The Future of Digital Assets: Insights from Citi Wealth’s Deborah Querub

How do you bring this into the traditional? How do you do it in a collaborative manner? How do you grow the pie for everybody?

It is a chance for, you know, the average person to be able to be part of something completely transformative. Bitcoin is now plugged into Wall Street and we're getting going. It's now becoming a mature, more mature asset class, even though it's really new.

We're still very focused on Bitcoin and Ethereum, really, because it's the majority of the market, right? I think the dominance in the whole market of Bitcoin is at 50%. What is the narrative? What is it and how does Does it fit our portfolio? This technology has no borders, but regulations have borders and governments have borders. And so how do you balance those two?

Welcome to the Crypto Megan Podcast. I'm your host, Megan Nielsen. I'm a high-end crypto and NFT portfolio and Web3 strategy consultant. I'm currently on a world tour as a Web3 keynote speaker at all the biggest Web3 tech and fintech events around the world as an industry leader To educate anyone from beginner to C-level executive, and of course, to advocate for women in Web3. My mission is to inspire new people to get involved in the crypto and NFT space with quality, entertaining information they can trust as pioneers in this cultural and financial revolution, a paradigm shift. My name is Megan Nielsen, AKA Crypto Megan, and I'm coming to you from our studio in New York, We have a really special session planned for you, not the typical session that we do, but we're going to be going over very interesting topics. Also getting the viewpoint of traditional finance and traditional asset management as we come into the maturing age of Bitcoin. As Michael Saylor said, we we're going to have some interesting topics today. We're going over current market conditions, the future of digital assets, and how this is all coming to play on the institutional level. And I am joined today by special guest Deborah Kerub, who. is the global head of digital assets at Citi Wealth. So we're really excited for that. And this episode is brought to you by Xebu, transforming settlements in the telecom industry, making settlements easy on the blockchain. So without further ado, Debra, welcome to the show.

Thank you, Megan. Great to be here.

How are you feeling today? I mean, we're here in New York. It's such an energy in the market, in the world right now. There's a lot going on. How are you doing?

Very excited. Things are moving. We have a lot of progress, and it's summer, so we can't complain.

Yeah, absolutely. It's a very exciting time in the market indeed, in the crypto markets, also traditional markets. And in order to set the tone a little bit, I'd love for you to tell the audience a little bit about your background, having started in Goldman Sachs and made the change to Citibank, a little bit about your trajectory.

Yeah, no, absolutely. So I started About 15 years ago, I would say. And I started at Goldman in a risk position, and it was right before the financial crisis. And I ended up getting— it was so interesting, but working so many hours, given everything that we had to see from a stress test perspective. We learned so much, but ended up getting a little burnt out and then realized that what I really wanted to do was whatever was the opposite of that.

Interesting.

And so moved to a new role that was existing, that was becoming— that was, it was called electronic trading. And so we had built an electronic trading platform for foreign exchange, and the idea was to democratize FX. And that was a little bit, as you can see, that's a little bit the transition into that. And so part of it, because I'm actually originally from Spain, part of it was going to be to cover the Mediterranean regions.

Mm-hmm.

And all the secondary banks. And sell our electronic trading platform. And so we were going to banks that traditionally we weren't working with and showing them that that was a way in which they could work now with Goldman in an electronic manner. So I would cover, you know, I would go to Spain, Italy, Greece, Cyprus, Israel, Turkey, all these regions. And it was a great time because it was really the start of the digitization of FX. After that, I actually moved to Goldman New York in that role. So instead of looking at banks, I started looking at hedge funds. And that's really when I started getting more involved in digital assets as well as side working groups. And then from there, I moved to Citi, who actually is a great bank on FX, to look after asset managers again. Very involved in digital assets there as well. And the working groups as we're starting to develop more towards 2017, a lot of the marketplaces were starting to develop some, some trading products. And, and so my clients were the ones that were most interested in it. So we were having a lot of early conversations in this space. And eventually when this role, you know, when, when this role came up to start a business on digital assets on the private bank inside Citi, I jumped on it. It was a great opportunity to be entrepreneurial, do a little bit of the startups, start to dip the toes in digital assets, but remain in what is my bread and butter, which is really the traditional world, the probably overregulated world as well, I would say.

Yeah. Wow. That's such an interesting background. And there's such a contrast there in a lot of ways. So it is difficult to bridge the 2 worlds, although it is absolutely necessary if we want to scale, if we want to make this integrated into society. I know we were having a chat earlier and, you know, there's a lot of what I like to call crypto pirates that think, okay, we just want this to be completely what Satoshi's vision was laid out to do, peer-to-peer, no intermediaries. But you know what, like for institutions to get involved and for this to scale, we do need what I like to call a hybrid approach, right? So I think it's important to hear from the traditional asset management side and your journey You know, kind of being the one, the liaison in between and introducing this new asset class. It's such an important role. So I just want to go back to what you said. You were right when the crisis was about to happen. You said you never wanted to go back to that. What was it that you didn't want to go back to?

Yeah, so it was basically being buried in spreadsheets and a lot of risk control numbers and stress tests and also actually being the the bad in the room where we had to go to clients and tell them that they actually owed us more money from a margin perspective because the risks were exploding. And so I wanted to do the opposite. I wanted to be the one talking to clients about the good fun things and bringing new business in. And that was an experience. And I will add actually how I first came across Bitcoin really, because it was early on. It was about 2012 or '13.

Wow, that is very early on.

Yeah, exactly. And it was actually on the back of that conversation where I was talking to— I was actually in Israel specifically, and already back then, uh, there was the Association of Bitcoin being created. And we were talking about how I was looking to modernize FX, right? And so a lot of the execution was becoming Way faster. So now, you know, back in the day, you had to call the desk and get a quote and then scream over to the trader, and then the trader will come back. You'll you'll do the trade and then block it. Actually write down the tickets and the confirmation. All of that, all of this execution was happening automatically. And I know now sounds crazy that this was only like fifteen years ago. It wasn't that way.

Not that long ago. Not that long ago.

Not that long ago. We've gone a long way, but at the time, that's how it used to be, and people were. Wow, that all of a sudden all of that, the execution part, you could do it in one go, right? Trade email was in your inbox and everything was done. However, the settlement side, the second part of it, the actual receiving of the money would still take 2 days, right? So it would still be on a T+2 basis. And it was back then when they started talking to me about what would it take to democratize and almost digitize that whole front-to-back part, and it would be something like Bitcoin. And Bitcoin had just started, obviously had brought blockchain technology, which actually, um, you have the execution and the settlement part at the same time. And that's how I got interested in the space. It was obvious to me that that could be a solution.

Um, that is very cool. I mean, that's very forward-thinking of you. It's also really cool to speak to a woman in the space that has been involved or at least come across Bitcoin so early on. You know, it's very male dominant. So I think it's very inspiring for many women to hear, uh, somebody like you who's come into contact with this and has kind of carried this narrative forward in this world, right? In this atmosphere that you're working in. So that's, first of all, really cool. And I'm hearing the word democratize, which I know a lot of people on the outside world that are not in this kind of like crypto Web3 bubble feel like it should not be involved with the traditional finance sector. Although you're laying it out quite nicely and quite interestingly enough that there is this intersection between the two worlds and that you were able to kind of like gauge. So you said one thing that I was curious too. You said there were a lot of conversations early on with clients. So there was on your part, like at least in your circle, people you had spoken to that were interested in this concept early on.

Yeah, no, absolutely. In a way, it's not that different to FX. If you think about it, a lot of the people that have gotten into even on the crypto side come from an FX background or commodities background. From a microstructure perspective, it's actually similar to FX and specifically to EMFX. The volatility is not unfamiliar. You're still talking about the balance between 2 assets, whether it's dollar and Bitcoin or dollar and euros.

Mm-hmm.

Or really dollar MX, a bit more, or dollar in Turkey, a little bit more volatile even. So if you're thinking about it as an asset or an emerging asset class, really at the time, is it really an asset class? Those conversations we're starting to have early on. It just feels like the market tends to go up. There's a lot of interest, then a little bit of adoption. Then something will happen, right? And talk about like the—

We know those of us who've been for many cycles, I mean, you've seen it all. And it's a lot to do with human psychology, which is also on the FX side. I mean, it is, you know, something that's been the most consistent thing in human history, right? Is that psychology in those market cycles. So, but so the reason why I'm asking you this is because I find it interesting now, BlackRock came out, you know, Larry Fink, the head of BlackRock, and he said that, all assets will be tokenized eventually, right? And he essentially gave the blessing, the authority's blessing in the world's eyes on the Bitcoin ETF and that, that was what they were getting behind. However, in 2017, he did say that absolutely no client had shown any interest in this and that he hadn't seen any interest. Regardless of what the motives then might have been, what do you think is the reason for people kind of starting to wake up to this now?

Yeah, so we— I wouldn't say it's not that they haven't— they hadn't expressed interest. It's probably more that they hadn't really taken the step farther to, one, do the education, second, actually go for the approval process.

Right.

And that's really where it starts to get a little bit more nuanced. Um, there was definitely interest, but taking it to the next step is always the hard part. It seems like, you know, with the addition of ETFs and the sort of the commercialization of digital assets, it's become a little bit more from a psychological perspective, a little bit more institutionalized, and so more understood. And so people are taking a little bit more effort in actually doing the education as well. So it, it probably is a combination of maturity, of having taken a lot of the bad actors, of some more institutions getting involved from all parties, and a little bit more regulation regulatory clarity in general that is sort of leading to this next evolution, a little bit more, you know, institutionalization. Thinking about from an institutional perspective, being able to address actual crypto, it was a difficult task for many reasons. So when you think about, okay, now we could do it in a way that you're taking a traditional wrapper around it, It becomes a little bit more simple. And so that's a great start. That's a good problem to have that we didn't have before. And so it's a good start. It doesn't mean that it's going to stop there. It's still very early, but it's definitely a change that there's been a lot of work behind BlackRock to get to a point where Larry Fink has that view. Right.

Right.

It's been years in the making.

And to build those rails to be able to Accept that investment in that asset, right?

Right. But also from an education perspective, bringing, bringing the whole machinery up to speed to where is the potential, what is the opportunity, how could this look like in the future? I think that evolution is, is happening, still happening. Some are more advanced than others, and BlackRock got there early, and it's obviously as biggest asset manager in the world is leading a lot of the way for the many that are coming behind.

Right. With just under $10 trillion in assets under management, when BlackRock speaks, the world listens, right? And so it is something that does garner mainstream attention. And we always, I mean, we kind of imagine how that might be, and maybe you can shed some light on this being, you know, working in the wealth management sector. Like when BlackRock comes out and says, this is the Bitcoin ETF is like, we're completely behind it, we're going to start getting new order flows in. What does that look like? Like, we kind of imagine Wolf of Wall Street style, you're calling up and, and just having to educate these boomers on what this technology is, or are they just lined up ready to invest? Like, what does that look like?

So it's interesting, there's a lot of work, a lot of work that still needs to be done. Um, there's still not necessarily a narrative as to like where it fits in a portfolio. That's still needs to be developed. So when the asset managers come and say this is now available, a lot of it is actually going to still be driven by retail or more the hedge funds, and less still so the actual institutions or the more high net worth side. There's still a lot of work to do on that side. So for a bank, this is obviously my views personally. personally, but for banks to be able to get to a point where they start actually having those conversations with their clients, a lot more work is gonna have to be developed. However, it's been remarkable to see the demand on the back of those, right? I think it's blown away any expectation. It very quickly, I think that their ETF was the first one to ever reach $10 billion in AUM.

Right.

It was the first ETF ever to reach $20 billion in AUM. In overall as a launch, it's been the most successful launch of any product in history as well. So those more than actually being Black are the ones saying like, we're behind this. Seeing that reaction in the market, I think is really what's driving the next evolution and the progress and the fact that, you know, you kind of need to get away. There was actually, Um, a survey that Fidelity launched a few, a few months ago, um, their institutional survey, and it shows as well, right? Like, I think it was 68% of high net worth individuals, they say they already—

68%, that's a pretty good number.

I have to double-check that number, but, uh, it's probably somewhere around there. It's already holding. Oh, that's huge. That's huge. Exactly. So It just shows that these are—

It's here to stay. I mean, most successful ETF in history, right?

This is happening. And so we need to figure out how to do it. And that's the challenge for me. That's the interesting bit is like, how do you bring this into the traditional? How do you do it in a collaborative manner? How do you grow the pie for everybody? That's what I find very interesting.

I think that's interesting, growing the pie for everybody, because it is a chance for, you know, the average person to be able to be part of something completely transformative. And so when you're explaining this to traditional financial people who are used to a whole different world, I mean, I know last night I was just at a dinner and I was with some people who were pretty high up in the financial sector, traditional financial sector, who really didn't have a solid grasp on what actually it was. What are the use cases? Like when people ask you to explain this, maybe just in your circle, how do you start? Like what do you say?

Yeah. So you know what, it's a very interesting question and I would say, A little while ago, I would start by explaining what blockchain was and really thinking more about like it's ledger, it's like a shared spreadsheet with some macros, which could be the smart contracts. I've a little bit evolved from that and really started to see that, you know what, when you have an iPhone, do you know how the iPhone actually works? No. Do you know how to use the iPhone? Yes. And that's really what people should start to think about. Think about the fact that blockchain is an infrastructure, really, and that it has— it could be— it's a great, interesting infrastructure for recording data and sharing value that doesn't need this intermediary that we have in the West. So it's just taking away a lot of the friction. And so think about it more that way, like an infrastructure play, without necessarily having to go into the details. Because I believe that adoption will really happen when people start talking about what is blockchain, or what is Bitcoin, or how does it actually work, and more about how do you actually use it.

Yeah, I would agree with you that it's not necessarily interesting to mainstream what happens under the hood, right, of the car, but just that it runs and that it runs more efficiently than anything ever before. But what about when your clients ask, why Bitcoin?

So again, we can't—

Personally. Again, I want to preface this as our own opinions.

But the reality is we are not yet speaking to our clients about it as to the why. It's something that it still needs to be developed. What is the narrative? What is it, and how does it fit in our portfolio? It's not yet. Obviously, it's still very new. It's still very early. It's really only 15 years ago since Bitcoin—

Bitcoin was conceived. Yeah. I mean, it's very short in asset terms, right?

Exactly. In asset terms. And so we are not yet having those conversations. Our hope is eventually we will have those conversations. We will be able to advise, but the market needs to grow a little bit more and some things need to be tested.

Right. Yeah. I imagine you have to approach it with extreme caution, especially with the volatility in the space. Now, these are obviously only your own views and not Citibank's views. So just to clarify that. So how do you think digital assets compare to traditional assets like gold and real estate? How do you explain the difference? Or maybe not even to— just to people in your circle, or how would you describe that? Like, what is the difference between those 2?

Yeah, so it really does depend obviously on what token you're talking about, and that's really the difficulty, right, is actually backing them up. We're still very focused on Bitcoin and Ethereum really because it's the majorities of the market. I think the dominance in the whole market of Bitcoin is at 50% at the moment.

Right.

So, Ethereum and Bitcoin together are still 70%. So, we really are focused a little bit more on those 2. They're a little bit older and a little bit more matured and way bigger. And so, they both can have different comparisons. They're totally 2 different animals, even though they could be bucketed into the same category. It's again, very early to decide what is the right narrative. Very often, it can be categorized as a currency. That was really Satoshi's vision.

Right. Peer-to-peer payments.

Peer-to-peer payment system. It's not proven a very good payment system. You know, part of it is volatility for sure, but part of it has also been the appreciation. Like, it's just not a good idea to buy things in Bitcoin, right?

I mean, not now anyway. I know, uh, Tim Draper, he's a visionary billionaire Bitcoin investor, you know, he's, he's all about Bitcoin. He's been on my show several times, and he has this vision that we're all going to transition into a Bitcoin-driven world and we'll pay with our Bitcoin, but not right now, he says, because right now, I mean What is the average that it— the yield that it's garnered after the past 10 years is about 250% per year. I mean, that's significant. I mean, it must be getting traction and attention within people from the industry. And just so your role specifically within Citibank right now, what does that role encompass?

So it's— we're really starting the business. It's—

Startup, essentially.

It's a startup. Yeah, it's a startup within Established bank, but the goal is it's threefold. But on the one hand, is if our clients are asking to be able to invest in products with exposure to digital assets, then we should be thinking about how we facilitate those. If our clients are asking for efficiencies in the markets, and that comes in the way of tokenization, and that's just really one technology, right? Like we're also very involved in in AI, and we're also very involved in cybersecurity. All these other technologies are sort of like coming together. So this is really just a way of looking at, you know, one technology in a way. So if that comes, if these efficiencies come in tokenization form, then we should be exploring how that facilitates that. That's one aspect on the product side. The second aspect is about being able to talk to these clients who have becoming, you know, have digital assets or crypto in their portfolio and thinking about how actually that correlates with the rest of their portfolio to really help them diversify their portfolio.

Right.

So at the end of the day, everybody should maximize their portfolios and diversification is a way to think about this. So that's another aspect which eventually we're thinking about. And this lastly is the, you know, sort of thought leadership content that comes through it, obviously starting from an education perspective of like, how are we thinking about the space, but eventually leading with how do we view it, if it really should apply into a portfolio. So that will take some time to develop, but that's sort of like the goal eventually, to be a full-fledged advisory, the same way that we do art, or the same way that we do sports.

Right, right, right. That's fantastic. It's very forward-thinking and It's great to hear that that's what your role is there and that you're in the driver's seat there because you clearly have a really well-rounded vision and view on this space. So emerging technologies. So we'll transition a little bit to, you know, it's not just cryptocurrency. And I think a lot of people are making distinctions between this, you know, when all assets are tokenized, as Larry Fink said. What is your favorite trend with the digital asset space that you believe will have the most significant impact? As far as the actual technology?

The actual technology, yeah. So obviously we're paying a lot of attention to tokenization, tokenization of assets. It's very interesting because when you think about tokenization, the most successful asset that has been tokenized is really money, right? Stablecoins, tokenized money market funds, that's really what's been the killer app so far in the tokenization space. So that's been very interesting. But how that applies to other assets that, to what we were discussing earlier, really are prone to be more efficient and to have secondary markets and to be more accessible to other people that don't have access or to have more minimums, that's really where it starts to become interesting as well. So tokenizing other assets like private markets, it's very interesting, or 2-point real estate. But I also am actually very, very passionate about the idea of tokenizing products that are going to be digitally native, right? So like more like art, or— right, or that, that— so like that in itself is a tokenized product. Um, so how do we distribute now products that are digitally native, which are really on a tokenized versus— like, it's interesting because It's actually merging in a way, right? So on the one hand, you have tokenized products, and on the other side, you're tokenizing products. Eventually, they're all going to be digital assets.

Right. That's an interesting perspective way to look at it.

That's what we are trying to— you're going to need a digital wallet to hold either way anyway, anything that ends up on the blockchain. So that's sort of a little bit The view.

Yeah.

And then creating new markets is going to be very interesting as well.

And tokenizing that, I mean, allowing that liquidity to come in to previously illiquid assets like real estate. I know on the show here we've had Propy, who is bringing real estate on-chain, and there are so many different use cases that I'm excited about. In particular, also Zebu, who's, who, you know, I'm also on the governance council of, they're tokenizing invoices and making it easier for those payments to happen. So, I mean, there's just a lot of different innovation happening. How far away do you think we are from, as Larry Fink says, the tokenization of everything?

Yeah, so it's very hard to tell. We did a— Citi did a study, which is public, on tokenization already a few years ago. And they basically were saying that probably by 2030, there'll be billions of users of blockchain. And that's really when you can start thinking about it being adopted. And it will be because it, it, it's not gonna be like the ChatGPT moment where it's like, oh, look, everybody on board. It will be because people will start using it without necessarily knowing that they're using it, whether it is to transfer payments or to book restaurants or buying real estate. They won't necessarily be— or getting loyalty points at places like Starbucks.

Yeah.

They won't necessarily be knowing that they are interacting with blockchain technology, but they are already users of blockchain technology. That's really where that tokenization story probably would be on the adopted. It'll be interesting to see if it's really that 2030. Yeah, so much, so much too. Everything, every year, you know, like we always say, like every year is like 6 years.

Yeah, it's light-year speed here in this space. I mean, it's just So fast. Yeah, I mean, the technology adoption curve, it actually is the fastest growing technology adoption curve in history. So faster than the internet. And yeah, other— according to that curve, it shows about 4 billion new users by 2030, if I'm not mistaken. So right now we're around, you know, 400—

400 million.

400 million, around there. So that's quite a jump. And yeah, and Arthur Hayes, who's the former CEO of BitMEX, is one of my favorite thought leaders, and he says that adoption feel so gradual until in hindsight it will look explosive. So Cathie Wood from ARK Invest also was on Spaces with us earlier, Propy, who I mentioned. And she said that right now we might be having a pause in the industry, which we've seen reflected in, you know, the market kind of going sideways, but that this is like the technology is ready. It's just now how do we implement this? How do we get people to adopt it? And I remember I saw this clip of a woman who was outraged in a diner because the diners were now switching to credit card and they wanted to accept credit cards. And she thought, she said something like, how could they expect us trust this. This is outrageous. How could they even start accepting these? So do you think that's how it's going to be?

Yes, I definitely think so. And it's funny because I've also seen it with FX in a way, right? Like where I started, we had a lot of pushback when we were bringing these electronic trading platforms.

Did you?

Because they weren't personal. So you were taking away that personal aspect and this was a relationship business. And now you wouldn't even think— like, I think over 95% of all the flow happens electronically already. And it's, as I said, it's not that long ago. So yeah, you wouldn't even think about not trading a lot of some markets. It also happened to equities as well. So you always get pushback on new technologies. I guess that's also something that I just like at this point. It's like going a little bit against the way—

Against the grain, huh?

Against the grain. It must be what I like. I'm not going to lie because I keep doing it. But yeah, I absolutely agree that that's a little bit how it's going to happen. Eventually, you're going to look back and think, oh, how did we get here?

Yeah.

And you already see it, right? Where we were a year ago to where we are today. It was funny. I was talking to a colleague of mine, a friend of mine from Bitwise before the Bitcoin ETFs. Launch, and this is, you know, a very personal story, but we were both having lunch and it was at a time where it's like September, October, still last year, still wasn't 100% clear that these Bitcoin ETFs were going to get approved, right?

It was all the talk, people were anticipating, but they were like, you know, Larry Fink has a pretty good track record. Yeah, but we don't know.

But we don't know. Exactly. You don't know until it's, it's official, right? Yeah. And we're both like, so if they don't get approved, we probably don't have a job.

That's it.

Like the next, because Because what are you going to really start building a platform if you don't have a product to build on the back on?

Right.

So we're like trying to think about what we would be doing instead. But so it was interesting to see. You see, you know, we met again recently, again for a recent lunch as well. We're like, wow, how have things changed? Even the Ethereum ETFs. So, you know, they happened from the day.

Yeah, I was going to ask you your thoughts on that actually, because the Bitcoin ETF, there's a lot of talk, a lot of back and forth, and There seemed to be a stance that Eric Balchunas—

Bloomberg.

Yeah, he's like, you know, the guy—

He tells us what to think.

Yeah, yeah. I mean, everyone goes to him on X, at least in the crypto space, to see what's happening in that traditional world.

Yeah. What's the percentage?

Yeah, it was—

What's the probability?

Exactly. And he's our guy, you know, he's the guy that tells us what's going on. So he said, yeah, 25%, it's not looking good. It's probably going to be pushed back. And then within one week, they completely flipped the stance and okayed it. What do you think was the change there?

I could never know. I don't think they know. And I rely on him as well. I was also talking a lot to the asset managers and they basically hadn't seen any movement from the SEC. They hadn't really reached out to them. So they didn't think it was going to happen because they hadn't seen the movement that they would have expected.

Many attribute it to political pressure, which I know you can't comment on because it is, but You know, like, it is interesting where you have this, these presidents coming out now and saying they're pro-crypto, um, Kennedy as well as Trump. And then the Biden administration was, was typically, you know, anti— well, not anti-crypto, just not coming out as pro-crypto. And so many attribute it to that, and we'll, we'll just leave it at that. You know, we don't know.

The one thing I would say about that though is, and obviously I don't know if that's what it was, but it could also be that the SEC actually learned some lessons from the Bitcoin ETFs where at some you knew way in advance that they, you know, well, it wasn't way in advance, but like a few weeks in advance that this was going to happen already. And so the market reacted accordingly, expecting it, right?

Right.

Whereas this time they maybe wanted to keep it a little bit more under the radar until like very, very last minute to avoid that sort of rush. That could be part of it. They've done similar, they've done some changes in the way that they've issued, um, they've, they've allowed They've accepted these ETFs, they've approved these ETFs. The last thing they said is like, okay, file everything, but not the fees. They didn't want to see this fee war.

Which, yeah, it's established itself.

Exactly. There's some lessons learned. I don't know if it was or not some political pressure, but it could also be definitely some lessons Learn on the back of like previous issues.

I think that's safe to say. Yeah. So now transitioning toward the future of this space, it's been interesting to see the evolution in such a short time. How far away do you think we are from other ETFs potentially being approved? I mean, do you think that's on the horizon or is that maybe next cycle? What do you think?

Well, it's funny because who knows, right? Let's ask Eric that question. He will tell us.

Fair enough.

It's really hard to say because, again, no one expected Ethereum ETFs to actually launch this year. But we kind of knew that it was— well, actually, no, we didn't even know for sure because there was this big question about whether Ethereum was a security or not, whether they were going to allow for staking or not in the ETF. So there were many questions that needed to be resolved, which actually turns out that they weren't big questions after all. The rest of the tokens, I think they're very— there's still a lot more education to happen around the rest coming up. And I know there are some asset managers that are already starting to issue, like, filing for Solana, you know.

Yeah, we've heard, we've heard rumors, some news coming out that that could be potential. And that's also interesting to see the SEC's view on what is the security versus a utility token and how how that will evolve. But regulatory questions, how has it been to kind of like work within the regulatory framework that is established right now as far as like your role at the bank? Has that been challenging for you?

Yeah, listen, on that sense, banks are not going to work if there's regulatory clarity. Like, it needs to be very clear. So not only are the regulators They actually have to tell us that it's okay to do something more than anything. And we're not going to be operating in gray areas.

Right. For banks, it's essential that there is very clear regulatory approval. I mean, obviously the ETFs have helped establish those rails as a means to accept.

That's the clarity that needed to be brought. So in all honesty, it's very easy. Whatever the regulators tell us, that's really how the banks are going to operate. And there's no room for error there.

Right. So it is really just waiting for the space to come to and to mature as an asset class, as we've been speaking about.

Yeah. And again, there's a lot still— this is a very complicated space because, in my view at least, it's that intersection between finance, technology and people coming together. And so there's a lot of nuances there, and there's a lot of education as to like how it interacts and like what is it, right? What's the narrative? And also very different in terms of like how it's developing. Is it utility? Is it loyalty? Is it incentives? Is it— what is it that it's solving? Like, what's the problem?

Right.

So it just has so many different considerations that it becomes very difficult to explain or to prove or to provide. And so a lot of education still needs to happen.

And again, going back to that conversation, how do you explain this to your table when, you know, people come to ask you, what is Bitcoin? What is it? And, you know, it's tough. You got to find something that they resonate with, that they can understand. Um, you did use—

yeah, I think like what I would say to that though is like What we try to say, or at least I like to think, is blockchain will eventually do to value the same thing that the internet did to information. And I feel like that resonates to people.

Yeah, it's the first—

When the internet was created, did anybody think that Facebook and Google would be the most successful? Amazon, like everything would be traded online? Like, no, right? So like, it's really hard to see the future and what these technologies are going to evolve into. I think it's even harder to see something like blockchain because it's such an infrastructure, really. It's not, as I was saying before, like AI, you kind of like can think a bit about like taking over everything without necessarily going where it's going to take, but you can imagine it, right? Blockchain is harder.

It's hard to conceptualize.

To conceptualize that that way.

I remember one boomer friend of mine asked me, but where are my Bitcoins? Like, where are they? Just even conceptualizing where they're stored and how, you know, this digital value, it's very hard for people to think about because it's not something that's tangible per se, right? So it's hard to explain that it's almost, you know, like Michael Saylor says, money is an energy, right? And so it's very different. It's interesting to each time I kind of refine that.

I like that Michael Saylor also says that it's It's actually like real estate. That's why he says— Yeah, digital portable property. Yes.

Yeah. But more than property, it's digital and portable.

So it's digital portable property.

Yeah. And in Web3, it's essentially the first— it's the free transfer of value. So that's like what, for me, it's real true ownership, right? And digitally verified. So it's the next iteration in technology, the next layer of the web. It's a really exciting time for sure. So Yeah, those, those coffee table conversations about it, it's just like you say, it's almost much, much easier for people to— our brains can't comprehend where this could be going. It's very hard to, to conceptualize. So I think that's really cool. And speaking back to what you said about democratization earlier, just along those lines, do you think that digital assets can help improve financial inclusion?

Yes. So I had told you my story of how I got interested and familiarized with Bitcoin initially. But the other area that I thought was very interesting was, as many families around the world, like my family was also immigrants into Spain.

Yeah, one thing we share. I also live in Spain, so I think that's fantastic. Yeah.

So I was born in Madrid, but my family wasn't. They moved there and in a way they actually had to leave in a rush their original country. And it was incredible. And, you know, you had to sell their house and you had to leave a lot of your possessions behind. And the idea that you can have something that is portable, that has value, that you can take with you regardless of what's happening in that region. I think it was, to me, what really drew me into the space. I just think there isn't anything like that. And I think it's very important that there is the option for those people that will need it in countries that are having issues with their currencies.

Right.

Or a bit more dictatorial. to be able to have that option. So I think that's a very interesting concept. And why is that? It's because of this decentralized technology doesn't rely on a third party, and that is instant execution and settlement at the same time, and that you can port— portable without having any intermediary. And so if you apply that to other assets, then you have democratization.

Right.

Across and inclusion and be able to— but I think there are a lot of things that still need to be resolved, like the identity part and the security part and money laundering and making sure that it's not being used illicitly. So a bit more of the regulatory clarity and the difficulty and the fact that this technology is That has no borders, but regulations have borders and governments have borders. And so how do you balance those two? There still needs to be a lot of work around that.

Yeah, yeah, that's for sure. Although to your point about that, about the money laundering, I think that some studies have been done that it's actually, out of all the currencies there are, one of the least illicit currencies today as far as money laundering.

Yeah, it's not necessarily that it's— I wasn't trying to say that it's like the most used or delicious, it's just that it's used and—

Something that needs to be figured out.

It needs to be figured out because also the beauty of it is that it's more transparent and so it can also be more trackable. And so how do you protect that transparency, but also how do you track where it shouldn't go, right? Like there is more functionality around it and it's programmable, you know, it could be programmable in a while. So like a lot more work needs to happen around that layer anyway for it to be more inclusive. Like right now, almost to your point, like that's why a little bit of the financial system is, is not so inclusive. It's not necessarily because they don't want it to be, it's because of these restrictions that have to be put in place that make a lot of the friction in the ecosystem.

Yeah, no, absolutely. And now they have access to these tools that traditionally potentially only accredited investors had access to, but which will also be a difficult narrative to kind of weave into this whole thing to navigate through because DeFi has also evolved and these peer-to-peer transactions and payments. But we want that to be on a mass scale and we want this to be facilitated to everybody. So what I deem to be the hybrid approach, eventually, you know, banks will have their position and their place in this to help facilitate that to their customers in the future. Can you comment at all about what you think could be like the beginning of the process or how they could be intertwined?

So it's a great question. And to your point, you know, I don't like to think about this distinction between like all the crypto natives and the institutions so much. I like to think that there could be a place where we sort of merge together. Right. There's that. And it so happened, you know, we were saying when fintech started to come along or where digital banks started to come along, a lot of people were saying, oh, they're going to Disintermediate banks or they're going to replace banks. And in the end, we just work together in many different capacities. And I think that's what's going to continue to happen in the digital asset space as well. This place is going to continue to evolve and grow, and there's a lot of room for growth. And I think there's room for both players. Right.

Those who want to self-custody and those who want a different option within the space. And they're not necessarily going to be on the camp of, I want to do this all on my own. I need to be doing this on my own myself. Because some way to preserve the ideals of what this is facilitating, but also to allow access to everyone.

Exactly. And it's incredible to see the innovation that has taken place in the digital asset space from the natives community. I think there are lessons learned there for the banks. to be adopted. I think DeFi is incredible. I think the DEXs are super smart in the way they route a lot of the trades. Some of it could definitely be adopted in the future in banks. But there has to be also that other way of thinking in terms of how do you think about regulation and governments and relationship with regulators.

Like you said before, this technology has no borders, but governments and countries that do have borders.

So, you know, exactly. So there's, there's definitely this relationship, um, that it's going to continue to evolve and to grow, and this merge that is going to continue to happen where we sort of all come together in a way. And that's my hope, and that's why I like to think about it. Um, I mean, I consider myself, you know, a crypto person in an institution.

2012. I mean, I think you have the right to consider yourself—

Yeah, that's, you know, it's funny, that's when I started thinking about it. Like, funny story as well is like when I finally But Bitcoin for the first time was actually 2015, so I missed a few years.

It's still very much an OG, what we consider today.

And it was funny, I actually, I had my first daughter, and, and I, and my husband and I, we, I wasn't, I couldn't stop talking about it. I just thought it was such an interesting technology. And he was like, stop talking about it, just open an account, buy some, and like, let's not think about it for 18 years. And you know, maybe it actually will pay for her university. And that's what we did. We're like, bought it and put it on the side, and we think about it as it's hers. Then when my son was born, we bought Ethereum instead.

You're like, what's the next best thing? I mean, that's, that's cool though.

Yeah.

And that could be— I mean, that's so cool to have had that conversation though at that point in time. Not many people could have even chalked it up to that. I mean, it's incredible that your husband, uh, was able to think that way. Means you transmitted the message quite well, I would say.

And yeah, well, yeah, it was definitely a two-way conversation that way. We were both looking into it. Which is interesting. But, you know, it's funny because we think— we just think it's going to continue to progress in that space. We'll see. We'll see how it develops.

Yeah, I love your personal story. I think it's true that adoption will come when people are not necessarily understanding that they're even interacting with the technology, when they continue to invest for their 401s or through the rails that are set up through entities like BlackRock, but also emerging, like, countries that it's a necessity there.

Mm-hmm.

I think that that adoption will happen more when, when actually they need it. And that's been a topic in this, this space recently, in a narrative that people in the US take ownership for granted. So, because it's always been a right, right? But so in other countries where that's not been something that's been inherently available to them, this is really making a difference in their lives. more than we could possibly understand in other areas where we've had that ownership, right?

You know, absolutely. And it's interesting because it's actually similar to FX, again, bringing it back. But like, if you go to Europe and people actually care about whether the dollar versus the euro is, and the sterling versus the dollar—

I'll say I do because I'm seeing that my euro—

You come here and you're like, oh my God, like, what's happening here, right, with the prices? But like, everything else is really denominated in dollars, so there's less of that pressure in the US to think about it that way.

Right.

But like when I used to travel to Turkey, for example, for work, and I remember that the taxi drivers used to ask me about FX. It's like, oh, you're in FX? What do you think is going to happen to the lira? And to me, that showed that everybody day to day have, you know, care about where the dollar exchange is to the lira. And so they have different needs and necessities, and it's a different way to understand what this, this is, this gives them, right? Like the opportunities that this brings to them to be able to hold assets that are not necessarily government and subject to inflation and things like that, right? Exactly. And subject to inflation, um, for better or worse in different places. But it's just for sure there's some, some countries where it's a little bit more top of mind than others, right?

Yeah, it'll be interesting to see how that adoption happens. I loved your story. What I will say on a personal level is when I got involved in this space and it was on the investment side. I really love explaining it to women. I think it's really cool that you were the one explaining it to your husband and that you went so far deep down the rabbit hole because I've seen that, I think that the education that's happening now is, is didn't necessarily happen around financial instruments as much. And now it feels like there's going to be more talk about that and that maybe people who are left out of the traditional financial system will start to learn about finances because of this new movement. And I love teaching women. I love that you, you are a role model for many women out there that want to learn. about investing, about getting involved in this landscape, and that we can all come together and kind of democratize the space.

No, absolutely. And I've seen some stats also that say that actually a lot, a lot of women who we know are less investors than men in general, right, some of their first investments have actually been in crypto as well. That's how they actually got into crypto, into, into investment, is via crypto as well. So that's— there's actually an opportunity there, um, which is very interesting to To see and to follow. And I would love— I, I do that often. I like to do it as well, have little groups of women come together and talk about this, um, and beyond this, and how do you get involved. Because to your point, the interesting thing about this space is that the best place, the best way to learn is by doing, right?

Absolutely.

And going through them, right?

Absolutely. Just get involved.

Just remember what I was going to say before, but like, the other interesting thing is when we first bought Bitcoin and That was when the first fork happened. And I remember I seen in my account double the amount of the Bitcoin. I was like, there's been a mistake. Why do I have 2 of these things in my account?

Right?

And then you're like, oh, this is a fork. What does a fork mean?

And then you learn by trial and error.

And then you learn by doing it. And what do I do with this? And what does it— so you really end up having to do it. And that's what I try to tell a lot of especially women, is like, just like, just start from learning, right? Like, you don't have to put your— all your investments. Just put $10. $10 already, buy one NFT. Like, and why, why buy one NFT? I don't care about the NFT. I care about open a MetaMask account and like figure out how it interacts and how you sign in.

Absolutely.

And that's sort of like part of the process of learning by doing, which I think is very important in the space. But sometimes there's a little bit of pushback because it's still not user-friendly. And I also think there's a lot of user-friendly work that needs to be done in the space actually to bring a lot more people on.

Absolutely. I mean, you said it best. It's just learn by trial and error, learn by doing. You're inspiring so many women out there, and I really appreciate your insights today. And you heard it here, just get involved however you can, get as much knowledge as you can, and watching these kind of shows is one of those first steps. So Deborah, thank you so much for sharing with us today, and we hope to catch up with you sometime soon around the world.

Thank you so much.