And we're also building very sophisticated smart contract applications, so we have one every Microsoft Xbox video game. All those purchases are processed using a smart contract developed for EY and deployed for Microsoft.
This episode is brought to you by Gemini, which is one of the top crypto exchanges in the industry. I've been a user of Gemini for many years. They make it easy for you to buy, sell, and trade crypto. Gemini has a lot of unique features. They have a fully functional app, a credit card, they include staking on their platform, and they also have a stable coin called Gemini Dollar, which is USD back and Gemini is certified,
regulated and licensed. They are available in seventy plus countries and if you sign up using my code or link which will be in a description, you can get fifteen dollars in bitcoin when you trade your first one hundred dollars. So if you'd like to learn more about Gemini, visit the link in the description. Welcome into the Thinking Crypto podcast.
I'm your host, Tony Edward, and with me today is Paul Brody, who is the global blockchain leader at e Y also the chairman of the Ethereum Enterprise alliance and also an author. Paul, great to have you on Hey.
Thanks for having me, Paul.
I'm super excited to speak with you. I've followed EY for years. Of course, I've seen the brand in different places. On the Garden State Parkway that I drive down here in New Jersey, I see the EY logo and a building, and the fact that you folks are building with blockchain and doing all types of great things has me really excited. So I want to learn all the details. But before we get there, tell us about yourself on your background.
So jeez, that's a wonderful open ended question. I really I got into the blockchain business by accident, kind of an entirely unintentional way. I used to I've always kind of been in the technology business, and before I came to EY, I spent about fourteen years at IBM, And while I was at IBM, I got very excited about sort of cloud computing and especially distributed computing, where these
devices that we own are getting very, very smart. And one of the really strange things about these super smart devices we own is that somehow we still need all this cloud infrastructure to manage them. And I got into this idea of Hey, if the devices are really smart, we should be able to make software where the devices managed themselves. And so we started looking. I had a
little research team. We started looking at a decentralized and distributed computing and somebody came to me they said, hey, bigcoin is like a decentralized computing thing, and I got very excited. I's like, wow, it looks really amazing. It's it's decentralized computing, it's permissionless, and it's even got kind of a flo of money in it. And we were going down this bitcoin path, which was already very exciting, when somebody came to me and said, you know, I
found something that's really cool. It's like Bitcoin but programmable. And I've met this guy. His name is Metallic. You got to meet him, and that like directed us again. And honestly, once I went down this road, I mean, first of all, we built IBM's very first blockchain product, which was for kind of smart devices. We launched it with Samsung as a prototype, but also for me, it really kind of changed my life. It's like, this is it, this is the future. I want to go do this.
And when did you meet Metallic? Was that before etherorem became a thing, or was it In the early days after I launched.
We were actually working on the alpha version of Ethereum when I was at IBM, so this was this was like twenty thirteen. My engineering team was working on this and we really got ramping up in twenty fourteen and we showed we showed our protoce pipe with Samsung at the Consumer Electronics Show in Las Vegas in January twenty fifteen. And I have this great picture. It's it's so funny.
It's like the IBM crew on one side, and it's the it's the Samsung crew on the other and in the middle are like me and Vitalic and you know it just like, I keep that picture because it's it's such a fun reminder, like we had no idea what we're doing. We didn't know what was going to become a huge thing. But I think for a lot of the people in that picture, certainly for me, it really changes the course of my career.
Oh absolutely, that's amazing. And I'm sure you have that frame, that picture frame somewhere in your office or something like that.
I had to say in my office, but I know where it is in my like iPhoto archive. And it's funny actually because I you know, I've stayed in touch with him Talaic. He wrote like a nice little forward for my book and I send him a copy and it's actually really cool. A couple of weeks ago he DMed me and he's like, you know, I've just been reading your book and I want to talk about like you know, some of these like protocols that you kind of envisioned. And I was like, wow, that is so
it's very exciting, you know. It is so awesome when people come up to you like, hey, I was reading your book and I thought about this, or I read your book and it caused me to change like how I'm thinking about the business or my career path stuff like that. It's it's it's really awesome. It's also, honestly, it's a little bit scary because you feel like this responsibility, like I, when did I become a role model for people? For sure?
So tell us a bit more about your book. It is the topic is of course, arounding your theorem.
Yeah, so the book is called the Theoeum for Business and what I For a long time, I spent so much of my time, especially in ey I just kind of explaining to people, like, first of all, what is crypto, what is blochain, and like cows that work. But also, you know, the inevitable next question from people is what's the point? Why what are you doing with this stuff? Like why does any of this matter? Why is bitcoin important?
Why is the theory important? And so I wrote the book to kind of answer those questions in playing English with no technical jargon. And so there's three parts of the book. The first part is in very plain English,
what are blockchains right? How does the theory work? Why is it actually really important to have a public blockchain, Why is it that permission private blockchains are really not a super constructive, helpful thing to have around, and why in particular is privacy technology important part of the overall
blockchain picture. So that's that's the first part. The second part, the main chunk of the book, is like twenty chapters on specific use cases Payman's supply chain management, procurement, carbon emissions tracking, things that businesses can do that are practical and useful on ethereum with this technology. And then the last part there's a little bit of a section which is just on things like you know, what's an audit?
You know, this is a business. By the way, people are running around with this business saying, oh, we did the audit, We've been security audited, we've been audits. Like no, all these people who are saying that their audits like that most of the things that people talk about as audits are not really audits. Their reviews or their assessments, but they're not audits, right, And I speak at somebody, I'm not an account but I do work as an
audit from I do. Actually, in almost ten years, I finally figured out what an audit is and whatever it is. It's not all this security stuff that people claim to be doing, right, And so I kind of explained like what is an audit? Right? What is a real audit? Like, what is not an audit? How do you actually kind of check security properly? And also just other things that people ask a lot about in the bit were like, you know, what's the what's the carbon foot print of eterium?
Is this like a huge problem, Like isn't it crazy to use a blockchain to track emissions? It's the carbon equipment is really high, And so kind of just dispel a lot of the miss and misunderstandings that people have around this technology.
I love it. And one of the challenges I've seen over the years is the education and awareness is not there of the use cases. And sometimes people, uh, you know, they follow headlines, they listen to some skeptic we said, oh, this is a fax machine or there's no use for it, right, But there are uses, there are release use cases, and it will solve a lot of problems. I love that your book explains that.
Yeah, people were saying like, oh, NFT is just a little bit of barts. No, NFTs are essential for industrial infrastructure. Every every car, every piece of factory machinery, every every satellite in orbit. That's an NFT. It's a non fundatable, unique guide.
Absolutely. And you are also the chairman of the enterprise. It's give me the Etherem Enterprise Alliance. Tell us about what you're doing there and the initiatives and so forth.
So the real purpose of the EEA is to as a group represent the etherium business users, right, to get us together. And you know we're we're a very sort of fun but boring industry association, right. We do meetups, we do conferences, we're sponsoring like a business day called
Industry Day at DevCon next month in Thailands. So we have meetups, We work on standards we just published like defied risk standards, we published cross chain interoperability standards, so and we you know, we basically work on education as well. We are here both to talk to the Ethereum Foundation about what business users want and we're also here to talk to the business world about how you make use of Ethereum and really educate people about the practical applications of this technology.
So let's talk EY. For those who may not know about the firm. I know what it is, but you know, sometimes people haven't heard about the brand, or they may have heard of Ernest thing young and not realize it's EY. Tell us about the company a quick overview, and also some of the blockchain initiatives you're working on.
Absolutely. So EY is one of these sort of what the people call the big four global professional services firms. They're all grounded in financial statement auditing, but they all also offer consulting, usually tax advice in some country legal services as well, right, so they're just really big professional
services firms, you know, firms like EY. We serve pretty much every big company out ours You can think of a big company, either we are their auditor, or we provide tax advice, or we provide consulting advice like we are, or we do kind of system integration work. So firms like euy have this this direct path into the world's largest businesses and we do a lot of kind of essential services for them. And you know, from my point of view, we are therefore also an incredible mechanism to
deliver transformation around blockchain technology. Right if if you ask, like any CFO, any chief financial officer, hey, do you have to say payment and bitcoin? Like would you use stable coins? The first thing they're going to say is, let me check with my auditor, let me check with my financing, let me check with my technology team. Is it safe to do it? Is it legal? Can we do it? And we have to pay taxes on it?
And so I see, you know, particularly for the blockchain team of hy I see this path for us where we our mission is to make the world's business users feel comfortable, ready and able to go use this technology, and that takes a bunch of different forms. By far, the biggest thing we do is just financial statement audits. All that like a ton of these cryptocurrency exchanges. We've built a lot of technology for audits. You know, some
things that are very simple but super important. Like let's say you've give an exchange one thousand dollars to buy some bitcoin for you. One of the things that our technology does, and one of the things that auditors do, is they say, okay, they got one thousand dollars, and we match their financial transactions, their internal record of a transaction with what's on chain, Like if we add up all the money that was given to this exchange, do they have that much bitcoin on shame? Like? Can we
verify that? That is kind of a foundational thing that that auditors do, and they do other things like check for you know, are you properly separating duties? Like do you make sure that nobody's pledging bitcoin that you owe your depositors to say somebody else. So financial favorite audit is hugely important and I think critical to giving people confidence that companies can they can buy and safe for use crypt though with other businesses.
I love that. Sorry go ahead, No, I was going to say the keyword you use there is critical because in a post FTX world, we see how important that is. And no, commingling these exchanges have the funds they say they have, and so on and so forth.
Yeah, absolutely, And I you know, one of the things that I've been really happy to see is like, for example, with the marketing crypto assets regulation in the European Union, they've laid out a really good regulatory framework and it will It has a clear role for what auditors are supposed to do, what kind of business controls companies are supposed to put in, and you know this this is really really great because without it, people don't often know even what to ask for. But with it, the rules
are very clear. If you're going to play in this market, you need to have these certain controls just like those in place, hugely important, right And I also, by the way, like it's a much better marketplace when people are all operating legitimately. I can tell you it's super frustrating for legitimate businesses to compete with frauds because frauds can make promises legitimate businesses can't match. Right.
Absolutely, you were mentioning there was a second item of related to what you're doing as hard as initiatives.
Yeah, so if I think about sort of the stuff that we do, one is financial statement audits right, and then in addition to financial statement audits, we also build applications and do business services. So we have consulting services, we do implementations, we build things kind of for higher for clients. But additionally, we are really and we're quite unique in this compared to pretty much any of the big professional services firms. We are building applications on top
of it. The area and our applications are for business users and we build quite a few of them. So one of the ones that we built is a smart contract security testing system. You can actually go in, you can test your smart contracts, you can simulate smart contracts, and you can also hire us to do a full security review of your smart contracts. Secondly, we are building more sort of direct operational business application so we have one that is for minting NFTs. We have one for
supply chain traceability. We're tracking I think something in the order of like six or seven million bottles of wine, millions of bottles of beer, like many many tens of thousands of vaccines. Like that's a very typical application. And we're also building very sophisticated smart contract applications. So we have one every Microsoft Xbox video game. All those purchases are processed using a smart contract developed for EY and deployed for Microsoft.
Wow.
We've also just started a really cool program that we're rolling out, which is it enables companies to manage their renewable energy purchasing, their green electric purchasing on a blockchain using a smart contract built with privacy technology, so your competitors cannot see what you're doing.
So that was going to be my next question. Are these blockchains that are being built on top of eight are they private? Assuming their permission? So it's just within the enterprise.
They're generally not permission in the case of Microsoft, so very early on and we are again, so we're super unusual in the sentence that euy is really the only big firm that made a commitment pretty much from day one that our priority are public blockchains. Now that doesn't mean that we never do kind of permission systems. We do from time to time, but so the most part, we really try to build on public chains. Specifically, we're
a very ethereum centric. We're a build on an ethereum organization, and that's just that's just for me. It's it's very strategic, Like I would rather be the best in the world at Ethereum than okay, like five different things, Like it's just about focus, right, I have a limited engineering budget. I want to be great at Ethereum. The thing that is important and the reason why people are always embracing
permission change is enterprises needed privacy. Right. No company wants to show their competition what they're buying, where it's going, how much they're paying. And so the last thing that we do, and one of the things I'm especially proud of, is we do privacy technology research. So lots of companies for a decade, lots of companies people have looked at the ethereum and said, scalability is a problem. I looked at Ethereum and I said, privacy is the gap, and
very few people are working on privacy. And so we made it our priority, and we have built and industrialize the tools that make it possible for companies to transact with privacy on top of public Etherium, and we've donated those tools into the public domain so anybody can use them.
Now, there have been people that said why, and it's not me, but just questions in general, why would someone build an ether given that maybe it's slower from a transaction standpoint, because there are layer twos that help to uh scale it and improve transaction speed but also transaction costs. So tell us a bit about that. Is it the security? These these companies want security and they want something that is trusted and you know that works.
So layer twos in my point of view, are Ethereum. They're they're even compatible. They build on top of Etherium. So when I say that we build on Etheroereum, the truth is actually from most of the things that we do, we actually deploy on top of an L two or a side cham like Polygon or Base or some of these others. Right. And in fact, our privacy tool that we built called Nightfall, that we put into the public domain, it's it's deployed on the Polygon proof of state network,
but it can also be deployed on like Base. It can be deployed on Ethereum as an L two on basis an L three for example. So you know Ethereum plus the L two is are the Ethereum ecosystem. Now the point you make, though is a good one. People are like, well, why not all these other chains, because you know, one of the things that you can get sucked into really easily. Is this whole discussion of like hey, x y Z chain has a faster finality or whatever. I regard that as a kind of those kinds of
debates as a little bit of a dead end. Historically in the technology world, the best technology does not win. Technology improves all the time, but it's really the best one that right. Nobody is going around saying that the desktop remote operating systems we have are the best ones that are possible. They are just the ones that happened to be good enough at a certain point in time to get mass adoption. That was Ethereum. That was easy, And I'm going to get sucked into this debate about
which one is better. I'm just going to say, the vast majority of the world's developers and money and users is in the Ethereum ecosystem. Therefore, we are going to build in the Ethereum because we are going to build where our customers are already.
Yeah, that absolutely makes sense. And I know Etheroreum has had a first move or advantage, but I think one of the things I've heard and seeing is the security aspect. It's trusted. There are a lot of folks building on it. So that's a great point that you brought up. Now, you mentioned the wine industry, you mentioned pharmaceutical If I'm not mistaken, what are the industries are you seeing leveraging your services? Auto? Are there others call outs?
So fundamentally, every business agreement on Earth boils down something face. I've got money, you got stuff, and we're changing my money for your stuff under the term of agreement, under terms of an agreement that describes every single industry on Earth. Now, in financial services, it's just a swap, right I want to buy some sock or a bond or a bigcoin token, it's just money for the market price. But in most
other business environments there's actually a complicated agreement. If you think about a big car company and the relationship that they have with a supply, it's usually like some of these relationships last for decades. They have special terms and conditions, they have special rules. My goal is to basically build the tools that allow any company to transact with any other company. Because we can represent the money as diggal tokens, right, stable coins or crypto. We can represent the sauce as
digital tokens that can be real world assets. They can be physical assets, cars, paintings, crypto acids, doesn't matter what it is. The money in the stuff are tokens and the agreement that covers their exchange in the smart contract. So what we're what we've been limited to in the recent past is things that people are willing to do without privacy because privacy like hugely increased your transaction costs.
We're now entering into this era where we have industrialized privacy infrastructure that we can run on a public chain efficiently, and so we're going to start to get into what I hope are We're going to shift from marketing stuff like hey, look, I have six million bottles of wine on the blockchain and you can see where they went to operational stuff, which is I've got, you know, three million auto parts moving through my factory kind of structures.
They're going out to distributors and dealers. We just finished a prototype for big Electronics Jumping, which I'm very excited about. It's a full supply chain model where everything is tokenized, running under privacy on a public blockchain. Wow, and that's for me, is kind of where I want to be.
That's amazing and exciting. So what I'm curious about Paul is are these companies in the R and D trial and error phase or are they in the full production and they just have to scale it? Or I don't know. It may be different for each individual, but let's say on average, are they, you know, in the production phase and they just have to scale it.
So it really depends on the industry. Financial services, which doesn't care as much about privacy because fungible tokens are provided much easier level of privacy. Financial services are way far down the road. They're production, they're scaling up, they're ramping up their real old asset process. They are. What they are now trying to do is they've got real old assets, they've got crypto assets, they've got regular tory infrastructure. They're now cutting deals with banks to figure out how
to like distribute these to millions of users. The financial services market all over the world is in this massive scale out process manufacturing supply chain stuff that depends on privacy. It's in the pilot and proof of concept stage right as well as like public private public public chain smart contracts that run as zero knowledge circuits. Again kind of in that that that proof of concept stage or the
pilot stage or early production customers. So it's is ramping along, but anything that requires privacy is probably five or six years behind the mainstream, like financial services stuff which doesn't require privacy.
Interesting and that makes sense now speaking of the payments and finance aspect, PayPal EY and I think via coinbase settle the first corporate invoice payment. I believe what p y usc stable coin tell us a bit about that.
Yeah, so so we've actually been we have been accepting at ey. We've been accepting payment in stable coins on crypto for quite a few years. But we've been doing it manually, right, so so you know, our client politicians like, hey, I'm going to send the money, and we then we call up like our coin base institute on people and we're like, hey, did you get the money? Right? And it's it's a it's a very manual process. It's cool you get some bragging rights from that, but it's not
scalable and it doesn't generate return on investment. The big milestone that we achieved a couple of weeks ago was that we basically we turned what was a kind of individualized, customized hand you know, manual process into a scalable automated process by plugging it into SAP. So the big milestone wasn't just that we got a payment, it was that
this payment was executed from inside of an enterprise ERP. Now, I don't know how many of your viewers know what ERP is, right, And to anybody who doesn't know what ERP is, I say, I'm so envious because ERP is like the monster of all enterprise systems. But it is ERP systems what are known as enterprise recoal Planning systems. They're this infrastructure that companies used to run everything, and
they use it to automate everything. And so if you go into a store and you buy the last hoodie on the shelf, and you check out with that hoodie, the company's ERP system says, oh, I'm down to zero hoodies in the store. I'm going to place an order for punishment. All of this stuff gets automated, and when you automate stuff, you make savings. Now we all know that, say, paying somebody using PayPal, USD or USDC crypto rails its way cheaper than paying somebody with a traditional wire transfer.
What was missing in the corporate world was the technology to automate that, and the big Moleston we had wasn't just getting paid with PYOSD and an invoice, it was that the SAP instance of PayPal automated just payment and what that means. And SAP it's hardnessed into their system.
So now you can use the wallet inside of SAP, or you can use an institutional wallet as a company and start taking your literally millions of payments and orders that you make every year and moving them from more expensive networks too much cheaper crypto blockchain, stable coin infrastructure.
Wow, that's amazing, Paul. We've come in such a far away and to hear it what's happening from behind the scenes, it's amazing. And you know, as far as where you're at in the phase of rolling this out to other clients and worth is it trial arrow right now and then further iteration is needed and so forth.
Actually, the really cool thing about the SAP case is that they have hardened this industrialized. It's now in the product right now. SAP is not a consumer product, right, It's not like, hey, open up your smartphone and flip a couple of switches. But there's a kind of thing where a CFO can tell somebody on their team like, hey, I want to go implement this, and you know, within a few weeks, you know, they might call ey. Hopefully they call ey, we'll come in. We're like, listen, here's
your security process. Here's how you make sure you don't accidentally pay somebody. Here's how to configure the SAP tool. Right, that's the kind of thing that we love doing and are actually quite good at. And you know, in doing this with PayPal and SAP, we work together with them to figure out okay, because it's not just like hey, cut a check, but when large companies transact with each other,
they're like, okay, what's our security policy? How do we make sure we don't actually get you know, don't accidentally pay somebody the wrong amount of money or send it to an irretrievable address. So those are the kinds of things that they go on, and we laid out all of that process and all the configuration rules so that other companies can repeat this relatively quickly.
Now, py USD was used, Are you going to enable it to use the system to use USDC and other stable coins?
Yeah, we can use basically any kind of stable coin you can use a cryptocurrency And what's really cool also is SAP is enabled a wallet and with a wallet inside of the AIRP system. Again, come back to this, like I have money, you have stuff. Well, this deal with SAP was all about the money, moving the money back and forth kind of on crypto rails. But once you have a wallet, there's nothing stopping you from automatically
minting stuff tokens. Like if you have a factory and every time you produce a car, you know, a cup, you can create a token and put that in that wallet. When you sell it to somebody else, you can transfer that token. So now we're into the business of managing inventory, tracking inventory and moving it all around and doing it
in a fully automated way. And eventually what we want to get to this model where basically all of your contracts, your business transactions, your assets, your inventory, it can all be managed on a public blockchain.
Wow, that's incredible. How does what you guys do And I was you're the experts align with the irs And I know there's still some you know, clarity that's needed on the IRIS front with taxes and crypto and so forth. Are there any hurdles there or you are you in contact with the folks of the IRS to figure all this out.
So we have some really awesome tax people, and I'm not an awesome tax person. I'm not even a bad tax person. I have to ask somebody else for advice. So you does some degree you asked the wrong person. What I would say is when it comes to like staking and some of the like more cutting edge stuff there is you know, our tax people do work with
the IRS. We try to figure out what the rules are ply and that is you know, a lot of the some of the newer stuff that the crypto does is is kind of working its way through that process. But when it comes to more traditional B to B procurement applications, in those cases, you don't actually need new tax rules. You don't need anything else. Like all we're doing on shape is replicating a process that already exists
in the real world. And the same tax rules that apply if I pay you with a wire transfer also apply if I pay you with like USDC. So you know, that kind of keeps it relatively simple because systems like SAP and large companies have already built all of their tax.
Rules in Okay, that makes sense, so there's no like you said, nothing new here because stable coins you're just in and out and there should be no capital gains or whatever it is obviously unless they use.
Right I wouldn't don't quote me on that for the absolute certainty, because you'd have to talk to a tax person. But generally speaking, you know, large companies are not going to embrace this if it's going to make their tax liabilities more complicated.
Now, are you working with any companies that are starting to hold bitcoin in their balance sheet? Because that seems to be a growing trend and there was the fast be update to rules and accounting. Are you are you seeing you know, growing adoption in that front as well.
So we serve a ton of like hedge funds and investment funds that absolutely hold all kinds of crypto assets on their balance sheet. That's pretty normal. We also serve a lot of banks that act as custodians or serve as kind of third party holders for other people's assets,
and that that again is pretty normal. What we're really not seeing is any kind of traditional business you know, I think everybody thinks about, you know, micro strategies kind of this example of a company that's that's they've bought a ton of bitcoin. That's actually a very atypical strategy. For the most part, large companies think about bitcoin or xrpor eth the same way they think about any kind of foreign currency, which is they really want to minimize
their risk. They are you know, if you ask a car maker, hey, what do you do, they say, we make cars, right, we don't speculate in currency like Their main goal isn't to make a profit on a crypto currency like holding position. Their main goal in almost all
cases is actually to minimize risk. And this is actually one of the main reasons why in the large enterprise space what people mostly want to do is they want to transact in stable coins in national currencies, because if you're in an American company, your revenues are in dollars, your employee salaries are in dollars, your taxes are in dollars, your shareholder dividends are in dollars, So you just want to stay in dollars because then you have for an
exchange risk. And it's the same if you're a British company or a New based company or a Japanese company. That's why we're going to see such immense adoption by stable coins in the enterprise sector because they minimize risk for business users.
And to your point of stable coin adoption, I mean, we're just seeing the stable coin wars heating up as rumors of new companies coming in with stable coins. Do you think some of these enterprises may create their own stable coin which they use internally, Like I think of JP Morgan's jpm coin. It's very intrabank, if that's the word, and it's not outside to the public. What do you think about that?
I think that's very likely. So, so companies do a ton of transactions with themselves internally, right Like if I do a project, I have a client, I have clients in the Middle East. When I do a project in the Relice, what actually happens is a client in the Middle East goes like e Y and Saudi Arabia or the United Emirates, they sign a local contract there and then e Y in that country say, oh, we want
some of Paul's time. They actually signed at what's called an intercompany agreement with e Y in the United States. So and that is common. That is that happens millions of times a year in big companies. And we estimated that we spend you know, many many millions of dollars, billing ourselves, paying ourselves, sending that money around, and so I very much expect to see internal stable coin transactions,
internal sort of company coin transactions. Uh. And I also think some very large enterprises why I know, some very large enterprises are actively thinking about launching layer two networks stable coins, right. They see these as strategic assets in a rapidly growing marketplace and ecosystem.
Wow, and how are you and those enterprises navigating the uncertainty in the market. I know, using stable coins, there's not necessarily any red flags with the SEC unless you're offering yield and so forth. But there is this uncertainty because the SEC seems to be going after everything. We don't know what the rules of the road are. Congress is trying to get some bills together get through the Senate. Are there any challenges there?
There are challenges, but actually there are less than many people realize. Like, one of the things that's sort of interesting is you'll hear people say, oh, it's not allowed or I heard you can't do this, but that's not actually really true. The truth is that if you are thoughtful and work to follow the law, you can absolutely do Look at PayPal. Right, no one's coming after PayPal, and no one's going after Fidelity. No one's going after
black Rock or Goldman Sachs or Circle right. You know, the companies that invest a lot of money in regulatory compliance make very good efforts to follow the rules have generally not had bad outcomes. Doesn't mean it's perfect, but they've generally not had bad outcomes. Now, I would not say the regulatory environment in the US is as clear
cut and as straightforward as say Micah. In Europe is really excellent because it lays out in a very prescriptive manner if you want to offer any kind of crypto asset or what they call it asset back to token, like a stable coin or a gold coin or something like that, it explicitly and very clearly lays out the rules in
a way that's relatively straightforward to follow. So I think right now the European Union, particularly in terms of large financial markets, sets the bendmark in terms of like, I can clearly follow the rules, but you know people, you know, anybody who comes to me and says, oh, I can't do this in the USA, I'm like, no, that is absolutely not true. There are a ton of examples. You absolutely can't do it in the USA. You just need to be maybe a bit more careful, right, and maybe
a slightly a bit more risk averse. But I would not There's not as much uncertainty as people think there is, right, It's just in some cases a bit more complexity.
Oh yeah, for sure. Now you're one of the top four accounting firms in the world. Are you paying attention to what your competitors are doing? How what you know? How are you are you trying to what's your strategy to stay ahead of the curve, you know, against the others?
I mean, for sure, like somebody comes in and says, hey, XYZ is doing X. You know, I would never say, don't tell me what they're doing. But for the most part, like you know, and we are, we're really unique in this. You go back, go back nine ten years ago, look at some of our documents, presentations. Honestly, I'm a broken record. I'm super boring. I've been saying the same thing for
decades public blockchains, stable coins, privacy, technology, regulatory compliance. But literally the fourth thing that I've been saying for a day and the you know, at the end of the day, it's very interesting. I would say most of our peers have kind of exited the exited any effort to really build a strategic place here or you know, build their own applications. So but our business is doing really well. You know, we had a rough year during the crypto winter.
Last year. We almost returned to the same level we were at before the crypto winter, just below that. Like, business is good. I'm expecting us to surpass that this year and have our best ever kind of blockchain and crypto year. I think a consistency and listening to the clients and what they want is much more valuable than kind of worrying about your competition. I will say, however, that listening to the clients does not mean always giving
them what they want. And this is where I am stubborn and difficult to deal with, and people say mean things about me sometimes inside of the firm, because you know, many times the truth is clients don't really know what they want. They think they want a private blockchain, but they don't. And you know, a lot of times we basically walked away from deals because the client's like, I
want you to do this on xyz chain. It's not ethereum or I want to do it on a permission chain, and we'd be like, honestly, it's not going to work. It's not going to have a happy ending, and it's it's super frustrating when you see a competitor pick up that revenue and make a lot of money. And it's also kind of satisfying when you see the project kind of belly flop, or when the client comes back and says,
you know, I think you are right. I first and foremost, I believe it's important to kind of stick to it, to what you know is right. And sometimes that does mean walking away from the business if somebody wants to do something that's just not going to work.
Yeah, absolutely makes sense. Now have you seen a growing demand from different enterprises and industries since the likes of black Rock have entered the space with ETF's tokenization, where you know, they kind of raised the credibility of the industry and not to mention Fidelity Franklin, Templeton and so forth. Have you seen the surgeon demand.
I mean, it's kind of amazing. One of the things that that is, uh, you know, uh, the Crypto winter was we we work on it like a like a ju lives to July fiscal year. But the crypto winter was kind of going full swing. It's pretty difficult. And two things happened that were really important. First of all, the MICA legislation came to effect inside the European Union,
and secondly, the ETFs were approved. And honestly, just business one like this, you know, it was it was okay, but for but it just it just took off like a rocket and we went from like not being busy enough to actually being very busy, like basically sold out on the consulting side, like significant backbloger projects. You know,
it's it's uh. Business has improved a lot. And what's what's interesting is even though if you're an industrial company and you want to do like supply chain traceability, you don't need any SEC approval, you're not doing anything financial. But the the ETF offerings, the seal of approval that kind of comes from like Blacklock, black Brock and others getting into the specifically endorsing public etherium as their path forward.
That had an impact on industrial customers where like, Okay, I guess it's gonna be all right, and it was very positive.
Mm oh, I can imagine. I mean just on the retail side, which I have a view of, definitely changed things, and I can imagine the enterprise side. This is related to something I asked you earlier about Timeline. You know, Paul, do you see us in five years the majority enterprises will be using blockchain and that's a supply chain management.
All these things will be running a blockchain. I can go on Amazon and click on a dialogue box and see where this product came from, what it's made of, and it's verified on the blockchain.
In five years for some companies, you know, basically, the way they think about this is that large enterprises and also major investment changes take decades to kind of unfold. So if you look at e commerce, e commerce has been growing at about twenty to twenty five percent a year for the last twenty years, right, and still the majority of our commerce is actually done in stores. So that kind of mainstream of option does not mean like
everybody's doing it overnight. That means is that you when you enter a mainstream adoption period in almost any kind of product, would you end up with. This is like, if it's a consumer product, it takes about ten years. If it's a business of business thing, it tends to take twenty or more years. Some things can take up to thirty years. Like a good example is in the nineteen fifties, if you had a retirement plan, and if you lived in the US and you had a retirement plan,
ninety seven percent of your assets were in bonds. Ninety seven percent. By the nineteen eighties, less than fifty percent were in bonds and more than fifty percent were in stocks. It took thirty years for people's investment behavior to change.
So I would say conservatively, thirty years from now, almost every company will be using blockchain for something, probably for large chunks of their business, and almost every person will have some form of digital asset crypto, you know, a blockchain based investment vehicle as part of their savings and retirement plan. Right, And one of my frustrations is people think too short about the timeline. Here. The timeline for real transformation, for really changing how the world works isn't
five years or even ten years. It's twenty to thirty.
Yeah, that absolutely makes sense, and they'll be the first movers and then we benu you the rest will follow. But that definitely definitely takes time.
Right, And I think the big danger so a lot of people will hear twenty or thirty years and say, oh, it's early days yet. No, no, no, go look go look at e commerce. Go look at the web. The leaders were found within a decade of the start of the business, and go look at e commerce. Go look at like cloud computing. The leaders in that business not only did they have their lead within the first decade, they held
onto it. They're almost impossible to dislodge, right. And so if you're a business leader thinking yourself, I have time, you don't. You do not have time. You need to be in this game and winning it now, otherwise you're going to be playing catch up for twenty years.
Well, I know we're running up in time. So I want to get a couple of questions here before I let you go. What's on your roadmap for the remainder of twenty twenty four, maybe early twenty twenty.
Five, So big roadmap, kind of key things for twenty twenty four and twenty twenty five. We've a major release of our supply chain security infrastructure that we are going to deploy, So I can't tell you what it is, but it's going to be awesome. I'm actually pretty excited about It's cool and we're also you know, we announced Nightfall three. We announced Nightfall earlier this year, which is our fourth generation privacy technology. We showed the prototype in April.
We will be we're in now what I would call a private alpha in production kind of testing it out. We will have a we'll go into like a private beta with a couple of partners in January February, and I hope we will have a public beta announcement to make by March or April of next year.
Well, I will have to have you on to talk about that. That that sounds really exciting. I have some wrap up questions there for you. First, if you could create your own metaverse, would the theme be.
Wow? That was a good question. I am. I'm personally in a bit of a science fiction that I love the story of Alistair Reynolds. I kind of grew up on a lot of the like Isaac Asimov stuff. I think, uh, you know, Alistair kind of an an Alistair Reynolds kind of revelations based universe would be a fun place to live.
M rapid fire questions. Favorite food?
Uh, I don't have one anymore because I've I've learned to like so many different foods, but I would say, like my comfort food is often like it's some kind of breakfast food like pancakes, Yeah, chip pancakes.
Favorite musician or bad.
Uh depeche Mode, I'm an athiest boy.
Nice favorite movie.
Brisbille but Terry Gillian.
I don't think I've heard of that, but I'll have to check that one out. Favorite book.
Think, I think Foundation by Isaac Asimov. It doesn't reread well, like people say, oh, you know, science fiction doesn't age well, but and that's really true, but it had a huge impact on me as a kid. Star I'm thinking about you know, we're not just on planet earths. We're part of this like enormous galaxy, and there's there's so much out there that we we we should I hope be able to explore.
Mm hmm. And I think I know the answer to this. But what do you do for fun outside of working at uy.
Well, I've got a husband, two kids, and a dog. But I do. I do triathons. I do about one iron Man a year, so I kind of like a little bit of the sports stuff.
Awesome, Paul, Absolute pleasure chatting with you. I'm excited for the future updates are on ey and I'd love to have you back on as those things roll out. Thank you so much for joining me.
Thank you so much, Tony. I have a terrific day. Thanks for having me.