A Top Crypto Exchange CEO Explains Why The 2020 Boom Is Different

guest today, a very important player in the industry. Of course, over the last several months, along with everything else, everything is going to the moon these days, stocks, gold, bonds, you name it. Cryptocurrencies are no exception, and it feels like there is certainly the most amount of enthusiasm that we've seen in crypto pribace since the the boom in UH And still the questions are remain and that there's still plenty of skeptics. What's it for? Where is this

all going? Is this just another bubble that will burst like last time? So we're gonna dig into some of these questions today. Very excited to bring in our guest, Katherine Coley. She is the CEO of Finance US, a cryptocurrency exchange in the u S a wholly owned subsidiary subsidiary of Finance, which is one of the biggest cryptocurrency exchanges in the world. Katherine, thank you very much for joining us. Thank you so much. Joe really excited to

be on. So I do remember last time, during last the last boom, we did see the emergence of Finance, which is the company that owns you. Just what is the structure and relationship of Finance and Finance US. I hate to come out of the gates correcting you on a couple of things, but I'm going to Okay, that's fine, that's fine. So Binance dot com it's a global ecosystem that really has been around for about last three years, really expanding the access around the world for people to

engage with digital assets. And around last year in the summertime, I joined to become the CEO of Finance US, which is actually an independent entity entirely run out of the United States, with the ability to license the technology that Finance dot Com has, So you think about matching engine, the tech st act that's really there. We're able to really bring that into the US as well as customize

it entirely for an American audience. So when you think about a cryptoo crypto global platform, so many things are so different in the United States on ramps, a c H, debit cards, wires, all the dollar components, so everything has to be custom fit and made specifically to the US.

So that's really where Finance US comes in. The other components are the US regulation, so uh in terms of violence US, we're registered with fins in we have are are regulated by the state level, with the money transmitter licenses fully operating in thirty eight states, with the newest state being Florida, and so everything we're doing is in line with the U S regulation as well as catered

to an American user. Got it? Okay, with that out of the way, and I appreciate you clarifying it, and I want people to understand what the exact structure is. Let me start with what I see as sort of one of the issues or problems with the crypto currency industry at large as a market and carried out I want to hear. I'm sure you'll disagree with me, but this is this is something that I think about a lot. So late seventeen or you know, people started getting like

super into bitcoin. Also ethereum, and maybe a couple of others, and then by like no member and December of that year, suddenly the market was just flooded with supply, and suddenly it's like and now here buy some bitcoin cash. And then here by like eight more hard forks of bitcoin cash. Oh, and there's like fifty other I c o s, And so basically you have this thing which kind of started off essentially as bitcoin and bitcoin alone. And one of the big selling points was the fact that it's unique

that there's a fixed supply of it. But then the industry, strikes me, is manufacturing so many new assets to capture the demand for crypto, and so suddenly exchange has become, in my mind, flooded with new coins, new project very fast. The incentive for new players is not to jump on a project that, say, has already gone up ten percent, but to start a new project that could itself go

up ten thousand percent. And so then eventually it all sort of comes crumbling down because the investor the empire is just sort of choked with so much supply, and so, hey, I'm curious if you think that phenomenon is real. It seems like that way to me. And are we seeing it again this time with the sort of numerous, the hundreds of new coins that seemed to be emerging onto the ecosystem every day, you hit the nail on the head.

So when Satoshi Knakamoto came out with IS or her imagination for a peer to peer network with this scarce asset, you realized that this would be absolutely possible assuming no other coin was manufactured, no other supply came in to dilute it, and this was the only way that would be But you forget that humans have a competitive need, and so we really can't take people away from building something that can be better, faster, stronger, or better marketed

or cater to a different audience. And so you're going to always see people try to riff on it or fork as the you know, the industry says along when you're using the same elements of the blockchain and just rebranding it. Uh. And so with that, I agree with you that it does seem like, oh no, I can't I can't really see which one I'm going to be involved in. But that's really the element that we face

into all things in life. You know, it wasn't that Coca cola was the only carbonated beverage that was out there. You're always going to see something come up new, something that was going to either be capturing a new market audience or something that was going to be delivering a different need. So that that's really where I see the

human need for competition continuing and we have to accept that. Um. The best part about that is you get innovation of so where there's things like the birth of Ethereum, which then has let us see items as humorous as crypto kitties and then as impactful as stable coins, you're also seeing it change the way we're we're seeking yield now. So you've got different components that are letting people really evaluate how this industry can change the game. And I'm

all for it. Okay, So your comparison to Coca Cola and then you know, Pepsi emerged and there's other sodas that kind of makes sense to me. It's like, right, that's capitalism, that's human nature. We're going to compete, ingenuity, innovate, so forth. Coca Cola is still around, but people have other options. They're being said, it's one thing to have

a new competitor to Coca Cola, on the market. It's another thing for the listed exchanges to capitalize on the hype for Cola and suddenly list every new Cola project as something that trades. So, okay, you have Coke shares, But what if you know, over the next few months there was a boom and coke suddenly all kinds of new cola startups existed primarily to um well quench investor thirst for soda related assets, so to related financial assets.

Doesn't this end up just sort of diluting and swamping the sort of supply demand supply demand effects that was pushing the original asset asset up of the first place Insider it more of a marketplace. I'm going to have Coca Cola, I'm going to have Mountain Dew, I'm going to have a sprite, I'm going to have a variety of options because i know that my user base is going to be demanding it. So I'm going to make

sure that what I'm serving isn't poison. I'm going to make sure that what I'm providing is in demand of the market, and I'm going to be possibly pushing the market into seeing if something you know is worthwhile keeping on our menu. So so that's really how we view

offering digital assets. There's going to be the majors, the ones that we see as having the largest adoption so far, the ones that have either been there the longest when you think about it, or we're going to be providing things where the current market environment is both approval of a from a regulatory standpoint as well as the market is demanding it, asking for it to be included in certain things because there's actual growth or team and and a mission behind it that's going to be catered to

a US growth that concept um or the idea that we're going to be needing this from a utility perspective. So we've launched a series of coins forty six of them in total today, and we break them through with with different you can kind of put them in categories too, um, you've got your diet sodas, you've got your caffeine free, you've got your fruity fruity drinks, uh, And you can kind of break them through in that where you see governance tokens being something as a need for people to

understand and want to be involved in. You see staking as something where people want to be involved in these proof of steaks where if you park your deposits you're able to earn um you know, rewards on top of that. So those are kind of the subcategories to which digital assets provide people different ways to interact with the markets. You don't have to be high frequency trader in order to capitalize on digital assets. You could possibly be very

involved in staking having large deposits there. You could be involved in the governance of these defy or decentralized finance UH protocols and and so forth. So that that's really how we break it down and offer people that variety, because being a gatekeeper in this industry is way too soon. This gets to UH something that you know, you need

to help educate me on. And during that boom, you know, I thought I was pretty reasonably informed on various goings on in the crypto industry, and I'd like to think that I would have been reasonably informed, except I don't know if you've noticed, but a bunch of other things that have happened in and so I have to admit that I haven't paid as close attention to all the development as I did back then because I've kind of been distracted with some of this other stuff that's been

happening this year. So to a sort of nubie in the space or someone who like isn't paying attention, how would you describe this world? I mean, all this stuff staking and stable coins and yield farming and governmentce tokens

like I actually have, I don't really understand it. So you were to like describe to someone what the big new things are in that were sort of characterized the ecosystem versus what's your sort of like I don't know, elevator pitch for it all because I see these charts of like a million coins interacting with each other, and I just have to admit I don't really get it. If you could have predicted, I would have given you all my money in So, Uh, there's certainly some components

that none of us saw happening. Um, but of those I break it down into two. Really the benefits of the freedom of digital assets. And that sounds like a big jarble of words, so I'll break it down. I am currently trapped in my living room, uh, with a limited amount of exposure externally, unable to get most of my news or media except for online or Bloomberg TV. And the components to which I can interact with other persons, my team, a company of business all have to be digital.

So when you look at a space that allows you to interact, access funds, invest trade from a mobile device, you think about how that benefits us for whatever may come. Unless we're all underwater and the internet is bad there. But the the components that we've currently faced in this pandemic have all been suited for a resilient industry to take off. And that's really where digital assets has thrived is the idea that you anyone with an Internet connection

can access their funds in digital sets. And the digital assets can either be placed in highly volatile assets staple assets pegged to the dollar, or ones that reward you for keeping it parked there and not trading it, or ones that help you, uh, you know, build on top of it and create different things, be it tokens or chips that are rewarded, or things that unlocked doors like

a chucky cheese or a gaming token. Let's say, I'm actually really curious on the tokens that pay you for not doing anything, and so people collect yield and this is something I don't still don't quite understand, but you can buy a token, stake it somewhere, which basically means kind of like it seems to me, like putting it in a c D kind of where you commit to locking it up for a certain out of time and then you get some yield, some above market yield. How

does that whole world work? And who is paying me that yield? So I get some sort of income from it, But who's the one, uh, you know, spending that money that's becoming my income. There's a common word from every part of finance that you know before this that is not changing, and that's liquidity. So the need for a market to have enough supply to be able to meet the demands without fluctuating the price of the asset is

still something that is a component in any marketplace. Um, I only have one soda and I have thirty people that need it, that's going to be a very expensive soda. If I have an infinite supply of this soda, or if people want to give me their sodas so that I can sell them for other people, I can lower that price. I can have a better market, I can

have more users. So we think about it in ways where yield farming, which is this you know foreign word that comes up with the same thing as you know, seeking yield, which is what you do in f X when you're deciding to go into the AUSI dollar. But the components of being able to provide your supply of a token to a provider so that they can make markets with it allows you to then be rewarded for sacrificing the chance to BILO so high during those times.

So because you're actively taking a stance that says I'm not going to touch it, I'm not going to you know, seek to trade this thing actively, I am sacrificing some element of the market that is out there currently so that this whole entire marketplace can have more supply to be able to make healthier markets. That's where you're getting this reward or this this staking reward or the yield guilt in return. So the yield payer in this case, I don't even know that's called. I'm not sure if

I'm using the right term. But whoever is paying me that a market maker who is then using that coin to engage in a facilitate a more a liquid trading environment, basically in in a in our old world, in our centralized world, that is a market maker in this new world, it is anyone. So that is that that is the component that gets people, especially you know as a former banker, gets them going confused, like what about what about my counterparty? How do I know who they are? How how am

I familiar with this? And that's the feature, not the bug, that you're going to be able to give up your assets into um an unknown pool that someone, anyone can be able to use to then make markets on. And so that is a huge benefit to people that are not classified as the Susquehannas Steve r twos of the world UM that would naturally have that as a business.

And you're able to see you first time traders able to pick up and learn about this as well as provide automated market making strategies and build this out and therefore take advantage of a bad advantage but be able to capitalize on visibility to provide markets safely. So that's

like the unusual component. But you can break it down into I'm giving up my asset into a to a market maker, and the market maker is paying me for that service, and then you have to flip it and say, in decentralized finance, I'm giving that up to an unknown entity, and that unknown entity is then doing what they want with it um, which is a benefit if you are democratizing the access to this capital. Right, two questions. The

first one is a very short one. So again I'm assuming that for a lot of listeners this is like pretty new stuff. Yield forming, locking up your coin is actually collecting an interest rate on a cryptocurrency. First question is how big is this market or like how you know,

how how big is this growth? This has grown astronomically in the last few weeks, with the astronomic being still under you under ten billion dollars we're talking about the stable coin industry inside of digital assets is ten billion dollars. But this component of yield farming and decentralized finance is now eclipsing these centralized exchanges. So for the first time ever you saw unit swaps volume, daily volume exceed coin basis. You know, as a as a company that's also working

on eclipsing other people's market share. Um, there is an ability to do this, but it's also just the differentiation of your of your feature or of your platform. So the the excellence of these decentralized platforms is that they are allowing a global participation level, not just a regional So I said, I had two questions, but I'm going to ask a question in between again for the purpose health listeners. You know, the hot exchange was coin based.

That's more or less a regulated bank in the sense that you can wire your money to them, put it on deposit, and then they hold something for you that they call a bitcoin or some other coin that's really just their liability, and when you want to take it off, they'll send it to you. But it's like people in regulation. Something like nice swap is just a protocol. There's no actual fiat money held, and it's a sort of purely digital algorithmic exchange on chain that essentially has there's no

custodial aspect to it at all. Is that more or less right? Very accurate? I except for the fact that I'm sure coin base in myself would both say we are bank life, but definitely not. We did none of our banking licenses to be a chartered bank, so just to be just for every everyone out there listening, we have our money transmission licenses, but I'm not the bank chart an important distinction. Okay, So then this gets to me to my other question, which is one of the

common complaints of um crypto towards crypto from skeptics. So like, yeah, okay, it's kind of interesting. Maybe the technology is interesting, but all it's used for basically is speculation and games and trading. And when you we sort of look at the last three years and the you know, I guess innovation that's taken place. There are a lot of new things that have been built, but it seems like still the only thing in the end is more speculation in trading. There's

just sort of like a new layer. It's it's a more sophisticated market. Maybe it's more liquid, maybe there are more participants in more different different ways of profit. But in the end, what's being built is yet another layer for a speculative game. Having been someone that's dedicated her entire career too speculative assets, and my first five years were with Morgan Stanley and Foreign Exchange, not that much as different. So uh, to clarify, the past three years

have been dedicated to crypto. I have stayed busy, I've stayed employed, and I've constantly been learning. So for an industry to be able to provide that much opportunity as well as give me the chance to hire and bring in new voices and names and give them careers in something that is an added benefit any industry would hope to have. So the the benefits of anything blossoming, whether it is for a speculative purpose or not, is that this is able to build a sustainable ecosystem for enthusiasts

as well as experts as well. As the on ramps into crypto are so much wider than the on ramps into finance, into technology, and with that it's it's a global benefit of people's curiosity. So I see it as despite the skepticism, I've been able to stay off the streets because of crypto um and there's so much benefit in that that people underestimate. And for the ability to have, uh, you know, a woman's CEO of of an American exchange. We only just got our first woman in banking as

the CEO. So the changes we can make inside of the digital asset industry, whether it is seen as skeptical or you know, concerning for folks, is merely a birth of a new industry that is giving more people an opportunity to seek it out. I'm actually like how did you go crypto? Because you know, over the years there're been stories is like longtime banker makes the leap, but they jump into some new thing. They launched their own new thing, or like one of the exchanges will pluck

a well known exact from the legacy finance world. What's your story, like, how did you decide um to make the dive to leave Morgan Stanley than you went to Ripple than to finance us? But what was that like making that decision to sort of leave the warm embrace

of traditional finance into this new world. Well, I definitely wouldn't call it a warm embrace, but the I've always wanted to be in front of the biggest wave out there, and so right after college, I threw myself into Hong Kong FCS trading and saw a world that was wild and it was you know, while while we were comparing ourselves with our New York and London colleagues, we were the wild West. We were you know, Asian and the f's we were um these wild options on China. Uh,

the the components inside of the Asian market landscape. We're still wild, We're still untamed and had so many idiosyncratic features to them. It kept you captivated. And so when I moved to London with Morgan Stanley and was you know then just doing huge size of euro and sterling and nothing, nothing, nothing too exotic, you saw that kind of Uh, this is this is, this is where my future is headed. And so I leaned into the electronic

trading side. UM being able to provide this for our users to have that autonomy, to be able to trade without me, which helped for a human errors, be prioritization of my own personal time and see better execution from a trading standpoint. They were able to use algos, they were able to have trade cost analysis. Um, it was

much more of a transparent market. Uh. The other component while I was in Digital Asso or while I was in Wall Street was this this item on Bloomberg that was that was popping up with DTCC, and it was the ability for you to see the trades when a client of yours traded away, which was in my opinion, revolutionary because I could immediately call out my client for

having a premium and an option that was bullshit. So UM, I could I could look at that list and say, why why in the world did they trade away on this, you know, we had we had a tighter price, we had a bet, we had a better deal there. Let me let me engage with that. And when I realized that's exactly what blockchain was providing. The realized now that that was two years after I left Wall Street, was

when I really recognized what crypto could could hold. But that was the connection point I saw is that transactions that were able to be as transparent as as Bitcoin transactions, where they were able to be found on a block explorer, which just is the essentially DTCC on Bloomberg, but provided to anyone with an Internet connection, you're able to track

and trans and identify each transaction that takes place. And in my opinion, that's a frightening for certain things that don't want to be visible to the to the naked eye. But the counter to it is that you would be able to have a significantly higher amount of efficiency in a market if that was the component. So if we're moving from Hong Kong, where I was feeling like the inefficiencies were so great that the margins were appropriate there,

I witnessed them get decimated. I was trading Indonesia back at the time, and and you you could drive a bus through the spread that they were providing you on shore.

And now I think it's you know tips, which you're just like what that you know that there's there's no there's no space there anymore because the market has moved so so quickly efficiently, and so when you're seeking out where are the most inefficient markets that we can improve upon or acknowledge while they're still rich, that to me was what digital assets didn't have because it was birthed

out of a computer science regime. It was missing the components of a natural trader mindset that came in an understanding trader psychology, supply and demand, arbitrage, all the components that a professional that is working to make a market's more efficient enjoys. So so that to me is really where I saw the lights go off that said, I mean, well at first, I mean, I'll admit it, and plenty

of people listening probably may go, yeah, me too. When I when I heard about bitcoin, it was from a client that had bought some as a joke, I think for his fantasy football league. He lost that season and had to buy bitcoin. Um. He ended up selling I think it a five and bought his mom a house, So I was like, well that's something. Um. But the he felt good, he probably felt good about himself for like six months and then he and then he hated himself for the rest of his laf Oh, well, his

mom has a house, so I hope himself. But the the components of of bitcoin when I heard about them, sounded terrible. It's super slow to move, it's clunky, it's expensive, and you got to do work in order to earn it out of thin air. Um. And and to me, I was like, Okay, well this isn't gonna be f X because we're getting close to T plus two is

our normal settlement. Um. We have nearly efficient markets in terms of our pricing and or just banks competition is forcing us to have no margins, so we're pricing everyone at market and taking glosses because that's the only way to retain customers at that time. But the the components of bitcoin were not competitive in my opinion, for replacing a currency that would be moved around the world like payments,

which payments are only one portion of it. You think about the FX markets, they have the corporate flow, the speculative flow, as well as just the natural course of this business or travel, and then as well the economic factors of countries creating their reserves in it. And I was going out, well, there's no way a country would build for their reserves and something like this unless it was going to be improved upon. And so that's really where when when you say, like, why would you have

more than Coca cola? In my opinion, I was like, this could be improved upon. There could be a better soda flavor out there, which made me look into the different digital assets at the time. And so this was about when I was leaving banking, going into the new unknown for me. Um. I moved to San Francisco saying, Okay, I know the world of hedge funds, I know the world of global macro. I love it, but it's feels one dimensional at sometimes. How does my generation and tech

get involved in that component? And so I came over to San Francisco to try everything. And I remember all of my interviews with these great fin techs. I kept on asking them about their balance sheet and their f X risk, and I knew that I had a sickness, but I was just so so focused on the the inefficiencies that these companies were having partially because they were VC funded, but there there's so many components that they were leaving chips on the table because they weren't aware

of how these markets were moving. And so I I learned a little bit about x RP and said, well, this is faster, this is cheaper, this is UM you know, seems to be more scalable, but definitely has the features that are also appealing to bitcoin. Not they're not present, so that self sovereignty that UM, you know, the entire

supply being limited UM. Some of those components with x RP were a little bit different because there were there people working on it UM and so I I joined Ripple and that was kind of my first foray two feet in UM, just having been an observer. I was at Silicon Valley Bank for a hop that UM observing how these startups were, as I said, leaving so many chips on the table because they weren't hedging their f X risks with their you know, their Indian arms or

their their Chinese arms, with their businesses. Sure enough, you know it's three people in a garage. They're not going to be whipping out FX options to protect their to protect their hedging their operational costs. So UM, fair on them, they're growing, They're probably all I p o by now. But the components to me where I just had to learn more about it, and the the way that I learned as an obvious statement to moving to Hong Kong. To understand effects, I have to go in with all

two feet. So I completely submerge myself into an industry in order to learn about it, in order to be a liaison translator to my peers, to people that are too intimidated to understand a space as obscure and frankly intimidating as crypto. So where where I can be the the liaison or the translator for an industry, I'm all there. And so I did my I did my tour of duty with uh, you know, foreign exchange, understanding how those markets worked. Um, it's nearly page for page of Liars Poker.

But there's a new book to be written and that's in crypto, and I want to make sure that that industry we can educate people on rather than intimidate. I love that. I love your story because I mean, I'm aware you obviously, every there's always headlines about people leaving legacy finance for crypto, but I don't think I've ever really heard anyone sort of spell out the whole thought process like that. So that was really cool and also sort of gives me another question, and it gets back

to the sort of what for questions? What is crypto four? And it's interesting, you know, your comparison of Okay, by the end of your effects stint, you saw the incredible spread and narrowing i'd say Indian or Indonesian rupia trading, and you realize they're like massive inefficiencies with are still you know, huge spreads and massive inefficiencies left out there

with digital assets and crypto assets. But it still gets to the question, okay, okay, maybe the trading can be improved, become more decentralized, can become faster, spreads can be narrowed, but it still raises to me the question, like, okay, what for. So let's say the market does get much more efficient and liquid and so forth, then what do we do with those markets? What's done with that liquidity?

To actually sort of I guess bridge the gap between finance and the real world, because when I think about finance, yes, you know, there's a lot of gambling and speculation. But at the end of where there's somewhere on a chain someone gets the liquidity to buy a house, or someone

gets the liquidity to make an M and A transaction. Somewhere, you know, there's sort of a real world coral area at the end that all this liquidity or liquidity transformation is serving some real world action and I don't yet

really see that um in the crypto space. So you mentioned those great kernels, and those are kind of the shining lights of why capital markets exist UM to to get that, you know, to get the mortgage to um close the M and A deal, to be able to repatriate the revenues of a foreign on you know, foreign product overseas, and there's still so many limitations on when and who can get those and that's really where digital

assets comes in. So closing that M and A deal on a Friday night at four pm is no longer the deadline. You can close it on Saturday morning at two am, you can close it on Sunday at five pm. Digital assets are going to be trading, operating, transacting, and being able to be accessed. So what does that free up in terms of the ability for us to provide funds, remit payments, close books, be able to send transactions to close deals by homes, by buildings, uh, you name it.

It's going to be freeing in that aspect that this can be done now without the time constraints that the current banking system, as the other components are the access So when I think about my time in Wall Street, my current status as a analyst and associate still limited me from being an accredited investor. Yet I was reading Bloomberg every day, talking to the world's largest hedge fund managers, and fully aware of financial products, so that the current

the current sec adjustments have benefit of that. But only if I still was at a bank, working, taking my taking my licensing exams. Um. So there's still so many components where people are prevented from taking steps in their own financial futures. The digital assets alleviates and to me, that is a huge component and a shift that makes it less of this hard to attain. You know, you can only get a mortgage if you can only your

credit score has to be this. If we were we are going to be able to free up capital and let people take control of their own capital in ways that may give them a better life. And that is the ability to work in a a nine to five job and still go home and invest, the ability to um work night shifts and yet be able to send money to your parents anywhere around the world at any time that you need to. Is that the revolution? Because I

mean it does. It is annoying that when say I need to wire my rent check to a landlord that you know I can't do it on certain days or you know, it would be very annoying to have to wait till Monday to close an m and a deal fixing. That doesn't exactly sound revolutionary to me. It sounds like, yeah, that should just be something that they fixed and finance. Is it that sort of in universal access part that in your view is sort of the potential revolution with crypto?

In my opinion, it's a huge component. I was an early adopter of globalization UM, which was a huge burden looking back. Um, you know, my I have I have to four o one case around the world that I can only act as when I'm sixty five, um, and they're not even four one key is there? You know, a UK pension and Hong Kong pension. So when you think about you know, giving people this opportunity to grow

their own, you know, their own lives. We're telling people, by the ways that our infrastructure is built and by the way that banking is built, stay home, don't talk

to anybody, get your local bank and growth. We're we're discouraging people from taking risks to go outside of their own boundaries to be able to build businesses overseas, to be able to build businesses in the United States that reach overseas audiences, or or take components and funding from um others, And that to me is still so stifling that I'm not sure the world is that courageous to

be able to continue to push that forward. Yet there are an insane amount of benefits from looking outside of your own neighborhood, and so that that that universal access is a huge component. The ability to reduce the fees that you you get at every turn of an international transaction and give that back to the user are some of the huge ways to unlock this and allow people

to actually get a lot from it. You think about if you're running a foreign company, you basically have to have a huge balance sheet in order to accommodate the f x P and L loss that you're going to be having You think about every earnings call where there's a drop down that from these largest companies in the world, and there's always like, yeah, we we acknowledge our f

X pan L wasn't that good this year. So there there are huge losses taken that only benefit those that come with the cash already to be able to afford to take on this tyle of business that can be drastically reduced by having something that is universally accepted at any corner um. The other component of that is truly

the access to it. If it is internet based. We are moving to a world and the world is actually caught up faster than America in terms of mobile banking, and so if we're moving to a world where phones are the new wallet, and that component allows people to really transact in ways that are significantly better for business, you're not going to have the same style of burden that people face when even small mom and pop shops

don't want to be running an amex. Before we wrap up, you know, one of the things that strikes me as the space is that there's sort of this spectrum of projects out there and I think, you know, I'm sure it's always in the sense going to be like that. Due to the zero barriers to entry, really anyone can launch a new coin in theory and may be traded on one of these decentralized exchanges UM, as long as they meet some technical requirements. There are obviously some projects

that are pretty interesting and take it pretty seriously. Then there are projects that I think probably everyone would agree are blatant egregious scams. And then there's probably projects that are in the middle which are not really scams per se, but they're also like are they a joke? You get these like weird ones. You mentioned crypto kitties earlier. I don't think that was a scam, but like it was difficult to tell how seriously to take the whole thing.

This year's like all these new random coins and things with names like Sushi and yam, and it's like, I can't tell if it's performance art when people talk about this is like a serious new experiment and monetary governance, or is it just to get someone's get rich quick scame? Like I can't tell, And so I'm curious how much of a challenge that is for the space for education, for regulators, for UM legacy investors, that would like to

have an allocation to crypto. The difficulty in discerning what is UM a sort of serious legit project that people are going to nurture and build on for a while, versus either a joke or a scam that was like pumped in some telegram room that we're not part of. Right, you mentioned a couple of things of like not being able to tell if a trend is worthwhile or not, and I still am worried about Capri pants in that

way too. UM. But the crypto industry continues to fight against bad apples, and because of the inclusivity of the space, the ability for anyone to be involved, you are going to face that need to educate the customers and the community about more components than you do in the traditional world. Because the barriers to entry are just so high, people

don't even get involved. So around internet security, around how to protect yourselves and your privacy, those are those are kind of items that we have to remain vigilant about from educating people that are first stepping into these waters. That's kind of the one oh one of entering crypto. You need to be aware of how your privacy and your data and your crypto is being protected, and that is being protected by yourself. So we we take those

components to to educate people there. The next components to really educate people on are really just showing how traceable and transparent these are, so that you can do your research and be able to see all of the components that you need in order to make a decision. And that is one of the unique things about digital assets is that the college courses, and the financial degrees and the pH d s are all available online to anyone.

The components of education in this space are wildly available and made available, and as our purpose of our platform, we continue to produce content that helps people get educated specifically on this to make better decisions. The third component is understanding the risks, and this is something that I think everyone needs to understand and also needs to be aware of that you can take risks. You don't always have to just be afraid of them. So understanding that

is your balance that you're going to be taking. There is the trade off between am I engaging in something that is highly volatile? Does this help and benefit the long term benefits that I hope to seek, or is this something that I'm a believer in the technology as a changing component as the world needs something that needs to be more inclusive, more digitally accessible, and more transparent,

and I'm here for the long haul. So we see we see regulation coming in in ways that are helping curb the near term volatility, which confuses the long term benefits in these short term gains, and this kind of hype hyper cycles um definitely depreciates the long term value of building an ecosystem that is increasingly inclusive, providing financial freedom and access to everyone with the shadow of UH

scammers and those kind of components. So what we can do in our mission to build out mainstream cryptocurrencies is building that education component as as a as a required layer to feel comfortable about this space and make sure that as you're accessing these digital assets, you're fully aware of one the privacy and the protection needed on your on your information, as well as the risks inherent in investing and trading into an asset class as volatil is

this one. And then understanding the fundamentals or the economics in supply and demand, which I think is one of the fascinating things that we've seen accelerated by digital assets. Unlike finance before is that this is an entire industry that is reaching a significantly different audience than finance, and yet every single day the conversation topic is money. Money

has been a taboo table conversation for so long. Finally we've had an industry that makes it digestible for people, interesting for folks, and they're they're beginning to learn the components. There have been more people in the last two months that now understand what a basis trade is, not be because they've been following the interest rate markets. They've been following crypto. Oh, I thought it was because like they were listening to odd lots and they are listening to

odd lots, but also because of the explosion of crypto. Right. But much like odd lots, you have been democratizing the way for people to get information and educate them through digital needs, which is a huge component of how we're seeing this world take a turn. And I think that's you know, one of the fascinating things is for the first time ever, students online are attending their econ one on one courses and they're already familiar with the supply

and demand model because they have bitcoin. So final question real quickly if we revisit, if we do a follow up interview into five years, by then you would you predict that by then cryptocurrency in some form will have this sort of real world corollary where the market infrastructure that you're building is actually helping people engage in recognizably commerce, whether it's an investing in new businesses, doing him an A deals, mortgages, things like that are recognizably uses of

money beyond speculation. Will that happen in five years? Absolutely? Okay. If you're if you're building a company in the next five years and you do not consider digital assets as a component, you're going into this in an ignorant way. All right. So it is, it is a trend that is picking up. It is an adoption case that is pandemic resilient, and if you're planning on any business model going forward, I would sure hope that you make it

pandemic resilient as well. All Right, Well, September two, I'm looking forward to our that's been recording this September two. September second five, looking forward to our follow up. Katherine Collie, thank you so much for joining us. Fascinating conversation. Thank you, I hope to not be in my living room by then. Yeah, I hope so too. Good luck, Thank you too, m Um. Well that was Catherine Coley. If Tracy we're here, which

she's not, we would banter for a little while. But you know, I'll just say my one observation is, and it really does seem to me like there is to some extent, and this is actually even true of bitcoin as well. How this sort of random people on the Internet got into it before Wall Street. So much of crypto is backwards to me. And I don't actually mean

that in a negative or judgmental way. I mean that in a literal sense, crypto or bitcoin start off with sort of random people on the outside and then it's sort of invaded a legacy finance. Crypto in general seems to be this thing where they're building all of these sort of liquidity and market infrastructure first prior to actual

it being used in sort of recognizable finance. It feels like very much the opposite of the history of finance, where you probably had loans and uh, you know, stock joint stock companies early on, and then people developed more sophisticated infrastructure to trade loans in stocks. So it'll be interesting to see if that continues to develop, whether all this infrastructures much of its speculative does then become the sort of facilitating platform for more recognizable uses of money.

But um, that will be the question, and like I said, we'll follow up in five years. So this has been another episode of the Odd Lots Podcast. I'm Joe Wise and thought you can follow me on Twitter at the Stalwart. Follow my co host on Twitter even though she wasn't here, Tracy Alloway at Tracy Alloway. Follow Catherine Coley on Twitter. Her handle is at Crypto Cooley. Follow our producer Laura

Carlston at Laura M. Carlston. Follow The Bloomberg had a podcast, Francesca Levy at Francesca Today and check out all of our podcasts under the handle at podcast. Thanks for listening to