Oasis Pro Markets CEO on Bitcoin Surge

merchant bank. And Pat spent some thirty years on Wall Street working in investment banking and capital market senior positions. And he joins us on the phone from Dairy and Connecticut. Pat, nice to have you here on Bloomberg. Thank you, Carol. It's a it's a real pleasure. And if I may say, I've been a big fan of yours free well, thank you. I listen to your program, um it's always on in the background when I'm on a call. I just think you're the best interviewer at Bloomberg. So this is a

real treat for me. Well, you're very kind. Doesn't mean I'm gonna be easy on you. I'm just gonna tell you now I'm just I'm kidding. Thank you. You've started off my week really nicely. UM take us back to the SEC you were there, if I got it right, I think a couple of weeks ago. Uh. Tell me about that exchange and what they were trying to figure out, because I am curious about what they are thinking in terms of regulations when it comes to cryptocurrencies. Great, yeah,

just regards the sec SEC. You know, we're in discussions with our regulators all the time. UM, but this is really you know, we've been spending time over the last several weeks with um uh, the innovation groups at the regulators and coming up with ideas, sharing ideas, getting their feedback, etcetera. This whole blockchain area and what we focus on is digital securities. And I can talk a bit about that later. Is completely new. I'd like to say that. UM, well,

actually I don't like it, but it's reality. We're a bicycle with training wheels with Ferrari brakes, which are the regulators. You know, a great wave of explaining it. Actually that's where we are today. Eventually, the Ferrari, the bicycle will become a Ferrari. But you know that's that's several years away and um, So we have a lot of ideas and the regulators know this tsunami is coming. Um. You know, they're very focused on cryptos right now and DEFY or

decentralized finance. We're taking a step further and focused on digital securities, and we view ourselves as the bridge between traditional finance and defy. That's that's a direction, that's our mission statement, that's where we're heading. But they know this is coming. You know. We call it a tsunami of of opportunities and it's a tidal wave regarding what's happening in the crypto space and they're trying to stay ahead of it. A lot of smart people there trying their best.

You know, they're the guardians of our financial system at the FINRA, and they want to make sure that they get it right. So talk to a little bit more about digital securities exactly what they are, what it what it presents, uh, in terms of opportunities for investors. Unpack a little bit more for me, if you would pack. Sure, digital securities are very similar to traditional securities. So what

we were approved for. We're equities broadly defined and fixed income for corporates both public non national market securities as well as privates, and by privates I mean all exempt securities reg D, REGGS, one, etcetera. And they represent a proof of ownership of some type on the balance sheet

and are an underlying asset of a company. But unlike traditional securities, they can be programmed through smart contracts to comply with regulatory requirements and standards as well, and they can be purchased and traded just like any other security. But it involves the blockchains, so it's very bespoke. It can be very tailored. Um, but all the back office um. So give you an example with Game Stop in the

halting of trading a couple of weeks. So one of the issues that have come up is it's trade plus two days, right, and it you know, in the nineteen sixties it was you know, it's transaction day plus five days, uh, and then three and then let's jump all the way became trade plus three days. Then it took another twenty four years for it to get to trade plus two days.

And while the UI has has improved, like on any trading app you might have the trade Charles Schwab Robin Hood, the back end is has been improved over the years, but it's still based on the infrastructure from the nineteen seventies. Now what blockchain does with digital securities, it really it's not a revolution, but an evolution of the trading system. So it's just taking it. It's just taking it to the technology level euro days. So I feel like pat

and are talking to you. And also just some of the research I did coming into this, I know enough. I know enough to be dangerous. So in terms of digital securities, I mean you you basically you know you own an underlying asset, right, what are the advantages? Is it the liquidity aspects? Is it the security aspects? Is it that you can have fractional ownership of something that you might not have been able to own otherwise? Yeah,

absolutely all the above. Um, there's also uh the advantages we were approved for digital cash payments for digital securities you own uh stable coins for instance, or um you know eventually c B, D C S. And I heard the common earlier you had mentioned about yelling he actually while she is not a fan of bitcoin, she actually came out today and also said that the Central Bank should be looking at sovereign debt currencies issued on the blockchain.

So um, she's not a big fan of bitcoin, but she in this was endorsing c CBDCs to a certain extent. So all those advantages you just mentioned, So if you have stable coins right now and by that that's like die or USDC or hack those, you can utilize that to purchase digital securities. And another benefit of the digital securities is and this is unlike crypto. You've heard stories that someone had uh, you know, had fifty dollars in bitcoin, it's now worth a hundred million dollars and they can't

find their wallet right so it's permanently lost. With digital securities, while the blockchain is is immutable UM, the regulators have determined that the authoritative ledger is either the issuer or the transfer agent. So if you own digital securities and you lost your your your wallet somehow or whatever, you know, whatever custodian was holding it, it got stolen and there was fraud. The beauty of digital securities is it could actually be burned that digital security was stolen and re

issued to you. So some of the disadvantages of UH let's say cryptos and defy are not applicable to the UH digital regulated digital security space. So pat where do you see it all going? I mean, you're someone who has spent a lot of time on Wall Street in different capacities, and you see I mean and aside, I feel like the conversation over bitcoin, blockchain, digital currencies has definitely evolved from a couple of years ago. So where

do you see this all going? Do we ultimately does digital securities take over from I mean I feel like we're doing it already right on some level, Like where does this all go in terms of how we trade today, how we invest today? You're you're absolutely right, it's not if, but when? Yeah, and uh that could be three years away, that could be five, it could be a decade. But it's coming. And uh, you know, the light was shined

on me. But one of my partners, Joe Quintilion, who convinced me to get involved in this about three years ago, and uh I blame him, No, I'm just joking, but but got involved in all this and Greg Diprisco as well. But it's coming and we're already there. So it's really the back end that's getting changed, not the UI the front end. If you think about it, and it will we will get there. I mean three years ago defy decentralized finance where a lot of the ethereum um uh

projects trade were less than a billion. In fact, was like four million. And if you if you want to determine value, let's call it market cap. Today, less than three years later, it's over forty billion. Bitcoin just surpassed a trillion. I think it's a nine billion right now or something along those lines. But um, I mean, who would have guessed I I opened You know, I tell people this story. I really got involved about three years ago. But I actually opened a coin based account in two

thousand fourteen. And the only reason I know is because in two thousand nineteen I tried to open a coin base account and they told me I already had one. So that's one of those things, right. Uh, well you know now that I because where do you you know when it comes to bitcoin, I think we're watching these levels trying to understand it. You know, as I said,

I know enough just to be dangerous. When I look at bitcoin, it's a supply and demand issue on some level, and I do wonder how much of that is that play? I mean, how do you see it? Is it commodity? Is it currency? Is it collectible? What is it? Great, great question, um, and my answer would have been different three years ago. But let me just say this. Uh, you know, this is a disclaimer what I say today of my personal views. It does not constitute a recommendation

or endorsement of any particular security or strategy. Now that's out of the way fairness in regard to it. In regards to bitcoin, um, you know, I I do view it as a modity. Uh some of it. It's an inflation hedge of sorts. But um, you know, three years ago it was more of a you know, just to play like gambling in a way. I mean, not for the believers. It was this democratization, etcetera away from central banks.

I think what's driving a lot of the interest to day is beyond uh Elon Musk and others making positive comments. You look at the big dogs, what I call the big dogs. You look at b n Y Melon now custodian. You look at Black Rock that's announced that two of their futures funds are buying bitcoin. You look at the o c c UH federally federally nationally chartered banks now

can custody um stable coins. That that's all happened the last like three months, which is unbelievable, Like if you get your head around that, right, absolutely, Morgan Stanley has come out as well, and the MasterCard has come out packing. Uh, it's it's uh so to your earlier question is not if, but when? All right? Just yeah, just amazing, amazing. UM. One last question real quickly, what kind of activity are

you seeing on your platform in terms of growth? Well, well, we're launching Q two, so we're launching in in let's call it May or June this year. UM. I wish we had launched by down, but our tech guys keep telling me that's unrealistic. But we're gonna get We're gonna be launching them. Are you guys going to be very similar? We hope to what uh like a Robin Hood and others have. At this point in time, we're seeing a

tremendous amount of interest from issuers, both fixed income and equities. Uh. They view the this this are a t s is an opportunity to actually access new investors who are in the who hold cryptos or stable coins. They're very excited about that. And uh, institutions as well, because on the fixed income side or or dived end paying side, we estimate the cost savings on the back end right or anywhere between twenty basis points to fifty basis points per issues,

which is tremendous. I was gonna say that's real money. Hey, listen, once you guys launch and everything, come back and update us. I'd love to hear more. Um, gotta run, Pat, have a great evening and and so great to have you on. Pat Lavekia, chief executive officer at Oasis pro Markets, joining us on the phone from day in Connecticut. Really interesting in terms of digital securities and the platform that they are building.