September 3, 2025 • 37 mins
The Genius Act in the US and a new regulatory framework in Hong Kong have helped legitimize stablecoins, potentially setting the stage for increased usage. The two largest issuers of dollar-backed stablecoins, Tether and Circle, hold more than $270 billion in US treasuries. At least one person – US Treasury Secretary Scott Bessent – sees that rising to $2 trillion.
This should reinforce the dollar's role as the world's reserve currency while disrupting the global banking and SWIFT payments system, says Yat Siu, co-founder of Animoca Brands, which has $1.8 billion in digital assets. He breaks down what's next for stablecoins and digital assets – and reveals why his company tokenized a 1708 Stradivarius violin. Siu joins John and Katia on the Asia Centric podcast.
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Speaker 1 (00:00):
Stable coins. You've probably heard about them, you may not
know what they are, and you should. In June, US
Congress passed the Genius Act, creating a regulatory system for
these digital assets. And here in Hong Kong, very recently,
the city began the process of issuing licenses to stable
coin companies. These are big steps towards legitimizing the asset
(00:24):
in the global financial system.
Speaker 2 (00:26):
Total circulation of stable coins is also booming. The two
largest plays in the market, Circle and Tether, now hold
over two hundred and seventy billion dollars in US treasuries.
That's more than what sovereign countries like South Korea, Saudi
Arabia and Germany hold, and this could have profound implications
for interest rates and currencies.
Speaker 1 (00:48):
You're listening to Asia Centric from Bloomberg Intelligence. I'm Kaetidmitriva
in Hong Kong.
Speaker 2 (00:53):
I'm John Lee, also in Hong Kong. Today we have
one of the industry leaders in this space. He is
Yatsu founder of Animoker Brands, a digital assets conglomerate based
in Hong Kong with one point eight billion dollars in assets. Yeah,
welcome to the show.
Speaker 3 (01:09):
Thank you for having me.
Speaker 2 (01:10):
It's a great pleasure to be here now. Yet there's
a lot of sophisticated crypto investors. There's obviously bitcoin bros.
But for crypto luotites like myself and me, can you
explain what exactly is a stable coin?
Speaker 3 (01:24):
Right? Maybe before we even go to what is a
stable coin, I think it's important to think about what
does tokenization do and what is tokenization. When you tokenize
an asset, any asset on chain, what you're really doing
is you're giving it the qualities of togonization, which is
enhancing its network effect, and that actually brought about an
entirely new industry. Whether this is a stable coin which
(01:45):
is essentially expanding the network of the value of the
dollar in this case, the sort of a stable coin
in itself, or if it's something like a pure network
asset like bitcoin or ethereum. These are assets that don't
have necessary something underlying it, but are held up by
the power of the community and the network effects inherent
and the builders and developers on top of it. So
it's really a way for the first time to own
(02:06):
a network asset that wasn't really possible for And so
what a stable coin is is the marrying of essentially
the real word asset of the dollar or any currency
around the world with that of tokenization, which then essentially
brings it both the speed and distribution of the Internet.
And if you think about what the Internet did for information,
basically stable coins and tokenization is now doing that for
money and value. And that's why you see this massive expansion.
(02:28):
The growth that you've seen in stable coins is really
what you see when you put something on the Internet,
which is essentially global scale, reach, distribution, and everything else
that comes with that.
Speaker 1 (02:38):
And before we get into how it actually functions and
how it's you know, different from a bitcoin, for example,
where did it come from? Because I feel like just
in recent months you're suddenly hearing about the US Genius
Act Hong Kong issuring what's kind of the history of
stable coin?
Speaker 3 (02:52):
Well, I mean, stable coins have been around for a while,
and you know, companies like Tether and Circle thereafter, and
there's actually many other companies there as well, whether it's
like you know, for instance, companies like pack Sauce, they
actually provide services to enable other people to launch their
own stable coids, and in principle what they're doing is
is they're basically saying I'm buying something that underpins the
(03:13):
value of the dollar and keeping it stable with a
basket of assets and in the case of something like
circle treasury bills or maybe just you know, in the
case of sort of what the HKMA is mandating it
has to be in the currency, so on hundred dollars.
But also some people have, especially in the early days when
there was no regulation in no clarity around it, have
basically put other assets in them, and so controversially in
(03:34):
the early days, and the reason why teather has had
a controversial past, according to some is because some of
those assets consisted of bitcoin. So what they would say is, hey,
we have x amount of bitcoin, and then essentially we
would mint a certain amount of dollars based on the
value of bitcoin which we had in the reserve, and
the reserve asset essentially creates that way in which we
sort of represent the dollars. So if you have a
(03:55):
one hundred million dollars worth of bitcoin, then I can
basically mint on a hundred million dollars worth of dogs,
and if the bitcoin goes down, I have to basically
buy more. If it goes up, then maybe you so
well you can basically create kind of a stable reserve balance.
This is of course much less controversial when you do
it with cash or with treasury bills because there's a
clear value denomination, But when you start mixing it with
digital assets in the past, that was more controversial. Tether
(04:18):
has definitely moved further away from that, but in its
early days it was essentially pegging against that, and it
was also an era of sort of experimentation as well.
People were sort of seeing these kind of interesting new
financial constructs and say, okay, this could be a stable coin.
This is how we do this, And when bitcoin didn't
have the legitimacy the head today, using that as an
underlying asset, it would have been controversial, but that was
(04:39):
really the history, and the history was also around how
do I onboard people into the digital assets world? You know,
now we talk about it in terms of crypto or
with three for instance, and if I tell someone, you
know what, you can enter this world by converting your
one thousand dollars into one thousand digital dollars. It's a
much easier way to onboard someone and then they can
start buying other tokens and on, and really the biggest
(05:01):
use case for stable coins has been trading and purchasing
and activities that are on chain or in exchanges, so
all of the decentralized exchanges where people can trade, all conferences,
the stable coins have a big use case, and of
course it's used for remittisances and everything else like that
as well.
Speaker 2 (05:15):
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(05:38):
If you like what you're hear, don't forget to subscribe
and share. I wanted to talk about the recent US
legislation in particular, you know, the Genius Act. Can you
explain why this is so important?
Speaker 3 (05:51):
Well, is particularly important because when you consider what the
US stance was on crypto generally including stable coins, up
until the Trumpe administration, it was quite hostile. So to
see essentially the US go from very negative to the
industry to incredily positive to pass legislation on the stable
coin is a massive legitimization of the market. And you
(06:13):
can see this already not just an impact on prices,
but also people want to build and develop on that.
So that's one way to look at it just macro
what it means. But the other thing is that this
administration certainly believes, which is maybe diferent what the previous
administration believe, that stable coins is a way for the
US to continue its dollar hegemony through stable coins. Now,
when you consider where these stable coins are being used,
they're used all over the world, but they're growing tremendously
(06:35):
in places like Nigeria, South America, Southeast Asia, places that
really couldn't be dollarized in a classical sense because you
couldn't even have a bank account, and now with a cryptoallet,
I can now have digital dollars, and dollars has always
been desired in these markets, that's just no way of
reaching it. So you could say that in a way,
they've been assimilated to the dollar at a young age.
(06:57):
And so therefore, if you talk about these rising nations,
which are mostly young populations like prinstance, Mina, Africa, South America,
they're also essentially growing up to the dollar, and that's
basically a way which you can create that influence, which
is also the reason why other markets are in the
world are looking at this and say, okay, how do
we either counter or deal with that sort of circumstance,
because that's something that you can really control. Also, the
(07:17):
governments themselves have no oversight of it in a classical sense,
So if you're a bank, you have to be banked
first in order to receive any currency, and the bank
itself might restrict you from being able to exchange money
or maybe to buy dollars. But with a stable coin,
basically the internet is all you need and wallet and
someone or across the world can send it to you
and you can transact with it, which basically means that
the digital dollars that were in the form of stable
(07:39):
coin becomes the way in which you transact in many
of these economies, effectively dollarizing these economies even more. And
that's actually one of the key areas around why it's
important for the US because of course a big part
of the US business model is around essentially using the dollar, right,
and it's exactly it's a reserve currency of the world.
How do you make sure that it's the reserve currency
(08:00):
of the world. You know, basically you sort of enter
the internet and make it the native currency. And so
that's a strategy white so important to the US. And
what is also interesting is that because of the Genius Act,
banks before were not allowed to enter into that space.
So expect that every major bank, maybe even smaller banks,
are all going to start issuing their own stable coins.
I mean, you even talk about companies like Walmart and
(08:21):
Amazon and possibly Google and Apple, all of them who
have so much dollars in their treasuries, Well, they could
issue a stable coin now, and they could basically use
it for their own commerce and receive transaction fees or
use them in different forms of commerce. And it also
enables money to move faster from place to place and
also brings you more loyalty to the customer because they're
now attached to your currency as it.
Speaker 2 (08:42):
Well, but wouldn't this cannibalize the business model of banks,
Like that's how they make a lot of money, you know,
retail customers they send their money through the swift system,
usually takes like two to three days, sometimes business days,
and they always give you a bad effects, right, but
they make big margins. But now if you could do
this like seamelessly, wouldn't it be bad The margins would
be smaller.
Speaker 3 (09:03):
Well, first of all, anytime when there's an innovation and
a change, it necessaries a change in the business model
and also requires people to become more efficient and more competitive.
Frankly speaking, so I think it's high time, just generally,
that the industry move away from something like swift and
move on to some area where the value doesn't simply
come from a transaction fee. I mean, just think about.
You know, what we used to pay for a phone call.
(09:23):
It's expensive, and what happened when we reduced the call
or the phone call to something that was essentially deminimus
in terms of the cost. The value basically didn't come
in terms of making the call. The value came on
the speed of the connection that we had and the
ability for us to conduct business faster and have more interactions.
I can always reach you all the time. And what happened.
Networks grew faster, business grew faster, Expansions happened because transactions
(09:45):
were cheaper, faster, better, And that's basically what we have
with blockchain. So to me, this is Actually they're positive
for society because I'm not able to transfer money across
the world cheaper, better, faster. I mean, think about all
the extraction that happens for people who are unbanked, right,
I mean, there's so so much value that goes away.
Is it isn't it better that instead of paying really
large type of transaction fees where it's not just about
(10:06):
the swift transfer, but about the middleman who basically is
able to gouge you sometimes ten twenty percent on the transaction,
that it now goes with nine nine percent of their
value to the actual end user, and then in their
local communities they get to spend it in local economies.
Now what does it mean though for the banks, Well,
it means that banks are going to be changing the
business models around acquiring te bills or maybe looking at
(10:27):
ways and incentivizing customers to deposit their stable coins that
they would then generate active yield on, you know, in
the same way that you would do term deposits for example. Right,
So there's still ways in which you would make money.
I don't think the bank is gone because they would
still have their trading strategies and their yield generitorise they
just have to be more competitive and ultimately also more transparent,
(10:47):
which I think is just better for the consumer.
Speaker 1 (10:50):
And how much of this relies on the US dollar
as the reserve currency relies on US exceptionalism.
Speaker 3 (10:58):
I think it's very critical at this small one in time,
because the US is the reserve currency of the world.
It is basically the standard. Without the US dollar, the
legitimacy and the ability to reach the world wouldn't be there.
Because it's not just about, you know, the fact that
the US is behind it and supporting it. It's also
the fact that the communities around the world desired it.
I grew up in basically still when we had an
(11:20):
East and West Europe, and I remember my mom used
to work at the eastern side of Berlin, and so
when you cross that border, the dollar was the most
desired thing. It's like the whole black market around basically
trading either Deutsch MARKO dollar back in the day. And
that had to do with because it was stability, it
could be used as global trade and that sort of
(11:41):
image persists. So the dollar is the desired asset. Also
from a branding standpoint, I mean, it's not only about
the utility, it's also Hollywood, it's movies. It's all that
kind of stuff, right, you grow up to like, you know,
whether you do a business deal in the media, you
talk about it in dollars, you don't talk about it
in other current and right, so that all of that
sort of matters. And I would say now as a
(12:03):
result of that, for deck to get that digital adoption,
if it's in the dollar, it just has a much
more legitimate framing, and especially if it's now licensable through
the Genius Act or maybe also what Hungko was doing
with their stable coin, it just makes it that much
more safer and accessible.
Speaker 1 (12:19):
But does that world still exist because we are seeing
cracks in it? You know, with President Trump tariffs, shifts
in global trade policy. There was I think it started
a couple of months ago, but this idea that US
exceptionalism might not be so solid going forward, those.
Speaker 2 (12:36):
This D dollarization trend.
Speaker 3 (12:38):
So is there a D dollarization trend? There is a
D dollarization trend only I think primarily because a dollar
has been so weaponized in a way. But I would
say there's a difference between a dollar stable coin and
the CBDC. So what the industry and especially the Republican
party was railing so much against was the CBDC. The
reason why the CBDC is such a negative construct, because
in some ways they're both digital, is that one the
(13:00):
government has full control over your money, like they can
literally take it out of your account right and that
type of control means is never your money and you
don't have the freedom to transact because they can also
side where the stable coin technically speaking, it's in your wallet,
the issuer isn't, you know, they have to comply, but
they're not actually issued by the government per se, and
it's not controlled by a single entity. They can just
basically delete your money as it were, takes stuff away
(13:22):
from you. So I think the construct over it as
a stable coin, actually I think will reverse that tread
because now you have the safety and the assumed security
of owning your assets, which is also the argument where
people were so into bitcoin, because there's an asset that
I have self custody over that I control versus I
put it in the bank. So you know, putting in
the bank, the bank can lock you out. You can
(13:44):
be debanked or unbanked. And then and they're using it
as well. In some cases you've heard some of these
stories and as a result you are excluded from the
financial world, but all the assets that you have in
there you lose as well. Here you have an element
in which you can scale self custody. So this is
also an important point because you know, in the older generations,
it wasn't that on typical to have a lot of cash,
maybe in your back pocket or like in Japan, underneath
(14:05):
your bed, you know, that type of stuff. That is
something which wasn't feasible or practical anymore. But in the
digital construct you could actually have your money yourself or
a certain amount and have the freedom around that. So
I think it's a way in the combat sort of
this dedoorganization. Having said that, I think US exceptionalism is unique.
And I know there's some proponents who are like saying, Okay, well,
the US is kind of done for and you know,
(14:27):
all that type of stuff. I don't believe that. The
reason why I don't believe that is because the US
has probably the only country in the world where it
can have this amazing amount of creative destruction. Right It's
the place where you can blow things up, and somehow
it still works because as a culture it celebrates that
and it's because it focuses so much on the individual
versus in other places it's much more focused on the collective,
(14:49):
for instance, diverging a little bit. China's sort of reach
in AI for instance and other technologies would not be,
in my view, as advanced if it wasn't for the US,
because it's something to comput against. So the US pushes
a boundary because they have that exceptionalism, this innovation, and
then China reacts to it as its ability to create
and produce and innovate as well. But if it wasn't
(15:09):
for the US, I think China would nearly be as
competitive or maybe as advanced because it doesn't have to.
And that's basically the difference between I would say that two,
both of them being incredibly ingenious in their work. But
I think that you need that exceptionalist I think the
world needs that exceptionalism, and the dollar represents that in
a way.
Speaker 1 (15:26):
On that point, is there a world in which there's
a stable coin that's actually backed by Chinese currency, by
the yuan?
Speaker 3 (15:33):
I mean, I think there's a lot of question. No,
So it's not a dumb question. There's a lot of
speculation around that. I would say at this moment in time,
there's a lot of discussion and people are saying it's possible.
But of course, you know, we for instance, with our
joint meentor with standard Charter and HKT anchor point. You know,
we recently submitted our application to have a license here
from the HKMA to a launch a hundred dollar based
(15:54):
table coin. And the difference about the HKMA license is
that it does have the ability to do it with
different basic currencies. So is it possible it is? Is
it in the works? No? Right, I mean, that's obviously
something that is being investigated, is being observed. But for
sure China is looking at Hong Kong as the test
bed for that as it always has been, right, Hong
Kong has always been sort of the experimental financial sandbox
(16:17):
for what happens in and out of China to learn from.
And clearly, and this has been already publicly said by
the Chinese government, they are also observing and reacting to
what the US is doing with the Genius Act and
stable coins and blockchain technology because they realize that, you know,
neither country wants to be behind in any form of
any shape of anything related to technology. It doesn't matter
(16:38):
whether there's robotics, whether there's AI, whether it's you know,
compute or where there's blockchain.
Speaker 2 (16:44):
So let's talk about Hong Kong. So, Hong Kong, you
know stable coins, the regulations passed on the first of August.
Speaker 3 (16:50):
Yeah, actually ahead of the US.
Speaker 2 (16:51):
Interesting enough, Okay, so Hong Kong's really here, So tell
us what's the aims of the Hong Kong government with
this new regulation?
Speaker 3 (16:57):
So, I mean, first, what is Hong Kong. Kong is
maybe one of the leading financial centers in the world,
certainly in Asia, if not in the world, you know,
top three, top five, So you have to stay relevant
in that and how do you stay relevant. You've got
to go where the future is going. And Hong Kong
has made it very clear that the future is digital,
so that means you have to embrace blockchain technology and
(17:18):
digital assets. When you look at the demographics, and especially
younger demographics in places like South Korea or Turkey or
you know, places in the Mid East, it's something like
sixty to seventy percent of people under the age of
thirty in some of these places exclusively old crypto. So
they don't buy stocks, they only owly tokens. You know
they're going to get older, and they don't just suddenly
(17:39):
switch and say, oh, you know, I should buy some stocks.
They keep buying crypto, So you have to be ready
for that market. You can't just say, you know, things
that used to work ten years ago or twenty years
ago are the same, which is true for everything. I mean,
change is the only content, sort of famous proverb. So
I think here Hong Kong recognizes this, but I think
there was sso a few catalysts. If you think about
what happened in Hong Kong before, you know, with the
disruptions with protests with COVID, Hong Kong also lost a
(18:03):
lot of its financial luster. People left Hong Kong, went
to Singapore, went to Dubai, went all over the world.
So Hong Kong wants to sort of reclaim that crown
that is rightfully hers as it were, and digital assets
is one way to do that. But I think it's
also around how do you engage the next generation in
this area of financial inclusion, because that's a big topic
as well, which is that people who understand the stock
(18:25):
market and understand traditional forms of finance, they're in their
particular world but most people don't actually understand finances as all.
They're not financially literate. Hong Kong is a little bit
of an exception because most people here understand and grow
up in money. But think about the rest of the world.
I grew up in Europe and we don't talk about
money at all. And how do you include more people
(18:45):
into the space? And again, digital money, digital assets. Tokenization
democratizes access and also educates people about it because it's
now accessible. Think about how inaccessible it is for a
first person to enter the financial world. It's not a
bank acout. He has been able by shares, he has
a stand about money, He needs to pass certain kind
(19:05):
of you know, like tests and queries. He has no
way of experimenting and playing around with it, which basically
tokenization makes it much easier to do. So it's part
of that as well. But that's why it's so important
for Hong Kong to stay relevant in a financial future
that is digital. You have to embrace blockchain and neoge assets.
Speaker 2 (19:23):
And you mentioned that China is using Hong Kong as
almost like a test case. Now for China, could stable
coins be used as a means to get away from
the Swift system.
Speaker 3 (19:37):
So first of all, stable coins in general China accepted
will generally, I think replace Swift And that just makes
sense because you know, like take a place like Africa.
So I was just in a meeting with people from
government and pri certain businesses, and the cross border transaction
that happens in Africa between their countries basically transactor through
(19:58):
Swift go to America, and so they paid billions of
dollars in transaction fees just to do business with each other.
Stable coin just does as a fraction of a cost,
and you can still have it with the safety and
security of knowing that it's a dollar or whatever currency
that would be. So that value then essentially flows directly
into the economies that they're building, and so it just
makes a lot more sense. Now. What it also means
for global trade is it makes it much more fluid
(20:20):
and much more transactable because now I can just do
it very quickly as opposed to having to deal with
a bank. Just think about how much money through a
wire transfer is stuck inside a bank somewhere that even
one day, but on average sometimes three to five days
in some cases. People will tell you stories of we
send a wire transfer, and two weeks later, I'm still
waiting for it. Well, that's maybe a bit of an exception.
(20:41):
The promise is that that period of time is essentially
opportunity lost. And maybe thirty or forty years ago, when
the world was a little slower, it didn't matter, like
it's okay if the money arrives a week later, but today,
one day. I mean to think about you being a
trader or you forge, that opportunity cost is tremendous, right,
(21:01):
It's not just a matter of it let the money
come in. Maybe in the laborer construct it's okay, but
in a capital construct literally seconds can matter, right or
minutes or certainly hours then, let alone days. So that
means from a transaction standpoint, it's not just reducing fees,
it's the value of I get the money right away,
and I can deploy it right away, and I can
do something with it right away. That is really important.
(21:22):
I mean, ask anyone who sort of trades and assets
of all sorts the opportunity costs related to that. It
does disrupt things like credit and lending that will have
to change as well, but it just has to requires
them to be more innovative and also offer more value.
As a result of.
Speaker 2 (21:35):
That, the US government has in a way weaponized the
Swift system. Now they seized Russian assets during the onset
of the Russia Ukraine War because they relied on these
transfers via Swift. In this tokenized like stable coins world,
would countries be able to get away from potential US sanctions.
Speaker 3 (21:54):
So first of all, you can really get away from
sanctions because of the on and off ramp. Even though
you could own the crypto, if you want to do
off rampet in the US for dollars, you can trace it.
So if this is tainted money or tainted crypto, you
would be able to see it because the blockchain tracks everything.
So if someone were to send you money from Russia,
it could be in the form of a bitcoin. Theoretically,
(22:16):
if they're sophisticated enough, which is not very difficult, they
could say, hey, wait a second, this was send from
a wallet that comes from a Russian bank or something.
They could basically technically block that, and it's up to
the basically on and off ramps to do that. So
it's not the blockchain that does that, it's just basically
on and off ramps. So it means that the asset
itself is yours, but for you to utilize it in
the way you wanted to, there might be some restrictions.
(22:38):
And one would argue that's one of the reasons why,
you know, Russia, for instance, their banks have essentially legalized
crypto for that reason. But I would also counter this
thought as well in terms of sure, the US has sanctioned,
you know, using swift, but how effective has it really
been in the sense that it hasn't really crippled the
Russian economy. Things seem to be going okay for the
most part. They're still able to deploy weapons and putin sales,
(22:59):
seems to be able to say the things he wants
to say. Generally speaking, I think the age of the
sanctions as we see only work when the world is
unified in their direction, which they're not so, meaning that
you've got different alliances around the world. It's no longer
a US centric world in the traditional sense of if
the US wants to Dissuay, everyone follows, because US also
(23:19):
had a lot of good will which they've lost over time.
You know, when you look at the alliances. I mean,
India is a US ally, but they also do business
with Russia. And China, like, there's many pathways around. So
I don't think the issue of swift is only something
related to what's happening in the US. It's also the
alliances that you need to have with different countries around that,
and I think stable coins and crypto are just visualizing
(23:40):
what's already happening in the world today. Again, I would
argue that actually that becomes a more powerful way for
them to continue that influence, because you know, if you
want to have influence in a place like Russia and
they're using stable coins, actually having the Russian economy become
more dollarized, I would argue, is much more soft power
and maybe even hard power for America than just be
able to sort of turn on and off of the
(24:02):
swift buttons.
Speaker 1 (24:03):
Interesting, yeah, to Jones's point on the geopolitics of it,
So you basically don't see stable coins or in your words,
sort of the dollarization of Russia. You know, this goes
more wide scale, of course, so you don't see that
as having kind of a negative impact for that because
from the US perspective, you know, they wouldn't have those
on and off switches anymore, right, Well.
Speaker 3 (24:24):
They wouldn't have the on and off switches in the
way that Swift has it, but they can still block
the transaction because it's on chain. So if a known
wallet in let's say, North Korea is a good example
of that, because North Korea is known to be hacking
for a lot of that crypto, that crypto that's sitting
in North Korean accounts is frozen effectively because people can
see its source and origin. So no exchange in the world,
no intermediary is ever going to touch that money. And
(24:45):
if that money was transferred from that wallet or you know,
from whatever sort of wallets that they've tracked that they
know is North Korean, it would immediately be frozen wherever
it was set. So that's something that's very easy to detect.
Speaker 2 (24:56):
So you don't get this animity that supposedly was scriptocurrency.
Speaker 3 (25:00):
The anonymity is down to the individual. I don't know
who owns the wallet, but the assets itself you can
track all the time, right, And I think there's often
a misunderstanding around that because of our thinking around identity
in the physical world, like when you think, oh, you're
not anonymous because I know your face, have your passport,
of your idea, all that kind of stuff. Right, and
people often think of it as, oh, that's my public
bank account. I don't want that. Blockchain has the ability
(25:22):
for you to anonymize the identity of who owns it,
but the transactions themselves is essentially that display of truth.
And that's actually what makes it work because every time
I do a transaction, I can verify that this transaction
is real and the whole world is witness to it.
But I don't need to know that it's your money,
and you know, you don't have to be too technical
about it. But what you can now do with schools
(25:44):
and blockchain with zero knowledge proofs, is you can now
also attest, for instance, the value of what you might
have without ever revealing your wallet. You know, like today,
for instance, when you have to give a credit statement, right,
I mean you have to literally, outside of a letter,
print out your bank statement, send it over to whoever
agent is doing it, and say, look, this is proof
how many assets I have. You know, maybe I cross
(26:04):
off the bank account, but like, oh, I see it's
a JP Morgan account, and look you have ten million
here and I know your name, right, Whereas on blockchain
I don't even have to know your name. I can
just attest because blockchain can say I could verify this
and this absolute truth because the blockchain can be tempered
that Okay, he has enough assets, and I just need
to know that you have enough assets. I don't need
to see everything. And when you do your tax refund,
(26:24):
how ridiculous is that, here's my passport, so you can
see everything about me, so I can go buy one
hundred dollar thing to get like a you know, three
dollars discount on tax, and then all of that information
is in some database that is completely unsecure in some
shopping mall. It's crazy, and we think it's normal. It's
not normal at all because it's just been normalized societally,
and blockchain solves all of that. So again it's not
(26:45):
to say that you're anonymous, but you can use it
as proofs.
Speaker 1 (26:48):
I also like have an example you pull the number
out of the hat and the number was ten million.
We have very different make accounts. I wanted to talk
a bit about because you know, we've talked about stable
coins being backed by currency. We've talked a little bit
about tea bills, but there's other assets. And you were
involved in a very interesting transaction involving a violin and
(27:11):
I would love to hear about that.
Speaker 3 (27:13):
Yeah. So about a year and a half ago we
proceeded together with Galaxy, I purchased a stratavirus violent and
Antonio Strativaru was probably the most celebrated ruth year in
the world, a violin maker from the sort of classic
criminal schools, you know, hundreds of years ago. And that
strata virus is worth millions of dollars, and all strata
varrays are expensive. There's maybe six hundred of them around
(27:35):
the world, give or take. And we tokenized that. We
tokenized that first as a way to create collateral and
then later on to essentially offer it for people to buy,
essentially as a kind of quasi fractionalized asset. The vision
behind that was so I grew up learning classical music.
My parents are musicians, specifically my mother. She didn't anything
(27:55):
about money. And by the way, this is not just
true for artists around the world. It's more even more
true for artists in Europe, I would say, or just
generally people in Europe, right, because you know, we don't
talk about money. It's not like in Hong Kong or
in Singapore. It's normal to have a you know, in
dinner you talk about real estate and stock market and prices.
You don't do that in Europe. Like if someone does that,
you're like, mm, you're kind of weird, you know my
crowd type of thing, right, it's like it's like, gosh,
it's like rude to talk about money. So we are
(28:19):
generally quite financially illiterate, I would say, in those circles.
But that also means in the capitalist world that we
live in, we get taken advantage of. So you give
money to an agent, they run it for you and
they abuse it. And today in the digital construct, that
entity is called Spotify. There's no musician in the world
that makes money selling music, right, they have to do gigs,
(28:40):
they have to do other things. Music is advertising, But
who makes the money off the music? Someone like Spotify
and Spotify used to be the agent, I mean, was
personified by an agent or something. But the point is
that the middleman takes all the value because they understand
money and they can transact from that. So how do
we break that cycle? And the idea was the stradivarius
instrument has always appreciated historically over decades between ten to
(29:02):
fifteen percent a year that's also why groups like fifteen
per year. Yes, and that is also why Nippon Foundation
and banks around the world, especially Japanese ones literally by
violence and just vaultam. But that's obviously a little known fact.
Speaker 1 (29:16):
Why is that though, sorry, just why is it the
specific violin that appreciates that ten to fifteen percent a year?
There's only six hundred of them. Sure they're scarcity, but
there is there other Yeah, I.
Speaker 3 (29:25):
Mean the quality of the fact that the instrument has
a distinguishable sound tonal quality, the fact that it can
never be reproduced. So it's kind of like it has
that art history element, and you know, in a way
you could say it it's now created incredible lore where
there's a marketplace for it. And the marketplace is someone
will pay more money for this violin over time because
of the fact that they appreciate it and also its
(29:48):
historical importance. And today the world's most famous violinists or
play on a strat or del jesu because these are
the two most valuable instruments and they have the best sound.
So that's kind of that value construct. The point is that,
you know, if I go to a traditional investor and say, hey,
you should buy a strat because it's a good investment.
Unless he's culturally inclined or he's into music, it doesn't matter,
(30:09):
and that's okay. But to me, the opportunity that was
more exciting was how do I teach people who don't
know anything about money about the world of money, and
by tokenizing something they appreciate, which is every musician in
the world will say a Strata viarus is valuable. They
know it's worth millions, but they can never afford it.
So they're not going to buy a bitcoin and then
(30:30):
I'll got my bonds or tesla because they don't care,
but they will care about that, and in that process
they're going to start learning about money because they're going
to say, Okay, I have an ownership in this strat
or it goes up in value, I appreciate it, I
can talk about it, I love it, and at the
same time, I can also make money on this, and
then suddenly I understand what it's all about. So the
(30:54):
inspiration was, rather than trying to teach people about money
in let's call it somewhat abstract concepts of stocks or commodities,
copper or gold, o lithium, this is pretty abstract For
people who don't deal in this kind of world, why
don't you own assets in you know, the artists that
you love. That is a much easier way to teach
(31:16):
people about value and money because they immediately appreciate the
constructs themselves because they're passionate about it.
Speaker 2 (31:22):
So what's next in terms of tokenized assets?
Speaker 3 (31:25):
Like?
Speaker 2 (31:25):
Is is it a burken bang? Is it a on
the peak in Hong Kong solid gold?
Speaker 3 (31:31):
Yeah? Well, I mean just on the leaboou point. I
would argue that Laboobu's inspiration very much came from what
happened in the NFT world in some way of fashion,
although they don't have digitasties. If you look at what
happens with board apes or you know today we have
it with like Mocha verse or pudgy penguins like these
are all NFTs and digital acids that build Oh you
haven't heard of pudget penguins, I guess, yeah, so, I
(31:53):
mean pudgie Penguins is basically another NFT kind of like
a board ape, excepted to keep penguin. And the floor
price of a pudget penguin is now fourteen eighth to
fifteen eath. It's a serious asset, right, and of course
crypto punks, which are for the og assets that are
worth hundreds of thousands or some of these millions of dollars.
But anyway, the point is that these are cultural artifacts
(32:15):
that have meaning. And just quickly, why do these NFTs
have value? To your point about the birken bag, why
do people buy birkenback and why do buy rolics? People
don't buy a rolics to tell the time, and they
don't buy a broken bag to put stuff in it.
The utility is not the reason. It's the status, the
cultural capital that is associated with it, right, whether I
made it, or whether it's the group of people who
(32:36):
own a rolex that I want to be associated with,
or that status at success and in the world of
digital assets, that's represented by NFTs. And you can see
this in every context. When you have a new wealth
class emergent, this is important to recognize. Crypto is a
new wealth class for the most part. Yes, sure you
have Wall Street and institutions getting into it now, but
the class that got into crypto didn't come from money.
Speaker 2 (32:58):
At least most of them.
Speaker 3 (33:00):
They made money through crypto, and they had a new
wealth class and with them, they deliver and bring a
new form of culture, which is you know, NFTs and
certain kind of where you know, I've been in the
tech industry now for thirty years, and I remember in
the early days, you weren't taken seriously if you didn't
have a suitain tie, or if you were drinking you know,
wine or something like that. But because that was the
(33:20):
culture of the wealth class of that time, which is
you have to be dressed a certain way, and you
had a certain kind of the chorum in terms of
what you drink and do and even smoking in the eighties,
and then you had this new form of wealth, which
is a Silicon valley and the tech wealth, and these
guys were all you know about I don't drink, I
wear hoodies and so on, and suddenly you had billionaires
with hoodies, right, and they created a whole new type
(33:42):
of sort of cultural capital where they're driving electric cars.
And now it's kind of wild to see how these
sort of sports where brands are now priced almost like luxury,
where brands in some cases precisely because that audience that
is that new wealth class, have emerged into that and
that's their product category. So the same people who, let's say,
were the Wall Street bankers in the eighties, Maybe that's
(34:03):
not their cup of tea, But for the Silicon Valley guys,
that's a cup of tea. And what we're seeing here
is with NFTs and digital assists, it's the same. So
where it's going to go is we're going to see
this toganization of everything. And the biggest form of current
form of tokenization, which you see in old coins like
all these funny meme coins and tokens and other things
and gaming tokens, what they're really tokenizing is attention. And
(34:25):
I think a lot of people misunderstand that because I
think it's like out of thin air. But I would
argue attention and digital advertising is kind of out of
thin air as well, because what are you really trading
or investing in. You're trading the attention of here's a
biddle board, here's a banner, here's a TV ad. Right arguably,
broadcast networks like Bloomberg, you make a lot of money
probably on advertising and sponsorships. That is also a form
(34:47):
of attention or sort of paying for that attention that
may be fleeting, but it's still important for generating business
from that and now through tokenization, you have a way
of owning that attention. And what was the form of
digital attention in the early days of the Internet, It
was a website. If you remember, back in the nineties,
we had a website, and today we have many websites.
If you look at your TikTok page, your Instagram page,
(35:10):
your website, your LinkedIn profile, these are just evolutions of
websites and all of these are forms of generating attention.
And all of these forms of attention are going to
be tokenized. Now, that doesn't mean that they're gonna be valuable,
just like you know, there's someone who has a million
followers on Instagram is probably a little bit more for
valuable than someone who has five thousand followers or a
hundred followers. But the point is there is a value,
(35:30):
as small as it might be, and that's now represented
the toganization and the first wave of all these tokens
that have come out are that which means, if this
is true, then we're gonna have billions and billions of
tokens as we have billions and billions of websites.
Speaker 2 (35:42):
Yeah, your company animoker, you're the founder of that company
or coin founder invests in these digital assets. And look,
I'll be remiss to not ask you, like you've announced
that you're in a list or you're going to do
an IPO, give us, you know, can you give us
anything like I know, there's a lot of discussion of
ways you can at least is it going to be
in the US, is it going to be in Hong Kong?
(36:03):
You know, just give us some color?
Speaker 3 (36:04):
Can I say, no comment? So I think the I mean,
it's not a secret that we want to go public. Again,
we were once a public company in Australia and we
were small and we had to actually dealist because we
were dabbling and dealing in crypto at the time because
the Essex did not like that. That was in twenty nineteen,
so you know, lifetimes ago. But now, of course the
(36:25):
capital markets are ready for it. You know, Hong Kong
Us are great markets for this. There's a lot of
attension if you look at all the treasury companies. What's happening,
you know, between companies accumulating bitcoin, whether it's like a
strategy or a DDC or whichever, right, all these companies
are basically showing the value of digital assets or like
the circle IPO which was incredibly blockbuster success. All of
(36:46):
these basically pointing attention to it, so it would be
remiss for us not to look at that seriously. But
I'm not really at liberty to discuss our specific plans,
but it's definitely clear that we're looking at it. As
a company. We are very institutionally focused. We do have
a roster of some of the most sophisticated investors in
the world. We also have over three thousand shareholders, so
we're a little bit of a different beast. And I
(37:08):
would say us, having worked in the space, you know,
having the revenues that we have, which hasn't been nine
digital the last four years, has made us very much
a consistent player in the field. So I think again,
I think the timing is right, but you know, I'm
not at liberty to discuss some more specifics other than
to say that it is very important for us, and
of course we are here to also deliver value to
our shareholders and our stakeholders.
Speaker 1 (37:30):
Fair enough, what an interesting discussion. Thank you so much
for joining us today.
Speaker 3 (37:35):
Thank you for having me.
Speaker 1 (37:37):
You've been listening to Asia Centric from Blooming Intelligence. I'm
cut Jamey Treva in Hong Kong.
Speaker 2 (37:41):
I'm John Lee, also in Hong Kong. This podcast was
produced and edited by Clara Chen and you can listen
to all our episodes on Apple Podcasts, Spotify, or where
you listen. Thanks for joining
Stable coins. You've probably heard about them, you may not
know what they are, and you should. In June, US
Congress passed the Genius Act, creating a regulatory system for
these digital assets. And here in Hong Kong, very recently,
the city began the process of issuing licenses to stable
coin companies. These are big steps towards legitimizing the asset
(00:24):
in the global financial system.
Speaker 2 (00:26):
Total circulation of stable coins is also booming. The two
largest plays in the market, Circle and Tether, now hold
over two hundred and seventy billion dollars in US treasuries.
That's more than what sovereign countries like South Korea, Saudi
Arabia and Germany hold, and this could have profound implications
for interest rates and currencies.
Speaker 1 (00:48):
You're listening to Asia Centric from Bloomberg Intelligence. I'm Kaetidmitriva
in Hong Kong.
Speaker 2 (00:53):
I'm John Lee, also in Hong Kong. Today we have
one of the industry leaders in this space. He is
Yatsu founder of Animoker Brands, a digital assets conglomerate based
in Hong Kong with one point eight billion dollars in assets. Yeah,
welcome to the show.
Speaker 3 (01:09):
Thank you for having me.
Speaker 2 (01:10):
It's a great pleasure to be here now. Yet there's
a lot of sophisticated crypto investors. There's obviously bitcoin bros.
But for crypto luotites like myself and me, can you
explain what exactly is a stable coin?
Speaker 3 (01:24):
Right? Maybe before we even go to what is a
stable coin, I think it's important to think about what
does tokenization do and what is tokenization. When you tokenize
an asset, any asset on chain, what you're really doing
is you're giving it the qualities of togonization, which is
enhancing its network effect, and that actually brought about an
entirely new industry. Whether this is a stable coin which
(01:45):
is essentially expanding the network of the value of the
dollar in this case, the sort of a stable coin
in itself, or if it's something like a pure network
asset like bitcoin or ethereum. These are assets that don't
have necessary something underlying it, but are held up by
the power of the community and the network effects inherent
and the builders and developers on top of it. So
it's really a way for the first time to own
(02:06):
a network asset that wasn't really possible for And so
what a stable coin is is the marrying of essentially
the real word asset of the dollar or any currency
around the world with that of tokenization, which then essentially
brings it both the speed and distribution of the Internet.
And if you think about what the Internet did for information,
basically stable coins and tokenization is now doing that for
money and value. And that's why you see this massive expansion.
(02:28):
The growth that you've seen in stable coins is really
what you see when you put something on the Internet,
which is essentially global scale, reach, distribution, and everything else
that comes with that.
Speaker 1 (02:38):
And before we get into how it actually functions and
how it's you know, different from a bitcoin, for example,
where did it come from? Because I feel like just
in recent months you're suddenly hearing about the US Genius
Act Hong Kong issuring what's kind of the history of
stable coin?
Speaker 3 (02:52):
Well, I mean, stable coins have been around for a while,
and you know, companies like Tether and Circle thereafter, and
there's actually many other companies there as well, whether it's
like you know, for instance, companies like pack Sauce, they
actually provide services to enable other people to launch their
own stable coids, and in principle what they're doing is
is they're basically saying I'm buying something that underpins the
(03:13):
value of the dollar and keeping it stable with a
basket of assets and in the case of something like
circle treasury bills or maybe just you know, in the
case of sort of what the HKMA is mandating it
has to be in the currency, so on hundred dollars.
But also some people have, especially in the early days when
there was no regulation in no clarity around it, have
basically put other assets in them, and so controversially in
(03:34):
the early days, and the reason why teather has had
a controversial past, according to some is because some of
those assets consisted of bitcoin. So what they would say is, hey,
we have x amount of bitcoin, and then essentially we
would mint a certain amount of dollars based on the
value of bitcoin which we had in the reserve, and
the reserve asset essentially creates that way in which we
sort of represent the dollars. So if you have a
(03:55):
one hundred million dollars worth of bitcoin, then I can
basically mint on a hundred million dollars worth of dogs,
and if the bitcoin goes down, I have to basically
buy more. If it goes up, then maybe you so
well you can basically create kind of a stable reserve balance.
This is of course much less controversial when you do
it with cash or with treasury bills because there's a
clear value denomination, But when you start mixing it with
digital assets in the past, that was more controversial. Tether
(04:18):
has definitely moved further away from that, but in its
early days it was essentially pegging against that, and it
was also an era of sort of experimentation as well.
People were sort of seeing these kind of interesting new
financial constructs and say, okay, this could be a stable coin.
This is how we do this, And when bitcoin didn't
have the legitimacy the head today, using that as an
underlying asset, it would have been controversial, but that was
(04:39):
really the history, and the history was also around how
do I onboard people into the digital assets world? You know,
now we talk about it in terms of crypto or
with three for instance, and if I tell someone, you
know what, you can enter this world by converting your
one thousand dollars into one thousand digital dollars. It's a
much easier way to onboard someone and then they can
start buying other tokens and on, and really the biggest
(05:01):
use case for stable coins has been trading and purchasing
and activities that are on chain or in exchanges, so
all of the decentralized exchanges where people can trade, all conferences,
the stable coins have a big use case, and of
course it's used for remittisances and everything else like that
as well.
Speaker 2 (05:15):
Asia Centric is produced by Bloomberg Intelligence, where more than
five hundred experienced analysts and strategists work around the clock
to bring you timely, world class research. Our coverage spans
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about Bloomberg Intelligence, visit bi go on the Bloomberg terminal.
(05:38):
If you like what you're hear, don't forget to subscribe
and share. I wanted to talk about the recent US
legislation in particular, you know, the Genius Act. Can you
explain why this is so important?
Speaker 3 (05:51):
Well, is particularly important because when you consider what the
US stance was on crypto generally including stable coins, up
until the Trumpe administration, it was quite hostile. So to
see essentially the US go from very negative to the
industry to incredily positive to pass legislation on the stable
coin is a massive legitimization of the market. And you
(06:13):
can see this already not just an impact on prices,
but also people want to build and develop on that.
So that's one way to look at it just macro
what it means. But the other thing is that this
administration certainly believes, which is maybe diferent what the previous
administration believe, that stable coins is a way for the
US to continue its dollar hegemony through stable coins. Now,
when you consider where these stable coins are being used,
they're used all over the world, but they're growing tremendously
(06:35):
in places like Nigeria, South America, Southeast Asia, places that
really couldn't be dollarized in a classical sense because you
couldn't even have a bank account, and now with a cryptoallet,
I can now have digital dollars, and dollars has always
been desired in these markets, that's just no way of
reaching it. So you could say that in a way,
they've been assimilated to the dollar at a young age.
(06:57):
And so therefore, if you talk about these rising nations,
which are mostly young populations like prinstance, Mina, Africa, South America,
they're also essentially growing up to the dollar, and that's
basically a way which you can create that influence, which
is also the reason why other markets are in the
world are looking at this and say, okay, how do
we either counter or deal with that sort of circumstance,
because that's something that you can really control. Also, the
(07:17):
governments themselves have no oversight of it in a classical sense,
So if you're a bank, you have to be banked
first in order to receive any currency, and the bank
itself might restrict you from being able to exchange money
or maybe to buy dollars. But with a stable coin,
basically the internet is all you need and wallet and
someone or across the world can send it to you
and you can transact with it, which basically means that
the digital dollars that were in the form of stable
(07:39):
coin becomes the way in which you transact in many
of these economies, effectively dollarizing these economies even more. And
that's actually one of the key areas around why it's
important for the US because of course a big part
of the US business model is around essentially using the dollar, right,
and it's exactly it's a reserve currency of the world.
How do you make sure that it's the reserve currency
(08:00):
of the world. You know, basically you sort of enter
the internet and make it the native currency. And so
that's a strategy white so important to the US. And
what is also interesting is that because of the Genius Act,
banks before were not allowed to enter into that space.
So expect that every major bank, maybe even smaller banks,
are all going to start issuing their own stable coins.
I mean, you even talk about companies like Walmart and
(08:21):
Amazon and possibly Google and Apple, all of them who
have so much dollars in their treasuries, Well, they could
issue a stable coin now, and they could basically use
it for their own commerce and receive transaction fees or
use them in different forms of commerce. And it also
enables money to move faster from place to place and
also brings you more loyalty to the customer because they're
now attached to your currency as it.
Speaker 2 (08:42):
Well, but wouldn't this cannibalize the business model of banks,
Like that's how they make a lot of money, you know,
retail customers they send their money through the swift system,
usually takes like two to three days, sometimes business days,
and they always give you a bad effects, right, but
they make big margins. But now if you could do
this like seamelessly, wouldn't it be bad The margins would
be smaller.
Speaker 3 (09:03):
Well, first of all, anytime when there's an innovation and
a change, it necessaries a change in the business model
and also requires people to become more efficient and more competitive.
Frankly speaking, so I think it's high time, just generally,
that the industry move away from something like swift and
move on to some area where the value doesn't simply
come from a transaction fee. I mean, just think about.
You know, what we used to pay for a phone call.
(09:23):
It's expensive, and what happened when we reduced the call
or the phone call to something that was essentially deminimus
in terms of the cost. The value basically didn't come
in terms of making the call. The value came on
the speed of the connection that we had and the
ability for us to conduct business faster and have more interactions.
I can always reach you all the time. And what happened.
Networks grew faster, business grew faster, Expansions happened because transactions
(09:45):
were cheaper, faster, better, And that's basically what we have
with blockchain. So to me, this is Actually they're positive
for society because I'm not able to transfer money across
the world cheaper, better, faster. I mean, think about all
the extraction that happens for people who are unbanked, right,
I mean, there's so so much value that goes away.
Is it isn't it better that instead of paying really
large type of transaction fees where it's not just about
(10:06):
the swift transfer, but about the middleman who basically is
able to gouge you sometimes ten twenty percent on the transaction,
that it now goes with nine nine percent of their
value to the actual end user, and then in their
local communities they get to spend it in local economies.
Now what does it mean though for the banks, Well,
it means that banks are going to be changing the
business models around acquiring te bills or maybe looking at
(10:27):
ways and incentivizing customers to deposit their stable coins that
they would then generate active yield on, you know, in
the same way that you would do term deposits for example. Right,
So there's still ways in which you would make money.
I don't think the bank is gone because they would
still have their trading strategies and their yield generitorise they
just have to be more competitive and ultimately also more transparent,
(10:47):
which I think is just better for the consumer.
Speaker 1 (10:50):
And how much of this relies on the US dollar
as the reserve currency relies on US exceptionalism.
Speaker 3 (10:58):
I think it's very critical at this small one in time,
because the US is the reserve currency of the world.
It is basically the standard. Without the US dollar, the
legitimacy and the ability to reach the world wouldn't be there.
Because it's not just about, you know, the fact that
the US is behind it and supporting it. It's also
the fact that the communities around the world desired it.
I grew up in basically still when we had an
(11:20):
East and West Europe, and I remember my mom used
to work at the eastern side of Berlin, and so
when you cross that border, the dollar was the most
desired thing. It's like the whole black market around basically
trading either Deutsch MARKO dollar back in the day. And
that had to do with because it was stability, it
could be used as global trade and that sort of
(11:41):
image persists. So the dollar is the desired asset. Also
from a branding standpoint, I mean, it's not only about
the utility, it's also Hollywood, it's movies. It's all that
kind of stuff, right, you grow up to like, you know,
whether you do a business deal in the media, you
talk about it in dollars, you don't talk about it
in other current and right, so that all of that
sort of matters. And I would say now as a
(12:03):
result of that, for deck to get that digital adoption,
if it's in the dollar, it just has a much
more legitimate framing, and especially if it's now licensable through
the Genius Act or maybe also what Hungko was doing
with their stable coin, it just makes it that much
more safer and accessible.
Speaker 1 (12:19):
But does that world still exist because we are seeing
cracks in it? You know, with President Trump tariffs, shifts
in global trade policy. There was I think it started
a couple of months ago, but this idea that US
exceptionalism might not be so solid going forward, those.
Speaker 2 (12:36):
This D dollarization trend.
Speaker 3 (12:38):
So is there a D dollarization trend? There is a
D dollarization trend only I think primarily because a dollar
has been so weaponized in a way. But I would
say there's a difference between a dollar stable coin and
the CBDC. So what the industry and especially the Republican
party was railing so much against was the CBDC. The
reason why the CBDC is such a negative construct, because
in some ways they're both digital, is that one the
(13:00):
government has full control over your money, like they can
literally take it out of your account right and that
type of control means is never your money and you
don't have the freedom to transact because they can also
side where the stable coin technically speaking, it's in your wallet,
the issuer isn't, you know, they have to comply, but
they're not actually issued by the government per se, and
it's not controlled by a single entity. They can just
basically delete your money as it were, takes stuff away
(13:22):
from you. So I think the construct over it as
a stable coin, actually I think will reverse that tread
because now you have the safety and the assumed security
of owning your assets, which is also the argument where
people were so into bitcoin, because there's an asset that
I have self custody over that I control versus I
put it in the bank. So you know, putting in
the bank, the bank can lock you out. You can
(13:44):
be debanked or unbanked. And then and they're using it
as well. In some cases you've heard some of these
stories and as a result you are excluded from the
financial world, but all the assets that you have in
there you lose as well. Here you have an element
in which you can scale self custody. So this is
also an important point because you know, in the older generations,
it wasn't that on typical to have a lot of cash,
maybe in your back pocket or like in Japan, underneath
(14:05):
your bed, you know, that type of stuff. That is
something which wasn't feasible or practical anymore. But in the
digital construct you could actually have your money yourself or
a certain amount and have the freedom around that. So
I think it's a way in the combat sort of
this dedoorganization. Having said that, I think US exceptionalism is unique.
And I know there's some proponents who are like saying, Okay, well,
the US is kind of done for and you know,
(14:27):
all that type of stuff. I don't believe that. The
reason why I don't believe that is because the US
has probably the only country in the world where it
can have this amazing amount of creative destruction. Right It's
the place where you can blow things up, and somehow
it still works because as a culture it celebrates that
and it's because it focuses so much on the individual
versus in other places it's much more focused on the collective,
(14:49):
for instance, diverging a little bit. China's sort of reach
in AI for instance and other technologies would not be,
in my view, as advanced if it wasn't for the US,
because it's something to comput against. So the US pushes
a boundary because they have that exceptionalism, this innovation, and
then China reacts to it as its ability to create
and produce and innovate as well. But if it wasn't
(15:09):
for the US, I think China would nearly be as
competitive or maybe as advanced because it doesn't have to.
And that's basically the difference between I would say that two,
both of them being incredibly ingenious in their work. But
I think that you need that exceptionalist I think the
world needs that exceptionalism, and the dollar represents that in
a way.
Speaker 1 (15:26):
On that point, is there a world in which there's
a stable coin that's actually backed by Chinese currency, by
the yuan?
Speaker 3 (15:33):
I mean, I think there's a lot of question. No,
So it's not a dumb question. There's a lot of
speculation around that. I would say at this moment in time,
there's a lot of discussion and people are saying it's possible.
But of course, you know, we for instance, with our
joint meentor with standard Charter and HKT anchor point. You know,
we recently submitted our application to have a license here
from the HKMA to a launch a hundred dollar based
(15:54):
table coin. And the difference about the HKMA license is
that it does have the ability to do it with
different basic currencies. So is it possible it is? Is
it in the works? No? Right, I mean, that's obviously
something that is being investigated, is being observed. But for
sure China is looking at Hong Kong as the test
bed for that as it always has been, right, Hong
Kong has always been sort of the experimental financial sandbox
(16:17):
for what happens in and out of China to learn from.
And clearly, and this has been already publicly said by
the Chinese government, they are also observing and reacting to
what the US is doing with the Genius Act and
stable coins and blockchain technology because they realize that, you know,
neither country wants to be behind in any form of
any shape of anything related to technology. It doesn't matter
(16:38):
whether there's robotics, whether there's AI, whether it's you know,
compute or where there's blockchain.
Speaker 2 (16:44):
So let's talk about Hong Kong. So, Hong Kong, you
know stable coins, the regulations passed on the first of August.
Speaker 3 (16:50):
Yeah, actually ahead of the US.
Speaker 2 (16:51):
Interesting enough, Okay, so Hong Kong's really here, So tell
us what's the aims of the Hong Kong government with
this new regulation?
Speaker 3 (16:57):
So, I mean, first, what is Hong Kong. Kong is
maybe one of the leading financial centers in the world,
certainly in Asia, if not in the world, you know,
top three, top five, So you have to stay relevant
in that and how do you stay relevant. You've got
to go where the future is going. And Hong Kong
has made it very clear that the future is digital,
so that means you have to embrace blockchain technology and
(17:18):
digital assets. When you look at the demographics, and especially
younger demographics in places like South Korea or Turkey or
you know, places in the Mid East, it's something like
sixty to seventy percent of people under the age of
thirty in some of these places exclusively old crypto. So
they don't buy stocks, they only owly tokens. You know
they're going to get older, and they don't just suddenly
(17:39):
switch and say, oh, you know, I should buy some stocks.
They keep buying crypto, So you have to be ready
for that market. You can't just say, you know, things
that used to work ten years ago or twenty years
ago are the same, which is true for everything. I mean,
change is the only content, sort of famous proverb. So
I think here Hong Kong recognizes this, but I think
there was sso a few catalysts. If you think about
what happened in Hong Kong before, you know, with the
disruptions with protests with COVID, Hong Kong also lost a
(18:03):
lot of its financial luster. People left Hong Kong, went
to Singapore, went to Dubai, went all over the world.
So Hong Kong wants to sort of reclaim that crown
that is rightfully hers as it were, and digital assets
is one way to do that. But I think it's
also around how do you engage the next generation in
this area of financial inclusion, because that's a big topic
as well, which is that people who understand the stock
(18:25):
market and understand traditional forms of finance, they're in their
particular world but most people don't actually understand finances as all.
They're not financially literate. Hong Kong is a little bit
of an exception because most people here understand and grow
up in money. But think about the rest of the world.
I grew up in Europe and we don't talk about
money at all. And how do you include more people
(18:45):
into the space? And again, digital money, digital assets. Tokenization
democratizes access and also educates people about it because it's
now accessible. Think about how inaccessible it is for a
first person to enter the financial world. It's not a
bank acout. He has been able by shares, he has
a stand about money, He needs to pass certain kind
(19:05):
of you know, like tests and queries. He has no
way of experimenting and playing around with it, which basically
tokenization makes it much easier to do. So it's part
of that as well. But that's why it's so important
for Hong Kong to stay relevant in a financial future
that is digital. You have to embrace blockchain and neoge assets.
Speaker 2 (19:23):
And you mentioned that China is using Hong Kong as
almost like a test case. Now for China, could stable
coins be used as a means to get away from
the Swift system.
Speaker 3 (19:37):
So first of all, stable coins in general China accepted
will generally, I think replace Swift And that just makes
sense because you know, like take a place like Africa.
So I was just in a meeting with people from
government and pri certain businesses, and the cross border transaction
that happens in Africa between their countries basically transactor through
(19:58):
Swift go to America, and so they paid billions of
dollars in transaction fees just to do business with each other.
Stable coin just does as a fraction of a cost,
and you can still have it with the safety and
security of knowing that it's a dollar or whatever currency
that would be. So that value then essentially flows directly
into the economies that they're building, and so it just
makes a lot more sense. Now. What it also means
for global trade is it makes it much more fluid
(20:20):
and much more transactable because now I can just do
it very quickly as opposed to having to deal with
a bank. Just think about how much money through a
wire transfer is stuck inside a bank somewhere that even
one day, but on average sometimes three to five days
in some cases. People will tell you stories of we
send a wire transfer, and two weeks later, I'm still
waiting for it. Well, that's maybe a bit of an exception.
(20:41):
The promise is that that period of time is essentially
opportunity lost. And maybe thirty or forty years ago, when
the world was a little slower, it didn't matter, like
it's okay if the money arrives a week later, but today,
one day. I mean to think about you being a
trader or you forge, that opportunity cost is tremendous, right,
(21:01):
It's not just a matter of it let the money
come in. Maybe in the laborer construct it's okay, but
in a capital construct literally seconds can matter, right or
minutes or certainly hours then, let alone days. So that
means from a transaction standpoint, it's not just reducing fees,
it's the value of I get the money right away,
and I can deploy it right away, and I can
do something with it right away. That is really important.
(21:22):
I mean, ask anyone who sort of trades and assets
of all sorts the opportunity costs related to that. It
does disrupt things like credit and lending that will have
to change as well, but it just has to requires
them to be more innovative and also offer more value.
As a result of.
Speaker 2 (21:35):
That, the US government has in a way weaponized the
Swift system. Now they seized Russian assets during the onset
of the Russia Ukraine War because they relied on these
transfers via Swift. In this tokenized like stable coins world,
would countries be able to get away from potential US sanctions.
Speaker 3 (21:54):
So first of all, you can really get away from
sanctions because of the on and off ramp. Even though
you could own the crypto, if you want to do
off rampet in the US for dollars, you can trace it.
So if this is tainted money or tainted crypto, you
would be able to see it because the blockchain tracks everything.
So if someone were to send you money from Russia,
it could be in the form of a bitcoin. Theoretically,
(22:16):
if they're sophisticated enough, which is not very difficult, they
could say, hey, wait a second, this was send from
a wallet that comes from a Russian bank or something.
They could basically technically block that, and it's up to
the basically on and off ramps to do that. So
it's not the blockchain that does that, it's just basically
on and off ramps. So it means that the asset
itself is yours, but for you to utilize it in
the way you wanted to, there might be some restrictions.
(22:38):
And one would argue that's one of the reasons why,
you know, Russia, for instance, their banks have essentially legalized
crypto for that reason. But I would also counter this
thought as well in terms of sure, the US has sanctioned,
you know, using swift, but how effective has it really
been in the sense that it hasn't really crippled the
Russian economy. Things seem to be going okay for the
most part. They're still able to deploy weapons and putin sales,
(22:59):
seems to be able to say the things he wants
to say. Generally speaking, I think the age of the
sanctions as we see only work when the world is
unified in their direction, which they're not so, meaning that
you've got different alliances around the world. It's no longer
a US centric world in the traditional sense of if
the US wants to Dissuay, everyone follows, because US also
(23:19):
had a lot of good will which they've lost over time.
You know, when you look at the alliances. I mean,
India is a US ally, but they also do business
with Russia. And China, like, there's many pathways around. So
I don't think the issue of swift is only something
related to what's happening in the US. It's also the
alliances that you need to have with different countries around that,
and I think stable coins and crypto are just visualizing
(23:40):
what's already happening in the world today. Again, I would
argue that actually that becomes a more powerful way for
them to continue that influence, because you know, if you
want to have influence in a place like Russia and
they're using stable coins, actually having the Russian economy become
more dollarized, I would argue, is much more soft power
and maybe even hard power for America than just be
able to sort of turn on and off of the
(24:02):
swift buttons.
Speaker 1 (24:03):
Interesting, yeah, to Jones's point on the geopolitics of it,
So you basically don't see stable coins or in your words,
sort of the dollarization of Russia. You know, this goes
more wide scale, of course, so you don't see that
as having kind of a negative impact for that because
from the US perspective, you know, they wouldn't have those
on and off switches anymore, right, Well.
Speaker 3 (24:24):
They wouldn't have the on and off switches in the
way that Swift has it, but they can still block
the transaction because it's on chain. So if a known
wallet in let's say, North Korea is a good example
of that, because North Korea is known to be hacking
for a lot of that crypto, that crypto that's sitting
in North Korean accounts is frozen effectively because people can
see its source and origin. So no exchange in the world,
no intermediary is ever going to touch that money. And
(24:45):
if that money was transferred from that wallet or you know,
from whatever sort of wallets that they've tracked that they
know is North Korean, it would immediately be frozen wherever
it was set. So that's something that's very easy to detect.
Speaker 2 (24:56):
So you don't get this animity that supposedly was scriptocurrency.
Speaker 3 (25:00):
The anonymity is down to the individual. I don't know
who owns the wallet, but the assets itself you can
track all the time, right, And I think there's often
a misunderstanding around that because of our thinking around identity
in the physical world, like when you think, oh, you're
not anonymous because I know your face, have your passport,
of your idea, all that kind of stuff. Right, and
people often think of it as, oh, that's my public
bank account. I don't want that. Blockchain has the ability
(25:22):
for you to anonymize the identity of who owns it,
but the transactions themselves is essentially that display of truth.
And that's actually what makes it work because every time
I do a transaction, I can verify that this transaction
is real and the whole world is witness to it.
But I don't need to know that it's your money,
and you know, you don't have to be too technical
about it. But what you can now do with schools
(25:44):
and blockchain with zero knowledge proofs, is you can now
also attest, for instance, the value of what you might
have without ever revealing your wallet. You know, like today,
for instance, when you have to give a credit statement, right,
I mean you have to literally, outside of a letter,
print out your bank statement, send it over to whoever
agent is doing it, and say, look, this is proof
how many assets I have. You know, maybe I cross
(26:04):
off the bank account, but like, oh, I see it's
a JP Morgan account, and look you have ten million
here and I know your name, right, Whereas on blockchain
I don't even have to know your name. I can
just attest because blockchain can say I could verify this
and this absolute truth because the blockchain can be tempered
that Okay, he has enough assets, and I just need
to know that you have enough assets. I don't need
to see everything. And when you do your tax refund,
(26:24):
how ridiculous is that, here's my passport, so you can
see everything about me, so I can go buy one
hundred dollar thing to get like a you know, three
dollars discount on tax, and then all of that information
is in some database that is completely unsecure in some
shopping mall. It's crazy, and we think it's normal. It's
not normal at all because it's just been normalized societally,
and blockchain solves all of that. So again it's not
(26:45):
to say that you're anonymous, but you can use it
as proofs.
Speaker 1 (26:48):
I also like have an example you pull the number
out of the hat and the number was ten million.
We have very different make accounts. I wanted to talk
a bit about because you know, we've talked about stable
coins being backed by currency. We've talked a little bit
about tea bills, but there's other assets. And you were
involved in a very interesting transaction involving a violin and
(27:11):
I would love to hear about that.
Speaker 3 (27:13):
Yeah. So about a year and a half ago we
proceeded together with Galaxy, I purchased a stratavirus violent and
Antonio Strativaru was probably the most celebrated ruth year in
the world, a violin maker from the sort of classic
criminal schools, you know, hundreds of years ago. And that
strata virus is worth millions of dollars, and all strata
varrays are expensive. There's maybe six hundred of them around
(27:35):
the world, give or take. And we tokenized that. We
tokenized that first as a way to create collateral and
then later on to essentially offer it for people to buy,
essentially as a kind of quasi fractionalized asset. The vision
behind that was so I grew up learning classical music.
My parents are musicians, specifically my mother. She didn't anything
(27:55):
about money. And by the way, this is not just
true for artists around the world. It's more even more
true for artists in Europe, I would say, or just
generally people in Europe, right, because you know, we don't
talk about money. It's not like in Hong Kong or
in Singapore. It's normal to have a you know, in
dinner you talk about real estate and stock market and prices.
You don't do that in Europe. Like if someone does that,
you're like, mm, you're kind of weird, you know my
crowd type of thing, right, it's like it's like, gosh,
it's like rude to talk about money. So we are
(28:19):
generally quite financially illiterate, I would say, in those circles.
But that also means in the capitalist world that we
live in, we get taken advantage of. So you give
money to an agent, they run it for you and
they abuse it. And today in the digital construct, that
entity is called Spotify. There's no musician in the world
that makes money selling music, right, they have to do gigs,
(28:40):
they have to do other things. Music is advertising, But
who makes the money off the music? Someone like Spotify
and Spotify used to be the agent, I mean, was
personified by an agent or something. But the point is
that the middleman takes all the value because they understand
money and they can transact from that. So how do
we break that cycle? And the idea was the stradivarius
instrument has always appreciated historically over decades between ten to
(29:02):
fifteen percent a year that's also why groups like fifteen
per year. Yes, and that is also why Nippon Foundation
and banks around the world, especially Japanese ones literally by
violence and just vaultam. But that's obviously a little known fact.
Speaker 1 (29:16):
Why is that though, sorry, just why is it the
specific violin that appreciates that ten to fifteen percent a year?
There's only six hundred of them. Sure they're scarcity, but
there is there other Yeah, I.
Speaker 3 (29:25):
Mean the quality of the fact that the instrument has
a distinguishable sound tonal quality, the fact that it can
never be reproduced. So it's kind of like it has
that art history element, and you know, in a way
you could say it it's now created incredible lore where
there's a marketplace for it. And the marketplace is someone
will pay more money for this violin over time because
of the fact that they appreciate it and also its
(29:48):
historical importance. And today the world's most famous violinists or
play on a strat or del jesu because these are
the two most valuable instruments and they have the best sound.
So that's kind of that value construct. The point is that,
you know, if I go to a traditional investor and say, hey,
you should buy a strat because it's a good investment.
Unless he's culturally inclined or he's into music, it doesn't matter,
(30:09):
and that's okay. But to me, the opportunity that was
more exciting was how do I teach people who don't
know anything about money about the world of money, and
by tokenizing something they appreciate, which is every musician in
the world will say a Strata viarus is valuable. They
know it's worth millions, but they can never afford it.
So they're not going to buy a bitcoin and then
(30:30):
I'll got my bonds or tesla because they don't care,
but they will care about that, and in that process
they're going to start learning about money because they're going
to say, Okay, I have an ownership in this strat
or it goes up in value, I appreciate it, I
can talk about it, I love it, and at the
same time, I can also make money on this, and
then suddenly I understand what it's all about. So the
(30:54):
inspiration was, rather than trying to teach people about money
in let's call it somewhat abstract concepts of stocks or commodities,
copper or gold, o lithium, this is pretty abstract For
people who don't deal in this kind of world, why
don't you own assets in you know, the artists that
you love. That is a much easier way to teach
(31:16):
people about value and money because they immediately appreciate the
constructs themselves because they're passionate about it.
Speaker 2 (31:22):
So what's next in terms of tokenized assets?
Speaker 3 (31:25):
Like?
Speaker 2 (31:25):
Is is it a burken bang? Is it a on
the peak in Hong Kong solid gold?
Speaker 3 (31:31):
Yeah? Well, I mean just on the leaboou point. I
would argue that Laboobu's inspiration very much came from what
happened in the NFT world in some way of fashion,
although they don't have digitasties. If you look at what
happens with board apes or you know today we have
it with like Mocha verse or pudgy penguins like these
are all NFTs and digital acids that build Oh you
haven't heard of pudget penguins, I guess, yeah, so, I
(31:53):
mean pudgie Penguins is basically another NFT kind of like
a board ape, excepted to keep penguin. And the floor
price of a pudget penguin is now fourteen eighth to
fifteen eath. It's a serious asset, right, and of course
crypto punks, which are for the og assets that are
worth hundreds of thousands or some of these millions of dollars.
But anyway, the point is that these are cultural artifacts
(32:15):
that have meaning. And just quickly, why do these NFTs
have value? To your point about the birken bag, why
do people buy birkenback and why do buy rolics? People
don't buy a rolics to tell the time, and they
don't buy a broken bag to put stuff in it.
The utility is not the reason. It's the status, the
cultural capital that is associated with it, right, whether I
made it, or whether it's the group of people who
(32:36):
own a rolex that I want to be associated with,
or that status at success and in the world of
digital assets, that's represented by NFTs. And you can see
this in every context. When you have a new wealth
class emergent, this is important to recognize. Crypto is a
new wealth class for the most part. Yes, sure you
have Wall Street and institutions getting into it now, but
the class that got into crypto didn't come from money.
Speaker 2 (32:58):
At least most of them.
Speaker 3 (33:00):
They made money through crypto, and they had a new
wealth class and with them, they deliver and bring a
new form of culture, which is you know, NFTs and
certain kind of where you know, I've been in the
tech industry now for thirty years, and I remember in
the early days, you weren't taken seriously if you didn't
have a suitain tie, or if you were drinking you know,
wine or something like that. But because that was the
(33:20):
culture of the wealth class of that time, which is
you have to be dressed a certain way, and you
had a certain kind of the chorum in terms of
what you drink and do and even smoking in the eighties,
and then you had this new form of wealth, which
is a Silicon valley and the tech wealth, and these
guys were all you know about I don't drink, I
wear hoodies and so on, and suddenly you had billionaires
with hoodies, right, and they created a whole new type
(33:42):
of sort of cultural capital where they're driving electric cars.
And now it's kind of wild to see how these
sort of sports where brands are now priced almost like luxury,
where brands in some cases precisely because that audience that
is that new wealth class, have emerged into that and
that's their product category. So the same people who, let's say,
were the Wall Street bankers in the eighties, Maybe that's
(34:03):
not their cup of tea, But for the Silicon Valley guys,
that's a cup of tea. And what we're seeing here
is with NFTs and digital assists, it's the same. So
where it's going to go is we're going to see
this toganization of everything. And the biggest form of current
form of tokenization, which you see in old coins like
all these funny meme coins and tokens and other things
and gaming tokens, what they're really tokenizing is attention. And
(34:25):
I think a lot of people misunderstand that because I
think it's like out of thin air. But I would
argue attention and digital advertising is kind of out of
thin air as well, because what are you really trading
or investing in. You're trading the attention of here's a
biddle board, here's a banner, here's a TV ad. Right arguably,
broadcast networks like Bloomberg, you make a lot of money
probably on advertising and sponsorships. That is also a form
(34:47):
of attention or sort of paying for that attention that
may be fleeting, but it's still important for generating business
from that and now through tokenization, you have a way
of owning that attention. And what was the form of
digital attention in the early days of the Internet, It
was a website. If you remember, back in the nineties,
we had a website, and today we have many websites.
If you look at your TikTok page, your Instagram page,
(35:10):
your website, your LinkedIn profile, these are just evolutions of
websites and all of these are forms of generating attention.
And all of these forms of attention are going to
be tokenized. Now, that doesn't mean that they're gonna be valuable,
just like you know, there's someone who has a million
followers on Instagram is probably a little bit more for
valuable than someone who has five thousand followers or a
hundred followers. But the point is there is a value,
(35:30):
as small as it might be, and that's now represented
the toganization and the first wave of all these tokens
that have come out are that which means, if this
is true, then we're gonna have billions and billions of
tokens as we have billions and billions of websites.
Speaker 2 (35:42):
Yeah, your company animoker, you're the founder of that company
or coin founder invests in these digital assets. And look,
I'll be remiss to not ask you, like you've announced
that you're in a list or you're going to do
an IPO, give us, you know, can you give us
anything like I know, there's a lot of discussion of
ways you can at least is it going to be
in the US, is it going to be in Hong Kong?
(36:03):
You know, just give us some color?
Speaker 3 (36:04):
Can I say, no comment? So I think the I mean,
it's not a secret that we want to go public. Again,
we were once a public company in Australia and we
were small and we had to actually dealist because we
were dabbling and dealing in crypto at the time because
the Essex did not like that. That was in twenty nineteen,
so you know, lifetimes ago. But now, of course the
(36:25):
capital markets are ready for it. You know, Hong Kong
Us are great markets for this. There's a lot of
attension if you look at all the treasury companies. What's happening,
you know, between companies accumulating bitcoin, whether it's like a
strategy or a DDC or whichever, right, all these companies
are basically showing the value of digital assets or like
the circle IPO which was incredibly blockbuster success. All of
(36:46):
these basically pointing attention to it, so it would be
remiss for us not to look at that seriously. But
I'm not really at liberty to discuss our specific plans,
but it's definitely clear that we're looking at it. As
a company. We are very institutionally focused. We do have
a roster of some of the most sophisticated investors in
the world. We also have over three thousand shareholders, so
we're a little bit of a different beast. And I
(37:08):
would say us, having worked in the space, you know,
having the revenues that we have, which hasn't been nine
digital the last four years, has made us very much
a consistent player in the field. So I think again,
I think the timing is right, but you know, I'm
not at liberty to discuss some more specifics other than
to say that it is very important for us, and
of course we are here to also deliver value to
our shareholders and our stakeholders.
Speaker 1 (37:30):
Fair enough, what an interesting discussion. Thank you so much
for joining us today.
Speaker 3 (37:35):
Thank you for having me.
Speaker 1 (37:37):
You've been listening to Asia Centric from Blooming Intelligence. I'm
cut Jamey Treva in Hong Kong.
Speaker 2 (37:41):
I'm John Lee, also in Hong Kong. This podcast was
produced and edited by Clara Chen and you can listen
to all our episodes on Apple Podcasts, Spotify, or where
you listen. Thanks for joining
Hosts And Creators
John Lee
Tom Corbett
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