Conversations from the Edge: Innovations in tokenization platforms and corporate issuances

Captions as YouTube publishes them, usually machine-generated, so names such as Daml and Canton can be misheard.

1. 0:03

   hello everyone and thank you so much for joining us today for our next uh in the series of conversations from The Edge brought to you by digital asset um with these discussions as you might know we get the expert insight and perspective from industry leaders and organizations who are driving Innovation across the financial ecosystem with smart contract and distributed Ledger technology and today we have three such leaders focusing on the development of exchanges and platforms that will enable

2. 0:37

   and transform digital corporate finance activities we're privileged to have here today Tom Sullivan who is the head of U.S market access and business development for soccer uh John Palmer who is the president of sibo digital and my colleague Simone LaTour who is the head of strategic initiatives at digital asset and with that we'll get right into it um gentlemen if I could ask you just when you start if you could give a little bit of background on your own organization

3. 1:08

   um in fact why don't we go around the table and just do that first just to get a few minute intro to acclimate our listeners into what your organizations are doing and then we'll start with the questions for today so um John do you want to start with sibo digital yeah and thanks Kelly uh for having me today really looking forward to the conversation so simple digital is the uh digital focused arm of sibo global

4. 1:31

   markets we operate markets globally uh 25 26 different markets uh 18 19 different uh jurisdictions uh from a regulatory perspective and uh sibo digital's focused right now and uh spot and derivatives cryptocurrency exchange and most recently with tokenization great thank you so much Tom hi good morning and thanks so much for having me I'm really looking forward to this conversation so sakin is a is a large financial institution based on based in France

5. 2:04

   obviously and we've done a lot of work in the digital asset space and in fact uh Sachin has a standalone uh legal entity called SG Forge which is focused solely on the digital Assets in the Capital Market space so um you know we've we've been spending a lot of time working on uh delivering products directly into blockchain environments and focusing on how we can build the ecosystem to build a robust capital capital markets infrastructure in the blockchain and digital asset space

6. 2:34

   great thank you as well and Simone you want to spend a minute just on our own organization sure um so digital asset is a software development company focused on blockchain and discrete Ledger we have our own smart contract language called demo and our blockchain protocol called Canton and we really focused on the capital markets uh Financial Citizen Space where we help people like Cebu and

7. 2:59

   sojan and many others build this with Ledger application to digitize the financial ecosystem great okay well so hope everybody listening now can appreciate that that you all are actually the leaders in the industry and your expertise and the insights you are today is going to be really fabulous so Tom let's start with you um Stockton and you just mentioned a moment ago SG Forge have made

8. 3:23

   considerable effort in creating digital Capital markets activities and Paving the way frankly I think something else you're known for for sharing the feedback very openly into the industry and really elevating the level of information and discussion not all of the folks listening in may be fully aware can you share an overview of what you're doing expand on what you've just said in the digital Financial Services

9. 3:45

   space sure so in fact uh SP forage is as I mentioned is a standalone legal entity it was formed about uh five years ago interestingly out of an internal startup so it was treated as a startup that's often funded and it was really created with the idea as I mentioned the capital markets can and should function and function better in you know in the in the blockchain and distributed Ledger

10. 4:09

    environment and so over the course of time um SG4 has done a number of you know uh groundbreaking transactions and and I say that you know uh as a relatively recent Joiner of stock gen Forge uh I started with the team a year ago so I can't take credit for a lot of the work that the team has done but there have been you know somewhere in the neighborhood of 25 transactions that the

11. 4:32

    team has initiated uh most of them have been in fact on uh on on public blockchains but they take a view we take a view that we are agnostic to you know which platform we are on we are looking for the you know for the right environment with the right control set to be able to you know and with the right Partners so that we can engage in in this space um and so I mentioned that this was 25 plus transactions uh most of them have

12. 4:57

    been focused on on notes issuance and fixed income type products where we see you know the the most appetite and the the clearest path to begin you know to begin this journey um but we've also done a number of uh you know really I would say groundbreaking things uh in April the team launched a stable coin in Europe called coin vertical and most recently last week was granted you know a first a digital asset service provider licensed

13. 5:22

    in France uh so you know we you know we think that this there's a there's a promising future in the space and we're really looking forward to uh you know the work that EA is doing and sibo is doing uh so you know I I think that it really goes nicely with with the things that Stockton Ford is trying to do great thank you so much actually it's a nice lead-in to uh to John as well because John similarly uh sibo has

14. 5:45

    advanced focus on the opportunity to provide a platform and services for creating and issuing tokenized assets um across different different types can you share a bit of insight on your strategy for New Capital markets infrastructure yeah and I think a lot of it um ties into exactly what Tom said it's really where are we going with the future we as I mentioned we operate markets globally in a lot of different asset classes and

15. 6:11

    so looking at you know with with kind of the kind of step one getting into cryptocurrencies via sibo digital is really just the start it's really how do we leverage uh distributed electric technology in in different blockchains in terms of how we're going to move the industry forward right what types of assets are the first types of assets we should look to really digitize Beyond call it what cryptocurrencies are and

16. 6:36

    how do we see our markets move into and leverage this technology both for efficiency but also just the future of Finance right and so that's not only just the tokenization of an asset but also how are we leveraging smart contract technology to bring efficiencies into just the processing of data and the standard types of things that exchanges and clearinghouses do on a date day basis that's great thank you um uh it's been wonderful to hear where

17. 7:07

    both of you are at and we'll delve into that a little bit more but before we do that Simone um uh both gentlemen have been uh kind enough to reference uh a connection to us so digital asset and maybe I could ask you to expand on that a little bit digital asset recently announced the creation of Canton network with a number of leading financial institutions and other industry organizations such as the two uh colleagues we have here today so um for

18. 7:31

    everyone just to have a grounding as we go on in the conversation what is Canton Network and why is it attracting this level of Engagement yes sure so Canton network is a blockchain network that we announced in May together with a group of 30 strategic partners and I think we see a high level of Engagement because I think contrary to other chains we we decided to build the application first and then launch the network connecting these applications and so for the for the past six plus

19. 8:01

    years digital asset helped major financial institutions and fintech player to build decentralized ledger-based application and maybe I can give you a few few examples uh we have several multi-asset to condition platform one from Goldman HSBC BNP for instance that they shoot bones often in various jurisdiction uh in Asia Europe and in the US we also have tokenized structural products with Dr borsa um in the syndicated land market we have a fintech backed by JPMorgan CDN and

20. 8:33

    bammo called versana um on the treasury repo space we have we have broadridge and and many others I think it's a it's a pretty amazing achievement I I don't know any chain actually that has so many institutional Finance use case in production and Kanto Network now allows to to connect these applications together and we start seeing very very strong Network effects um and this is why I think we have a we

21. 8:58

    have that flywheel for the for the adoption of it yeah no no it's that the stage for the the technical aspects we'll talk through if I could start I want to pick up on the thread that a couple of you mentioned with regard to capitalizing and debt servicing so I I know that what we're talking about here is much more broad than one type of asset class but just to to have a place

22. 9:22

    to start where we can talk about some of the experiences from Real World implementations you've already done Tom if we could start with you and then Simone if you could you could pick up right after um could you share just a bit more detail on how digital issuance will improve uh Capital raising and debt servicing what you've seen from the 25 or so activities that you've had what advantages does um does digital Bond

23. 9:46

    issuance offer compared to traditional uh financing methods sure so and I think that John touched on on one of the key points uh which is the Smart contract elements of it and I think that even then we're really at the early stages of getting the benefits of smart contracts but I I'll I'll I'll get into it a little bit so one of the things that that you know we can talk about is is you know how you manage risk

24. 10:10

    and and part of that comes from the speed and efficiency that you gain from from from using these uh using this type of environment um I've done some you know analysis even internally about how a standard you know Bond issuance works from the time that you know we get the information from the issuer through the time that we deliver uh Securities to you know to to an investor and then from there on from the

25. 10:35

    servicing of the of that asset in terms of uh corporate actions and and coupon payments and things like that and that transaction will touch somewhere in the neighborhood of 60 applications so and each of those applications you know have a discrete process it's their own data sets um and they there's a you know a one-way flow of the way information is is conveyed so the beauty of of using a using a blockchain environment is that you you take away some of those layers

26. 11:06

    now you can't delayer everything of course um and that those things can happen incrementally over time but you certainly can can delayer some of those things and and the the The crucial thing is that the starting point and the ending point are the same meaning that the issuer and the investor see the same exact information so there is no discrepancy from the time it starts the 60 systems that it passes through to the end so that's one of the one of the key

27. 11:29

    things and then as I mentioned you know and that's certainly a risk mitigate and as I mentioned this the speed element as well so what we found is that when we did an issuance that that can take you know a minimum of two days in a normal environment sometimes upward to five or more days of some of the issuances that we did we were able the team was able to settle within an hour and you know and that's including all of the external steps that happen so you think about in the

28. 11:54

    industry right all the risks that you you kind of take away counterparty risk system risk all those things that that get pulled out so I think that that's really where you know we're seeing we're seeing the benefit and again with the smart contract element it's really the tip of the iceberg of how you can improve the servicing and build new products you know so that's that's what we're excited about that's cool great thank you so Monty want to just um add some thoughts to it

29. 12:18

    from from our side of the experience no I fully agree with Dan uh clearly the the big advantage of using a discrete Ledger instead of a traditional database it in in the way information is shared as you say term like everybody has the same information you don't rely on on traditional messaging of sending CSV file or a fixed message anymore the the information is reconcile and the various parties have the same information so trade position recall the solution for

30. 12:43

    instance is is very very much simplified and it means that you're taking Ops costs are reduced so like a bottom line gain your ebitda just increases I would add that in addition when when you have both the assets that is digitized and the cash like as digital cash is coming we're going to be able to do what we call Smart contract composability which means that the the two legs will settle

31. 13:06

    at the same time and I think as some highlighted this reduces your Your settlement your counterparty risk and you can explain kind of a significant reduction I think in capital requirement because the risks are all over and and so not only you have a an increase in your in your in your profit but you have a decrease of rather wa which is which is what everybody wants and and you increase your return on Equity so it's it's pretty significant if uh

32. 13:31

    consequences of changing the technology yeah you're both commenting on it or touching on is a little bit of a theme of the the ability to apply this technology and these types of solutions to this space is going to make the let's say the barriers but the but the wall of being able to to be able to use corporate finance activities in a broad way um maybe more available uh to to more types of Institutions and of smaller

33. 13:55

    size so maybe along the same lines John we could pick up on that in trade fire it's it's often the costs associated with it the issuance and support from the market makers that have an effect on limiting growth or causing growth to happen um but so what are the advantages um that you think a tokenization platform you guys are experiencing as a tokenization platform could offer in terms of cost or time

34. 14:20

    um or cost or time to Market or client experience that's different from what you have in the in the trade by examples that you have expertise in yeah I mean I think you've heard a little bit touched on today um already in the sense of you know if just a general amount I think number one is time to market right so if you're able to bring something to Market quicker um and then also just the timing of all around just the settlement nature the trading nature of something if you think

35. 14:50

    of the full life cycle of not just the issuance or the minting or the tokenization of it but then what do you do after what do you do with it after where is it custody how do you move it around how do you leverage that whether you're using it as collateral somewhere or it's just sitting I think the concept of being able to put that on chain and then move that um there's a there's a lot of efficiency

36. 15:13

    there and so if you're able to to lower the amount of time that you're able to do those different steps and um and leverage you know potentially whatever it is you've tokenized for other purposes quicker um drives a lot of efficiencies just in the general course of action for for someone that that's uh you know potentially as an example using debt issuance right maybe a very simple

37. 15:37

    example could be um tokenizing at that issuance and then using that as collateral to create derivatives right I'm here to do that today hey the process to do that kind of from issuing the debt right call it to actually finding and using it as collateral for training derivatives is is complicated um and it takes a long time and there's a lot of different parties uh counterparties and and third parties are involved in that process call from start to finish and by tokenizing it and

38. 16:08

    bringing it onto a blockchain we're not only able to shrink the amount of time right to Tom's point but also we're able to lower the amount of counterparties in third parties that are involved in the process which just streamlines it right so it lowers operational risk it lowers counterparty risk it lowers involvement of legal teams um and and all the types of process that are that are involved really from from start to finish so so really interesting

39. 16:34

    as we're able to uh call it step one is tokenizing that issues and step two maybe is I'm using as collateral in other aspects of trading activity so we're really interested in how we um bridge that call it from step one to step two that's where all the post trade becomes cool I've heard someone say that the the evolution of the market um up until this point that it was a creation of assets the creation of

40. 16:58

    derivatives and many post-trade services transpired over decades what we're about to experience now is having that same thing for digital assets transpire over years um so uh so it'll be nice to see um let's switch if we could to a different aspect of the market because I think oftentimes we've spent so much time focusing on the exciting new creation of these assets um Tom if I could ask you many current market activities are focused on just

41. 17:22

    that asset creation asset issuance but what I want to do now is talk a little bit in picking up on the theme that John just laid down um talk a little bit about the secondary Market growing um what liquidity options are available now or or probably more interesting what do you think is going to be needed to be able to get sizable markets created yeah so I think that that's really an excellent an excellent point and it kind

42. 17:47

    of it you know it goes hand in hand with why you know you know seeing sibo at the Fable is is really you know a great step in in this in this type of uh process because what you know what we see is in you know when as I mentioned we started by issuing notes and products that and you know by their nature or less liquid so you know the equities markets already have you know exchanges ats's things that operate you know fairly efficiently at least from the starting point not always you know the things that happen behind the curtain maybe not always with

43. 18:20

    efficient but there's quite amount of efficiency in those markets but you know what what we see and what we're looking for is to be able to create more liquidity in this in the marketplace um to create greater velocity for the assets that that we create and one of the ways you do that is by having you know having a you know a partner and provider who can create that you know create that Marketplace and doing it in

44. 18:44

    a way where where you have uh you know real Financial players you know who were there to to make markets on on both sides so I think that that's really critical and when you need to get the scale when you have institutional scale you really need to be able to to do those things and it opens up the different types of assets that you know that that you can trade in those marketplaces and how it behaves and I

45. 19:08

    would you know also lean into a little bit what what John was mentioning earlier about even the you know the next steps in terms of you know collateral management and using the assets for for collateral because you know the liquidity you know there's two ways you look at liquidity one is from a trading standpoint but one is from a you know from a financial and um that type of thing so repo um you know collateral management and I

46. 19:33

    say this and Kelly I know that you have a lot of experience in the in this space of the amount of effort that it takes you know and I in my prior life before I was in this in this job I I ran operations teams for more than 20 years and among them was you know our collateral management team so you know what John mentioned really resonates to me because I know what it takes to take collateral that we need to you know use to coloradoize a sloth and move it from

47. 19:57

    one you know uh CCP to another and and the you know the effort and the cloth and you know that the traps liquidity and and the trapped Capital that gets that gets caught up in that process so that's that's you know the two things and they really go hand in hand I think yeah it's a good point you're both making a really good point about is a degree to which the current market model has as any number of of agents and

48. 20:22

    and intermediaries you know interjected to to be able to support the reduction of Market risk and Market participant risk and increased certainty in in transactions but as we start to shift to these Technologies is that same thing going to be needed or a different model around it it's just I think what you were all focused on so John if I could pick up on that I want to get your thoughts on the same question the

49. 20:44

    development of secondary Market liquidity but but on the same point also just to delve a little bit more because you kind of have this unique perspective on how the growth of a platform CTP that supports uh trade fights regulated approach to to digital asset builds off the success that you've had on the crypto side with with sibo digital so I was hoping you'd give a little bit of unique Insight on that as well

50. 21:09

    yeah I think um you know it's to also lean into what Tom said I think he nailed it right so you have the liquidity side of the fence you have the collateral side of the fence um so you know we operate kind of in both Avenues in the sense that we haven't exchanged to your point um SQL digital uh or a spot and derivatives uh regulated cryptocurrency exchange which is really kind of in my in my mind just the start of where we can see other

51. 21:35

    digitized forms of of assets trade right so we're a crypto native Grudge 24 7 um built on the on kind of the concept of interacting with you know these assets on the blockchain and then we also um you know do things very Trad by like in the sense of proper CCP clearing in our Clearinghouse both for the same spot and derivative assets and so the two kind of functions work really well to not only um find potential opportunities for collateral which in my mind will unlock

52. 22:08

    liquidity right you provide more than you know obviously trading as a use case in the sense of you know there's volatility there's people that want to trade volatility or or trade to trade and so you're always going to have natural liquidity that way but if you can find the full use case where you can actually use what you're tokenizing in the form of collateral that naturally is going to create liquidity because you're going to have people that want to get in

53. 22:30

    and out of that and there's going to be churn and there's going to be movement and I think that power is really the ecosystem and so when we think of kind of the full Suite of that the other piece of the pie is is Market data and so if you think of all those three pieces I mean how they work in any existing Marketplace today whether it's very opaque or it's you know very efficient those are really critical and so by leveraging

54. 22:54

    um you know DLT technology blockchain data oracles you know like like pith that sibo's involved in um alongside the lines of Canton and the demo framework and stitching those all together right end state where are we going how we make all that work together I think it's really powerful to be able to bring tremendous amount of efficiencies to vary what I'll call opaque markets to start right I think

55. 23:18

    Tom made a good point like U.S Equity markets very liquid very efficient markets probably not going to be the first Market we see move to digital maybe I might be wrong but probably not the First Market but if we look at other opaque maybe less efficient markets where you know um more uh transparency and Market data more transparency in trading more ability to to see value and

56. 23:43

    collateralize or CCP involvement and doing so on the rails of of this new technology I think is really interesting and if we're able to package that the right way obviously the brand and the involvement with sibo our relationship with market makers with banks with participants we're able to leverage that right they're already connected we already have relationship with them um you know how we can work with them along

57. 24:09

    with the issuers and and with the customers of these assets um to bring these over right into a tokenized uh you know more transparent world I think is really interesting opportunity that's that's where we're focused yeah you know what I'm struck by is is that you're you're talking about an approach to a market model that's more about these ecosystems of of services and I think that that's um you know the the benefit that a lot

58. 24:35

    of of what we get by bringing the business goals that you all are defining architecting and and delivering uh Mary's up against the technology that organizations such as us are are working on it it really creates these new ecosystems these new networks for financial services to be delivered um so Simone can I can I ask you John had mentioned this earlier it's sort of weaved in but similar to secondary market trading digital assets are also

59. 25:01

    going to need post-trade asset servicing now these these guys have mentioned collateral management which warms my heart a great deal um but um can you talk a little bit um Simone from what we're seeing what activities are underway to support the post-trade Asset Services um uh on these new assets that are coming to Market yeah yeah we we clearly see a need for I think a cash on Ledger like when you

60. 25:24

    have a greater amount of secondary Market you have more trades uh potentially smaller ticket size uh and you have like on the first trade size whether it's a corporate action coupon payments really the key piece in my opinion is being able to have the cash also on Ledger and so we do see a lot of activities in in that domain uh for instance uh the Ireland project regulated Library Network in the US with this recently uh its conclusion of phase one I think that's pretty interesting and we were happy to be the tech

61. 25:54

    provider to that to that group and we also work with the Civil banks on on tokenized Bank deposits and to me this is this is a key enabler for for the whole ecosystem for post trade for security Market having having cash on Ledger in some kind of form uh we will be key to to to to get there and and similarly to what what John and Tom said I do think that the collateral and Margin Call and smart track to to pledge and release Assets in a kind of a program programmable way uh will bring a

62. 26:26

    lot of efficiency and um and kind of The Next Step will be taking that and using this tokenized asset as underlying for derivatives and and to joins Point like the need of having fixings in Market data on chain the need of having I don't know credit ratings on chain to to monitor the Covenant on the on the clo for instance this is kind of to me the next step and and what it what is coming and we do see we do see some activity there but but going back I think the the most important in the in the short term to be

63. 26:56

    a bigger adoption of the technology is to to have cash on shame that will trigger as we say like secondary market and inefficient prostrates asset servicing got it that's that's that's super helpful thank you John you mentioned it earlier just before we move on anything else that you wanted to say about uh Asset Services that's to some degree organizations are are sort of clamoring

64. 27:19

    for for um from sivo to be able to to have that be part of your ecosystem but anything else to add no I mean I think what Simone and Tom mentioned I think I think really Nails it here you know I love the concept of cash on chain is as if I look at the the crypto side of the fence right rails getting cash into cryptos obviously a a thing we've seen grow over the last five or ten years really um but it's still a problem right and if

65. 27:45

    we look at it very regionally it's a it's even bigger problem because the US is still the king um the dollar is still the king in the U.S at least and but we see stable coins called like usdt and usdc gaining steam offshore um and and really what's going to be the winner I'm not going to use terms whether it's going to be a stable coin or tokenized deposits or whatever but finding a way to represent you know cash liabilities call it or or something like cash on chain I think is is going to be

66. 28:14

    um really powerful and and really a need in order to help facilitate um the you know folks access in order to be able to to deal with you know whatever it is that it is going to be tokenized we'll talk about number of the the really positive outcomes and the benefits that we just also want to be really you know real and and um and uh insightful in this type of conversation so can I turn a little bit to just ask

67. 28:45

    each of you Tom we'll start with you um are there any limitations or challenges associated with the creation of these platforms like for example you know for digital Bond issuance that investors should be aware of um just things that um that the industry maybe to say it a different way is still working through on its path to grow sure so I mean I think that you know we you know when we talk about the liquidity piece we talk about you know

68. 29:09

    that's what's possible what could be but we're not there yet you know so when you think about the issuances that that SG Forge has done so far you know even though they're available 24 7 and even though uh you know the theoretically it's it's available to be to be traded in that way it's still OTC products it's still uh you know not as you know you know not as liquid as you want it to be and you have to take the steps so you know to issue the products first to

69. 29:34

    build you know and and then to have that liquidity platforms come along afterwards I think I think makes sense so it's just you know the the what we're at the maybe the walking step um the other thing I think is is is is the you know the network component and that that comes both from the participants in you know a particular Network they're being able to have this interaction and you know Simone talked about that a little bit between you know

70. 29:58

    what's available what will become available on Canton and not only the the networks themselves but when I say the network I mean the types of players that that are are there in the space and that's really crucial too and that comes from you know I was talking to an asset manager recently about their ability to do custody and so you know they want to have a seamless custody experience with you know knowing that we're going to have traditional assets operate

71. 30:22

    alongside digital assets and you know to have those type of things you know those are the the steps that need to be taken and you know they have not been accomplished yet for sure those are great insights John um what would you like to add yeah I mean I would Echo exactly what Tom said I think there's still a lot of work that we have to do in terms of call it Market infrastructure um focused on digital whether it's you

72. 30:45

    know cryptocurrencies digital assets digital digital asset Securities whatever you want to call them or all of them um to really see you know continued growth and adoption and to kind of see that hockey stick almost affect in terms of you know um interaction from different participants so you know a lot of work I think as a as an industry we have to do right not there's not just one person that can lead this effort or solve this problem we have to figure out how to how

73. 31:10

    to work together and solve it um the other aspect I think that's really important is is regulation and and it's probably talked about too much maybe but it is so important because there is uh still a lot of focus on you know call it cryptocurrency regulation and how that may or may not impact um digital asset security or non-security regulation I think is really important how the treatment of

74. 31:32

    assets depending on the different blockchains they may or may not be Beyond could be different and how that could impact it I think Tom mentioned you know OTC versus kind of centrally cleared assets and whether or not digital assets are treated differently than call it current assets just because maybe going back to my original point the market infrastructure isn't fully there yet all has implications

75. 31:55

    um you know sap 121 and things like that all have implications on how participants are choosing to interact with this new not only technology but these new assets that are you know being minted or being represented on on blockchains and so we need to figure out as an industry how to continue to move the needle prudently right but but still innovating so that way we can continue to see you know really very liquid very

76. 32:21

    deep very trustworthy markets in the US which has you know really been the Cornerstone for the U.S financial uh system and Industry uh for a long time yeah ultimately it's all how it's How we can sort of rely on the stability that you're talking about um Simone thoughts on on your side what people should be thinking about uh as still challenges to overcome yeah no I fully agree with we stop in John I think

77. 32:45

    it's still early stage um we we talked about regulation we talked about cash on chain I think this this these are two key topics of course um I will just give an example like there's a big difference in in terms of adoption like where there is a the investor or custodian some already have a node connected to retain and some other are very far from there and I think what it means is that we're gonna have to live in a kind of a hybrid

78. 33:07

    system for for a while and and this is costly like uh you you don't get the full benefit until you have really migrated away so we were talking about debriefing or reconciliation and things like that and personal process but as long as you kind of have both that are both processes that are running in parallel you have to realize that this is going to be like really more costly than before and this is why we kind of

79. 33:32

    need Visionaries uh to to make the Strategic Investments to get that um up and running and and this is this is honestly a challenge in the in the current kind of cost cutting or driver that everybody is in so I think that that the the fact that having to run the two systems in parallel um it is an additional challenge yeah yeah thank you all right well I I want to just conclude by asking uh for a little bit of insights we've talked a bit about regulation here but just some more broadly uh on on activities you

80. 34:05

    guys are doing in the marketplace so John you were recently named to the cftc's TAC the technical advisory committee and the digital asset subcommittee can you just give a little bit of insight on the group's goals and what it's focused on yeah no it's great and I'm really pleased to be able to work with the uh my colleagues on the on the committee um and thankful for the cftc's uh nomination there and so very excited so we're the the committee is focused on

81. 34:29

    kind of the intersection of a lot of things we're talking about today right called policy called law regulation and financial markets and Technology right so everything you know that we covered today is really um in in scope for the attack and so some of the things we've been at least in the near term focused on are called cyber resiliency uh defy applications um artificial intelligence well not maybe near and dear to tokenization all

82. 34:55

    really interconnected to how we see financial markets move more and more into you know call it this new technology right even though we are um you know a lot of financial markets are very fintech right moving into TLT blockchain type of Technology really is is another step further and so all these things are really important so we're focused on that and then also making sure that we can continue to keep the

83. 35:20

    laws and the regulation up to date with the new technology right so sometimes technology leads the regulations and so we need industry groups like the TAC to get together to really figure out a way to make sure that we um Can properly but but properly and frequently but also Open Arms Embrace technology for the benefit of of the End customer thank you oh sorry I think I cut out there for a second um thank you um so uh Tom the same committee very soon committee has

84. 35:54

    the benefit of your Insight and wisdom and presence as well um can you talk about that from your perspective but I do want to go back to the point where you have been involved in so many issuances across the market just your perspective on regulatory considerations or compliance or or anything in that controls environment yeah and I think the things actually go hand in hand so as I mentioned earlier you know uh SG Forge you know last week

85. 36:18

    was granted a digital asset service provider license and that really comes from the EU and France in particular you know being ahead of the curb you know in respect at least to the United States with you know with the regulatory Outlook and how they're looking forward in in the market so given that and given you know our size and scale in France we've been able to collaborate with The Regulators collaborate with the central banks to be able to you know to

86. 36:44

    demonstrate you know how these things can work in a controlled way and one of the things that the team has done has developed what's known as the cast framework which is an open source framework that kind of lays out the way that we can and should operate you know and this is diffused more towards you know say public blockchains than than um permission ones but it's still it you know it kind of defines the rules of the road and that leads into as you mentioned you know I think that the cftc

87. 37:10

    and commissioner Caroline Pham has done you know a really wonderful job of bringing a super group of people together uh you know to think about how you know the industry should be what the framework should be from a regulatory standpoint from a governance standpoint from a best practices standpoint and those are some of the things that that we're working on to really be able to demonstrate that we can use you know uh this technology in a safe and sound way

88. 37:34

    the same way we do with other types of technology and and that's really that's really the goal so I'm really looking forward to the work the the committee and subcommittee is going to do over the next coming months that's fantastic thank you both um Simone monitor give you the last word just in creating the technical infrastructure for Canton Network one most of them are the considerations from a regulatory perspective or really more to the point how has a an organization such as us

89. 37:58

    engaged with Regulators that um uh that are supporting the market more broadly yeah yeah so clearly our goal as a tech provider is to provide a technology to our client that will allow them to um do their business in a in a compliant way whether whatever the jurisdiction and then it's true that there's a broad set of constraints whether it's in Europe or the US I think it's it's it's

90. 38:22

    clear that it's not exactly the same constraints and if you look at what the UCC says for instance is that we need to demonstrate I think uh appropriate operational technology and compliance risk management framework like and Canton has been designed to to allow to implement such risk management processes uh and and it's really to to allow our client to convince the regulator that they're operating in compliance with

91. 38:47

    with the regular framework so if I go a little in the details uh with Canton you have a you have a known validator set which means that similarly to a regular trade the let's say the issuer the buyer the custodian are the one validating the trade uh not kind of a random set of mining companies that you could have on some some permissionless public change so that that's that's something the regular kind of like we presented our framework to some of the regulators and

92. 39:15

    they they kind of have a relief when we explain that the vehicle said isn't is a known one um similarly at the Smart contract level you can Implement some some transfer restriction and and that really helps being compliant with like kyc AML CFT CFT requirements and and on the technical side like how do you how do you mitigate the tech risk um the The Canton Network protocol allows for an application to be run on dedicated nodes or dedicated servers it means that whoever runs a

93. 39:48

    given application has full control over over these servers and that means that if something else happens to another part of the network that will not impact the SLA for the settlement of a suction Bond on the Civil exchange for instance and that that's something very critical that the infrastructure uh is is resilient and so we've been designing our our protocol with regulated industry in mind this is why we have a fairly

94. 40:13

    different design as other chains and this is what I think allows many of our clients who are regulated institutions to be able to move into production even in the most constraining jurisdiction like like the US okay all right well with that gentlemen thank you so much for for your insights I think it was a really wonderful and practical level of dialogue that that I hope everyone who listening in really

95. 40:37

    benefited from I know I certainly did and so with that I will thank you all for joining this session of conversations from The Edge and wish everyone a good day thank you very much thank you so much thank you