Tokenization and Transparency: A Conversation with Renata Szkoda (E4)

(air whooshing) - I'm Phil Arman. - And I'm Douglas Borthwick. - And this is Old Men New Money. - So thanks everyone for joining us again. Today we've got an incredible guest, Renata Skoda. I've known Renata for three or four years now in the digital asset space and we've worked together. Renata is the Chairwoman of Global DCA. Renata, welcome. And if you could please tell us about yourself, that would be lovely. - Absolutely, thank you so much for having me. It's a pleasure to be here. Renata Skoda, I am a CFO in digital asset businesses. Most recently it is Cube Group based in Chicago and it is an exchange.

It's a trading platform for digital assets that has been built originally on the Solana network. But most recently, and this is where I met Douglas. I was at INX, INX is an ATS. It's a trading platform as well, but for regulated products. And I also serve there as a CFO. In my free time, however, I serve as the Chairwoman of Global DCA. Global DCA is a non-for-profit organization for digital assets and blockchain technology.

We work with businesses in the industry to advocate for the space, but also very much focus on developing standards, best practices for businesses that are developing in the digital assets industry and growing based on that technology. I think we all understand that it's very important to have certain best practices in place and also to enter the space in a proper way. And so we're helping many small businesses just grow up to that level and have proper governance in place internally, as well as guide them through the development as they're growing their businesses based on this technology.

Digital assets, some people will think it came from kind of software developers and just moved in towards FinTech. And I guess it sounds like we had Annalise Osborne on one of our shows, and she talks about from hoodies to suits. And I guess what you're helping companies to realize is that, okay, now you're in this financial space. It's time to grow up. And there's a lot of things you need to do. And you've got three core principles, if I'm not mistaken. It's accountability, integrity, and transparency, which obviously we're all used to in the traditional finance space, but hasn't always been the case in the software space. - Absolutely.

And I don't necessarily want to take anybody from hoodies to suits most of the businesses when they are in a financial institution space. There is just a lot of responsibility is on the shoulders of these firms who many times take in customer deposits. They offer trading of digital assets. And with that, there are certain responsibilities and certain obligations that you probably should be aware of. Many principles that come from traditional markets that can be absolutely used when we develop these firms and these practices.

And so that's why actually last year, at the beginning of last year, global DCA after many firms failed, mostly because of lack of governance and controls within these firms, put together core principles. And the core principles was meant to be an aggregation of best practices that we use today in traditional finance, in financial institutions like broker dealers, futures brokerage firms, FCMs.

And many of these principles can absolutely be used and should be used and really shouldn't be ignored by firms who are developing some kind of financial offering using blockchain technology or offering digital assets for trading, for investment, for staking, and you name it, right? At the end of the day, these services are very much financial services. - Do you see yourself as an educator to the industry? - I think we have three prongs within global DCA. One, we are definitely an educator.

We work directly with firms and help them connect with, for example, with compliance firms, with many attorneys that are very engraved in the space and also helping them develop like this backbone. So that's one side of it. Second, we have multiple events and through the events, we educate general public as to what is blockchain? What are digital assets? What is Bitcoin? What is Ether? And through these events, we try to be very plainly trying to relate to general public that doesn't really have a good idea of the underlying, we'll call it piping for the technology to really explain what this is and why it came here.

- Yeah, when we started Old Men, New Money, we are the old men, by the way. We wanted to talk really about new money to a lot of the population that is not really aware of it or they've heard it, they've seen stories, they think of it as being scammy. Obviously, BlackRock's come in, the ETFs have come in now. I think people are becoming more educated, they're adding it to their portfolios. The RIAs we talked to and others are talking about adding one to 2% of someone's portfolio in digital assets. Now, primarily through ETFs, Morgan Stanley has just opened up the ETF space.

So I think that as it's becoming more mainstream, but it's also becoming a political issue too. We've seen Donald Trump, who's talking about Bitcoin now, Kennedy, who's also running, pushing Bitcoin and Bitcoin awareness. Some talk about strategic reserve fund. So far, nothing from the Harris camp. Could you talk about where you think politicians are going or which politicians you think would be best for our crypto? - Let me say that digital assets, but especially blockchain technology has a huge promise. However, it's not free of issues, right?

And whomever the winner, we don't know who the winner will be, but whomever the winner is through the campaign, we can see that the Trump campaign has embraced a space more compared to the Harris campaign. I wanna emphasize that whichever side it is, Janet Yellen recently talked about how blockchain and digital assets, specifically Bitcoin, is impacting and potentially the effect in the future of Bitcoin itself on US dollar, on the dominance of US dollar worldwide globally, right? Whomever the winner is, I think we should think about what blockchain people have talked about this for a long time now.

Should we really ignore this space or should we embrace it? Because at the end of the day, potentially this is how computers will exchange value. There has to be a way for computers to exchange value if we are starting to enter the AI space and AI realm. It's just not going to be enough to exchange information. We already can exchange value and people can exchange value. And I fully expect for computers to have to do that in the future as well. So what is going to be the currency that we will use for the computers to exchange that value to transact on our behalf or the transactions are automated.

We have to develop some kind of mechanism for that. So that's on one side. And then the other emphasis is stablecoins, a huge invention and honestly underappreciated for the fact that it's based on US dollar. And I think that's something that we should think about when we think about the global dominance of US dollar and how stablecoins can actually maintain that US dominance in the long term. - Can you touch on, if some of our audience may not understand what exactly a stablecoin is and the relevance of it, could you just touch on that for the audience?

- A stablecoin plane that you can define it as a digital asset that is backed by a, typically a US dollar could be backed by something else but typically you see it backed by US dollar deposit. It's a one-to-one deposit, issuers of stablecoins. We have few of them here in the United States, like Circle, like Paxos. You exchange US dollar, one US dollar for one stablecoin. And this relationship one-to-one is guarded by the issuer of that digital asset.

When you receive the digital asset, you are able to transact, you're able to exchange it for other digital assets quite simply just like you're using US dollars today and you are able to also come back to the issuer counter to have it redeemed for dollars back. - During the education process as you're trying to educate the entire industry and companies and so on and so forth, how challenging has it been to articulate what we need to do, where we need to go to policymakers that don't necessarily have a technology background or a finance background and how do you go about that?

Because I know when we were doing it for video notarization, conceptually it was very easy to understand but here folks may not have a financial background or even a tech background and I have to think that they're scared because they actually don't know what maybe they're voting on. - Of course, there is a lot of emphasis on the underlying technology and how things work. Eventually, we won't care.

Just like how you don't care how the bank is transacting your dollars and how come it takes two or three days to send the dollars from here over to Europe or the dollars can show up immediately in your friends account through Zello or some other means. We don't go into the piping so much. I think that what's important to highlight is that digital assets are a mean to send value peer to peer globally as if you're sitting next door and exchanging value to someone that's just next to you. It doesn't matter that person maybe in Middle East or in Europe or in Africa.

That person will get the asset within minutes and so when you think about that kind of cross-border payment functionality that's probably like the main one that is developing now. I think we should think about functionality of digital assets not so much underlying technology because the underlying technology, there are few leaders and that technology will be developing when banking institutions, financial institutions pick up that technology or use the technology which they're already using it to be able to offer those kind of cross-border payments.

Can I send the dollars to my friend or my family somewhere in Africa, somewhere in Europe immediately, somewhere in Middle East immediately and what do I need to do that? So I think that sort of looking at it from a user perspective is probably best. - Close to instant settlement I think is very important. I never really cared about the inner workings of how dollars get from one place to another until Lehman went under and when Lehman went under we had tens, hundreds of millions of dollars that we were waiting to get delivered and it's two day settlement in the FX world and just that wait was miserable.

And so having essentially dollars move from one person to another or one bank to another and it's an instant move as opposed to in two days. Now I say two days, that's in wholesale foreign exchange. I think we all know if someone wires you a million dollars or $100,000 your bank will hold it for maybe a week, two weeks, three weeks, they may even ask you what's this for before they actually deliver it into your account and allow you to spend it. So having that immediacy I think is very important and look, we're the Amazon generation.

We're used to getting things quickly and if I can get a package or a chair or a CD, I say CD, that's probably the wrong word now but it's delivered essentially in 24 hours except my money takes a lot longer to get delivered and so catching up with the US banking system, catching up with that I think is very important. Just from a personal level as a consumer but also as a trader, banks I think want instant settlement and it's much more important for them on a risk basis.

- When I try to explain it to someone that is just entering the space, I have them imagine sending an email with an attachment except for the attachment is dollars or some kind of value. So imagine receiving an email and in the attachment you have something that will be added to your wallet. That would be wonderful, right? I think people would say what's Zelle? - Yes, but Zelle is more of a domestic system and this is where you can open this up globally and you're not bound by any jurisdiction really.

- Now when you open things up globally, obviously we run into KYC, AML, something that's imposed by the US but other countries as well and I'm guessing that's probably something that you push for at Global DCA? - Yeah, one of the things that is very important for any business in digital assets given the highlighted risks that exist in the United States as well as globally is making sure that you have the right partner to review transactions. That's definitely a highlight, especially when the space is still maturing as any other space that is currently, we're still so early.

There are people that are not exactly honest and everybody really should be, if you don't know who to ask, I bet you that if you ask a friend, they can direct you to someone that knows something about digital assets. There are over 50 million people in the United States that have digital assets, have touched digital assets and at least when I go to a party, my friends, it's not like I'm the only person that knows digital assets. They all know about it, they all wanna know about it, they all wanna talk about it and it's best probably to start with your friends and family and see where to direct your inquiry or how to get started.

- Digital assets, I think the layman or layperson, maybe he looks at it and thinks of it, it's all the same thing. You get NFTs, you've got stable coins, you've got meme coins, you've got digital securities and you've got things like Bitcoin and Ethereum, some of these digital commodities. All of these have different rules. How do you balance that? Because I think the layperson, because they lump it all together, they see the failure of an NFT launch and they say, "See, it's all a scam, I'm not buying Bitcoin." And I think that one of the hardest things is gonna be educating people that there are so many different levels to this.

- Many digital assets get issued, things get tokenized. So you may have an equity shares for a private company tokenized and therefore you end up with shares with equity of some private company. And those products, those are regulated products and they're offered as Douglas by ATSs in the United States. They're offered globally, they're offered here in the United States as well for people to buy. That's something that's not exactly available for general public today in a brokerage space, right?

You cannot come up to Charles Schwab and say, "Hey, I'd like to buy 5,000 shares of some private company that's not available." Now, when these products are tokenized, all of a sudden, instead of having a circle of investors that are able to participate in the space, you as a retail person, regular general person can actually look at some of the shares of this private company and see if that's something you're interested in. Maybe you want to invest in some venture, you can start investing some of the money into private companies and not so much public companies that you have access to in your brokerage account.

- But I think we can expect that public companies are gonna move on to the blockchain as well. BlackRock, Larry Fink, don't fight the think. That's what I like to think. He's definitely pushing for all of the assets that BlackRock has under management moving into a digital arena 'cause efficiencies of scale when it comes to this and you're cutting out so many different middlemen having someone go directly to the consumer, having the consumer be able to deposit money or crypto and then be able to buy a digital security that then they can hold themselves in their own wallets or can be held somewhere else by a custodian.

Everything seems to be moving in that direction. I think I've told Phil, Phil really likes real estate and I could go to Florida and I could have breakfast, lunch and dinner with real estate companies talking about tokenization. There's not a lot of products out there yet, but certainly it feels like it's coming. Oh, absolutely.

I think that you have this explosion of tokenization of all sorts of different products and whether you talk about equity, stake in a private company, public company, whether you talk about tokenized money market funds, tokenized commodities, tokenized gold, any metals that get tokenized by companies and you can own some of that, how great for hedging. You don't necessarily have to use the futures markets. There are just so many different examples of tokenized products. It's all about getting started and getting interested in the space.

And plus from the other side, I think that in the United States, we live in this bubble where we have so many choices and so many things we can invest in and it's the best market in the world. But people globally outside of the United States, they don't necessarily have these opportunities and being able to participate in a tokenized product, it's just the different world for them, which we don't necessarily see that. Looking for a global perspective as an investor or a wealthy individual, which is regular individual and getting access to tokenized loans.

Think about getting credit and being able to start a business globally somewhere because you're able to get funding that is not necessarily a large amount of funding, but it is readily available to you versus not available at all 'cause you have to search again through a private network. Those are just opportunities that can be captured that we from here, from the United States, we don't necessarily see that just yet, but globally, I think it's very much embraced.

- You're touching on points that we had an interview with Upstream, that's a company, I don't know if you're familiar with them, but what they're taking is listed companies on global stock exchanges doing tokenized versions of them and offering them to people outside the United States who otherwise would have zero access. - We think buying Nvidia shares is easy. We think buying Microsoft is easy, but if you're in Indonesia, India, places outside the United States with significant populations, you can't buy it. You really can't get, first you gotta find your broker, then be able to buy it, it is another story.

Whereas what they're doing is they're saying, look, we're going out there to all these different population groups who could buy it with a credit card. - Absolutely. - And you're absolutely right in that the distribution is going to change significantly with tokenization, but as we also know as well, tokenization is much more forward in other parts of the world. Japan and South Korea have embraced it. I think there's very few family offices in South Korea that are not in digital assets in some way. And this allows us to now open up US markets to folks outside the US that otherwise wouldn't get a taste of it.

- Absolutely, and it's also remembering the fact that it is a peer-to-peer sort of transaction and relationship. The transacting is much more efficient. It is faster. It is directly to the other side of the transaction. When you're comparing it to the traditional space, not only are you opening up to global distribution, but you're also able to be much more efficient, faster. Think about the dividends that, for example, got distributed on INX's platform. How fast was that done? And how efficient that process is? It doesn't compare to the current traditional dividend distribution process in a typical publicly-held company.

It is much more streamlined. It is faster. That process will mature. It will grow, and it goes exactly to the point you're trying to make earlier, is the efficiency and scale, there is a huge potential. - Let's just look at something in the news lately. Ondo Finance said, "Look, I'm sure there's people around the world "that want to invest in the US dollar or US treasuries "and get a yield." But with a staple coin, you don't get a yield. And they set up essentially a front piece of technology that sells to people outside the United States all around the world, treasuries. And how did they do that? They then went to Securitize.

Securitize went to BlackRock. BlackRock had a money market fund. They created Buildle. And now there's, what, $503 million under management. Fantastic. Looking for where the demand is, finding a US asset manager that has that already in analog form, we could call it, creating a digital version of it, and then matching the two together over an ATS. It's genius. And I think that's really where the market's gonna be going. It's like, where is the international demand? Can we satiate that demand? Can we go to issuers or asset management companies and essentially satiate that demand with a digital version?

Absolutely, and that is a huge use case for globalization and opening up products that don't necessarily exist now. And they're not available for global audience. I think it's one, you can say it, a use case that's immediate. For US clients, customers, general public, I think it is mostly going to be opening up sort of opportunities that today exist primarily for sophisticated investors, people that are part of family offices, venture funds, networks, where an ordinary I wish when, let's call it 10 years ago, someone offered me a tokenized Amazon stock for investment when it first went public, right? Wouldn't that be great?

That sale, that initial public offering, never ever went to a retail consumer investor right when it happened. Many companies today will be success stories and today consumers with tokenization will get that benefit of seeing these startups and companies from the very early stages instead of getting a benefit of them when they're already public entities, they're big, they're already extracted a lot of the value from the growth that already happened. Retail doesn't really have a lot of opportunities at that time. Most of public companies continue growing but they've gone through that initial hyper growth stage already.

>> Yeah, it's a lot easier though to tokenize a public company and then have retail be able to access it than be a private company that essentially decides to go public so they can do tokenization 'cause the costs are just prohibitive, as we know, when we went through the INX public offering. So most guys come out now and if they are a private company, they want to raise capital this way or they want to tokenize so they can split up ownership in some way. They do like a RegD RegS, which is much simpler, much easier and you can access retail outside the United States but it's still accredited investors in the US.

Do you see a change in the law for the accredited investor? Do you think that would be helpful for digital assets? >> I think the regulators attempted to update the accredited investor definition about three or four years ago and they weren't successful. However, I don't think that there are any immediate plans to update the definition of accredited investor. If you look at statistics, one in every five Americans are accredited or fall underneath the definition of an accredited investor just because of lack of update from that definition to the amount of annual earnings you make just having a normal job.

20% of population in the United States being part of an accredited investor, that's a lot of population to be able to participate in these transactions. So when you think about it, the threshold is $250,000 or 300 jointly when you file tax returns jointly. That is not such a high bar to pass and all of a sudden you meet the definition and you can participate in some of that space. >> But how does an issuer or someone that wants to go down this road, how do they reach those accredited investors? You're talking about 30 million people, 60 million people all across the United States that are accredited investors. How did they reach them?

'Cause right now they're reached by E-Trade, Morgan Stanley, huge hordes of brokers that are going out and pitching different stocks or different ideas. That doesn't exist right now for digital assets. But Coinbase is an exchange rather than a broker dealer slash ATS. How do these ATSs that are coming out with these new ideas, that's like Securitize, T-Zero, Oasis Pro and INX, how do they reach these accredited investors? >> It's a great question, Douglas. And I think that really the question is how do you ensure that you have an attractive offering on the platform?

Once you have an attractive offering on a platform, it's not too difficult to show and to be able to market to similar group to what you'd have today, saying people that are interested in JP Morgan, people are interested in Schwab and are part of this, they have a habit of investments, right? Maybe small investments, continuing investments, looking at stocks, interested in the markets and what's happening. It is not too difficult to get them interested in something new. But I think it's still very difficult to offer an attractive set of products that can entice these people to say, let me look at this company. It seems to be making money.

It seems to have financials. It seems to have a track record. There are positive news about the companies. I think it starts with product offering. I think it also starts with being able to support the market properly. Irregulated markets have many market makers that support the stock. And I think the same exact market principles apply here. There has to be an ecosystem that supports that market to be able to provide and offer proper liquidity. That's always something that any investor is going to look at. We're still very early and this phase will be developing and getting to those levels.

But I think product offering and proper market support are like the key items here. - Or you could just subscribe to our YouTube and essentially find out what products are available in the digital asset space. And that's where the distribution is gonna come from. I think that folks listening to podcasts, YouTube shows like our own have already expressed an interest and as we bring different products and introduce them to them, then obviously that's a distribution channel as well. But I think that it is one of the biggest hurdles. There's so much news out there just to get Reuters to write a story about you or the Wall Street Journal.

It's a huge uphill effort. And I think we all know that 'cause we've all worked with smaller companies that are trying to get the word but with something that they see as being absolutely mind blowing, a huge new technology. And no one wants to hear it if it's under $100 million or really celebrity attached to it. Which I think maybe is why we see NFTs being so successful 'cause it'd be the NFT collection associated with a brand name or with a celebrity. And a lot of these have run into trouble, obviously. But I think that it really is hard for that small company to be able to find that base of investors. We've seen this with Reg CF platforms.

There's many Reg CF platforms, people that decided to go down that route that are now finding it a very challenging environment. And that isn't in the digital realm, that's in the analog realm. - Right. So when growing up, if I heard someone made $250,000, we were over the moon, we were like, "Oh my gosh, your parents are so incredibly rich." So what do we say to the folks that are in Middle America where maybe they're younger or they understand the space, they understand the technology and what's working but they're not an accredited investor but they want to be able to take advantage of this. Again, regulation is there to protect folks.

But what do we do for people that understand it? I know some of that has been passed. I think if you hold some sort of license, I believe even though if you don't meet those financial standards, you can still be deemed an accredited investor. - The accredited investor definition is dry and cut. Either you're it or you're not. And I think that everything starts with education and not to give any, this is not any kind of professional advice. However, I found myself, if I wanted to learn about digital assets, I have put in $1 in. And since that $1 was in Bitcoin or whatever asset you want to put it in, I then watched it.

And when I watched it, that was the best education ever. It was something that you can spend on coffee or you can just put it in and watch it. See what happens. Follow the news. Follow the platform where you put it in. Listen to podcasts. This isn't great. You guys have an absolutely wonderful platform here to be able to explain it in regular, plain terms. I learned that if I put in 10 bucks into Bitcoin and I didn't watch it, I observe it, I see what's happening with it because it's my $10, right? And that's probably like the best education you'll ever get there. - Yeah, it's certainly true that you gotta be in it to win it.

And the only way that you're gonna learn is actually by putting hooks in the water. That's the only way you catch fish. And I think that certainly as a trader, I understand the idea that talking about it and reading about it is nothing close to actually buying something and participating in it because then you learn so many different things. I learned about MetaMask through INX. So there's lots of different things that you learn about because you're actually interested in something and you want to go down that rabbit hole. It really is a rabbit hole today. But as UI/UX improves and it's improving, then it doesn't become a rabbit hole anymore.

It just becomes everyday life. - And you have to be careful. You have to be careful, do homework, but don't put in any more than you can lose or uncoffee honestly, but it is the best way by far to learn. - Back to, we were talking about startups and Custodia Bank is basically trying to make waves. And Caitlin Long has been a very outspoken person in the space. She even got a shout out from presidential candidate Kennedy, potentially would be one of his appointments. Why do you think that startup banking or that ecosystem is getting such a pushback, but yet in her words, not just not quoting, but it's like there's different rules.

The Fed has different rules for larger organizations versus maybe something like a Custodia Bank. - Yeah, what Custodia Bank is trying to do is progressive, it's very revolutionary. I hope that offering develops and it is maturing in a responsible way so we can learn from it. When you look back, there are many things that businesses that start today on blockchain technology have learned from giants that today are fighting the SEC, for example, right? We know today how not to put together staking because there are problems.

Not that we couldn't discover it when it was first done when for example Coinbase was putting it together, Kraken was putting it together, Gemini was putting it together as an offering, but we've learned from all of these things, right? So I'm hoping that the same thing is here, like Custodia is a very unique offering when you compare it to a banking offering. We can learn from that experiment as long as it's developed in the proper way. Regulators haven't really embraced the technology yet for whatever reason. The technology is not going backwards. We're only moving forward and only moving faster forward.

An idea like a bank on blockchain technology is not too far ahead here. A bank that is built on not traditional system, not web tube system, but web re-system. And being able to operate a regulated financial institution like a banking institution built on blockchain is most likely happening today already, is being developed right now. So I think the main sort of lesson even for me is to observe that development, take the best from the technology to improve the offering, to increase the pie, our economic pie, right? And if I can build a bank that offers both fiat and digital assets, right?

Blockchain assets as well as non-blockchain assets and does it seamlessly. Why is that a bad idea? Now we have to be careful because this is an experiment. It's something very new. And so if it grows tremendously and then it's tied with our regulated traditional financial system, we have to be careful, right? We have to understand the risks of everything is connected. (indistinct) I think that the FOMO initially of crypto, certainly the returns that you could get from it, from let's say Bitcoin, got so many people into it in a frothy way that they didn't read, let's say the fine print.

And I think Celsius would be a good example of this where people thought that they were staking, but meanwhile they were really handing over their crypto with no insurance, no sense of getting it back to Celsius to do whatever they wanted in order to get you those very high yields that you were getting for quote staking. Then there's the FTX co-mingling of assets. Essentially you're putting the money in there. You thought you were depositing it. It was very like a beginner stage type of explanation. Digital assets are a result or product of a database that is updated by people in a decentralized way.

That process has to be secured in a way that anyone can just update the database with some false information. It has to be validated every update to this database done by all of us distributed throughout the globe has to be secured in some way. And so in order to incentivize people to do the right thing, to do the proper thing, to not to try to scam the database itself, people that update this database, this blockchain database deposit digital assets that are serving as collateral as like this deposit saying, okay, I am going to update this database.

I'm going to be one of these people to provide new transactions validating new things that are happening on this blockchain. But here is my deposit. The blockchain will say, but I need you to deposit a portion of digital assets for you to be able to validate these transactions. So when you act badly, Phil, I am going to take some of these assets away from you and penalize you. You can't act badly because if you act badly, I am going to use this deposit to penalize you. And I may just ban you from the network altogether. Staking is actually in its sense what it says it means. I am staking in my assets to validate this blockchain.

I will get rewards from doing this work. But when I don't act in a way that the blockchain database prescribes, acts me to act, those assets are used as like a deposit and could be lost, right? - So you got to put your chips in the game in order to get the returns. - Absolutely. And you get a reward for staking, but at the same time, staking means you're helping to validate that database. - Got it. - And what we saw some back to bad actors do was they would take what the assets that they said they were staking, and then they would lend them out to others at exorbitant interest rates.

And if those people didn't pay, and they'd already taken the assets, that caused a big problem. And obviously that caused, I guess, the last crypto winter. And I think that since then, regulations have become a lot tighter. And certainly the consumer is less on a FOMO high and is more willing to read the small print. - Which brings me to your kind of, it's a great gateway to something that's quite important that we are also working on currently. And that is disclosures. Today, when you go on Coinbase, when you sign up on Kraken, Gemini, huge platforms where you can participate in buying or selling assets.

Those platforms don't necessarily provide this platform itself. What do they do? How do they work? When there is an update to the digital asset itself or to the network, the native network, on which the asset exists. There is no really disclosure, like we would expect disclosure. Apple just made a distribution or Apple made a dividend distribution or the CEO of Starbucks changed, or you get instant updates on stock, on public products. And so you can make a decision for yourself as to buy, sell, whatever, how to analyze. There is no such thing for digital assets. And there are all sorts of digital assets.

And what we believe would be helpful for the investors. And I think that's a lot of people are looking for this is a place to actually see this information, not only in one place, in one credible place where they can get it, right? But also information that is consistently presented for digital assets across the board. If Coinbase, let's say offers 100 tokens, 200 tokens to sell, buy or sell, I think it would be very helpful. And a lot of us believe the same thing. Very helpful to have access to information about these tokens. Where did they originate? Who are the sponsors or foundation issuers of these products, the lock up schedules.

And we talk about financial information. We have this project or undertaking with global BCA right now, where we have put together a senior steering committee that is working through this problem. What exactly would be helpful for any individual person, investor to see, to understand better when they sell asset. And there are multiple firms that are participating from the industry, but we also engaged the academics into this project and have some credible professors working through this with us. But I wanna highlight the need for, it gives the fundamental need for disclosures.

The disclosures, when you ask anyone, what would be helpful for you? Many people say financial information would be helpful. But many tokens, they don't necessarily have that. It doesn't apply, right? There are no financial statements because there is no underlying enterprise. And some law firms that are actually have been working with tokens from the very beginning when they first get minted and developed to actually put together guidelines for token issuers, token sponsors, to be able to offer some of this information.

And when tokens are then offered on a centralized trading when you like crack and like Coinbase, for these institutions to actually share that information with the users. - Yeah, this is so important. Not just for digital securities, but really for anything in the digital space. I was on a Twitter space yesterday with Martin Amal and both of all streets. And when mint coins go out there, maybe there's 10 VCs that all own a piece of it. They all have different lockup schedules. They know what the lockup schedules are, but does the general public. Probably not.

And so in six months sign, there's gonna be a date where essentially 10% of that float is gonna get unlocked and flood the market. And the retail investor has no clue about this. The insiders do, the VCs that initially got in there, the individuals that initially got in at very low prices next to zero, so that they could help essentially market that meme coin. The general public does not have that knowledge. And having disclosures would be fantastic because I think certainly it will take away some of the volatility that you see in a lot of these assets.

Because folks are gonna say, I'm not gonna buy here because in today's time, this thing's gonna collapse. So obviously someone's pushing up the price. - Think about Bitcoin halving and how huge impact on pricing of Bitcoin, right? - But Bella graft. - Raft, and that's great. But wouldn't it be helpful to have it right here on the trading venue where you participate, where you actually transit? - All of these things I think are very necessary for all of these different products.

And I think that comes down to transparency and integrity, which is obviously one of your core principles in that you need to be, if you're a DA or a foundation and you're putting out a token, you need to be transparent. And if you're not transparent, then maybe that lacks integrity. - No, absolutely. Not all these products will, many products, many of these tokens will be determined to be a security and then they will be regulated. And we have regulations today in place for security products and they all have to follow those requirements. But for tokens, many of them will not be determined to be a security.

Therefore, they don't have this path to follow. And having a, at this point, it's a voluntary process of disclosures for these products would be extremely helpful. And I think taking it one step further, when the regulations are developed, because they will be developed here in the States and globally, I think the regulators would find it also more helpful to have a starting point with an industry practice that is ready in place to be able to adapt and develop regulations based on something that... - I think it was Coinbase that said to regulators that a lot of these are essentially like trading in Beanie Babies.

Now Beanie Babies don't come with a disclosure statement. And so I'm guessing, are you seeing pushback from some of the larger institutions or is everyone saying absolutely this needs to be done? You don't have to give things. - We see a huge support from the trading venues to be able to develop this in the United States. We also see platforms, actual technology being developed to gather data and information about specific bookends and specific networks. We have many tokens here that have been issued on the networks. And technology look to collect and update information as it becomes available. So if anyone wants to subscribe, they can.

It seems that the trading venues are embracing it. The participants in the space and stakeholders in the space are also embracing it. We also have a MICA regulation in Europe that is quite prescriptive. Our regulations in the United States are more principle-based regulations. Whereas MICA, when their regulations in Europe come in place next year, it's very prescriptive as to what the venue has to disclose when it offers digital assets for sale. And some of that is, I think, fueled, very much fueled by we need to do something in the United States. We don't have any regulations in place.

Therefore, let's get together as an industry and put together a practice that can work in sync with some of these requirements that are already put in place in Europe. - I think that is a fantastic way to wrap this up. This has been a fantastic interview. Thank you so much for your time and your expertise. I think a great service to the folks that maybe aren't as in-depth of knowledge as someone that's living and breathing this every single day. I think the way to get mass adoption is through education and what you're doing within your organization is fantastic and we really appreciate it. - Renata, thank you so much for joining us.

And thank you for, you've given us a lot of things to think about, a lot of things to discuss. Thank you so much.