Hey, folks. We're recording at Halburn's Access Summit at the New York Stock Exchange and joining me is Henry Zang, who is the founder and CEO of DGFT. Henry, great to have.
You, Thank you, thank you for inviting me for your podcast.
Absolutely, I'm really looking forward to learning about what you're doing at DGFT. Let's start with your background. Where are you from? How'd you get into crypto.
Okay, yeah, given my age, I started with traditional finance, not called the traditional finance, but I would rather say this as a mainstream finance. So I'm working in the financial industry for more than two decades, mainly with City with Standard chartered and always on the East West Bank, mostly in Asia. Different functions brought me to crypto is in my twenties, which is in the year of twenty two thousand. It's a two thousand time. That was internet
at the time. That was internet at the time. I was the e commerce head when I worked for City, so I'm pretty much wept to og so starting Funders twenty in two thousand. In my twenties, in my role as an e commerce head, I built the first online
payment system for in the Asian market. I thought it was a very cool product because you make a payment electronically rather than paper based and effects to the bank to make the payment and then people call back right then become electronic and as a time, people talk about the internet would be the future in the ten years, everybody very brutish convinced, but people don't know what's going to happen entertainments. Later on, this product become a very
successful and profitable, commercially successful product. But actually it's on that that's starting from the online payment, go to the online banking, then go to the online finance. Then the whole thing tech build on the internet. So that was
my experience twenty five years ago. Not coming to continue my banking career in different roles, different jurisdictions, I appreciate that, but I have this kind of memory and continue to monitor the whole world because as a time I have a great company come out like a paper or issue market like ldipay blah blah. Theyater to become huge companies. Then coming to this web sree, it's that time internet.
Now we give it the name of a Web three next generation of Internet not only transferred information, it's transfer values giving my financial background and giving my tech background and my proder background. About twenty five years ago I realized this is something big, probably even bigger than Internet next generation, last generation that's called the web stream, a blockchain based because can transfer value. I'm so passionate about that. That's why I say, let me do something, engage early.
I was early in the last wave. I want to be early in this way, but in a different way as a as a builder, as an entrepreneur, rather than walking on on our platform. So I build the DGFT five years ago.
So do you see You know your background in the Internet, in e commerce, and you mentioned payments that where we are now with blockchain and the movement of value. It is a natural evolution of payments and the Internet.
Very true, you know. It is about the financial market right and also very important is about the money. Now we talk about stable coin or CBDC or tokenize the deposit, which is a hot topic today in the in the in the conference, which I think very very important because the money no matter, no matter called the stable coin or CBDC or whatever, it's the money on chain. Yes, Now, what are called the three the phase three of money? Phase one paper based phase two, which is current electronic.
Then the phase three is money on chain, it's money token the base why the three generations because the background is different, technology is different. Now were having the uh, we're entering to the age of this money on chin based on the block chain. So once the money on chin, you have two things. How to use money. Money is about two usages. If I may say, one is to
buy something, another is to invest. Buy could be to be to see to see its consumer spending, to be a unreceivable or comparable any money you didn't spend, you want to earn something, so you have to invest. So in this regard ones the stable can money move on chain and of course based on the whole infra there's a chain wallet or the other things. Now how to pay and how to invest is going to be fundamentally changed.
Oh absolutely, And it makes it almost a more global market because you have twenty four to seven trading. Anyone can access the asset because it's on chain. Right before, for example, not everyone could access certain stocks on the New York Stock Exchange. But with bitcoin and crypto acids and stable coins, you could be in any part of the world. So as you have Internet connection, you can access it totally.
These kind of new features of benefits people start to realize starting from the crypto native assets like BTC. Because of crypto native there are nothing in the real world but just an on chain. But then the people once they like the see the values of the asset, but also on the other side they see the value of efficiency, transparency, self ownership. Then people start to think about it. BDC is good as an asset, but on the other side, the BDC is very good in terms of its features.
Then people naturally think and the debating here is can we apply these good features enable make it enable other assets. Now there's a name called the r W A, although I don't think r W is a perfect name, but just use it real assets basically the assets which is not on chain, but we make the ownership or the representation on chain called r W A token or digital asset tokens. Then you can enjoy this kind of benefits which native assets crypto assets already inherited. That's the moment
things on chain. Then coming to your point is like twenty four seven etc. On the other side is if I may adam just a couple more sentences, then the people look at the current financial industry. Mainstream financial industry use the best of the technology so far, but still there's a lot of room to improve. The current financial market is very local and the pretty manual in terms of middle office and the back office, which the technology
hasn't been changed much in the past decades. The one, as you mentioned, it is like a stock we're sitting in. Your stock has changed, but this is US stock. If you go to japan stock, you go to European stock, you go to Asian stock. There are different separate markets which they cannot be you buy here, set over there.
You okay, only buy here, set over there, And each one has a very distinctive settlement procedure, some T plus two, some T plus one, some maybe T plus x, very very different, and you need to move the capital cross the border. Then you add on another layer of complexity. The result is your capital efficiency it's low. Your accessibility even doesn't exist, then the efficiency will be low. Even you can transfer around, so these kind of things. Thanks
for the technology. Using this token based Web three next generation of Internet can be largely addressed.
Absolutely breaks down a lot of the walls and connects more of these markets that were segregated before.
Indeed, totally that's going to be a non marginal change. The change work can be very substantial, as you mentioned, Tony said, currently is like a five days maybe eight hours right then next step people can talk about twenty four seven and the settlement and the clearing happened simultaneously, and it can be in minutes, seconds or even many seconds soon. So this is one step forward, yes, but this is one step forward. Is almost reached to the ideal,
most ideal situation twenty four seven. What else you can expect and the real time or near real time. So this kind of innovation, I would say it is not marginal innovation.
It's normal, absolutely, and I think I don't know if it was this week we heard the New York Stock Exchange they're looking to go twenty four to seven, you know, the NASDAC. So eventually, like you said, you know, everybody's going to be on the same playing field to get real time settlement twenty four to seven trading.
Yeah, that one, I mean just encouraging me to say two things right. One is the financial industry is never slow in adopting new technologies. Look at the history when a new technology come out telecommunication, PC, internet, mobile. Financial industry never never be the slow guide to adopt it. So this time just another new technology, so financial industry will be a very active use of it. This number one.
Another thing is that when you mentioned like an ASTech New York stock change coming in to do it is institutional engagement. So the institution was start coming. Oh absolutely, So that's never slow in the past. We're not slow this time. And also big guys start to come in, so this kind of change we can expect it will be accelerated.
Oh absolutely. So took us about dgf T what is what are the services you offer? The history and who are you working with and things like that.
DGFT is a marketplace we called our next generation of a marketplace. Why is that? Is a technology white? It is a dex non constudient platform. What do we call this open architecture means you can connect your own wallet to the platform and once you get the assets, the assets goes into your own wallet self custodiing. So this kind of thing never happened before. We have this technoledge. So far the lot of exchanges and marketplaces and the
financial institutions are almost one hundred percent centralized. You need to depend on intermediate to do financial transactions, so decentralize your self control. You have a minimum dependency on the intermediates or even no intermediate, So that's efficiency. That's efficiency. Number two. We deal with not only native crypto assets. We deal with the beyond crypto assets. There's so many assets of value fixing common stocks, equities, and real state commodities,
many others that are all of value. So there's a huge room to be upgraded in terms of efficiency, liberty, or disease knowledge. That's why we go beyond cryptocurrency, not called other buy or security digital assets.
Token assets essentially, oh yeah.
Yeah, token azed assets. Number three is were licensed because we're in the financial industry. We believe what we're doing is the mainstream finance. Financial industry has its own feature. It is heavily regulated industry in almost all jurisdictions. This is not going to be going to change and publisher, not change protection, blah blah, right, a lot of things. So we were licensed. We're dealing with that. When licensing is a key requirement hold the people accountable. That's why
you build a trust. So DGFT is a licensed decks for digital assets, and we're very proud we are the first way in the world be the license the decks for digital assets.
It's incredible because you don't hear about deck is decentralized exchanges for those whom no, But that's incredible. Uh, I think you're the first I've heard that has a deck setup to handle tokenized assets.
We indeed the first one licensed and the life in operations.
And I read that you're working with UBS and in Vesco, those type of institutions.
Correct, since we are regulated and we are regulated by Tier one jurisdiction. We're in Singapore starting Singapore, now in Hong Kong and entering to other jurisdictions, so we are regulated by tier one regulators and fully compliant. And on the other side, the good asset managers, like when you mentioned the UBS in Vesco, they also holding the same view as as will be distributed on chain. They're looking
for partners. That's why we make ourselves and be the partner be chosen by this kind of tier one asset managers. We're very proud of it. So now we have but we're working with UBS in Mesco, Wellington, DBS, develop Bank of Singapore and with some other asse managers out of Hong Kong our list. This list is getting longer and we're very proud of it. And also this also in our vision is more and more asset providers probably in the future percent they will move the way on Chin
just like a move from paper to electronic. Yeah, Leytown will be on Chen twenty five years ago online.
Oh absolutely, it's incredible the adoption that's happening, Henry. I know Singapore has always been more for thinking and ahead of the curve than the rest of the world with crypto. Here in the United States, we're almost at the cusp of getting crypto market structure. So are you seeing the US opening up more where you're talking to institutions here.
Yeah, there isn't a couple regulators of jurisdictions are very forward looking and taking action. Singapore, of course is the one we appreciate. That's why we also uh talking to the regulators in Singapore and also be endorsed by Singapore. The giving license then US definitely is in terms of size and the richness is never ware in the world as a financial market. We also see in the US market the regulators variously regulators which is not easy and
also legislations. But I'm also moving very fast. Yes, the more in fast, and the trend is very clear. The trend is to embrace this innovation. But of course there are a lot of debate, a lot of check and balance talking about how to embrace, what to embrace, and how to embrace. That's very natural. But the trends are very clear, including the stable coin. There money on chain is also digital.
Right, Yeah, the stable coin adoption is surging after here in the United States passed the Genius Act and a lot of institutions like banks want to launch their own stable coins.
Now incredible, Yeah, because I would say wise men think, I like right, People quickly realize it's not difficult to really to understand the benefit, right, especially once you try it a little bit, Just like before people talk about the internet. Then when they start to use internet, you quickly realize the kind of unprecedented benefits. Repeat again here. Then people see there's a room to improve. And back to what we just said, is a financial industry never
slow in adopting new technologies. Oh?
Absolutely, So what's on your road map for this year? What are your top priorities?
What do we have a lot of things to do so sometimes just overly excited, but we need to prioritize. So what do we focus on is a first of all, we believe in this future open architecture based the UH, the the financial infrastructure, new financial infrastructure. It is a very open based you can call the DeFi. This is our focus, so we're very focused on that. Number two will very focus on the capital markets. We are not
payment company. When not focused on payment, payments will work closely with payments, but we focus on the capital markets digital assets because money, how to pay, how to earn. Once you use the money to pay, you will immediately ask how do I invest? I want the assets being token That's the direction and of course we are core values. We're building this platform for the asset providers the name
like UBS, Invesco and others. We building this platform for the investors who are investing in this valuable assets in the token way, enjoy the quality of the assets and enjoyed efficiency of the way. And number three, which is unique for essay in tokens, we work for the builders just like you buy money market funds in tokens instead of as a replacement for deposit, what else can you do with it, Yes, more easy to be collaturalized or be for the lending, borrow money, cross border type of thing.
So that's we called the generally recorder for the builders. So it's for the for the asset providers, for the investors, and for the builders.
Yeah, you're able to open up new use cases and utility put put the assets to work in different ways.
Right, that's correct. Then we did we implement something last year. We'll continue to do it. We see the benefit, we see the market's demand. For example, we make the ubs IS money market fund. Ubs is a very reputable as a manager for money market funds, stable, good liquidity, decent written. We build an use case that we walk with a centralized exchange crypto exchange like a bybit cook coin. They take ub as money market as collateral.
Oh wow.
Then from the trader user perspective, they can enjoy boths. They can enjoy the efficiency in the in the in the token way. They can also enjoy the reliable and a sustainable yield from the collective assets. So it's enjoy on both sides. That's one of the typical case of building applications. Many can be due and a lot of peers in the industry also doing the same thing. We're very excited about it.
It's an exciting time, Henry. I'm really looking forward to seeing future updates on digit f T. Thank you so much for taking the time to chat.
Thank you very much. Thank you for having me.
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