Sep 7, 2023

The Tokenized Asset Coalition launches today with industry leaders like Centrifuge, Credix, Coinbase, and Circle teaming up to help bring the next trillion dollars of assets on-chain.

Video transcript

The Tokenized Asset coalition launches today with industry leaders like centrifuge credits coin base and Circle Banding together with a plan to bring the next trillion dollars of assets on chain. Joining us now to discuss this credits founder and Ceo Thomas Bonner along with Centrifuge head of growth, Colin Cunningham. Welcome to the show. Thanks for having us. Thank you. All right. This is launching today as we speak. I believe Thomas talk to us about why this specific group is the right one to bring a trillion dollars worth of assets on chain. Yeah, we couldn't be more excited to be a part of this group. I think I'm calling in here right from London. I just come from a conference with traditional asset managers and banks. And what you could feel is the excitement for tokenization is real, but the need for education, the need for support, the need for hand holding to bring trillions of dollars of assets on to this new technology is real and I believe that this coalition is a great start to trigger that education with the institutions. Uh It, it it this is for either one of you. Um And this has to do kind of with the purpose of tokenization in general. And it seems like an assault that's happening from the SEC, you could say uh against crypto in general and what that means specifically for tokens uh assets. And we've seen that and, you know, the, the, the thing that we've been pitched on here with tokenize assets is that it makes transactions easier, it's easier to settle. And there's the potential that you won't need a centralized exchange yet. It seems that the SEC views everything to be a security or a lot of things to be secure, charities here. Uh except for Bitcoin, possibly, we'll see how that goes. Uh How does this affect? And what is the need for tokenize assets? If ultimately they have to go through centralized exchanges? I, I if ultimately they have to be regulated in a centralized fashion, what is the benefit of tokens an asset that can be done on a database itself, more efficient and quicker to, to do than, and decentralize that method? I guess I'll take this one. So outside of kind of the regulatory side of how the world, uh or how the SEC specifically thinks about these things, um as we bring assets on chain, right. What you're really starting to do is you're starting to bring kind of more transparency, um more speed um and better execution to some of the traditional things that happen um in finance every day. Right. And So when we think about the Tokenized Asset movement, it was really born out of this idea of, if crypto is an industry is really gonna become something meaningful over the long term, it's gonna have to provide tangible value um to the real economy. Um And so this idea of tokens assets or as we affectionately call it in the side of things, real world assets. Um The whole idea was how do we bring the traditional, um you know, asset based industry onto the Blockchain? And then by using the Blockchain by putting everything on a single ledger um by um using smart contracts by using er C 7 21 some of the basic underlying technology. Um how can that kind of speed things up? How can that make things more transparent? Uh and how can that make uh execution, the execution of transactions um cleaner and quicker? Uh And that's what this whole, this movement is about. So it's not really, we're not really engaging in the kind of the debate of what's the security and what's not, we're just trying to use the existing technology um to replace some of the traditional kind of uh uh I guess, I guess I would say some of the opaque or some of the bulky and difficult parts of the traditional financial system that are a bit slow, smart contracts and the technology that exists in the Blockchain compresses and makes that simpler, easier, faster. So what's taken what's taken traditional, uh, you know, I'm thinking, let's say, uh, commercial mortgage backed securities or residential mortgage backed securities et cetera, uh, which have existed now for decades. Uh, you know, even though they got a lot of prominence a decade and a half ago, I mean, they, they've been going on forever. Um, why haven't they been quicker to adopt, uh, uh, uh, a decentralized method? And, uh, you know, is it just because of legacy systems and everybody wants to use, uh, uh, databases that were based on coal from the 19 sixties or is there a regulatory hurdle that they see ahead of them that could affect ultimately, what secu digitizing securities, uh, would, would you in basically your project? Is there, is there something that's holding them back that might affect you? Uh I'll, I'll give a couple of quick answers and then Thomas, I'm sure you have a couple. Um, I think first, like crypto has done itself no favors over the last two years, right? With a lot of the stuff, all the headlines, um, all the rug poles, all the bridges, all the things that have gone wrong in crypto as we try to build this technology and build this industry. Um But the fact remains, I think is that the majority of the institutional world understands and understands the Blockchain and the underlying technology very simply, uh, and very acutely. So the way I would, the way I think about this and I, I talk to a lot of people in the traditional financial realm is that they're not really talking to me about crypto, what they're talking to me about is the Blockchain. Um And I think the technology and what it actually does is going to prove out over time. Um Undoubtedly there's been headwinds in the US specifically from a regulatory perspective. Um But I think the technology continues to move along and even in moments like this where it's bare markets, um people are still building and I think that's speaks to um a lot of what the Tokenized asset coalition is about is that the technology and the underlying um stuff that we're building uh is, is truly undeniable. Thomas, what are your thoughts? No, I I definitely I couldn't agree more Colin and I think indeed it's, it's really we're talking here about the technology, right? And I think the big power that tokenization and Blockchain can bring us is the integration of the data processing layer and the settlement layer. And by doing this, we will be able to create a lot of efficiency, transparency. And this comes indeed with like big technology migrations, adoptions, transformation management and change management. And we're talking about trillions of dollars of assets that were moving into this new infrastructure. And I think we are at a point in time where the big banks and asset managers understand that this will be the future. And we have been able to also prove to them what the benefits are. Um And we're now all working together to, to start those migrations and those things will definitely take time. Um But the impact will definitely be significant on the topic of regulation. You know, we've seen regulators in the US taking a closer look at D I maybe um pressing some of the centralized pressure points when it comes to some of the on and off ramps. When we're looking at D I, of course, coin base is one of the partners in this coalition is facing a lawsuit against the SEC. Does the coalition plan to engage with lawmakers to help identify uh focus areas as so that you can achieve your goals alongside regulators in different jurisdictions. I think the way we think about it is there's probably a base level of education that needs to occur first. Um And I think there's a lot of, and this goes back to the question that was asked previous to, right is um there's a lot of thinking about what are tokenized assets and there's a lot of work that needs to be done on the nomenclature kind of the basic processes and getting to basic consensus amongst the traditional financial systems and the decentralized financial systems. Um all around this, this crypto ecosystem to just come to terms and agree on what it means to just educate at a base level. Um I think the next step is probably the advocacy, which is just thinking about best practices. Um How do we all start to do things the same way? How do we take the the learnings from the traditional financial system? And, and specifically, kind of the institutional mindset is where we're focused here and bring that into the technology layer that Tom has just described. Um And then it's about building, right? Which is like once we all are saying the same thing and we agree on the processes, the systems, the best practices, the way to do things, how do we build and scale from there? Um And as Thomas said, the opportunity is massive, um especially we haven't even, we've talked a little bit you reference like the CN BS and the public markets, but the private markets um that are untapped and undiscovered at this point in time and what the Blockchain can help us do there. It's, it's, it's truly incredible. So I don't think the, the initial uh spirit of this is to go to, to Washington and to start engaging with regulators or, or lawmakers and try and tell them what to do. Um I think it's about starting the conversation in a way that um is, is probably educational at first. Um and getting everyone on the same page, which I don't think we all are yet. And, and maybe if I could add to that, I think it's really showcasing to the industry, what the value add of tokenization can truly be the transparency, the real time data, the democratization and the access to these financial products provides truly a 10 better experience for the financial institutions for the stakeholders here. And I think it will be very important for us to indeed from an educational kind of perspective, standardize that into the market and work hand in hand with all the different kind of stakeholders um to educate them all. All right, Thomas Collin, we're gonna have to leave it there. Congratulations on the launch this morning and thank you for joining the show. Thank you for having us. Thank you. That was credits founder and Ceo Thomas Bonner along with Centrifuge head of growth, Colin Cunningham.

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