The New Swiss DLT Trade System

Transcript

good evening hi everyone my name is beyonce beck i'm a lawyer with wenger and vli with a focus on private monday venture capital private equity and not surprisingly blockchain projects welcome everyone to today's webinar regarding the new swiss dlt trade system hosted by secco and the crypto value association why is it me who makes an intro today and it's because the managing director of secca professor peter jonah has asked me to do so not least because i'm one of the few members who is active in both

associations which means cba in secca i'm involved in the venture capital chapter and in the ceva i'm a former member of the investors working group and one of my colleagues in the same law firm was a member of the board in cva let me allow trust to spend a few words on secca secca is the swiss private equity and corporate finance association which is the representative body in switzerland for private equity venture capital and corporate finance industry seca has the objective to promote private equity and corporate

finance activities in switzerland members are very broad equity investment companies banks corporate finance experts auditing companies management consultants lawyers and private investors so they are primarily focused on either investors or advisors but not on startups segka is the opinion that plt has a future and is very keen to learn what happens in that market uh so we are in particular zeitgeist in particular very curious about use cases in that dlt blockchain area the cva in turn is the crypto valley

association um in took which is the epicenter of the crypto valley as you all know cva intends to build the world's leading blockchain community by connecting the brightest minds and leading companies in the blockchain space cva grew into a global network of professionals startups corporates and investors to share the same belief which is the future is blockchain so we meet today due to the fact that switzerland has introduced a new dlt law which created first in early this year so-called

register value writes in german register a terrible word actually in both languages but that's is a few weeks ago that law was even broadened and so newly the law also allows elt trading systems um to introduce to be introduced which is a license for trading venues for digital assets such as those register value rights so the new law enables trading venues to trade dlt securities sekka and also the crypto valley associations would like to give you

today insights in selected projects that are currently developed or developed in such trading venues the moderator of today martin eisenring on my screen on the top left he's a colleague of mine he's also a lawyer who organized the whole event martin is as said a lawyer and a notary public in took since many many years he's specialized in corporate and contract law also in financial market law as well as in blockchain-based business models he has studied at the university of

freeborg and sankal and zurich and he has written a dissertation on asset management of pension funds three years ago he was a visiting lawyer in a silicon valley law firm came back with a lot of ideas and and input and feedback in addition martin leads the investor working group of the crypto valley which organized today's event together with secco he's uh also a member of secco's venture capital working group so he's one of the few together with me who is active in both uh associations martin i would like to thank you already

by now uh in organizing that event i'm sure that you will thank our speakers um on a standalone basis like later on and i'm having here uh i hope you can see that a bottle of wine it could be a topic of our next event how to transfer real assets virtually um but that's not the topic of today i'm very curious to learn what's happening in the space over to you martin thanks a lot thank you via for the introduction thank you to all speakers and also to our audience our participants to be here with us to learn about the new trading

venue possibilities we have in switzerland since first of august this year as you all know we have different token models here in switzerland and until now were all tokens with an underlying asset securities they didn't have trading venues and of course this was a problem if you create tokens but you don't have you can't create the secondary market now with these new venues with these new trading venues we have the possibility yet we have to see how and what will be created as tokenized securities i think it's now we have a full system in place

products have to be launched we will see what happens in the next few years but i'm i want to hand over now to our selected speakers who have deep knowledge in the business and they will explain how they tackle this opportunity i think they have quite different business models we have like large entities like estates subsidiary from swiss stock exchange we have smaller venues like now luxurious action area we have banks we have

security houses which are operating here so i would like first of all to welcome our speakers and then to hand over to um thomas eichenberg i let you um quickly present yourself so that we don't get too lengthy i'm looking forward to talking to you after your presentations all the best thank you very much we are then martin for these introductory remarks uh let me pull up a few slides to support um support what i'm going to present in a second so first of all thanks a lot for having the pleasure and

honor to be a part of this exciting panel today and then actually open up this session with introducing you to the activities that signum is conducting on the tokenization side of things and obviously i will also put a specific emphasis on the introduction of synax our organized trading facility for asset tokens that we are operating on our side as an integral part of our tokenization stack as martin has said my name is thomas eichenberg and i'm leading the products division here at cygnum and as such since tokenization is a strong pillar of our value proposition i'm having the pleasure to present signum or represent signum today maybe before we start and jump into the

asset organization topic directly let me give you a bit of an introduction as to what sigmund does overall i think martin has said it before we are a digital asset bank so tokenization is not the only thing that we're doing or we are not the only activity we're conducting here at cygnum basically with three strategic pillars that we're focusing on starting with digital asset banking which consists of uh fiat to digital asset gateway custody services 24 7 trading services for cryptocurrencies uh lombard lending activities but then also more importantly now staking and then decentralized lending or decentralized finance services that we are aiming to and are already offering to an

ever-growing client base second pillar is asset management where we have a number of um products that are active in the market so giving exposure to digital assets and cryptocurrencies through traditional wrappers also an area where we are growing steadily and finally the third pillar which is in the focus today is asset tokenization there our goal is really to provide an end-to-end tokenization solution covering the entire value chain i'm going to go into more details on that in a second and our goal is really to not only tokenize financial assets but also real assets and i think payout has given me the perfect um pause to maybe share our initial tokenization project with you where we

tokenized investable wine so about what you wanted to achieve we have already achieved and we're happy to apply that to the bottle that you wanted to hand over to martin at the end of this presentation but that just as a start um again i think asset tokenization are strategic priorities and i'm glad to share some more details with you on that today looking at our asset tokenization and activities more closely i said it before it is very important to us that we look at the entire value chain i think given where the market or the tokenization industry as a whole stands today and its level of maturity we strongly believe that we need to provide

potential issuers but also investors end-to-end integrated solutions in order to really bring tokenization to life and unfold its true potential because before we can start thinking about how can we trade asset tokens and then create additional liquidity i think we need to issue such asset tokens in the first place which is i think the primary activity that we also and sigma are focusing on at the moment we have a number of projects in the pipeline where we are in the process of issuing such tokens which will then in a second step be made tradable and available on our secondary market trading platform the latest among these projects is a four million picasso painting that we have

tokenized through the means of an ownership token which is currently available for a subscription on our platform and will then at the end of the subscription period also be listed on our trading venue but going back to the full value chain i think again everything starts with a primary market issuance platform where not only the technical issuance of such an asset token is in the focus but also obviously a robust legal and regulatory framework around it and i think and you have mentioned it in your introduction words the introduction of dlt securities or register securities has helped us a lot in switzerland and has put us again in a privileged

position globally that we can work with legislation and then the legal um the legal grounds in order to really exploit the potential of tokenized assets based on this then our platform can obviously handle the technical issuance of a token that's not such a big deal once this has been cracked in the first place we then offer as i said also capital raisers uh capital raised processes on our platform which is handled by an on-chain subscription management process and then in a second step once these assets have been created they are being made available on our organized trading facility synax that we are operating under our swiss banks

i'm going to go into a bit more detail what it means to operate an organized trading facility which is not a dlt training facility which is actually um at the core of today's discussion but it's very similar and i think we can draw a few conclusions also from from the organized trading facility that we are operating as an additional element of our tokenization stack we have issued the digital swiss franc stablecoin acts as a means of settlement on our trading facility but also on our primary market issuance platform because we believe that only if both legs of a trade are being handled and settled on chain and we can exploit the full potential of the organization and then finally all of this is obviously

integrated and seamlessly seamlessly embedded with our costly solution that is an integrated part of our tokenization step maybe final words on this slide we have obviously also made up our minds as to how we aim to position our tokenization solution where we feel we can create additional value in the first place our goal is to make currently hard to access and hard to invest assets more easily investable and accessible for a broader audience and hence we are focusing on four key investment verticals financing mostly on the on the equity side then mid cap financing beat on the equity or

the debt side real estate and finally arts and collectibles which i touched upon already before with things that examples of the fine wine and the picasso token that we've issued now looking at looking at fi asylex our organized trading facility a bit more closely we have tried to provide here an overview of the different trading venues that exist from uh from a regulatory point of view here in switzerland starting from the left hand side with the bulletin board which is actually not the trading menu and if you look into a fema circular 2018 one and then the otf the organized trading facility is actually the first regulated trading menu as a as a licensed bank or securities

dealer or trading facility you can you can operate such an organized trading facility if you seek a special approval for it with finma which we did and this allows us now to exercise discretionary trading of tokenized securities and other financial instruments on our platform this is a b2c trading facility so any end market participant can trade on such a trading facility the same holds true for dlt trading facilities but is then different different for multilateral trading facilities and exchanges where you need a regulated counterparty such as a bank or a broker in between to get access to such a trading venue

and then the third element which is in the middle which is basically then combining or linking these these elements of non-discretionary trading but still providing access to non-regulated customers which means end customers is actually now what has been introduced on august 1st and which requires also separate license which would also require signum to obtain a separate license to organize a dlt trading facility at the moment we've we believe that our organized trading facility fulfills all our needs and all the needs of our clients so we are happy that we have already obtained approval to exercise and operate such a training and finally

let me close with giving you a bit of a preview as to what this now really looks like in production again in the end the organized trading facility facilitates the exchange of asset tokens versus our digital swiss franc through a standardized through a standardized trading venue our clients can as i said before directly place orders uh they can also accept orders that have been posted into the order book and as such then all these trades are settled immediately and directly on the platform and in the background through the means of our digital swiss franc all of this again fully embedded into our overall digital asset banking platform that our clients have access to

covering the cryptocurrency side of things through our different means where we um interact with brokers and trading venues that are out there in the market and handling the asset token trading through our organized trading facility and benefiting from the platform that we have built ourselves in-house from scratch and with that i think i would close my speech i hope i didn't overrun but i feel like i'm exactly on time marked in the 10 minutes you gave me i have consumed so thanks a lot and looking forward to the discussion later thomas this was very interesting to see

how you organized through this organized trading facility so this is as we know one of the older possibilities and not one of the trading venues which was implemented now by the by the new law uh interesting approach you chosen now we go over to nada and kaiser from swiss digital exchange hi everybody thank you very much martin uh and thank you very much uh cba for for insecure for having me i'm gonna pick up right on on thomas's obviously the uh the one thing that we are trying to do at sdx which is a

100 subsidiary of six group is to do a uh to do a regulated stock exchange so that's quite different uh from what we've seen so far and from what we'll be hearing in the remaining part of this presentation so let me quickly just explain uh and i'm going to do that without slides what our current licensing approach is so we're using the let me call it old law or you could also say current law so we're pursuing a license for a regulated stock exchange and within that uh regulated stock

exchange and that license because of course you're gonna ask me when will the license come and uh since i don't want to answer that question but uh i'm gonna answer it right now the license will be will come very soon uh really very imminent within days that's when we expect it um that license will actually allow us to uh list securities as public security so that's quite far away from uh from uh what uh thomas uh just mentioned what what they are doing um once we have these listed securities we then use a private blockchain or a private private dlt

based on cortl that is integrated with the banks that are members of the stock exchange so that's for our current licensing approach in the future we will be looking very hard at the tlt trading system or trading facility as uh we have seen in the presentation just now with thomas so maybe let me see let me say here right away and that's sort of a part of my of my message is that what stigma is doing and and obviously will also listen to uh is very much complementary to what we are doing and vice versa so we see this

as a very clearly a larger ecosystem uh where different people different players do different things so for example we will not do the wine uh and we will not do the real estate however i very much see uh the uh approach for for tokenized assets wine and real estate and i'm personally a big believer so i'm actually i should be on boarding to see them as fast as possible i will send you the application form soon so how do we foresee how this will work again we have the organized trading facilities we will have our public securities license and then we have the new dlt trading

system which is sometimes something that i'm looking at and that our team or our teams are actually looking at very hard and we do think there is a place for different assets on different chains for a different audience on the different regulation and we do see that ecosystem approach where in the long term surely things will eventually merge and lines will be blurred and we actually have already seen that if you read the wall street journal just two days ago were in a site sentence they mentioned that uni swap is of course absolutely capable of dealing with security tokens because uni swap doesn't make the

difference whether the underlying asset is a is a security or whether the token itself is the security or not and uh maybe you've even seen today that bib phoenix has announced that they will be uh shortly commencing trading of security tokens asset tokens so i think this will be a very interesting space we're waiting for our license in the next coming days then we'll be tackling the issue of the dlt trading license which for me is clearly one of the next steps of interest and then we take it from there i might have been somewhat shorter martin than the 10 minutes allocated to me but i want to leave enough space

because i think it's going to be that discussion between all of us which which is going to be very interesting and i'm very much looking forward to it thank you thank you very much nathan that was interesting we will absolutely discuss later different approaches and i would also like to to invite our audience to submit their question to the q a button which is below on the screen we will discuss also maybe not all we try to discuss as many questions as possible now i would like to hand over to chris who will also give us some insights not

only about his project but also about how he sees the implementation of the dlt systems and what this could mean in the future so i'm looking forward chris to your presentation thank you martin on my screen so my topic today is observations and outlook i have been working with a couple of

dlt marketplace projects in switzerland and and outside and i think the the space is evolving very quickly and therefore it's important and interesting to see what could come and we have already heard the lines might blur and are blurring and that's exactly what what i will talk about there is however a certain risk that my explanations will be boring for the crypto expert i apologize for that but there is also risk that my explanations are uh very exotic for the for the crypto beginner so i really apologize for that as well so let's jump into it um i will start with a couple of key drugs and observations the first one we have

seen on thomas's slides built aboard the primary market transactions as we expect primarily illiquid assets to be tokenized in the in the foreseeable future primary market uh market transaction will have a much bigger share usually the secondary market transaction as compared to traditional finance and therefore primary is an important element to think about when when establishing a marketplace and it is the first part about the investor whether the issuer the borrower needs to connect to the investor that's obviously one of the main roles that new marketplaces needs to fulfill in order to compete with traditional finance secondly staking

one of the most fascinating innovations of of decentralized finance staking offers completely new opportunities on top of traditional finance as well as new revenue models and i think staking is is one of the features that will really um help us in the future to bring and connect different digital services into the third strand observation which is ecosystems we will see much more composable partnerships between service providers and we will see the technology coming more into the middle and transferable and and and and and players that had a traditional role in

in in the middle such as traditional exchanges and banks to be um to change into much more of the playing field with the other players on the same technology so i think ecosystems for for for projects that look into the future that look into benefiting from new technologies is is is an essential given in order to achieve success um talking about primary and staking i would like to show one example here which is a d5 launchpad this is ocam razer which offers a full-fledged primary

market functionality all digital it offers the different functionality requires for the originator of the trade it offers full compliance and drag tech tools in order to onboard that and whitelist participants and it offer it offers different participation mechanisms for for the investors and structure to execute the primary market transaction currently we see these transactions going through in dfi on on non-security tokens but i'm pretty sure that technology like that will will enter the space also on the traditional sides and security token will enter the space on the d5 sides

the fourth trend observation is automated market make another really fascinating innovation from decentralized finance on the left side we have the traditional market model the central limit order book where market makers and quasi market makers of forbidden offer prices for a market to happen for market uh takers and market makers to to to act in a in a in a joint order book on the right side here we have newly a similar market making with regards to bringing um

flow together but it's all built on on digital codes and the market is not fed by third party market makers or liquidity providers the market is fed by liquidity being staked by market participant directs and the interesting model here is and that's what really fascinates me is that a much larger share of the um of the revenues that can be taken out of the market is actually going back directly into the community i also think that automated market makers while it will not replace the traditional model per se it will be it will take a larger share going forward particularly in in medium type liquidity assets so i think we will see

automated market maker not only um flourishing in decentralized finance but coming into the into the central exchange space as well here i have an example ix swap which is a project in singapore um it's a project that connects an automated market maker based around the smart a smart contract and liquidity provided directly from within the digital assets with a traditional exchange model that is licensed in this example in singapore as well where customers can buy and sell so we need to watch this space mentions the traditional marketplace

model which the exchange in the middle um exchange members licensed exchange members being the transaction parties directly on the exchange and the customers and users outside this model will continue for the foreseeable future for highly liquid assets i'm pretty sure the the the dlt market model and product is on my view not yet fit for purpose for highly liquid products and the current the traditional system has many advantages over it but for um many new um use points of the digital security and the digital token

we will see as i have explained before new ecosystems to to come up like we see in decentralized finance but i think more and more also in in traditional finance and i think at some point we will probably drop the decentralized and decentralized finance and see technologies converge but this is not the end game so here there is uh obviously white space on the right i think the direction we are going to take is an integrated smart ecosystem where physical assets are in uh are included in in ecosystems as well and this is the missing parts today if you look at the centralized finance and

physical objects not only mean you know objects of value like gold and paintings and wine it also means you know vehicles it means machines it means all sort of thing that we need in smart economies these devices will have their own account will have their own rights to transact and i think that is what marketplaces of the future need to consider where the opportunities they're now an example here um smart economy a company called token fabric that i'm actually a co-founder of as well has the vision or has the intention to

build digital ecosystems for industrial equipment financing now industrial equipment financing is not totally ready yet for um for a tokenized end-to-end model but this is clearly the intention we want to go for interestingly the transaction in going forward doesn't look in such a graphic much different than it looks also in a hundred years a transaction will have a buyer and a seller now we will have much more technology and not much more technology function supporting the process in the middle and probably most important the buyer and the seller and all the transaction partners could not only be humans it can be machines

and it can be smart contracts and here the ecosystem connection comes into play again this entire model will be possible in the not so foreseeable future without any human interaction we will have machines we will have vehicles we will have smart contracts to make business with each other and somewhere on the way we might have exchange functions and marketplace functions and lastly we will have these protocol tokens that we already see today that are booming currently in decentralized finance that supports the ecosystem that cement it together that incentivize um the participation

of of these emerging ecosystems so um this i if if i build a dlt marketplace today if i want to look at new emerging opportunities i think this smart ecosystem space is something to look at and something to to go for that's all from my side exactly 10 minutes on my clock looking forward to the discussion afterwards chris for your interesting insights now i would like to hand over to lutsius maiso from actionaryart

hello uh nice to be here so uh as uh we've heard before we we all operate at the somewhat different scale and we are the ones that basically plant the seeds for companies to grow maybe later into bigger markets so there's when people talk about the new law there's one thing that is often not mentioned because it's considered not so relevant i for one consider it very relevant so what we have here is uh an exception for non-commercially operated trading systems so the the law is defined in a way that it says

you only need a license if it's if your trading system is commercially operated and this is the our recipe so we say we are we don't operate in exchange but we provide the tools for issuers of shares create small non-commercially operated exchange with based on smart contracts without any operational costs so it's all automated and they don't need to worry they can create a small market for their shares so there's it's actually not that hard to adhere to these restrictions you just need to not make any money and not take any client assets and then make sure you don't have

any ongoing uh client uh business relations so that means you should just have some attack trading and then you should be more or less fine more details on that will be discussed in the upcoming update to the secondary market circlet but we have a circle from the blockchain federation switzerland that uh discusses these kind of things how to create the market for for security tokens and we will publish an update somewhere later this year i hope uh quite soon where we go into more details about the legal dimension on this so

so in short we are about directly connecting the companies with their investors or shareholders so this is and this is also one of the promises of the blockchain is this intermediation is to cut out the middleman and to make sure that uh people can interact more directly that's how we do it so we have different tools uh that we offer one the core tool is the what we call the broker bot the broker bot is an automated market making smart contract with the small liquidity pool behind that this liquidity pool is fed by the issuer so it's

much simpler than uniswap that way the issuer can offer shares to the public or buy back shares from the public through its own website it's being used by ourselves so if you want to become a shareholder you can go to our website and buy a few shares it's also been used by a few other companies recently the men's underwear company tebow did a token offering using our technology and they raised the half a million over the weekend i think we might be onto something here and and help small companies to go into the direction of stakeholder

capitalism to involve not only their employees but also their clients and suppliers and everyone who believes in them and they can grow together with their stakeholders until they are maybe ready for sdx or another bigger exchange another part of our tool set is a corporate dashboard that the issuer can use to manage the market to make sure that there's liquidity and to see how many shares they've sold or pulls back usually so it's kind of a mixture between primary and secondary market most shares that are being sold are being sold for the first time so this would be considered a primary offering and

they're actually only very few shares that are repurchased and maybe later than offered again so and the third component we have is the portfolio app this is for the investors so they can see what shares they have this is a an ethereum wallet so we are all building on the theorem system and uh at the moment this is unique so you need to hold your private key which is kind of an obstacle for uh mainstream audience but uh it's still con it's convenient enough for early adopters and what i hope for here is that the sooner or later signum and other financial

intermediaries help their clients buying shares through decentralized systems like what we offer so we can also have clients that do not feel comfortable with managing their own key and feel more comfortable having their keys managed by saba or bitcoin space or whoever is willing to do that so as i said so the the the company can manage the market so it's a one big issue is when you want to create a liquid market you cannot just list the token so most cryptocurrencies they are not very

liquid because no one is uh is providing liquidity so it's not enough to be listed on bitfenix or another odd exchange or to be present in north book you need someone who sets the price and i think at the for an entry-level company that's that has no analyst coverage that has no professional market makers looking at it the easiest way to get in is to let the company do some market making and let the company define the price and also the dynamics how the price is adjusted as demand goes as the shares are sold or repurchased so in short we offer a shortcut to

public markets for swiss companies so usually swiss companies go through a labyrinth of different options some of [Music] die along the way some of them have an exit some of them have different financing rounds and we illustrated by the blue line kind of offer a shortcut where you can very early on involve the public in uh building your company and and uh and uh have your stakeholders involved in making the company big so and this is uh i think a very interesting promise because it makes it turns private equity into open equity and in the end they end up with a with

the nice so the investors they can the company the the company that they like on on its journey towards becoming bigger and bigger without the founders being forced to do an early exit or so so this is one of the things that i want to enable i want to enable founders to stick with their company and not have an exit just to do cash out they should be able to maybe sell a few of their shares early on to do to get some some of the fruits of their labor but they it would such a system would enable to stay to to the founders to stick with their company much longer and to have it grow to a much higher scale and this would probably also in the end lead to much

more listed companies on the stock market so today we are only with about 230 listed stocks left and this is less than it used to be in the past and i hope that i can contribute to turn this trend around and to make sure that more and more companies are publicly traded in switzerland that's it from my site uh here you see my email and the link to our investors page where you can buy and sell our shares thank you ludzius for the inside also again another approach very interesting we'll discuss later about this

and now last but not least we have lamin from taos from geneva welcome here on our panel and we're looking forward to your good afternoon uh everybody so i'll give a few words of what we do focus a little bit more on our digital asset marketplace so you know our premise you know what we do what we want to do at least is we want to allow our clients to manage any digital assets any uh with one unified platform when i say any it can be cryptocurrencies it can be tokenized securities

uh in the proper way uh down to the smart contract function level digital currencies we have been working with some leading banks integrating global stable coins we have also announced a collaboration with mastercard so we also believe that digital currencies are are coming fast as opposed to some of my colleagues that have spoken earlier we don't come at all from i would say financial services envelope we started building the tech from the ground up

roughly we work today with the full spectrum of financial institutions it can be systemic banks investment banks private banks actually both with crypto banks a bus signal user tech retail online banks such as swisscote as well in the same way that somebody mentioned it in the beginning you know some of our clients were tokenizing gases they had demand for it but they were missing you know a regulated map place that allows to do so so we basically built it also from the ground up so basically what we do is we we want to provide an infrastructure which is actually totally open architecture so our clients do not need to subscribe to any of those services in bank if they

want just you know to do crypto they can just take the custody if they want to do tokenization they take tokenization if they want to on board in our marketplace they can do it as well it was totally basically we work totally in open architecture mode the idea is to give choice to the clients uh if we now talk about um you know tdx is all marketplace that we announced and launched actually last may basically is the first really independent marketplace in the space we are totally agnostic we master the full technology stack so again as i said we want to give choice so if clients want to tokenize on e3 on

public or private they can do if they want to do it on taser safe 1.2 fa2 they can do and others are coming we're also totally diagnostic in terms of underlying it can be equity depth real estate by the way crypto and nfps as well you know our technology is uh allows to to island and process in other words you know perform proper asset servicing independently of the underlying i think what's very important also is we aim to obviously in that in that space independent so we work with a full spectrum of financial

institutions with banks we don't want to become a bank and we've never wanted to be so nor do we want to be in stock our core focus really is private assets so it can be anything that is not listed fast-growing smes it can be also but large companies that do not necessarily want to be listed in stock exchange and we have also now other segments such as nfts that are coming as an example made a direct you know listing of audacia which is a swiss-based company e-commerce company doing 30 million

revenues and growing fast there is a private placement 50 million plus that is being made by a large swiss bank for one of the large swiss you know for a large swiss company that that we're doing together there are also a couple of financial institutions that are willing with their asset management business create liquidity pocket for less liquid strategies so we're working on those types of things and um i agree to with the what nathan said in the end it's still early days but if i may to summarize it i would really use the e-commerce

you know parallel you know there is no reason why private assets securities and cannot be as easily you know acquired and transferred as if you were buying a book on amazon the regulation i lost for it the technology allows for it the main unknown is really the speed of adoption and we are here you know for the long term you know our fixed costs are very low because all attack is ours voila so to me really and to us or deep conviction is we are not really looking at public

markets or deep conviction is private are here to be digitized and easily transferable and all the elements of i would say the are now there and it's i guess the work of you guys in the crypto valley association some of the banks that are here today uh infrastructure provider you know to work and to to kind of educate um the market so that the market actually grows uh faster than slower that's it on my end thank you very much i mean this was very

interesting now what i have seen in all these discussions we have had now is i think i was also you regulate as an organized trading facility right did i understand this right that's absolutely correct when we filed for the license the dlt license didn't exist and to be honest we feel comfortable with what we have today so it's interesting i mean if if if we see today's presentation we don't even have one dlt trading platform license signum and

towers you're operating under this under a similar license i would say i see known as a bank you as a as a security house if i got it right that then lutzy was this trading i mean you were just providing a system let's say the company that they can submit and sell their own shares and they so you're basically just a tech provider without any licensing not done with sdx is going for a regular stock exchange license was it useful to implement in our law

this this this this is now the question maybe for each of you where do you see or why didn't you opt or who do you think will opt for these new trading facilities available martin i'm happy to start the discussion arguably we're probably the one player that everybody is looking at first and foremost for this new license and my personal takes i'm not speaking on behalf of of sticks or sdx is that everybody and everybody really means everybody all of us the companies the individuals involved but also the

lawyers the auditors simply need some more time before we'll see license filings i think this just takes more time i i i actually have said so at the uh conference last week and zug that maybe strangely enough the law change was faster than we all thought and strangely enough and i'm looking at beyond who i know from from before i think in failure of course uh strange enough maybe the the law and the regulators and the legislators that the lawyer this time were faster than the uh the companies involved so uh i think usually everybody says it's the other way around but i i

i really think that all of us in this ecosystem here just need a little bit more time yeah that's my personal like but happy to discuss other opinions so yeah i can build on what nathan said you know getting a license uh has been a long process that took more than a year and you know i'll be very pragmatic uh at least or experience you cannot apply to a license that does not exist so when you apply to a license the dlt license didn't exist that's why we selected that one and again we would be more than happy to

consider switching to it but as far as we are concerned we believe that what we are allowed to do is more than enough for our current needs yeah i can only second that from signals point of view i mean i i said that before i think we we were allowed to operate an organized trading facility under our existing banking license so for us it was it was kind of the low-hanging fruit if i may say so to establish a trading venue for asset tokens in the absence of sdx which we truly hope will get their license very soon and we will all be able to connect to sdx to also bring

their to add them to our ecosystem that we all jointly have to grow as lamin said before i think it's it's our own responsibility to make this work and again as lamin said also ourselves we are focusing on on bringing more liquidity and better and easier access to private markets or private assets and then we leave the the tokenization of blue chip stocks and the likes uh gladly to sdx and looking forward to be able to connect to them very soon yeah interesting we'll see what will what will happen and uh maybe we can do then

once uh we have some new actors in the market who will apply for this license to re-discuss this i have a question also to that down i mean you're you're aiming to become a regular stock exchange i just with digital infrastructure if i understand this right um do you what do you intend to trade on your platform is it also cryptocurrencies or is it only so-called asset tokens are also other tokens absolutely a good question so i think of course there's a lot of confidentiality as a as a once licensed and even before our pipelines of uh of products and

offerings is is really uh subject to confidentiality because we're denmark part of that public market uh so i can't really be as speaking specifics but we will start off with uh with securities because that's what the license is for within securities it's uh fair to say that we'll start with fixed income uh slash bonds and inequities will will come later uh i think that's a very first answer question uh the cryptocurrency part means the non-securities part is uh very big on our screen and we're spending

substantial amounts of time and effort on that part but that will also come in a next stage so immediate stage is really obtaining the license from vmware and then starting with a fixed income uh product uh that is a security yeah and then take it from there um we i mean we could we could maybe have a discussion here or or maybe that's the the very best uh place after discussion uh the question is uh cryptocurrency exchange versus a broker model is there space is there a commercial need

is there a sufficient commercial need within switzerland for a spot trading means an actual cryptocurrency exchange is i think a question that's that's out there versus a broker model like uh maybe bitcoin swiss acid or coinbase has it or crypto finance has it these are uh questions that we are currently asking ourselves uh what's what's the commercial need next to the regulatory possibility under the new dlt law to actually operate a spot trading cryptocurrency uh exchange but i'm gonna throw that into the the

the uh the group here if i may i have another question which i'm wondering about your thoughts about i mean switzerland being a small country but still very national oriented country so it's not being part of uh european union so with a very small let's say buyer market for our how do you see the developments will we be able in switzerland or our marketplaces to be able to play now our leading role being at the forefront of these developments in deal with the dlt law which we have

implemented will we be able um you know to attract also foreign investors on our trading facilities what's your thoughts about this please i'm going to do a quick answer i don't know if you're asking me martin but i can only talk about public listed securities because that's the part we're taking care of or or are going to take care of and for public listed securities uh jurisdictions are are are very important it's very jurisdictional and i really mean it when i say as a lawyer very uh so it's not even just equivalency issues from a cst perspective

uh it's investor protection and so on so it's not an easy there's no easy road to transact internationally for publicly listed securities but i i'd have i'd be very happy and very interested to hear from maybe thomas and lamian how you see that with regard to private markets for asset tokens look to me we are in the very very very very early days so do not expect prioritized tests to be liquid as liquid as tesla sorry my daughter is crying sorry

but to me well so we're here in the early days but is there a problem we are solving the answer is yes are we doing it better than the existing you know alternatives which are mostly pepper based the answer is yes the question mark for me is with the speed of adoption and you know we don't really only focus on you know you know private companies meet cap i think to me what what is actually very good in switzerland is that you know the law allows to do many many things for a swiss-based company we have two businesses now you know the tech side where we can scale anywhere we want from you know china to the us

but on the regulated side i have to say that i would say any sweet based company that doesn't have a footprint in europe is penalized so market access is really you know an issue but this is not just uh it can be any bank which operates out of switzerland they need to have something in europe to be able to to attract or at least market its services to european clients this is more of a systemic problem than anything specific to you know dlt but in long story short there is a huge potential we believe that you can differentiate

yourselves by providing you know the best tech out there the best possibilities and choices to the market and as we said earlier i think the joint a4 of every single uh player will make the the market increase on our side we're seeing it double year on year so basically and we continue to see to foresee double over the next two three years at least any other thoughts maybe yes so actually a blockchain is supposed to be not care about jurisdictions and not

care about borders one of the issues when you use this local licenses is of course that you then are stuck locally and with the local possibilities of the license but if you have if you try to go fully disintermediated like we do our clients they are able to sell shares to whoever they want all over the world of course they have issues when they do marketing then you need the prospectus but there's the for europe for example the reverse solicitation rules so if someone finds you and wants to invest you can accept that money and say here are the shares welcome among our shareholders so i think by

going the this intermediate way you can be global much quicker of course you then have a very a lot of other obstacles that you need to take care of but overall it's not impossible shareholders are free to transfer shares if i'm a shareholder of uh tokenized company i can transfer the shares to to someone in germany or to united states so it's uh it's my property and this is also something where blockchain technology and the idea of or shareholder rights is very well

aligned because blockchain technology gives you very strong property rights and it also means it it protects you very well as an investor from the company the company cannot just take your token away it gives you a strong position of ownership and it it this also enables decentralized worldwide markets and maybe an internet of finance interesting maybe a couple of thoughts to add um please as an issue today obviously you have to analyze what your options are and you have the traditional

finance that goes through the banks and by the banks of the investors and most of the investors are still on the traditional side and on the other side you have the digital way where the connectivity between the buyers the sellers issuer and the investor is only partly established at this point so in many in many ways the dlt security is not fully um i would say competitive to the traditional way for a traditional issue of security or a borrower of alone but this is changing fast and what lieutenant says what lucius says that this informative intermediate

policies were important because there is really where where we see most goals at the moment and technology will not stop at the border and we will see more connectivity between decentralized finance and and and centralized projects and i think we need to be very conscious of that space and it will be a regulatory challenge to to to really control this from a regulatory point of view but it will have to go hands hand in hand and i think with switzerland being an early adopter of of of new rules and also having a lot of projects here on the ground we have a unique opportunity to establish the

connectivity on one side with traditional finance so that the investor can invest in a security whether it's traditional or a token and we have to and we have the opportunity to connect to decentralized or disintermediated processes in a compliant way in order to benefit from the the evolutions on that end which the with the regulatory starting point we have we have a huge opportunity interesting um i would like to ask you another question i think uh rameen and all solutions and chris and all of you i mean you i think

we've also brought up the thesis the threshold to be let's say for a company publicly traded in a way or another will be lower so i think as i have understood it it's clear goal and i think this is also very interesting maybe for our audience let's say to have smes smaller companies which it for whom it would be two burdens on let's say to to start an ipo because this is too expensive to access public markets through now each issuance of digital of a digital um

security what what what is your your thoughts on this do you think this will this will really be an important an important player and maybe also what kind of costs would you expect for an sme to get its shares traded on on on on the trading menu and maybe the third question related to this once it grows much bigger will there be you know like a way out from this digital public traded venue to a regular stock exchange if this would still be needed

or do you harm your position for the future once you go to such a digital exchange i can i can give you a bit of feedback of what entrepreneurs tell us uh some of the entrepreneurs we talk to almost systematically they say okay especially you know the next the younger generation or even like a generation which is a bit older than me but but you know which have basically a modern way of managing their companies very first basic question you know they most of them have employee stock option plan incentive plans they say okay we want to allow or for employees to cash out can you do it

the answer is yes others you know have uh want to unlock kind of liquidity for the existing investors attract new investors obviously if you provide the possibility to get in and out every month every quarter every semester actually it fully depends it's quite you know interesting value proposition the liquidity to bonus is not guaranteed right doesn't mean that you are admitted for trading that you will have a debt of you know tesla but it's already good value proposition and in terms of costs to be honest it's marginal right i don't know how others price it but there has been a phenomenal work done by

the cmta capital markets and technology in relation to tokenization of you know company shares the smart contracts already exists it's plug and play you basically basically need to adopt your articles of association i have a decent lawyer working with you and in a couple of thousand francs maybe a bit more uh if you want to basically have a full-fledged service you can be admitted for trading that's our experience at least i fully agree uh see completely the same i think it's it's the enablement of let's say a standardized option for liquidity or beat and exit option also i think it's definitely

something that this brings to the table now and the other element is what you said martin in the other question it's definitely about providing access to such unique investment opportunities in terms of private assets to a broader audience to a broader group of investors to to diversify their portfolios on the one hand side but not only for let's say for financial um or risk return optimization purposes but also i think for a lot of these private assets there is also an element of emotional investing right you want to be part of something you want maybe as an issue or you maybe want to make not only your employees shareholders but also your clients you want to make shareholders i think we have a beautiful

example of neon who did that recently when they had a capital raise where they engaged or managed to get 1 700 of their clients to to become shareholders as and then eventually we're going to tokenize these participation certificates for them to then at the later stage hopefully enable also secondary market for that i think we really now using technology enables us to to make this possible at the fraction of the cost that you would see when leveraging traditional capital markets or traditional technology i think this has a really huge potential

if we see this and if we see the structure of let's say swiss economy with really great smes but with no direct access to financial markets obviously i mean this is a very compelling idea and i think we at the cva and also sick of course should also think about how we put you know how how we can position and help our members in there another thought we have already discussed that also at circus level is maybe also that i would be wondering about your thoughts about this i mean if we see in private equity

transactions i mean it's a very pain you know lots of paperwork to do of course with so many individual clauses but very often also with quite standardized clauses where do you see also the opportunity here to facilitate let's say this kind of transaction through digitalization tokenization i think we definitely see potential there as well you said it whatever is fairly standardized we we can also

implement into a token smart contract uh eventually or relieve some of the closest be part of the tokenization agreement so definitely i think we can we can definitely aim to lower the investment barriers or the thresholds or minimum investment sizes for such for such investments if we manage to digitize the processes and and then and contractual clauses around them definitely i i want to jump in here i think because i was going to say that it's not the tokenization itself that allows in my personal opinion that's not the tokenization itself that allows for an easier access to financing it's rather

the very standardization thomas that you just mentioned and and so cost savings through standardization but not the tokenization on its own it's it's not purely the tech that enables something that wasn't enabled it's the cost saving through standardization that makes things cheaper were before some things were cost prohibited prohibitive yeah i think if you only look at the coast cost saving perspective then you are not capturing the full potential because it's like saying email allows us to write letters faster it's kind of true but it still it

changed the pattern of how we communicate it wasn't just fastly changed how we communicate and the same i hope to happen with tokenized assets it changes the way we trade and one example we see today is uniswap which some believe it's it's clumsy in comparison to a traditional market it's it's a hack that they did out of technical necessity but i don't think that's the case i think they have found a new way of liquidity provision that's actually much more efficient than the traditional order book and much more elegant because it's it's not each so if you put in a market or a limit order basically you are not

putting it putting a point in the order book you're putting a whole range of orders and and a continuous order space so to speak where you then are providing liquidity which i think is is it's a true innovation in finance traditional stock market guys didn't come up with so that's one result of having programmable money is that you can that the programmers are suddenly in charge of financial topics of course it often goes wrong but sometimes they find find a nugget i i'm all for that rabbit hole of of disruption and i think uh maybe the comparison with email i'm i'm actually i

very much agree with what you said say i think the tokenization that standardization is exactly what was disruptive with email it's that email what wasn't in deep faster than normal mail it wouldn't have been disruptive if it happened as fast or as slow but then it put in that standardization that there was only one email protocol before we had obviously you know smtp and all that but there is only one email protocol and that standardization is like the containerization of international trade that allowed for business models with both emails and tokens and containers that just didn't exist before yeah i'm very much with you yeah

so i think um we will have another five to ten minutes to talk between us i would like to uh i mean many questions they were they were replied already in our chat so i don't take them up again but we have here derek q the stock gulp who ask us where do you see the key next areas of innovation in the coming years in the space tech wreck instruments over what's your thought on this i mean now we've been in an extremely dynamic in my opinion in an extremely dynamic environment we still are a bit in the fork even though visibility gets better

than it was the last few years but i think i mean also regulation-wise lots of stuff has happened here in switzerland will happen in many other countries i mean anyway the differentiation between tech provider intermediary probably will also be a point of discussion because you know there is of course regulators don't want to create thresholds where you get around and so this will be but maybe what what would you think as important development for the next few years we can try

look uh to me in the area where we are actually you know standardization is something very important and dvp delivery versus payment is critical so i know the stance of the swiss national bank we know them in a bit but you know there is you know if we can the technology exists it's already working quite a bit from a regulatory perspective you know we can have you know global stable coins that would facilitate settlement or dvp transactions that would make a killing

to be honest that's a deep conviction we have the second big challenge is you know there has been a question which blockchains will prevail or are prevailing there is a lot of multiple blockchains coming you know with smart contract capabilities at some point there need to be two three that will emerge just basically to to make things easier for for everybody and the last one which is not related to our business but which to me could have made things absolutely you know fruitify always try to sit in the shoes of the customer even the e-identity so the law didn't pass earlier this year but if we had something like a near

identity you would basically be able to sign documents online and digitize what you know the remainder parts of uh you know the value chain uh that would also streamline and smoothen interactions that would be for me the three big things over the next i would say two three years i see more uh this intermediation driven through um technology and solutions innovated in uh decentralized finance so i mean the the

innovation and the solutions are are just fantastic and also end-to-end solutions where traditional financial services provider are really pushed back into their core uh intercourse capability which is uh i think it's just distribution which is risk-taking which is an important part also going forward in the financial system but they will not intermediate all the processes i mean an example is the primary market process you can really automate all the aspects maybe besides the the large scale risk taking and and the potential distribution to institutional clients but the entire process and

particularly the compliance process the onboarding process the wire process can all be automated you don't need an account with let's say with the space bank or internal bank or with whatever bank necessarily in the future you might need it for to to add some trust elements that you don't need it to do all the services that are possible on technology going forward from my side and it has been said before i think what's going to slowly come

and place to watch and has been said today before is is this decentralized exchanges as the token security tokens i think that's a space that's gonna happen with or without us with or without the legislators with or without the regulator so i think that's a space that's that's going to be interesting to watch perfect gentlemen i thank you very much you have been here it would have been great and i hope in the next discussion we will have also

some female presenters who are coming into this very interesting field of trading venues i am sorry i mean there was a certain on linkedin about um you know i did not take care enough when i selected my invites about um diversity i'm i excuse this i want to mention again that we had at our last event it was a women's only for venture capital in blockchain space and we want to make we'll make sure that

also diversity is will remain a top priority here but i think i mean and this is important thing it was a very interesting discussion very interesting presentations i think what yeah what struck to me now is that we have now some very qualified participants in this market with a very clear vision where they want to go this is great it's interesting that they all opted for uh current or for you know for old regime licenses to get into this space so we'll have to

see what happens in the next few months and years and um thank you very much for being for presenting and being so with us thank you all to all the participants also to attend this meeting and let's enjoy the last hours of sunday of this beautiful day we have here thank you very much and hope to see you very soon thank you martin thank you bye