Tokenizing the world with ABRDN & Hedera

King Solomon of Genfinity interviews Duncan Moir, Senior Investment Manager at ABRDN and sitting Hedera Governing Council member about the future of tokenization.

Transcription

Genfinity - King Solomon - Founder & CEO
Exciting, all right, we are going to get kicked off, though, guys. So, if you guys are joining for the first time, I'm sure many of you have been here before. In partnership with Hash Pack, we have done multitudes of interviews within the Hedera ecosystem. And also, a lot of cross-chain initiatives as well that Hash Pack has really helped us to facilitate. We do them bi-weekly. So, I think over the past month and a half, we were able to interview IBM. We were able to interview Paulo Tasca, obviously, co-founder of Quant, sits on the coin committee at Hedera, now running the DLT Science Foundation. Multiple more, World Pan FIS, we just did recently as well, which was pretty awesome. Yeah, but today, super excited to say that we are joined by Duncan Moir. Duncan is with Aberdeen, and just really appreciative of the time that you're gonna take out of your, I'm sure, massively busy day, Duncan. So, I always like to kind of kick these off with, if you could give a little bit of a short introduction of who you are, an overview and background of yourself, what led you into your position at Aberdeen as well, that'd be fantastic.‍

ABRDN - Duncan Moir - Senior Investment Manager
Yeah, happy to. So, yeah, thanks again for having me and to everybody for joining. Actually, this, I'm based in London, so this is the end of the day. It's my greatest fear right now is my four-year-old getting out of bed and trying to walk into the room. I, you know, my background, I suppose everybody in digital assets has a background that doesn't resemble anything like their current job. But I'm originally from Scotland, a small island, very rural community, fish farming, sheep, so completely different from the world I'm in today. And have gone through the very, very traditional track of, you know, college, graduate schemes at Aberdeen, and spent my entire career at Aberdeen. I'm an economist by training, I suppose, but I think I use very little of that today. And my professional background has really been predominantly investing in hedge funds, with a focus on quantitative and systematic hedge funds. And that's what originally led me into looking at crypto, was looking at macro hedge funds that were investing in crypto, then crypto-dedicated funds, back when it was all a little bit Wild West, you know, the South South Valley valuation, self-administration, self-custody. But at least that put us on a journey to thinking about how we can use this technology. And I guess you can say it's been a little bit of an evolution, one thing led to another, and about two years ago, we put together a formal digital asset strategy for the business. Maybe just worth mentioning, Aberdeen is a global asset manager. We manage money for institutions, for individuals, across about, I think, 39 different locations in the world. And we do both public and private markets, and this space really fits quite neatly from an asset class perspective into that those alternative assets. So, that's kind of how I've ended up here.‍

Genfinity - King Solomon - Founder & CEO
Fantastic! Again, I really appreciate you giving a little bit of a background into Aberdeen as well. I know very, very large in Europe and the UK. I was going to kind of get into some recent milestones and achievements from Aberdeen. I kind of want to start with, you know, you guys joined, I think the, I think you joined the Hedera Governing Council back in October of 2022. Can you talk about kind of the lead up of what that looked like? Where you guys reached out to, in any way, or was it kind of more so of just trying to utilize the technology and then reaching out and figuring out if there was a fit within that Governing Council? Maybe give us your story around that first.‍

ABRDN - Duncan Moir - Senior Investment Manager
Yeah, I guess it was kind of organic, you know, in a way we had already, you know, made the decision that we were going to start tokenizing funds and eventually assets, and so, and we did, we ended up selecting Hedera for that. It wasn't the really the other way around. We'd already made that call through due diligence and just from talking to the team and some connected parties. That's how we kind of learned a bit more about the council and the opportunity to have this kind of governance role in a technology that you're using was really appealing to us. It was, you know, an interesting process. There is a real process to joining the council, and they're very careful about who they select, so it feels like a bit of a privilege to be on that, and, you know, I think it helps we filled a gap in terms of the kind of sector that we're in and geographically as well, to hit on that diversification across different industries and different time zones that the network wants.‍

Genfinity - King Solomon - Founder & CEO
100%, and I mean, so recently, you guys had, no, I know that you know we have the kind of the questions spreadsheet that we sent out, but I did a little bit of due diligence in the background here today as well. So, and I found some interesting stuff, but I will say I think it was over the past few months, Aberdeen, uh, announcing that they've tokenized part of your 15 billion British pound sterling, Lux Money Market Fund, and utilizing things like Archax tokenization engine. Maybe touch base a little bit about that and what that represents, maybe as a stepping stone for an organization like Aberdeen within the digital asset space, and yeah, that'd be great.‍

ABRDN - Duncan Moir - Senior Investment Manager
Yeah, you bet. So just in case the off chance that any of my lawyers are listening, Archax tokenized their interests in the fund and you know, I guess we can talk a bit about the whole strategy, strategy as a whole that we have, but that was kind of the first phase in our tokenization journey. And really, it's about working with all the partners that we have. Maybe I'll just touch on very briefly that strategy just to kind of put it in perspective. So, we put the strategy together a couple of years ago now. It touches on three areas. So, product building product to give our customers, our investors exposure to digital assets, so giving them some way to participate in the growth of the industry. There's the second part, applying DLT within the business, so tokenization is a large part to that, but there are some other things we're working on, and the third part is investing in and operating the technology. So last year, probably about, I think maybe like August last year, Aberdeen became the largest external shareholder in Archax. They're a UK-regulated digital Securities Exchange, regulated custodian, and they're on the crypto asset register in the UK for their crypto exchange, and we don't make investments like that without there being a strategic angle. So, it's truly a strategic partnership, and that means that we're working on a lot of different things with them, part of which is the tokenization. But that, yeah, that money market fund is, you know, it's a, it's a cash fund, right? It's a liquidity fund. It's supposed to be a sort of Safe Haven asset. It has a yield, which I guess maybe gives it a leg up on, you know, stable coins to a degree. So we hope to kind of meet some market demand there, but, uh, having it through a regulated venue like Archax, you know, it adds an extra element. So we will be able to then offer out to initially professional investors and then we hope individuals in the future.‍

Genfinity - King Solomon - Founder & CEO
Yeah, so, and thank you so much for the clarification as well. I mean, feel free to answer some of this stuff. I mean, I did do, like I said, a little bit of due diligence here at the front, and if you're not aware of what Archax is, who some of their advisors are, I'll just give you some examples. David Buckley, who's chairman of the Royal Bank of Canada, you've got the former Chief Strategy Officer at the London Stock Exchange Group, you've got the managing director of prime finance at HSBC. There are a lot of heavy hitters, UCL, so University College London, so also they're a governing board member. Quite a bit there.
Now, I read through the initial press release as well, and I think you briefly touched on it, so, um, this is the Archax kind of Aberdeen press release that came out through Finance Feeds, and it basically states the tokenization of the 15 billion, um, pound, uh, Lux Money Market Fund represents the first step towards a number of traditional real-world tokenization projects that the parties are working on together. So, with that being said, you know, looking at 15 billion, um, British pounds, right, uh, if you look at the overarching aspect of what Aberdeen has under management, so assets under management, um, 2022, I don't know if this statistic is 100% right, but 306 billion, 376 billion British pound sterling in assets under management. So, from Aberdeen's standpoint, is this first kind of tokenization aspect a little bit of a drop in the bucket for more things that are going to be utilizing the utility of these ledgers moving forward?‍

ABRDN - Duncan Moir - Senior Investment Manager
I mean, I definitely hope so. That's certainly part of the plan, and you know, we're already working on, we've been working on some other things in the background at the same time as this. You know, money markets, liquidity funds make sense first in terms of demand. From a demand perspective, there is already real demand for this, which is unique, I think, in the tokenized assets from an asset manager like us. But, of course, a lot of this is about taking assets that are not readily available to smaller investors and making them available. So, private markets, um, you know, private equity, private debt, real estate, infrastructure, these asset classes are areas that we're really focused on now, and that's been a big, uh, part of the strategy. So, we do have some, some stuff that we, you know, we're hoping that now later in this year that we're working on. We're working with again with Archax, but also with Toko. That's one of the, um, you know, the groups that actually we work with very closely in the initial, um, work on Hedera, but also the Governing Council application, and they've come out of DLA Piper as a, as a council member. So, there's some, there's some stuff that we're really excited about, but I think you should expect to see real estate and different private market funds tokenized, in the near future and ultimately individual assets because we, you know, we want to go from what's an off-the-shelf product, you know, a mutual fund, to then the next level, which is giving investors the real flexibility and choice in what they invest in, which is obviously going to be the underlying assets.‍

Genfinity - King Solomon - Founder & CEO
It's interesting that you mentioned Toko as well because, you know, maybe I'll start here, but, you know, being that Aberdeen's obviously on the Governing Council now, it seems like there's some close corresponding relationships with things like, you know, University College London or DLA Piper, things like that. How closely do you work with Governing Council members on potential use cases or pilots, things like that? And, you know, what is your expectation moving forward? Or do you see a lot of synergy with the Governing Council as is to try to streamline different aspects of what these organizations do best to come up with great technological solutions? Or is that maybe an overreaching statement?‍

ABRDN - Duncan Moir - Senior Investment Manager
No, no, I don't think it was ever the intention, and certainly not from our perspective, that we would get as much out of that collaboration as we have. So we absolutely do work with other council members, and both on stuff that will help our business but also on trying to increase adoption of Hedera. So we may be the only asset manager, only buy-side financial services firm, but there are several banks on the council, so we have good overlap with them. Obviously, I mentioned DLA and Toko. If someone like ServiceNow, I mean, I think probably every council member uses ServiceNow in their business, so there's really good overlap, and that's probably been one of the biggest value adds, certainly for me, is that almost like an education element. You're learning from the different sectors and how they're approaching things, and there are certain things that matter to every company, you know, digital identity is a great example. It's just that crosses all sectors, and it's something that we all have an interest in in some way.‍

Genfinity - King Solomon - Founder & CEO
100%, and then kind of leading into the DLA Piper, Toko aspects, like we found out, I don't know if you know about this, but you mentioned right after mentioning DLA Piper and Toko, kind of the real estate aspects of tokenization. I believe there was a Ripple interview with James Wallace at Ripple talking about how Ripple was working with the Hong Kong Monetary Authority as well as DLA Piper and Toko, and you start really kind of digging into the weeds within that, and it's like mortgage-backed securities, things like that that might be coming down the pipeline soon. And then, even take it a step further, about how these things potentially could integrate with Central Bank digital currencies, things like that. You know, how large is the tokenization use case when it comes to traditional assets? How large is the use case, I guess, and then what does that represent? What problems does that solve for the mass population to kind of defragment access into things that are just not really accessible for them as populous right now?‍

ABRDN - Duncan Moir - Senior Investment Manager
Yeah, I mean, I think long term, the number is so huge, it's almost ridiculous to say, but we are talking, you know, 500 plus trillion or more than that, depending on who, you know, down to individual kind of real estate. But at a minimum, the asset management industry, let's say, is 100 trillion dollars. So that should be a minimum. That's going to be a very long journey, clearly. I think most groups, including ourselves, probably think that there's a good 10 to 20 trillion that can be tokenized over the next sort of five to ten years. And it will all depend on what's the value add for the end consumer. So private markets will be a big one I mentioned. I think there's that, but as traditional finance infrastructure is upgraded and investors expect more and better services, such as shorter settlement windows for their security settlement I do expect that a lot of that will move on-chain to facilitate that, and you'll effectively have a tokenization of, I think, equities and bonds. We already see, obviously, a lot of bond issues, no digital issuance, and it makes a lot of sense for the bond market. Equities, less so, but if what you care about is getting T0 settlement on your portfolio, I think we'll probably see it move that way. The US is already moving to T1 anyway, so two plus one settlement anyway, and I think Aberdeen, and I'm sure a lot of our peers, want to be ahead of that.‍

Genfinity - King Solomon - Founder & CEO
And, you know, maybe some of the audience down here might not know, but, you know, from my understanding, you know, with T plus one settlement, it essentially means that, yes, payments go through, settlements occur within a day. T plus zero, a lot of the time, we hear real-time gross settlements, so almost like atomic swaps and instantaneous. It just means that it settles within the same day. For T plus one, it doesn't necessarily mean real-time gross settlement, but can you explain, maybe in layman's terms, that shift, maybe it is from the speed standpoint, where, you know, things get settled, whether it be from a consumer standpoint or a client standpoint, and what that represents, like, as we continue to digitize for clients, for consumers?‍

ABRDN - Duncan Moir - Senior Investment Manager
Yeah, yeah, definitely. So, you explained it really well there. I mean, yeah, and it is completely true that it will not necessarily mean a dominant, it most likely, for equities, it will be end of day, which is perfectly fine. So, you know, basically, you have an investment, and you think that the opportunity set is elsewhere, you want to sell that position. You might need to wait two days for that cash to come back, so you might not be able to place that new trade, and it could be a missed opportunity. That's for the individual. Now, in a lot of cases, if you're going through brokers with a lot of banks, the banks will actually offer you T plus 0 or maybe T plus 1 settlement on assets that are actually T plus 2 or T plus 3, which means the banks or the brokers, whoever's doing this, is taking the risk, and they need to hold capital against that. So there's a regulatory capital impact on them, which is costly. So who do they pass the cost on to? Well, the end investor ultimately is going to pay in some way for that service. So reducing those settlement windows, which is largely a cash settlement problem, I think will add a huge amount of value for the end investor.‍

Genfinity - King Solomon - Founder & CEO
So is that similar to what we hear, I'm kind of just going off the cuff now, to be honest, but is it similar to what we hear when we think about payments and settlements with traditional currencies with Nostro and Vostro accounts where there has to be kind of that promissory trust aspect on the front and back end? And if that's the case, you know, how would you imagine that these financial institutions or maybe even clients start deploying capital that was previously, you know, almost like trapped, and I wouldn't say necessarily illiquid because it gets used for certain things, but how would that look like for them if they start opening up capital that they can leverage in different ways in a much quicker standpoint without having to have it kind of locked up?‍

ABRDN - Duncan Moir - Senior Investment Manager
Yeah, so I think what you'll end up seeing, what it will basically mean is institutions will have to hold less capital to regular capital to hold, which means they have more—I don't want to say money to play with—but they'll be able to put more money into the market. So I think that will be, that will increase liquidity in general. And for the individual investor who gets, or even the institution who has faster settlement, I think that you'll probably just see more activity. They don't need to think two days ahead now, which can often be, you know, can impact your decision making.‍

Genfinity - King Solomon - Founder & CEO
100%. Last kind of off-the-cuff thing, I'm going to get back into all the normal questions here. I really appreciate it. So I actually was doing a little bit of digging previously, and you'd mentioned that Aberdeen, obviously a pretty large shareholder within Archax, which is the tokenization engine that was used to tokenize the Lux money market fund using hedera technology. I found a really interesting roadmap towards tokenization that they put out. It's got to be over the past six months here. I don't know if you've seen it, but you were you mentioned the 500 trillion, you know, kind of the really high numbers that a lot of people start thinking about. This is not investment advice for a digital asset or anything like that. This is more so to get a size and scale of the market opportunity from somebody that's in the weeds with this stuff all the time like you are. So let me just read a brief kind of statement from this roadmap towards tokenization that our tax put out. And I'm just gonna, I'll just do a quick little brief aspect of it. So essentially, it says, "If you believe, and there's a couple of really cool graphics here, uh, maybe I'll preface it with that. So it talks about Bitcoin and crypto and other funds. And then on the right side of this graph, it says all the valuations around private equity and real estate funds, and gold and physical currency, stock markets, all money, public debt, global real estate, derivatives markets, and then other assets like art, racehorses, shipping, royalties, etc." The statement they say, within this roadmap towards tokenization, is, "If you believe, as we do, that this means all asset classes, everywhere, from, can benefit from tokenization, will move on-chain in the medium term. The market opportunity is actually every tradable asset class in existence, and that's a really crazy statement." I guess from the thought processes of Aberdeen, and I had mentioned previously that you guys have, you know, a 15 billion tokenized aspect through our tax, tokenized it. I'll preface that like you mentioned before, but Aberdeen has 376 billion British pound sterlings under management, essentially. Do you think that eventually all of the assets that you may have could be tokenized, that you have under management currently?‍

ABRDN - Duncan Moir - Senior Investment Manager
I mean, yes, honestly, eventually, I do expect that. I don't think it would just be the assets that we have, you know, the asset that we have would be a fund, let's say, but I think the end, the underlying assets will be tokenized, the underlying securities. This is like, I don't know if I'm going too far right now, but like I even question whether the traditional mutual fund model exists in the future. At least I'm not sure. I don't see a huge need for it. Uh, that, I think, I think next year, maybe will we mark 100 years from the creation of the first open-ended mutual fund. I think it's still in existence. It's like MFS or something certificates in the US and not a lot has changed in 100 years. I mean, there's been a lot more layers of complexity added, so lawyers get paid, but in reality, it quite big, it looks quite similar, and what that means is it's old infrastructure and old processes. We still see funds where you have to fax subscription documents. This sort of stuff is going to change, so I honestly think in the future, we're going to have an end-to-end on-chain life cycle of the fund.‍

Genfinity - King Solomon - Founder & CEO
That's amazing, thank you so much Duncan. I really appreciate it, and I appreciate you answering the questions too. Sometimes we talk about these extremely best-case scenario aspects of what could be utilized, but I think most of us that pay attention to digitization and where we're heading, it's almost like there's no way of going backwards, so obviously the technology is going to be leveraged and utilized in certain regards.
I read through the press release with our tracks and the tokenization engine and Aberdeen with the tokenization of the money market fund, and there was an interesting quote within that. Maybe you could expand on it a little bit, and I think it was from one of your colleagues at Aberdeen, essentially stating that the broader adoption of digital securities is the views of that individual through Aberdeen the next evolution of market infrastructure. Can you maybe delve out a little bit more into that in a way that makes sense to even retail participants that might be sitting down here, not just institutional? Like, how does that make sense to everybody in a way that we can all understand it?‍

ABRDN - Duncan Moir - Senior Investment Manager
Yeah, I mean, today, what it looks like for fund managers is, so let's say you go to invest in a fund, right? So there's gonna be some service provider that's going to do, you know, they're called the transfer agent, and they do the KYC, the AML, and that can be a pretty horrible process. The user experience is not great. But let's say you get past that, you have an administrator comes in and they provide pricing, then you have a custodian who's going to hold the underlying assets and record the changes in value as well and the fund, and then you have an auditor who's going to make sure that what the custodian says they, you know, that's been held for the fund, it matches what's been held, what's showing at the depository, and you have lawyers in there as well who kind of update legal documents. So you have this really complicated process with multiple groups. Even the administrator and the custodians who might usually have the same entity, they maintain different books and records, and they maintain them in a different way. So you have this, you know, multiple layers of different things going on, and in a lot of cases, it is around trust, and that is clearly something that could be solved for with DLT, but public DLT, you know, in particular. So I think what we're going to see is as those processes move on-chain, a lot of either those entities need to change, or they're not going to be relevant in the future, and this is going to change that whole user experience for the investor but force other parties that are kind of, I'd say almost like ancillary to that to upgrade their technology. If you can offer the FTSE 100, you know, the UK major stock index, you can offer the FTSE 100 shares with T plus zero settlement as an exchange, let's say, why would you go to a broker that's going through a traditional exchange where it's going to take two days to settle? I think everybody will almost be forced to get in line, let's say.‍

Genfinity - King Solomon - Founder & CEO
I wanted to mention real quick we did have to restart this space at the very beginning because the initial link got dropped, so if you guys are interested in this conversation and you'd like to kind of share it, we are talking to Aberdeen right now, one of the largest fund managers in Europe in the UK. We've got Duncan Moyer up here with us, and he's dropping a lot of really interesting information if you've been here since the beginning, and I'm sure you could attest to that as well, Duncan. I kind of want to get into because you briefly touched on that with your last statement. When I talked about the broader adoption of digital securities being the next evolution of market infrastructure, talking about all of these, it seemed like a lot of front and back-end processes right now, and there's a lot of trust aspects. There's probably a lot of overhead that goes on. When you think about, and I'm sure there's multiple networks, certainly, how distributed ledger technology and some of these ecosystems can streamline those processes, so I'm thinking that obviously with the tokenization engine through our checks, with what you guys just recently announced and our tax facilitated, but you guys announced with them, I'm assuming that you used Hedera Token Service. I'm sure you're aware of all the other services within Hedera, whether it be consensus or the file service or the smart contract service. So as these processes become streamlined, and as more traditional, let's say traditional assets, traditional aspects become tokenized, how do you envision things like, for example, within Hedera, you've got Hedera Consensus Service, file service, all these things? How do those all kind of play a role? Do you think that they eliminate some of the aspects that go on right now with overhead and things like that, and it just makes it more seamless? Like, I would love to hear your thoughts on how different aspects could be integrated.‍

ABRDN - Duncan Moir - Senior Investment Manager
I think if it's going to be fully utilized, you're gonna, if we're gonna see the full capabilities here, what can be done, there are going to be other groups who are, well, and hopefully in the case for Hedera, we'll be building on Hedera that will add a lot of elements to our tokenization and to our everybody's tokenization efforts. So I think that our checks is a centralized exchange, right, and it's permissioned in a way, so they need to do KYC on investors coming in. Any brokers connecting to their exchange need to do KYC and suitability on those investors. But as you want to move to decentralized exchanges, the KYC element, suitability, becomes really crucial for a business like ours, where we're offering regulated funds in many cases that are only available in certain jurisdictions. So things that are being built on Hedera today, and you know, on other chains, will be able to provide really good add-ons to allow us to reach that potential. So the easy KYC of investors and adding these layers of permissions that make sure we're not, you know, getting on the wrong side of regulation will be important. I think things that allow interoperability will be good. And you know, what we need for HTS is for custodians and marketplaces to support HBARs. It's not good enough just to support HBAR, and so good partnerships, I think, where if you're not going to support it, that you're outsourcing that so that you can increase the adoption and the activity in the network will be.‍

Genfinity - King Solomon - Founder & CEO
It almost seems like a lot of what's going on right now. There's a gigantic push where organizations and institutions are understanding the power of democratizing financial markets as they exist currently. In that regard, what are some of the aspects you would expect to see coming out of that? Is it kind of the, you know, fractionalizing assets to enable people to invest in things that they previously couldn't have? How do you envision kind of that democratizing of financial markets occurring? Like, as everything becomes more and more digitized, yeah.‍

ABRDN - Duncan Moir - Senior Investment Manager
So, yeah, it's a great point because this is what we're seeing. Like, if you look at, you know, you look at U.S. equities, you know, more than 50% of, you know, of assets are for our retail. And I think we're going to see that across other asset classes. You know, bonds are tend to be very institutional. And as they're tokenized, I think the retail investors, the individual investors are going to come into it more. But certainly, the U.S. is leading this in a way. It's individuals' preferences, so that they're, they're their desire to have power over where they invest their money and their desire to introduce their preferences to their portfolios is becoming really, really important. And again, again, I think the U.S. is probably leading there, and others, obviously, we're seeing others in Europe follow. But as their demand for customization down to the finest detail increases, tokenization can help deliver that. Yes, we can already fractionalize equities, but not all bonds. It's an area that's really missing credit, and that's, at some point not too far away, I think investors are going to be able to just say, "I want this building on whatever street in London or New York or Hong Kong. I want to own that in my portfolio, and I want that commercial property because I like the yield." That's not something that they can do today. ‍

Genfinity - King Solomon - Founder & CEO
That’s fantastic. You mentioned briefly the US, and I do have up here, you know, additional things with Hedera and stuff like that. In the future, I think you mentioned to pay attention to the latter half of this year with some things that might be rolling out, which is pretty interesting. But when you talk about the United States, obviously, you know, from the, I know that we get really heavy into the crypto discussions, but from the digital asset discussion in and of itself and digitization, how do you view the United States' competitive competitiveness right now? And I'm phrasing this because Aberdeen just recently had high Visa acquire their US private markets portion of the organization. Does that change anything for you? Is, you know, what is that looking towards, and what are your thoughts regarding kind of US competitiveness in the digital asset landscape?‍

ABRDN - Duncan Moir - Senior Investment Manager
Yeah, so, I mean, no, it doesn't change anything for us that much because that business is a fund-to-fund business. So, you know, I think tokenization of funds like that, maybe less attractive because we're talking about an extra level away from choice when you, when you do a, you know, funds that invest in other funds that invest in assets. We, you know, the US is an area that we have spent some time looking at on digital assets in general. We don't have as much of a presence in terms of partners there. I suppose, well, maybe because, you know, you can argue about quite a few Hedera entities based there, but it's definitely not a critical market for us. That being said, part of that is driven by the fact that the majority of our funds are regulated in Europe and are regulated funds in Europe, you know, the 40 Act version of Europe is called the UCITS. They're not allowed to be sold to US investors. So we need to, you know, we need to think about where the market demand is going to be coming from. If those funds are, we can be sold in across Europe, the UK, and in Asia, but the US is a tougher market. We may not be, look, we can't be everything to everyone. We may not be the one that cracks the US.

Genfinity - King Solomon - Founder & CEO
I think one other interesting thing is, you know, I was watching an ArCEx video around tokenization of real-world assets again, and I know that from Aberdeen's standpoint, you have some synergies there. But I'm curious your thought process because for those of us that have been here for years, I'm thinking back to, let's say, early 2018, after the bubble popped on the last cycle, there seemed to be a lot of traditional finance mergers and acquisitions and partnerships and things like that that were, let's say, from 2018 to 2020. And they were probably operating behind the scenes of the wider crypto space, too, in my opinion, probably to start leveraging and figuring out how to leverage the technology itself. The Archax video that I watched had mentioned that there has been so much progress over the past 12 months in digital assets and utilizing the actual technology. What is your thought process on enterprise growth, adoption, and interest? Cycle to cycle, are you seeing just a total mass of uptick? I would love to hear somebody that's down in the trenches like in what your thoughts are in that regard.

‍ABRDN - Duncan Moir - Senior Investment Manager
Yeah, sure. So I think, well, everything we do, and I'm sure many groups like us, we need to think really long-term about things. So the different cycles are not something that influences us as much as they might do for, you know, newer companies. Like I said, we're 200 years old as a business. We really do need to think long-term. But I feel like people have been talking about, you know, the asset managers are coming or whatever for a few years, and maybe it's not materialized as much as people had originally thought. I do agree that the last 12 months, the activity has picked up a lot. And, you know, you, it's not just FOMO. Let me, I guess I would say, I would say that I know more than ever, the leaders within asset management firms, within other financial services firms, are seeing the real-world benefits. And they are able to separate the, you know, the FUD that goes on in the media with really, as really, you know, it relates to cryptocurrencies from the technology. And I think they are starting to see the real, the real kind of utility of a native cryptocurrency for respective blockchains as well but you know, my own experience is that you need to have a lot of discussions with groups internally. You know, there are lots of committees and groups within businesses whose job it is to look out for the shareholders and look out for clients, and rightly so. You need to spend a lot of time talking to them and working through the problems and managing risks for your business. So it has taken some time for other groups and for us, for us as well. But yeah, it's picked up massively in the last 12 months or so. It's quite amazing.‍

Genfinity - King Solomon - Founder & CEO
And I think you've mentioned it, and I've heard this from a lot of people that I've been able to interview recently that are actually building out these real use cases. I think a lot of the times from the maximalist camps, dealing in a native cryptocurrency, it's like, it's going to be used because it's going to be used. It seems like there's an understanding of the value that's represented in the underlying technology and what these networks represent as a kind of a first and foremost onboarding thing. And then obviously, as time occurs and the networks being leveraged or utilized, you can start thinking about the underlying asset as kind of a byproduct of value or utility because the network in and of itself has value. Is that kind of where you're, is that kind of what it is?‍

ABRDN - Duncan Moir - Senior Investment Manager
Yeah, completely. I almost view cryptocurrencies as, for, you know, say, for proof of stake, as, I mean, for me, it's almost like venture-style investing, right? You want to be a long-term holder of these, and you want to own the ones where the chains see the greatest adoption because it is this thing that gives you access, gives you exposure to the profitability and the uptake of a particular chain. So, I think there's going to be more acceptance of the ability to fundamentally value these businesses. More and more, you can obviously already do it, but it gives you a valuation that looks very similar to what a venture or an angel investor would see with the companies they're investing in, which are, you know, let's face it, they're not the what a kind of Bellwether asset manager would see with our regular portfolios. And I think that people need to connect those dots between the type where we are today and where we're going to be in the future.‍

Genfinity - King Solomon - Founder & CEO
Yeah, I mean, The Cypherpunk movement is fantastic when you're talking about an individual asset, and I think a lot of us kind of applaud it. But at the end of the day, if the network can't facilitate real-world utility and adoption, it's like, what does the underlying asset within that network actually represent?‍

ABRDN - Duncan Moir - Senior Investment Manager
It's exciting because you are undoubtedly going to have winners and losers here. So, you know, it's like, look at the S&P 500, how many of those companies were there, you know, 100 years ago? Yeah, I think it's exciting because you can really see the ones that have done it right, and that's partly that's how have you set yourself up, how do you market yourself, how do you conduct yourself as a business?‍

Genfinity - King Solomon - Founder & CEO
Do you think that as we start seeing kind of a little bit more of a mainstream rollout with Central Bank digital currencies like I think about CBDCs and stablecoins, I think about the recent announcement that came out of Hedera with Shinhan Bank, Siam Commercial Bank, TechX platform, I think also Zenobia, so the Senior VP of Communications within Swirls Labs mentioned on our last basis that the largest Taiwan Bank was involved. And there was an emitted portion of all the press releases except for in Siam Commercial Bank's press release where it said this is a stepping stone towards Bank-issued stablecoins. Do you think as CBDCs and stablecoins become more prevalent, that is going to kind of be one of the triggers towards mass adoption? And how, from an organization like Aberdeen, would you envision kind of integrating and leveraging those aspects of what's going to be coming down the pike?‍

ABRDN - Duncan Moir - Senior Investment Manager
Yeah, I mean, I think that CBDCs are basically an endorsement by a government of the technology, and I think that as you see these roll out, you're going to see a lot of groups will have confidence. Businesses will have confidence to set up in those respective countries to operate there with their digital asset businesses. CBDCs or regulated digital fiat is critical for T+0 settlement of securities. I don't see, at least in the near term, I don't see a world where banks and brokers are settling on, you know, for I don't know, your Apple shares in USDC, right now, I don't see that. So, I think that CBDCs and these regulated digital currencies are going to play an important role in the move to securities as a whole moving on-chain.‍

Genfinity - King Solomon - Founder & CEO
That’s fantastic. Before we close this out, I did want to kind of give just a brief recap of the space for you all, and then I want to allow Duncan to kind of give any forward-looking statements or closing thoughts. And we certainly appreciate your time, Duncan. But today, we obviously interviewed Duncan Moyer from Aberdeen. Aberdeen recently announced that ArcaX tokenized part of Aberdeen's £15 billion sterling money market fund on Hedera. Also, we had mentioned or I had mentioned, so I'll put this under my purview, that Aberdeen, in and of themselves, has £376 billion British pounds sterling. But we also talked about the opportunity for the tokenization of trillions upon trillions, and I can't remember the exact statistic, but I'm sure I'll find it, that it's not out of the realm of possibility that we might see 10 to 20 trillion dollars worth of assets tokenized in the next five to ten years, and it's really interesting and exciting to see where we're leading toward. I have to give a gigantic shout out to HashPack, who we're partners with, that help us to get these interviews and streamline these interviews. Duncan, I watched your interview with Zenobia from Hedera and Swirlds probably a month or two ago as well when I revisited it today. I want to make sure I didn't miss anything, Duncan. You had mentioned to kind of pay attention to the latter part of this year. Some interesting stuff might be coming out. But forward-looking statements, anything that Aberdeen is looking forward to for the rest of this year that I might have missed or even from a personal purview outside of the organization standpoint. Anything you might be interested in as well, I would love to hear you kind of lead us out here.‍

ABRDN - Duncan Moir - Senior Investment Manager
Yeah, yeah, absolutely. So from an Aberdeen perspective, you know, we spent a lot of time talking about tokenization. That is huge for us. But there are lots of other opportunities in financial services and upgrading the technology and bringing that on-chain that, to be honest, may have, in the near term, a bigger impact on the end investor, a bigger impact on adoption. A lot of old infrastructure that needs upgrading, so that's something we're working on and really excited about what might come after that. From a personal perspective and also from a Hedera perspective, what's going on in sustainability is really fascinating. Sustainability and blockchain, you know, the use cases that are coming out of there are not just around tokenization and tracking of voluntary carbon credits, but things in microfinancing, on the social side, it's there's a lot going on in that space, and I think it's there's two really interesting worlds, blockchain and sustainability, that are meeting with a lot of kind of good intentions and a lot of people back behind it. So I think we're going to see more and more there.‍

Genfinity - King Solomon - Founder & CEO
And if you were paying attention during this space and interview, Duncan did drop some dimes for some developers out there. I mean, there's going to be a need for marketplaces, not necessarily that natively have to deal with, you know, trading an HBAR, things like that, but leveraging the services themselves. So Hedera Token Service, maybe the Consensus Service, or the File Service, whatever it may be. Pretty interesting stuff coming out from the institutional mindset as well, and just really appreciate your time today, Duncan. Again, if you guys just joined us, we are going to close this down, but Duncan Moyer from Aberdeen, governing council member of Hedera, and they had recently had a portion of their one of their Lux money market fund tokenized through ArcaX. I very much so recommend that you guys look into ArcaX as well. It's a really fascinating kind of ecosystem of digitization and tokenization and things like that, institutional-grade. Duncan, thank you so much for your time. Same thing with you, Marc, from HashPack and Carola and the entire team at Genfinity. Really appreciate your guys' time. Hope to do this again in the near future.‍

ABRDN - Duncan Moir - Senior Investment Manager
Thank you so much, and thank you to everyone for joining.