Bridging the Gap: TradFi & Crypto in Conversation

Transcript

Hello everyone. Very happy to welcome you for a new Crypto Valley Association get together webinar bridging the gap trade finance and crypto in conversation with some established actors in the financial market. I'm very happy to welcome Marcus Dinklman from Asset Management Association Switzerland and Sandro Bulman from um uh post finance big established player in the financial market here in Switzerland. We're very happy to discuss this very important

topic and so um I would like to start um direct maybe just know a few phrases how it will work. I mean we will have now a discussion between us and then I'll pick some questions um uh from the audience so that we can discuss this. It's very unfortunate that we are only three and only three male. Um we had dea which organized this event my co-chair at Crypto Valley Investor working group which unfortunately came sick came home sick from her holidays.

So it's very sad that um she's not with us. We send her best wishes and a fast recovery. And we start um with our webinar and um I would like maybe Sandro to explain quickly what post finance is. I think we all know what it is but maybe one two phrases and then um also the the activities in the in the in in in in the in the crypto and trade and crypto space and then we'll do the same with Marcus.

Thank you very much Martin and hello everybody also from my side. It's great to be here. So I think post finance definitely is an established name in the financial industry especially in Switzerland or uh nearly only in Switzerland I would say we are one of the largest retail banks here in Switzerland with close to 2.4 million uh retail investors. So we are a retail focused bank um offering typical retail investment products u accounts, bank accounts savings accounts and also um more and more focused on the whole investment space.

So we have a very broad um offering and that we offer to Swiss retail investors and we launched our crypto trading offering uh last year in February 2024 um which is also a strategic initiative of post finance where we want to position ourselves as a leader in the digital asset space and that's also the reason why we're here today or why I'm here today is that postfind finance is more and more um going into the the crypto space or the digital assets world. So besides traditional banking services, we continuously expand our offering in the digital asset space.

Thank you. So then I take over shortly. Thank you very much also for having me today. So I work at the asset management association Switzerland as an asset management analyst and uh Amas that's our short name is the industry association for the Swiss asset management sector. So representing around 180 in the vast ma majority corporate members and uh Amas advocates for the interests of asset managers and fund management common companies as well in Switzerland focusing on regulatory affairs best practices and the overall development of

the asset management industry based in Switzerland. So we are headquartered in Basel and also have small offices in Zurich and Geneva and we are a small team of totally around 10 FTEES and uh so so to say my role at Amas covers a broad range of responsibilities including uh leading projects, developing publications together with partners as well and as well as industry guidelines, managing various committees that bring together experts from the different areas of the industry. So this include for example uh working groups in

the in the risk management investment compliance alternative investments ETFs and indexed investments as well as gips that's the global investment performance standards set by the CFA institute and then even tokenization and digital assets and the letter in collaboration with Swiss digital exchange. So we are quite working on a lot of things. Interesting. We need to know more but we will learn more about this probably in our discussion. So um maybe um Marcus could you tell me a bit what first drew your attention into to crypto into the

world of crypto and when did you start? How did it evolve? Where do you Yeah. Yeah. Thank you for this question, Martin. So, yeah, for a long time I was quite skeptical about crypto and bit Bitcoin. However, then in back 2019, I decided to take a closer look at the topic. At the time, I was completing my master's degree in banking and finance at the University of Zurich and was basically searching for a thesis topic. At the same time, I was also working for a fund management company in Likensstein which was closely moni monitoring the crypto space but remained also a bit cautious about entering it. So this gave

me an idea um I could analyze how adding crypto to a traditional institutional equity bond portfolio would impact the risk return profile. And uh yeah, so to do this, I constructed a hypothetical passive fund that aimed to cover a certain percentage of the total market cap of all cryptocurrencies. And uh yeah, depending on Bitcoin's dominance, then the portfolio included between five and 30 different cryptos back then. And uh yeah, my of course my results were also influenced by the crypto winter that uh began in December to 2019. So so some up

and down since then. Uh nonetheless, so uh I concluded that an allocation of just 1% in crypto in an institutional portfolio could under some circumstances uh offer beneficial characteristics. And uh yeah at that time Bitcoin was trading around at $9,000. So unfortunately then I didn't follow my own recommendation partly because as a student I had and too much money to invest. So then some time passed when I joined Amas in 2021. There was already a dedicated working group in place working on innovation with a strong focus on

tokenization and this were to shape then my perspective uh on the technology and also on digital assets but I will happy be happy to share more on that later. Thank you very much. Um um we actually share a very similar story um how we got into the market and uh I always think it's funny when we when we look at how people usually get into crypto right I mean the perfect answer would be something which I mean the decentralization all that thinking drew me into that market but I mean the true reality is it's about the upside potential right that's always what first draws the attention and then when we

look closer at it then we see the the potential that really comes with with the technology, right? So, that was pretty much the same with me back in 2017 until uh 19. We were working on uh in my for with my former employer um more in the traditional asset management asset management space. We were already launching a whole range of different investment products in the crypto space all structured as an AMC and we also launched I would say the world's first fund of tokenized venture capital funds where we focused on investing in tokenized VC funds. So very early on very at the edge of uh the revolution in

the financial sector I would say but it was still very early and but my out of my curiosity I would say into that market or in in this technology it became more a let's say strategic thinking how this can be integrated and that's where I relate to you Marcus into an institutional portfolio right um and there the questions that came up is what infrastructure actually is needed needed and how do we align this with the regulation and I mean back then there was no very clear regulation about crypto it slowly began in 2019 and ever since then it has increased and that it has improved of course that's also what

puts in more institutional money in the market which is needed for acceptance of course but it all started with this let's look at it something a new asset class right with a high upside potential That was the first thing that actually drew my attention after that really digging deep into the technology and I mean now we're here we offer crypto as a system systemically relevant bank in Switzerland that's also probably a world's first um that we have been doing there. So I think it's amazing the journey that we have come so far and I'm more than more than happy to to continue on this path.

If I may ask here, what how do you see now the response from your clients? How is this offering getting traction? Well, we are more than than happy with the with how it has started the offering. Um, of course, we did some analysis prior to the launch of course what we can expect, but although I can't disclose very exact figures there, um, we we exceeded all the targets that we had. So um it's interesting to see also now in the market the over the last two weeks when market have bumped again that we have more uh buy orders than sell orders. So also the the the not very educated retail investors let's put it

that way are starting to see the market bumping as an opportunity. Uh which was definitely not the case a couple of years ago and which is definitely not the case in other traditional assets when we look at retail investors. Right? So we exceeded the the target. We are very happy with how it's going. And what's also very encouraging, I would say, is that the broad demographic uh uptake that it has. It's not just the early adopters that are now able to trade within their uh bank, right, their house bank or some tech enthusiasts.

It's really the the Hans and Kuns from Switzerland who is now entering into a new asset class that gives him an exposure to an upside potential which he did not have before. So this also tells us that crypto has become mainstream right and when offered in an institutional grade setup like we have post finance we can really allow people to gain access to a new asset class that they did not have before. And one other I would say very very interesting factor is that we have attracted many new clients which have not been clients with post finance before. And the even more interesting fact is that we have attracted many new investors. So these

clients have not been investing in any asset class before. So it's the first it's their entering into the investment world. Let's put it that way. um was crypto. And I think that's very funny. I mean, if we look back a couple of years, crypto was like the end stage that you enter if you're an investor, right? And today, we see it as a starting point for for many investors who start with crypto and would then potentially go into other asset classes. And from a from a bank perspective, of course, that's a huge cross-selling potential that you have.

So, it's not the end stage anymore. It's actually the entry point for many investors out there. That's this is really very interesting. I mean it would be exciting to see once maybe your stats also about this maybe if I'm I'm also wondering how is it now age wise is only young people or is it also even like middle-aged or older people which are which are start Yeah, it's very diverse. um we we only allow as of now um the opening of a crypto portfolio um at the age of 18. Um so obviously the the youngest investor that we have, youngest client is 18 and the

oldest if I remember correctly is somewhere 85 or somewhere there. So and in between of course we have the the typical um demographic distribution of investments that's not not different to the traditional world where we see it in the range of 30 until to 45 50 somewhere there right we have the largest amount of investors but that's not different from from other asset classes if we if we look at the market but it's actually very diverse so I've also been in touch with different clients of ours for some features that we have been discussing with them and some of them have not been very educated let's say even the younger ones they didn't really know what the

technology is about and then I had a conversation with a client who was I think he was 17 72 73 somewhere there and he was very well educated on the topic he knew all about layer 2 solutions upgrade of the blockchains hard forks all that stuff so you can't really put a number into behind the technology. It's very diverse I would say. Yeah. Very interesting. Very interesting. May I I mean just now before we move before we go back to to Marcus just maybe could you also tell us which cryp which services you offer also did you and then I'm also wondering how how is it did you build up your own

infrastructure or are you doing working do you have collaborations? Mhm. We are working with signnum bank um who is doing the custody for us and also the brokerage services. So we are in very close relationship with signnum. They are a enabler for us to enter the crypto and the blockchain space. Um we started with the direct um custody and trading of cryptocurrencies. We are now offering custody and trading for 16 different cryptocurrencies. um all payment tokens there uh as as as of the current uh moment and we also launched staking just two months ago uh in February this year which was also

world's first it's a native Ethereum staking retail product so we don't do liquid staking we don't put anything uh into lending and then we promise some returns and say it's from staking it's real native Ethereum staking um which was uh which is a gamecher I would say but which was very hard to design especially as a systemic systemically relevant bank as you can imagine. entering that space, being in touch with FINMA uh and getting the regulatory clarity there on such an offering was was a tough thing to do, but we managed to do it. And we are now working also on the uh crypto transfer feature where you can withdraw or

deposit uh cryptocurrencies that you already hold on an exchange or on your private wallet. And of course also the other way around, if you want to withdraw something, you can do that. That's something that we are currently working on. and more information on that hopefully very soon. Perfect. Thank you very much, Sandro. So, um, Marcus, maybe tell us a bit more about the involvement of of Amas with digital assets. Yeah, sure. Um so back in 2021 when I was starting at Amas Amas uh already had in collaboration with the multi-chain asset managers association launched a pro project that created a fully

tokenized fund a so-called vault vault via an online platform. Through this um we kind of explored digital assets and tokenization which uh so simply put refers to securities that can be traded onchain. And one key objective there was educate educating our working group members, helping them understand the vision of onchain asset management. And uh there we explored questions like how can smart contracts be used to simplify fund processing and what investment opportunities exist within the crypto space. So this included then as Sandro already mentioned lending and borrowing

assets so so-called staking insuring risks and so on. So the key takeaways then were were basically that the technology itself is ready for onchain asset management and offer several advantages including full transparency and uh so today I can for example buy Bitcoin via Bitcoin ETF without leaving the traditional financial system interestingly or dealing with wallets fiat via fiat to crypto hurdles etc. So I can stay in the traditional space and to further add the scope of investment opportunities remains limited and as traditional financial institutions have

built a wellestablished and centralized trading infrastructure over the years. Um so now this statement may may sound a bit provocative but the traditional system works. So even today retail investors can buy fractional shares of securities at relatively low costs without requiring blockchain technology. So you can buy for example 0.1 shares of lint uh just as you want. So and but what we what is to be added here is of course uh DT and distributed ledger technology could certainly be

helpful in ina in enabling such fractionalization however as far as we observe it's not strictly necessary but it certainly would make it more efficient. So I believe in to sum up and it's fair to say that investment opportunities in traditional finance are still significantly broader than in DI and so coming from a traditional perspective we often just just to move on uh we think in terms of investment funds especially as the asset management association representing also the fund management companies. So an investor buys fund shares and thereby owns a portion of the

fund and uh the fund itself then holds securities. And now where comes tokenization into the play which we uh observed that really interest we think this is really interesting. Um, so is the fund share tokenized? So buying a tokenized fund that holds traditional securities or are you tokenizing the underlying assets? So buying a traditional fun share for example a bitcoin ETF and then that invests in digital assets. And uh the full vision we explored in this working group was buying a tokenized fund share of fund

that exclusively holds tokenized assets. So that's the far the far vision of fully onchain asset management. So just to finish up here uh itself is not directly involved in tokenization projects. However, we actively engage with our members and further stakeholders uh to represent the asset management industry in this evolving space and uh including also regulatory aspects there.

[Music] No, that's very interesting. I mean maybe just first of all is there like a paper published by you regarding the findings which you which with your working group how is there something maybe also our listeners and viewers could could read. Thank you for the question. So yes it's something in the pipeline not yet published but uh for sure will come sooner or later. So we're still working on and uh soon we have as we have some results that it will be published and made uh made available to to the broader public.

Yeah. I mean maybe if I just mention quickly I mean what you've said I mean there of course there are certain advantages or many advantage and with maybe also with if if you even traditional financial instruments if you tokenize them and provide through blockchain based uh channel uh first of all I mean you would have 247 oper possibility to buy and to sell if the market makers are also there and you don't you don't have to stop Friday at 5 and start Monday. Um I mean and now I mean if you see the whole space with um you know with um payment tokens and

with stable coins etc. I mean it would be maybe very simple interaction between different asset groups within the same uh within the same blockchain or within the same pretty seamless and probably also much cheaper to provide with because if you think now the cost the you know it's all different entities very segregated very complicated very expensive also And but did you also look into this? Yeah, sure. So, uh this is especially that what makes it difficult in the end that uh you see the vision in the end. Uh it offers a lot of uh

upsides and and efficiency gains potentially. So, uh but the difficult question is how to get there, right? So you have a a working uh system in place now and uh how do you change it and how to how you how you can get uh how can you develop it and uh go to this more uh decentralized systems which offer a lot of benefits in the end. Can I ask a question to that? Maybe a bit uh provocative. Um sorry already. Um I've also I've already looked at tokenization as I as I've mentioned before like seven seven years ago, let's put it

and ever since then we actually didn't really evolve. Um so it didn't really take up. And the question I always like to ask and also to these marketplaces that offer the tokenized version of stuff, right? Are we trying to solve a problem that doesn't is that isn't really a problem. So if you if you talk to large investors they don't care about T plus zero. It's potentially even if at all the infrastructure or somehow when it comes to crossber payments if you have the settlement there okay let's put it that that's okay then there I see an advantage or when it comes to fund tokenization if we look at the venture

capital or the alternatives market private market funds why should they be tokenized so number one is have people invest in a asset class, right? Retail investors, which we are not allowed yet as of now because we have somehow a regulator that says, "Okay, this is not a suitable asset class for you. You are not allowed. You need to be a qualified investor in order to invest." And there you have this minimum investments in an EC fund. You have some two to three millions at least, right? You have a lock up period of 10 to 12 years. All that stuff comes along. So now we say okay if we tokenize we can make it accessible for retail investors right

but are the people then really investing in it because first of all they don't understand it the typical retail investor in Switzerland doesn't understand private markets neither should he why should he right the typical allocation in Switzerland you have some equities you have some bonds you have maybe some gold maybe some some real estate that's the typical investor in Switzerland And that's fine for the most people that's enough. And if we look at the dem at the demographic distribution Switzerland who is investing I mean not even the the the people that you would expect are really actively investing in these asset classes. They just rely on 3A right and

their pension funds where they are already invested in such a model portfolio. So do we really solve this issue if we tokenize it or I mean where is really the the immediate benefit or the even the benefit in five years because we are trying to tokenize something that people don't understand and they don't invest in. Yeah, it's if I may give here also an idea. I mean of course you're right. Uh I mean there there's still many promises which were not not held until now.

Uhhuh. So I mean basically it's true that maybe there are certain you know we talk we resolve certain problems but in the end it doesn't or if you have let's say tokenization of real estate you know people are talking about it in years but if they go to market then basically there is very little interest but I mean uh there I mean a few things first is I mean once that basically the advantages of let's say 24/7 seven and so on. Even though not people say I don't need it once it's there everyone wants it. I think then basically all the old legacy legacy system will be will be you know they they will lose lots of advantages

or then also costwise I mean in the end that's what we see in digitalization no and it you know takes certain time but of course if you sell if you have a few few basis points for the transaction instead of half a percent then it makes a difference and I mean that's why we see that you have like actors like Robin in hood in the US or eto they have a huge success and and so once it's known um then I think it will be used then no one will go back I mean it's the same a bit I think with the maybe with the online shopping or with the iPhone I mean before we had it no one needed it it was absolutely sufficient to have a

you know to send some text messages and to do some calls now everyone needs it And there is obviously lots of other business models you know to lock in assets in a very simple way you know basically to to to you know to to to grant uh some assets which you have digital and to get get the loan on it which will be much simpler than if you do it now through the institutions I think and that's what we will see I mean many of the developments I I think you know the short the shortterm advantages they are overvalued or you think they're

here but they're not coming but the longterm changes they're basically undervalued so I think it's really taking some time but it's probably has some effects like with an avalanche you know very slow at the beginning very slow but once it's here then it will go very fast and I think that this is one thing at the Second thing is I mean we have now these systems which are working which our banks and maybe this is also something which is very interesting to learn also from Marcus you know we have now an infrastructure which was built in the '9s let's say it like this or maybe in the 2000s or something but you know every like 25 years infrastructure will

be changed will be built on a new you know on a new basis and I could imagine I mean I'm not so deep in the financial markets as you are but you know once it's here then probably if you know if some big US banks switch on the new um infrastructure then basically all the others have to follow it's you know the first let's it's a bit like with the iPhone we you it's impossible now to pay basically normal phone anymore that's how I I I would argue here and that's why I think I'm I'm staying positive for uh that blockchain technology and and and and

tokenization still or they they have a future even though that many hopes were not yet fulfilled but maybe Marcus I'm not yet just so yes I mean I would totally agree also with Sandra what the points he raised up so for the moment we don't see the avalanches bombing. So um uh but we know that uh the financial uh financial participants are are working on the those projects and uh well but for the moment they they are not uh no nobody wants to be the first one. So uh and you all always need to ask the question which also under it uh

which problem do you solve and uh for the moment I think that's also a big struggle of the crypto space that some problems are solved which are not really a problem. So and uh which which are working and al also to add up on the tokenization so only tokenizing an asset doesn't make it liquid in the end. So uh yes a lot of problems will will remain. So and uh maybe also an interesting question which pops up probably is that for a retail investor it doesn't matter if he buys a tokenized asset or not. Uh so in the end he does probably does not care. What brings pro what may maybe

brings difference is for the financial institution if there is to realize some efficiency gains or not and if there are efficiency gains everybody will adopt it and if there are no nobody will. No I fully agree. Good. Okay. So maybe Sandro, could you tell us I mean you mentioned already that you've been um happy with let's say the traction you're getting in these projects but could you tell us how much under management how many assets under management you you have in crypto in in in tokens? No, I can't disclose the exact number there. I'm sorry for that.

But what I can disclose and that's also been public in our annual report. all these figures I can announce. Um we have more than 25,000 uh clients as of now within one year. So we're happy with that. Um numbers are increasing. Um so we still see a very very uh upside trend in our client base and also um we have more than 200 I think it's even more than 250 now thousand trades already within these clients. um I think it's even more but I don't have to remember the exact number there and and also with staking we are very happy um we have already um a huge amount um of

our client base that is uh staking their their assets with with post finance there we we more or less hit the market we have around 25% of our total assets are being staked um with um from Ethereum and we expect this number to increase in the future especially when it comes to pectra right we still wait for the update there but we are sure that it will facilitate many many features uh when it comes to staking and are very much looking forward there but I'm sorry I can't disclose the exact number absolutely okay maybe um for you Marcus could you tell us how what

percentage or how many members Amas members are having an exposure to digital assets and um maybe also how you see the development what do you think where will we be in 2030? Yeah, thank you Martin. So unfortunately I also need to pass providing exact figures but for sure we would also be interested in the for example post finance figures. So uh yeah, Swiss asset management in the end is known for a strong in uh expertise in alternative investments. However, uh since digital assets still make up only a small fraction of the broader alternative investment space, um their overall share

of assets under management across the industry remains for sure quite low. That being said, uh our members are deeply involved in digital assets. So for example, some institutions are venture capital asset managers uh uh managing digital assets uh or investing in digital asset firms. So or companies providing trading infrastructure or firms offering crypto investment solutions for end clients. And uh looking ahead uh it's hard to predict ex exact exposure levels. However uh it's quite clear that it makes that many recognize the potential of the

technology and uh especially its ability to create trustless efficient systems in operational proc processes as already mentioned before. So it can bring efficiency gain gains especially in the often highly complex fund back office processes and uh if the adoption of the blockchain technology in those back office systems becomes widely adopted um it could be seamlessly integrated meaning that end clients as already mentioned also before uh may not even notice that uh they are investing in something using blockchain powered solutions.

Maybe to comment on that Mark because I think that what you just said the found back office that's is exactly where I also see the the advantages. I experienced it firsthand when we invested in these tokenized venture capital funds and in the VC space it's even more a nightmare handling these investors who are changing bank accounts from day to day and all that stuff was a nightmare and we there already received a fully automated onchain distribution from one of the funds. So tokens that we hold in custody which represented a a fund share or it was an SPV that has been tokenized um have been withdrawn and we were paid out or deposited USDT. Um so it was

fully automated. It was um with at very low cost and we didn't have to change anything. So that's where I also see the advantages when it comes to tokenization. It's really in the administrative part in the back office part where we can gain efficiency um where we can benefit from efficiency gains. Exactly. Fully agree. Good. Interesting. Now maybe um another question for for Sandro regarding uh post finance and the security concerns we have in crypto.

um how do you and your clients protect themselves using crypto platforms and or wallets? What did you implement there? Where do you see the risks? So for us um and especially when it comes to crypto securities non-negotiable, let's put it that way, right? um all these irreversible transactions or the nature of the blockchain that comes along with it means there's absolutely no room for errors. Um so this was one of the main focus that we have also when we chose um signum um who is doing the custody part for us and there we work with um best-in-class um um MPC custody

solutions that we have in place and also continuous risk monitoring that needs to be there otherwise we can't offer anything in that in that space there right so we offer actually for our clients we offer them that we take uh over the this responsibility of of managing the custody part and still that of course one one can argue okay not your keys not your coins yes but that's not the solution for the typical retail investor right so you need to provide them with an easy access with a secure way and I mean as a systematically relevant bank we we need to ensure highest security standards that's also where signnum adheres to our standards

who is also a FINA licensed bank in Switzerland. So we have more or less I would say although we systemically relevant there are some more FEMA attention on us but in general we have the same standards that we that we applied to. So it's an absolute must to have uh the highest standards of security when it comes to custody of crypto assets. Yeah. Perfect. Interesting. maybe for Amas what's the what's the obstacles for uh for your members in investing in the um in digital assets and so in general um of course and I can't speak on behalf of our members here but some key challenges I see now

is uh first uh we have a limited and also risky investment universe when in when it comes to digital assets so it's still a relative small market compared to traditional asset classes and uh often unfortunately associated with scams, fraud and unverified projects. And uh secondly, even though heavily improving uh some companies still might for some companies, it still might be true that we observe a lack of market infrastructure. And unlike in traditional financial markets, the crypto space still lacks wellestablished trading platforms, custodians, and

clearing mechanisms. But this heavily improving to say so. And then a third point probably is the counterparty risk. So you really need to be aware of of those risks and uh and uh take a lot of time to to have a good due diligence process in place just to limit the downside potential and the reputation loss which which are key to manage. Uh maybe a question here for for for for Sandro about uh post finance. Are you only providing services in digital assets and crypto? Does also post

finance itself uh take a bet and maybe invest certain amount into crypto or in other alternative investments? you mentioned just before you mentioned private equity funds and uh I'm wondering how is it with with with digital assets so post finance as a typical traditional Swiss financial institution systemically relevant bank we do not invest directly into crypto so there's no strategy where we need to allocate money we have a a bank license so we are a bank we need to offer banking services and investing in crypto as a bank does

not really meet that criteria. Right? Um if you want to double check that um give you a small hint uh we have a published annual report and as a bank if you take in a position in crypto you need to publish it. So maybe there was something small with a different book value than the fair value but that's public information so you can check that. But basically we do not invest in crypto as post managers directly. Maybe here I have a question from one of our listeners. Uh I think it's well the right timing to ask this question and he and he asks or she um if Swiss Swiss

finance as a leader in Swiss banking are you exploring the integration of security token offerings into your product suit and if no why not? So we are exploring different initiatives. If you look at our road map what we have on that um security token is definitely a topic that we look into but it's not the main priority right now. um but especially I mean all these topics related to um fund tokenization and gaining efficiency gains there that's it comes with handling security token at one point right so and post finance as a payment provider in

Switzerland we have a large IT infrastructure we can provide a security that very little other institution in Switzerland can and so it's very obvious that we also need to look into that market. I mean we had something with token market cap right um where we provided price feed for um security tokens. So post finance especially in our venture lab uh the vant has already been looking into security tokens for years and uh now with in the business side of the bank um we are looking at it but not with a high priority as of now.

Perfect. Thank you. Now, um, stable coins, DeFi, Bitcoin only. What areas of crypto space do you find most exciting and promising right now? Me or Marcus? Should I each? Okay. Would you like to start, Sandro? All right. Okay. So, I think I think for me it's pretty easy to answer. Um, it's the whole uh stable coin world. um especially when it comes to crossber payments and that's also where we can make benefit of the of the efficiency gains right um with the settlement T plus zero all that stuff so I'm really looking into how the technology there can really evolve I mean stablecoin

isn't an investment part right it's really about the technology that needs to make sure that we gain efficiency and there when we look at the other topic that pops up it's the tokenization that we just discussed fast, right? Um although I'm there, I'm more a bit more skeptical when it comes to timeline when it will really fly, when it will really be the new normal. Um um let's say five years ago, I said five years, we are now here and it's not here. So let's give it another five years, right? Um let's try it out. So it's stable coin with when it comes to crossber payments and settlement also when it comes to increasing efficiency in the in the

domestic payment systems but there I think it's very hard to to take a part in as of now because the the merchants won't be um willing to pay more than they accept for fiat currencies right and offering stable coin payments at the the point of sale definitely comes with more cost as of now. So will be a hard part there. But payments, tokenizations, and the whole stable coin world is what excites me as of now. Uh the most I would say. And Bitcoin not really. Bitcoin of course, but Bitcoin is Bitcoin, right? I look at Bitcoin completely different than I look at other things. I know it this opinion uh

is diverse or controvers let's say. Um but for me I want to own your opinion. So Bitcoin for me yes it's for me it's the investment case uh per se. So if I invest in crypto I invest in Bitcoin. Um, of course I also look at other tokens, but that's definitely the main investment for me, especially when we look at the institutional adoption that just has enormously increased over the last two years, right? So, it it has really become mainstream.

Marus, yeah. Um, I agree with what Sandra said, but also to share my opinion, I believe that meme coins in have a had a massive impact on the credibility of old coins recently and not in a good way. So maybe on that and then stable coins make sense as a bridge between traditional finance and crypto, but uh they also raise credibility concerns depending on their design and backing. So a central bank controlled stable coin for example who would be then accessible also for retail inter in investors would contradict many of the core principles of the crypto industry and also uh to the entire functioning of

the bankdriven credit system in the end. So yeah that's quite interesting to have also a philosophical look at it. So and then I also find DeFi applications very interesting. So some layer one tokens uh will likely rem maintain their re relevance because they provide the flexible infrastructure for further applications and uh then uh also to come to bitcoin. I find bitcoin's history quite remarkable. So it had has existed for over 15 years now and uh it's established worldwide. So the idea of Bitcoin as digital gold is becoming increasingly mainstream and I personally

find this growing acam acceptance very promising also for the future of of of Bitcoin. Very interesting before maybe just to ask to this question. I mean we mentioned it now twice or already three times in our discussion that you know maybe this promise which was not held until now. But um I mean now what we see now happening in the US with much more which being basically the leader in financial markets with being responsible for biggest part of you know total assets and uh I mean now opening they were very reluctant the

last few years and basically closing down all you know all crypto companies and this now changes 180°. I mean, now just in in the last few weeks, um, so much happened and I mean, you know, a stable coin act, the genius act, etc. So, I mean, this could change the world now. I mean, this could be maybe a bit this avalanche moment. We don't know it yet. I mean, we'll see. We will see in three years, in four years, we'll see what will happens. Maybe already in one year. It's it's difficult to say but still I think this could have at least a merger major impact. I mean

it's not it's pretty clear that even if Switzerland has a very pro DLT legislation doesn't matter really because I mean the investment universe even in Switzerland it's not defined through our uh the offering which is provided here in Switzerland. But uh I mean or what do you think about this? Yeah, I mean historically it's absolutely true that uh for the financial industry uh everybody the world is following what the US does and so it's interesting to see how how they develop their regulation and what they will do. I mean it probably doesn't make much sense if we have a very strict

regulation here when and in the US you have the the opposite but uh that's just a personal opinion. Yeah, I think it's we really need to be careful in Switzerland, but especially in the EU that we don't lose our position, right? Um I mean we see it with AI what's happening right now with regulation of AI in the U and the EU. It's a nightmare, right? We we definitely going to lose there on this front. So let's try not to lose on crypto as well. And I mean in Switzerland we have stable regulation, we have a stable currency, we have a stable economy. This definitely helps and we we have attracted many many interesting companies in that space. All these foundations they came to

Switzerland because they couldn't open up in the US, right? Why should a company in uh open up an office in Switzerland if they want to attract the global market or especially the US investors, right? That was the only reason they came here back then and uh we're going to lose this advantage if we are not careful and what currently is also been discussed with the regulators is that we might make a step backwards there. And so we need to stay bold in that market. We need to be at the forefront otherwise it's very dangerous and I'm not willing to lose again. I mean we had it with the fund industry in

Switzerland, right? which all all of the funds have moved out to to Luxembourg or Lienstein. Uh let's try to bring them back and uh give them a regulated way to launch tokenized funds maybe in Switzerland right? Maybe this is something Marcus, what are you doing there? I mean you are basically an interest group from important financial actors. How is your discussions with Finma and other regulators in this respect? Yes. So currently we are uh not uh I mean we are talking and uh we have exchanging of opinions. Uh I think uh the with the with blockchain act which

came into uh was uh introduced some years ago. We had a good uh starting point but we are definitely true that we need we don't uh we we we may not le lose traction here and we want we need to develop further and as soon as uh also we hear something from our members to to to raise to raise the voice towards burn we are ready to do so and we are happy to to to help the space and develop the business here. Perfect. Yeah. Now for for sure maybe it would be good also now if Crypto Valley association or blockchain association is you if we talk together and I think

because absolutely it seems now like Finma is very much absorbed by UBS former credits topics and all the rest is basically far away out of the out of sight out of thought which is a very dangerous thing because as Sando mentioned it I mean the world now especially now turns really very very fast and I mean that's a bit the problem probably in our digitalized world that now I mean this developments don't come up little by little but it's just like once it's here then it's takes one year and the world is is different right yeah we need to be ready for that and ready like the video call thing right I mean

we they dreamed about videos call since the 90s but after goa it was just here. Absolutely. Okay. And so maybe now few personal question or one you had if you had 10,000 Swiss Franks and you had to invest it into crypto and maybe you haven't and maybe once you have to invest it in crypto what would you do and um if you just have to invest it what would you do then?

So if I'm starting h so yeah first of all I have to say that I'm absolutely no expert in crypto investing and I do not have an expertise to provide here an investment strategy. So uh in fact I would rather consult a specialist from one of our member institutions. uh a lot of them offering crypto, but if I you would force me now to invest $10,000 right now, um I would likely go 100% Bitcoin. Not because I think other projects aren't promising. Quite the opposite. But especially when not coins are in the middle of interest, but the technology itself, then other projects

are are of interest for sure. But so however I would go 100% Bitcoin because I lack deeper knowledge and recognize that Bitcoin was here for 15 years and probably there's a that's what a lot of people are thinking um I also have to bring up a more strict disclaimer that's of course at all really it's only reflecting my personal opinion so it does not entertainment exactly Um no I would I look at it in two ways and that it really depends on the term that you want to invest right if you say I want to invest in the for the next 10 years or I want to get out after a year

or something I would definitely uh change the the allocation there but a typical portfolio either you go 100% Bitcoin as Marcus said right and you're the long-term investor the hodler and you just uh believe in in Bitcoin which is absolutely fine and uh the opinion of many people out there. If you want to go more diverse, let's say, I would rather or probably like allocate definitely the largest bulk like 60% or something into Bitcoin. Uh also definitely due to the the uncertain times that we currently have, right? Um and also to the dollar diminishing in in value, we'll definitely see larger inflows into into Bitcoin, thus providing investors with a

potential upside. Um then I mentioned it before staking in Ethereum a passive income um source. So definitely want to invest in Ethereum. Although the price has lately been bumping and there have been rumors on and on about Ethereum and how it will be developing over the next years, I still see it as the most accepted from institutional client um layer one solution out there and also the most secure one. um although it needs to rely on layer 2 solutions, right? But nevertheless, I think it is currently or potentially un undervalued and I'm also betting on the pectra upgrade which hopefully leads to a potential rebound

in in price for Ethereum. Um next up I would say Salana a darling of many investors out there. Um but definitely with with an upside potential still payments is one of the main use cases when it comes to crypto Salana could be an alternative layer one solution there. So there needs to be competition and competition often drives up prices right or down if you bet on the wrong one. Um then um which something which I would not not have guessed um or thought that I would be saying that today for one year ago is Ripple. Um but with the situation in the US the long ongoing

lawsuit and now it looks quite positive that they will have a positive outcome in the lawsuit um which will further um drive up price in in in XRP. So XRP would definitely be um a part of my portfolio if I invest for a year let's say and mentioned it before all these layer one or layer 2 solutions um Ethereum relies on layer 2 solutions so it's uh it's close to say okay we also need to invest in layer two there and there I'm more more or less open but let's put in orbit room um also with a 10% allocation something like that then you have a diverse portfolio I would say the security part with Bitcoin, the

infrastructure part with these layer 1 and layer two solutions, you have some payment uh in it and you have Solana which represents DeFi, payments, all the things, right? So I think that would be a portfolio that that I could invest in. Perfect. Thank you very much. We're coming to an end. I have one last I mean one last question from um a listener from us and he asked and probably this is basically addressed yeah both of you isn't it a contradiction to use a bank with its heavy costs for crypto investing?

Yes it is. That's the simple question. If you look at the thesis of crypto yes it is. It's against the the um the deletion of these intermediaries. Now we put in another de intermediary. Right. Absolutely. But the thing is crypto is a very complex and technology focused um asset class and it's only open for although we always claim it's the most open ecosystem in the world. If we really look at it practically, it's only open for these people who are able to handle a private wallet, right? And that's not something that everybody can. I mean, if looking at my my grandmother, she's she's 93 years

old, she would not be able to handle a private wallet, but she's able to open up crypto portfolio within Post Finance her bank within one minute. So, we don't push anyone into our offering. we just provide them an alternative solution and that's what banks do right they provide their clients an alternative way to invest in something that they otherwise would need to invest in a very technical way so against the idea of crypto yes it is but nevertheless it supports the ecosystem by providing an alternative way into it so thank you very much both of you maybe

another thing here. How can listeners open account with post finance or how can they basic I mean this is pretty simple now but how can they interact and maybe learn more from Amas and post finance regarding their crypto thesis and crypto offering. So maybe I just give my short answer to that. So we represent an industry assoc association. So we don't have direct client relationships. Uh what you can do visit our website and see if and uh have a look at the the content there and also approach our various uh partner assoc

associations and uh they have interesting projects and uh have a look at that and uh sorry and for those interested in opening an account I would refer them to our member institutions also both phenos and Excellent. Perfect. Thank you very much. I think it was a very interesting discussion. I think what we have seen or heard was I mean there is still a certain skepticism about the next wave uh in crypto. Where will it go? When will these huge promises come to truth which was which were given? I think we

discussed about this. On the other hand, I think it was interesting to see from Sandro that there is an interest even by we have this retail clients they were basically the offering was used and more than expected and uh there is a good response. I think what we've also seen where both of you have agreed that especially in the whole back office um procedures crypto or blockchain could help with the digitalization and basically the you know to make it uh processes more seeming seamless more efficient and cheaper and we have also agreed that um the Swiss regulator

should has to take care that Switzerland keeps its place um in in in in crypto and um that we stay open-minded and open to business and that it's probably important for the future of our country also as a financial center. So I want to say thank you especially to you Sando and to you Marcus. It was really great to have you here. It would be also very nice to meet you in person once in the forest.

No real forest that forest you have there are not many like many leaves there. Let's hope now that we get the green forest with many flowers and fruits and um thank you very much and uh also would be great to welcome you at the crypto valley conference here in road c which will take place in June. I think it's always a very interesting meeting for industry leaders and it would be great to have you with us and I wish you a wonderful evening also to our listeners and we try to make another event soon and I think

crypto valley association also other working groups are very active and um let's work together for a better world and all the very best. Byebye. Byebye. Thank you very much.