From Margin to Mainstream: Digital Asset Banking

Transcript

we will wait for Valerie and then we can kick it off in the meantime I'm going to introduce the topic from margin to mainstream and why why from margin to mainstream there is only a few I think a handful of banks who actively engaged today in um in a crypto offering be it trading be it custody however there is a survey according to ey apparently 70 of banks are already working on their crypto offering and then we will see more and more go live thank you for being here let's do a quick introduction I'm curious to know

about you as a person and the company you represent from left to right by all please go ahead wonderful thank you so much for uh for having me um CME Group I lead the equity and crypto product development at CME um and we um you know we we um we have Futures and options on a number of asset classes everything from equities FX interest rates um gold silver we got into the crypto space about seven years ago we offer Bitcoin and ether Futures and options and also a number of reference rates with our partners CF benchmarks so on kind of the top 20 22 tokens in in in

the crypto space thank you so much Valerie so hello everyone so my name is veterin oil I'm a head of trading of banksies which is a Swiss Private Bank family owned 26 billion asset under management I'm no Trader since almost 30 years now all asset classes but my background is more equity and derivative and we launch trading and custody um for crypto since last December and I was part of the project to to launch that Mercy there thank you Amy um directly I'm CEO of VidCon Swiss I joined about a year ago from traditional Finance actually to previous Barclays UBS BlackRock really

excited to be at Bitcoin Swiss we're founder of the crypto Valley like yourself Amy and we're looking back at a 10-year history of Innovations of being the first broker First Institutional custody first stable coins was famous Babel coin um you know we've been very instrumental in the ethereum icos that's very well known so a lot of innovation and proud of the people and culture at bibkins Swiss hi I'm Franz burglar CEO of cyber Bank I have a background in Consulting and financial services and I'm just enjoying the journey from web 1 web 2 and then finally with 3 and crypto

Zeba as you know is one of the few regulated crypto banks in this world we're offering basically all products and things people need also serving traditional customers and especially with the focus now on crypto Natives and crypto companies in three regions we focus on Asia Middle East and our home base is close by in Switzerland thank you Amy uh my name is Alfonso Gomez I'm the CEO for bbba Switzerland I don't know how familiar you with bbba group we have a big a strong presence in Emerging Markets we have the largest

bank in Mexico we are half presence in Colombia Peru Uruguay Venezuela Argentina and Antarctica and we became the first tier one in the Eurozone dealing in the in the crypto space so we are managing traditional assets and we're combining or value proposal to our customers also with a digital digital assets we are really focused on on this opportunity because we do believe that in this Crystal space we have many things to do uh since the the incumbent Bank sites

so where are we from margin to mainstream by our friends what do you think uh do we have a long way to go well I think the um if we if we dissect the question right what is how do you make something mainstream um so I you know for me it's a number of things right it's Choice having an asset class where you can access you know different points of access different Choice um the model to to manage risk is there I think those are the things that make something too mainstream so with crypto um I think you know for for Bitcoin and for ether yeah we probably are we probably are well on the way to

mainstream adoption um it's certainly what we're seeing on our markets um so for for Bitcoin and ether we launched um those Futures beginning uh 2017 and when we started uh with Bitcoin we were probably doing a thousand contracts a day we're now doing 10 000 contracts a day so that's what um four and a half nearly five billion notional uh dollars per day in volume so yeah if we look at Bitcoin and ether yeah um I think that the the ecosystem around is growing right so it's not just Futures and options uh on on the regulated side people have choice right you can you know depending on

institutional um ability to access right some institutions are able to access the spot markets well in good right some are able to they're not able to access the spot markets because of Regulation or regulation lack of clarity and so you have the regulated exchanges uh like CME um and there's also this really nice ARB that's forming between the regulated exchanges and the unregulated exchanges and spots and then you have the introduction of ETF markets I mean just um a couple of years ago we saw the introduction of the um Futures based ETF one of the quickest growing ETF

gifts I think it amassed over a billion dollars in in two days so that's access right there's another way for people uh Pension funds asset managers to access so for Bitcoin and ether yeah for sure and for the other asset classes sorry for the other uh crypto tokens I think there's probably some some time to go um before we see that mainstream adoption and I think that comes from the technology it comes from you know how many people are using the network what the growth is uh what the use cases and applications are um and therefore you know the trading aspect will come at some some point what do you think friends I have a

little bit of different view how old is this industry really 14 15 years it's a teenager it's still early it behaves like a teenager it's crazy like we see volatility and crazy things going on remember the last 12 months right so I'm totally positive about the future but how teenagers are a lot of energy wild ideas right but we need to grow up as an industry in this teenage industry and I think there's a good way to go to mass adoption there are a few things really missing from my point of view but I love to be in this industry and to work with this teenage industry yeah um I share I share partially your

Viewpoint um but then it's incredible how much Innovation um blockchains bring to Capital markets instantaneous settlement then just visibility and and yeah um I think we are we're far still from mainstream absolutely Valerie and Alfonso you to work for a long time Private Bank who decided to implement crypto offering how was the journey from the idea to to the point of implementation can you share a bit sure and just to respond to what he said um I was here in 2000 when the.com bubble came on the market

everythingwest.com it was you know your buying company was you know having debt in less than 10 15 years later but people watches.com so it's a little bit the forest uh teenager of Southwest for the moment but yeah if we see uh for sure we see an adaption an adoption so us we can trade a trading uh you can trade and custard the cryptosis like December is being a quite long journey 18 months to do it because what because finma because regulator we are she's private bank we need to do stuff uh step by step and it was quite challenging not only the regulatory part but to security because you know it's money of people so security is a big big part uh trading as

a trading point of view um as soon as you can plug the yeah found the the control party you want to trade with which are regulated also and find API or fix to put the connection together to have a good connectivity you we also found challenging to trade with crypto broker because for them API fix was not obvious so they say you can you know maybe text me on telegram to pass me your order no it's not gonna that's not gonna be that that way so we broke a couple of arm also so we we find a way but it was a long journey not only for us also for the broker uh crypto control parties and the Big Challenge we can we still facing

now is on the back office and middle office because it's not standard standardized everyone every exchange has got his own um his own workflow and for the back office the Middle East it's a lot of manual we are talking about web3 everything but I can tell you in a real life it's a lot of manual and the Big Challenge right here to so yes for sure one day we hope that the blockchain will do the settlement um but there is also a lot of money around this activity by a lot of people so it's yeah we need is gonna come but we need a couple of times I think and why why did you decide to correspond to the demand of your clients you were telling me that the kid

so yeah the clients were for sure the Bitcoin was 60 000 you know we received a lot of phone code well we need to you know we need to trade what can we do blah blah blah you know my kids pushing me you want me to buy Bitcoin I don't know what it is and could you talk to them so then I start to talk to the children of the client and you know they explained the the point and as I said we are she's Private Bank family owned so at some stage we knocked the door to the CEO and and said this is happening you know Bitcoin crypto is very emotional now people love people hate you have you still have all these uh you know uh very emotional um um stuff on on crypto but then we said for us yeah we we understand the concept

for us is a new asset class this is the way we have done it I mean uh we didn't Outsource uh trading custody to someone else we this is the same Trader the same workflow for us with same people on the back office and we just Elevate ourselves with this new asset class we understand why we are doing this and um so yes the children of it's also it's also a generation stuff you know if your account is more or less four and a half percent of people you know hers who own crypto for the moment but 18 uh between 16 and 21 are um uh 16 and 21 years old the the old 20 between 18 and 20 so it's also a

generation for sure and it's going to come with them thank you how about BBVA Switzerland yes uh no in BBA uh we have a the mission um to bring the opportunities of the new era to our customers do you know that they the most important asset that we have uh banks are or customers right and we are fully focused on customers actually one of our values is customers come first so when we analyze uh the the magnitude of the of the crypto space obviously is too big to be ignored and this is something that we're taking into account

very seriously and when we analyze also the adoption curve um Let me let me share with you Santos that I think uh make make a lot of sense if we go back to the 1997 uh the internet users all around the world was something like a 100 million 100 million as of today the users of Internet are 5 point billion the current users are for today in the blockchain with blockchain technology is something like a 400 million

so I don't think it's really difficult to analyze uh and trying to to create a proper forecast in order to see how it's going to growth this industry in the next few years so it's a question of responsibility and when you are if you are focused on the on the watch management side which I think is quite relevant also um the current positions of investments in the crypto space are less than one percent over total asset allocation which means that there are some it's a big room uh to improve in terms of of Investments so

basically we we see clearly uh the opportunity uh as BBVA Switzerland we are just focused on a couple of protocols uh Bitcoin and an ethereum I completely agree with your statement I think uh our the name of the game in the industry right now are obviously the the biggest one but there is a technology risk also so um from BBVA we do believe that uh the opportunity is here and another important point that I would like to share with you all uh Switzerland right Switzerland is a small country focused on business and we are we are becoming

really cutting edge with a blockchain I think the opportunity uh is massive no because uh we are focused on this technology I think even more important uh Regulators are proactive they are trying to analyze and trying to create a solid framework and this is I think is really outstanding and at the same time we have a huge traditional employer banking from you know many years bbba Switzerland is is completely sure that we we will be able to to you know to capture a new business in this new space particularly in the wealth announcement side but also with institutional customers regarding crypto

custody because at the end of the day uh in this current timing you know counterpower risk is becoming even more important than it was in the past and traditional Banks or incumbent Banks which is the case of bbba with 160 years of History we can put in place something that you you know you cannot pay with this trust right uh um we are really focused and we are focusing three uh important angles um education which is absolutely relevant cyber security also and regulation thank you so much

um the next question goes to Dirk and it's a bit more of a personal one so Bitcoin Swiss has been pioneering crypto Finance for 10 years now you started last year first of April after a career where you build a global banking platform of UBS then you also have blackrock's ETF platform and then you decided to join Bitcoin Swiss what what was the motive behind this change and also how do you see this world parallel to traditional Finance yeah I think curiosity is a big piece of that but I also saw Both Worlds converging and Bitcoin Swiss being a poster child of that right if you look at the clients

that we serve and and that's kind of where I see the world is coming together so we started with crypto punks um crypto foundations and then we added private individuals which which you are serving so I would say now it's probably half half but it's really a parallel world right we have clients that don't even understand why they would need a bank but yes maybe it's some right and and there's the other side that wants to diversify their their portfolio so having come from the traditional world where I build products were built technology for for banks and asset managers I thought that this is the right time to add clearly um you know when France said it

um it's also an industry that needs a couple of grown-ups and I think that is you know where can probably add to the equation so bringing you know governance regulation and all those pieces together with great technology and great people and great culture and I I love the vibe of the uh the blockchain and the crypto world right it's inspirational um it's it's definitely the future it comes in wave we stumble we stand up and also what I like about our industry is that it's an honest industry right if you fail as a pink Bank we just saw that

the state comes to your rescue if we fail we're dead and I think that's a good thing sir different and definitely you don't have time to get bored so that's uh that's nice in our industry it makes it more Innovative right without a doubt right the the the the fear of failing you make sure you get it right because there's nobody to bail you out can't agree more yeah I'm happy that you're in agreement here um but yeah the stakes are real so um payal you are not a bank with CME Group you have been around for 180 years you however service and and work together with a lot of banks how do you help them

Warehouse their risk yeah so I think it's the same for you know whether it's a bank whether it's a asset manager pension fund um you know for for your clients for example um where they might be long Bitcoin holders um I think where CME comes in or where Futures comes in is the future is the most effective way of of capital um uh accessing markets in a capital efficient way and you don't have to necessarily ride the wave so you know we're hearing all about the halving coming up we're hearing all about different catalysts that will either increase or reduce the price and where people are entering crypto markets you

don't have to necessarily buy and you know just manage or sail through that risk with crypto with crypto options um you know you're able to mitigate some of that risk you can take call options and just trim a little bit of that exposure so yeah so certainly something that maybe you know private Banks and CME could work together on the same way with ETFs coming online the ETF provider would Warehouse some of that risk with an institution like CME and so really it's a way of managing that risk and the way that we created the contract you know much to your point earlier is

it needed to plug and play with the traditional markets so a lot of our customers were already in you know the traditional asset classes so the way that we created the contract was that it plugged and played and it looked exactly the same as an s p contract or a gold contract and by that I mean a couple of things right so it's it's cash settled so when you're trying to explain to an institution and what we've seen over the past four or five years is that where people wanted to get involved in crypto explaining what crypto is was like you know mind blown and then if we then went and said okay you now need to open a wallet you need to worry about insurance and

custody and you know maybe being hacked like it was all too much too much confusion um and so with a cash settled offering we're doing our way with all of that right it's completely it's set the the future settles to an index in much the same way as Futures on the S P or like the CAC 40 any index um and so we we do away with all of those barriers to entry and you know throughout the um I think the last few months have actually been a really good um learning curve for for many industry participants that you know we saw the collapse of FTX we saw the the contagion spread through like Silicon Valley Bank

and svb and you know silvergate um but it actually Rose people's curiosity about right there's volatility back in the market and crypto behaves I think in much the same way as other asset classes that when there's volatility when there's something to trade on that people want to get back involved and we certainly saw that but it raised the the Curiosity and it raised the understanding of what a regulated Marketplace brings so everything that you you see in traditional markets was just refocused on and re-honed on upon using crypto market so the things that people are very comfortable with you know the idea of segregated assets I think is going to

be really key going forward so with a cleared model CME becomes the counterparty to every trade so we are the buyer to every seller the seller to every buyer so there's no risk um you know one and you've seen that contagion right in in some of the unregulated marketplaces unfortunately where there's Auto liquidations or clawbacks with with CME because you know it's because of the the the way that contract is is created so cash settled as I mentioned right um centrally cleared so we become the buyer to every seller there's no counterparty risk and the third and probably most important thing is the ability to get in and out so there's liquidity that when you want to remove

your position there is adequate liquidity and we're seeing that um from the number of large interest open holders so this is a a stat that the cftc puts out and the cftc is who we're governed by um in in the US and they put out a stat um every every Fortnight that shows the number of large open interest holders and for Bitcoin that is any institution that holds 25 contracts and so one Bitcoin contract for us is five Bitcoin so it's five Bitcoin times 25 contracts and so those institutional institutional uh firms are holding what 1.2 1.3 million and you know on last count there

was a hundred and fifteen large open interest holders so that shows like how CME is working with banks with institutionals because we can see it in the growth of of large open interest holders we can see in the the um the amount of trading that we see the liquidity in our markets and it's it's time and time again right Whenever there is um any um risk in the broader markets we see corresponding spikes in our market so we saw it last November with FTX where we traded 210 000 contracts we saw in March when we had our biggest trading day of the year when we traded like five five billion in crypto contracts so that's you know I

think it's it's the ecosystem and you know to your point it's what I love about this industry that it's not one or the other there is space for everybody and we like the the the the interconnectedness or interrelatedness I think is is really key here thank you so much um the next question goes to Valerie and after I take a question from the audience if there is any I will pick someone who closed the door gently here so get ready with your questions Valerie this Wednesday you launch the fund of crypto hedge funds with very notable Partners I believe Billy Vu is also one of your

partner on the on the fund can you tell us a bit more yeshu so the launch will be first of July it's a fun of fun of crypto as you said with willywoo and she's Capital so it's his group and it sees vacancy's Capital so it's a mark C to heading seats Capital which is the son of the the founder of C group and yes for us is a second step we we start with direct exposure then we do a funnel phone and also we have done this because I don't know if you know about any discretionary portfolio there is guidelines for the Swiss banking and for on um um or can I say that for assets who are not transitional you need to do you you

can trade it by by a mutual fund or final font so if one day we want to put some um crypto you know mandate it has to be by a final fund We cannot put a direct exporter for the moment that that's the law uh for the moment so as we believe on this new asset class uh and we receive a demand also for client that for some of them is also very complicated to to have direct exposure but they can have direct exposure via final fund so that's also why we have um we have decided to to create this fund which is going to launch uh first of July 1st of July right okay super yeah congratulations very exciting is there a question from the audience

if not oh there is one please next to to Paulo um can I thank you um we all come from Trad five for the most part um with more tokenization coming in to the space uh with tokenization of real world assets and things like that do you see and you talk about the culture do you see the Bitcoin crypto culture becoming more institutional and Enterprise driven and become more like tradfi or do you see Trad five becoming more digitized and more tokenized and more of the crypto culture I try if I just take this one I mean we

can uh actually I've seen a client who has two or three uh days ago um is one of the founder of one of a very big token and um so he's a token holder of East token massively and he's looking for a bank because we can also do crypto in crypto out we do transfer crypto in transfer crypto out and you want to place some token with us also to diversify first I say I mean couple of things a custodian I can imagine with FTX that it's actually quite good to have multiple custodian and also because you need um you know you want also maybe to buy some Nvidia or apple or something like that so is happy to sell a little bit of his

token uh it's not like it's against the trade file but um it's more it's part of his journey I have to say so I received more and more Demand on this side than um I mean client you know client wanted to have an exposure they start to try to trade ETP which is a ETF but a mono product already since since two years ago so the more the men I have at the moment is more people from the crypto world was coming and said okay now we find us you know we found a way to have a bank when we can have a end of the statement uh you know you can have your equities fixed income crypto nft because if you have a structure and

we have an infrastructure with um uh we segregate wallet so then you know one day people you know they come with art in a safe but one day they're going to come with the nft in their cigarette wallet yeah I think I'm coming from from both sides so I see the um the blockchain world expanding um and probably quicker expanding than the traditional world is reaching out in terms of tokenization let's not forget this is also a cultural thing I think you were pointing to that so kind of representing a little bit the more crypto native side

um it's all about decentralization versus centralization right and kind of you guys you are centralist right in a good way right regulated centralist but there's there's a whole world that wants that world to be a little bit more democratized and on broader shoulders and I think that's where both sides need to learn from why it is not just having better technology and it's not having just the better asset class and better speculation there's really a cultural a huge cultural Trend behind this and and I think it's there's this it's a positive

trend um and also making a lot of mistakes uh yeah I agree with that but what we face well we face and I think everyone's going to face that it's a it's regulation we uncountry regulate and tax you know a lot of people it doesn't want some would like to be regret and put the Crypt on the tax some days on one so we can we can feel we can see this um uh it's not a fight but yeah some people who won't be completely decentralized I can understand that I trust probably you or you better than maybe some Central Bank especially as of today that address you know Rising the depth setting and the just you know spending so at some stage who do you trust it's all about trust and you want to trust so maybe appears to appears that actually didn't

catch is much better than you know I have a bank in the middle that we don't even know if the bank is going to stay now stay lost so as you think there is a shift um we are lucky enough to leave this this changing world and maybe our kids will will have uh just a peers to peers and I I have to say on top of old you know cryptos coming or not us we are facing regulation that's in Switzerland we need to follow as a private bank or as a bank regulation and even if we believe that this centralized will be maybe much better at some stage we need to follow the regulation and the straight I don't know the last things I've seen on a financial time two days ago there is Charles Schwab Citadel in

virtue which are which are three massive liquidity provider on a a traditional stock market they are creating a stock market and trading and custody because they believe that a lot of people would trust someone who already do that instead of going on decentralized Exchange that they don't know what's going to happen with the coin so everyone is thinking to to every bank I know would like to be fintech and be fintech would like to have the banking license so at some stage we're going to find a way to to meet up yeah I I think I think we need to to find the the deal of the balance right and it's a question of trust

um I think uh four years ago most of the crypto natives were defending in the market the peer to beer and as incumbent Bank we suffer you know a lot of impacts for many people saying listen traditional Banks don't have anything to do in this crypto space it was when we launched or plan here in bbba in Switzerland as of today I can say that most of our customers they rather to have the cryptos in a bank

than in a USB it's very simple idea right but it's a question of cyber security counterpart risk and how do you can manage these different protocols and and the message is quite solid I I don't think we can create the proper environment with this such a decentralization if we don't have important players in the market and and regarding the the collaboration in in the in the space that you mentioned I cannot agree more unfortunately uh in the traditional industry is much more difficult to see how the different players are willing to

collaborate in this new space I think uh probably is a question of a responsibility but we need to create the path all together and in that regard I think a decentralization is is going to be quite uh difficult to see in the in the future we will have to to find you know the proper balance but trust became more important than it was in the past just because the the statistical sentence that we saw with FTX and all the you know the players in the market with a bad behaviors let me let me tell you uh I think we have the right to

create the proper framework being aligned with the regulator and creating you know a really high standard level of Education in the community in order to move forward altogether I want to give a quick answer and thank you for the question good question also about culture it obviously differs from business model to business model I would answer the question you know coming from our clients and this is super interesting what we see actually that the traditional clients are moving in the direction they really have interest especially their children right are pushing them we heard them before and more and more they're coming closer to this new technology and this decentralized Concepts however the funny

thing is our crypto Natives and crypto companies as a clients believe it or not they come closer to the traditional world all of a sudden they ask a question we can I buy a few Securities with you yeah of course right so it's an interesting merge at least for our customers right and this is also would be my answer if if you would ask me what's the difference between C5 and D5 at the end we will come together right the technology is strong and and people are just merging together at least what we can see I think that's exactly exactly um you know the net new clients are the crypto Nations right so we now have an influx of miners you know the new hedge funds that are just in the

crypto space um but then the Curiosity as you said you know the Curiosity Peaks oh can we now start trading um you know the the correlation between Bitcoin or NASDAQ so then it's like the the curiosity is there to start trading Nasdaq futures which then lends to something else to something else um so I think for us it's it's the the the evolution of new clients to CME um is from crypto question thanks for the good question Let's uh speed up a bit we have 15 more minutes and then we get a break um fronts and Dirk we have um quite some turbulent events behind us

with the Q4 of uh of of FDX last year and then the banking crisis this year what are you focusing on as a CEO what are the cornerstones of risk mitigation and then yeah like what what is really what is on your mind and your number one Focus yeah the funny thing is that we started the same day April 1st last year oh right after 12 months like end of March what we've seen is you know we entered the companies and then we had the crypto crisis from Terra Luna to FDX right that was interesting and and then in March obviously everybody knows Silicon Valley Bank signatures in Brigade even credits with so we had two major events

interesting time for us but you know people learned a few things yeah after the first crisis all of the sudden right regulation was positive so many people came to us and they learned a few things right and a crypto regulated bank is something they demand and after the banking crisis another learning right I believe cyber is extremely strong and risk management and this was exactly the point what missed in March right risk management and especially for the U.S banks asset liability management and all of a sudden it's not about big Banks or small Banks and medium Banks anymore what lions are

asking is proper risk management and some regulation you know because they've lost money learned a few things and I can tell you the last weeks for us are extremely exciting our pipelines are bursting everybody wants to have a bank account with seba so at the end of the day hey it was quite a riot and not easy to manage but we're sitting here with a very bright future at the moment over to YouTube well you know it's been a steep learning curve in the last year clearly and interestingly the mistakes that happened in the in the blockchain world of the crypto world were threat fire problems right there were old school

problems um you know it's basically a hundred year wrap up of what could go wrong right this appropriation of client funds segregation of assets I mean this is in the thread fire world this is regulated and solved for decades right but we have to find out right I mean not in our company but in the broader industry that wasn't the standard right that wasn't even there wasn't even known there needs to be risk management right I mean listening to the FTX thing right I mean it's all over right I mean and right um daddy wrote the trust and and whether you are in Trad fire or indeed for whatever it's it's only about trust right and you build trust by

a consistent track record of you know you know be being truthful and managing client Assets in a fiduciary way in a proper way and uh you know doing it with the right governance and and the right mitigation and I think this industry still has to learn a lot right um from the trade fire world and that was the key now all right we need to again focus on the on the Innovation piece of growing um of putting in more rails but the last year was a was a setback and I think you know we're all talking about institutional adoption which has arrived I can see that but it's it's still building more rails

um than it's institutional demand uh ready now right it will come but um I think you know we need to all consistently work on regaining trust and building thank you I'm curious what's Valerie's and Alfonso's take after the past 12 months where the last crypto Valley Conference was a very different environment or did take place in a different environment and how incumbent Banks can take place in advancing or industry as a whole um I think in fact the last 12 months are you know many uh I could say big events or big impacts

in in the market I think uh the important things in life uh always you know happens during the such a long period of time I think it's pretty obvious that this is not a passing fat there's not a when you analyze how was the you know the past years ago and people was concerning about internet and you can see you know that there are many many new many newspapers in the 90s were saying you know this is a passing fat and obviously internet today is uh all around all around the world um and you analyze the how is the speed in the in

the last 12 months we realize in the case of BBVA how important is once again education this is absolutely key we have to be really focused in the ecosystem trying to create a proper training programs in with the entire team with with employees nodias in in the in the front area in the compliance legal risk all these areas is this is absolutely relevant we need to understand how is the transability of the cryptos in order to mitigate the the potential risk mostly in the anti-money laundry this is

something that we had to be extremely focused because at the end of the day reputational risk is is key so we are really focused on that and another thing that we have in Discovery in the last 12 months is a liquidity is is very relevant and just thanks for the technology this is something that we can increase easily so uh we think uh the more the most important thing is the most important I would say key topics are moving forward quite aligned with the with the Regulators at the same time with with all the important players around so I think I think that we are you know with

the with the proper direction no speeding a lot because this is something that we will have to be very prevalent at the same time but quite comfortable with the with the ways that we are taking slowly but surely yes Valerie how about you I would just give two example of what was done in traditional Finance from a year ago so Bloomberg put 50 cryptocurrency live on Bloomberg terminal so for a trade five it's fantastic because you can see the price and see all the news about the crypto so that's actually one a big step I have to say and the second one if we talk a lot about crypto but there is also blockchain uh cements the company

Siemens in Germany they use a private blockchain of Goldman Sachs to issue a bounce we've been direct to the investor so they didn't put investment back in the middle so it was done on a private blockchain and another one on on a public blockchain in December last last year so that's all optimists good things would happen since a year ago it's a big advance in a in a trade fire that we already using blockchain okay time to time so we are testing more the technical stuff and as I said it's maybe nothing for you but Bloomberg have 50 token on it live price it's very cool

super sounds great well I'm really interested in your take because um when we when we prepped you highlighted that specifically from a risk management perspective and looking into the future what's role CME is playing in Risk mitigation as well as what we are seeing in terms of capital efficiency frequent risk management practices and Innovation how how you see us moving ahead and making up for what the damage caused last year um yeah I mean so if I can take that question maybe back to front um in terms of innovation right I think the crypto space is probably out of all the asset classes the the area that

we're innovating the most so if you think about last year we bought a new product or a trading mechanism to Market every month so that was 12 consecutive products and reference rates to Market so the growth is there the appetite is there the trust that maybe was broken a little bit I think that's coming back because of the things that are now being built but being built better right so um you know as as you mentioned some of the collapses of last year were because of a lack of risk systems in place this time around or you know with cme's kind of time-tested markets we have those checks and balances in place we talked

about segregated assets we already have things like position limits in place so that any position can't be too large and can't be you know have a Snowball Effect we have what we call Dynamic circuit breakers in place so if the market moves too quickly too fast we put you know we just put a temporary halt on on that market so again the things that we see in traditional Finance we're now putting in we're seeing more common place in in crypto so I think the Innovation is there the trust because of these you know checks and balances that we need those are coming back um and you know the growth potential especially in Europe I think is huge

right for a number of reasons you know it's it's probably a little bit more of a fragmented market and so the appreciation of technology and crypto being part of that I think is there and we obviously have you know more clear regulation I think the the us maybe is struggling with with with the regulation but especially in Europe you know it's it's a lot more clear um and there's more access right we we already have the ability to transfer very you know instantaneously money person to person but also um you know the availability of funds etps ETFs you name it there's all of these access points so I think you know

bringing all of those things together um means that there's more adoption in crypto in Europe and so one of the things that we introduced we already have the USD denominated Futures Contract but we also bought to Market a Euro denominated so it works in exactly the same way but rather than the underlying index being USD denominated it's Euro denominated so still six con exchanges that contribute to that price the Futures settle to the index but you'll you have the almost a track history of the seven-year-old you know Big Brother US dollar component of that and then the other

thing we're seeing is um you know volatility so volatility you know after FTX obviously spiked um but is now probably at two-year lows so you know there's this eagerness for people to access the market in different ways and so for a long time we had option contracts that would settle on a monthly Cadence so the options would settle on the last Friday of the contract month to the few teacher which would then settle to cash we now two weeks back introduced weekly options so Monday through Friday there's always an expiry so this kind of lines up with what people are seeing in some of the other platforms as well and it comes back to just having more and more access points and more and more Tools in in you

know the institutions toolbox to access that risk whether they want to hedge whether they want to speculate so I think it's it's all of those things for us thank you so much uh being mindful of the time we have two three more minutes I have a question to the two two CEOs who started the same day um what are you the proudest of us the CEO of Bitcoin Swiss um Innovation and people and culture because that drives everything drives good outcomes we are trusted Partners since 10 years we survived three bear markets in crypto land and we're still here and going strong so proud of that very nice thing to be proud of um France how about you

loyal clients I always you know clients first is my Mantra so I'm just enjoying the interaction with my clients learning from them developing new products secondly our investor base our entrepreneurial investors are just amazing we have investors from around the globe and it's just fascinating to work with them and last but not least our people right the employees right we're working in a crazy industry and there one of our employees thank you for all your hard work we are startup in a crazy industry and thanks to our employees we're doing a good job thank you so much um so like before the closing question

and just focusing on current affairs Alfonso um we you're here um impacted in the way that metaco was purchased by Ripple and you are a client of Ripple now what do you think about that um that's a very good question um yes we we do believe on the relationship between um you know different partners in this case we don't consider metaco as a provider and this is something that you know we we are started dealing with metako four years ago so this is something that you we know metaco pretty well uh

and their relation that we have between BBVA and metaco is outstanding so you you have a look to the sad circumstances that we have been seeing in the in the market in the last in the last few months and suddenly you know a really important player in the American Market is paying 250 million dollars for a Swiss company I think it's a great news obviously you know uh for metaco but uh even for for the partners for the current Partners which is the case of vvba we are so happy uh working with metako and from our professional

perspective nothing change we will move forward together with metaco with our strategy I have to say that they are absolutely outstanding with the service that we have and and obviously you know uh Ripple which I think is something a good signal of of value um that we have to be proud of uh Swiss company right yeah yeah so um I'm happy you see it this way gorgeous the last question is for everyone you can answer by one uh word or one sentence um from left to right but how do we get

from margin to mainstream what is missing what's the recipe for for getting there quicker uh it's simple it's trust it's risk management it's liquidity um unfortunately I think for now it's everything that a centralized Marketplace brings so that we get to mainstream I add regulation and education all of that but don't forget Bitcoin is a decentralized masterpiece so I want to hold up that the Gateway needs to be centralized the access the trustworthy partner but lot that's not centralize the blockchain please right um beautiful answer yeah I love that you

brought in Bitcoin thank you France simplicity we are way too comfortable you can handle wallets private Keys staking but we're talking about Mass adoption here right hey we need to work on more Simple Solutions for this industry in order to reach that option three important topics education and regulation and cyber security I think are are the three key factors that had to be the drivers of the output adoption in the next few years if we are really focused on these three I think we can accomplish a great great Milestones altogether

thank you so much for this fabulous panel please put your hands together for uh today's panelists thank you clap clap clap