 Thank you very much. Welcome to the panel discussion. Yeah, delighted to be the moderator of this panel today. Professor Yoramak doesn't need to be introduced any more, I think that's fine. I wouldn't like to ask the other panelists to please introduce themselves before we get right into the discussion. So thank you very much. My name is Haise Winter. I'm from the Deutsche Bundesbank, the John Central Bank. I'm in the payments division and in this respect, not a supervisor, but see the whole development of crypto tokens up to ICOs from the perspective of the central bank from the payments angle. Thank you very much. Hi, my name is Hagen Weiss and I'm a Federal Counsel with BAFIN, the German Federal Security Regulator. And what I do on a daily basis is I actually look at ICOs and determine whether they are securities or not in short. That's perfect. Now, Dr. Weiss, we already have the view of one of the world's leading scholars in the field. The question to you guys, what is from your perspective blockchain and ICOs also from payment but also from a fundraising perspective? Is it an innovation we need to keep in mind? How big you see this at scale for the next 6 to 12 months? What are your major concerns with that kind of new phenomenon from your both perspectives? Would you like to start? May I perhaps, yes, the whole topic crypto tokens is from the technical perspective, of course, a new innovation. But when you think in this more theoretical way, then you can say it's speaking about crypto tokens for payments. Then the most prominent example is still Bitcoin and you can compare this as you like to a regional. Because we had also private currencies on a regional level, this is something which is not new and existed for ages more or less. Now, with this new technical background, it's really something new because it's on a global level and that makes it so interesting. And I guess Ms. Weiss, more from a securities loss perspective, right? Yeah, definitely. Well, first of all, I couldn't agree more. I concur. It's a major thing. It's a major innovation. And at the same time, it raises a lot of difficult legal issues, a lot of issues which we haven't seen. And basically, answering your question, it's going to be a major thing with all its possible and potential repercussions and ramifications, even like society as a whole. And could you share us some background on your current practice when it comes to dealing with ICOs from a German securities regulator's perspective in terms of enforcement? How do processes and coordination with startups going to look like? Definitely. Well, our current regulatory standpoint is Vafian uses a case-by-case analysis, meaning we look at each case individually and we determine more or less like three things. A, are those tokens or maybe even coins transferable? Are they negotiable on the capital markets? And most importantly, are there any rights attached to the individual token, which is what Professor Rimmer has already outlined? Cash flow, dividends, profit rights, governance rights, that kind of stuff. So basically, as far as the legal reasoning is concerned, you have to keep for things in mind transferable, negotiable, and rights attached. That's our case-by-case approach. That's interesting. I think this is particularly interesting because most people are still trying to find a way or to get a better sense of what does a utility token look like from a Vafian perspective as opposed to a security token and how to draw this thin line of most startups in the market are trying to avoid securities laws totally with you on that one. There's basically two factions right now. There's the ones who try to avoid being labeled as securities, which is for obviously apparent reasons. And on the other hand, there's another group who deliberately tries to be deemed securities. And as far as finding out what Bafian thinks about that, there's a publication readily available on the Bafian homepage, also in English, so it basically answers a lot of questions. Yeah, that's interesting. And also there's a second perspective or second layer of interesting regulatory questions when it comes to qualifying tokens. This German specific concept of a unit of account, which leads to a situation at least across Europe where we have a special way of qualifying tokens, because nearly almost all tokens somehow qualify as a unit as a count and therefore as such as a financial instrument under German banking laws, which makes it rather unattractive from a commercial perspective to set up shop in Germany and running your ICO or token fund funding out of Germany. Could you give us a little bit of background on that one as well? Yeah, definitely. Well, I think there's a few things that you should keep in mind here. It pretty much depends on your business model and your business idea that you have. The units that you mentioned aren't necessarily going to be a problem if you get your securities laws right. And like you mentioned Germany as an example, the thing is, I want to say like 90% of all financial securities laws have their origin on an EU level, on a European level. So it's not necessarily Germany, those damn Germans making it so goddamn hard on those. I'm a German, that's fine. Yeah, I'm German myself, so don't take offense. Yeah, but the interesting concept is that the majority of for instance crypto brokerage firms and other firms like providing crypto or token related services, investment services are trying to run those businesses out of well let's say Austria, Switzerland, even Belgium, France, just for the reason that utility tokens in this jurisdiction do not qualify as a financial instrument under their respective banking laws. This is something which is quite interesting because at least to my personal experience this leads actually to the situation that we have. We do see highly talented development teams based out of Berlin but running their token offerings out of Switzerland, Liechtenstein, Gibraltar, Malmö. Yeah, I've seen that too and believe me what I do is I closely examine what's going on with other jurisdictions too. And well the Swiss have been quite opportunistic as far as that. It's concerned in the crypto valley. What they did is they started a huge marketing machine that highlighted the advantages of being like a Swiss ICO. If you really compare legal framework as far as securities are concerned, the German background gives you a lot of accuracy. It gives you a lot of like dependability and it gives you a lot of other advantages which I'll be happy to highlight later on maybe during dinner or something. Yeah, I totally agree and this is something I slightly did agree with you because most startups we've advised on we've seen in the last six to twelve months actually embrace regulation for exactly that reason to have a prospective proper license in place which is sort of passport across Europe or in other jurisdictions and definitely consider this as a type of USP as opposed. Well, in simple words we no longer have 2016 or 2017 which is in blockchain terms like twenty years ago right now. At least it feels like that. But talking about Switzerland, the interesting thing is this also goes to the regulators again as the way Swiss FINMA is embracing the technology and the entire phenomenon. It's not only a marketing machine running out of crypto valley, it's the Swiss FINMA, the Swiss National Bank although stakeholders are on board in a way that they're trying to enable newly designed and decentralized business models and with the clear intention to attract more blockchain startups coming to Switzerland that's for sure. Do you see from a regulator's perspective any severe shortcomings when looking at let's say legislative initiatives in Liechtenstein you already mentioned Dribalta as well or even Switzerland. Is there something which, well, Professor Jermick just mentioned Cointre-Trim, we have a competition between jurisdictions in this sense. Yes, it's a general remark. It's because this kind of competition is now so more severe because they are so flexible, those people who are coming up with ICOs and so we mentioned that also somewhere during the morning sessions we had that, yes, how to locate them really. What is the criterion to say where is the ICO situated? Is it the personal address of the issuer or what is it? And so this is something that makes it I think more difficult than we had it in the former years and also, yes, the strong competition which is now challenging regulators in a way you can say. Do you see any lack of investors protection in these jurisdictions? Well, I can definitely see where you're coming from and thank you for that question but I'm not going to, you know, it's a nice bait but I'm not going to comment on that because I'm not going to criticize the Swiss colleagues or the Liechtenstein colleagues because at the end of the day, you know, we're all government lawyers. We're trying to protect the public. I know there might be just different approaches to address the similar problems, right? Most definitely. So the thing is, you know, our mandate, by a thing and pretty much any other securities regulator around the world has its mandate to protect the public, to protect investors. So basically it's all about upholding the law, okay? And not about particular business interests which I totally get because I've worked in private practice too as a lawyer so you have to advise your clients but at the same time I'll let you in on a little secret. When I get up in the morning I don't plan like which little startup am I going to, am I going to strangle next? I'm glad to hear that. You're welcome. If a plan, if a business venture succeeds, even better. But our mandate is to protect the public. Now in the U.S., the regulator has two missions. One is investor protection, the other is capital formation. And these are not necessarily either or that you have to do one or the other. There really should be a sweet spot where you're optimizing the balance between both. But what I think the message in my talk was intended to be is that they're doing almost an exclusive focus on investor protection and ignoring the other part of their mission. And in the end if there's no capital formation, there's no economic growth, no new jobs. You know, it's very, very expensive in the long run. We've had a federal system in the U.S. that has permitted the 50 states to compete in many areas of corporate regulation and this goes back to areas like mergers and acquisitions in the 1980s and even bankruptcy codes back in the 19th century. And the debate that has always taken place is whether this is the race to the top or the race to the bottom. And you know, do they make more and more lenient laws to attract shady promoters? I think you can control this within the 50 states because ultimately Congress can step in. But internationally this is much harder because you do have groups like the Bank for International Settlements that have some type of loose oversight but very little enforcement. And the incentives for one or two countries to break out of that framework and do whatever they want are really much higher within the international community. And I think the inability for any international organization to really enforce a common set of rules and values make it very likely that the water will seek the lowest level. And whether that is going to be Switzerland or the United Arab Emirates or Estonia, there are many people that are kind of nibbling around the edges of this game. And I think we're only in the early stages of what might be a very interesting period where countries keep innovating and experimenting, often with very different objectives. May I have also one word? Because we have in Germany the mandate of the Bafin is very clear of the banking supervision. But you can also, and I think you know that from discussions you have in Berlin, that the Bafin is strict and say we have the clear mandate and we will keep to that. But on the other hand you have also a lot of political discussions now about industry policy because that is the thing which is in the mind of a lot of politicians to say let's keep this innovative or might be innovative firms in the country. But the mandate of the Bafin is the same as it is. Interestingly in Switzerland, Swiss FINMA has also a political mandate similar to the SEC in the US which might lead to two different approaches in regulating such a nascent commercial phenomenon in a way. The irony is that when Trump appointed Jay Clayton it was in the belief that he was a capital formation guy who was going to stop all the excessive regulation that you had under Obama. And it's been completely the opposite. He has been the most aggressive regulator in the SEC since the 1930s and doesn't seem to care damn about capital formation. I mean it's just exactly the opposite of what people thought they were getting. But you know balancing this if anything the SEC has been criticized for going too much in the other direction. You know for ignoring problems like Bernie made off and all the credit default swaps that led to the financial crisis you know that all of this happened without the SEC really putting a stop to it. And now you're seeing a real swing in the other direction very surprisingly under a government that's supposed to be pro-business free market is turning out to be a very heavy handed regulator discovering consumer protection at a time where the rest of the government couldn't care less about it. Yeah and there are two further aspects. The first one is that regulation is just one aspect taken to be in count when designing a token offering or deciding over the jurisdiction where you would like to offer your token. To my experience the most important aspect is whether or not you have a viable ecosystem which you can make use of whether you have banks which are actually willing and able to take money raised by an ICO for instance. And the another interesting aspect is that what we've seen quite lately is that a lot of crypto intermediaries like well let's for instance take Coinbase are seeking government approval and many jurisdictions trying to get to sort of an evolutionary step to a regulated infrastructure to get to crypto infrastructure 2.0 Which may or may not will enable a wide range of institutional investors to enter the market while complying with their internal compliance requirements at the same time. Is it, is it Professor Jermak from your perspective fair to say that 2018 is already the year of the rise of the security token? It's certainly in the last three to six months one of the most interesting things. The stable coins as they're called tether and basis that are meant to mimic the U.S. dollar and the increasing attempts to securitize everything from credit card receivables to real estate ownership and precious metals. We've seen this going back into the 80s and 90s on Wall Street where people brought things like collateralized mortgage obligations to the market. But what this does is dice them into much smaller pieces with probably much higher liquidity so that ordinary investors can trade them in very small volumes. I think this is actually a very promising you know even an overdue innovation that will make asset classes that most households couldn't have invested in. It'll make them affordable and accessible to a much broader market. It would lower the cost of finance in those different industries. It's also squarely within the securities laws is currently written so I don't see these things as nearly as controversial or even as interesting. I think they're a very healthy application in the technology. I would also say that some of these stable coins that are pegged to currencies. I'm skeptical that they'll work. You know it looks a lot like Argentina trying to run a currency board and this works until you run out of money. And most people run out of money even the Swiss backed off of pegging the Swiss franc to the Euro and so forth. So I'm not sure I would own these things myself but they clearly are responding to market demand and trying to meet a need that investors at a small retail level have had for a long time. This also comes with a huge opportunity to implement some sort of smart contract based automated compliance directly into the trading protocol. For instance I assume you would like to ensure that certain securities just traded among accredited investors in the U.S. And you could make sure that by trusting the protocol that buyer and seller are definitely accredited investors. No I mentioned before that this technology solves many problems and this would be very high on the list that it really can be quite helpful with compliance if you're inclined to stay at the high end of the market. And I think many people are and it makes the regulators job much easier and even arguably makes the regulator unnecessary which is something that they're probably worried about but for a rather different reason. I think we're all keen to hear your response to that one. If I'm worried about job security, job safety, no I'm not. It's definitely a good point. I think everybody who listens to the market has seen some kind of uprising of security tokens this year. So indeed. Have you already seen some security token offerings approved by your agency so far? Well there is this little thing called confidentiality unfortunately but definitely speaking from a market perspective and I've said that a few minutes ago there was different groups and there are definitely people who try to be deemed as securities and who talk to us too. I mean there's always a lot of people talking to the regulators. Another interesting aspect when it comes to distributed ledger technology and well the intersection to conventional traditional capital markets is how could DLT influence current payment systems we have. And I guess there was an experiment running between German central bank and the Frankfurt Stock Exchange right? Could you just share some background on that one? What was the major goal of this experiment? Do we have any, do you have any outcomes you actually use in practice? So this was really, yes in general if you come to distributed ledger technology or blockchain technology for the, yes at the moment we don't see a need to change payment systems because they work very smoothly, very efficiently. And so we see not, and we have central issuer of the money so we don't see at the moment any need to that. What banks or other financial actors always stress when it comes to blockchain technologies then they say they need something, they need money on the blockchain. And this is because otherwise it makes things more complicated when they have to change every day. They have to invent a simulation of money and then they have to change it afterwards to settle things and this is something that we get quite often from many banks especially the demand. Could we invent something like we would call that wholesale digital money. This is one aspect and for this experiment with the Deutsche Börse there was the idea try to simulate such an environment where we have on the one hand a bond issuing authority on the other hand a coin issuing authority to make some experiences to use the blockchain because that was more a technical experiment. There was not the idea behind that we will switch everything on the blockchain. It was more to experiment with DOT as a settlement technology then? Yes, yes and so it was more, there might be people expected more about that but it was more a technical experiment we did. For both institutions it was important to know and make their experiments with this new basic technology as we see it. That's interesting and is there any plans to take this from an experimental to a practical level using a DOT technology as a settlement layer anytime soon? Not in the near future that is because we did, yes we made some tests on this pilot to see how the scalability is and such things where there are chances to accelerate the performance of the whole thing but this was in this let's say test tube and whether there will be a day when settlement systems can be improved via blockchain technology might come the day but at the moment we don't see it. There is a new system we have this target 2 security system and in this this is now it is planned at the moment without any blockchain technology so if we come to make a new renovation of this system might be then but this will take some years. Speaking of testing this could also be applied to the regulatory layer again. What's your take on sandbox features for instance for blockchain technology something which has quite successfully implemented by the FCA in the UK what's your take on that one? On the sandbox? Yes on sandbox features in general from both from all perspectives. Yeah well definitely what is the sandbox issue or concept is definitely like intriguing and it's interesting and it basically is based on the fact that blockchain raises a lot of new nascent legal issues that even the prospectus law has problems addressing but ultimately that's a different question which will be solved on a different level most likely the European level. So sandbox also comes with a lot of difficulties and disadvantages because at the end of the day it's a substance of a form. What specific concerns are associated with this sandbox feature? For instance substance of a form. You cannot tailor something specifically to a new phenomenon. And you have to use the European framework or the national framework and address those questions and I'll be more than happy to talk to any like you know issuing entity in terms of blockchain or you know I see always in general to solve those questions and those issues. The UK FCA is well at least still bound to the same set of rules right and they successfully implemented that well is there any different view from a central bank perspective on that one? No sometimes one has the impression because the sandbox is in everyone's mouth and sometimes the question is what is behind and what is more or less a marketing thing because I think also the Barfin has opened up I think since 2016 you reorganized yourself and then there are new entities which are in the dialogue with those fintechs and I think this is the core of a sandbox as such and so I think it's not necessary to have exactly those sandboxes but it's of course necessary that all those supervision authorities have to look and to learn and to try to understand from those new icos fintechs etc. Right and assuming that icos are primarily a new means of funding for very early stage even pre-product companies what kind of or what level of disclosure would be meaningful from your perspective to dealing with those issues because I think we are on the same page that we need a certain level of investor protection and it's probably also boils down to the policy question whether or not we would like to see main street investing in highly risk early stage start-ups. It's about disrupting this sort of disrupting the VC industry as well but what's your perspective from that angle? I think it's very interesting how it pushes us back to the old University of Chicago free markets argument about voluntary disclosure and really ever since the securities laws were written in the 1930s there's been pushback saying that mandatory disclosure is both costly and just in terms of the sheer volume of information but that it also forces companies to release information that either may not be relevant or may even be harmful to them. And I think you've seen a real flowering of voluntary disclosure under the icos and my research suggests that people simply avoid the ones that don't do any disclosure. And that there's really a huge diversity in what companies are choosing to disclose and through which channels whether it's social media or white papers or even regulatory filings. And I have to say that my own views have changed a lot and have really swung in favor of the voluntary disclosure regime. I think that the greatest casualty of this is maybe economic research. The nice thing you got from mandatory disclosure was a standard set of numbers that you can compare across companies the same balance sheets the same prospectus data. And with when disclosure becomes voluntary you don't get that standardization so it's much harder to do research. But on the other hand you're seeing such an upsurge in capital formation where people are clearly responding to such an impressive range of ways that people are finding to communicate with them. I think it's just really interesting how these Chicago guys might have been right all along and that we don't need a nanny state saying Main Street shouldn't invest in this. The government thinks this is not suitable. Let people make up their own minds. I think most people have enough common sense and the data have been encouraging enough that the withdrawal of disclosure and the willingness to let companies innovate on their own and decide for their own case what's best to keep private what's best to release. This may be a better way. I think there's a slightly deviating opinion from the guy right next to you. A regulator is not likely to agree with this. Guilty is charged. I kind of disagree. However, I think I have like legitimate reasons to slightly disagree on that. However, I agree with you on the following. Voluntary disclosure, kind of like immense mandatory disclosure. So you see it as a floor that people can add to. Well, the more disclosure the better. The more disclosure as long as it's accurate the better. However, I really do think that there shouldn't be like a nanny state. And I really do think that people are entitled to their own decisions even to their wrong decisions and failures. That's not the government's decision and not the government's job to prevent like every potential outcome or failure. However, there are things like the Jesus coin or the Ponzi scheme coin. The Ponzi coin where people like even invested in clearly like, you know, frauds or clear like, you know, obvious examples of people not being serious about that. People make money off Ponzi schemes as long as you're in early. Yes, that's my job to prevent that. To answer your question, it really depends. If an ICO is deemed to issue securities, well, a full blown prospectus might be in order, but there's also other options. You know, you can do private placements or other stuff. So it really depends on the volume. Sure, sure. But isn't it really hard to try to press a nascent economic phenomenon like a decentralized ecosystem based on more or less complex incentive schemes in a pre-product state to press those those those phenomenons in in existing securities or prospectus laws requiring to try and to disclose information those companies doesn't have by nature at this very early stage. Yeah, well, the thing is we're not pushing anything. We're not pressing them into like that, like, you know, regulatory coffin or anything. If they're a security, then what they have to adhere to the securities, you know, law and laws that pertain to that. We're totally on the same page. This was more a question from a policy perspective. What should what should a meaningful disclosure regime should look like? I can I can definitely see that. And I'm likely to agree with you on that. Depending on the experiences that we're about to make, there might be the need to have a specialized building block for ICOs for this like new typology, depending on, sorry, depending on the security on the experience is obviously right. So I would like to speak a little bit as a as a from a consumer perspective view. And when I see this this total liberal point of view to say yes, every every investor knows and every consumer knows. But I'm sure that in especially because this technical progress is so fast at the moment. And there are some very few people who really understand what this kind of ICOs are. So a little bit of standardization would be quite helpful from my point of view. Would you like to directly respond to that? I see you just waiting. The counter argument is very simple that if the public doesn't know, the government knows even less. At least in my country, this is obviously true. I know civil service in other countries is somewhat better qualified, less politically corrupt. I mean, you look at what's happened in China where China has banned the ICO and from everything I read in the press, it really made the thing more popular and it's it's led to even more use of the instrument with the idea that if the government bans it, it must be good. You know, where does Germany fall in the whole spectrum of countries and how they've dealt with it? I don't have enough local knowledge to comment on this. But I think, you know, there's a general skepticism that the government should be giving financial advice to people in any country because most governments do such a bad job of managing public finance. And, you know, China would probably be exhibit A for this, but, you know, the U.S. would be on the list and most other countries would, too. You're probably right. Another interesting aspect, speaking again of new intermediaries in the space, what do you think the, well, we've seen the extremely impressive numbers of the token ICO or telegram ICO raising billions of dollars, actually. And what just trying to do to thinking fast forward 12 or 24 months, what kind of impact that might have on existing financial intermediaries in the conventional or traditional capital markets? I don't think they will exist, really. You know, the banks and stock exchanges are not going to disappear, but they're going to shrink. And I think you're going to see a lot of defensive mergers to the point that, you know, many of these things have a much smaller presence in the economy and are really catering to a legacy market that doesn't wish to deal with these new channels of raising capital. I was asked to speak at a credit suise event and the CEO took me aside and said how interesting it always. And I said, you know, you're going to have to merge with UBS. And he said, oh, no, no, not in a million years. But there's all kinds of reputable research reports by people like McKinsey who say that there's just going to be a lot less banks because the banks are going to have their business hived off. So you look at what's happening in international payments and how the SWIFT network is quickly being displaced by Ripple and by many other blockchain ventures by the credit card companies and so forth. This is very profitable for the banks. And once that business is gone, the DLT people will look at the next thing where the banks, and pretty soon the banks, you know, one product line at a time are going to lose their profitable businesses to this new technology. They'll be left with the dregs. They'll merge to compete on scale and so forth, but they'll be smaller. I think you look at the stock exchange clearinghouses, what's happening with the DTCC in the U.S., which is embracing the blockchain now after some reluctance. The markets will look very different and I think employment will be greatly reduced. There's going to be far fewer jobs done by people, many more done by smart contracts and, you know, various forms of artificial intelligence. I think the jobs that exist in the finance industry in 10 or 20 years will be much higher value added and there's a real risk of mass middle class unemployment and things like the audit industry. But it's something that you can't turn back the clock on. You can't put this back in the bottle. And I think the cost advantage and the integrity of the data is so overwhelming in favor of the new technology that you're going to see these changes whether you want to see them or not. You can't really be stopped by governments. Yeah, and it's interesting to see that even conventional stock exchanges like this seek in Switzerland, the Shanghai Stock Exchange, some exchanges in the U.S. Sydney, Australia. Yes, and it already started to make up their minds what kind of role they could play in this future financial system. They're trying to stay relevant. They understand that this is an existential threat and it's not clear that you even need the stock exchange in the future. But if you do, it's probably going to be a blockchain stock exchange. Totally in the same page. And from a regulator's perspective, supervising German banks and financial intermediaries, do you already or do you also see this way of fast forward thinking in the German banking or financial intermediary industry or what's your feeling about that? Well, you would have to talk to a different guy or person at the bottom, but I personally do think that blockchain is going to change the market and the industry tremendously and yet changes are coming. And that's exactly the quote unquote beauty of blockchain, if you like, or not, to completely kill the middle man. So changes are coming. Maybe I can add something from the payment sphere because there is the threat already there. There are competitors from non-bank competitors. If you say, okay, in a legal way, PayPal is a bank, but on the other hand, we can group them under this non-bank label still. And they are those who are quite successful in the German market when you look on payments in e-commerce. And that was something banks in Germany ignored for, I think, quite years since the e-commerce started to get remarkable in the midst of the zero years. And then the payment was a more interesting business field, but that was not taken up by German banks. And now they have understood and they try to correct that development, which is very, very difficult. They have new offerings, but they are not accepted because that's the way the payment market works. That if there is already the demand is satisfied, say, the acceptance of the payments are satisfied with the e-commerce traders. And on the other hand, people, the payers are also satisfied. So it's very difficult to come into that market. And I think they have learned from that experience. And now they, from my point of view, they behave more flexible to invent new offerings like instant payments, which is something which can be competitive in nearly every sphere. So there is a learning process, but nevertheless, it's obvious that things are quite hard times. These are hard times for the traditional intermediaries. There was a really good paper upstairs about an hour and a half ago that was comparing mobile payments in China and Germany. And one of the authors, in fact, is from the Bundesbank. And it's clear that the banks, the Alipay and Tencent presence in the Chinese consumer market is so different than what you see in Germany. Now, do you think Germany is going to be stuck in the past forever? Another interesting country is Sweden, where the banks on a somewhat urgent basis got together and created this product called SWISH, which was meant to pre-empt the social media companies and the tech companies, and I think has been rather successful at transitioning to a cashless economy in a way that was protective of the banks' continued existence, because they realized if they didn't do this, they would be driven to the sidelines, as has already happened in China. I just know that back in the U.S., I don't read about the German banking system that much, but every six weeks there's an article about how troubled Deutsche Bank is and how there can't be another management team brought in. And if they go down, I think the whole system goes down, and how the government's going to protect them, God only knows, but it's clear that they're 30 years behind, and that this is a big problem for the nation. Those guys have far more serious issues than blockchain. But you already touched the topic of tokenization as a means of digital securitization. From your perspective, what are the most significant advantages a blockchain or DLT-based securitization and tokenization has opposed to conventional traditional asset-backed securities? You have to remember that the blockchain is a record-keeping technology, and it forces people to tell the truth, which is very different than double-entry bookkeeping, where you rely on an auditor to catch mistakes. And we have seen disasters in the securitization markets in the U.S., and I would just point to 2009 as the greatest example of these, but the securitization markets have not been transparent, and they've been complex to the point that people couldn't understand them. And so the hope is that with blockchain systems that you are able to track this stuff and not able to go back and edit and rewrite data, you know, you have to mark things to market in real time and so forth, all the things that didn't happen that contribute to the financial crisis. So you could go watch the movie The Big Short and say, you know, what if these CDSs were on blockchains and all these mortgages were connected and would this have ever gotten to the point that it did 10 years ago? And one hopes that the answer would be no. So I think that's the potential. It's just way more robust record-keeping that doesn't rely on corrupt third parties like ratings agencies and auditors to keep people honest. Because quickly, it's obvious that they've failed in this, not just in 2009, but for centuries. And this is a better system that relies on artificial intelligence and technology to displace people who have horrible conflicts of interest and have compromised the integrity of the system many, many times. Have you discussed this internally at your agencies back home how to deal with this kind of new digital securitization if it comes well? If we see this really at scale? Well, the thing is you don't need a future legal framework whatsoever to address that question because from a security standpoint, meaning is it a security or not, there is even in current law there is no requirement that you need some kind of, you know, certificate or something. So you could like integrate the blockchain and the digitalization there pretty seamlessly, I guess. Yes, not especially securities, but when I listen to you and you describe the great advantages you see from those technical equipment in comparison to the way this is run by human beings. So I'm not that optimistic to technique. So I would think we should make sure that within this new ecosystem, in this blockchain and artificial intelligence surroundings, there should be people from the government, from the state to organize that in a way that there are proper governance structures whom you can really trust. So this is why I think this is a learning from the history of central banks because things were organized more and more the way that there is stability of money. This is something I would also wish to have that for the future as well. I would see this role better played by market competition than by government ministries. That's no surprise to me. But when you think, have there been, because when the organization how to make a currency stable or to have a stable currency, then it was something that the history learned there should be something like an organization which should be independent from the government like central banks are. And they have quite, let's say, narrow mandate just to make sure that the currency will be kept stable. And I think in general that works. And I'm not sure whether you can convince me to say that the competition in these things would be really better. I would like to add just a few remarks. The thing is I think we shouldn't limit our view to jurisdictions like Germany or the European Union, even in the US. There are so many countries and jurisdictions out there where Bitcoin and other cryptocurrencies are considered as a super stable means of payment and a store of value as opposed to the central bank controlled currencies like, for instance, the Indonesia Rupio where Bitcoin has been so popular due to the high volatility of the fiat money back there. So I think this heavily depends on the ecosystem we're talking about. I don't think it's ecosystem that much. It's more the regulation how the central bank can act independently from the government. I think this is a crucial factor in that I would, I have never made empirical research on that, how things are in Indonesia. But I'm quite sure that in Venezuela that there is not an independent central bank with this mandate as we have that here for the ECB and also for the central banks within the euro system. This is a somewhat different area and it can be somewhat hard to defend the European central bank in light of the Greek debt crisis. We don't really need to get into all this. But the phrase independent from the government is I think important here and I'm not really suggesting anything too different. I think free markets are independent of the government as well. And where the problems come in is where you have securities agencies that are trying to implement policy for political reasons. In the U.S. it seems to have degenerated into turf wars where you've got the, as of yesterday the consumer financial protection bureau has joined the fray but you've got the commodities regulator and the securities regulator. All of them trying to grow their budgets and to increase the visibility of the leaders of the agencies in a way that the Federal Reserve perhaps doesn't do. So I think independent central banks are fine whether you have one in Europe is an interesting discussion. But I think generally the people regulating the securities markets are not so politically independent. In fact quite the opposite in my country. Do you would like to add something or? Well it depends you know you should always like distinguish the law from politics obviously right. Obviously there is like you know parts and the fringes where it kind of like you know gets conflated or anything. But you should never mess too much with politics in terms of the daily application of the law. You know pretty much all I can say to that. It's a fine line. How are we doing on time actually? I think we should open up the discussion for questions from the floor.