WEBVTT 1 00:00:00.200 --> 00:00:03.600 It's inevitable that the largest banks in the world, some 2 00:00:03.720 --> 00:00:08.240 you've mentioned in your question, will be offering crypto services 3 00:00:08.279 --> 00:00:08.759 this year. 4 00:00:13.519 --> 00:00:15.800 This episode is brought to you by Uphold, which is 5 00:00:15.839 --> 00:00:18.839 a great crypto platform that I've been using since twenty eighteen. 6 00:00:19.039 --> 00:00:22.679 Uphold makes it easy to buy, sell trade cryptocurrencies like 7 00:00:22.760 --> 00:00:25.600 Bitcoin and all coins. In fact, they have three hundred 8 00:00:25.640 --> 00:00:29.320 plus cryptocurrencies on their platform, and they carry precious metals 9 00:00:29.359 --> 00:00:31.519 such as gold and silver, and you can swap between 10 00:00:31.559 --> 00:00:35.240 these assets, so it's really unique. 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So this is a really great rewards 22 00:01:16.799 --> 00:01:19.480 program and if you'd like to learn more, please visit 23 00:01:19.519 --> 00:01:23.159 the link in the description. Welcome into the Thinking Crypto Podcast. 24 00:01:23.239 --> 00:01:25.640 I'm your host, Tony Edward, and joining me today is 25 00:01:25.680 --> 00:01:29.480 David Mercer, who's the CEO of l Max Group. David, 26 00:01:29.519 --> 00:01:30.239 great to have you on. 27 00:01:31.239 --> 00:01:33.560 Hey, Tony, good to be with you today, David. 28 00:01:33.560 --> 00:01:35.879 I'm excited to speak with you. I followed el Max 29 00:01:35.920 --> 00:01:39.760 over the years and your journey towards digital assets of course, 30 00:01:39.799 --> 00:01:42.640 and David, you have a plethor of experience in the markets, 31 00:01:43.000 --> 00:01:45.040 so I have a lot of questions for you and 32 00:01:45.560 --> 00:01:48.239 where you see things going. But before we get to 33 00:01:48.280 --> 00:01:50.200 all of that, tell us about yourself. Where did you 34 00:01:50.239 --> 00:01:51.959 grow up? How did you get into finance? 35 00:01:53.359 --> 00:01:55.200 Wow, that's a long story. So I was born and 36 00:01:55.200 --> 00:01:58.120 bred in Belfast, Northern Ireland. Believe it or not, I 37 00:01:58.200 --> 00:02:01.879 left Darmerald Doll what I twelve years of age and 38 00:02:01.959 --> 00:02:05.400 arrived in London. So I guess my formative years were 39 00:02:05.439 --> 00:02:08.719 in London. I've been in London ever since. And then 40 00:02:08.800 --> 00:02:12.919 the sort of journey into capital markets went via accounting 41 00:02:13.000 --> 00:02:17.159 firms such as EY. I spent a decade at in 42 00:02:17.159 --> 00:02:22.240 investment banking at Credit Sueee, moved through various brokerages and 43 00:02:22.280 --> 00:02:27.400 then arrived at Elma's Group in twenty eleven. Initially I 44 00:02:27.479 --> 00:02:30.560 was sort of hired gun at Elma's Group and then 45 00:02:30.800 --> 00:02:32.960 there's a famous advert and I did the advert, which 46 00:02:33.000 --> 00:02:36.680 is we bought the company in twenty thirteen, so twelve 47 00:02:36.800 --> 00:02:40.280 years ago. And yeah, we've just carried on from there. 48 00:02:40.680 --> 00:02:43.840 But I guess my whole working career has been in 49 00:02:43.879 --> 00:02:48.919 capital markets, particularly fixed income emerging markets, where I learned. 50 00:02:49.960 --> 00:02:52.879 I guess I learned everything everything that we do today, 51 00:02:52.919 --> 00:02:55.080 and I'm probably doing exactly what I should be doing 52 00:02:55.120 --> 00:02:58.240 after thirty years in the market. So that's how we're, however, 53 00:02:58.280 --> 00:02:59.319 arrived here today, Tony. 54 00:03:00.199 --> 00:03:03.520 And you know what you're experiencing capital markets? What was 55 00:03:03.560 --> 00:03:07.199 your first encounter with bitcoin and what was that moment 56 00:03:07.319 --> 00:03:09.120 like for you? What was your AHM moment when it 57 00:03:09.159 --> 00:03:13.360 clicked for you that this was different? Do you know what? 58 00:03:14.759 --> 00:03:17.000 Great question, but I'm not sure we've had an a 59 00:03:17.080 --> 00:03:23.360 hard moment for me. Perhaps we launched el MIC's Digital 60 00:03:23.400 --> 00:03:29.360 twenty eighteen. In we started thinking about it in twenty seventeen. 61 00:03:30.400 --> 00:03:33.840 In two thousand and thirteen, it was presented to us 62 00:03:33.960 --> 00:03:37.159 first at what we call a brown bag lunch, and 63 00:03:37.240 --> 00:03:40.960 we didn't do anything with it, and in fact, we 64 00:03:41.080 --> 00:03:48.919 launched another asset backed digital coin first in twenty and fourteen. 65 00:03:49.439 --> 00:03:54.280 We didn't get any traction. None of our institutional clients 66 00:03:54.520 --> 00:03:57.800 wanted to trade it, so we sort of dismissed it 67 00:03:57.840 --> 00:04:02.960 and I watched bitcoin from Afar. Then two thousand and seventeen, 68 00:04:04.159 --> 00:04:06.960 a whole bunch of our proprietary training firms, so you know, 69 00:04:06.960 --> 00:04:08.960 all the biggest banks in the world trade with us, 70 00:04:09.319 --> 00:04:12.360 all the largest prop training firms trade with us, and 71 00:04:12.400 --> 00:04:15.479 a few of them started saying, hey, we need some institutional, 72 00:04:15.479 --> 00:04:21.399 great infrastructure to transact this new digital asset. Can you 73 00:04:21.480 --> 00:04:23.160 do it, David? So we went and went and had 74 00:04:23.160 --> 00:04:26.240 a look, and we went from field to fork, or 75 00:04:26.279 --> 00:04:30.560 from origin of idea to live launch within six months. 76 00:04:31.079 --> 00:04:34.439 So I guess, no eureka. There was just the case 77 00:04:34.480 --> 00:04:36.199 of this is another market for us. You know, in 78 00:04:36.279 --> 00:04:41.399 Elma's group we list we run six exchanges. El Max 79 00:04:41.480 --> 00:04:44.319 Digital was the latest at the time, that was fifth 80 00:04:45.560 --> 00:04:49.600 at the time. The small eureka for us was that 81 00:04:50.040 --> 00:04:53.360 it was the fastest growing exchange I ever built. We 82 00:04:53.519 --> 00:04:56.879 got to break even within six months. I mean other 83 00:04:56.959 --> 00:04:59.759 exchanges typically take three years four years to get to 84 00:04:59.800 --> 00:05:02.639 break even as a company. I guess that took us 85 00:05:02.639 --> 00:05:05.160 four years, so digital took six months. So there's a 86 00:05:05.240 --> 00:05:09.720 little bit of a eureka moment there. I think it's 87 00:05:09.759 --> 00:05:14.800 a constant, constant small gains you see in the digital 88 00:05:14.839 --> 00:05:18.240 asset world or the crypto world at the moment. So 89 00:05:19.160 --> 00:05:23.720 perhaps for me, the most recent one was just two 90 00:05:23.759 --> 00:05:27.399 months ago in Singapore, you know, paying for a meal 91 00:05:27.439 --> 00:05:33.319 and a bunch of drinks with a meta based credit 92 00:05:33.360 --> 00:05:37.000 card right which only had ethereum on it. So paying 93 00:05:37.879 --> 00:05:41.399 paying a bill in a bill that came and singing 94 00:05:41.399 --> 00:05:48.319 dollars with ethereum via a crypto back credit card. That 95 00:05:48.600 --> 00:05:49.879 was sort of the thing that made me go, this 96 00:05:49.959 --> 00:05:55.240 is really real. And the you know, the the hospitality, 97 00:05:55.959 --> 00:05:58.399 the bar, the restaurant, they were unaware of what I 98 00:05:58.439 --> 00:06:00.199 had on this credit card. For them, it was just 99 00:06:00.199 --> 00:06:04.920 a master card. So that was probably the most recent 100 00:06:04.959 --> 00:06:07.240 one which has been close to eureka that made me 101 00:06:07.360 --> 00:06:14.879 think that digital assets, crypto assets can pervade everything we 102 00:06:15.040 --> 00:06:17.360 do through all our walks of life. 103 00:06:19.720 --> 00:06:22.360 And what are your thoughts on how this asset class 104 00:06:22.360 --> 00:06:25.720 has matured because it started with Bitcoin and then came 105 00:06:25.800 --> 00:06:28.240 other blockchains like Etheroreum and so on and so forth 106 00:06:28.279 --> 00:06:31.800 with a proof of steak and smart contracts. And now 107 00:06:31.839 --> 00:06:35.279 we're seeing the move towards tokenization, putting traditional assets like 108 00:06:35.319 --> 00:06:38.800 stocks and other commodities on the blockchain, which will allow 109 00:06:38.879 --> 00:06:43.720 twenty four to seven trading, fractionalization, more global markets, and 110 00:06:43.759 --> 00:06:46.040 things like that. What are your thoughts in the direction 111 00:06:46.160 --> 00:06:46.879 things are heading to? 112 00:06:48.920 --> 00:06:55.480 The direction is inevitable, so there is there will be 113 00:06:55.639 --> 00:07:02.319 a convergence of traditional assets and digital assets or crypto 114 00:07:03.319 --> 00:07:06.639 in the decades ahead. I think the evolution to date 115 00:07:06.720 --> 00:07:11.600 has been slow. As an industry. We've got to challenge ourselves, right, 116 00:07:12.000 --> 00:07:15.319 we need to do better. Within Almax group, I stradd 117 00:07:15.319 --> 00:07:19.879 all the two. So if you like, I've been trying 118 00:07:19.920 --> 00:07:23.439 to drive this convergence, I've been ready for this convergence 119 00:07:24.319 --> 00:07:27.399 for seven years, since twenty eighteen. I mean still to 120 00:07:27.480 --> 00:07:30.839 this day, ninety percent of my volume are in trad 121 00:07:30.920 --> 00:07:37.160 fi assets, so mostly we trade currencies or fiat currencies. 122 00:07:37.720 --> 00:07:42.360 So you know, last week with all the tariffs going on, 123 00:07:42.560 --> 00:07:45.199 or certainly through the month of April, you know, we 124 00:07:45.199 --> 00:07:48.560 would trade fifty billion dollars a day. Now, only ten 125 00:07:48.600 --> 00:07:51.839 percent of that, not even ten percent of those given 126 00:07:51.920 --> 00:07:57.519 days would be crypto assets. So but my strong, long 127 00:07:57.560 --> 00:08:01.600 held view is that by the end of this decade, 128 00:08:02.560 --> 00:08:07.680 ten percent of traditional assets will be tokenized. Now, what 129 00:08:07.680 --> 00:08:11.399 does that mean. It means you're talking about a market 130 00:08:11.439 --> 00:08:16.040 the size of twenty twenty five trillion dollars, so slightly 131 00:08:16.079 --> 00:08:20.439 bigger than the market cap of gold today. But then perspective, 132 00:08:20.480 --> 00:08:23.519 the total value of crypto today is just short three trillion. 133 00:08:24.160 --> 00:08:28.360 So I fully expect that to happen. And once that happens, 134 00:08:29.439 --> 00:08:33.960 there's absolutely no reason, nothing that can stop this going 135 00:08:34.000 --> 00:08:36.120 all the way so that eighty percent of the world's 136 00:08:36.159 --> 00:08:38.879 assets are tokenized by the end of the next decade. 137 00:08:38.960 --> 00:08:47.279 I mean, it's just inevitable because of the reduction and 138 00:08:47.399 --> 00:08:50.399 friction which exists today, and that's what's going to happen 139 00:08:50.480 --> 00:08:56.600 with the l like of tokenization, with fractionalization, with the 140 00:08:56.639 --> 00:09:01.200 fungibility of collateral, the ability to trade twenty four hours 141 00:09:01.200 --> 00:09:05.279 a day, seven days a week. It's just inevitable. You know, 142 00:09:05.360 --> 00:09:08.360 everything we've done, everything we do in markets at the moment, 143 00:09:08.799 --> 00:09:12.000 and traditional markets is quite clunky, Don't get me wrong. 144 00:09:12.039 --> 00:09:15.000 I've been in there for over thirty years, and they're 145 00:09:15.159 --> 00:09:18.559 way less clunky than there were when I started in 146 00:09:18.600 --> 00:09:20.840 the nineties. You know, all we've ever done over the 147 00:09:20.879 --> 00:09:28.159 last thirty years is increased market access. Blockchain tokenization are 148 00:09:28.480 --> 00:09:34.039 the next steps on that path to greater democratization of 149 00:09:34.159 --> 00:09:39.799 the market and more inclusive market access. And I think 150 00:09:40.639 --> 00:09:49.240 that tokenization and digital money, digital collateral will just accelerate 151 00:09:49.519 --> 00:09:53.600 what we do day to day and, if you like, 152 00:09:53.840 --> 00:09:57.720 amplify all of the excellence we have in capital markets today. 153 00:09:59.000 --> 00:10:01.600 So do you see along the lines what you mentioned, 154 00:10:02.320 --> 00:10:06.799 the opening up a more liquidity, the financialization of certain 155 00:10:06.840 --> 00:10:11.919 assets that couldn't be financialized before. And then we DeFi 156 00:10:12.399 --> 00:10:15.720 people being able to transact with each other globally like 157 00:10:15.799 --> 00:10:17.919 they never have before. So if I want someone's in 158 00:10:17.960 --> 00:10:21.679 Germany and they want to borrow some I don't know, 159 00:10:21.799 --> 00:10:24.799 the crypto assets or digital assets I can facilitate that 160 00:10:25.080 --> 00:10:26.600 they don't necessarily have to go to a bank. 161 00:10:27.879 --> 00:10:29.039 It's just going to be seamless. 162 00:10:29.080 --> 00:10:32.039 I mean, look, I don't know whether I'm not gonna 163 00:10:32.000 --> 00:10:36.120 sit here today and say that we are going to 164 00:10:36.159 --> 00:10:40.879 disintermediate the banks. Right the biggest provider of credit in 165 00:10:40.919 --> 00:10:43.440 the world today are banks right, Everyone who owns a 166 00:10:43.480 --> 00:10:48.679 house needs some leverage, So it is possible a bit 167 00:10:49.039 --> 00:10:53.840 like crowdfunding, it is possible you could have that crowd 168 00:10:53.960 --> 00:11:00.080 staking crowd leverage. It's quite expensive today when ultimately the 169 00:11:00.919 --> 00:11:04.480 you know, the best lenders, well, our governments, but after 170 00:11:04.559 --> 00:11:08.440 that our banks who will analyze credit rating. So I 171 00:11:08.480 --> 00:11:12.480 still think you need that leverage in the system. But 172 00:11:12.679 --> 00:11:18.320 certainly breaking down the friction in markets, being able to 173 00:11:18.639 --> 00:11:22.720 easily move from one asset to the other, or to 174 00:11:22.720 --> 00:11:27.559 earn an income, to earn interest on any asset that 175 00:11:27.919 --> 00:11:33.200 becomes enabled by blockchain and by tokenization, so you know, 176 00:11:33.200 --> 00:11:35.000 I think at the moment, the problem is we have 177 00:11:35.039 --> 00:11:39.759 to pre position our assets days in advance. I mean, 178 00:11:39.759 --> 00:11:41.720 to be clear, I mean, if you want to buy 179 00:11:42.440 --> 00:11:45.279 you know, move into a new asset class and buy 180 00:11:45.279 --> 00:11:47.480 a new etf you have to preposition your assets. It's 181 00:11:47.480 --> 00:11:53.080 going to take you onboarding plus positioning your collateral. It's 182 00:11:53.120 --> 00:11:56.799 going to take you five to seven days. The reality 183 00:11:56.919 --> 00:12:00.759 is when we have fungible collateral, when we have digital collateral, 184 00:12:01.240 --> 00:12:01.840 when we have. 185 00:12:03.519 --> 00:12:05.039 A market where. 186 00:12:07.120 --> 00:12:15.559 Institutions will accept digital dollars ethereum bitcoin, which can where 187 00:12:15.639 --> 00:12:19.440 ownership can be transferred, you know, at the sort of 188 00:12:20.039 --> 00:12:23.320 not instantaneously as everyone says, but within a matter of 189 00:12:23.440 --> 00:12:28.200 seconds and within a matter of minutes. Then suddenly you're 190 00:12:28.240 --> 00:12:31.799 going to see much more fluidity in the markets. And 191 00:12:31.799 --> 00:12:34.399 that's all we've all been looking for. And what happens 192 00:12:34.399 --> 00:12:37.240 with that, by the way, is that all markets will benefit. 193 00:12:37.399 --> 00:12:39.600 So you know, I'm in a foreign exchange market that 194 00:12:39.639 --> 00:12:42.240 trades seven trillion dollars a day that's doubled in the 195 00:12:42.279 --> 00:12:45.480 last decade. Guess what it's going to double again in 196 00:12:45.559 --> 00:12:48.919 the next decade. It just might be that a lot 197 00:12:48.960 --> 00:12:52.879 of the underlying will be digitized, so it'll be digital Euro's, 198 00:12:52.919 --> 00:12:58.600 digital dollars, digital yen and the like. So absolutely, what 199 00:12:58.639 --> 00:13:03.039 we're doing together is breaking down the friction that exists 200 00:13:03.080 --> 00:13:05.480 in markets. But I just want to say one thing 201 00:13:06.080 --> 00:13:09.559 to you know, all the crypto evangelists out there, we 202 00:13:09.600 --> 00:13:12.159 need to do a better job. It's still really small, right, 203 00:13:12.519 --> 00:13:18.320 Gold by market cap has outstripped crypto over the last 204 00:13:18.720 --> 00:13:22.559 five years in terms of the market capitalization, right, so 205 00:13:22.799 --> 00:13:26.840 gold that gold today is over twenty trillion dollars, Crypto 206 00:13:26.919 --> 00:13:29.759 is still three. So you know, we need to do 207 00:13:29.799 --> 00:13:33.960 a better job are showing the use cases for crypto, 208 00:13:34.080 --> 00:13:39.000 for digital assets and for tokenization. But another butt But 209 00:13:39.159 --> 00:13:40.279 what I want to say at the end of this 210 00:13:40.559 --> 00:13:44.080 is that we are huge believers at our MAX group 211 00:13:44.399 --> 00:13:50.120 that tokenization is inevitable and is the future of capital 212 00:13:50.200 --> 00:13:53.159 markets and you will see a fusion of the two 213 00:13:53.720 --> 00:13:55.879 by the end of this decade. 214 00:13:56.080 --> 00:13:59.440 And David, do you believe that part of the uh 215 00:13:59.799 --> 00:14:02.360 you utility and like you mentioned, the use cases that 216 00:14:02.440 --> 00:14:03.600 have to be put out there, we have to do 217 00:14:03.600 --> 00:14:07.039 a better job. Was the lack of clarity from the 218 00:14:07.080 --> 00:14:11.080 governments around regulations because certain institutions may not have wanted 219 00:14:11.080 --> 00:14:14.120 to touch this because they're risk averse. We don't know 220 00:14:14.159 --> 00:14:15.799 if this is going to get clarity. We don't know 221 00:14:15.799 --> 00:14:18.240 if this is going to get banned. But now that 222 00:14:18.360 --> 00:14:20.480 things are opening up here in the United States where'rem 223 00:14:20.480 --> 00:14:24.240 at Congress's work in legislation, we have a more favorable environment. 224 00:14:24.440 --> 00:14:26.960 In the EU you have the MICA regulations and the 225 00:14:27.039 --> 00:14:31.279 UK believe they've passed some regulations. Things are starting to 226 00:14:31.279 --> 00:14:35.679 get clearer now. Once we have those things set in stone, 227 00:14:35.840 --> 00:14:38.759 it may kick off adoption like we've never seen before. 228 00:14:40.480 --> 00:14:45.039 It needs to simple as that Tony. It absolutely needs to. 229 00:14:45.519 --> 00:14:51.720 It was somewhat of an excuse, but the lack of 230 00:14:51.799 --> 00:14:55.200 a framework never helps the growth of an asset class. 231 00:14:55.600 --> 00:14:55.840 Right. 232 00:14:56.360 --> 00:15:00.519 By the way, fighting the existing regulator is never a 233 00:15:00.559 --> 00:15:04.039 good There's never a good place to start either. But 234 00:15:04.120 --> 00:15:07.480 I think certainly the US was anti crypto. But let's 235 00:15:07.559 --> 00:15:10.960 look at the if you look at the history of bitcoin, 236 00:15:11.159 --> 00:15:13.960 you know, going back to Silk Road, you look at 237 00:15:13.960 --> 00:15:18.159 some of the bad actors and some of the you know, 238 00:15:18.919 --> 00:15:22.159 the convicted felons we have we've had within crypto that 239 00:15:22.240 --> 00:15:25.320 hasn't helped, right, you know, you're trying to convince you know, 240 00:15:25.360 --> 00:15:28.159 you're trying to convince this The way I look at 241 00:15:28.200 --> 00:15:30.320 it is, I'm trying to convince two hundred and twenty 242 00:15:30.360 --> 00:15:34.559 trillion dollars of trade fire assets to move to this 243 00:15:34.759 --> 00:15:38.879 new world of digitization, of tokenization and digital assets. 244 00:15:39.360 --> 00:15:39.600 Right. 245 00:15:39.840 --> 00:15:45.000 Having a couple of get rich quick bad actors, you know, 246 00:15:45.960 --> 00:15:50.360 being the spokespeople for this new asset class wasn't a 247 00:15:50.399 --> 00:15:53.799 great thing. I think the new administration in the United 248 00:15:53.799 --> 00:16:00.279 States should help. But then more importantly, after that, the 249 00:16:00.279 --> 00:16:12.279 industry needs to create infrastructure and product that the if 250 00:16:12.279 --> 00:16:16.879 you like, the centers of capital want to invest in, right, 251 00:16:16.960 --> 00:16:18.679 So we're going to talk, no doubt're gonna ask me 252 00:16:18.720 --> 00:16:21.720 about ETFs and things like that. But you must remember something, right, 253 00:16:22.000 --> 00:16:25.639 The fastest growing ETF of all time is the bigcoing ETF. 254 00:16:25.639 --> 00:16:29.519 It's about forty billion dollars. That's tiny, right, It's really 255 00:16:29.559 --> 00:16:31.879 big in ETF land. But I look at the two 256 00:16:32.000 --> 00:16:35.480 hundred and twenty trillion dollars traded FY assets. Again, I 257 00:16:35.519 --> 00:16:40.840 look at the three trillion dollars of crypto, and I'm saying, well, okay, well, 258 00:16:40.840 --> 00:16:42.840 how important is forty one? So we've got to keep 259 00:16:42.919 --> 00:16:48.480 creating products that are accessible, that people want to trade. 260 00:16:49.440 --> 00:16:51.519 And if you like, back to one of your earlier questions, 261 00:16:51.519 --> 00:16:55.679 we have to create those use cases. Let's get the 262 00:16:55.720 --> 00:16:59.720 frameworks established. They're not established in the United States, just 263 00:17:01.320 --> 00:17:06.920 they will come. I'm sure of that. We have a 264 00:17:07.160 --> 00:17:12.599 better structure or a better think tank in twenty twenty 265 00:17:12.640 --> 00:17:15.839 five than we had in twenty twenty two, twenty three, 266 00:17:15.960 --> 00:17:16.640 twenty four. 267 00:17:16.960 --> 00:17:17.240 Good. 268 00:17:17.839 --> 00:17:20.720 I think the same is true in the EU. I 269 00:17:20.759 --> 00:17:25.480 think there are some forward thinking regulators in Asia, like 270 00:17:25.559 --> 00:17:30.440 the MS, likewise in the Middle East. So I think 271 00:17:30.480 --> 00:17:35.519 those global frameworks being established will help the asset class 272 00:17:35.519 --> 00:17:40.200 to grow, and then as an industry, we have to 273 00:17:40.240 --> 00:17:47.160 demonstrate that we can act within those guidelines, right and 274 00:17:47.279 --> 00:17:53.200 let the industry thrive, because you know, one of the 275 00:17:53.240 --> 00:17:56.200 big things, there's three things regulators have to do. One 276 00:17:56.559 --> 00:17:59.839 protect consumers. To be clear, within crypto, we did not 277 00:18:00.119 --> 00:18:03.799 protect consumers, right, look at those bad actors, look at 278 00:18:03.839 --> 00:18:05.680 the things that happen in twenty two and three. We 279 00:18:05.759 --> 00:18:09.319 did not protect consumers. So we need that regulation. The 280 00:18:09.319 --> 00:18:13.640 second bit is they have to create a wholesale framework. 281 00:18:14.519 --> 00:18:18.640 And the third thing is they have to harness innovation. Okay, 282 00:18:19.079 --> 00:18:21.920 So I think what we did a little bit in 283 00:18:21.920 --> 00:18:27.720 crypto is innovate, innovate, innovate without protecting or creating the framework. 284 00:18:27.839 --> 00:18:31.279 I think now we have a structure that will allow 285 00:18:31.319 --> 00:18:34.119 it to happen, and then we must innovate. We must innovate, 286 00:18:34.359 --> 00:18:42.079 and we must demonstrate the convergence of tradi fi, DeFi, 287 00:18:42.279 --> 00:18:46.640 crypto digital assets and show the benefits of the digitization 288 00:18:46.920 --> 00:18:50.400 of markets going forward. So I think, to answer your question, 289 00:18:50.519 --> 00:18:53.319 in short, we have a better opportunity now than we've 290 00:18:53.359 --> 00:18:53.799 ever had. 291 00:18:54.960 --> 00:18:58.079 And David, what do you think about this? I kind 292 00:18:58.079 --> 00:19:00.599 of see the crypto startups as almost being their kids. 293 00:19:01.000 --> 00:19:04.000 To your point, they weren't. They didn't have their i's 294 00:19:04.079 --> 00:19:08.119 dotted and their t's crossed for everything, FTX com mingling 295 00:19:08.119 --> 00:19:11.400 their funds and you know all that nonsense, right, But 296 00:19:12.200 --> 00:19:14.559 the Wall Street firm, the banks that you work with 297 00:19:14.640 --> 00:19:17.759 and things like that are here. They have the knowledge, 298 00:19:17.839 --> 00:19:20.680 they have the infrastructure, they have the pedigree to come 299 00:19:21.079 --> 00:19:23.440 set up the et apps and do the proper custody 300 00:19:23.480 --> 00:19:25.640 and all these things. They're going to be the ones 301 00:19:25.640 --> 00:19:27.839 to kind of lead the charge in creating these financial 302 00:19:27.920 --> 00:19:29.039 products and things like that. 303 00:19:30.960 --> 00:19:33.119 You can be careful soon, we have to be careful, 304 00:19:34.240 --> 00:19:40.839 but not disenfranchising either group. And I think both groups 305 00:19:41.640 --> 00:19:44.160 need to put the egos in a draw to a 306 00:19:44.160 --> 00:19:48.799 certain extent and take the best bits from both sides 307 00:19:48.799 --> 00:19:51.200 of it. I think an al Max group I were 308 00:19:51.240 --> 00:19:56.519 fortunate because we're working trad FI. We operate with all 309 00:19:56.519 --> 00:19:59.400 the world's biggest banks, prop trading firms, all the biggest 310 00:19:59.400 --> 00:20:03.079 asset manager in the world, and hundreds of brokers. 311 00:20:03.039 --> 00:20:05.839 And then we work with a lot of crypto native firms. 312 00:20:06.480 --> 00:20:10.440 So I think it's not a case of hear I 313 00:20:10.480 --> 00:20:13.240 do hear some institutions talking about pushing as you just 314 00:20:13.240 --> 00:20:15.319 said that using that fraight, pushing the kids out. 315 00:20:15.400 --> 00:20:19.680 I don't think that's true. Right. Derivatives were built, you know. 316 00:20:19.640 --> 00:20:23.200 Back in the nineties when I started, Derivatives were built 317 00:20:23.240 --> 00:20:29.279 by the latest rock stars, the latest engineers, the latest scientists. 318 00:20:29.400 --> 00:20:33.279 I think that's true in crypto today. So you know, 319 00:20:33.759 --> 00:20:37.279 I look at people who are running the digital side 320 00:20:37.279 --> 00:20:40.039 of our business or some of the more forward thinking 321 00:20:40.079 --> 00:20:44.519 parts of our digital business here, and they're in their twenties. 322 00:20:44.799 --> 00:20:49.079 That's the demographic their computer engineers. And I think we 323 00:20:49.240 --> 00:20:51.880 have to let them have their way. They have to, 324 00:20:51.920 --> 00:20:54.319 We have to let them show us the way. 325 00:20:55.680 --> 00:20:56.559 In many ways. 326 00:20:56.680 --> 00:20:59.920 But there are things we can learn from tradifi that work. 327 00:21:00.400 --> 00:21:03.480 So let's use that plumbing for example. You said it, 328 00:21:03.680 --> 00:21:09.279 said it first there, Tony. Let's have separation of function, 329 00:21:10.319 --> 00:21:12.599 Let's have segregation of funds. 330 00:21:13.119 --> 00:21:18.079 Right. I'm a little bit dismayed within. 331 00:21:17.960 --> 00:21:21.519 The crypto industry even right now, when I see brokers 332 00:21:21.559 --> 00:21:24.400 pretending to be exchanges, when I see exchanges wanting to 333 00:21:24.440 --> 00:21:30.240 be custodians, and I don't know why they want that 334 00:21:30.359 --> 00:21:33.119 to be the case. Right, you have to have that 335 00:21:33.319 --> 00:21:37.640 separation of function and that segregation of funds it's for 336 00:21:37.680 --> 00:21:41.759 a reason. It protects consumers, it protects the market, and 337 00:21:42.079 --> 00:21:45.240 it also allows specialization in every part of the market. 338 00:21:45.359 --> 00:21:50.680 So let's take the best bits from. 339 00:21:49.480 --> 00:21:50.519 From both of the markets. 340 00:21:50.640 --> 00:21:53.960 Let's have that true fusion, and I think together we 341 00:21:54.160 --> 00:21:58.599 end up with a much better, more accessible capital market 342 00:21:58.680 --> 00:22:00.000 structure than we have today. 343 00:22:00.799 --> 00:22:03.519 Yeah, well, put it tell us a bit about Elmac 344 00:22:03.640 --> 00:22:07.359 Digital's services that you provide to the banks and institutions 345 00:22:07.359 --> 00:22:08.039 that you work with. 346 00:22:09.039 --> 00:22:12.160 So look, I'm going to take you back a step 347 00:22:12.599 --> 00:22:18.240 and say Elmac's group operates exchanges. We match buyers and sellers, 348 00:22:18.279 --> 00:22:21.680 simple as that, up to fifty billion dollars a day, right, 349 00:22:21.720 --> 00:22:27.640 and we cover the whole spectrum of customers from banks 350 00:22:28.039 --> 00:22:31.039 all the way to asset managers all the way to 351 00:22:31.039 --> 00:22:35.720 too brokers. So what happened in twent twenty eighteen was 352 00:22:35.799 --> 00:22:39.680 that a big part of that. Let me say, forty 353 00:22:39.759 --> 00:22:42.640 percent of my client base were training digital assets already, 354 00:22:43.039 --> 00:22:46.200 and they were their proprietary training firms. Some of the 355 00:22:46.200 --> 00:22:49.440 biggest names or you know futures futures trainers you'd see 356 00:22:50.599 --> 00:22:53.319 in Chicago and around the world. They were training crypto 357 00:22:53.359 --> 00:22:57.519 assets and they wanted to do it with institutional grade infrastructure. 358 00:22:57.640 --> 00:22:58.480 They did it with us. 359 00:22:58.640 --> 00:23:03.720 So the core thing we do is provide liquidity and 360 00:23:03.799 --> 00:23:08.160 match buyers and sellers. Now, what was different with crypto 361 00:23:08.319 --> 00:23:11.160 as opposed to FIAT, so I say ninety percent of 362 00:23:11.160 --> 00:23:14.319 our volume every day would be in FIAT, was I 363 00:23:14.359 --> 00:23:17.440 didn't have prime brokers. So all I do in foreign 364 00:23:17.440 --> 00:23:20.599 exchange is are match buyers and sellers, and then I 365 00:23:20.720 --> 00:23:24.079 send the trades down to a prime broker or to 366 00:23:24.240 --> 00:23:27.960 a bank who aggregates those trades settle them. Guess what 367 00:23:28.720 --> 00:23:30.880 I couldn't do that in crypto, So we had to 368 00:23:30.920 --> 00:23:35.599 integrate directly with the blockchain. So guess what we had 369 00:23:35.599 --> 00:23:40.200 to settle? We had to pay twenty four hours a day, 370 00:23:40.319 --> 00:23:43.599 seven days a week. From twenty eighteen, we've been doing them. 371 00:23:43.960 --> 00:23:47.759 The next bit in my core business and my Tradifi business, 372 00:23:48.759 --> 00:23:52.240 the customers deposit funds with us, but they don't deposit 373 00:23:52.279 --> 00:23:55.680 them with Elmac's group. They deposit them into a bank 374 00:23:55.680 --> 00:23:58.759 account with Elmac's Group. And I've got one hundred and 375 00:23:59.359 --> 00:24:03.920 over one hundred seventeen Nostro accounts across seventeen different currencies 376 00:24:04.319 --> 00:24:08.000 in trad five. But they're all you know, G ten banks, 377 00:24:08.200 --> 00:24:11.519 G ten bank accounts. Guess what, that doesn't exist either 378 00:24:11.680 --> 00:24:17.240 in crypto. So people wanted to posit bitcoin with me 379 00:24:17.319 --> 00:24:19.720 or with ethereum with me, then I have to I 380 00:24:19.839 --> 00:24:23.960 have to store that summer. So we built our own custodians, so, 381 00:24:24.559 --> 00:24:33.599 if you like, since twenty eighteen, I have been storing, settling, matching, 382 00:24:33.640 --> 00:24:41.240 and providing liquidity to institutional clients, so for the last 383 00:24:41.279 --> 00:24:41.920 seven years. 384 00:24:42.039 --> 00:24:43.240 But doesn't mean, by the. 385 00:24:43.200 --> 00:24:48.920 Way that we always expect to be every part of 386 00:24:48.960 --> 00:24:49.559 that chain. 387 00:24:50.359 --> 00:24:55.000 I now have a. 388 00:24:53.119 --> 00:24:55.680 Digital custody hub, so we integrate with some of the 389 00:24:56.440 --> 00:25:00.119 best custodians in digital assets. If my customers want to 390 00:25:00.240 --> 00:25:03.359 use those custodians, we're very happy for them to do that, 391 00:25:03.720 --> 00:25:07.960 as long as I can transact and settle with those custodians, 392 00:25:08.359 --> 00:25:11.279 so we do that. I'm very, very hopeful that the 393 00:25:11.400 --> 00:25:16.839 logjam and institutional markets that is credit will be solved 394 00:25:16.839 --> 00:25:20.519 by some really big names moving into the prime broker space, 395 00:25:20.960 --> 00:25:23.359 because again I just want to our core business is 396 00:25:23.359 --> 00:25:26.200 to match buyers and sellers, so I'd be very happy 397 00:25:26.240 --> 00:25:30.400 that a customer on boards with two customers on board 398 00:25:30.400 --> 00:25:33.880 with me, I match the trade and they both with 399 00:25:34.279 --> 00:25:36.920 the same prime broker. Or with different prime brokers, and 400 00:25:36.960 --> 00:25:41.079 that settlement happens between those two prime brokers. So I 401 00:25:41.119 --> 00:25:43.480