RULEMATCH Spot On

1:12 Intro

The topic of MiCAR - the European Union's Markets in Crypto Assets Regulation - is top of mind for crypto asset service providers (CASPs) not just in Europe, but also around the world. The implications of MiCAR for the current crypto market and its potential to shape institutional involvement in the space are wide-ranging and far-reaching.

In this episode of RULEMATCH Spot On, host Ian Simpson spoke to Dr. Joachim Schwerin, Principal Economist at the European Commission and a contributor to the drafting and writing of MiCAR. Together they discuss MiCAR's background, implications for stablecoins, liquidity, bank and broker operations and much more.

Episode show notes:

00:55 Intro and Dr. Schwerin’s background in drafting MiCAR

2:52 How big a deal is MiCAR (really)?

4:32 The second part of MiCAR’s development

6:52 The danger in global convergence of rules

7:48 The true scope and scale of MiCAR

9:30 How MiCAR reverses the “burden of proof” onto regulators

10:45 The need for a liberalization of financial markets with MiCAR

11:28 How will MiCAR change the crypto market in 5 years?

13:45 How the crypto community should consider regulation

14:19 Traditional financial regulation for crypto is “dead”

15:40 MiCAR: horizontal or vertical?

16:10 The real things to look for in 5 years

17:10 Bottom-up innovation needs new forms of regulation

17:45 MiCAR as a desire to target specific market players

19:02 Creating a “radical place that is driven by experimentation”

19:12 Why educating “the right” way is important

20:06 The influence of MiCAR on regulation in other places

22:40 Why competition goes beyond just company vs company

23:49 MiCAR in the context of industrial policy

24:40 MiCAR and GDPR as EU exports

25:56 GDPR as the first crypto regulation

28:20 Specific implications of MiCAR for: best execution

32:07 The ongoing discussions around best execution

33:43 Specific implications of MiCAR: liquidity

34:50 The political reality around stablecoins

35:20 Competitiveness, the dollar’s decline and Europe’s imperative

36:26 “Deal with it”

37:30 Analyzing the “protectionist” view of MiCAR

39:26 How global crypto players will adapt to MiCAR

41:05 Stablecoins as a passing phenomenon

41:59 “MiCA prohibits nothing…”

42:34 Specific implications of MiCAR: tokens deemed securities

46:44 The potential for tokenized assets in Europe

50:10 A curious case of private crypto tech

51:21 Jealous of Switzerland

54:01 Thoughts on Switzerland’s DLT law and MICAR 2.0

56:38 NFTs and MiCAR

58:40 NFTs in the financial domain

1:01:10 The “unexplainably” strict rules around reverse solicitation

1:04:50 The pace of 2nd-level standards publication from ESMA

1:05:44 Is the tail wagging the dog?

1:07:25 The unhealthy focus on a few standards

1:08:59 The number of CASPs in the pipeline for MiCAR

1:10:33 How long will it take for MiCAR to “populate” across European countries?

ABOUT THE HOST: Ian Simpson is Director of Marketing and Communication at RULEMATCH as well as host of the RULEMATCH Spot On podcast, focused exclusively on the institutional crypto and digital assets industry. Previously he was Head of Marketing at Bitcoin Suisse and Head of Communications at the Crypto Valley Association. His insights on the Swiss crypto and blockchain ecosystem have been featured in CoinDesk, the leader in blockchain news.

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Disclaimer:

He used to be a rocket scientist in South Africa, but now James Kilroe and his co-founder Geoffrey van Ryneveld run Tendex, a market neutral crypto hedge fund with a focus on medium- and high-frequency trading strategies.

ABOUT THE HOST: Ian Simpson is Director of Marketing and Communication at RULEMATCH as well as host of the RULEMATCH Spot On podcast, focused exclusively on the institutional crypto and digital assets industry. Previously he was Head of Marketing at Bitcoin Suisse and Head of Communications at the Crypto Valley Association. Ian is a veteran of the Swiss crypto and digital assets industry since 2017. His insights on the Swiss crypto and blockchain ecosystem have been featured in CoinDesk, the leader in blockchain news.

Liquidity in markets is always key. What assets get traded

In crypto it is no different. Keyrock CEO and Co-founder

(00:41) Intro

(1:44) State of global liquidity

(3:03) The actual location of liquidity - geographically and

(4:42) Breakdown of Keyrock’s business pillars

(6:12) The driving factors behind the founding of Keyrock

(6:40) Crypto as a proof-of-concept

(7:17) Where Keyrock got started - market making as a

(8:53) Comparing crypto vs TradFi market making

(10:55) Why crypto’s retail history has hindered “the tech”

(12:54) Getting to more standardization and technical

(14:18) How large orders from the world’s largest trading

(16:07) Crypto ETFs as a sign of liquid markets

(16:52) Preparing for US Bitcoin ETFs

(17:50) Weekday vs weekend liquidity in crypto

(19:53) Stablecoins as a buffer

(20:14) State of play in crypto market models

(22:38) The fantastic speed of innovation in crypto

(23:44) Re-setting global capital markets

(24:14) “Pattern match” for TradFi players coming into

(25:35) Why OTC?

(26:42) Non-existent best execution in crypto

(28:05) Standardization in trade settlement

(29:07) Waiting on Trade Cost Analysis

(30:14) TCA and transparency through regulation

(31:15) Adapting and implementing regulation in the light of

(32:30) Keyrock’s preparation for regulation developments

(34:48) Different plans for different scenarios

(35:25) The global (and regional) implications of crypto

(37:42) Implications of MiCA for liquidity in crypto markets

(39:06) Paths to the reconvergence of liquidity and better

(40:04) Scary MiCA?

(41:18) Leading crypto countries in Europe

(42:00) Why Switzerland for Keyrock?

(43:11) Keyrock’s HFT ambitions

(45:03) The dominance of engineering

(45:18) Pushing the pedal on acceleration (and regulation)

(46:35) The last question

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Swiss private banks are known for their long tradition of service - and in some cases their agility. Zurich-based Maerki Baumann Privatbank is an excellent example of this. As one of the first banks in Switzerland - and in Europe - to offer crypto services, it got a head-start on the industry in 2018.

How do you lay the foundation for fully digital capital markets? How far has work actually come in integrating a central bank digital currency into efforts towards tokenization?

And how is Switzerland pushing the industry forward in the next evolution of financial markets?

In Part 2 of this RULEMATCH Spot On episode, Ian Simpson and David Newns, Head of the SIX Digital Exchange (SDX) discuss the different ways that Switzerland has played a leading role in the development of the digital assets industry globally - with the support of the Swiss National Bank and others and with close input from FINMA.

Digital capital market infrastructure lays a foundation for a new evolution in finance - one that combines proven parts of traditional structures and the potential of new technology like blockchain and DLT. This transition has has many layers - as well as challenges and opportunities.

But what efficiencies does digital capital market infrastructure actually bring? What links remain between the “old and new” worlds - with exchanges, central securities depositories (CSD) and other elements of the ecosystem? And how do changing regulations and technological innovations promise to alter the landscape overtime?

In Part 1 of this RULEMATCH Spot On episode, Ian Simpson speaks to David Newns, Head of the SIX Digital Exchange (SDX) for an in-depth discussion of SDX’s development and operations, perspectives on the current state of digital assets and SDX’s place in the wider world of digital capital markets.

(1:31) - What is SDX exactly?

(2:50) - Equal regulation as the foundation of SDX

(6:30) - How Switzerland (and SDX) have benefited from crypto

(11:05) - The advantages of regulation

(12:35) - The why and how of dual asset listings

(17:44) - Why bonds and how successful they are on SDX

(20:05) - Digital bonds in financial products

(22:50) - (Digital) securities equivalence and why it’s useful

(25:38) - Digital central bank money - the missing component

(25:59) - Why capital markets need riskless digital money

(30:37) - The key considerations for building a blockchain-based capital market infrastructure

(36:17) - Moving forward towards “digital supremacy”

(36:50) - Intermediated (dematerialized) securities in the digital assets space - and why Switzerland is good at them

(39:45) - Central securities depositories (CSD) on the blockchain and collateral mobilization

(42:54) - “Borrowing” DeFi use cases for regulated financial services

(43:52) - Privacy, settlement finality and other considerations for use of a private blockchain

(50:44) - The use cases for instantaneous (precision) settlement and its potential downsides

(55:07) - Details on the trading and settlement processes of SDX

(58:29) - (No) needs for a Central Counterparty Clearing House (CCP)

Disclaimer:

Consistent liquidity in crypto markets has never been more important than now. With the shift away from purely retail-driven buying and selling, market makers take on an even more essential role.

But as new financial products with crypto underlyings come to market - and market structures and trading models evolve, how the dynamics change?

Will RFQ models and CLOBs exist in parallel? How will opening and closing times in TradFi influence market movements?

RULEMATCH Spot On host Ian Simpson welcomes Flow Traders Global Head of Digital Assets Michael Lie to the podcast to discuss all this - and more.

(:47) - Intro and crypto history at Flow Traders

(4:59) - Understanding market making

(6:35) - Crypto and TradFi market making compared

(7:40) - Evaluating the risks and opportunities in a new market like crypto

(10:05) - Mitigating counterparty credit risk with exchanges

(14:42) - Adapting to a lack of post-trade settlement and low latency infrastructure in crypto markets

(19:17) - HFT activity in crypto - past and future

(20:45) - How Flow Traders makes a market across different crypto market models

(25:50) - Transparency for institutional players in crypto markets

(27:42) - Advantages of post-trade over atomic settlement

(30:13) - The particulars of price discovery in crypto

(31:49) -Regulation and the development of spreads in crypto markets

(34:39) - MiCA, stablecoins and the euro stablecoin project of Flow Traders

(43:09) - A look back at spot BTC ETF launch in the US

(46:25) - Thoughts on an ETH ETF

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Disclaimer:

The information contained in this podcast about RULEMATCH AG (“RULEMATCH”) and any guest company is for general informational purposes only and should not be considered exhaustive. They do not imply any elements of a contractual relationship nor any offering.

Banks who have built a business in crypto and digital assets want to do it “by the rules.” But what does that mean exactly? What are the major considerations and how are regulatory considerations evolving?

In this episode, RULEMATCH Spot On hosts Cornelia Stengel, a partner at Kellerhals Carrard for an in-depth discussion on legal and regulatory topics from AML and capital requirements to stablecoin classifications and more.

(1:55) - Intro and “the big question” about regulation

(5:54) - How banks are thinking (and deciding) about legal and regulatory topics with crypto

(13:28) - Keeping up with regulations

(16:02) - Following BlackRock’s example and tips for banks to “get ahead” with crypto and digital assets

(18:17) - When AML rules are top of mind and technology-agnostic (or not)

(22:27) - Treatment of crypto vs cash transactions

(23:52) - Focus on the Travel Rule and tainted coins

(25:55) - Dealing with custody in the framework of banking law - and its side-effects

(30:04) - The burden of the balance sheet and risk-weighting for crypto

(33:42) - What other jurisdictions are saying about risk-weighting of crypto assets

(34:34) - Deep dive on token classifications and the laws they trigger

(38:31) - Understanding asset tokens

(42:29) - How financial institutions are preparing for tokenization

(43:30) - The alignment of Swiss token classifications with MiCAR and other rules

(46:41) - The (special) treatment of stablecoins in Switzerland

(49:42) - How attractive is Switzerland (still) for doing business in crypto and digital assets?

(50:54) - Looking for maturity with CBDCs

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Disclaimer:

The information contained in this podcast about RULEMATCH AG (“RULEMATCH”) and any guest company is for general informational purposes only and should not be considered exhaustive. They do not imply any elements of a contractual relationship nor any offering.

Crypto hedge funds and asset managers have seen rapid change over the last few years. With changing market structure and more institutional investors, come more possibilities for advanced strategies to take advantage of market trends.

But how will prime brokerage and a new emphasis on low-latency infrastructure change the game even more? And how will well-established crypto hedge funds adapt their approach to these realities - also on the regulatory front.

In this episode, RULEMATCH Spot On hosts Wilhelm Roth, founder and CEO of Coinmerce Capital (formerly Icoinic Capital) - a Netherlands-based asset manager with multiple crypto asset funds.

Wilhelm is a founding member of the Digital Assets Steering Committee of the Alternative Investment Management Association and a Research Fellow at the Digital Euro Association.

(0:59) - Intro and a look down memory lane

(3:16) - Asset management strategies for crypto

(5:38) - Building a diversified crypto fund strategy at Coinmerce Capital

(8:55) - Moving from retail to institutional market structure

(11:52) - Why pushing education of regulators was/is key

(13:56) - The “proper segmentation” of crypto market players

(16:06) - The weak points - including latency - of the current market landscape

(17:38) - The critical need for clearing houses and “proper custodians”

(18:36) - The link between capital efficiency and partnering with technically capable venues

(20:52) - Working together, part 1: Dealing with banking partners (”Fees are too damn high.”)

(24:34) - Working together, part 2: How prime brokers speak the “right language”

(26:12) - How does the crypto PB space expand beyond one dominant player?

(27:29) - Competition among venues - and what will be the edge

(28:04) - Dealing (transparently) with counterparty risk - FTX case in point

(31:22) - Uncompromising due diligence and transparency

(35:12) - Why responsibility is key for institutional adoption

(39:31) - What could change in fee structures

(43:24) - What horizontal market infrastructure specialization (and compliance) might do to fees

(45:14) - The multi-facets of the Swiss/Dutch crypto connection

(49:11) - The heritage and advantage of Dutch trading firms

(50:20) - The implications of MiCAR for a European fund manager

(52:16) - No regulatory iron curtain over the EU

(55:04) - Looking out for dark pools

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Disclaimer:

The information contained in this podcast about RULEMATCH AG (“RULEMATCH”) and any guest company is for general informational purposes only and should not be considered exhaustive. They do not imply any elements of a contractual relationship nor any offering.