1 00:00:13,760 --> 00:00:15,920 Welcome to Epicenter, the show which talks about the 2 00:00:15,920 --> 00:00:18,720 technologies, projects and people driving decentralization 3 00:00:18,720 --> 00:00:21,320 in the blockchain revolution. I'm Sebastian Kucio, and I'm 4 00:00:21,320 --> 00:00:24,720 here with Fedeka Ernst. Today we're speaking with Spain 5 00:00:24,720 --> 00:00:27,080 Valtels, who is one of the founders of Manarium. 6 00:00:27,440 --> 00:00:32,450 Manarium is an issuer of. Euro E, which isn't authorized 7 00:00:32,450 --> 00:00:34,970 and regulated euro token for Web Three and it's available on 8 00:00:34,970 --> 00:00:39,770 Polygon, Ethereum and Gnosis. And it's an interesting product 9 00:00:39,770 --> 00:00:44,090 because it allows you to very easily on board and off board to 10 00:00:44,290 --> 00:00:48,610 any Euro, European bank account. And so we're really excited to 11 00:00:49,170 --> 00:00:53,810 talk about Manarium, how it works, the regulatory framework 12 00:00:53,850 --> 00:00:56,410 in which it exists, stable coins and all kinds of other things. 13 00:00:56,410 --> 00:00:58,010 So Spain, thanks for joining us today. 14 00:00:58,970 --> 00:01:01,810 Thank you. So before we get started, maybe 15 00:01:01,810 --> 00:01:04,769 getting a little bit of background on yourself and how 16 00:01:04,769 --> 00:01:07,650 you became a founder of Manarium. 17 00:01:08,930 --> 00:01:12,610 Well, I was always fascinated by technology and size when I was 18 00:01:12,930 --> 00:01:19,090 young, so ultimately I wound up doing a physics degree in 19 00:01:19,090 --> 00:01:24,210 experimental physics, but I also complimented that with an 20 00:01:24,210 --> 00:01:26,450 engineering degree at Stanford essentially. 21 00:01:27,150 --> 00:01:30,350 And when I was a staffer, I was back in the late night. 22 00:01:30,350 --> 00:01:37,470 itwasthe.com boom and then a subsequent bust. 23 00:01:38,270 --> 00:01:41,270 I was messing around with cryptography for various reasons 24 00:01:41,270 --> 00:01:42,870 I was just really, really curious about. 25 00:01:42,870 --> 00:01:47,030 So I had the foundation, the cryptography, and then going 26 00:01:47,030 --> 00:01:51,950 back to Europe, started working for companies there in tech and 27 00:01:51,950 --> 00:01:54,950 starting my own companies there. I was really curious about the 28 00:01:54,950 --> 00:01:59,230 financial system. And living in London in 2011, 29 00:01:59,750 --> 00:02:03,110 I'd been age investing and investing in various tech 30 00:02:03,110 --> 00:02:06,190 companies. In Europe I was came across 31 00:02:06,190 --> 00:02:08,150 Bitcoin. Accidentally, I came across 32 00:02:08,150 --> 00:02:11,430 Bitcoin because I did. I went on holiday to California 33 00:02:11,710 --> 00:02:13,950 and met somebody in California, asked me what I thought about 34 00:02:13,950 --> 00:02:16,790 Bitcoin and I was. I became very curious and 35 00:02:16,790 --> 00:02:21,710 started looking into Bitcoin. And I immediately graphed the 36 00:02:22,310 --> 00:02:24,710 potential relevance of Bitcoin for the financial system. 37 00:02:25,470 --> 00:02:29,190 Thanks to the preparation I had in cryptography and also the 38 00:02:29,190 --> 00:02:33,310 fact that I'd been involved in some activism trying to rebuild 39 00:02:33,350 --> 00:02:36,590 Icelandic financial system after 2011. 40 00:02:37,270 --> 00:02:40,710 So Iceland was the epicenter of the 2008 crisis. 41 00:02:41,470 --> 00:02:44,910 Almost everything that could go wrong went wrong in in the 42 00:02:44,910 --> 00:02:48,230 Icelandic financial system. There was a systemic crash for 43 00:02:48,230 --> 00:02:53,070 the backs the UK, the British financial system almost went the 44 00:02:53,070 --> 00:02:57,100 same way. And so it drove me to start 45 00:02:57,100 --> 00:03:01,180 thinking about how to build a more resilient financial system. 46 00:03:01,660 --> 00:03:04,460 And one of my friends had just been appointed to the Board of 47 00:03:04,460 --> 00:03:07,380 Governors of the Central Park of Iceland following the crash in 48 00:03:07,380 --> 00:03:09,620 2008 to help rebuild the financial system. 49 00:03:10,020 --> 00:03:13,460 And we started talking about Bitcoin, but Ethereum came out. 50 00:03:14,060 --> 00:03:16,940 We had been fortunate enough to meet the talent at one of the 51 00:03:16,940 --> 00:03:19,780 early Bitcoin conferences. We took note, and we started 52 00:03:19,780 --> 00:03:22,620 thinking about how it could put assets on chain. 53 00:03:23,340 --> 00:03:28,820 Like Italic anticipated that Italic predicted and wanted to 54 00:03:28,820 --> 00:03:33,580 do in his white paper, we very, very soon came to the conclusion 55 00:03:33,940 --> 00:03:37,140 that the key dependency of implementing the italics vision 56 00:03:37,500 --> 00:03:40,700 of putting assets on blockchains was to put a reliable form of 57 00:03:40,700 --> 00:03:44,020 Fiat currency on trade. Now, together with two other 58 00:03:44,020 --> 00:03:49,740 founders, we joined up to start on an area based on the premise 59 00:03:49,740 --> 00:03:53,730 that Fiat was. A reliable link to Fiat currency 60 00:03:54,250 --> 00:04:00,810 was needed to essentially help Vitalik's vision to unfold into 61 00:04:00,810 --> 00:04:03,930 the mainstream economy and to build a more resilient financial 62 00:04:03,930 --> 00:04:07,290 services. So what year was that when you 63 00:04:07,290 --> 00:04:11,450 founded Monarium? So Monarium started in stages. 64 00:04:11,450 --> 00:04:14,410 It started as a commissioned report for financial institution 65 00:04:14,410 --> 00:04:17,800 that was. Are completed in six months 66 00:04:17,880 --> 00:04:21,800 starting late 2015 into early 2016. 67 00:04:22,120 --> 00:04:24,480 We started with by meeting with the back of England, the 68 00:04:24,480 --> 00:04:26,880 research department, Harvard, Berkman Center, but also 69 00:04:26,880 --> 00:04:31,960 consensus in New York and people who were actively hacking in the 70 00:04:31,960 --> 00:04:33,480 system as they were back in the day. 71 00:04:33,760 --> 00:04:38,000 Robert Sam's in London. So we started with this by doing 72 00:04:38,480 --> 00:04:40,760 like a thorough research report on the. 73 00:04:41,620 --> 00:04:46,780 On the implications, systemic and also the implementation as 74 00:04:46,780 --> 00:04:50,660 it was envisioned at the time we started mining ether. 75 00:04:50,660 --> 00:04:54,100 We started writing smart contrasts and due diligence in 76 00:04:54,100 --> 00:04:58,020 the entire stock as it were from the regulation to the 77 00:04:58,020 --> 00:05:00,460 technology. And we came to the conclusion 78 00:05:00,460 --> 00:05:03,860 that Ethereum was a viable system in some way, shape or 79 00:05:03,860 --> 00:05:06,380 form or some fork of Ethereum would be a viable system. 80 00:05:07,090 --> 00:05:09,530 But at the same time, we came to the conclusion that we needed to 81 00:05:09,530 --> 00:05:13,050 be our licensed, regulated institution in the major 82 00:05:13,130 --> 00:05:16,410 jurisdiction to be able to put Fiat money on Chip. 83 00:05:18,330 --> 00:05:24,210 So in a way, I mean you guys have been around in blockchain 84 00:05:24,450 --> 00:05:28,450 terms almost since the get go, right. 85 00:05:28,650 --> 00:05:32,330 So basically if you look at kind of like the stablecoin system 86 00:05:32,690 --> 00:05:36,130 today, I mean there's kind of this clear dominance of. 87 00:05:36,770 --> 00:05:40,530 Tether and USDC and then kind of in the decentralized space we 88 00:05:40,530 --> 00:05:44,570 kind of have die. So Yuri, the sable coin that you 89 00:05:44,570 --> 00:05:49,650 guys have launched, never really made it into the limelight so 90 00:05:49,650 --> 00:05:51,570 far. I mean often that's kind of just 91 00:05:51,570 --> 00:05:54,690 because people are late to the party, but you weren't late, 92 00:05:54,810 --> 00:05:56,290 right? You were there from the get go, 93 00:05:56,450 --> 00:05:58,730 so. We were there from the get go, 94 00:05:58,730 --> 00:06:01,010 but we started with a very different approach. 95 00:06:01,850 --> 00:06:06,690 We do diligence all. The regulations, relevant 96 00:06:06,690 --> 00:06:10,610 regulations in the major jurisdictions because we we are 97 00:06:10,650 --> 00:06:14,530 fundamental premise was that Fiat money has to be regulated 98 00:06:14,530 --> 00:06:18,890 and will have to be regulated in major jurisdictions in some way 99 00:06:18,890 --> 00:06:22,730 should before so. So we we looked at all the 100 00:06:22,730 --> 00:06:25,210 relevant licenses in the major jurisdictions. 101 00:06:25,210 --> 00:06:27,930 We kept to the conclusion there was only one major jurisdiction 102 00:06:27,930 --> 00:06:31,970 with relevant license that is Europe and that's called the E 103 00:06:31,970 --> 00:06:34,370 money and that's now been enshrined with my car. 104 00:06:34,890 --> 00:06:38,930 So our regulation first approach took us inside the system, so we 105 00:06:38,930 --> 00:06:43,930 can scale now inside the system, whereas the other stable coins 106 00:06:43,930 --> 00:06:46,610 have come up against the various regulatory wars. 107 00:06:46,970 --> 00:06:49,690 And in my view, I think it will be very, very difficult for them 108 00:06:49,690 --> 00:06:53,370 to overcome that those obstacles unless they try to retrofit 109 00:06:53,370 --> 00:06:56,610 themselves on to regulations or try to restart themselves as 110 00:06:56,610 --> 00:06:59,410 regulated entities. So the other thing that we 111 00:06:59,690 --> 00:07:01,690 discovered as well after we got our license. 112 00:07:02,470 --> 00:07:07,430 Is that we started closed trial better settlements on chain 113 00:07:07,950 --> 00:07:11,710 using virus tokenized assets primarily invoice is working 114 00:07:11,710 --> 00:07:15,030 with the Danish company back in the day and trade shift which 115 00:07:15,550 --> 00:07:18,910 transacts hundreds of billions of dollars globally in supply 116 00:07:18,910 --> 00:07:22,070 chains and we're thinking about always how to disintermediate 117 00:07:22,070 --> 00:07:23,790 the same way. It's a Toshi thought about 118 00:07:23,830 --> 00:07:25,790 disintermediation and italic as well. 119 00:07:26,270 --> 00:07:29,610 It's like how do we. Put money on trade to settle 120 00:07:29,610 --> 00:07:34,010 invoices so they can move and be finest all the way through the 121 00:07:34,010 --> 00:07:38,370 stack of the supply chains. And how do we put money on 122 00:07:38,370 --> 00:07:41,610 chains so we can help small companies in supply chains 123 00:07:41,810 --> 00:07:45,890 factor or get oral against their invoices that they are able to 124 00:07:45,890 --> 00:07:49,730 issue against a much bigger, more credit worthy companies. 125 00:07:50,050 --> 00:07:53,610 So, so discovery, we're going through these. 126 00:07:54,500 --> 00:07:59,380 Stages and these trials we're using Euro, Sterling, dollar and 127 00:07:59,380 --> 00:08:03,260 and ISIL the croner. Even we we discovered also it 128 00:08:03,260 --> 00:08:07,180 made no sense to us that we should issue money through an 129 00:08:07,180 --> 00:08:08,700 exchange. Why would you ever go to an 130 00:08:08,700 --> 00:08:13,900 exchange to buy money let alone unregulated proxy from it. 131 00:08:14,460 --> 00:08:19,380 So so we we we came to the conclusion that the only way for 132 00:08:19,380 --> 00:08:24,620 Fiat money to reach on chain. In a major way, in a scalable 133 00:08:24,620 --> 00:08:28,940 way, would be to link a blockchain to a major currency 134 00:08:28,940 --> 00:08:31,620 payment system. So when the pandemic ensued, 135 00:08:31,620 --> 00:08:35,260 instead of issuing the negative interest rate environment for 136 00:08:35,260 --> 00:08:38,020 cryptocurrency speculators, bless them, I'm one of them. 137 00:08:38,620 --> 00:08:45,260 We set about to build a connection to the SEPPA systems 138 00:08:45,260 --> 00:08:49,220 in Europe because we're licensed in Europe and we're authorized 139 00:08:49,220 --> 00:08:51,710 in Europe. And the main currency of Europe 140 00:08:51,790 --> 00:08:55,950 is the euro. And so we've figured out a way 141 00:08:56,190 --> 00:08:59,750 to essentially mint money directly from a bank account on 142 00:08:59,750 --> 00:09:04,150 chain and redeem directly from on chain back into a bank 143 00:09:04,150 --> 00:09:05,990 account. So we're the first company 144 00:09:05,990 --> 00:09:09,470 arguably properly regulated in a major jurisdiction to issue Fiat 145 00:09:09,470 --> 00:09:11,910 money on chain. And also we're the first company 146 00:09:12,550 --> 00:09:17,070 that that essentially does away with the on ramp because our 147 00:09:17,070 --> 00:09:19,830 money is money that we issue is transferable. 148 00:09:20,240 --> 00:09:24,240 Directly back into the back account, there's no rap, There's 149 00:09:24,240 --> 00:09:26,640 no indication. I think that's an important 150 00:09:26,840 --> 00:09:31,120 distinction that that your your, your money is regulated and that 151 00:09:31,120 --> 00:09:35,680 it transfers directly into a bank account and I think looking 152 00:09:35,680 --> 00:09:38,440 at Manarium, so just kind of describing the way Manarium 153 00:09:38,440 --> 00:09:44,520 works is you have this Euro stable coin, that euro stable 154 00:09:44,520 --> 00:09:48,960 coin. Stands as a balance on 155 00:09:49,080 --> 00:09:54,400 essentially a Euro Seppa account and you can transfer those Euro 156 00:09:54,400 --> 00:09:58,760 stablecoins is immediately into the SEPPA payment system and 157 00:09:58,760 --> 00:10:01,040 vice versa. So you can send money to this 158 00:10:01,040 --> 00:10:06,240 iband account and then you know EUR Euro E's stablecoins pop up 159 00:10:06,240 --> 00:10:09,840 on your Ethereum wallet. So, but but what's important 160 00:10:09,840 --> 00:10:14,840 here is that this stablecoin is actually a payment instrument 161 00:10:14,840 --> 00:10:18,480 that is also regulated. It's not like a USDC or 162 00:10:18,480 --> 00:10:23,280 something like that that you guys are having to do that, that 163 00:10:23,280 --> 00:10:27,560 kind of onboarding when you use Euroe or using a regulated 164 00:10:27,880 --> 00:10:32,520 payment instrument. No, exactly, because we 165 00:10:32,520 --> 00:10:37,560 discovered this secret hiding in plain sight the fact that Europe 166 00:10:37,560 --> 00:10:40,280 has had the stablecoin regulation since 2000. 167 00:10:41,010 --> 00:10:43,570 It's called electronic money. It's been used for prepaid 168 00:10:43,570 --> 00:10:45,570 cards. It's been used for mobile 169 00:10:45,570 --> 00:10:47,010 wallets. It's been used for online 170 00:10:47,010 --> 00:10:49,650 payments. It's been used by transfer wise. 171 00:10:49,650 --> 00:10:52,850 It's been used by PayPal, it's been used by Revolute to provide 172 00:10:52,850 --> 00:10:57,610 services. All we did is we sought a 173 00:10:57,610 --> 00:11:02,290 license to issue that form of regular fee of money on chain. 174 00:11:02,290 --> 00:11:05,210 We first company authorized to issue that type. 175 00:11:05,370 --> 00:11:08,650 You know of money on chain and it's won't one exchangeable for 176 00:11:08,650 --> 00:11:12,450 bank accounts. It is intended to be fungible. 177 00:11:12,450 --> 00:11:15,890 With CAF, it's an electronic surrogate for notes and coins. 178 00:11:15,890 --> 00:11:17,770 That's what it says literally in the directive. 179 00:11:18,290 --> 00:11:21,490 It's just plain old though. That's what it is. 180 00:11:21,930 --> 00:11:27,530 So because we're licensed as an electronic money provider, aka 181 00:11:27,530 --> 00:11:32,650 fee at stablecoin provider, then we are inside the system and we 182 00:11:32,650 --> 00:11:37,090 can safeguard inside the system, we can be on boarded by all the 183 00:11:37,090 --> 00:11:39,050 regulated financial institutions. 184 00:11:39,460 --> 00:11:43,380 To safeguard and also to perform payments, we can link up to the 185 00:11:43,380 --> 00:11:47,820 system, the SEPPA system in a way that unregulated companies 186 00:11:47,940 --> 00:11:51,820 will never be able to. And so we issue these what we 187 00:11:51,820 --> 00:11:55,420 call Web three I bands to our customers and these Web three I 188 00:11:55,420 --> 00:11:57,620 bands are beautiful. They what they do is that they 189 00:11:58,100 --> 00:12:02,740 essentially receive funds from inside the banking system and 190 00:12:02,740 --> 00:12:06,300 they route them to Web 3 wallets and then you can go the other 191 00:12:06,300 --> 00:12:08,980 way around. And So what we've in principle 192 00:12:08,980 --> 00:12:14,980 done is that we have linked the European banking system with €11 193 00:12:15,260 --> 00:12:19,900 trillion worth of cash to blockchains to web. 194 00:12:19,900 --> 00:12:23,820 Three in our view, in my view is almost like the biggest wallet 195 00:12:23,820 --> 00:12:27,220 that's out there is you can go back and forth seamlessly. 196 00:12:28,460 --> 00:12:31,460 Absolutely. I've actually onboarded a few 197 00:12:31,460 --> 00:12:34,100 people into Monaro myself, because. 198 00:12:34,420 --> 00:12:37,740 When I started using it, I'm an Abbott Monarium user. 199 00:12:38,340 --> 00:12:42,860 When I started using it, it just basically before Monarium when I 200 00:12:42,860 --> 00:12:46,260 kind of wanted to go in and out of crypto, you had to go via 201 00:12:46,260 --> 00:12:50,340 centralized exchange, right? So be it kind of like Kraken or 202 00:12:50,340 --> 00:12:54,420 by Nans or Coinbase or whatever you want, but basically you send 203 00:12:54,420 --> 00:12:57,980 money there, like it takes 2 days to kind of appear in your 204 00:12:57,980 --> 00:12:59,540 account and then you kind of buy. 205 00:13:00,010 --> 00:13:02,210 Crypto from there. And basically it's it's a 206 00:13:02,370 --> 00:13:05,730 terrible user experience and it's also quite costly, right. 207 00:13:05,970 --> 00:13:10,530 So basically this magic of kind of just having this, I ban you 208 00:13:10,530 --> 00:13:15,210 send money to this shows up in your wallet basically all the 209 00:13:15,290 --> 00:13:18,250 kind of crypto natives I onboarded to this, their mind 210 00:13:18,250 --> 00:13:21,890 was completely blown. And I think that's super 211 00:13:21,890 --> 00:13:25,810 beautiful because it's such in principle in the way it works, 212 00:13:26,130 --> 00:13:28,930 it's such a simple offering for the user. 213 00:13:29,330 --> 00:13:32,970 And the functionality is so limited, but I can only imagine 214 00:13:32,970 --> 00:13:36,530 kind of all the kind of parts that you needed to kind of get 215 00:13:36,690 --> 00:13:39,930 in a row in the back end to kind of make it such a good user 216 00:13:39,930 --> 00:13:44,130 experience. No, I mean and that's part to my 217 00:13:44,130 --> 00:13:47,490 dev colleagues hacking away during the middle of COVID, 218 00:13:49,130 --> 00:13:51,970 making sure that you know, double testing and triple 219 00:13:51,970 --> 00:13:55,170 testing or all these interfaces that you have to connect with. 220 00:13:56,140 --> 00:13:59,860 Because we indirectly connect to SEPPA via currently 2 providers 221 00:14:00,620 --> 00:14:05,620 in Europe inside the Eurozone and getting that straight is it 222 00:14:05,620 --> 00:14:08,060 was a major development achievement also. 223 00:14:08,300 --> 00:14:10,700 It's not just the concept of moving the money in and out, but 224 00:14:10,700 --> 00:14:16,620 also you have to build on top of the Treadfi interfaces and 225 00:14:17,300 --> 00:14:20,460 provide with a beautiful experience on the other end to 226 00:14:20,460 --> 00:14:25,350 make it easy to use in Defy. So my hat does to my dev 227 00:14:25,350 --> 00:14:30,510 colleagues who were not on this call, but my it was a phenomenal 228 00:14:30,510 --> 00:14:36,390 achievement on their behalf. I'd like to talk a little bit 229 00:14:36,390 --> 00:14:41,550 about this Euro stablecoin this Euroe or Yuri. 230 00:14:41,750 --> 00:14:44,910 I don't know how you pronounce it properly, but yeah. 231 00:14:45,700 --> 00:14:49,780 And in this, I like this E money regulation. 232 00:14:49,780 --> 00:14:52,500 So it's a directive that I'm not super familiar with. 233 00:14:52,500 --> 00:14:56,380 So maybe let's talk a little bit more about this directive and 234 00:14:56,380 --> 00:14:59,980 how it applies or how it can apply to stable coins, because 235 00:15:00,300 --> 00:15:04,780 what's striking about what you said earlier that we effectively 236 00:15:04,780 --> 00:15:08,260 have this regulatory framework in Europe since 2000. 237 00:15:08,980 --> 00:15:13,460 Well, in the conversation about Mika and the EU crypto 238 00:15:13,460 --> 00:15:16,420 regulation, and certainly Nika too, there's a lot of talk about 239 00:15:16,420 --> 00:15:20,540 stablecoins. And so how is it useful to have 240 00:15:20,540 --> 00:15:24,740 another piece of regulation when from your perspective, we 241 00:15:24,740 --> 00:15:29,220 already have the required regulatory framework for this? 242 00:15:30,650 --> 00:15:35,290 Electronic money has served as a technically neutral, and I'm 243 00:15:35,290 --> 00:15:37,050 quoting this from the relevant directive. 244 00:15:37,050 --> 00:15:39,050 It's a technically supposed to be a technically neutral 245 00:15:39,050 --> 00:15:42,930 standard for digital cash. That's what it's supposed to be, 246 00:15:42,930 --> 00:15:48,010 and that's how it has served for over 20 years on prepaid cards 247 00:15:48,010 --> 00:15:51,370 and mobile wallets, etc. Right now along comes Satoshi 248 00:15:51,370 --> 00:15:53,970 and then metallic, and then a number of other people who 249 00:15:53,970 --> 00:15:56,150 start. To call up these, you know 250 00:15:56,150 --> 00:15:59,150 phenomenal shared ledgers where you can read and write and issue 251 00:15:59,150 --> 00:16:04,110 your own tokens, right. So E money is, is, is in 252 00:16:04,110 --> 00:16:09,990 financial terms is is the same whether it's on prepaid card or 253 00:16:09,990 --> 00:16:12,590 issued on a Ledger. It is always safeguarded in the 254 00:16:12,590 --> 00:16:17,670 same way and it always is the same requirements which 255 00:16:17,670 --> 00:16:21,750 essentially it has to be over collateralized by 2% is 256 00:16:21,750 --> 00:16:27,110 safeguarded in segregated. Accounts so it's really the 257 00:16:27,110 --> 00:16:29,470 user's money. It's your money on trade and the 258 00:16:29,470 --> 00:16:38,550 spirit of defy and it's so it's principle is the same it's 259 00:16:38,550 --> 00:16:40,390 supposed to be. You can safeguard either with 260 00:16:40,390 --> 00:16:44,310 banks it's your choice as an issue or in high quality liquid 261 00:16:44,310 --> 00:16:46,710 assets. In AAA we safeguard the both 262 00:16:46,710 --> 00:16:49,990 cover funds in triple-A short duration instruments with a 263 00:16:49,990 --> 00:16:53,630 global asset management company. So essentially it's your money, 264 00:16:53,670 --> 00:16:56,530 it's. On chain, in the same way we owe 265 00:16:56,570 --> 00:16:59,570 money on a plastic card, if you had like a prepaid card, right. 266 00:17:00,050 --> 00:17:06,250 So the main difference which is the interface, it's a token on 267 00:17:06,250 --> 00:17:07,770 chain as opposed to a plastic card. 268 00:17:08,849 --> 00:17:13,369 So we just, we think it's there's no need to change the E 269 00:17:13,369 --> 00:17:16,250 money regulation in any way shape or form just because 270 00:17:16,250 --> 00:17:19,849 there's a new technology and the original legislators didn't 271 00:17:19,849 --> 00:17:22,890 think that either. Now micro comes a lot and micro 272 00:17:22,890 --> 00:17:25,329 resolves a lot of uncertainty in many ways. 273 00:17:25,530 --> 00:17:30,610 It brings under the regulatory umbrella of traditional consumer 274 00:17:30,610 --> 00:17:35,930 protection in financial services like the service providers and 275 00:17:35,930 --> 00:17:39,090 the asset issuers, which is great. 276 00:17:39,090 --> 00:17:42,810 And then it recognizes the E money as a way to issue Fiat on 277 00:17:42,810 --> 00:17:46,290 chip. So that's one strike for micro. 278 00:17:47,170 --> 00:17:50,090 Just recognizing E money is the way to go inside the European 279 00:17:50,090 --> 00:17:53,800 Union. Number two, however, it imposes 280 00:17:53,800 --> 00:18:01,160 some additional constraints on emony which are not in place in 281 00:18:01,160 --> 00:18:04,440 the original Emony Directive. So it fragments the Emony 282 00:18:04,440 --> 00:18:07,200 standard and makes it more difficult to issue emony or 283 00:18:07,200 --> 00:18:10,760 blockchains than on other technical mediums, which in our 284 00:18:10,760 --> 00:18:13,440 view is wrong. It's not a big showstopper, but 285 00:18:13,440 --> 00:18:17,930 it is in sense anti competitive. Because it requires for example, 286 00:18:18,010 --> 00:18:22,050 E money issues that issue E money as token or chain to 287 00:18:22,050 --> 00:18:25,570 safeguard at least 30% with banks, which is not the 288 00:18:25,570 --> 00:18:27,090 stipulation in the original direct. 289 00:18:27,770 --> 00:18:30,730 So it's anti competitive because this forces the E money issuers 290 00:18:30,730 --> 00:18:34,490 to rely on the banks and it introduces them as 291 00:18:34,490 --> 00:18:38,490 intermediaries where they're not really necessary, which 292 00:18:38,890 --> 00:18:42,250 increases the cost also ultimately to the issuer. 293 00:18:42,660 --> 00:18:43,900 Because the bags take their spread. 294 00:18:43,900 --> 00:18:48,380 So I think there's a lot of things that need to be redone in 295 00:18:48,380 --> 00:18:53,420 my car in the second iteration of my car, including removing 296 00:18:53,460 --> 00:18:57,740 the additional restrictions that are posted on e-mail issuers by 297 00:18:57,740 --> 00:19:00,100 my car. Now this is something that the 298 00:19:00,100 --> 00:19:07,180 UK hopefully will, has not or will not repeat or replicate in 299 00:19:07,180 --> 00:19:09,780 their digital asset rules, so I haven't been able to look at 300 00:19:09,780 --> 00:19:11,820 the. The final outcome of the UK 301 00:19:11,820 --> 00:19:16,060 legislation. But they typed the HM Her 302 00:19:16,060 --> 00:19:20,180 Majesty's Treasury was going to build on the robust framework of 303 00:19:20,180 --> 00:19:24,340 E money, they said, going into the legislatory process. 304 00:19:25,340 --> 00:19:28,220 And America does not have to repeat that mistake either. 305 00:19:28,700 --> 00:19:33,740 So Europe was almost, I would say they've made an own call, 306 00:19:33,740 --> 00:19:37,380 Not a massive own call, but a little bit of an own call. 307 00:19:37,800 --> 00:19:40,520 By imposing additional restrictions on e-mail issues 308 00:19:40,560 --> 00:19:43,240 under MICA, a lot of all the things are really great, for 309 00:19:43,240 --> 00:19:47,920 example, the consumer protection clauses that are imposed on the 310 00:19:49,120 --> 00:19:53,840 on the service providers and at the same time putting like asset 311 00:19:53,840 --> 00:19:56,920 pressures tokens into a very clear umbrella of how they 312 00:19:56,920 --> 00:19:59,760 should be licensed and authorized etc. 313 00:19:59,760 --> 00:20:03,560 So I think overall MICA is very good for Europe. 314 00:20:04,530 --> 00:20:07,210 But when it comes to issuing money on blockchains, it opposes 315 00:20:07,330 --> 00:20:10,490 restrictions which are, in my view, totally unnecessary. 316 00:20:11,450 --> 00:20:17,450 Why do you think Mika too and imposes these additional 317 00:20:17,450 --> 00:20:20,570 restrictions and effectively breaks from its technical from 318 00:20:20,570 --> 00:20:23,170 the technical neutrality of the E Money directive? 319 00:20:23,170 --> 00:20:26,570 Is it for political reasons or are there other reasons you 320 00:20:26,570 --> 00:20:28,290 think? I would. 321 00:20:28,710 --> 00:20:33,550 Well, to hypothesize, but I would suspect that it's #1. 322 00:20:33,550 --> 00:20:38,270 It's a knee jerk overreaction to what? 323 00:20:38,670 --> 00:20:42,670 Legislative spheres and perhaps lack of understanding of this 324 00:20:42,670 --> 00:20:46,550 new technology And #2. Possibly the incumbents, bless 325 00:20:46,550 --> 00:20:48,590 them, are lobbying for their own interest. 326 00:20:48,830 --> 00:20:53,190 So we'll be. I bank on that second on that 327 00:20:53,190 --> 00:20:58,070 second assumption pretty hard. So what do you guys do with the 328 00:20:58,070 --> 00:21:04,270 money that you have to hold in custody for your customers? 329 00:21:05,070 --> 00:21:11,950 We safeguard in AAA funds short duration with a global asset 330 00:21:11,950 --> 00:21:18,830 management company that is based in Ireland and authors regulated 331 00:21:18,830 --> 00:21:24,870 in Ireland. So if we issue E money to you. 332 00:21:25,500 --> 00:21:28,820 And you said this money, you said this €100 from inside the 333 00:21:28,820 --> 00:21:31,620 system. We made the €100 to euro on 334 00:21:31,620 --> 00:21:34,900 chain. We sent the bulk of it to this 335 00:21:36,020 --> 00:21:42,100 to this global asset management company which has triple-A short 336 00:21:42,100 --> 00:21:47,620 duration assets packing it. And then we hold what we think 337 00:21:47,620 --> 00:21:52,020 we need for redemptions with a back inside the euro zone. 338 00:21:52,300 --> 00:21:54,780 We haven't disclosed these packing partners, but. 339 00:21:55,810 --> 00:21:57,170 And we will discuss them at some point. 340 00:21:58,730 --> 00:22:02,370 So I assume this is also Monarium's business model, 341 00:22:02,370 --> 00:22:04,850 right. So basically for the customers 342 00:22:05,090 --> 00:22:08,330 and kind of moving money on chain is free. 343 00:22:08,370 --> 00:22:11,890 There's no fee on kind of having the account. 344 00:22:12,170 --> 00:22:14,650 And basically you can do separate transactions from the 345 00:22:14,650 --> 00:22:17,810 account for free. Basically for the user, there's 346 00:22:17,810 --> 00:22:21,130 no charge, but you kind of get the yield. 347 00:22:21,510 --> 00:22:26,670 From the assets that you put in custody with the Irish provider. 348 00:22:28,470 --> 00:22:31,310 So our customers, we have direct customers, companies, 349 00:22:31,310 --> 00:22:35,590 individuals such as yourself, but our main goal to market is 350 00:22:35,590 --> 00:22:38,790 to arm the builders is to make what we've built available to 351 00:22:38,790 --> 00:22:40,550 all the web three builders out there. 352 00:22:40,550 --> 00:22:44,070 We want to share it with them so they can use it to build 353 00:22:44,070 --> 00:22:47,910 services in D Fi. We believe that D Fi is this 354 00:22:48,350 --> 00:22:53,030 phenomenal technology. That essentially enables open 355 00:22:53,030 --> 00:22:55,550 banking in a way that's never been possible before. 356 00:22:55,790 --> 00:22:59,550 We think it's essentially defy is open banking austerity, 357 00:22:59,590 --> 00:23:05,470 that's what we call it. So our main go to market is to 358 00:23:06,310 --> 00:23:12,870 serve the builders including builders such as the closest pay 359 00:23:12,870 --> 00:23:17,710 for example and whoever's building in closest court. 360 00:23:19,510 --> 00:23:23,030 The Monarium offering as a user is free, right. 361 00:23:23,030 --> 00:23:25,950 So basically I sign up for an account, I don't pay a fee for 362 00:23:25,950 --> 00:23:28,430 that. I can do separate transactions 363 00:23:28,430 --> 00:23:30,510 for free. I can on and off ramp for free, 364 00:23:30,510 --> 00:23:35,030 which is typically points that exchanges take a major cut, 365 00:23:35,270 --> 00:23:37,310 right. So basically all of that is free 366 00:23:37,550 --> 00:23:40,470 in Monarium and I assume your business model is that kind of 367 00:23:40,670 --> 00:23:45,870 the you get the interest from the assets that you put in 368 00:23:45,870 --> 00:23:48,870 custody with your Irish custody provider. 369 00:23:49,560 --> 00:23:52,200 Is is that correct? That, that is correct. 370 00:23:52,200 --> 00:23:56,600 I mean, do you pay when you move money from Deutsche to Parable? 371 00:23:57,040 --> 00:23:59,160 I mean it just moves inside the SEPA system. 372 00:23:59,440 --> 00:24:00,120 It may. Be something. 373 00:24:00,840 --> 00:24:03,960 It depends. So basically if I think for on 374 00:24:03,960 --> 00:24:07,080 most private accounts you don't pay, but on business account 375 00:24:07,600 --> 00:24:10,880 accounts, I think there's different years and I think we 376 00:24:10,880 --> 00:24:13,560 pay something like 9 euro cents per transfer. 377 00:24:14,640 --> 00:24:15,760 There you go. So so. 378 00:24:17,200 --> 00:24:20,560 Our thinking or model or philosophy is the same. 379 00:24:21,240 --> 00:24:25,920 Moving money on chain and off chain should be as seamless as 380 00:24:25,920 --> 00:24:32,680 the experience inside track. So we make money holding your 381 00:24:32,680 --> 00:24:35,920 money, safeguarding your money while you move your money around 382 00:24:35,920 --> 00:24:38,000 our chain. So we collect the interest just 383 00:24:38,000 --> 00:24:40,320 like the backs do. We're making our offering 384 00:24:40,920 --> 00:24:43,080 currently free. At some point we'll stop 385 00:24:43,080 --> 00:24:47,670 thinking about imposing. Or start charging for some of 386 00:24:47,670 --> 00:24:51,390 these services, but it will be in the same way as the banks to 387 00:24:51,830 --> 00:24:58,150 try to make it as light and burden less for the user as 388 00:24:58,150 --> 00:25:01,110 possible. And I'd like to add also our 389 00:25:01,110 --> 00:25:04,670 main go to market in that sense is to arm the builders. 390 00:25:05,230 --> 00:25:07,910 We want to share what we've built with all the web free 391 00:25:07,910 --> 00:25:12,550 builders up there. So we want to make it as easy 392 00:25:12,550 --> 00:25:14,510 for them to import their customers. 393 00:25:15,000 --> 00:25:17,840 And for their customers to use our services as possible. 394 00:25:18,440 --> 00:25:21,760 Why do you think that's not taken off so far, right? 395 00:25:21,760 --> 00:25:25,000 Because basically in my view kind of Monarium on and off 396 00:25:25,000 --> 00:25:29,200 ramping is kind of definitely best in class and in my view 397 00:25:29,200 --> 00:25:32,800 kind of it seems like a super solid offering. 398 00:25:32,800 --> 00:25:38,560 But if you look at like the total Ure on chain and it's you 399 00:25:38,560 --> 00:25:40,840 know on the order of like 10 million or so, it's not. 400 00:25:41,280 --> 00:25:45,080 Not huge amounts compared to say USCC or Ted. 401 00:25:45,600 --> 00:25:47,600 And what do you attribute that to? 402 00:25:48,400 --> 00:25:50,160 Because we're really, really early. 403 00:25:51,360 --> 00:25:56,240 What three is just like any technological innovation as is 404 00:25:56,240 --> 00:26:00,280 going through waves of adoption. We went through several waves of 405 00:26:00,280 --> 00:26:03,760 adoption and then we hit the pandemic which massively 406 00:26:03,760 --> 00:26:08,650 distorted the monetary system. And totally gave rise to a 407 00:26:08,650 --> 00:26:12,810 speculative bubble like we haven't seen since since very 408 00:26:12,810 --> 00:26:15,570 long time ago, not since 2008 at least. 409 00:26:16,170 --> 00:26:21,170 So all the focus in web tree building has been on supporting 410 00:26:21,170 --> 00:26:24,610 speculative activities, which means unregulated stable coins, 411 00:26:24,610 --> 00:26:27,490 which means exchanges, centralist exchanges. 412 00:26:28,090 --> 00:26:31,130 We've never believed in that future. 413 00:26:31,130 --> 00:26:34,410 We always believed that D5 would be the way to go. 414 00:26:35,740 --> 00:26:39,980 And so we've always been building for the builders of D5. 415 00:26:40,020 --> 00:26:43,740 Now that there is the last speculative bubble is over and 416 00:26:43,740 --> 00:26:47,140 the technology stack is maturing and we're seeing all kinds of 417 00:26:47,140 --> 00:26:51,620 services coming out there that there are we try to remove it to 418 00:26:51,620 --> 00:26:55,620 Medi race then we think are the time is right for our regulated 419 00:26:55,700 --> 00:26:59,900 authorized table coin with the direct connection to a payment 420 00:26:59,900 --> 00:27:03,400 system to serve the builders. That serve the mainstream 421 00:27:03,400 --> 00:27:07,360 economy, mainstream individuals and mainstream companies. 422 00:27:07,640 --> 00:27:09,800 Maybe let me push back a little bit here. 423 00:27:09,960 --> 00:27:12,880 So let me talk about USDC, right. 424 00:27:12,880 --> 00:27:14,920 So basically, I don't want to talk about tether because kind 425 00:27:14,920 --> 00:27:18,080 of tether redemptions are notoriously difficult and so on. 426 00:27:18,080 --> 00:27:21,080 So maybe let's kind of not talk about Tether, let's talk about 427 00:27:21,080 --> 00:27:23,080 USDC. I understand they're not 428 00:27:23,080 --> 00:27:30,080 regulated, but in a way they are an extremely serious company. 429 00:27:30,620 --> 00:27:34,900 That is taken seriously in the space that kind of custody's 430 00:27:35,540 --> 00:27:41,740 user user Fiat in various bank accounts and kind of then issues 431 00:27:41,740 --> 00:27:44,260 them on chain. I totally understand they're not 432 00:27:44,260 --> 00:27:47,860 regulated, but why do you think they have kind of they have 433 00:27:47,860 --> 00:27:52,260 gotten so much adoption while you guys haven't when kind of 434 00:27:52,260 --> 00:27:57,260 you're offering is similar? Well, we just launched 435 00:27:57,380 --> 00:28:02,120 officially about, you know. Under a year ago, number one, 436 00:28:02,120 --> 00:28:06,320 that's number one, we didn't launch until we had the 437 00:28:06,320 --> 00:28:08,960 connection to set by and place in a scalable way. 438 00:28:09,360 --> 00:28:13,920 So that's number one. And but two, I think that I mean 439 00:28:13,920 --> 00:28:16,160 there's waves of adoption, there's different types of 440 00:28:17,000 --> 00:28:19,880 instruments that will serve the community in different ways at 441 00:28:19,880 --> 00:28:21,840 different stages of the adoption cycle. 442 00:28:22,240 --> 00:28:27,800 So USDC was and Paxos, bless them both good enough for the 443 00:28:27,800 --> 00:28:32,270 speculators. But now it turns out that know 444 00:28:32,270 --> 00:28:34,630 what that they're building on licenses that are being 445 00:28:34,630 --> 00:28:38,830 challenged by the US government. And I'm not saying that, you 446 00:28:38,830 --> 00:28:41,350 know, that's right or wrong. I'm just saying. 447 00:28:42,070 --> 00:28:45,230 But it goes to the extent that even the issuers themselves, 448 00:28:45,230 --> 00:28:50,390 like Jeremy Allaire of Circle, is calling on Congress itself, 449 00:28:50,390 --> 00:28:54,310 the main legislative federal body in the United States, to 450 00:28:54,310 --> 00:28:57,790 remove the regulatory uncertainty of these tokens that 451 00:28:57,790 --> 00:29:02,860 he's been issuing on check. So this does not surprise me 452 00:29:02,900 --> 00:29:07,060 because we did our due diligence on the regulatory stock before 453 00:29:07,340 --> 00:29:10,020 comes a conclusion that European E money license was the way to 454 00:29:10,020 --> 00:29:12,100 go. We spoke to lawyers in the 455 00:29:12,100 --> 00:29:16,260 United States. We spoke to the OCC even at some 456 00:29:16,260 --> 00:29:21,500 stage there is no federal license in the United States for 457 00:29:21,500 --> 00:29:25,980 stable coins and it turns out that these these licensed. 458 00:29:26,420 --> 00:29:32,300 That they have been building on Paxos and USTC are not really 459 00:29:32,300 --> 00:29:35,620 intended for holding all people's money and reflecting 460 00:29:35,620 --> 00:29:38,580 all people's money in the way that the European licensing 461 00:29:38,580 --> 00:29:43,780 regime is. So that means that you guys have 462 00:29:44,260 --> 00:29:48,820 issued a Euro stablecoin, right? But in the interface I also get 463 00:29:48,820 --> 00:29:55,100 given the option to kind of hold the krona and. 464 00:29:56,000 --> 00:29:59,720 British Pounds and USD on chain. How does that work? 465 00:30:00,280 --> 00:30:02,720 We decided to focus on the Euro because Euro is the main 466 00:30:02,720 --> 00:30:06,680 currency of Europe. So we built an interface between 467 00:30:07,120 --> 00:30:11,600 the set bar and blockchains and we're our main focus is on 468 00:30:11,600 --> 00:30:14,360 serving our customers that want to use Euro check. 469 00:30:14,960 --> 00:30:18,600 But the actually the first currency which don't chain a 470 00:30:18,600 --> 00:30:22,640 Euro E money license in 2019 was the Icelandic Chroma that was in 471 00:30:22,640 --> 00:30:25,460 July of 2019. The month after we got no 472 00:30:25,460 --> 00:30:28,340 license approved by Isla the regulator. 473 00:30:28,900 --> 00:30:34,580 And then so officially the Isla, the Krona is the first fully 474 00:30:34,580 --> 00:30:38,300 authorized Fiat currency on chain. 475 00:30:39,140 --> 00:30:44,700 We followed shortly thereafter with trials using EUR at dollars 476 00:30:44,740 --> 00:30:48,540 and sterling and we're able to issue both dollars and sterling 477 00:30:48,820 --> 00:30:52,060 at scale when we decide to focus on dollars and sterling. 478 00:30:53,220 --> 00:30:58,100 The European E Money Directive allows the issuers to issue E 479 00:30:58,100 --> 00:31:04,460 money denominated in any currency that qualifies in a way 480 00:31:04,460 --> 00:31:06,140 that you can safe keep it in the correct way. 481 00:31:06,580 --> 00:31:10,820 That's one thing that Mike also breaks is deadly because Mike 482 00:31:10,860 --> 00:31:14,140 essentially makes it more difficult to issue non European 483 00:31:14,140 --> 00:31:20,020 currencies on trade, which we think is not really necessary at 484 00:31:20,020 --> 00:31:23,260 all. Cool. 485 00:31:23,580 --> 00:31:27,860 I'd like to talk about Cbdc's. I know a lot of our listeners 486 00:31:27,860 --> 00:31:30,660 are probably gonna like roll their eyes at this topic, but 487 00:31:31,300 --> 00:31:37,420 it's it's an interesting topic because it I think for a lot of 488 00:31:37,420 --> 00:31:43,700 people, they see it as a concept that is at best useless in the 489 00:31:43,700 --> 00:31:46,540 face of like cryptocurrencies and other stable coins, and at 490 00:31:46,540 --> 00:31:51,440 worst a very sinister. Attempt by governments and 491 00:31:51,440 --> 00:31:56,000 central banks to fully control the flows of money and and 492 00:31:56,120 --> 00:31:59,720 particularly in the hands of their citizens and there are 493 00:31:59,720 --> 00:32:04,760 some some fears there that CDD C's become a Chinese like social 494 00:32:04,760 --> 00:32:10,480 scoring system or become integrated in like very very 495 00:32:10,720 --> 00:32:13,600 pervasive system of of surveillance. 496 00:32:13,960 --> 00:32:17,800 So your your cofounder Jan was previously the chairman of the. 497 00:32:18,260 --> 00:32:21,500 Icelandic Central Bank Supervisory Board and you know 498 00:32:21,500 --> 00:32:24,820 he's talked about the right approach for for central banks 499 00:32:25,140 --> 00:32:28,860 as they enter this world of digital money. 500 00:32:28,860 --> 00:32:32,980 And in a world I think where we could qualify as having a 501 00:32:32,980 --> 00:32:38,020 broader diversity of money like assets and and a greater E to 502 00:32:38,020 --> 00:32:41,340 create money like assets. You know what are your thoughts 503 00:32:41,340 --> 00:32:45,740 on on central banks entering this space broadly? 504 00:32:46,460 --> 00:32:49,020 A bit back in the brick and mortar day, did you ever go to 505 00:32:49,100 --> 00:32:52,420 the High Street or Main Street and and make it posture 506 00:32:52,420 --> 00:32:54,740 withdrawal at Central Point? No. 507 00:32:55,100 --> 00:32:59,020 My A look OK so central bikes are not set up to serve non 508 00:32:59,020 --> 00:33:01,740 financial institutions or consumers. 509 00:33:03,580 --> 00:33:06,820 If they want to do so online it will require a major policy 510 00:33:06,820 --> 00:33:08,940 change. It is not really up to them to 511 00:33:08,940 --> 00:33:12,820 do the KYC AML experiment and explore with the interfaces 512 00:33:12,820 --> 00:33:15,780 that. Are needed to show different 513 00:33:15,780 --> 00:33:19,380 market segments. I think CBDC is not going to 514 00:33:19,380 --> 00:33:23,540 happen. I think it's a really bad idea. 515 00:33:23,540 --> 00:33:25,260 And it's not just me who thinks this. 516 00:33:25,500 --> 00:33:29,020 It's like senior economists at the IMF have actually argued for 517 00:33:29,020 --> 00:33:35,180 the opposite, that instead of central banks experimenting with 518 00:33:35,180 --> 00:33:39,700 CBDC, what they really should do is to take these non back 519 00:33:39,900 --> 00:33:44,550 decentralized issuers. Like E money companies and give 520 00:33:44,550 --> 00:33:50,310 them full access to central bank facilities and issue digital 521 00:33:50,350 --> 00:33:54,270 currency through that. I think that's by far the best 522 00:33:54,270 --> 00:33:57,110 way to go. This idea is articulated in a 523 00:33:57,310 --> 00:34:00,910 beautiful paper by two senior IMF economists called The Rise 524 00:34:00,910 --> 00:34:03,030 of Digital Money, issued in 2019. 525 00:34:03,710 --> 00:34:07,710 I encourage everybody if I read this paper because coming from 526 00:34:07,710 --> 00:34:10,710 the opposite side, from the technology stack, this is the. 527 00:34:11,560 --> 00:34:16,000 I I think this is the canonical paper in Trot Fire, which 528 00:34:16,000 --> 00:34:20,719 explains how the Trot Fire field system should be set up to make 529 00:34:20,719 --> 00:34:23,159 it decentralized, resilient, robust. 530 00:34:23,880 --> 00:34:28,080 So CBDC shouldn't happen, and it's not going to happen in 531 00:34:28,080 --> 00:34:33,800 mind. But the ECB has announced A CBDC 532 00:34:34,080 --> 00:34:38,440 project, and as far as I know, people like Kissing like out. 533 00:34:38,440 --> 00:34:41,000 They're very bullish on this idea. 534 00:34:42,120 --> 00:34:46,840 And you know, very fairly have offered fairly bearish 535 00:34:46,840 --> 00:34:51,800 sentiments on on the on private stable coins. 536 00:34:52,800 --> 00:34:55,960 Do do you think that at the highest level of EU policy 537 00:34:55,960 --> 00:34:59,840 makers there is a desire to want to control more of the monetary 538 00:34:59,840 --> 00:35:05,960 stack and and get into, you know, doing KYC and you know, is 539 00:35:05,960 --> 00:35:08,400 there, is there something more sinister here that people should 540 00:35:08,400 --> 00:35:12,920 be concerned about? I wouldn't call it sinister, I 541 00:35:12,920 --> 00:35:15,680 would call it didigist and in the fresh spirit. 542 00:35:15,680 --> 00:35:22,040 Right is there is a tendency always a government to to expand 543 00:35:22,040 --> 00:35:24,520 the approach on the private sector to a certain degree and 544 00:35:24,520 --> 00:35:26,720 vice versa. There's this cost of tension 545 00:35:27,000 --> 00:35:31,360 between private public in these these countries that we call 546 00:35:31,360 --> 00:35:34,480 democracies and and free market countries in the world. 547 00:35:35,040 --> 00:35:37,960 I think there are the ECP is totally over itching. 548 00:35:38,040 --> 00:35:41,440 I think it's totally. Misunderstanding its mandate. 549 00:35:42,120 --> 00:35:44,000 And I think they should just back off. 550 00:35:44,240 --> 00:35:48,960 And instead of trying to compete with many of the companies that 551 00:35:48,960 --> 00:35:52,040 they're supposed to be serving and in some cases regulating, 552 00:35:53,080 --> 00:35:56,520 they should instead support them. 553 00:35:57,600 --> 00:36:00,480 So I think they're absolutely on the wrong track and they should 554 00:36:00,480 --> 00:36:03,400 totally cease to experiment with CBC. 555 00:36:04,800 --> 00:36:09,640 So in the ECB foray into the CBC? 556 00:36:11,040 --> 00:36:18,240 Ram the current ideas that every citizen will only be allowed to 557 00:36:18,240 --> 00:36:25,960 hold a limited amount of EUR with the ECB to to protect the 558 00:36:26,800 --> 00:36:29,960 the remaining banking sector legacy and non legacy. 559 00:36:31,520 --> 00:36:36,880 Because basically the the fear is that citizens will just want 560 00:36:36,880 --> 00:36:40,990 to hold. Their assets with the central 561 00:36:40,990 --> 00:36:44,590 bank rather than with the retail bank, How do you see that? 562 00:36:46,470 --> 00:36:49,470 That's also what the economists have proposed is that what you 563 00:36:49,470 --> 00:36:56,110 can do is you can give non banks and banks separate reserve 564 00:36:56,110 --> 00:37:00,750 facilities at the ECP or annual central bank, so you could 565 00:37:00,990 --> 00:37:05,640 control the influx. An outflow of money in a way 566 00:37:05,640 --> 00:37:09,960 that's similar to how you incentivize the banks to to hold 567 00:37:09,960 --> 00:37:11,840 or not hold money with central bank, right. 568 00:37:12,120 --> 00:37:19,160 So there's ways of managing that risk of flight as it were away 569 00:37:19,160 --> 00:37:22,640 from the banks. But what is also important to 570 00:37:22,640 --> 00:37:26,840 understand is that I think introducing a non back 571 00:37:26,880 --> 00:37:30,360 alternative for holding money and and issuing money. 572 00:37:30,780 --> 00:37:34,820 On blockchain or any other technological medium, it is a 573 00:37:34,820 --> 00:37:38,820 way to essentially put checks on the backs and make them more 574 00:37:38,820 --> 00:37:43,340 responsible in their behavior so that they are more mindful of 575 00:37:43,340 --> 00:37:47,460 the outflow at risk as it were. If they make in the case that 576 00:37:47,460 --> 00:37:51,380 they add loss, the backing system is not going to go away 577 00:37:51,380 --> 00:37:53,820 and it should be a core part of the international system. 578 00:37:54,260 --> 00:37:57,940 But it is highly inefficient. It is very inefficient because. 579 00:37:58,560 --> 00:38:01,200 Number one, it transmits liquidity really, really 580 00:38:01,200 --> 00:38:04,840 inefficiently and of the tool it's very expensive to set up a 581 00:38:04,840 --> 00:38:10,200 back and maintain. So it's it's the backs need an 582 00:38:10,200 --> 00:38:16,360 alternative as it were to keep them competitive and but of 583 00:38:16,360 --> 00:38:20,840 course you have to experiment with the alternatives in 584 00:38:20,840 --> 00:38:23,400 responsible way. So it's not to increase systemic 585 00:38:23,480 --> 00:38:27,940 risk Now I think the way to do this is to Open Access. 2 586 00:38:27,940 --> 00:38:30,980 central bike facilities, 2 non bike issuers. 587 00:38:31,700 --> 00:38:34,540 But of course you have to be mindful at the same time that 588 00:38:34,540 --> 00:38:38,820 you want to perhaps put caps on, how much the back issuers could 589 00:38:38,820 --> 00:38:40,820 safeguard with these central bikes etc. 590 00:38:41,940 --> 00:38:46,620 But that's more of a deep macro discussion that I'm prepared to 591 00:38:46,620 --> 00:38:48,180 do on the epicenter at this stage. 592 00:38:50,180 --> 00:38:53,700 Let's maybe kind of go to the smaller realm of. 593 00:38:54,230 --> 00:38:58,190 I Bands and EU banking kind of on a practical level, right? 594 00:38:58,190 --> 00:39:03,350 So what have been your biggest challenges working from within 595 00:39:03,350 --> 00:39:08,630 and out of the SEPA system? There's a lot of challenges. 596 00:39:08,630 --> 00:39:12,430 SEPA system is you would think SEPA system is standard, but it 597 00:39:12,670 --> 00:39:16,670 isn't and each financial service provider has different types of 598 00:39:16,670 --> 00:39:20,390 limitations of SEPA, so it's getting SEPA to work. 599 00:39:21,250 --> 00:39:27,930 Building on an interface that is stable and consistent, and it's 600 00:39:27,930 --> 00:39:31,450 supposed to follow the seppa standard, it takes a while. 601 00:39:31,930 --> 00:39:35,130 So so seppa. Maybe just sorry, sorry to 602 00:39:35,130 --> 00:39:37,370 interrupt. Maybe just describing what the 603 00:39:37,370 --> 00:39:40,250 SEPPA system is could be a good starting point here because I 604 00:39:40,250 --> 00:39:42,170 realize that probably a lot of our listeners are in the States 605 00:39:42,170 --> 00:39:44,970 and or not in Europe and don't really know what SEPPA is. 606 00:39:46,570 --> 00:39:50,610 Seba is essentially at the core, it's just a bunch of XML files. 607 00:39:51,200 --> 00:39:58,520 So it's one back says I want to credit something to your account 608 00:39:58,520 --> 00:40:00,600 and debit from my account or vice versa. 609 00:40:00,960 --> 00:40:04,520 They sent an XML file to a centralized intermediary and 610 00:40:04,520 --> 00:40:06,360 boom it. Then it clears. 611 00:40:06,800 --> 00:40:10,720 So one back debits and one another by credits and your 612 00:40:10,720 --> 00:40:13,840 money mortgage. So that's all it is. 613 00:40:14,310 --> 00:40:17,510 But it's relatively new way of moving money in that sense 614 00:40:17,510 --> 00:40:19,430 because Euro is a very new currency. 615 00:40:19,470 --> 00:40:25,070 So the the main payment systems for the Euro got built 616 00:40:25,070 --> 00:40:27,670 relatively recently. So it's XML files as opposed to 617 00:40:27,670 --> 00:40:35,390 something even more so. But all it is able to do set bar 618 00:40:35,430 --> 00:40:39,790 is to debit from your account and credit to somebody else's 619 00:40:39,790 --> 00:40:43,710 account inside this system of European. 620 00:40:44,860 --> 00:40:50,540 Euro supporting backs, right. So but what we do is essentially 621 00:40:50,540 --> 00:40:55,580 built on top of a payment provider inside that system. 622 00:40:55,860 --> 00:41:01,420 We accept whenever there's ASAP payment instruction that comes 623 00:41:01,420 --> 00:41:05,380 to us, we receive money from inside the system. 624 00:41:05,380 --> 00:41:08,940 It's credited to an account that we hold on behalf of the 625 00:41:08,940 --> 00:41:15,100 customers and that. We issue and return a token 626 00:41:15,100 --> 00:41:18,940 corresponding to the inbound on the blockchain. 627 00:41:19,580 --> 00:41:23,740 Now going the other way, we receive a burn instruction 628 00:41:23,740 --> 00:41:29,900 essentially from a blockchain and burn €100 from Gnosis for 629 00:41:29,900 --> 00:41:32,460 example. And then what we do is that we 630 00:41:33,460 --> 00:41:36,620 send into the separate system. Okay, we know where it's coming 631 00:41:36,620 --> 00:41:39,980 from. This is our Xerox address, so on 632 00:41:39,980 --> 00:41:43,900 our chain. That is linked to a customer 633 00:41:44,260 --> 00:41:49,340 that we support and then we send it back to wherever it's 634 00:41:49,340 --> 00:41:52,020 supposed to go. The magic here is that we used 635 00:41:52,020 --> 00:41:56,580 to start that a customer that has our Web 3 ibot in their name 636 00:41:57,180 --> 00:42:01,340 can receive not just from their own account, but from any 637 00:42:01,340 --> 00:42:06,500 account inside the system. So if you hold a Web 3 ibot that 638 00:42:06,500 --> 00:42:08,020 is linked to your Web Three wallet. 639 00:42:09,050 --> 00:42:12,050 You could receive from any of your friends, from companies 640 00:42:12,050 --> 00:42:20,170 that you're billing or from any account that is inside this 641 00:42:20,170 --> 00:42:25,690 system EUR, and then you can send also outbound to any iPad 642 00:42:26,450 --> 00:42:31,250 using our web free service. iPad services work, so you can send 643 00:42:31,250 --> 00:42:36,250 back to your friends and suffer whatever you want or pay a bill. 644 00:42:37,070 --> 00:42:38,670 Wherever you like. We actually have a customer that 645 00:42:38,670 --> 00:42:45,790 paid their tax bill recently in the Netherlands using our Uri or 646 00:42:45,790 --> 00:42:48,550 chain. They borrowed the money from the 647 00:42:48,550 --> 00:42:51,430 blockchain. They sent it into Zeppa with a 648 00:42:51,430 --> 00:42:55,710 string. Zeppa has a wait for you to send 649 00:42:55,710 --> 00:43:01,230 like a comment or a string along with the payment into Dutch 650 00:43:01,870 --> 00:43:05,030 Dutch tax authorities bank account. 651 00:43:05,770 --> 00:43:11,330 And then next time they had a statement of their tax that that 652 00:43:11,330 --> 00:43:18,170 payment was reflected. So my monarium I ban is a 653 00:43:18,170 --> 00:43:21,530 Spanish I ban. How do you determine kind of who 654 00:43:21,530 --> 00:43:25,330 gets what nationality of I ban? Or does everyone get Spanish? 655 00:43:26,370 --> 00:43:29,970 No, we're about to support more ibots. 656 00:43:30,090 --> 00:43:31,730 Ibots were set up in the days, but. 657 00:43:32,270 --> 00:43:34,990 Everything was kind of regional in Europe. 658 00:43:35,110 --> 00:43:38,990 So the iPod is constructed to have first the country prefix 659 00:43:38,990 --> 00:43:43,350 and then a institution identifier and then a bank 660 00:43:43,350 --> 00:43:45,230 account identifier and a bunch of other stuff. 661 00:43:45,670 --> 00:43:49,110 So but it's it's really irrelevant in the modern day and 662 00:43:49,110 --> 00:43:52,350 age because we ultimately safeguard the money inside the 663 00:43:52,350 --> 00:43:57,790 eurozone, a AAA in Ireland, in a bank in Estonia. 664 00:43:58,630 --> 00:44:02,150 So it doesn't really have. Yeah, yeah, the prefix that you 665 00:44:02,150 --> 00:44:04,910 use that has nothing to do with how the money is safeguard. 666 00:44:04,910 --> 00:44:12,470 It is totally archaic and and it reflects the the Europe as it 667 00:44:12,470 --> 00:44:15,270 existed before the four freedoms and the European Union. 668 00:44:15,270 --> 00:44:21,950 It is modern form came about. Well I I I I agree that it's 669 00:44:21,950 --> 00:44:28,110 archaic I I don't know if I think it does make I think that 670 00:44:28,110 --> 00:44:31,150 the. The I've been prefix I think to 671 00:44:31,230 --> 00:44:33,710 to certain institutions does make a difference. 672 00:44:33,910 --> 00:44:37,710 My feeling interacting with Seppa and like neo banks and 673 00:44:37,710 --> 00:44:41,950 traditional banks in Europe or at least in France feel it feels 674 00:44:41,950 --> 00:44:46,070 like there's a multi tier system where you have traditional 675 00:44:46,070 --> 00:44:49,230 national banks at the top. You know like the Deutsche Bank 676 00:44:49,230 --> 00:44:53,750 or BNP or you know Santander or whatever like these big national 677 00:44:53,750 --> 00:44:57,390 banks that effectively control most of the banking sector. 678 00:44:57,940 --> 00:45:02,940 And then there are sort of second tier banks and payment 679 00:45:02,940 --> 00:45:07,740 service providers who are you know the neo banks, the N 26 is 680 00:45:07,740 --> 00:45:12,220 the revolutes who are operating in the SEPPA system but are very 681 00:45:12,220 --> 00:45:15,380 much relying on the traditional banking system. 682 00:45:15,860 --> 00:45:18,980 And what I've experienced is I've experienced a lot of what 683 00:45:18,980 --> 00:45:24,820 we call I band discrimination which is a either an institution 684 00:45:24,820 --> 00:45:27,840 like your. Or a company like it could be 685 00:45:27,840 --> 00:45:32,960 your cell phone provider or your electricity provider refused to 686 00:45:33,040 --> 00:45:36,280 withdraw funds from an I band that doesn't start with the 687 00:45:36,280 --> 00:45:39,440 country in which you're in. And I've actually recently 688 00:45:39,440 --> 00:45:44,400 encountered a situation where I tried to withdraw funds from 689 00:45:45,200 --> 00:45:47,840 sort of like a life insurance policy type, you know, 690 00:45:47,840 --> 00:45:52,240 investment account to, you know, a bank account outside of France 691 00:45:52,240 --> 00:45:55,160 that I own where it was outright refused by. 692 00:45:55,510 --> 00:45:58,270 By the French financial institution. 693 00:45:58,270 --> 00:46:01,870 So I think a lot of people experience this. 694 00:46:01,910 --> 00:46:03,910 I've been discrimination, which is actually illegal in Europe. 695 00:46:03,910 --> 00:46:07,110 You know, Article 9 of of the SEPA regulation prohibits it. 696 00:46:07,950 --> 00:46:10,350 Is this something that your customers have encountered and 697 00:46:10,430 --> 00:46:12,710 how do you think, How do you think we should combat this? 698 00:46:12,750 --> 00:46:18,030 Cuz like it, it's contrary to everything that I think the 699 00:46:18,030 --> 00:46:21,430 European Union or the sort of ethos of the European Union 700 00:46:21,430 --> 00:46:24,630 stands for. We intend to offer more. 701 00:46:24,630 --> 00:46:28,910 I bans the market. Let the market decide. 702 00:46:28,910 --> 00:46:31,310 If you want the German I ban, we'll provide it to you 703 00:46:31,310 --> 00:46:34,550 eventually. It's in our road map to support 704 00:46:34,550 --> 00:46:38,470 more country I bans. I ban is the standard that 705 00:46:38,470 --> 00:46:41,550 exists not only Europe but also in some places outside of 706 00:46:41,550 --> 00:46:44,030 Europe. So it would be happy to support 707 00:46:44,030 --> 00:46:47,350 whatever country I ban essentially that our customers 708 00:46:49,510 --> 00:46:54,530 would like to have, I mean do. Make your own iPad is almost our 709 00:46:54,530 --> 00:46:56,330 philosophy in that way, ship or form. 710 00:46:56,330 --> 00:47:01,730 But at the same time, I think long term with Fiat and 711 00:47:01,730 --> 00:47:03,450 gradually we're going to move on chain. 712 00:47:03,450 --> 00:47:06,530 We will Start Stop thinking in terms of iPads, we'll stop 713 00:47:06,530 --> 00:47:10,610 thinking in terms of also 0X. It will just be there will be 714 00:47:10,610 --> 00:47:13,690 some something seamless, there will be some identity on top of 715 00:47:13,690 --> 00:47:16,130 all of that. That masks all that identity. 716 00:47:16,370 --> 00:47:19,730 It's like we don't really care about IP numbers, do we? 717 00:47:19,850 --> 00:47:22,670 I mean. And they're hierarchical and in 718 00:47:22,670 --> 00:47:26,630 another way shape or form And iPad should, you know, not 719 00:47:26,630 --> 00:47:32,070 really be an issue inside the common market of Europe. 720 00:47:32,910 --> 00:47:35,830 And I regret that, you know, but it's still a fact that in 721 00:47:35,830 --> 00:47:40,670 people's heads that that they, the Europe is not yet united 722 00:47:40,670 --> 00:47:45,350 enough that people think of in European terms as opposed to 723 00:47:45,350 --> 00:47:48,670 country terms. Do you think that this I've been 724 00:47:48,670 --> 00:47:54,670 discrimination is? Motivated by political for 725 00:47:54,670 --> 00:47:57,830 political reasons or is it compliance pressures that banks 726 00:47:57,830 --> 00:47:59,830 have like? What's the reasoning behind 727 00:47:59,830 --> 00:48:04,510 this? We all have our prejudices about 728 00:48:05,310 --> 00:48:08,310 which are which. Our biases are built in based on 729 00:48:08,310 --> 00:48:13,670 our experiences, and I think regrettably it's just a 730 00:48:13,670 --> 00:48:16,870 manifestation of the fact that Europe is not integrated enough 731 00:48:17,150 --> 00:48:20,420 yet that people. Still fake in terms of country 732 00:48:20,420 --> 00:48:23,700 code, There's some I would say perhaps there's cultural 733 00:48:23,700 --> 00:48:27,500 divisions that people more comfortable dealing with people 734 00:48:27,500 --> 00:48:31,780 of the same type culture. So it's just a reflection of 735 00:48:31,780 --> 00:48:35,860 this human trait and and the way to counter it is #1 okay, give 736 00:48:35,860 --> 00:48:39,340 people what they want. If you want the Spanish Ivan or 737 00:48:39,340 --> 00:48:43,260 Estonian Ivan or Danish Ivan, then you know that's you could 738 00:48:43,260 --> 00:48:46,540 have whatever you want but at the same time realize that you 739 00:48:46,540 --> 00:48:49,950 know. With respect to Europe, for 740 00:48:49,950 --> 00:48:52,350 freedoms should make it irrelevant where you vote, your 741 00:48:52,350 --> 00:48:55,750 money and whatever the prefix of your iband account is. 742 00:48:56,910 --> 00:49:01,230 Which countries outside of Europe use the IBAN? 743 00:49:01,310 --> 00:49:04,350 Or maybe which other countries don't use the IBAN system? 744 00:49:04,870 --> 00:49:07,990 Well, the Europeans for the Americans for example. 745 00:49:08,630 --> 00:49:11,030 And it's 4th of July, Happy 4th of July. 746 00:49:11,800 --> 00:49:15,040 The Americans don't use ibots. The Americans have their own way 747 00:49:15,040 --> 00:49:19,040 of doing things in many ways, and they have their own routing 748 00:49:19,040 --> 00:49:23,600 systems, routing number, account numbers, which is more archaic 749 00:49:23,600 --> 00:49:26,280 than the European system because it's older, it's been built, 750 00:49:26,600 --> 00:49:29,720 more European systems are built more recently. 751 00:49:30,240 --> 00:49:33,600 I'm not aware of the biking systems. 752 00:49:33,600 --> 00:49:36,840 I've not looked deeply into many biking systems outside of 753 00:49:36,840 --> 00:49:39,200 Europe, but I know that parts of the Middle East and I think 754 00:49:39,200 --> 00:49:42,880 parts of South America. Use iPad, which is the European 755 00:49:42,880 --> 00:49:45,280 standard. So European standards in banking 756 00:49:45,280 --> 00:49:48,560 are actually relatively widespread. 757 00:49:48,560 --> 00:49:52,680 Not as widespread as the European mobile standard, GSM, 758 00:49:52,720 --> 00:49:55,080 but which became the dominant standard in the world. 759 00:49:55,120 --> 00:50:00,680 But they spread, it seems, naturally to countries that are 760 00:50:00,680 --> 00:50:04,120 affiliated with Europe through traditional ties or something 761 00:50:04,120 --> 00:50:05,720 like that. Okay. 762 00:50:05,720 --> 00:50:10,910 And so basically to kind of. On board as a user of Monarium 763 00:50:11,310 --> 00:50:14,910 and to get an IBAN you have to go through like KYC, do you have 764 00:50:14,910 --> 00:50:19,710 jurisdictional constraints? So kind of say, I mean I'm very 765 00:50:20,030 --> 00:50:23,270 obviously a German person and I was allowed to go through it, 766 00:50:23,430 --> 00:50:28,110 but say if I were a US person or an Argentinian, would I be 767 00:50:28,110 --> 00:50:30,310 allowed to get a Monarium account? 768 00:50:30,830 --> 00:50:33,310 The way it works in Europe is that we. 769 00:50:33,930 --> 00:50:38,370 Have common European laws that support the four freedoms, which 770 00:50:38,370 --> 00:50:43,850 means all the regulators are supposed to operate in the same 771 00:50:43,850 --> 00:50:48,810 way we have licensed in Iceland. We are passported across Europe 772 00:50:49,210 --> 00:50:52,170 so we can serve anyone inside of Europe. 773 00:50:52,170 --> 00:50:57,970 We could onboard anybody that's inside of Europe, but not 774 00:50:58,050 --> 00:51:00,810 outside, except with the permission of a regulator and 775 00:51:00,810 --> 00:51:04,620 except with the permission of. The local regulatory replacement 776 00:51:04,660 --> 00:51:07,260 we intend to serve, there's something called reverse 777 00:51:07,260 --> 00:51:10,540 solicitation in finance, which means that if you're not really 778 00:51:10,900 --> 00:51:14,460 seeking to serve somebody outside of your jurisdiction, 779 00:51:14,460 --> 00:51:17,460 they can come to you. But well, right now we're still 780 00:51:17,460 --> 00:51:21,740 a very small company and and Europe is a big marketplace for 781 00:51:21,740 --> 00:51:25,780 us. We focus on European customers, 782 00:51:26,300 --> 00:51:30,340 meaning the European member States and the UK and 783 00:51:30,340 --> 00:51:32,600 Switzerland. Okay. 784 00:51:32,600 --> 00:51:36,200 So now we've talked about nation states for a while, let's talk 785 00:51:36,200 --> 00:51:39,560 about the D5 ecosystem and stables that we've seen there, 786 00:51:39,560 --> 00:51:40,560 right. So basically there's 787 00:51:40,560 --> 00:51:45,080 fundamentally different stable concepts that we see on a daily 788 00:51:45,080 --> 00:51:48,720 basis. So there's like the fully off 789 00:51:48,720 --> 00:51:52,400 chain backed kind of like you guys and circle and probably 790 00:51:52,400 --> 00:51:56,240 also tether and so on. And then there is over 791 00:51:56,240 --> 00:52:00,840 collateralized on chain, so kind of the maker dies of the world 792 00:52:01,160 --> 00:52:04,770 and. And then there is the Algo 793 00:52:04,770 --> 00:52:08,450 stables, right? How do you see this landscape A? 794 00:52:10,170 --> 00:52:14,570 Lot of what is happening on Chain actually will eventually 795 00:52:14,570 --> 00:52:19,050 come inside regulatory umbrellas because it seems to be new, but 796 00:52:19,050 --> 00:52:25,410 it really isn't new. What is really new on blockchain 797 00:52:25,410 --> 00:52:31,010 for example, like Bitcoin, it is an asset that is truly virtual. 798 00:52:31,640 --> 00:52:36,520 Backed by energy consumption, proof of work and it has no 799 00:52:36,960 --> 00:52:39,520 representation in the physical world. 800 00:52:40,320 --> 00:52:45,240 But the qualities of Bitcoin nevertheless are similar to 801 00:52:45,280 --> 00:52:50,680 another traditional currency, gold, in a way that the European 802 00:52:50,680 --> 00:52:54,480 Union recognized that. So it brought the Bitcoin out to 803 00:52:54,480 --> 00:52:57,840 the same value added tax umbrella as gold. 804 00:52:58,560 --> 00:53:01,360 So UV unit has already recognized, well, we have this 805 00:53:01,360 --> 00:53:04,960 phenomenal virtual thing called Bitcoin, which is backed by 806 00:53:05,040 --> 00:53:08,280 essentially entry consumption. It's got the same properties and 807 00:53:08,280 --> 00:53:12,360 qualities as gold. So it's a pure virtual 808 00:53:12,680 --> 00:53:15,280 commodity. And Bitcoin, my view is a 809 00:53:15,280 --> 00:53:18,480 beautiful construct in the technical ways and all the ways 810 00:53:18,480 --> 00:53:21,240 as well. Now on the other hand, you have 811 00:53:21,240 --> 00:53:24,400 these come from the other side assets they're trying to 812 00:53:24,400 --> 00:53:29,210 replicate or already exists. Like traditional money, Fiat 813 00:53:29,210 --> 00:53:33,170 money, like what we're doing and there's different ways of doing 814 00:53:33,170 --> 00:53:36,210 that. So our view on that was to go 815 00:53:37,370 --> 00:53:42,570 using a vehicle and a regulatory license that was already proven 816 00:53:42,570 --> 00:53:47,010 and tested, baffle tested over 2 decades in a major jurisdiction. 817 00:53:48,930 --> 00:53:54,090 In a sense you could say E money that we built on, which is the, 818 00:53:54,370 --> 00:53:56,090 in our view of the ultimate stable coin. 819 00:53:56,500 --> 00:54:01,180 Is algorithmic in a way that there is a, there are there are 820 00:54:01,180 --> 00:54:03,660 constraints on how you can safeguard the assets. 821 00:54:04,260 --> 00:54:10,740 You must only safeguard with high quality, liquid, low 822 00:54:10,740 --> 00:54:15,220 volatility assets and you must over collateralize. 823 00:54:15,220 --> 00:54:19,020 You have must have a buffer of your own capital to protect 824 00:54:19,020 --> 00:54:21,980 against fluctuation in the value of the underlying assets, right? 825 00:54:22,780 --> 00:54:30,700 So, So in some sense that's. An algorithm so to speak and we 826 00:54:31,620 --> 00:54:34,580 which is, which is proven and tested because the money has 827 00:54:34,580 --> 00:54:36,860 been very robust over the past the two decades. 828 00:54:37,140 --> 00:54:41,500 Coming from the other side you look at you know if you want to 829 00:54:42,740 --> 00:54:45,500 construct the algorithmic stablecoin that's supposed to 830 00:54:45,500 --> 00:54:50,540 reflect something then where do you start where do you start 831 00:54:50,540 --> 00:54:53,940 where if your premise is, how do you back it and where do you 832 00:54:53,940 --> 00:54:57,600 back it and. When it goes to Fiat, regular 833 00:54:57,600 --> 00:55:01,520 money and stablecoins, the safest way in my view is always 834 00:55:01,520 --> 00:55:05,240 to back it up with assets which are high quality, low 835 00:55:05,240 --> 00:55:08,800 volatility, highly liquid, and denominated in the same 836 00:55:08,960 --> 00:55:11,840 currency. So for all these other 837 00:55:11,840 --> 00:55:14,560 experiments for Fiat, stablecoins, algorithmic or 838 00:55:14,560 --> 00:55:17,160 otherwise, less than you know, good luck to them. 839 00:55:17,800 --> 00:55:21,240 But be mindful of the risk if you try to back it up. 840 00:55:22,200 --> 00:55:24,920 With something that's denominated in another currency, 841 00:55:24,920 --> 00:55:27,200 something that is not even denominated in the currecies 842 00:55:27,200 --> 00:55:31,760 like commodity because it always just increases the volatility, 843 00:55:32,160 --> 00:55:34,480 sometimes it decreases the liquidity. 844 00:55:35,160 --> 00:55:38,840 So just be mindful of what you've tried to reflect and try 845 00:55:38,840 --> 00:55:40,920 to connect it with the way you're supposed to back. 846 00:55:41,640 --> 00:55:46,120 How do you see the onboarding of real world assets into kind of 847 00:55:46,280 --> 00:55:50,610 the naturals here? That is the big wave ahead real 848 00:55:50,610 --> 00:55:55,730 world as it's on trade, that's what we're really seeing in our 849 00:55:55,730 --> 00:55:59,930 pipeline today. It's it's not just it's 850 00:55:59,970 --> 00:56:04,690 equities, it's all the securities like ass and back 851 00:56:04,690 --> 00:56:09,410 that in my view that that will be the big main wave of 852 00:56:09,410 --> 00:56:12,810 adoption. We're seeing some of the early 853 00:56:13,090 --> 00:56:15,170 mainstream adopters coming to us now. 854 00:56:15,810 --> 00:56:21,650 And starting implementing such projects ranging from carbon 855 00:56:21,690 --> 00:56:28,970 credit tokens to asset back debt and ETF's of equities. 856 00:56:29,210 --> 00:56:32,410 So it's just brilliant that's the big wave of adoption is 857 00:56:32,410 --> 00:56:38,290 coming out and that type of asset or tray needs #1A 858 00:56:38,930 --> 00:56:43,170 regulated Fiat token on trade to South against. 859 00:56:44,020 --> 00:56:47,740 And #2 it needs a direct connection to the payment 860 00:56:47,740 --> 00:56:53,340 systems of the major currencies because these use cases are not 861 00:56:53,340 --> 00:56:57,300 going to come online unless there's reliable Fiat on chain 862 00:56:57,340 --> 00:57:01,660 which is directly redeemable into back out, we provide just. 863 00:57:03,900 --> 00:57:08,620 Very cool. I just onboarded Monarium like 864 00:57:08,620 --> 00:57:11,380 today and so I'm really excited to start using it and I can see 865 00:57:11,380 --> 00:57:14,770 all kinds of use cases for this. Including personal, but also 866 00:57:14,770 --> 00:57:19,530 like business use cases. So what can people expect in the 867 00:57:19,530 --> 00:57:23,050 coming months and how can people start using the linear? 868 00:57:24,890 --> 00:57:27,370 Well, mate, go to markets, always been to arm the builders. 869 00:57:27,370 --> 00:57:31,610 We have this direct consumer, direct company offering almost 870 00:57:31,610 --> 00:57:34,530 as a showcase. So if you come to us and onboard 871 00:57:34,530 --> 00:57:37,890 as a user directly or for your company then you'll find we'll 872 00:57:37,890 --> 00:57:41,480 serve you and we'll. Please tell us what we are doing 873 00:57:41,840 --> 00:57:44,120 because we love to. The market is still discovering 874 00:57:44,120 --> 00:57:48,920 what you could do with money on chain, but when it comes to the 875 00:57:49,080 --> 00:57:53,840 builders, the web, three builders, it's for them. 876 00:57:53,920 --> 00:57:57,120 We're almost like listening to what they're telling us, what 877 00:57:57,120 --> 00:58:00,280 can happen. And the main builders that are 878 00:58:00,280 --> 00:58:05,400 coming to us now are these tokenization platforms that are 879 00:58:05,560 --> 00:58:07,440 bringing real world assets on chain. 880 00:58:08,090 --> 00:58:11,250 And that's going to be a huge wave of adoption and we much 881 00:58:11,250 --> 00:58:13,970 bigger than the crypto speculative bubble that we just 882 00:58:13,970 --> 00:58:17,410 went through. And unlike also the speculation, 883 00:58:17,410 --> 00:58:22,410 these are recurring use cases that they're not going to go 884 00:58:22,410 --> 00:58:24,570 away. If you should take down our 885 00:58:24,570 --> 00:58:28,010 crypto today and, you know a few speculates would be out of 886 00:58:28,010 --> 00:58:29,890 pocket and they would be, you know, hurt. 887 00:58:30,130 --> 00:58:32,570 But if you take, if you take down pay polo strike, a lot of 888 00:58:32,570 --> 00:58:34,570 people measure, business would cease to exist. 889 00:58:35,400 --> 00:58:39,400 So the challenge for Defy is to get into the economy and start 890 00:58:39,400 --> 00:58:44,800 serving the economy in a sustainable, repeatable way and 891 00:58:45,640 --> 00:58:49,960 which brings real value to real companies and real users. 892 00:58:51,120 --> 00:58:52,280 Great. Well, I think that's a great 893 00:58:52,280 --> 00:58:56,080 note to end on and I think we certainly agree with So and 894 00:58:56,080 --> 00:58:57,680 thanks you for coming on the podcast today. 895 00:58:58,560 --> 00:59:00,640 Thank you. Thank you, Shane. 896 00:59:02,880 --> 00:59:04,600 Thank you for joining us on this week's episode. 897 00:59:05,120 --> 00:59:06,560 We release new episodes every week. 898 00:59:07,200 --> 00:59:09,960 You can find and subscribe to the show on iTunes, Spotify, 899 00:59:10,000 --> 00:59:13,680 YouTube, SoundCloud, or wherever you listen to podcasts and if 900 00:59:13,680 --> 00:59:15,240 you have a Google Home Oregon Alexa device. 901 00:59:15,670 --> 00:59:17,790 You can tell it To listen to the latest episode of the Epicenter 902 00:59:17,790 --> 00:59:21,830 podcast, go to Epicenter TV, subscribe for a full list of 903 00:59:21,830 --> 00:59:23,030 places where you can watch and listen. 904 00:59:23,030 --> 00:59:25,950 And while you're there, be sure to sign up for the newsletter so 905 00:59:25,950 --> 00:59:28,270 you get new episodes in your inbox as they're released. 906 00:59:28,270 --> 00:59:31,550 If you want to interact with us guest or other podcast 907 00:59:31,550 --> 00:59:33,190 listeners, you can follow us on Twitter. 908 00:59:33,590 --> 00:59:35,150 And please leave us a review on iTunes. 909 00:59:35,310 --> 00:59:37,710 It helps be behind the show and we're always happy to read them. 910 00:59:38,590 --> 00:59:41,110 So thanks so much and we look forward to being back next week. 911 00:59:45,710 --> 00:59:48,430 I want to do it. I want to do it. 912 00:59:48,630 --> 00:59:51,190 I want to do it.