Henri Arslanian: "The Future of Finance" with Henri Arslanian, Co-Founder of Nine Blocks Capital

If you're today, you're a central banker and you love Bitcoin, you're crazy. This is a bit like a taxi driver being excited to see Uber come in their market. Central bankers were quite smart. They realized maybe they don't like Bitcoin, the fact that it's decentralized and it's permissionless, but there's certain features of digital currencies that they actually quite like. And this is what we saw, the rise of central bank digital currencies, which is a digital currency issued by the central bank. And really the big catalyst here has been the launch of Libra in June 2019 by Facebook, Meta. Since then, we've really seen the rise of central bank digital currencies.

Welcome, Henri. I'm super excited to meet you today. It's been a long time coming and you're the first in a series of conversations we have with different leaders in the financial services sector. I had a couple of reasons why I wanted to, to interview you first, because you have a very interesting background, right? Being a partner at PwC, having both a JD in law and a master's. On top of that, you're a professor at University of Hong Kong, and you left a big firm to be able to create your own crypto hedge fund. So, and on top of that, what we have in common is that we went to the same school in Quebec, Collège Boribœuf, which I love. So just this whole connection. So I just want to hear a bit more about you, what brought you to this path from Montreal, Boribœuf, and now you're living in Dubai. And from traditional finance to now decentralized finance and having your own fund?

Thank you. First of all, thank you Katheline Jean-Pierre for having me on the show. And thank you to the LinkedIn family. As you know, I'm a big fan of the platform and a big fan of the work you've been doing there. No, I'm very excited. My passion and my focus in life is the future of finance and the future of money. And I do this, like, as you mentioned, wearing various different hats from having my crypto hedge fund, from being a professor where I teach the topic, from being an author where I write about the topic, to creating content on LinkedIn. Great book, by the way. Great book. Thank you. Thank you. It's become actually, you know, I just heard it's been on, still on the top bestselling list. If you want Snoop here, I'm gonna, I'm working on a comic book actually for kids to teach teenagers about the importance of the future of money, the future of crypto and the future of Web3. So there's a lot of exciting projects coming in, but all this happened actually, you know, I grew up in Montreal, like you mentioned, come from a typical Armenian immigrant family, grew up there, became a lawyer. As soon as I graduated from law school, I was very fortunate to be quite good in school. I was working in a big law firm. But I realized really the entire legal profession will need to change and the world is changing. And actually I bought a book called Chinese for Dummies and I literally left for Beijing where I learned Chinese. I did a degree in Chinese law and before moving to Hong Kong to work as a financial markets, as a hedge fund lawyer. And then I was in banking. I was at UBS and covering the hedge fund industry in Hong Kong. And one thing that I realized—

I want to pause. So basically you took Chinese for Dummies, you learned Chinese, and then you went to study law in China.

Yeah. And that was before the Olympics.

Wow.

I remember I learned to count from 1 to 10 in my plane from Montreal to Beijing. I couldn't sleep. There was this grandma next to me who taught me how to count. And actually when I got to Beijing, I remember it took me hours to get to my campus and I wouldn't go to bed until I learned 15 new words a day, written, writing, speaking. And that was the discipline I had to put in place to be able to learn Chinese and of course, study. And I have to say at the time, And now everybody knows what China is. At the time, I remember telling my friends in Montreal that I was moving to China and half of them thought I was going to Japan. I mean, China was not as much in the front line as it was pre-Olympics at the time.

Yeah, of course.

Now the rest is history. So I was still a big fan of, you know, the Asia, the region. I spent 15 years almost in Hong Kong as a banker and then at PwC, like you mentioned, where I, where I set up and built the entire global crypto team before launching my hedge fund and getting involved in more entrepreneurial activities. And the real reason I think the entrepreneurial bite came in is the question of what if. You know, I could have easily stayed being a partner in a big firm, which is a very lucrative, a very comfortable job, very secure, extremely secure, and extremely profitable as well. And my view was, I don't want to be on my deathbed and say, you know what, what if, what if I'd done that? You know, in my case, I knew that somebody's going to build the next leading crypto asset management firm, and I knew if it was not me, it would be somebody else, and I'm going to regret it all my life. So that was kind of the journey. And now I'm based in Dubai, where really I think I'm very bullish for the next decade, in the same way that I was very bullish on Asia Asia 15 years ago, and I was able to see that wave take place. I'm very bullish right now in the Middle East, and you know what I call AMEA, which is Africa, Middle East, Asia, this new corridor where I think the, the future will be in various verticals, including the future of money.

I'm excited. I have a question on that later, so I'm going to keep the, some of the momentum there. So I want to jump right into the topic. So I want to talk about a bit more about CBDCs. So what do you think central bank digital currencies mean for the future of finance?

Sure. I mean, today, if you think about Bitcoin, for example, which is a decentralized currency, like nobody could stop Bitcoin. It's there as decentralized, and there's only going to be 21 million Bitcoin ever. If you're today, you're a central banker and you love Bitcoin, you're crazy. This is a bit like a taxi driver being excited to see Uber come in their market. However, you know, central bankers were quite smart. They realized maybe they don't like Bitcoin, the fact that it's decentralized and it's permissionless, but there's certain features of digital currencies that they actually quite like. And this is what we saw the rise of central bank digital currencies, which is a digital currency issued by the central bank. And really the big catalyst here has been the launch of Libra in June 2019 by Facebook, Meta. Since then, we've really seen the rise of central bank digital currencies. Now, why central bank digital currencies could have a big impact. One, it allows policymakers to have a live snapshot of the total economic activity in, in an economy at a live perspective. And you can even slice and dice it. For example, they could say, you know what, what is, how much are people spending today in Los Angeles in, you know, Spanish restaurants? And that data will be available on the spot.

So you're saying that in traditional finance, there's no way they can get the snapshot. They would have to probably work with some payment companies, but it's not concentrated anywhere.

Payment companies and cash, as you know, is the most confidential way of payment. Today, when you see criminals being arrested, you don't see them with piles of credit cards or Bitcoin. You see them actually with cash because it's the most anonymous way of transacting. When you get a certain paper bill, you don't know where it was before. And that's the beauty of central bank digital currencies. But that's not only all, Katheline Jean-Pierre. There's a lot of other benefits. For example, one of them is, you know, it could really put an end to corruption, for example. If today I wanna, I wanna, I wanna bribe you, I would give you that typical envelope full of cash. That becomes impossible in a CBDC economy because everything is traceable. And most importantly, third, it really makes central bankers into super central bankers. That means, mean, that I can really make what we call money programmable. Let me give you a very simple example. During COVID for example, every single American got the $1,400 from the government. This was given by checks or wires, but nobody forced you to spend it, which was the whole purpose of the economic stimulus.

Yeah.

However, with a CBDC, I can give you the money and I can tell you if you don't spend it in 2 weeks, you lose it.

That's super interesting.

But there's a big issue as well. Yeah. For example, privacy. How do you deal with privacy? Like, are people comfortable to see all their financial transactions visible to the government? Maybe you want to make certain transactions you don't want the government to find out about it. And this is why I believe CBDCs will be not only a policy matter, but maybe a political matter as well in the next couple of years where at the present, the presidential election, in the same way right now we debate abortion or immigration, we will debate the privacy of money. And this is one of the reasons.

I think that's super interesting because you can see a trace in the blockchain of every single transaction. Right. And then the question would be how transparent and how accessible and what do we do with this information? What does the government do with that data? So we talked a little bit about politics. So let's jump into geopolitics a little bit. What is— there's been, there's been a lot of news globally and also locally in the US, and I know you're in Dubai. So what is the impact of the geopolitics when it comes to the future of finance? Because there's different hubs that are being developed right and left.

I think there's a lot of questions on when it comes to geopolitics and even geopolitics part from a policy perspective. Let me start from a policy perspective today. The approach you are seeing being taken by the United States, for example, which is really a clampdown on the crypto industry is the exact opposite of where you're seeing other jurisdictions. For example, right now we're seeing a lot of crypto companies really leave the US and go to places like the UK, Switzerland, the United Arab Emirates, Singapore, and Hong Kong, who are ready to welcome this kind of and be open to the future of money.

Portugal and Japan are coming up as well.

Yeah, there's been a number of jurisdictions at different times have tried different initiatives. And, you know, the argument there is that today, if you're the US, the current system where you have the— you're the leading financial center of the world. You're also kind of the policeman of the world using the SWIFT system where you can put any country on a sanction list or cut them off from SWIFT, for example, plays in your favor. Whereas actually for many countries who are looking at this, there's a whole broader conversation around de-dollarization and actually the future of money. This is playing a big role. But also let me give you an example, Katheline, on the topic of central bank digital currency that we just discussed today. When you look at the topic of CBDC, Without any doubt, countries like China, for example, are easily, easily 4 to 5 years ahead of the rest of the world, probably a decade ahead of the US, for example. And when you're looking at some of the countries like India, for example, another rising superpower, their CBDC initiatives are not with Europe, are not with the US, they're not with Canada. They're actually taking place like with places like the United Arab Emirates, for example. So I think we're really seeing geopolitics play a big role when it comes to the future of money and also the future of money from a policymaking perspective as well.

And if we fast forward 20 years from now, what could be the impact? I'm gonna go come back to the US because a lot of our listeners are from there. What could be the impact on the US of not being at the forefront of the innovation with CBDCs?

I think I would say it's broader than CBDCs. It's broader on the topic of cryptocurrencies, digital assets, and Web3. The United States was very lucky to really be the forefront when the internet boom happened, you know, like over the last couple decades. The fact that companies like LinkedIn, are based in the US, are acquired by firms in the US. It's a very good example. Today, when you think about the big tech firms, you think about the West Coast, Silicon Valley in the United States. I'm ready to bet that when we think about the future of Web3, a lot of these leading companies may not rise from the US but may come up from places like India, like the Middle East, or even part— other parts of Asia. And I think this is the big risk for you. The US is, unless the US decides to be a leader when it comes to the broader Web3 world, to that the risk of actually cannibalizing some of its existing dominance in the traditional financial world and other Web2 economies, it may lose the race when it comes to, to Web3. And a very similar example is many analogies in other industries from the car industry, for example, you know, the many of the car makers were very comfortable with cars running on gas until Tesla came and really became the leader in electric cars. The same thing may happen with the US is the good old, you know, gas-powered cars with the big engines. And there's actually these Teslas coming in the market, which are pretty much the rest of the world. So very interesting development that's going to happen when it comes to the future of money.

Now, with the car, I totally resonate. I spent the last year with all the automakers to help them bridge the gap in terms of electric vehicles and LinkedIn. So more on that on another day. So let's jump in a little bit more about stablecoins and talk about stablecoins. So there's been many changes. In the stablecoin market over the last couple of months, like from the downfall of BUSD to the growth of new stablecoins like FDUSD and PayPal's new stablecoin. So what do you think the future of stablecoins is and how can stablecoins really impact the global payment landscape in your opinion, Henri?

I think one of the big trends to watch over the next 12 to 18 months will be the rise of stablecoins. First of all, stablecoins have seen tremendous growth over the last couple of years. To put things in perspective, Katheline Jean-Pierre, on January 1, 2020, there was less than $5 billion in stablecoin assets. Today, when you look at, you know, the, the growth of stablecoins, we know we're talking there's over $150 billion in stablecoin assets. And first of all, what is a stablecoin? It's a digital currency that is backed 1-to-1 by fiat money. So if I send you today a Bitcoin, you know, you don't know what the price will be a week, a month, a year from now. Whereas if I send you a stablecoin, it's $1 today, and it'll be $1 in a week, a month, or a year from now. So actually enables actually for 2 things. One of them, people are trading crypto. When they want to get risk off the crypto markets, they can park it in stablecoins. But most importantly, this has a very practical element on everyday financial transactions. Payments is a very good example. Today, if you're in the US, it's like somebody like you's in LA who's sending payment to San Francisco within the US. It's not a problem. There's numerous offerings from PayPal to Venmo. We can easily transcend money pretty much for free. Pretty much instantaneously. However, when you try to do cross-border payment, ooh la la, that's where the trouble starts. Today, Katheline Jean-Pierre, the cost of a cross-border payment globally is around 7%, and this includes the G20 countries. In many African countries, it's double-digit. Literally, I find it unacceptable that in 2023 I can send you a WhatsApp message, an email, everything, even having Zoom conversations for pretty much almost free. Or if I try to send you money, the fees are incredible. And by the way, it doesn't even work 24/7. If I try to send you money from Dubai to LA on a Sunday, for example, it doesn't work.

I don't know, maybe the banks will charge.

So it's— I think there's a lot of issues on that side that stablecoins allow 24/7 instantaneous and pretty much free transactions. And that is a game changer, not only for people in developed markets, but especially for those in emerging markets.

No, that's amazing. I love how you, you simplified the concept for us, but also make it understandable, like what the barriers that we're facing right now. I work with investment management firms. I work with institutional investors. That's my day-to-day. And there's been a lot of conversation. We published a report about retirement and how people are looking at like really moving their money for the future. What we're seeing in many studies is that we've seen that investors and particularly younger ones want crypto in their retirement accounts. It's a trend. So do you think retirement plan providers should offer crypto in retirement plans? And if so, how should they do it? What is the best way?

Yeah, interesting question. I would say there's a couple angles to look at it. First of all, I believe people should have a choice. Whether you may like Bitcoin, you may hate Bitcoin, you know, you may, you may believe in it, you may not believe in it. But I think people should have a choice to be able to access it in the same way they have the choice to access other financial products. Now we can have an entire debate whether somebody who's young having, let's Bitcoin as part of the portfolio or having any of these layer 1 tokens, we call it, like Ethereum and others, which are the kind of the future of the internet, if you want, as part of a diversified portfolio could be beneficial, especially for people who have a long-term investment horizon. My advice that I give to everybody, and, you know, I've been teaching courses on crypto in university since 2015, is actually everybody has the moral and kind of intellectual duty to at least understand what they are.

Yeah.

You know, I tell everybody when I got into crypto in 2013, literally it was very difficult to learn about it. There was hardly any videos on YouTube that you could— all the documentation was very technical.

It was hard.

If you wanna read about it, there's a lot of ways. And what, what I often say is the best way to learn about it, you know, when it's your, your friends, your boyfriends, your girlfriends, or a baptism, a bar mitzvah, whatever anniversary, instead of giving them the typical gift that you always give, why don't you give them some crypto? And it's a great, not only cocktail conversation topic, but also a great way for them to learn. What I often do for kids is, you know, if you want to get your kids interested in the topic of the future of money, giving them some digital currency could be very interesting. And this is the big thing is whenever I deal with CEOs, people on the board of banks, regulators, central bankers, they tend to be of a certain age. And often they tell me, ah, what is this thing? You know, it's digital. People want to touch it. It's not an asset. And I always tell them, what about the next dinner you have, family gathering, family dinner? Ask the youngest member of your family. Ask your son, your daughter, your nephew, your niece, and you'll see what they say. And it's very impressive because it happened to me many, many times that these individuals, they will come back to me and say, Henry, you know what? I was at the Easter dinner with my nieces and nephew. It turns out they're all into crypto. They're all into NFTs. So I think there's a big generational divide here. And I think that not empowering the next generation about crypto, about digital assets, is really a big disfavor. The reason I teach crypto universities is because I find it's unacceptable in 2023. We let students graduate out of universities in business school programs or engineering programs with no courses on digital assets when they are the, are the generation that will be the most impacted by it.

I think there should be more finance classes, right, in high school. I think what we've learned, even though we went to the best schools, it's not necessarily applicable. So when we go back to the retirement, right, some people do like self-directed IRAs. Those are for people people are very comfortable investing in crypto on their own. But what are the other vehicles if I have a retirement account and I want to make sure that I have a little bit of it in crypto? What are the ways?

So today, let's say if you're talking to your US audience, it really depends country by country. But let's say for a typical US or Western country, the problem we have right now is there are no easy ways to access it. Yes, you can go sign up on a crypto exchange, like there's many of them in the United States as well. You can buy Bitcoin, you can buy Ethereum, other cryptocurrencies and hold it. What we are really watching over the next couple of weeks and months is whether we're going to have a Bitcoin ETF today. What we have, what we call cash-settled ETFs, where the underlying assets are cash-settled futures. But what we're probably going to see over the next couple of weeks or months are physically— ETFs are backed by actual physical Bitcoin, which, by the way, already exists in many other countries, including in Canada, by the way, where we have some of the biggest Bitcoin ETFs. On this topic, Canada is way more advanced than the US. So I think it's going to be very easy really in the next couple of months for people who want to buy listed products that give them exposure to cryptocurrencies to do so. But today it's, it's easily accessible by people who want to, want to do it directly by going to some of these crypto platforms. Now, you should you put all your life savings in it? Of course not. But I, what are my recommendation to everybody is, you know, just buy a little bit to experiment, do a transfer, send, send some crypto left and right, and you will then, it's by using and experiencing it, you see, you can see the benefits of digital assets. And their potential on the future of money.

Super interesting. And I think it's good to know. I know there's a lot of people who are going to be listening to that. They're going to be excited about it. Thinking about all my people, my friends in investment management in Canada. So when we look at the topic of digital assets, so there's many digital asset custodians now from the traditional bigger custodians to also new entrants that only serve the digital asset space. Are we going to see banks embrace digital assets a little bit more? Like, what do you see on your side? What is your prediction as well?

I'm a firm believer and very strongly believe that it's only a matter of time. In the next 12 to 24 months, we're going to see most financial institutions have a crypto offering, whether it's custody, whether it's brokerage, whether it's asset management. The reality is many of them will need to do so, not because they want to, but because a lot of customers are asking for it. And for a lot of these banks, this is another revenue opportunity, and they know that if they don't, somebody else will. I think the reality is, unlike a couple of years ago, there is now on a global perspective, regulatory clarity on digital assets. And what customers want is the— for many, a big tranche of the customer base, they rather deal with some of the regulated traditional financial institutions to get exposure to this new asset class, which is digital assets. So if, for example, my bank with whom I do my savings account, my retirement plan also offers me crypto custody, for example, crypto asset management, that would be the approach that for some portion of the population they may decide to go with. So for me, it's a matter of time, not not because these banks believe in crypto, but for them it's a revenue opportunity and they know that if they don't, others will. The reality is crypto is here to stay whether you like it or not. There's now between 400 to 500 million crypto users, and especially if they want to target the younger generation, the mass affluent, the young, you know, the, the Henrys or the young mass affluent, this is something that would really, you know, is relevant to the audience. So this is why I'm convinced it's just a matter of time.

No, and I think what you're saying aligns with one of the reports we just launched, which is about institutional investors. So what is top of mind for them? It's AI, machine learning, the blockchain, and cloud computing. But also when they look at the top, top of mind topics, crypto is the number 5. So it's— things are changing and it's, it's evolving quickly. So when we look at banking, what is the potential of decentralized finance or DeFi on the existing banking system. So how could it potentially integrate or parallel paths? What are your thoughts on this?

Yeah. So the world of decentralized finance, DeFi in short, first of all, it's really the ability to conduct financial transactions with no intermediaries. Today, if I do a banking transfer, for example, from me to you, I'll be using an app or banking app or any payment app. There's an intermediary in the middle. DeFi, what's really exciting, allows basically to conduct financial transactions with no intermediaries. Literally, I can have, you know, asset management, I can have the borrowing lending in crypto, but I'm not interacting with a financial institution. I'm literally interacting with smart contract code. And this opens up a whole new world of opportunities. For example, one, for first, it really allows us to have this first principle approach to financial services, really rethink how we're delivering financial services. There's something, for example, in DeFi we call composability, which means that actually I can take any, or if you want financial Legos, that I can take any two DeFi applications, I can literally mix and match them together and come up with a new application, which is something that is not possible in traditional banking where each bank or payment app will try to protect its IP.

Yeah.

And this really opens up a whole new world of opportunities. And I think it's, it's gonna be very, the direct impact on traditional banks today, I think will be quite limited. And I think for, for a foreseeable future, we're gonna see centralized finance, including centralized finance of crypto, and decentralized finance cohabitate, and they'll be interacting and there'll be some arbitrage between both. But I think there's no doubt in my mind that we're gonna see growth in the world of DeFi. To put things in perspective, Katheline Jean-Pierre, again, if we go back to January 1st, 2020, there was less than $1 billion in DeFi. Today, it's over $50 billion in the really the span of 3 years. So there's a lot of growth there. And, you know, and there's also more broader topics. For example, with DeFi, it's permissionless. Whether we like it or not. It, it doesn't, DeFi does not care if you're rich, if you're poor, which country you're born, you know, what's your heritage, what's your background. A lot of the factors that as we all know, a lot of financial institutions will use to choose their client.

Yeah.

And that's one of the benefits that DeFi really opens up. It's really its permissionless nature that really opens up to a whole new world of opportunities. What its exact impact will be, very early to determine. And the same way that it was very difficult to determine the impact of the internet 30 years ago. Able. Yeah, but the same thing, there's no doubt in my mind, either DeFi will have the same impact on the future of finance.

But I think it's super interesting on how finance is evolving, but I think it's also— there's different layers where it's getting integrated, whether or not people like it. So let's talk a bit more about the financial system. So do you think that Bitcoin really has a role to play in the global financial system? And I feel like it's a trick question because it's the most known currency and it has a lot of potential, but where does it fit in the, in the big continuum of things with the different players that we know locally and globally?

Absolutely. I mean, Bitcoin is here to stay. If you think about Bitcoin as an asset that is only 13 years old, I mean, it's a very baby asset if you compare it to others. But there's no doubt in my mind that Bitcoin is here to stay. It really depends on what optic you look at it. For example, many people will compare it to gold. You know, they say Bitcoin has a lot of similarities with gold. For example, both are finite. Yes, you can discover new gold. A Bitcoin is 21 million Bitcoin ever. That's it. So both are finite, both are divisible. You can have a big bar of gold, you can have a wedding ring. Same thing with Bitcoin. You can have 1 Bitcoin or you can have 1.18. You can have up to 8 decimals when it comes to Bitcoin. So there's a lot of similarities on that. You know, many would argue that, including myself, Bitcoin is like gold 2.0. For example, if I want to send you from Dubai to LA a bar of gold, it's quite complicated. It, but I can send you Bitcoin right now in a second. Uh, you know, but there's also some drawbacks. If you think about gold, people like to wear it, there's jewelry, they use electronics, whereas Bitcoin is not used, uh, for such purposes. So there's a lot, I would say, similarities with gold in that matter. The important thing is that Bitcoin is here to stay. I think it's important to give people a choice. And I think this is where, especially for our American audience, it's important to take a step back and be humble. Today, if you live in the US, and I know many of my American friends may disagree, but I think by and large we can trust the Fed, we can trust the government, we can trust the central bank and regulators. I know this is a controversial topic, and this is the same thing in Europe and other markets. However, if you ask this question, if you believe in Bitcoin or the role of Bitcoin to somebody who's in Argentina, somebody is in Turkey, it means something totally different because Argentina is a very volatile currency. Exactly. Where people have seen in countries like Turkey, literally where people have seen all their life savings go away. Somebody that was in Cyprus or Lebanon, and these are, you know, we're talking millions of people. For them, Bitcoin in many cases is a lifesaver and in a way gives them the option to be able to have their life savings literally if they want to, and then give them an option compared to the banking system today. If you tell somebody in Lebanon that has literally seen all their life savings go away, some in Argentina and Turkey, and I admit there's tons of other countries like these, they would probably see Bitcoin and digital assets in a very different angle than somebody who's comfortable in LA with different banks, who's well banked. So I think we need to be very humble when we ask this question, understand that we live in a global world that, that believe it or not, is bigger than the United States.

Yeah, no, it's a, it's a good perspective, right? The perspective of being a lifesaver if you're, you're living in a world where your currency is very unstable or your government is unstable. So, and this could be a consistent point for a family who wants to, to build a legacy. I think that's a good point.

Yeah, I find one of the biggest unfairness in life is actually where you're born. So today, for example, if you've had— literally, you're born in Iran, you're born in Yemen, you're born in North Korea, you're born in Lebanon, you're born in Syria, you have not chosen your governments. In all these countries, the governments were in place whenever somebody was 18 years old, didn't choose their government. And I think I find it very interesting that ethically and morally, even though you're the smartest guy in Iran right now, for example, and you may hate your government, for example, there's nothing you can do. You're excluded from the banking system. If, for example, even if you live in the US and on your passport it says that you're born in Tehran or in Sudan, any of these countries, the one thing in your life on which you have no control is where you're born. And for me, I find it incredible that the fact one act that you have no control on has such a big impact on the rest of your life. And I think as a society, we're going to look back in 20, 30, 40 years and say, wow, this was such a big example of discrimination, where we were discriminating some people on literally the one thing they have no control on. And I find— I think this is one area where I believe the future of finance will be hopefully not only more inclusive, but we'll be able to address some of these issues like that we have today in the banking system.

So you, you feel that it could create a, a more even leveled field for people as it partakes to their money and their money opportunity.

And also more inclusive, right? Today, if you go to a bank, they will look at your salary, they where you are. I mean, there's been numerous litigation and cases like these where there's discrimination on who you are when you open an account. Whereas when it comes to DeFi, it's purely smart contract code. Literally, it's code you're facing, right? And it's— and anybody has access. So when it comes to financial inclusion, I think it really opens up a whole new world of opportunity on that side.

No, 100%. It's a bit more democratic. So let's talk about trust because there's been a lack of trust in crypto. It goes up and down. So what impact has the crypto boom and bust had on the financial sector's trust in new technologies?

Oh, absolutely. You know, trust, I would say many industries, including right now with digital assets, has been severely hit. It. I mean, if you look at the crypto space, like any other new industry, you have people legitimately building the future of finance. But at the same time, you have bad apples trying to take advantage of the situation. And frankly, some of the big fraud cases that we've seen in recent months are good examples of people just, you know, they committed fraud on a wave. Yeah, and nothing to do with crypto. I mean, it's just a business, you know, if it's a Ponzi scheme, it's fraud, it just happened as crypto on the underlying, but it's nothing to do with nothing to do with Bitcoin, you know, or crypto assets. So unfortunately, I think that because of the euphoria, the boom and bear, the bull and bear markets, the big hoopla hoopla in the crypto industry, it attracted also a lot of players who were there to make a quick buck. And I think this is what affected a very significant trust towards digital assets. And I think today, if you go to the average guy on the street, and you ask him, hey, what do you think of crypto? They may say, ah, isn't it a fraud? These are these exchanges or drug dealing, which are generally not true. You know, if you look at data, for example, today, literally less than 0.3% of crypto transactions are linked to illicit activities. In absolute terms, we're talking less than $20 to $30 billion. To put things in perspective today, according to the United Nations, anywhere from 2 to 5% of global GDP is being laundered every year in the existing system. So I think there's a lot of difficulties there. I think we have this bad— crypto has a marketing problem in a way where unfortunately, people—

get a bad rep. News.

Yeah.

Do you think we're out of the crypto winter? Or like, I think, you know, are we?

I've been very fortunate to be in crypto since 2013. I organized my first Bitcoin event in January 2014. So I've seen these cycles over and over. What I would say is a couple of things on that is, first of all, that it's in bear markets. Whoever is in crypto in a bear market tends to stay in it for many years. I can tell you whoever is in crypto right now, in this environment, I guarantee will be in crypto the next 10 years. I think when it comes to crypto winter being in and out depends on a number of factors from macro environment and going on. But also I think we need, we need to see some of the dust settle. For example, there's now numerous court cases going on, trials going on for fraud and other activities, which will give a bad taste to the industry. But this also depends on some of the big catalysts. For example, recently there's been some pretty important court victories by the crypto communities, and there's many catalysts that may come, you know, from some approval of ETFs, DeFIs, for example, to other developments in the US. So I think while I look at the future, I think we probably hopefully pass through the bear of the, the worst of the bear market and some of the worst of the bad news in crypto. And I think where it's gonna be, and I remain very bullish and very optimistic on the future of digital assets, including cryptocurrencies in really various verticals. Let me put it this way. If a company survived the last 12 months in crypto and in crypto's still here despite all the things that we're seeing, I guarantee it's gonna be here for the years to come.

So do you think, do you have a prediction in terms of when trust is gonna be a bit higher for crypto?

Yeah, you know, I trust you.

Globally in different markets, of course it's different, temperature is different. But do you have any prediction on that?

Yeah, first of all, I think that trust is a very relative term like we discussed before. If you're living in Turkey today or Lebanon, you're Zimbabwe, trust me, you prefer cryptocurrencies to your fiat money or your central bank activity. That's for sure. I think globally though, if we had to generalize on it, what is happening now in where we have pretty much in most countries right now pretty good regulations. We may like them, we may not like them, but at least there is some regulatory framework. Second, that we have very good infrastructure players coming in, whether it's custody, whether it's exchanges, whether it's other players. The foundational building of crypto now is becoming— has become definitely more solid in the last 2, 3 years, and it's continuing to grow as well. So when it comes to trust, I believe we need some of these factors to be in place, uh, for actually to be able to build. If you want to build a nice house, you need build foundations, and then you can put the nice window or the curtains you want. But it's important to have the foundations in place. And I firmly believe the foundations are being laid right now will really allow us to build a future of finance. And I'm very excited about that.

So let's go back to our friends who work in asset management. So there's been many conversations about the tokenization of real-world assets. So RWAs. So how do you see this trend playing out with asset managers and investors?

I mean, tokenization, which is basically the act of taking an asset that is large, illiquid, and being able to tokenize it, I think is really gonna open up a whole new world of opportunities. I mean, if you think, and actually solve a lot of problems as well today, for example, if you're living, let's use your LA where you're based, Katheline Jean-Pierre, if a young 23-year-old wants to go buy a nice house, wants to buy an apartment, it's very difficult. Why?

Unless they have all cash.

That's what I was gonna say. Unless you have a very wealthy daddy or you have somebody's paying for it, you know, it's very difficult to have the down payment to be able to buy the house. And this, by the way, has led to many social unrest over the years from Hong Kong to other places where young people are not able to buy a house.

Yeah.

What's interesting with tokenization, I can take any asset, let's take real estate for example, where maybe I'm not able to buy a whole building or a house in LA if I'm 23, but I'm able to buy one ten-thousandth of it and each week I'm able to contribute and get my exposure to the real estate ladder. And that, I think, is a very good example that it provides not only access but also liquidity. And for asset managers, you mentioned that, I think, opens up a whole new world of opportunities as well. Anybody that has subscribed to any kind of fund, whether it's a mutual fund or an alternative, a private equity fund, a hedge fund, knows how cumbersome and really outdated is the subscription and the redemption process. Literally, it's all paper-based, it's documents, legal documents that nobody even reads. Whereas I think with tokenization, it allows us not only to create, make the process more smooth, but also more liquid and create a whole secondary market on it. So I remain very optimistic on when it comes to tokenization of real assets. And I think we'll see this in various instruments.

Yeah.

We're gonna look back in 20, 30 years and our grandchildren or our great-grandchildren will ask us and say, wow, if you had to buy a house, you had to come up with a down payment and like get that 30, 40%. I mean, wow, and you couldn't access it. So I think it's gonna be very interesting that, I mean, everything could be tokenized, right? So I think that's very, very exciting and it's gonna take some time. There's a lot of things that need to happen. But I remain very optimistic on the future of a tokenized economy.

Have you seen some startups that you think are promising in the world of tokenization?

Oh yeah, there's actually a lot of companies that have been active in the field of tokenization, both in the US and globally as well. I would say there's been a couple of challenges over the years. So I would, I was personally very optimistic on the future of tokenization 2018, '19. I have to say that I was wrong, that it happened slower than I expected it. There was often what the chicken and egg problem. If for example, you're a real estate developer, you would say, well, my clients, people are buying houses, why would I bother doing tokenization?

Yeah.

In the same way, you know, if you're an asset owner, you were the owner of the real estate, you'll be, you know what, there's a whole education process. It was cumbersome. So actually took longer than we expected it. And there was also a lot of technical difficulties, whether, whether what standards were gonna be used and what blockchain and stuff are here and, and so on and so forth. When it comes to actually the future of tokenization, I think right now we are seeing some pretty impressive developments, not only from startups, but also from the traditional financial sector as well. You know, every week I hear about new developments from banks who are looking at the space. New startups are coming up with new innovations, and I'm a really firm believer that we're really gonna see a lot of inroads in the space. And by the way, in very surprising ways, you know, for example, your apartment. You may say, you know what, I have this apartment, I want to tokenize half of it and allow people to get exposure. Now, if you want to sell your house, you sell your house. You're not able to sell half of your house. And you can try to go to the bank, try to get a mortgage for half of it. But what about you're able to tokenize it and sell it out? This show that you're doing, your podcast, your episode, why not tokenizing that show? Let people have exposure to it. So it really opens up, I think, the creativity. It's going to open up from entrepreneurship to new ideas to the creator economy. Everything else is going to be amazing. And that's going to be a game changer. And we're going to look back, by the way, at the era we have right now and say, my God, I mean, this was crazy whether we didn't have these possibilities.

We're gonna feel like dinosaurs in 20+ years. I can't wait. I mean, I don't want to get older, but I want to, I want to see the future. I'm excited about the future.

It's very, you know, Katheline Jean-Pierre, I really feel a privilege. I really believe the period that we're going through right now is a historic moment in the future of money and the future of finance. And our kids and our grandchildren will look back at this period and say, wow, This was such a game-changing moment. And from all these, from the creation of Bitcoin to even elements like Facebook at a time launching Libra, to the first central bank digital currencies, to the rise of DeFi, to stablecoins. And really our, you know, our kids and our grandchildren will ask us about this period, say, wow, how was your first NFT? I remember, you know, like I remember the first time I used the internet, for example, it was in a library in Montreal when I was on a chat group and I wrote a message, somebody responded. I was like, wow. And actually our kids and grandchildren will ask us, what was the first time you heard Bitcoin? Transaction, how was your first NFT? And I think it's such a beautiful moment that we're— and I feel personally not only privileged and honored to see it, but to have the chance and the opportunity to play a role in shaping it. You know, I thank God every day for that role and that opportunity that we have. So I think it's a great opportunity for everyone of us. It's a great time to be alive when it comes to the future of finance.

Yeah, I agree. I remember my first Bitcoin, it was in 2015, and at the time it was so complicated to transact. Fact. But fast forward to now, it's a whole different world. I understand it. I didn't understand it at the time. So it's exciting. I agree. So we're gonna go in the last portion of the interview, which is rapid-fire questions, where I'm gonna go from like different topics and then just tell me what you think. The first one is ready. Yeah, I should call it maybe hot sauce.

I love these. Go ahead, I'm ready.

Okay, awesome. So Kenan, FTX FTX scandal happen again?

I would say the exact same way, probably not. There'll be another scandal in 2, 3 years, but it won't be exactly like FTX. You know, as the financial industry has grown over the years, there's always scandals. It happens in traditional finance as well, by the way, over and over. That exact type of scandal may not happen because there'll be safeguards around it, but there'll be a different scandal. I think the reality is there's always going to be booms and busts in crypto, scandals and you know, different kinds of them. And this is why the crypto industry, and I've been advocating for it, needs a base layer of regulations that everybody can abide with, and then best practices that come not only from the companies but by the users as well.

Awesome. Second question: what impact do you think Web3 will have on the future of finance?

Oh, I mean, I think Web3 will be a game changer the same way the internet changed everything, right? I think there'll be also a big impact not only on the future of finance, but on the future of individual on a financial perspective. I mean, very good example. If anybody's listening to this interview, you're not getting paid. If you watch a video on any YouTube or any platform, the platform—

You're being monetized. You're being monetized.

Exactly. I mean, you're being watched. I think we're going to look back and I think in a couple of years where I think it's very normal that you're going to be— you're watching this video, you're listening to this podcast, you're going to be be compensated for your time. And as a content creator as well, I mean, let's use LinkedIn as a very good example. À propos, I mean, I've been creating daily content on LinkedIn for the last 6 years. You know, I have over half a million followers and I create a lot of content, you know, from my newsletter to other videos. Tomorrow morning, if LinkedIn doesn't like me, you guys can cut me off. I don't own that content, which is crazy. And I think I really believe in the Web3 era, I will be able to own my data. I'll be able to get compensated compensated for what I do. And also, people who watch this video or listen to this podcast will be able to be compensated for their time. And again, we're gonna look back and say it was crazy. We used— people used to spend hours on YouTube and not get paid for the time they were— they're spending on. And again, this will be one of the moments. In the same way, today we watch and we say people used to take a ship to go from New York to the UK. It would take them, you know, weeks, or take them, you know, weeks to— for mail to go from one side of the country to the other. We're going to look back and say, wow, this was absolutely crazy. This was how things operated back then.

It's exciting though to know that it only gets better from here. I mean, better—

it gets better for people. For the big Web2 platforms, I'm not sure, but definitely it gets better for overall.

So let's look at the future of money. So where do you think the future money is taking place? Country, region, different governments?

Oh, I think the future of money is taking place. You know, I call it AMEA, right? It's— I think it's happening between Africa, Middle East, and Asia. This corridor right now is years ahead of the rest of the world when it comes to the future of money. The future of money is not going to happen in North America and Europe. It's really going to happen in Asia. It's happening already in various verticals. You see what— how advanced Asia is. Africa, for example, with really where people are unbanked and are looking for alternatives. This is where we're going to see I see the future of money. So I think the next big tech companies will not come up for Silicon Valley. They may be anywhere from Africa and the Middle East and Asia. And I think this is where, on a regional perspective as well, you're seeing massive developments today. I would argue, uh, it's very likely in the next 2, 3 months, the global hub of crypto, it's not gonna be San Francisco, it's not New York, it's not London. It's actually probably gonna be the UAE, Abu Dhabi, Dubai, places like Singapore, Hong Kong, uh, even in, you know, places like Kenya and Nigeria, because these are places where really there's a lot of activity and people need such a future money.

That's super exciting. What is the role of NFT in the future of finance? Because we haven't spoken about NFTs a lot.

Yeah, I just realized that, which is incredible having a panel. And those NFTs that, you know, the non-fungible tokens, for the benefit of the audience, is that really for the first time we can mathematically prove that an asset is unique. So I can prove that mathematically. If I send you an NFT, you know that I'm the owner, you know when I bought it, what price I bought it, and I can prove you on the spot that it's there. I think NFTs went through a whole rise around with artists and collectors, and there's obviously a lot of pump around that. But I really think the best use case for NFTs will be boring old school activities. For example, your driver's license, your university diplomas, you know, your passport. I mean, God forbid today you need to apply for a visa or you need to apply somewhere, you need to get a certified true copy of your university diploma. My God, there's a whole process that starts with certifications, getting apostille from your embassy, shipping around. I mean, that's completely stupid. And we're going to look back in a couple of years where I'm convinced it's really a matter of like single-digit years where university diplomas will be NFTs. Your concert ticket will be an NFT. Your plane ticket will be an NFT. And that really opens up a whole world. So actually I'm very bullish on the future NFTs, but not on the sexy stuff like art collections.

Yeah.

It'll be actually on boring things, on the foundational things. 100%. And that's where I think the real economy will come. There's a whole world of, you know, NFT art collection and stuff like that. Uh, but I think really the biggest growth will have in the most boring stuff like driver's license, passports, university diplomas, and other, you know, what if you get a, a certificate on LinkedIn? LinkedIn, why aren't you getting your NFT? How can I prove that I'm not making up stuff on LinkedIn? How do you know if I put my certain university on LinkedIn that it's, it's true? Maybe I haven't graduated from university, maybe I haven't done the degree, you know? And I think this is where NFTs will play a role that I can get verified on LinkedIn. If I was a product manager at LinkedIn, if I was a look at, looking at the future of LinkedIn and how the platform will play a role in Web3, I would really look at the role that NFTs could play in the broader platform, especially if we want to trust that what people are putting on LinkedIn is actually accurate.

I love it. I'll send it to our COO, who's a big creator, by the way. When we look at, um, you were one of the first top leaders on LinkedIn, a topic that you love, and I know we have 1 minute left, so I'm curious to know how you've used LinkedIn in your career to help build connections in the Web3 space specifically, and also in the finance financial services space?

I love LinkedIn. I'm a big fan of it. Like, my over my half million followers, the majority are LinkedIn. My newsletter is LinkedIn hosted. It's the really— I use the platform. I use LinkedIn in many regards. One, I refuse to meet anybody who's not on LinkedIn, very point blank. If somebody I want to meet is not on LinkedIn, unless they're over 65 years old, for me it shows a lack of EQ and business sense that you're not— you don't have a public profile. So I I really refuse to meet them. Second, I hire only via LinkedIn. I don't care about CVs. I look about not only somebody's LinkedIn page, but also what they've interacted with, what article they wrote, what they've interacted with. That for me, that says more than a stupid piece of paper that was written in a traditional format like many others. For me, I'm a big believer in LinkedIn. When I start creating content on social media, I didn't go on TikTok, YouTube, or other platforms. My main one was LinkedIn because my market is often the institutional market, that's the financial industry market. What I always say, you can have your LinkedIn page open in a bank. First of all, it's not— only platform was not blocked, but you cannot have your TikTok or YouTube or Instagram open. And I think LinkedIn is really the platform that is the— has the most upside potential. So I think for anybody looking at creating content, I know it sounds biased because we're on a LinkedIn curated show.

Yeah.

And I work at LinkedIn, but I remain very optimistic on the future of LinkedIn. And I think for content creators, the biggest upside remains LinkedIn. LinkedIn, there's always areas for improvement on the platform side, but I think it's really the platform that I think more people would benefit of spending time on.

Definitely. And do you have any magic moment that happened on LinkedIn or somebody that you met you thought was incredible? It's like, oh my God, because of LinkedIn.

Oh, it happens every week. I mean, I would get, I get weekly on a daily basis, people reach out to me, especially with my content. You know, I create this 1-minute crypto capsule videos that I really try to give what's happening crypto in 1 I have my newsletters. I have so many videos of people that have changed careers. People have discovered a new passion, who discovered a new business line because of LinkedIn. Actually, even I even have at home a section where people give me gifts, often physical. They're like, wow, you changed my life on this or that. So I really believe that for me, what amazed me with LinkedIn is the only platform that people care about because it's their image, it's their appearance. I'm shocked that I see people that don't have a proper profile page. That haven't updated their LinkedIn profile. They don't get the right amount of bio. And I think that for me, it really shows a lack of business and common sense. My last— my message that I give to everybody is that you have to be your own brand regardless if you work for any company, any organization. You as an individual have your own brand. And if you're not building your own brand, I think you're doing a disfavor to yourself. I'm a big believer in the future. It will be individuals that will be really sought after. I know I was a partner at PwC for many years. Many people didn't know that I was a partner at PwC. They knew I was a partner at a big firm. They would send me any business, but they didn't care where I worked, which big firm I was working at. It's the same for law firms, especially for people in professional services. Same thing from a hedge fund. Again, people don't know the name of a hedge fund, but they care. They want to work with individuals. And I think LinkedIn is the one platform. The biggest, I think, unknown on LinkedIn is I call the silent majority. More people than you think consume your content. They may not like it. They may not reshare it. They may not comment on it. On it, but people watch it. So spend time on LinkedIn.

It's incredible. Well, thank you so much, Henri. And if people want to follow you, they can follow you on LinkedIn. You also have other channels. You have your capsules on, on YouTube, and you have the newsletter that you have also on LinkedIn. And then what's coming up? You have your comic about crypto, and you have two books that people can purchase today if they want to get educated as well.

Of course, the book, The Book of Crypto, which is a guide if anybody wants to learn about crypto. I have my newsletter on LinkedIn people can subscribe to on my LinkedIn everything is Henri Arslanian. Henri with an I, the French way. Arslanian, the good old Armenian way. And very— I love to connect with people. So really, thank you very much, Katheline Jean-Pierre, and thank you for allowing me to share my passion of the future of money and the future of finance with you and your audience today.

Thank you. 100%. The pleasure was all mine. Thank you so much, Henri. Bye-bye.

Thanks for having me.