Olga Feldmeier on Why Switzerland Has Welcomed Crypto - Ep.137

Transcript

hi everyone welcome to Unchained your no-hype resource for all things crypto I'm your host Boris in case you haven't heard I have another crypto podcast called and confirmed it's shorter news here and comes out Fridays if you haven't yet go subscribe now wherever you get your podcasts also find out what I think are the top stories in crypto by setting up for my weekly newsletter at Unchained podcast calm Kraken is the best exchange in the world for buying and selling digital assets it has the tightest security deep liquidity and degree the structure with no minimum or hidden fees whether you're looking for a simple Fiat on-ramp or futures trading Kraken is the place for you cipher trace cutting-edge crypto

currency intelligence powers anti-money laundering blockchain analytics and threat Intel leading exchanges virtual currency businesses banks and regulators themselves use cipher trace to comply with regulation and to monitor compliance are you passionate about blockchain but fall short and the technical skills to build and deploy blockchain applications then check out simple chain the smart contract as a service blockchain simplification layer on simba chain comm and their new enterprise offering on the Microsoft Azure marketplace my guest today is Olga Feld Meyer CEO smart valor welcome Olga hello Lara nice to be here you have a really interesting personal story that I think give some insight

into the downsides of centralization or perhaps the power of decentralization so cageless about how you grow up in Ukraine and then came to leave and live in the West sure in other I had a very interesting life I was actually born investor in Ukraine being actually you know mixture of Russian polish Ukrainian and Jewish blood and as I was teenager the Soviet Union collapsed and was that you know Ukraine that'ss was and still is quite dependent on Russia in in terms of economic relationships while Ukraine was in very bad condition and to save the country what they started

to do is basically to print money so we used to have a hyperinflation of 10,000% per year was down to five thousand percent for I think around five years so in that time you know it's it's really it's really pretty crazy you know all the people that work for the states they got their salaries paid like much later six nine months it's the same for my mother who was a piano player so by the time we got you know your salary six months later the massless salary was enough to buy a piece of bread right so and you know we were carrying this bags full of paper money to the next shop to get rid of it right so and all of that

you know it was a very tough time you you basically of watching you know the collapse of the state right nothing is working there is no electricity people are dying on the street nobody's you know bringing them away they're there for the days right and as you watch all of this and you think like oh my goodness how how you know how could this happen that was the moment for me I started to study economics and macroeconomics to microeconomics macroeconomics to understand how could this happen and ever since you know I was pretty much big fan of well basically it was always very fascinating to me economy and that finance and how this works

so I received a scholarship from German government and started to study in Germany just you know a very very kind of the beginning of this story but this beginning of the story gave me also quite a solid view on you know buy bitcoin as needed and violence is place now and one other detail of this story that I love is that you didn't even know any German and you heard that they were giving out scholarships so then you just crammed like at the last minute to try to you know pass these exams I think you said it was something like nine months that you had yeah wow that's very you know intimates follows the story that's true and you know I learned that if you

want something like really bad sensors since it can stop you right I mean there were all the other students that had German for the last ten years and I had no clue right and I said like no I gotta make it I gotta learn German for this exam right and for nine months but then I couldn't talk him into people I was like because I learned all the stuff by heart where it's a macroeconomic micro economy book and and all of this stuff so I wasn't able to talk I'm like don't talk to me because I gonna forget you know how this sounds what central bank is doing against inflation but this Jesus worked out Ukraine was racine in bags and three scholarships for the whole country right and I got one of

those top three scholarships it's amazing right it is everything yeah well but you know law reserve the rest of my professional life I started in Germany I finished University in Munich but then you know because you come from there as a country and you speak with your funny accent what you do is the first you know first professional years you're trying to prove everybody into yourself so if you're not set you're as good as them right so I you know I started really hard I was one of the best students I you know applied to all the top companies investment banks BCG McKinsey I received offers from all of them and somehow I decided to go to BCG you know because BCG was the Boston Consulting

Group was a very diverse place there were women you know not like an investment banking server movement server more people with diverse backgrounds and that was just the right place to start for me I did that for five years all in financial services working on big strategies for big banks deutsche bank like almost all the European banks yeah and at some point I said like wow this is good to be advisor huh but how it is to be a banker so I switch to Barclays Capital done that for several years in London and then I decided to learn another side of banking was wealth management

so I joined you bears here in Zurich in Switzerland in their headquarters as a head of sales for Central and Eastern European region involves management so that was also quite a face yeah and your next stop after that was Zappos so how did you get into Bitcoin like you did you know about Bitcoin before zoppo mmm yeah well you know to be honest I tried hard to understand it and initially I didn't get it like I was reading and here and The Economist wrote about I was like no like I'm not getting this like how this is just a code like what's the value behind

it so hear about it from The Economist or how did you yeah yeah yeah yeah so that was because I was a very passionate to read our economists for many years so but but you know basically then I think it was just a great time in because you know by the time I kind of realized I'm fine you know I made my Korean bank and I'm as good as everybody else and maybe even better I don't need to like for the first time in my life I really asked myself what do I want to do yeah and then by that time you know been good you know kind of appeared focused people like me you know from banking and by

that time I was like enough to me advances kizer's you know who was a founder of Sabah and it was how did you live it here in Switzerland it was one of I think it was one of his first visits here beginning of 2015 and that was because he had reached out to him right yes exactly I knew some guys here in Switzerland some investors and I said like you know I'm actually quite you know tired of banking I I don't see like you know since a vision is not there for me like I don't know why I'm based in great answer so and I want to do something really exciting I actually like Bitcoin and they told me oh you know there is ven

says he's in San Francisco and then it's funny I wrote him a letter just like you know letter on our Security and Exchange Commission registration as a registered address and it looked like and everybody said like I'll forget it you know you've read a letter like nobody's ever come back to you like god you know yeah exactly you know Laura it's funny like three days later I had an email from him and he was like Olga let's meet next week I'm in Switzerland it's like with those things you know you there is a good time in and pluck but you also have to take a chance and take an action right and then both

of them will meet and you'll like it right so it was beginning of 2015 right so example was founded in 2000 certain basically the idea offenses he wanted to create as this opportunity for people for investors in Bitcoin to store their bitcoins in a safe way and well also how people around the world to have no financial freedom and but but you know his problem was you say builds attack but the problem was that back then in 2015 there wasn't even bitlicense in New York like there was literally nothing in terms of regulation how do you deal with mythical custody well

nobody knew that and I think they keep quite you know quite some difficulties in yes so the idea was they will come to Switzerland and we'll try to get licensed here and you know for me it was very interesting also meeting was Lance's first time you were sitting here on the lake looking at the lake he told me his argentinian story you know how they were poor just living from so ships you know it's a form and and historian my story was actually you know pretty much the same was the only difference that it was Argentina or Ukraine but we all suffered you know from this collapse

and stayed from defaults from hyperinflation and all of this experience filled both of us was a vision that now they have the technology to change this to protect us to protect the people and basically you know to give more empowerment and basically you know improve this balance of power between people and state right and give people something how they can say no so that was a very visionary first meeting than that I think this changed my life pretty much and it was that actually also the reason when you were saying that you you know originally tried to understand Bitcoin after reading The Economist was it your personal experience that finally made you

understand the potential in it yeah well the fool that you know I think my first small investment I made it in 2013 I was reading and trying to understand and for me the event was basically you know then Cyprien banks there was you know some banks went bankrupt and there is a lot of banks that was you know in connection to Greece crisis in crisis in Greece so something stopped to pay out money and it was kind of like a little default situation there and then you you were you saw the Pitt convent from 30 40 to 70 and I thought like wow this is

amazing for the first time I see it like you know macroeconomic indicators or what happens in one country really has correlation with this digital currency so imagine if things will get even worse image in the European Union collapse or there is a war so obviously this thing has a you know chance to become a new kind of hedge right so I bought my first bitcoins back then and then of course was been CSM example I port pretty much ever since that I haven't been going right it's actually you know Laura helped me to start my own company smart feller

right I was the first one of the biggest investors in smartville or how well I would never earn that much money in Bank in banking right working for banks but that was my Bitcoin purchases from 2013 so I think I made some good choices back then oh oh interesting all right we're gonna have to talk about that in a little bit but first I wanted to ask what was it like trying to work at a Bitcoin company in Switzerland in 2015 like now it's known as you know crypto valley and whatever crypto nation but back then what was it like well you know I was the only one here in Switzerland

and there were I guess like three other companies which all had a stuff between two to five people right so the whole crypto valley was basically you know some 10 20 people and he didn't have any you know place the meat or any Association nothing you would just know them and some guys just started you know meet up so they sometimes met you know just for a beer here in sook but there was nothing you know and well etherion was there right was that they arrived in 2014 yes yes exactly oh yes you're right you're right of course metallic was here just across the street from where we sit now

Houston's his little house and they were putting mattresses and every single the floor so they were sleeping and working there and everything right so that's true yes serum Bitcoin Swiss monitors and suppori whereas the first four companies so to say right and we I thought so earlier in the conversation you said something like here in Zurich but then just now you said right across the street so are you in Zook right now alura's this is all so small and so close here so now our office of smart velour isn't souk soup is kind of like has this name of crypto valley because it looks like a valley it has a late great but if you jump on the train it's just in 20 minutes

in Zurich so for me Zurich and souk is the same right so no Zurich is a little bit further down right so Zurich is the biggest city in Switzerland and this is where all the banks are they have their headquarters there praying okay so why don't you let's talk about what you did at SAP oh um well my major mission was help Sabah to get licensed here in Switzerland right because you see bags and we had like the biggest you know risk to survival of the company was that we have no banking partners right and as you probably know every relationship with a bank starts with well what is

your status what do you do how a licensed and so on so us you know being not licensed at all being basically you know holding can Hong Kong and you know like having no no lis regulatory status as a you know financial institution that was very difficult to obtain and keep banking relationships so obviously we needed to get licensed and initially we thought well it doesn't matter we will go any Lance you're happy to do even banking licence whatever but then we figured out Sat banking license especially here in Switzerland comes at

a great cost you know you have minimal capital requirements of 10 million plus you need to employ around hundred people you know you have super high a cost to run the bank right and this here advanced before you even get you know permission to operate so all of this actually was you know not appropriate for the business model and we decided to try to get regulated as money transmitter were like you know payment institutions but something that is actually suitable for custodian so our goal was actually to be able to operate as a regulated financial institution

without banking license and exactly that was a problem because you see fin ma is a Swiss financial regulatory authority bags and looked at our business you can imagine we were basically one of the first Bitcoin businesses they ever heard about right and they looked at the custody solution and they said well look guys you know if you take it conservatively then basically you're taking money from investors you hold it so it's kind of like public that was it taken activity right so in a very conservative case you should still get the banking license you were like oh no like you don't want the

bank my since this is too much work too much capital and so on and so on and they said well then you know look for another solution so it was kind of like a dead end you know and that after one year of work on it you know the money spent on lawyers right all of the work you know then says that they were regularly here it was quite frustrating you know that there is that and and and why is that you know like looking back I actually understand because you know bags an this institution did not have such a broad you know understanding of this technology and of course what what you know and what you hear that you know this is the currency that is used you

know for drugs purchases in dark net like all of this but you know thanks whereas actually Switzerland is you know taken way big step away from this you know banking secrecy and from this money launderer from all those bad things that happened in the past right and so what scientist target in to position itself as an absolutely clean jurisdiction was a toughest Courvoisier and AML and then you know for them to make a step into bitcoin you can imagine this is you know quite would be quite the change right back then right right

our friend exactly so and and you know actually i was very disappointed and Francis said like suppose this is it we live in Switzerland seoul-based of the time and then I had just I think I was just very lucky I had met some people said you know knew some other people and say told me well look in in the Swiss Parliament services group you know parliamentary members that is called digital sustainability and they kind of like they promote innovation in you know technology and in financial services and and technology space you should talk to them

instead I got connected to those well Parliament members invited me to burden I went to burn burn is a you know formal capital of Switzerland and then I told them like look guys it's a great company it's Silicon Valley company we got 40 million seed funding from top investors it just basically building this technology to store securely the digital currency right and we want to be licensed and you guys look years you know banking secrecy was abandoned 2008 wealth management your most important industry in banking is not growing right this is scared of like it's not you know

the future of financial services you need innovation everybody knows this everybody says we need innovation blockchain is an innovation this is the technology right and and of course you know there are all very smart people so they say years us and they said well we're gonna help you so then one of those peoples and submitted a motion to the Parliament about the changing of the banking law that would change the definition of public deposit so that you know storing the private key to do cryptocurrency addresses would not fall under category of public deposits taken activity right and I thought like wow

that's great so follow my piss voting about it and then it's really funny you know that Parliament actually voted no to motion so they follow the motion fall downs it lets emotion fall down but on the other side you know all the conversations was finland moved forward and they kind of like they got it rights it's a god's message like you know a lot of people who really want this and we should look at it and there is also you know the film is guided by a great guy mr. Branson he's you know British citizen and and he's very Pro innovation and and he actually told us guys I want to make it happen yes it

takes a while but but we'll get there and yeah so another half a year later so in total after one and a half year they finally allowed us to be regulated and abrade and out of switzerland not as a bank but just as a financial intermediary right so member of self regulate regulate organization not even supervised by FEMA but you know in Switzerland kind of financial supervision is delegated to some other self regulatory authorities so we have become the first financial intermediary you know to provide bilko in custody so that was a big news yeah and was that

was the the switch kind of the rationale for the switch sort of predicated on this idea that like what's different is that you're not using the deposits you're just sort of storing the bitcoins is that what the decision was like exactly yes so there's no interest payment on that series now as a use you're not lending it and not pledging it you're not doing anything right yeah yeah and I feel like did you also help Zappo kind of like get clients to store their bitcoins in the vault and if so what was that like well of course Laurie I did I cannot provide you know specific

details but of course you know we were targeting large financial institutions here in Switzerland and I was responsible for you know connection with some brain consumed to this to other world showing how the world works it was pretty amazing you know it was basically you know ex-military bunker in the middle of some mountain right in sis got hurt the mountain right its massive it was actually is major airforce military station that was built during the Cold War and was massive security could sustain 30 Hiroshima bombs like you know it's just security

you cannot take this is kind of like what you see in James Bond movies right and I used to bring there all the bankers and their Commission's and their internal control and all the peoples that try to understand is this real safe and normal is they went away with a feeling always super safe right and and yes we did it we attracted some quite big clients here in Switzerland those Bank sets and later issued the first certificates on Bitcoin right they did not offer a first visitor certificate like the government yeah so blanking on the name you know when people basically

buy a note yeah it's a bank and like Sequoia shares holds a Bitcoin yeah yeah yeah exactly so that was you know and then I think I was actually very happy as is several weeks ago I heard that example well exactly this business institutional jointly I guess was the Swiss entity was sold to coinbase for 15 million like to me personally of course i yeah i'm sure helped shareholder of off top right but for me personally it was kind of like my first little you know exit anyway right right yeah well speaking of kind of uh I guessed investments you have mentioned

earlier that your early Bitcoin purchases helps you found smart valor that's how you funded the founding of that company you know it's a little bit different from some of the others in this face who took their holdings into investing in icos but so what why don't you tell people what it is that smart feller does yes so smart dollar was founded well after I left example and basically understood oh my goodness Wow I can pull this off I could you know makes a mission impossible father I received this last I was like wow no let's do something really difficult and no security tokens right and and basically you know we found it early

2017 here in Switzerland in-seok was a vision to build the first ever security token marketplace exchange for alternative investments with vision basically you know to give people all around the world and easy access to exclusive investment opportunities that you would otherwise only get access if your client of your bears and and super rich right II remember my background I work for UBS right I know that world right you've reached your five million plus there is a red carpet for you your assets on board it in Switzerland its you per se

if you get all the exclusive offers you can invest in private equity your return is fifteen percent plus and to me you know Laura I remember this life in Ukraine right where if people have bank account well this is great but there is no investment opportunity is risk capital control right you can do anything without it they devalue your currency you can't even change it into dollar like I remember this world right and to me you know there was such a huge gap between what is there for each people and what's there for the rest of us I said like no we're gonna change this our mission is to give people access

to create a measurement opportunity in in stable jurisdiction you know where there are people and organizations that are responsible for their money and and thatís thatís kind of like what's behind you know this vision of creating this company well wait so one question I have is if her security tokens are the same are there the same limitations on who can trade them and if so like does that really expand access yes so that's that's a very good question of course security tokens are securities and they are trading it very differently from currencies and this is also you know a little bit kind of what's behind our staged implementation roadmap so yes we

started 2017 and we said okay there will be two phases phase one we just launched in exchange right and this exchange there are crypto currencies and two utility tokens and in the second stage we'll add security tokens so this is actually what happened where do we stand right now so they launched an exchange in July via licensed video just Fox out by his financial intermediary here in Switzerland this time it didn't took me one and a half year it took me just three months and we did it all myself no llores I'm very proud of this and and we also licensed English teacher sign as a as an exchange for a currencies so that's first age now the exchange is

running it's amazing I love it people can buy currently teaches three crypto currencies this is it like the first version but you can pay with credit card you can take via bank wire we are now adding deposit function via adding a lot of other cryptocurrencies next week via or soon via Aiden as advance trade in view so it's basically you know the same as Kraken or coinbase it's a full-blown crypto currency exchange this is a first Idol stage first so we got the tech done right and now the second stage is coming with getting licensed for distribution and trading of security tokens this one we expect early next year definitely

prior to the summer 2020 all right so we're gonna talk more about the smart valor platform in a moment but first a quick word from the sponsors who make this show possible today's episode is brought to you by Simba chained do you have a blockchain idea that could benefit your organization but are you not sure where to begin then go to Simba chained calm Simba chains API based approach simplifies blockchain for developers and provides a simple web application that empowers business analysts domain experts managers and executives to design their smart contracts Simba chain supports aetherium quorum stellar and many more to come they turn business analysts into API designers and non blockchain developers into blockchain developers check out Simba Chang comm to

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Switzerland is actually not our only two restrictions so they are regulated and present in two countries what silent engaged in style and Lichtenstein is you know you get there just in one hour it's the neighboring country but Liechtenstein is a part of European economic zone which gives you access to 30 European countries so we have in Europe this so-called passport in system so if you get a license in one country you can passport passport it into 30 other European countries so we are regulated currently in Switzerland but we applying in the process of application for so-called MTF

multilateral trading facility it's kind of equivalent to ATS in yes we applying for this one English Tudor style so for us all the definitions of what a security and how this works are relevant for European Union right so in Switzerland there is a certain definition and in european union service better might say that are pretty much the same right so securities ever since that gives you you know a certain income income stream and represents you know ownership of certain financial product and what is the demand for trading security tokens or

any kinds of tokens representing world world assets so things a problem is not so much that there is no demand for security terms that people don't want to buy it I think the problem is actually you know that we're just in the very early stage right for this space to be successful you need exchanges a lot of them which are easier to access you need a lot of different assets on those exchanges right you need a minimal critical mass right and we are not yet there and but just so I understand like for some of those security tokens that you'll be offering will anybody be able to tray them like across jurisdictions

or like how are you gonna implement all the rules around who can trade them because I would imagine they would differ for each different token exactly exactly so it's different investment product right if you start with asset classes of course it's very simple to to organize gold and so it's all gold to everybody gold is even tokenized this can be viewed as not a security right so that's super simple it gets more complicated with shares of companies right the shares of companies actually there is nothing new it's it's basically IPOs right so IPOs you know sell enough new shares right and it's the same for Sto if it's a new security token or

friend it needs to you know to satisfy certain criteria the company needs to be able you know to prove that they have revenues that they have audited statements financial statements you know that this is something that can be offered to public and if all of those criteria are there right so then yes you can do IPO and you can offer it to public to retail investors whereas you know some sense that a super risky like venture capital funds or private equity funds they of course subject to certain limitations this is something that we call you know accredited investors so only people that can you know can handle

this risk and will not be damaged with this can have access to them so basically smart feller will determine kind of what types of different tokens people can trade and then just limit them based on based on what they're okay sure yes so it's it's not even you know we will determine this all of this is you know we have here in Europe so called me fit sniff it one and now me fit to this is like super comprehensive regulatory framework which is you know targeted at protecting investors in all the different jurisdictions across the Europe on the same basis and and me if

it is actually you know regulating which type of investments is suitable for which type of investor and and V is a platform provider are responsible for offering the right product to the right people right so yes there will be tokens that anybody can see so you log in and even if you're not accredited investor or you don't have experience with you know dealing with derivatives or more risky assets you will see them for example it can be real estate it can be metals it can be a public stock of you know certain companies that are doing IP on our platform but on for other investments which are like more risky you will not see them for this for this

other part you will need to be qualified as accredited investor and a smart feller is actually the first crypto exchange in Switzerland I believe why do you think there hasn't been an exchange thus far the first fully integrated exchange was custody and trading and brokerage right there Commerce some other exchanges which are just you know basically kind of like decentralized you know some kind of text exchanges yes you can buy but you cannot store you two cans there the reason for that is actually that you know FINA is very very restrictive and and tough in how they treat custody and how they want you know

this custody to operate so they were very reluctant to enable exchanges here that provides your own custody and this as far as that she'll also the reasons that we operate from two countries right because our custody solution is actually provided through our subsidiary English interests and right which is you know was much easier process to register and run it out of the least in style so we kind of like you know we are licensed in both countries and certain parts of our business is provided by different you know companies in the holding structure right so we found a way how to basically make it work but we're not I would not

say if he has a first exchange in sweats on is the first cryptocurrency change operated by Swiss company out of Switzerland this is our headquarter but we are regulated in those countries since what's on Anton eight inch time and a smart fella also uses a Swiss franc based stable coin why why do you have that only because there are a lot of demand for trading pairs and this was Frank yeah well yes so Swiss franc not a stable coin for now it's just fiat currencies was Frank yes even with this funds there are no changes that offer Swiss Drake the Swiss franc trade in Paris right it's funny but it's a way is they wanted last year we had a plans to issue stable coin and

we looked at different implementation options but basically you know we puts us for now a little bit on hold in the view of well negative interest rates you know maybe you have heard recently even UBS said say say I'm gonna start in November charge all clients minus one percent for storing for basically the opposite right so you imagine if you issue that coin you actually already need to charge people this one percent right because this is the money that you need to pay to central banks to deposit money so it's actually you know he saw that the time is not right yet and and the form how we will do it we'll do it a

little bit later so for now it's we have four different fiat currencies on our platform Europe British Pound Swiss franc and of course dollar and for the time being this is that we will be looking how we list more stable coins I'm very much interested in Korean Won in you know Chinese yen so stable coins for this currency they will be hugely valuable yes Mert valor decided to make Korea its second home would what do you mean my second home and why did you choose Korea well first of all you know we define ourselves as a global platform for

global audience of investors and if you look you know like from perspective from here in Switzerland you know so it's length is the largest wealth management center offshore banking balls management center globally right we have four trillion assets being booked here on a Swiss bank accounts right it's it's actually quite quite a big amount and if you look you know where the vows is coming from so the source countries that are growing are basically in Asia right so it's of course it's China it's different countries that that that are different in size but it's always this you know need for people to find a safe distance estimation for their savings

right and we were looking at Asia and thinking well where is this you know where else is gonna come from another bad form well you know doubles it's the same as for those management so it's Hong Kong its Indonesia its China but also South Korea this is a special thing about South Korea is that South Korea is also one of the biggest countries in cryptocurrencies right around 20 percent of population people have some kind of cryptocurrency or talk and it's amazing right and fast it was the question like where it because a list of alone currency Japan is super tough you know violence we cannot afford

and and then we got in conversation with some people in Korea and I was a very good option you know they were in terms of compliance at the level where we can you know deal with it so he is a fully compliant financial intermediary in Switzerland it cannot go to an exchange you know so the final choice was put on pizza for the listing of all or token how much would it cost to let's turn on - well you know what I don't even know but I think it was like crazy some some people were speaking about 1 million and then somebody came back was a reference of 400,000 but anyway it's just you know it

to me personally this is not the amount of money that I think is responsible CEO you would put into listing off your token on any exchange so actually this is the perfect segue to my next question which was I wanted to ask you you know you have this extensive background in finance as you outlined working for BCG and doing consulting for all these things and then you worked at Barclays and UBS so how would you compare what's happening in the crypto space with traditional financial markets hmm well I think you know if you look back like let's say 20 years you know there was

this time or even 15 years where it was all around online banking and oh my goodness you don't need to go to the just bank now you can do it all online and well what a freedom is that so I think what people experiencing now is that you don't even need banks right you can do it all out of your wallet and you starting to realize what this means I think we're kind of like in in that age right but was a difference lawyers that it will have a much more profound consequences for people's life and for society's right I think you know what I'm excited about is that you know the same way as Bitcoin knows

pushed itself as a you know digital gold and you know you can wire money and there are so many payment options now with cryptocurrency ascent you know the state cannot anymore say people well you know what we want your money so keep it home you're not allowed to buy abroad right so this is you know it doesn't hold true anymore people can send money wherever they want right and I think what happened was bitcoins exciting thing the same will happen with investments securities opportunities to invest in other countries so this whole notion of decentralized exchanges and security tokens or any kind of tokens

that represent some kind of value or participation this is amazing right it's kind of like you know it doesn't matter if government's want it or no there is regulation or there is no regulation it will just happen right there is nobody to stops us that's kind of what I was asking you before I mean if the security token still carries the same restrictions with it then how does it kind of democratize access I don't understand that part yeah so look I think you see it's it's just a huge huge space right and the space of you know security tokens it will have different niches right so they were smart velour via targeting this regulated compliant you know being an exchange right in

accordance with all the laws you know here in Europe so this is kind of like other niche right but there will be other players you know that are completely out of nowhere nobody knows who runs them nobody knows where those people are it's decentralized exchanges right I send you Apple sure you send it back to me and and there is no way any government can stop it right and for people who has appetite for that it's look it's like you know some people go to violence some people go to only coinbase some people go to some like super shady exchanges right yeah and you know to some investors it doesn't matter to some investors it doesn't matter right so there will be also was in

security tokens there will be there that's right and and and you know in countries like there will be certainly some countries where we will not be able to offer our services officially right and there will be other platforms that will serve those countries right I'm speaking about Iran sanctions countries like you know the countries where is very tough security regulations there are all those cases and that business will go to other platform look what opera is doing right there basically replicate and you know stocks right so a greeting in public companies and and anybody can access it from so many countries right I I love it it's a great vision is it our business

no our business is this regulated space right but but even within that space you know even if it's security Laura you know there are big big opportunities to look for innovation in this space give you example what I'm talking about so if you think about actually this multilateral trading facility so what is this it's basically you know self regulatory trade and venue for securities it was created around ten years ago it's relatively new license and why because you know before that all the exchanges they were all local so there is a French exchange there the London exchange service German Deutsche

Bursa and say all pull like Sarah national securities so they are all very small markets on the German on the French and the idea was to create this you know pan-european market so for this MTF was created that you know any shares of any companies issued in any European 30 European countries can be traded on those exchanges and you know what happened yes this done those new platform trading venues came to life and they become big as a national exchanges right so so this is great right because I just take this regulation and apply this for you know shares of the companies syncretized on the blockchain

will it be better I believe it will be much much better liquidity cheap infrastructure you know simpler handling of clearing and settlement right so all of those exchanges this is one part technical but the other part is that there is also amazing new space of new investment opportunities right I'm super excited about the whole Asian investment space all right films music art you know all the stuff that was never securitized right now you have chance to tokenizer securitize it and and sell it into fractional ownership - to a lot of people and make it even tradable it

doesn't have to be tradable every day there can be auctions or it can be weekly trade there's so many options you know to do that and really go wouldn't like with a physical item like an artwork or oh do you mean like a digital artwork because any otherwise yeah well but then who would take possession 'el ownership of the Mona Lisa I'm just making this up then who keeps possession of it Museum it's the same place but you just you can own it like one millionth of it and you can give it to your daughter as a present and of course there will be certain value increase over time with Mona Lisa if you want it but but imagine Laura for the first time you would be

able to hold a super diversified portfolio of super different assets even if you have just ten thousand it's not possible today if you come to me like five years ago with UBS I would tell you well bring five million otherwise we are not talking about diversification it's not possible right because stakes are so high you want private equity well for good one please bring at least half a million right so all of this you know like for every people the access and diversification is very limited and this is what Tekken ization is changing you can have anything in a very small fractional ownership and it's not so expensive we can't organize much cheaper than security

securitisation is possible today and yet in other areas that I'm super excited about is you know what is fair what did a cell like is a shared Jesus ordinary shares that we know and send on the other sides there is a utility token and payment token or there is a mixture or level C is a new definition of share like you probably heard about this exchange I guess it seven was you guys in yes I annex or something right the issue and the tokens are this kind of security it has a features of violence tokens so it's kind of like you can pay their fees with a

token but it also pays dividends like what is this it's it's absolutely new instrument and yeah we need a trade in venues for those new instruments right do you agree yeah no I I do agree that there's kind of new financial instruments as you said that are being created that don't have pre-existing correlates um one other thing I want to ask you about was is why do you think I mean you know obviously you explained your pitch to Switzerland about how this was kind of the wave of the future and this was the new technology but do you have any other theories about why Switzerland has been so open to the crypto industry um well I think so so

historic reasons right so basically if you look back hundred years so during the first second world war because Switzerland was always in neutral politically neutral countries you know not being involved in armed conflicts in worse so all the wells came here you know for safety and and even after the Second World War you know this country saw an incredible increase in assets pulling into this country as a safe haven right and then basically what happens in 2008 you know that US dragged down on UBS and you know basically asking you bears to reveal all US customers data and that

was actually gains a bank in secrecy which was part of banking law for two hundred years right so you know it was very dramatic development here in this countries they had to abandon Bank in secrecy and with that you know this is a core business wealth management I mean there is no growth right like Zagros as an Asian year we have like two three percent stick and the question is like well that was a competitive advantage she knows this banking secrecy is safety and exist goes away what is going to substitute this competitive advantage and I think it's very obvious answer is that yes it's

technology we want to establish ourselves as a you know place where innovative businesses and financial services new market capital market infrastructure is being built of course that said the only you know source of growth in in this industry right does it make sense yeah and one thing that interests me is so so far a lot of people say that zhuge has been the center of all these different crypto companies and foundations and I mean we see you know just where the foundations are based and stuff but obviously now we have the Libre Association which will be based in Geneva it's a little bit far from zhuge and seems to be culturally different because zookas german-speaking

Geneva's french-speaking you know I'm not Swiss I have no idea how much that stuff matters but I just wondered like do you think that that means that Libre will have kind of like a different experience or or will that have any kind of effect on the development of crypto going forward or in the development of Libre since they're gonna be kind of separated away from where crypto belly has historically been hmm I think doesn't matter you know the country is so small you get on the train and in three hours here in Geneva right it's everything is very small here and and you know Geneva has an advantage it's been always a place for non-governmental organization you know for UNESCO World Trade Organization or all those guys has

there right so if you want to position this project as a you know this global so supranational entities and renewals absolutely sir place to be in terms of regulation it's still Finland it doesn't matter right so they are work in West FEMA Facebook reached out to them in terms of applications it was actually just yesterday is that fin ma released the guidelines about stable coins right and they dedicates a whole page to to to kind of Libre the stable point Facebook yes that's great one thing we did you leave is amazing I think it's amazing

it's it's absolutely too bright was the right place to do it not just you know being a little bit farther away from from yes but also you know because Switzerland still has very solid privacy data protection rules right which late is shared with school and so on and and I think a lot of people will feel much better about Libre knowing that it's not you know it's not us supervisor or at least feelings it was that way right I I don't know I I cannot say you know how much it will be possible to move away from yes supervision and from Big Brother watching all your transactions I cannot speculate about this one that I think

it's a it's very good that is try to get away but one thing was that that was interesting was so obviously if in my did release this guidance on the stable coins and address Libra but then then very next day France said it was gonna block Libra so do you have a take on why that is and how you know why they're not kind of sort of waiting to see how things play out well I think it's you know this is a biggest difficulty with Facebook project you know that there are a lot of politics right so this can be almost like you know political move like thus France want to be closer to regulation and with

regulators saying us like in distance itself from the holes with Scripture like you know there are so many things like you know under the waters that that we don't even perceive right but what I don't think this matters you know like even look it's it's almost the same as with Bitcoin right how does it matter the Cheney's Bennett or one can she bends it I think the vision is so big you know and with those 2.5 billion on like this crazy number what they have users right and actually people need it only that people want to transact and easy you know efficient way outside of the banking system right and and I think

Libra is going to be super success it's just it won't take time right it will take times I'm also to get here throws a Swiss regulation right but division is big the users as their as a funding is they're like you know if you made it with sample was forty million being funded you know was that and also being soup I knew and everybody said house this is not gonna happen Facebook is gonna make it anyway I am actually quite actually quite positive for this one huh okay well you leave it on a positive note thanks so much for coming on the show where can people learn more about you and smart valor well on our website it's smart valor

calm so smart is in smart and Baylor is actually in Switzerland is a name for securities right so smart Baylor comm join our crypto exchange today and you will be the first one to get access to exciting opportunities in the space of security tokens great okay well thanks so much for coming on Unchained you're welcome Laura was nice to talk to you thank you so much thanks so much for joining us today to learn more about Olga and smart feller check out the show notes insight your podcast layer if you're not yet subscribed to my other podcast and confirmed which is shorter and a bit news here be sure to check that out also find out what I think are the top crypto stories each week by sending it for my

email newsletter at Unchained podcast calm Unchained is produced by me Laura Shin with help from fractured recording Anthony Yoon Daniel Nestor rich truffle Eno and Josh Durham thanks for listening [Music]