that's what I'm trying to build up what do you think and I think with let's say the SEC or with the US it's been a little bit like whack-a-mole if you're a little bit too

loud and you pop up too much on their radar like then you get whacked so I think they do need to approach things maybe a little bit more in a collaborative sense and I think as Alex was mentioning before I think they will slowly but surely get there get their act together but uh I think yeah Switzerland as a whole uh has great measures in place for these things thank you very much all right um thanks a lot again for the question first and the great panel also for the moderation Victor that was fantastic give another hands to our great panelists out here [Applause] thank you