Knowledge Circle podcasts

What role can traditional financial services play in the crypto universe?

Banks have long overseen the money system, but to date, Non-Bank Financial Institutions (NBFIs) including crypto exchanges, specialist acquirers and FinTechs have embraced cryptocurrency more rapidly than the traditional financial services sector.  With the crypto market at $15.8 trillion and 300 million people holding crypto worldwide, what will the next few years look like for crypto and traditional financial services?

This episode brings together a panel of experts to discuss where Banks are in the crypto adoption cycle and what’s next for them.

Our line up of speakers includes:

  • Rita Liu, CEO/Board Member, Mode
  • Sendi Young, Managing Director, Europe, Ripple
  • Mishal Ruparel, Regional General Manager, APAC, Banking Circle
  • Maximilian Marenbach, Head of APAC Expansion, Banking and Payments, Kraken [Moderator]


Transcript

Russell Goldsmith [00:00:05] Welcome to the Knowledge Circle podcast from Banking Circle, my name is Russell Goldsmith, and in this episode, we’ll hear the highlights from our webinar that asked the question ‘what role can traditional financial services play in the crypto universe?’

Our guests were Rita Liu, CEO/Board Member, Mode, Sendi Young, Managing Director for Europe at Ripple and Mishal Ruparel, Regional General Manager, APAC, Banking Circle. Our host was Maximilian Marenbach, Head of APAC Expansion, Banking and Payments at Kraken, who we’ll hear from first.

Max: [00:00:40] Mishal, since you are our primary banker here on this panel, it would be great to get your input into, how has the rise and growth of the cryptocurrency industry and movement, revolution some people say, over the last few years really impacted your business model of Banking Circle?

Mishal: [00:00:58] So we sit right in the clearing and settlement flows when it comes to payment businesses and banks. And I think a big part of our business is actually underpinning payments companies that are servicing exchanges. And we’ve seen a real trend, I think the last three years there’s been such a huge shift and increasing volume of payments companies settling funds to exchanges. Now, these are not small payments companies. I think as we go closer into what’s actually going on, we can see that there is a lot of friction in this space. Fiat, payments and crypto. There’s always going to be an element of friction.

I think all of us that know this space are well aware that the existing financial system, it’s not really built for accommodating the needs of crypto businesses. This is a 24/7 highly liquid, high speed, a lot of velocity, and when you think about banks and correspondent banks and financial systems, it doesn’t quite marry. So, we could see that there is just a lot of friction in this ecosystem. And in many ways, that’s why Stablecoins were born. Because when you think about why did Stablecoins come in the first place, retail consumers couldn’t move their crypto onto a more stable fiat environment, and therefore Stablecoins came in and were able to fill that void. So that’s why we see there’s a lot of friction in the space. And I think sort of to end this sort of this particular segment, the costs were incredible.

When you look at on-off ramps, trying to move your crypto, your Fiat onto crypto, it’s very expensive. You know, one of my friends moved some USDT across to my USDT wallet, which is amazing. And then when I moved off-ramp those funds onto my USD account, I was charged 3%. So, for all of the benefits of this ecosystem, it’s just incredibly expensive when you look at when banks sort of intersect with this environment.

So, for me, I feel like there’s just a massive opportunity in both bringing some sort of order and standardisation to this environment. And also coupled with the fact that this is just a really fascinating space for an organisation like us to be involved in. And then one final point I would add, looking into the future, the blockchain is super relevant. I mean, we are in the business of payments, cross-border payments. Banking is built under an ecosystem of IOU. That is just how banking works. And when you look at blockchain, it’s there, it’s done, the payment is executed, it’s real-time, it’s recorded. There are so many benefits of blockchain, it really changes the way in which payments operate. So yeah, that’s in many ways, that is why we’re looking at this space in a lot of detail.

Max: [00:03:29] Thank you so much. It’s a great answer. I’m not looking at the other side of the spectrum. Rita, from your perspective, how is your experience with banks or payment companies in general changed over the past few years from your current cryptocurrency standpoint?

Rita: [00:03:43] I think, first of all, you know, being through sort of a FinTech boom and now also crypto boom, one thing I can for sure say is like when new industry, becomes more and more adopted, right, it goes through different cycles. And those cycles drive education and understanding as we go through each cycle. For example, if I think back like ten years ago when FinTech was just about to take off, there were lots of discussions in the industry. Will FinTech replace banks? Will customers all move to FinTech? You know, banks have the FinTech pushed back in terms of like just working with banks, you know, in terms of like service and customers.

And now I think we in the past few years, we’ve seen the same in crypto. But every cycle, as we improve as an industry, I think it drives education and understanding, not just the banks, but also the regulators.

I think the regulators are also getting more and more serious about crypto and getting more and more informed about the industry by working with the industry and understanding more about the industry. So, it’s normal that I think, you know, like in the beginning there’s misunderstanding and also taking sort of stances. But generally, I think definitely more and more understanding is being created in the industry between different players at different parts of the value chain. But I think as Mishal said, I totally agree. I think people will see institutions’ and individuals’ adoption of crypto, is unstoppable. It’s an unstoppable trend. So, that’s why we see we’re seeing that in a different including Banking Circle. Sort of so-called traditional financial services players are more and more entering this space and service the players. We’ll see that definitely happening because, you know, players will see more and more customers asking for it. There’s demand. And more and more assets or money moving to that direction. Ultimately, it’s an unstoppable trend that everyone is aware of. And it’s also an unstoppable trend that more and more the traditional financial services banks, that’s my view, will enter into the space.

Mishal: [00:06:14] If I add one point to what Rita mentioned, if we were to send, for example, a payment using very traditional correspondent rails to Australia, it’s quicker for me to fly there than it is for that payment to reach the end beneficiary. And when you’re in a world where the Internet exists, how do you bring financial services, you know, to marry up with the capabilities and reach of the Internet? And that for me is super relevant. And that for me is why we have to just embrace it and really understand this space because it will change the way in which global payments could potentially, evolve into.

Max: [00:06:50] Maybe I can just add two cents from our Kraken perspective. It’s definitely mirroring what you Rita and Mishal, just said. It’s changing a lot. If I look at where we were four years ago, four and half years ago, and where we are right now, Kraken obviously always having played a central role in the global peer-to-crypto intersection, essentially, right? That has definitely changed a lot. You know, we couldn’t really choose a lot of our partners. We are now in a more favourable position and work with partners that have the size, the technology, and the attitude really to go along with us. But the road is a rocky road and it’s not an easy one. Absolutely. Rita, you quickly touched on it already and I would like to dig a little bit deeper on the topic and it’s everyone’s favourite topic, I know it, and that’s the topic of regulation. Everyone loves talking about it.

How is it, that we have seen in multiple jurisdictions across the globe, we have more and more crypto-specific regulatory frameworks coming up? Different shades, different colours, but we have them. And how is that really impacted your business?

Rita: [00:07:49] Well, it’s definitely a favourite topic of all time. Whenever there’s, again, industry becoming more and more adopted like I remember back in the days when FinTech again back in the days when FinTech was new. It’s also like, what about regulation? You know, that’s like the top topic always. First of all, I think we talked about this Money20/20 with Mishal as well on the panel, when we say crypto, right, it’s a very big word, actually. It’s a universe on its own. Not every crypto is created equal and not every crypto player is created equal. And different crypto players also have different, let’s say, approach.

For Mode, for example, we sort of from day one probably because our core team has experience in traditional financial services, FinTechs or banks. So, we understand the importance of customer protection and regulation for an industry to prosper in the long term. Regulation has to come in because ultimately what it does is customer protection and customer protection leads to confidence, faith in the industry. If faith is lost, sometimes it’s hard to get it back. That’s what we’ve been seeing in the crypto industry in the past few weeks. But we know it will come back because it’s just some of the players. We knew from day one that as a company, we want to put being in the regulatory framework at the core of our business because we understand the importance of it. And even though sometimes it probably makes us seem less aggressive, we do believe it’s a more long-term and prudent way of growing.

We were one of the first companies to receive the registration from FCA for UK crypto firms. We’re one of the only 33 companies that are registered with FCA for Crypto Asset. We are quite proud of that and that will be the ongoing sort of core of our business going forward, you know, playing the regulatory framework, being in for the industry in general. I’m sure you know, Max and Mishal you feel the same way. I think generally in the past few months or year, what we’re seeing is that regulators are getting more and more serious. There are more and more debates and discussions happening in the regulatory space. But I guess the word we always use is thoughtful, thoughtful regulation. So how to do that? I always say probably it needs the regulators and market players to come together because market players, you know, like are in the forefront and we understand the customer behaviour, customer needs, both good and bad.

So, I think it’s quite important the regulator and market players come together to look for a thoughtful way of regulating the industry in the spirit of protecting customer assets. So, I think what we’ve seen in the past few weeks, for example, FCA hosted this crypto sprint in the UK, inviting players to come together, discuss the best way to regulate the industry. I think that’s a great practice and very happy to see that and hopefully we’ll see that more in UK and beyond.

Max: [00:11:25] Mishal, what is your view on this topic? How is the crypto-specific regulation impacted your banking business?

Mishal: [00:11:33] Yeah. I mean, we are all about regulation. So, bring it on, is my perspective. I think it’s great that this industry grew the way it did because it was able to do so and be as innovative and as aggressive in the absence of regulation. But we’re now in a space where, especially with the events of the past couple of months, it further emphasises the fact that now is the time to really push ahead and start implementing regulation. I think one of the things that I want to make sure we sort of resonate, which is I think is quite an important point to make is that a lot of the regulators are coming in.

There is MiCA in Europe coming in and you’ve got regulations in Japan that’s coming in Singapore, MIS has been very vocal about their regulatory requirements in Singapore, releasing quite important and strong statements today around crypto regulation. And I think a lot of these organisations, a lot of the regulators, they may not be working together, but they are definitely looking at what each other are doing. So, the way in which they’re operating, the requirements that you need for a license, the capital requirements, a lot of those are actually quite similar when you look at what regulators are doing. I think ideally what I would have liked to see is sort of a global standard which at least everyone can adhere to, which, I know, is a controversial topic. But again, I go back to where are we today in the market. And this is something that I think is definitely relevant. And I think if I look at what’s happening in the last four weeks, the market’s taken a massive hit in confidence. You’ve got Bitcoin, which has plummeted in value. You’ve got Terra Luna, which I think everyone is now an expert in algorithmic Stablecoins. I think if we’d asked that question a month ago, probably not, but it’s emphasised the fact that Stablecoins, except you, Max, of course, but it emphasised the point that Stablecoins need to be backed and you need to know where your money is.

It’s basic. It’s basic 101. Where is your money kept? And I think also when it comes to crypto lending as well, this is a whole space that has taken a huge hit. And questions are being asked like, what is leverage yield farming? I mean, Max, you and I spoke about this topic and staking in quite a bit of detail, I remember in Dubai, and I’ll be honest, I still don’t quite get it because DeFi is a very complex topic and it has exploded. No one questioned it when it was growing so well. And now that you’re seeing this market collapse, now is the time to really come in and let’s start regulating this space without stifling innovation, which is the balance that regulators are going to have to take.

Max: [00:14:13] What are the main challenges that you face as the most heavily regulated entity in this group today?

Mishal: [00:14:21] So I think I need to no particular order because I think this is all just equally as important. I think we’ve spoken about this, and regulation is key. Banks need direction. They need a framework to operate in. If that’s lacking, it’s not a risk that many banks will take because the reality is you trust your bank.

That trust will lead to mass adoption. So, taking that risk for a bank is just doesn’t make any sense. So, regulation is really important and we’re really glad to see that that’s happening. MiCA is in draft in Europe, as I mentioned earlier, and we would expect that to come into force and there will be more regulation coming in across the various regions globally.

I think the second area for a lot of banks is just having internal buy-in, which I know it sounds obvious, but this is a huge space to go into crypto for a bank to go into Web3. This is no easy task, right? You need to sort of really understand the space. You need to have your KYC team on board, your compliance functions on board. You need to have your legacy platforms need to be adapted to this space. You need to embrace partnership, which for a bank is very difficult because quite often partnership means critical outsourcing, which again is a challenge for a lot of banks. So how do you embrace this new space? And this is not a decision that’s made within middle management, or it needs to be done right at the top, which for us at Banking Circle was really important.

We have strategically made a decision that this is a space that we’re absolutely going to invest in, and therefore the whole organisation is involved in looking to really understand how do we really underpin this space? And then finally, it’s trust, you trust your bank. And I think I sort of labour this point over and over again. But you do not want to put your money in a bank that’s then playing in DeFi. That’s just not going to happen. So, trust is critical. Regulation is critical. Regulation sets the framework that will encourage trust and that will lead to mass adoption. And that’s why for us, all of these three variables need to really work hand in hand.

Max: [00:16:22] Rita, with the current bear market that we are in and well, what I think you could fairly call some sort of industry turmoil that you see every day, entities blocking withdrawals, layoffs, erratic Twitter behaviours at times. You know, what lesson could, or maybe even should the industry learn from what we are going through right now?

Rita: [00:16:45] First of all, we have to say that the recent volatility or quote on quote, crash in crypto, there are many reasons contributing to that many factors. We should also acknowledge the macro environment, macroeconomic environment’s impact on it. But of course, there’s lots unravelling of, like you said in the turmoil that was, as we already said, it was because there’s not clear regulation on certain activities and also some players just running wild.

So, what can we learn from it? I guess, first of all, as we already said here many times, is regulatory clarity. And why is it because the core purpose of regulation, again, is customer protection. And that’s how suddenly that leads to what Mishal said, right? Trust. Trust is so important for our line of business. Ultimately, I would say any business inb any industry dealing with people’s money is a business of trust.

Right. Ultimately, like until today, why many people still keep their money was incumbent with big banks because they trust them right because like they are seeing most trustworthy, so I think because we are in the line of business that’s all about trust, I think regulatory clarity can help drive that. And among all the unravelling of drama, the turmoil as you can see that there is definitely behaviour by some players that’s not acceptable if we’re in a traditional financial services setting.

There are definitely some bad actors out there. So that’s why regulation is important, to separate the bad actors from good actors. That’s definitely the first lesson learned. Of course, like lots of people are concerned will this trigger strict and unthoughtful regulation? But I guess we’ll see, like we said before, that the regulatory and market players need to come together to find the best way to regulate the industry. And second point of lesson, I guess, is education. Education to the mass market, to the customers. Because there’s lots of hype around crypto. So, there are all kinds of people coming to basically monetise on the hype. And not every customer is informed about the different mechanisms and different product in the industry. I saw this tweet about, CeFi generating more than DeFi. And as we always say that, if you don’t know where the yield is coming from, you are the yield.

So, I think our customers need to understand the different types of products and what they’re getting into and what is behind every product. Because, you know, at the back of this, some CeFi providing generating more yield. It’s money coming from the venture capital, the investor – it might be a marketing gimmick that can be short-term and like reasonable. But if people don’t understand the difference between different products and that’s a problem, then people don’t know what they’re getting into. So, I think education is key. And I think, you know, everyone here, I think I can see the market, the good market players are doing a lot to educate the customers. And it is, to be fair, not an easy thing to understand our industry. So, it takes time and education is definitely key.

Max: [00:20:35] Thank you Rita. Couldn’t agree more, Sendi, anything to add from your point of view?

Sendi: [00:20:39] Yeh, I would summarise as probably three lessons, right? One is building for the long term. Two is that, you know, along the lines of what Rita was saying, regulation that is clear, transparent, but with the right safeguards in place. And three, not only transparency from a regulation perspective but also transparency from industry players as well. If I talk about, you know, solving real-world problems, again, over the last ten years, we’ve since day one essentially focused on using this blockchain crypto technology to solve or address some of the big pain points in cross-border payments. And, you know, basically with that experience, this is not the first and probably won’t be the last crypto winter or turmoil that we have to see we’ve come out stronger every time and we hope to do so. And I think again, along with those companies who do build for the long term and not just focus on the hype and the short term, I think we’ll thrive.

Secondly, around the kind of more regulatory clarity and safeguards perspective, we have to also remember that, I mean, we are still in the relatively early times of the development of this technology. It is one of the fastest adoptions of technology, I think, in history ever, but it’s still early days. So that regulation and safeguards are important. And, I mean, it’s unfortunate that I think especially in some jurisdictions because it’s been quite delayed, honestly, coming up with these more cohesive regulations, we have actually missed that opportunity to educate customers and provide those guardrails. And that’s why I think some of the things we’re seeing today.

And to touch on the third point, which is around the transparency more from the market players as well, I think we clearly see that as an issue that has caused a lot of devastation for customers and employees and investors. Again, we’ve seen that as an important part of how we operate and how we set examples in the industry as well, whether it’s around the CeFi case and how we are kind of managing that process or whether it’s about what we buy and sell XRP. We issue quarterly markets reports available on our websites or from very early days constantly, making this recommendation suggest in the markets that we do need these clear regulations.

Now, everybody is saying, four or five years ago, we kind of almost started saying it from the beginning. I think all of that is really, really important that we all act with the utmost transparency to avoid these kinds of challenges. Issues happen and we all focus on, again, building for that long term and solving real-world problems.

Max: [00:23:25] Thank you, Sendi. Fantastic answers and very important points to note and remember always. Thank you so much, everyone. The first question of this last segment is for you, Mishal again, what is next for banks? Where is the growth opportunity for banks such as Banking Circle?

Mishal: [00:23:41] You want me to answer this in 30 seconds? All right.

Max: [00:23:45] I’ll give you a minute.

Mishal: [00:23:46] All right, cool. So, look, I think blockchain is going to be key, especially with cross-border payments. And I think the evolution of Stablecoins to help facilitate that is incredibly powerful. And that is something I think the market should absolutely embrace. That is really, I think, is something that we’re looking at. And I think we’re cognizant of the fact that this is going to be a big change in the market. Partnerships. So, I really want to see banks start partnering more with crypto businesses.

When you’re running on blockchain rails or crypto rails, it’s not perfect as much as Sendi claims it is, it’s not. So, there is work that can be done between banks and crypto businesses when it comes to on-off ramps, when it comes to reducing gas fees, instant payments. So, there’s a lot that we can do together, which I think is going to be really important. So, bringing old, traditional, secure to a world where it’s definitely innovative but together I think is very powerful.

And I think the final point, I hope I’ve got ten more seconds, which for me, personally, is very important, is financial inclusion. Blockchain really helps in this space, we’re quite spoiled in the markets that we’re in. But going into a developing market where you’re a shop and your bank doesn’t have corresponding access to global markets, how do you globalise your business? You can’t. And blockchain really efficiently can take that shop, that retailer, into a global environment. And that’s really powerful. And it’s not just developing markets. Go to the US, there’s 40 million people in the US that don’t have a bank account and quite often banks are not equipped to target that consumer base, that customer base and blockchain again can really help in that instead of helping them access banking needs, helping them with payments, etc. So, there’s a lot that can be done in this space, especially when it comes to financial inclusion. So, I’m sorry I’ve gone over a minute!

Max: [00:25:30] That’s ok, that’s absolutely such a fantastic answer. Mishal, you can speak as much as you want almost. Thank you so much. Rita, what would you like to see from banks such as Banking Circle to really support the growth of the industry?

Rita: [00:25:43] I think as a crypto app or a company. And so I guess, you know, where we are playing the value chain is facing the customers who have demands with crypto. So, I guess banks to us is a provider for accounts for example and partners right on that front, Mishal already touched upon it, which is, you know, we would like to see more banks willing to support and partner with which crypto companies such as us, especially if we’re recognised by the regulator as we’re FCA registered.

And that’s actually with the backdrop of regulatory clarity. I think, if banks can embrace companies more, that’d be great. But I think, I want to also talk about this from the other side of the aisle, which is how crypto companies can do better, I really like Sendi’s word about our industry becoming less and less radicalised. That’s really good because clearer education about the industry comes from a non-radical place. Right so from the crypto industry, I think we could be more clear about what we’re doing so that these two worlds – traditional financial services and crypto – can come together.

Max: [00:27:08] Thank you, Rita. And Sendi, last question, what will be needed really for the industry to make the next big step? You always hear people telling about the next 10x customers, 100x, whatever. How do we get them?

Sendi: [00:27:21] Certainly. I think the clear regulation factors in there massively. I think the approach we’re seeing, for example in the UK with FCA doing crypto sprints and gauging the industry as they inform, to inform the next kind of regulation to come up or the approach that Europe is taking with the markets and crypto assets. Again, the time to harmonise the regulation across Europe. These are all great approaches to do this in an informed way and in partnership with the industry as opposed to, for example, in the US like what we see was a lot of regulation by enforcement.

But besides that, I think touching a bit more as well around, you know, from banks and their approach. I think again, obviously regulation will impact how much and how quickly banks embrace the space. But I think what also we see today is some banks, especially more sort of kind of established traditional high street banks have a very blanket approach to saying, you know, okay, you know, we don’t want to work with you if you do anything at all with crypto. And we see that, for example, when we talk to customers prospects, when we talk about how we use XRP in that payment flow, and it’s just a means of getting that efficiency, transparency.

Our customers are not exposed to any sort of volatility. They get it immediately. They want to jump on board. But their number one worry is how will my bank treat this, right? And what we see a lot of times is when we are in that conversation with their banking partner to talk about how we actually use XRP, there is no speculation it’s a means to an end. It’s a technology play, right? They actually understand and they really kind of jump on board. So, I think I would basically warn against a blanket approach and really banks to kind of jump in and understand the specific use cases and how it’s done. And that’s only going to be right to their advantage because I think we all agree here that we see the future as that crypto-enabled future. And those banks basically who don’t jump on board, unfortunately, will stay behind.

Max: [00:29:22] The next question is a little bit more focused about the role of cryptos in the cross-border payment market. So, question is, besides the adrenaline of investing in cryptos with the expectations to have higher returns, what could be the role of cryptos in the cross-border payment market? And Mishal I think you touched on this earlier today, maybe you could answer that question?

Mishal: [00:29:43] We see the evolution of Stablecoins is playing a really big part in cross-border payments. So today, especially when you look at institutional and B2B payments, there’s a lot of friction, especially when you’re running these payments through traditional rails. It’s not optimal. Quite often when these payments are running through correspondent banks, different banks have different risk appetite. It’s not 24/7, it’s not liquid. It’s liquidity challenges as well. So, it’s not optimal. I think within the retail space, the consumer space, it kind of works, it’s a little bit clunky behind the scenes, especially when you look at like netting off accounts and but it kind of works and you ask anyone on the street that would be quite happy with using their remittance wallet to make a retail payment. But within the B2B institutional space, there is a lot of friction. So, for us, Stablecoins is very important. Again, the market has taken a hit with Terra Luna and the questions are being asked around, how much security is there behind Stablecoins, where are the funds kept?

Regulation, again, you know, we sort of angle on this point where regulation needs to come in to help cater for this space and provide a framework. But it is absolutely where we see a real future in cross-border payments is utilising blockchain, enabling Stablecoins to really help facilitate these payments. I think one final point I’ll add to this is a lot of the crypto-native Stablecoins, they’re very good I think within the retail space. But what I really want to see more of is banks stepping up and starting to launch Stablecoins. We’re seeing governments making initiatives to step into this space with CBDCs, which I think would be very important when we start looking at institutional payments because again, there, there is a lot of friction in that space. But yes, for us that is where we see a lot of opportunity.

Sendi: [00:31:30] This is really I mean, the question I think speaks to the heart of Ripple. Right? Again, we’ve primarily focused on the cross-border payment space. And still today it does on average take 3 to 5 days to send the payments, depending on where you are in the world, it still costs 6 to 7% write to send money. 6% or so of payments still get stuck in the process. So, the sort of the still more established, let’s say, correspondent banking switch system is really has been built before even the Internet was around. So, it is certainly antiquated and blockchain certainly and crypto technologies certainly offer an opportunity. And I want to be very clear, this is not hypothetical, right? This has been proven now. I mean, we are running Ripple Net precisely for the last few years.

We have over $15 billion of run-rate payments flowing, hundreds of customers, over 55 countries, six continents. This is not hypothetical anymore – day in day out, people sending particular remittance which addresses remittance payments, small business payments, treasury flows as well. But, you know, people day in and day out when they send money, they may not know there’s crypto in the flow. All they’re seeing is my money’s there. I know when it gets there, it’s actually cheaper than before. And I’m happy. And my family’s happy because they have received the money.

Max: [00:32:51] And the next question we have is talking about CBDCs, another favourite topic of everyone. And you reckon that the adoption of CBDCs will provide banks with more confidence to either directly or indirectly get involved into the crypto space? And maybe, Mishal, since you’re the on-demand banker here on the panel today, you can take that one as well.

Mishal: [00:33:15] Yeah. I mean, I think. CBDCs is interesting. I think they’ll play a role, especially when it comes to institutional payments. So, these are payments between banks, central banks, and I think that there is absolutely an argument for and a need for CBDCs to come into that space. I’m not entirely sure how that’s going to filter down towards B2B payments and retail payments. And I think that is something that I’m going to watch with a relatively high level of intrigue to see how it sort of comes out into the broader market. But definitely within that sort of banking central bank’s institutional level, I absolutely see that there’ll be a need for CBDCs.

Rita: [00:33:55] Just echoing Mishal, I think it’s something that’s no one else because, we actually talking about this at a panel at Money20/20, like what how it will play out right between CBDC and Stablecoins, because there’s lots of lots of those things in play here. And when it comes to CBDC and there’s also a little bit of a geopolitical play here as well. So, I think it’s very hard to predict, like will CBDC be adopted, or will it replace Stablecoins? Or in some cases will wholesale CBDC be more adopted rather than retail CBDC? So, no one can predict that. I think it’s a fast-moving area.

But for us, like for example, for us as a crypto app, I guess it’s ultimately what the customers are using, because we are facing B2C – we are a B2C app, we’re facing the customers. So ultimately what they are adopting, we can enable it. That’s sort of us as a player in that part of the value chain. Our position would be to enable what the customers are adopting.

Max: [00:35:08] One question that I found very, very intriguing is, if you could have one wish from a regulator, what would it be?

Sendi: [00:35:16] I think one, where we’re clear, transparent, predictable regulation that is done in partnership with the industry.

Mishal: [00:35:22] Yeah.

Rita: [00:35:23] Sendi has summarised it very well. I guess clarity and education to the market as well in terms of like there is this if there is a regulation, then the market needs to know that because it’s for protecting the customers. The customer needs to know there is this regulation. Right. So that’s also quite important.

Mishal: [00:35:48] Yeah, I would just add regulation that doesn’t stifle innovation because it is amazing what this industry has built and where we are. So, I think you have to get that right balance between regulation versus ensuring that the markets still continue to innovate the way it is.

Max: [00:36:06] So I hear that all boils down to transparency, corporation regulated together with market participants in order to create a framework that everyone that is involved benefits from.

Rita: [00:36:20] Probably like, a more, sort of I don’t know if it will ever achieve that, is what Mishal already mentioned – global standards. But that’s probably quite a big dream. But I think that’s important because that will we do see regulatory arbitrage in the industry. So, a more wider standard would definitely drive better clarity as well.

Max: [00:36:45] Thank you so much. I would like to close up with one little question that I had, in 20 seconds or 30 seconds, how would you tell someone coming from your family, from a friend circle, who hears all the negative news about cryptocurrencies in the last few months – how would you convince them that now is the right time to get in it? Maybe Mishal we’ll start with you then Rita and Sendi.

Mishal: [00:37:05] Well, I don’t think I’d tell anyone to get into it right now. I think we need to give it some time to let the market stabilise a bit. But look, this is the future we’re in an Internet society and the financial systems need to adapt to this new world. And, yes, there’s going to be road bumps, there’s going to be stabilisation, there’s going to be clearing up. But that is just part and parcel of the journey that we’re on. So, embrace it.

Rita: [00:37:33] What I usually say to people who are new to it is, rather than focusing on the short-term price action, more on the long-term outlook. So, I always say that just compare to probably decades ago. Everyone is getting on the Internet. I definitely believe, my personal belief is everyone will get on to blockchain. So, and that’s happening. And if you talk to any youngsters, like any young people, like engineers, I would say half of them would say they want to go into chain. They want to go into this space. There’s so much intellectual property or intellectual talent going into this space. That’s why it gives me hope that the industry will prosper in the long term.

Sendi: [00:38:20] This is the fastest adoption of technology that we’ve ever seen in the history of humankind. And this is not only going to change payments, financial services, it’s really allowing us in finance to keep up with basically how we will increasingly change how we live, work, socialise, play, operate. It’s really bringing finance to our normal social lives and making it more adaptable to our day to day.

Russell Goldsmith: [00:38:51] Well, that’s it for this episode of the Knowledge Circle podcast. Thanks once again to our guests, Rita, Sendi and Mishal and to Max for hosting. If you enjoyed the conversation, please follow, like and share on your podcast platform of choice. Hope you can join us on the next episode but until then, thanks for listening and goodbye.

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