Those Entering Digital Assets: What You Need to Know

Transcript

[Applause] [Music] thank you good afternoon everybody so i'm la min i'm one of the co-founders of torres thank you very much guys for the presentation so what i wanted to do today is just simply take the stents that some of you might have from a financial institution and just reflect back on you know what you've been doing over the last three four years and a couple of things you should look at if you decide to enter the space so typically as opposed to what boris was focusing on or some of our

colleagues were talking on we only focus on banks we are not focused on family offices web managers asset managers our main focus is banks and those banks typically when they enter the space they look at three main things so you know talk about cryptocurrencies everybody knows about it tokenize securities i'm going to talk a little bit more about it all digital currencies so depending on the regulatory framework depending on the business conviction market demand they want to enter in any of those space sometimes all of them so what we've done at all is we just built an infrastructure that allows them to

manage any of those assets with the same platform so we've been meeting clients telling us oh i have a solution that is amazing in managing cryptos basically those guys are not able to process corporate actions in relation to securities what shall i do so that's very important what the main simple mission that we have is we want to offer the possibility to banks to manage any type of digital asset and when we look at tokenized securities i really mean managing core protection so any type of smart contract call any type of smart contract function we're able to detect it and process it so you see here a couple of our clients in a nutshell you know we work with the

full spectrum of financial institutions it calls from you know systemically important banks investment banks crypto banks private banks digital banks and what have you so what we've built we've built an infrastructure that started like three years ago something called tourist protect which is a custody platform we have extended it throughout the years with something called capital it is an extension that allows to manage not only to issue securities but also to process them it's totally integrated with our custody platform tourist explorer is basically nodes so at the time we had to build our own and you know we developed expertise so we built our own nodes indexing for detection reliable broadcasting we have that the last piece of it i'm gonna talk

about it a bit later on so we are entrepreneurs some people may say okay you have already two three products it's already a lot no we want to offer our clients the possibility to go through the full value chain so we have clients that want to tokenize securities it's a very nice intellectual sometimes practical exercise but if you don't have a marketplace that allows you know to exchange liquidity it's a bit worthless so we got to film my license over the last um summer and you have probably seen an announcement a couple of days or weeks ago with credit suisse that is making private placement fully tokenized and we're working with banks issuing structured products firms you know tokenizing less liquid strategies

so in a nutshell when you enter the space it's very very important again as a bank if you know you're an asset manager you're a crypto shop you know just focus on crypto and it's gonna be okay if you're a bank it is likely that within the within the next you know 6 to 12 18 months you will have either peers putting pressure on you or your own clients putting pressure on you going a bit more uh uh you know through the to the ladder you know managing tokenized securities so that's very important because in the end you will end up you know having one platform for one thing one platform for the other thing one other platform to the other thing and in the end it's a i would say higher operational risk higher total

cost of ownership so that's my first very piece of advice in the end some of our clients ask us so now i'm just gonna take a step back you know i'm gonna four or five key questions you know i can't spend an hour on it that that are that are being asked so you know which blockchains my very basic questions uh answer to you is actually don't mind you don't care what's very important is to make sure that whomever you work with control the full technology stack you have two main advantages in case of technology i would say disruption you know you minimize the risk and the risk is never null and the second one if you master the full

technology stack the speed of adoption is much faster the second one is you know we've been asked that over the last 12 months hsm mpc blah blah blah blah blah blah you know mpc we have uh looked at it some of our rnd teams have looked at these in details so we have implemented sorry for the barbarian names like frost eddsa gg18 ecdsa gd20 ecdsa we have published our first the first i think world i found the first open source implementation of cmp ecdsa which is i guess the one that is used by your friends from fireblocks a couple of months ago so you have you to look at it

and again you don't care right my point is we need to give you choice and depending on your level of comfort whether your security teams infrastructure team is more familiar with hsm they will go with hsms you know there has always been hardware there will always be hardware you know your apple iphone are based on hardware there will always be hardware there is no nothing harm in it today to give you a split 90 plus or for banking clients are more familiar with hsm and some are looking you know at mpc one very important point if you look at this it's super

so you may have the best you know certification you know it's always good to trust it's even better to verify uh if you want to enter into this space you want to ask you know the source code of the mpc implementation we provide the source code of the firmware that is providing or hsm as well as you know it's open source so by design you can even use it and tailor it to your needs so very very important whatever you choose ask for a source called audit the other one you know we have investors that tell us you need to go fast you need to go sas it scales it scales it scales you make more money in the end you know you need to go what where basically your clients are willing to go so some of our clients

they want to do stuff fully on premise if you go to singapore if you go to certain jurisdiction the local regulator will ask you to keep you know the infrastructure with you so in the end what you managed to do we have clients totally on-prem we have clients totally manage service we don't call it sas we manage infrastructure for them but you know it's theirs or we have clients in hybrid mode so we want to part of the infrastructure with us part of the infrastructure infrastructure with you we kind of don't mind so i think it's very important the very basic question for you is just basically what are my regulatory requirements what is my enterprise risk framework what am i allowed to do can my

provider allow me to do so and the last two thing and custody is fundamental as boris said but i find it a little bit boring right in the end once you control the technology once you control the infrastructure it's good to make trades you will make a lot of money trading bitcoin for some of your clients but it's even better to try creating products so that's that's what we have tried to do so we have now you know you know an infrastructure that allows you to do two things create any type of security like any type you can randomly generate it with you know randomly generated smart contract function name who are able to process them

and the second thing which is very important with global banks because global banks you know they have when london in london they have the fca flavor in singapore the ms flavor in switzerland the finma flavor in whatever the local regulator frava every single one of them will have their own requirements so it's very important to be i would say standard agnostic that's what we have been trying to build and to be honest it's one of the most amazing achievements our team has been making so we have we're totally agnostic on ethereum we are totally agnostic if you issue things on teslas and other i would say blockchains are coming so that's very important for you uh some issuance platforms are very good in the us they're going to do the u.s

flavor some of which have their own standard we are totally agnostic so whatever you want to do we're able to do and the last thing which is a little bit uh our baby project that we have been you know nurturing over the last two three years as i said before you know it's great to tokenize assets even better to provide the marketplace to to to trade them and we've brought that it's totally built on our infrastructure so our fixed costs are super low and we are basically having you know a very nice pipeline of companies some of which with some of our partner banks we have companies making 150 million revenues plus that's going to be admitted for trading you're going to see

that in the next couple of weeks so in a nutshell to me uh i was myself um in ceo positions in my previous life there are two things you you you want to check when you want to to enter the space first do your guys really master the full technology stack versus already assembling it and there's a very high premium we are in we are still in the very you know young industry there's a very high premium to those who control the technology stack and many of the guys today do so and the second one is you know does it cover the use cases that i need as a bank not only today basically what

i make this up you know the corporate bank is asking but also within the next 12 to 18 months concretely speaking not only cryptos but also tokenized securities and digital that's about it on my end