Zug Blockchain Initiative: Why Is Zug Investing $40M in Blockchain Research?

Transcript

everyone and welcome to this panel discussion uh dedicated to the topic why Kon of tuug decided to invest 40 million in blockchain uh research initiative um here all our fantastic panelists together I think we can we can maybe take a seat and get started a little bit my name is Olga and I'm head of legal at Prosperity digital which is Bitcoin mining company I'm also chair of Western chapter of CVA and I'm Prill to moderating this panel discussion today uh for those of you who don't know on the 8th of May K of Tu decided to invest 140 about 40 million to the new

blockchain joint research initiative uh which is actually joint initiative between two universities the universities of lern and lern University University of Applied Science and Arts actually the place where this conferen is now um happening and the key aspect of this initiative is to change a little bit the approach to the research around blockchain area and uh instead of having research dedicated purly to the technology actually shift and investigate also how it affects all other aspects soal social economic and

political aspects and for this reason this research has been created and this the goal of this panel is to discuss actually what what is the objectives what are the expectations of this initiative and how it's supposed to be implemented and today we have a fantastic opportunity to hand to have these questions uh answered um firsthand and so let me introduce you the panel our first panelist is hin staner who is financial director of Kon of Tu after we have we have also Andreas furer who is attorney at

law and professor of law at the University of ler after we have Thomas ankenbrand who is the head competence Center Investments uh at the University of litar university of applying science and arts and Rona hler who is also director of Department of computer science here at the lar University of Appliance Science and Arts so please welcome our four fantastic panelists and I'd like to start with the first questions to hind about the the budget itself and the the purpose like

this 40 million the first question I think we would have um would it be dedicated purely to academical structure or that might be some funding to startups or blockchain related companies maybe as implementation partner or somehow some funding can be uh dedicated to to business yes thank you first uh my English is not so perfect as the English of the other people here uh uh in this room but I try to explain in English what I can I'm the the the political uh uh man and I think R hler and the other person can better explain uh this this

this question for the Canon of T important for the Canon of T was the situation that the crypto Valley we have the crypto Valley in the Canon of T since 10 years I think 10 years about and uh the city of and the Canon of t uh supported the crypto valy and the blockchain technology from beginning uh and U I think this was this was the important point for us to be Innovative also in this question uh we will uh build up an Institute a blockchain Institute

together with the University of lern and the University of of rocks and U we discussed also the advantages of such Institute uh together with Rene hler and together also with the University of lern and I think um R hler is more competent now to to explain you uh why we uh pay for 4 million Swiss Franks to to start and to build up this this this institute and the Hub and also the combination between between the two

universities I think it's better he can explain better that but initially These funds are dedicated only purely for infrastructure University infrastructure there is no funding for business or something no that that's that's clear thank you and my I think the question that maybe we can continue with is indeed the the reasoning behind because Switzerland has been pioneering in Dy law and was always open to innovation in technology both at Federal and Cal level and it's not a big surprise that many universities and research institutions they have been running already um research in blockchain or effects of blockchain in maybe some uh social

aspects and I don't know analyzing tax as as aspects of this and the question is where do you see the Need For This indepth research and maybe this holistic approach for why you need this structure to make this this research happening he told me that actually I should answer this question as you mentioned there what you see a lot of activities on different universities where they focus more on a topic they really have a topic and they start from and then actually broaden their knowledge there in that field and I think that's the the the special point of this activity that we try to bring this together yeah that we not only focus as you mentioned from a technical

point of view but also see the the humanitarian the let's say the the social inspect aspects and all that stuff actually that will be combined in this research activities and this will be let's say when we look at what's going on let's say worldwide this will be a unique opportunity to have this combination and also coming back to your first question question actually how the the industry startups and stuff like that are involved then I can say that since the University of applied science really have this close contact to the industry to startups company and stuff like that that means that U research activities we doing also we're doing this also together with such institutions and bring the knowledge also directly to the to the to the

industry and the companies but they will be implemented they will be somewhere somehow involved as implementation Partners or or how they will be involved in or it's just they will benefit from the fact being within the community I think that's uh there are the the the usage for them is actually threefold actually one is that they're at the edge of the new research activities they also can provide or participate in these activities get the knowledge out of it can make business out of that and then also be part of the community and also dispers their knowledge throughout the throughout the the the the whole Community MH okay yeah thank you perhaps if if can add something I think it's

it's really important what R has said that it's not also to be to see it isolated this funding from the C on Tu it's also in combination for example with the inner funding and where we have the speaker before so we have also anyway at the moment a lot of projects but with this fund we can leverage farther the implementation part for for us for applied science yeah if I may add to it you know I'm I'm I'm from the University of L and I'm I'm involved in this business since 2015 uh being a lawyer in CC uh I think the interesting thing of blockchain from

an academic point of view is that there has it was not developed Within uh a university it was not developed in the military context it was developed by private persons that's why there are so many losses because usually if there's a new technology the state or the military or whoever pays for losses and the gains goes in the private sphere here it was really privately developed and I was also involved three years within for a project a private project blockchain project so I've seen all all perspectives and the problem developing in a private sphere is that you don't never have the time and the money to

think deeply about what you're doing you just do and you have to do and I think what we what we can now uh providing all support for the practice is that we have we get a bit of time and that's what we are academic paid for to think about to be in interaction to talk with people but also to take some time to think about about to make some thoughts about we we just had a very interesting conference a few weeks ago on the future of blockchain we invited friends from us from Canada from China from everywhere and just sitting together for one day having an interdisciplinary discussion on where are we going to where are we

coming from what is the impact on society what what is the impact on technology what is the impact on law for me as a lawyer very important so this is uh you know it's not a one to one gain for the community here it's a one to 10 gain if I want to say so but there is some you know we need to be in a discussion and it will never be a kind of uh separated and academic entity without any connection to the practice but there is there thinking about is completely different to just doing and we are we are we are responsible for thinking about yeah thank Andreas actually that's a very good moment you touched on now it's timing and we know that actually any decent research

normally takes at least five year five at least three years and the industry blockchain industry is very Dynamic and everything that was like classic we can say something that happened last year and the case law is very developing developing fast enough so how you can ensure it's also my question to to Academia part how you can ensure that you you will be tackling really right points paying points of the industry I'm not sure in applied research or applied science it not takes five for three years I think our u usual

projects are much shorter I would say between 12 to uh to 18 months something like that and how can we tackle that we really are close to the industry usually we don't make and we plan this also to do it in the future not to do projects without the industrial partner without the startup without a company so we are really close to the industry and I think this is also a huge Advantage what we are doing at the moment in combination with the University of lucern we have both side we have uh fundamental research in a broader sense and we have really the apply

side of the research but then you say you're very close to to business is it the same structure like as you mentioned in the for example so it will be always initiative will come from business first so how we think to do it it's not that we have exactly the same structure because in inos you have really a very strong implementation part and it's really 50% is coming from the industrial part perhaps with this funding we have also the possibility to shift a little bit or to do something more initial uh work on some topics but not for three or five years perhaps for another six months or something like

that okay yes Andreas you have something before I can this I think that's quite an important issue that if you working together with companies then as Thomas just mentioned that they really are interested in actually getting the project done having it on a market actually doing some business stuff like that and there we see a lot of that there is there is a gap that we see there there needs some more scientific or scientific work that has to be done to really know what's going on how this can be let's say even further used in different in different aspects and stuff like that and this is an activity also which will be primary and also we have then with with this financial uh background really have the opportunity to really do that and I think that's that will be also benefit

for all that we see that's not only focused on a certain implementation where you see that that we can really see what's the basic behind what really is the key functionality or whatever that we can actually then use in different topic and stuff like that okay yes yes and uh just to add on that uh you're right you know if you if you apply for uh Swiss National Fund it will take you half a year to prepare then it will takes a half a year that they decide upon and then you've got a two or three project which is all together four to five years and that only makes sense first of all that you draft a project which can develop so you you you you drafting another Spirit than than other

projects that's one solution the other solution is that you take higher questions the profound questions which do not really really change I I made once the mistake I I applied for smart contract project in 2018 and I was so happy that I failed with it because when I read my my application uh seven or eight months later I thought no that's that's a completely wrong questions I I I may it was too too practical too too down to earth my project so if you do that research you really have to lift it up to to general questions where you really can think about and then it does not really change let's say for example the impact on private law on blockchain or the relationship uh how to can how can

you escape the financial Market focus of blockchain which is completely stupid with modern blockchains you are far out of it these are questions you can discuss and and think about quite a long time and based on the funding we receive we can then do the the shortterm research like a seminar like a workshop like being in discussion because as there's a basic funding we can do this short-term thinking and out of this shortterm thinking out of our discussion deliberation with with you and with all then this higher and more academic and more abstract questions raises up and then we can think about but that takes

four to five years that's that's completely true and it's good because you need some time for thinking yes to have some fundamental research inde did and how this research will be implemented in general academic let's say uh parkour uh how it will be will it be with PhD students or what I think that using all the the aspects that we're having in universities that that is that actually with the research stuff this with PhD students and all the different aspects also with with corporations with other universities uh we try actually to build an ecosystem that is focused around these activities and then take all the different stakeholders that are

necessary in there to bring the topic forward yes I to add on that and I think that is from a political point of view that the important thing is we are also educating young people you know the the assistants the the academic staff working with us being in discussion with us we we introduce or they will then stay here they will help you to further work on it so it is if you look at the at the history of Swiss university the the uh uh the ADH in surk for example on the University of Sur but also my my experience as a founding member of the University of of Lon that it's a it has a huge impact that the young students

the young people go out in practice they they fall in love here they like the area here and they stay here and they they further develop in practice so it has a long-term impact so I think these 40 millions are well invested money yeah that's correct another question about the the research approach itself the initiative again says like the first key criteria is this interdisciplinary approach and as you mentioned how technology affects social political economic life um but in another aspect it's also International scale which is mentioned and this is actually the ambition to make this initiative International kind of Hub International

place for for blockchain research and in this context specifically uh considering these economic and social uh aspects all the things like taxes or legal treatment for blockchain technology are very differently represented in global scale and then Global Perspective in different countries even within Europe we don't have unified approach to this not to say the US versus Middle East or Europe even within European country we have very different treatment for tax uh how recognize digital assets for tax reasons or some legal aspects So within this

unharmonized approach and unharmonized environment how you want to tackle and how you want to consider this International aspect within the research I can start from this side I think that's that's also quite an important issue to see what's the difference between and why also and then when I think of what actually from the human scientific side what's the reason why it is so different in different aspects I think also this gives some some inp puts how this can be handled or how new ideas can actually then go into let's say law or whatever whatever regulations I think this would be also quite interesting to see because there is a certain usually there is a certain mindset or a certain idea behind how

things are defined and when we even have a broader View and see what's the different stuff like that this could be also quite interesting to see uh the reason behind and from that also get some some knowledge how you can actually do or improve this activities I think legal is important but I think it's not the most important thing for blockchain I think one of the most important thing is the adaption of blockchain and the users and I think there Switzerland in the DNA we are always export oriented so I think if we try to develop Solutions with our partners which are usually usually are also International oriented to export

all over the world I think this gives quite a clear answer to your question I think I believe in competition and uh a legal competition is a good competition for example if you look at the UAE uh with the different areas of small law in Dubai you know 38 free zones competing with each other with different legal situation that has really developed Dubai in a very fast way and we are in the same here you know we we are in a competition to Singapore to the Emirates to the US to whoever and and in Africa there is now a lot of movement there so it's very very interesting or very important for us to

be aware of it to compare if you look for example from the financial Market perspective what happened in 2013 to 2018 uh All The Regulators they've been sitting together and they talked about and the structure is more or less the same it's more how to apply the the the the similar rules is different in in the Emirates in the US but the logic is pretty much Al it's very close uh on how to to apply then uh Financial Market law in private law it's different we we are very late from loyal perspective we are very late in thinking about what private law relationship you know identity contract and uh liability

and all this stuff so uh but there we we have to learn learn from other jurisdictions and other jurisdiction can learn from us so this this dialogue This Global dialogue I think it's very important just to be a number one in in in in the competition when we are losing at the moment and do you see these initiatives can somehow motivate other countries also to This Global approach and maybe working together with in international scale and maybe create also similar initiatives yes no but to be honest we have different cooperation actually today

with different universities all over the world with Singapore or also with the the Silicon Valley to mention two perhaps the the two most prominent and I think especially with Singapore it's very interesting because they have a completely different approach to to see the the world it's more top down in Switzerland we have more bottom up and I think these combinations are very fruitful for both sides yes I couldn't agree more I think we are almost a bit behind uh if you look at the US what's what's in research in the US if you look at Singapore there there's a lot of basic research uh in

these countries and so we can catch up now which is uh so we are we are not really the first mover in academic research uh perhaps in in Europe there's not that much in Europe on this academic level uh so I think that's it's important yes yeah I mean in some countries crypto it's still a little bit Gray Zone not to say fundamental research around this topic so this is I mean a big step compared to to other countries this but you know we we we try to have a a bit a bigger view on it it's not just crypto it's blockchain blockchain is technology and and and this technology allows a lot of of

different things which has nothing directly to do with with with crypto like identity uh like uh AI for example the important role of blockchain in Ai and so on there are huge questions in energy for example uh there that there are huge markets where we can provide profound research to develop I think that's also one of the is issues that actually that was in this uh proposal for this joint research initiative there we different defined different topics that you just mentioned energy Health then basic process and stuff like that that we said okay there we see a big potential for for this blockchain technology that can be

applied in that field and they also do and what you just mentioned before actually that's how you actually spread out that actually apart from the let's say the support of the driffin University also there was the idea of a hop that really is has the basic functionality to spread the knowledge to the World on one side and bring the others in I think that's also quite an important is issue that that's special that these special activities also were defined to really not do it just internally here and between our universities that we really have the AIM to really spread this word to the world and also get the knowledge from outside in I think that's also quite important yeah thank you and this Hub will be

within the same structure of this joint initiative okay yeah it's part of this initiative actually there are three parts in it it's actually the the university university of applied science and this Hub these are the three basic basic issues that actually play together and this also used that actually that on One S that actually that we can combine our activities Define projects and stuff like that we just had uh you mentioned it before about two months ago we had a first conference that actually that somehow raised out of this idea that's that's the reason behind to bring these activities also together yeah thank you and also Andreas you mentioned that far reaching effects

of this initiative and it cannot be probably linear uh results it's rather exponential results it can touch many many aspects and it can be really uh ongoing results of this uh joint initiative uh both I believe for Academia um environment but also for business community and in this context I have question probably to all of you the announcement says that um the effectiveness of this uh initiative will be evaluated in three years it's it in this context it sounds a little bit too soon to to somehow assess the results of

this initiative what would be the criteria how how you're going to assess is it good initiative to continue supporting or it's not efficient enough I think this was a one just uh and just mentioned actually this is one of the crucial points also in this proposal because he said we we or the Canon want just spend the money and then at the end it's just finished and so they said actually that after three years we really have an evaluation where we can see whether there are already some some fruits or some seeds that actually are grown already and from that then will be decided how this will proceed but actually this quite an

important issue and the discussion were actually when will be the right time for the information okay and also actually that's also quite important also for the parliament because they said we don't want to spend this amount of money and see nothing till the end they really also want to have a feedback into the parliament how this this evaluation or how this development Evol in that field and I think this is quite important and we had discussion from this from the pure let's say from the basic scientific or research activities then it's too short that's clear to really have already have let's say the big the big results but to see since this is a combination of different different activities and Andreas just mentioned

that also in this long track we'll have some short track results and stuff like that and therefore it makes sense to really have after three years of first evaluation to see whether this is fruit ful or not or this should be canell if it's nothing or how this can actually can proceed afterwards but for can from Canal perspective would it be the criteria the new business in the in the Canton or what would be the focus what would be like from Cal perspective what would would be the primary criteria new business and new blockchain companies here coming here foreign business coming here what the main aspect to main criteria I think one

of the major issues actually the crypto Valley is located here it's connected with t and this should be strengthened even in the future that actually when you think for blockchain Switzerland then it should be Z and this initiative that that keeps that just that's the first idea that comes in mind when you think about it this perhaps just from from academic or from from a scientific University perspective even though you have four to five years to to go through a whole project uh if you have a general funding a state funding you you work on a project then you hand it over to those who really then work on the project but

because You' have got a Basic Finance you can start with the next project so our we had a lot a lot of this discussion at the University so with such a fundamental funding we can build a kind of third a third a third party Finance project which can be the Swiss National Fund which which can be the European Union which can be private uh private parties so but you need to have a kind of of fundamental funding and then you set up a a whole a whole project one after the other and that that is one of the ideas and and after three years we will have a very critical look at whether this what you mentioned but also the kind of setting up research

third party Finance research projects uh within that Institute and that will be part of of of of at the end this is this is only a political decision this is a decision of a parliament not more and if we don't make mistakes now uh when we build up now this project and then then nothing nothing happened after three years I'm sure but you know a parliament has other IDs than Specialists and universities and for the parliament it was very very um important very important to have

after three years uh a paper in the hand to see yes it's okay and then we continue the project this is this is only a decision of the parliament at the end for nothing okay I think this is a good closing remark of our panel discussion anyway I think the idea is to to keep um this image of t as the primary place for blockchain business and also within International scale um also keep the same role

as primary place for blockchain research okay that was good 30 minutes I'm sorry we don't have any question any time for Q&A session if you have any questions you can probably try to reach our panelists during networking part but at this moment I want to thank all panelists for joining us and thank all of you for coming for this panel discussion thank you