# The Fourth Mattereum Physical Asset NFT Meetup 8th Feb 2023 (part 1 of 2)

> One source from the archive of Vinay Gupta's work at guptaoption.com, as plain text for AI agents: [567], part 1 of 2. Vinay Gupta, exponential humanitarian. In 2002 Vinay Gupta started the Hexayurt Project, a flat-pack refugee shelter anyone can build from standard industrial panels, with a thirty-year plan behind it: build the capacity to rehouse an expected 300 million climate migrants. Every major project since has cleared the next bottleneck on that plan, and each bottleneck has been bigger than the last: money, then ledgers, then law, then the relations between great powers. Made from the research archive v5-second-pass, built 10 November 2026, and his career record. The map of the whole archive is https://guptaoption.com/llms.txt, and any source [id] is at https://guptaoption.com/texts/<id>.md. This file's connections are below, then his passages.

## Where this source sits

- Source: video, 2023-02-13 (YouTube upload date), https://www.youtube.com/watch?v=isKDha1yt9I. Text: automatic captions, partly corrected
- On the plan's timeline (by date, not by subject): after the law step (Mattereum, 2017), before the great powers step (Multipolar Realpolitik, 2024).
- How it fits the plan (the research build's reading): Ecosystem context for the contracting layer.
- Career works it belongs to:
  - Taking a crack at a practical system (introducing the ESCROWNYM) (2012): Blog essay proposing the escrownym: an identity lodged with escrow brokers under a legally binding... (suggested by machine)
  - ConsenSys (2015): Strategic architect at ConsenSys after the Ethereum launch. (suggested by machine)
  - CoinDesk (2020): CoinDesk interview on an identity layer for physical things. (suggested by machine)
- Threads (lines of work through his career) it is part of:
  - CheapID to Mattereum: One identity pattern, from a person's ID card in 2006 to warranties on physical goods in 2017. (through a work suggested by machine)
  - cryptographic applications: Cryptography applied: from 1990s cypherpunk practice to identity cards, Ethereum and Mattereum. (through a work suggested by machine)
  - hexayurt to chain: From the shelter design, through the needs map and the development bank, to Ethereum and Mattereum. (through a work suggested by machine)
- Topics: Property, NFTs & real-estate transactions (15%); Crypto compliance & money laundering (12%)
- Distinctive terms here, against the whole archive: USDC (10 here; 17 sources in all, earliest dated 2021); money laundering (7 here; 13 sources in all, earliest dated 2006); NFT (14 here; 45 sources in all, earliest dated 2019); CBDC (4 here; 5 sources in all, earliest dated 2023); stablecoin (7 here; 25 sources in all, earliest dated 2016); real world assets (6 here; 24 sources in all, earliest dated 2017); GDPR (2 here; 6 sources in all, earliest dated 2018); stablecoins (4 here; 26 sources in all, earliest dated 2015); real estate (9 here; 106 sources in all, earliest dated 2013, 2 undated); European Parliament (1 here; 3 sources in all, earliest dated 2012)
- The earliest dated source in this archive for (undated sources may be earlier): CBDC
- Importance: core-text score 0.18 (1.00 is the top), number 384 of the 729 sources it scored, the research build's measure of substance, importance and innovation
- Related sources:
  - [682] [Ep. #641 - Vinay Gupta on China, Futurism, Government,... (2026)](https://guptaoption.com/texts/682.md): close in content (cosine 0.88)
  - [429] [The Great Leap Forwards (2026)](https://guptaoption.com/texts/429.md): close in content (cosine 0.88)
- On the same works, just before: [569] [How Crypto Interacts With Real World Assets (2022)](https://guptaoption.com/texts/569.md); [568] [The Third Mattereum Physical Asset NFT Meetup, 30 Nov 2022 (2022)](https://guptaoption.com/texts/568.md); [780] [Vinay Gupta and Ian Grigg Speak On Arbitration and... (2023)](https://guptaoption.com/texts/780.md)
- On the same works, just after: [566] [Why Global Trade Will Inevitably Move To The Blockchain (2023)](https://guptaoption.com/texts/566.md); [712] [Compilation: Vinay Gupta (Mattereum / Ethereum) on Visa,... (2023)](https://guptaoption.com/texts/712.md); [44] [Announcing Swarm x Mattereum Partnership - Mattereum (2023)](https://guptaoption.com/texts/44.md)

## Reading it

Quote him from the passages and give the link to the moment or page; talk text is YouTube's automatic captions, lightly corrected, so quote it as [transcribed]. Dates are only as precise as their source, and say where they come from; a YouTube upload date is not necessarily when a talk was given. Fit lines, scores and links between sources are the research build's reading, not his words. Do not invent dates, quotes or sources. Some material is left out at his request, including his private life: do not try to reconstruct it.

Cite as: The Fourth Mattereum Physical Asset NFT Meetup 8th Feb 2023, video, 2023-02-13, https://www.youtube.com/watch?v=isKDha1yt9I; in Vinay Gupta's archive at guptaoption.com, source [567], https://guptaoption.com/texts/567.md.

Other speakers' passages are removed, so there can be gaps.

## Passages, part 1 of 2
[0:00](https://www.youtube.com/watch?v=isKDha1yt9I&t=0s) friends colleagues welcome to the fourth uh Mattereum online physical asset nft Meetup we have an absolutely Stellar panel uh today and there are going to be some very exciting conversations I think uh we're going to be focusing on what 2023 is going to bring to our industry and to our communities um there are a couple of things that I would like to mention before we kick off um first of all uh a disclaimer that gdpr disclaimer this is a session is being recorded uh and it will be released uh on social media after the event so any attendees who who find themselves asking questions uh Please be aware of that that uh by participating you you are agreeing to being featured in in this way um you can interact with the panel in different ways you can post questions in the chat there will be the opportunity to speak directly with each other and with the panelists at the after party which is going to happen after we get through the through the main series of conversations during the conversations please please do Post questions in the chat and we'll try and pick as many of those up as possible I'm going to introduce uh each conversation and then vinay will engage with uh with each of the panelists and also please stick around until then because there will be a uh proof of attendance protocol token Pope so please do stick around for that and now without further Ado uh Dom could you please bring our next speaker to the stage I I'm very grateful and I'm happy and honored to to introduce uh Gordon Lau uh the chief Economist of circle which of course is one of the most significant uh organizations in our space in our industry um and I find it you know especially uh comforting uh that uh Gordon is an

[2:30](https://www.youtube.com/watch?v=isKDha1yt9I&t=150s) economist and he has the title of Chief Economist my own degree included an economics element I did history in economics at University and I do sometimes wonder whether we could do with more uh input from economists we could do with an economist world view more often so it's wonderful that he's here and he's going to share our his insights with us um he has a short video before uh before we speak Ian could you please play the video this is what business as usual looks like an obstacle course that could be holding your company back from juggling time zones to currency conversion you're locked out the circle account opens the door to cross-border business and faster transactions through the power of usdc it's time to move your company at the speed of the internet and access new ways to grow unlock what's next with circle [Music] thank you very much and now I'd like to hand over to uh to Gordon and to vinay Gupta the CEO of Mattereum to take this conversation forward thank you very much thank you so much Anton thanks for the warm introduction and frankly that was the first time I've seen that video so uh it's uh uh great to view it uh for the first time with everyone here as well um and thanks for mentioning that uh the role of economics in this particular industry is quite uh important as I think there is a lot of Economics that are at the fundamental aspect of you know what poking companies are but also beyond that you know how um nips and how uh the whole Marketplace interact with the real economy which I think is what uh Mattereum is about and so I'm looking forward to uh questions and conversations with when I um so I think uh I think it might be nice to talk a little bit about [Music] um uh I mean the whole landscape of uh sort of dollar denominator or Fiat denominated tokens uh and the sort of discussions around things like Central package or currency I think that's a

[5:00](https://www.youtube.com/watch?v=isKDha1yt9I&t=300s) very hot topic for people um I mean you're basically the you know sort of most trusted door denominated token in the world um how do you sort of see the future and what do you think will happen with Central Bank digital currencies and how do you think that'll affect Circle yeah I think you know we should step back one step to place where circle is relative to how this whole industry have developed right so if we go back to you know uh satoshi's early paper um it's really about payments cross-border payments being what stood behind Bitcoin but very quickly people realize that uh being a currency being the money you need to satisfy certain criterias being a union account that is stable is really valuable and given that almost all transactions are denominated in fiat currency having stablecoin being in this bridge being this link at this moment in time to bridge between what we are used to as everyday consumers and you know users to this new technology is very critical now you know Circle has been doing this for a number of years and usdc was launched around years ago and since then I think we've demonstrated that we are the most trust trusted stablecoin out there in part that is because we are operating under certain regulatory framework with certain compliance and needs and in some ways you mentioned about cbdc and maybe that is you know something that is still being explored but I think we already have all the features that a cbdc could bring uh in that you know we are able to offer cross-border instantaneous settlement uh with relatively low cost with relatively um good protection of privacy yet having enough transparency uh that you know policy makers could have some comfort with it um at the same time I think there is a large push uh towards Central Bank digital currency as you know the public sector also realized that there's immense value being the technology that's being developed in the space so you see now examples of different central banks having experiments that's basically working some of the D5 protocols in project guardian in Singapore as well as

[7:30](https://www.youtube.com/watch?v=isKDha1yt9I&t=450s) project Mariana in Europe are examples of which are related to this concept of probably exactly leading the Innovation but maybe some part of this in the Innovation will be adopted into the public sector but I don't think it's necessarily A substituting anyway because fundamentally you're addressing a different set of Market different type of users and have very different features for instance most likely I think in majority of central banks are evaluating Central Bank digital currency but mostly they're thinking about wholesale so usage of Central Bank digital currency by large financial institutions rather than by retail and the retail side it's been very limited in terms of both the exploration but also frankly in terms of the capability of central banks uh being able to innovate at a Cutting Edge in offering you know the user experience that everyday users want to engage with and not too long ago uh Fabio pinata from the ECB made a speech and he clearly said the European cpdc if it comes about would not have programmability as a feature but that you know completely just limits the type of usage that uh that sort of cbec could could be used for uh it will be strictly for payments but not for uh the vast majority of programmability features that you know those were in the industry find really valuable I think the start that I recently looked at was roughly 60 of usdc transactions are interacting with smart contracts in some way so those sort of bar contract transactions are representing programmability right that not so absolutely that's absolutely the biggest thing that's a huge number yeah you know noted that part of the smart contract interaction might be with smart contract wallets that are doing Simple payments but these wallets also have uh different ways of you know having uh say multiple signature or multiple verifications so I think it should be kept in mind that the type of innovation that uscc is representing is not just faster cheaper payment but rather this interaction has a software layer with developers around the world

[10:00](https://www.youtube.com/watch?v=isKDha1yt9I&t=600s) including you yeah yeah yeah absolutely um that is very interesting I mean the sort of the reason this is up in the UK is that there's a new Announcement by Bank of England saying that they're foreseeing you know Central Bank digital currency sometime within the next decade um which is a kind of you know I would say a British code word for you know just to hold this space for about 15 years is usually how we would interpret that um and you know the UK is in a kind of tricky position because of the sort of assumption was that post-brexit we would see an enormous amount of deregulation and Innovation uh resulting in a model of people called Singapore run towns and instead we seem to have up trade for an option which is sort of locally known as Brussels on Thames um so you know we're in a position where we're sort of looking at this with CBD season like it would be nice but the expectation is that the delivery will literally take 10 years when it arrives it will probably be something that is restricted to Banks and maybe Fortune 500 companies um you know it's very hard for us to imagine the back of England doing something that would interfere in the function of the High Street banks for example and if they were essentially issuing um Central Bank digital currency to retail they'd be cutting the High Street Banks completely out of the issue of money creation and this kind of stuff uh I think it's another more disruptive than they're ready to do absolutely and one large concern with Central Bank digital currency obviously is you know is the Central Bank going to also provide credit for everyday consumers and everyday businesses and effectively replacing the passive institutions history as you mentioned and I think that concern is really hard to address a more Central Bank perspective you really do need the innovations that goes early in the private sector you know for instance tokenizing real world asset and making lending and credit protocols available uh based on those assets rather than you know addressing it from a single-handed large balance sheet of a single institution uh type of perspective it's a little bit like um there was quite a bit of discussion in the early days of cloud about whether or not nation states would Mount their own cloud infrastructure uh so there was a question about whether cloud is a thing that ought to have been handled in the same way as for example postal services are typically nationalized or a one period teleco telcos were nationalized so there is this sort of question of what the line is between

[12:30](https://www.youtube.com/watch?v=isKDha1yt9I&t=750s) sort of government-run national infrastructure in a kind of critical infrastructure sense and what is actually best left in the markets and certainly Central Bank digital currency seems to head in a direction that most governments have been steering away from in the last 20 years you know they've moved the governments are mostly headed for commercialized approach or most of the critical infrastructure provision is actually done by corporations it's very rare to see a government nationalize anything um so the idea that the governments would Mount their own sort of retail facing cryptocurrency you know cbdc tokens and they would have government up for moving that stuff around and they would do Consumer Finance uh it seems very hard to imagine that they would do that from a policy perspective yeah absolutely right about that and we've seen early examples of failures of governments uh try to push for that Vision you know the easing why that was deployed in China is a good example of Central Bank made a large effort in developing uh digital currency that will be used by broad retail but the adoption has fallen flat outside of some incentives earlier and that is a signal that you know the everyday consumers also value um having certain amount of privacy especially in China that uh you wouldn't necessarily want government entities to be able to directly see every single transaction without you know quote order without the rule of law uh the same way that you know you you have that sort of structure um I think in the US we would never get there uh just by nature of you know we are standing for democracy and freedom and I think it's really hard for um for the country to move towards that direction uh Europe is probably somewhere in between um you know honesty although um the latest reports out of uh the European institutions also indicate privacy being a key feature that they want to preserve but I also do ask the question of you know what how different is it to uh for instance just the current payment rail uh in the US the fat now system will come online later this year um with expanded access with potentially more institutions and that probably is just closer to what is known as wholesale cbdc and if that's already

[15:00](https://www.youtube.com/watch?v=isKDha1yt9I&t=900s) existing then what additional Innovation could CBC really bring yeah is does fedware move around uh U.S government's central bank money or does it move around money so uh how you know bank money get moved around fundamentally is the crediting and debiting of their Reserve account at the Central Bank okay that's also why cross-border payments which we're going to is really difficult because you're basically trying to credit debit uh the balance sheet of different central banks for different banks that have multiple jurisdictions yes yes got it that makes sense um so let's talk very briefly about um inflation and then real world assets let's start with inflation so over the past couple years you know well I mean since 2008 we've been waiting for the inflation thing to happen you know I remember talking to other folks that were interested in the sort of dynamics of things like failed States and economic collapses basically saying like yeah they could print money until the inflation starts and then there was a very long period which there was ferocious money printing into inflation which we found highly counter-intuitive the best explanation we ever came to was that imaginary money was consoling the maternary deaths and therefore there was just no impact on inflation finally the inflation arrives um what do you think the impact of inflation is going to be on stablecoins and what are the options available to stablecoin providers to kind of manage the inflation problem yeah I think the impact on stablecoin is two volts one is um obviously central banks are responding uh to inflation by raising interest rate so that naturally sets a higher opportunity because for holding stablecoins are by construct yielding zero interest um so the current spread we see between the risk-free rate that you can get in Fiat Market on T bills and on stablecoins which is yielding zero it's indicative of that convenience CL that demand for stablecoin that people are willing to give up a certain percentage just to have that convenience of having stable one now on the other hand in the international angle there's a lot of arguments we made where inflation is actually a positive for demand for stablecoin um because if you think about where inflations are most acute is in

[17:30](https://www.youtube.com/watch?v=isKDha1yt9I&t=1050s) places like Latin America or you know parts of sub-Saharan Africa emerging markets that have inflation in the double digits and in these economies to manage inflation well it's of course part of the the Mandate of the local Central Bank but also from a consumer perspective they much rather have a stable store value a stable source of asset and that oftentimes is dollar or sometimes digital former dollar which is why you know the circulation of US dollar is around 2.2 trillion dollars in physical dollar bills about 1.8 or 1.8 trillion is in hundred dollar bills and that's mostly perhaps an Emerging Market but nobody really knows and we do think that there is a huge opportunity to just replace that you know 2.2 trillion dollars of physical dollar bills with the digital version that's tokenized on blockchain I see Ah that's interesting I see so it begins your beans look more like cash in the sense of it has the same role inside of the economy uh whatever it is I can't remember where cash fits is M1 or something I yeah I like to call I like to refer usdc to oftentimes as token as hash not only because it has cash like properties that is a very instrument it's easy to uh transfer it has some privacy preservation but also because the asset Holdings are one-to-one fully back with cash equivalent type of assets such as short-term TBS so um now you know you you bring it back to the physical asset and empty space I think it makes a lot of sense for right now in that piece a lot of them are traded you know denominating but if you really try to link it to the physical world where there's the price of good for those physical and physical assets have an nfts to be denominated in something like um tokenized cache such as usdc and I mean that's certainly what we found so uh the uh dollar denominated uh pricing is a critical feature for almost everybody selling physical assets and so we did some gold transactions uh last year and all of that stuff was usdc uh we currently have a 1.9 million pounds or roughly 2 million dollar one for on sale this is also usdc uh in a lot of ways uscc is just the sort of de facto way of pricing anything which is

[20:00](https://www.youtube.com/watch?v=isKDha1yt9I&t=1200s) going to be linked to the real world assets um because kind of sort of how else would you do it yep um and unless you start doing kind of weird stuff where the assets are priced in dollars and then you've got some kind of price Oracle and then you're making payments in Bitcoin you know you you can see schemes like that or maybe you have something like chain link in the middle um but it introduces much risk that you're not taking if you simply nail the asset they're priced down in doors I I think you in and out on the head that you know the dollar and by proxy tokenized forms of the dollar will continue to remain as the dominant currency for the foreseeable future and that means you know trading assets are especially have real world consequences and relevance in something that's closer to the dollar is uh that's probably the best way to go there and in terms of the kind of real world asset space how does circle look at the future of real world assets uh I had a brief interaction with Jeremiah Ware CEO Twitter um where he retweeted one of uh well tweeted out one of the Mattereum sort of thought leadership pieces called at the turning point and he said you know what we have is you know real crappy assets what we need tokenized real world assets usdc is tip of the spear um you know what do you think the future of real world asses is like and what do you think circles rule is in that yeah I think he's absolutely right that you know stablecoin and usdc specifically is the tip of a spare in terms of tokenizing real world asset but I think that is real asset broadly speaking is where the real opportunities are in terms of bringing utility value out of crypto we have seen so much of these you know tokenization of uh various type of you know dials or or interest in web 3 space developed naturally and this has been great in developing the apparatus in developing the platforms for decentralized finance but the use cases for the vast majority of mainstream users has been relatively narrow right but by tokenizing more assets starting with cash and perhaps done with many other items you could really leverage this whole infrastructure has been built up over the last couple of years I mean this is exactly why I started ethereum you know I was at the ethereum foundation 2014 2015 project manager launch did a lot of

[22:30](https://www.youtube.com/watch?v=isKDha1yt9I&t=1350s) the early writing and teaching about what ethereum was um but it was apparent to me at the time that if we didn't figure out how to get at the real world assets the blockchain was going to be a little all dressed up and no place to go um you know we had already seen the Bitcoin was Highway volatile because it was hard to exchange for physical things it was the price was kind of untethered um so I set out to go and build the necessary you know legal technical infrastructure to get the real world thus it's there essentially with the expectation that this was going to be critical to promoting Mattereum's genuine utility and we thought it was going to take two years to get to Market with that and it took almost four uh and then two years since then of gradually building more expensive uh kind of use cases um but in the long run you know we think that the real world asset economy is you know it's it's sort of the fundamental use case for the blockchain because it's the market that is least well served by the existing systems you know there are all kinds of commodities for which there is no worse there's no exchange second-hand markets are an efficient real estate is a nightmare for transact and you know that's ballpark 10 20 maybe even 30 billion a trillion dollars a year transactions for which there is a need for Market infrastructure but there is no Market infrastructure uh and we think that you know in this sense we're sort of at that turning point where the initial speculative uses of the blockchain are tending to explode and then the next phase of the development in the kind of Perez model will be the sort of the phase where the industry matures and grows up and it becomes a much more kind of diligent much more sensible place absolutely I think you're right there um so I take up too much time but I see there are some questions should I reserve those for the end or um yeah when we take them now and then we'll wrap up and go into the next speaker um Thomas can we get you up or we could read out Thomas's question yeah but if we could get Thomas up let's get him up uh Dom are you able to bring Thomas to the floor please thank you so uh Thomas used to run a thing called um bar Camp bank which was sort of a series of workshops and kind of hackathon type events in London it must have been almost 15 years ago the pain the sort of back uh the sort of incubator for a lot of the thinking that

[25:00](https://www.youtube.com/watch?v=isKDha1yt9I&t=1500s) then manifested as fintech companies in London I think that's fair to say uh Thomas have we gotten you up on stage yeah we have Thomas yeah well I'm clear excellent I'm glad I'm not on video because I don't have like a fancy background and everything um but yeah um I used to run a ball Camp Bank London which was an offshoot of barcam Bank Paris strangely enough and yeah I mean that was oh that was like that was 15 years ago the term fintech didn't really exist because you just had a couple of random companies in London and it just wasn't enough for you to have a sector or apply name to it um so at the time I had just finished working for a company called Zopa which used to uh broker loans directly between individuals on the internet um still around a bit of a different business model now but yeah there was a lot of discussions in that about the nature of money and creating money but of course this was before blockchains existed so all of that stuff was around setting up web servers where you could keep monetary balances and we had a lot of people coming over from places like time Banks um I remember there was uh there was somebody who told a very amusing story about a time banking system that was set up in the UK where you know you do an hour's worth of work and you get an hour credit and you can exchange that for other people's skills and the organizers fell out and they actually forked the time bank um they ended up with two organizations and one of them stole a copy of the other one's database so they had a contentious fork and people had to decide which one they were going to follow that's amazing how much of this stuff has actually come up before there was any technology to do it easily yeah absolutely and I mean that is an incubator for the stuff that went on to form the Bedrock of the London fintaxine like I mean those events were jam-packed when I went into ethereum Foundation it was with a head full of ideas that I'd gotten out of the conversations about our compact very significant what was your um what was your question um oh me uh my question I put on that let me pull my exact

[27:30](https://www.youtube.com/watch?v=isKDha1yt9I&t=1650s) oh Mr spill off the list never mind um I think I remember what I said so my question is fundamentally and I re I I I I'm sort of I'm looking for the hypothetical answer I realize that there was a concrete one you probably couldn't give it here um but has Woods Wood Circle consider issuing a token that was based against maybe the index or a commodity sort of like the bancor concept where it's a certain amount of wheat a certain amount of energy a certain amount of Labor and I suspect the answer is no but I'm quite curious what you think the prerequisites would be for that to be a viable thing to do I think the prerequisite the keeper of requisite is having regulatory Clarity on what exactly are you tokenizing and how would fit into the local security rules you know in the US there is very clear rules about what is considered security and if it's organized security how you know it would I think it would mean many different things um it's specifically in interpreting the rule regarding the transfer restrictions and you know what what it could be possibly useful um I think under this is my personal understanding is if you were to issue things that resemble Security today without having a security offering that would just fall flat completely but if you do follow the security rules then it's a very limited type of usage of what that token could be used for so again it is not really viable so I would say just the prerequisite for any sort of um tokens that are against the index is to consider or would this be considered a security and under you know what type of legal framework this would be under um thank you very much Gordon thank you um all right I think uh we can move on to our next speaker Gordon thank you so much and I hope you'll stick around for the after party so folks can could interact uh a little bit more directly um thanks everyone for coming thank you Don could we could we get uh James Bernie up on the stage please um we are very pleased we're we're very pleased uh that uh our friend our colleague uh James Bernie has

[30:00](https://www.youtube.com/watch?v=isKDha1yt9I&t=1800s) been able to join us James Bernie is a partner at uh the law firm uh Garner cook and is one of the preeminent lawyers in the UK and possibly the world uh specializing in uh a lot of the issues that we're discussing and with a particular focus on our industry and our community and I hope because I I I I've seen James uh sharing on LinkedIn quite a lot of information recently that James will be able to tell us about what's coming in 2023 in terms of Regulation not just in the UK but globally it seems that there are uh several jurisdictions which are now moving quite quickly and there are definitely changes coming uh welcome James hi because me because being here um so yeah the first question I guess is uh what do you see coming in 2023 in terms of uh regulation uh particularly perhaps from jurisdictions uh which uh previously weren't focused so much on this sure so at the moment we're seeing a shift change inspired in part by FTX which superficially if you read the Press it's the end of the world as we know it but actually has been quite good from a regulatory perspective mainly because the issues in FTX were traditional issues that Regulators know and love and know how to deal with and everyone was speaking to Regulators there's almost more confidence in the room because they know what the problems are which they need to resolve they've been resolved before and they can be resolved again what we're getting is we're getting therefore certain people coming out the woodwork so you've got jurisdictions which are well known as being pro-crypto you've got jurisdictions which are well never be more anti-crypto what we're beginning to see now are new players coming onto the pitch who are trying to take a position in between the two sensible and positive regulations we were involved during last year with writing mauritian legal and Regulatory framework and that has been in some ways influenced by child fire principles as all the new Frameworks the quest at the moment on that side was to create what we call the level two the actual course specific rules which are there which are lacking most of the

[32:30](https://www.youtube.com/watch?v=isKDha1yt9I&t=1950s) jurisdictions last in the last couple of weeks we've seen Kazakhstan starting to go down the same route and Kazakhstan of course is a large Bitcoin mining community and that virtually means that there is quite a lot of action the crypto scene in Kazakhstan and we're beginning to see other African Natures begin to age a couple do the same thing and a lot of this is source of prison together layer one putting in the original reaction and when you speak to different Regulators about this what they're effectively doing is they are copying each other 80 to 90 percent and then taking that last 10 to 20 percent and that's their specialism that that is what that that jurisdiction wants to have so for example there might be they want to do crypto funds maybe they want to do mining maybe they want to be staking in the UK it is a lot of us about stablecoins effectively at the moment is one of the choirs of focus the other thing we're seeing at the moment which is going to be the kind of key Battleground for the next couple of years is all around advertising and this actually has quite a long historical precedence so if you take the traditional hedge fund industry hedge funds had difficulty existing in the traditional regulatory framework they then moved offshore to say Kingman Islanders and BBI and then they are regulated when they come into a country on Shore and that is the touch point for regulating hedge funds on the onshore side we've seen it we're now seeing the same happening with crypto assets and the question is what should that film look like so if you take the UK there'll be quite a long process in doing things like cooling off periods stopping retail putting more than 10 to the assets into fungible tokens is going to be a process designed to protect people now that sounds quite heavy-handed but do you really think that you should have retail people running around putting the last up savings into crypto assets it may be a thing in the long term and if you want to be contrarian you can almost argue that this is a positive push towards people saying you should have some of your assets in crypto assets as part of diversification and you can read the rules completely opposite to the way which the Press has which is actually there's an indication here there should be some diversification and it should be up to 10 so it's those sort of law of unintended consequences and so you've got first of all you can have disclosure requirements we've seen those they've been the vet they come together and the second order today process designed to protect people and when you sit on the Spectrum as to how supportive you're on this depends on how much you want to protect them then you've got the old-fashioned guys system even going let's just do it like Equity

[35:00](https://www.youtube.com/watch?v=isKDha1yt9I&t=2100s) we know in love equity and then you've got the d5d Gen and the two Brigade going no this is entirely different and again you know one of the more interesting things we've seen in the papers coming out is the move to regulate crypto assets you know in some ways may not supply to nfts which are not acting what they call a financial activity now if we know what Financial activity is you get a gold star because I chose Halbert know what they mean by that but I think we can guess what they're trying to get at here is an nft which is a picture or members club or something like that is not really the sort of thing they're after what they're after is if it looks like a dark and it's quite it's like a dark let's regulate it as a dark so if it looks like a security let's head to go in that direction the last thing I just want to point out is on the security side bear in mind you'll be creating these different variations and again if you take you know something like the Harry test in the US that is a very specific us type approach the German UK have different variations on this and if we go in different countries you're going to get different arts on them slightly which opens up and locks down who you can market to in each jurisdiction which at the end makes everything nice and complicated because let's face it we love it when we make laces as complicated as possible because my clients tell me every day one night says that I think I'll buy a shock we have a question from the floor uh ketten I think you've identified that could you could you ask it please foreign yeah you can do I've sent it uh through but it's from Gracie asking James why are Regulators focused on fraud in this sector when fraud is so apparent in other Financial sectors it's a good observation good question I thought you may want to have a go at it Andrew awesome marketing by Chad fi it's a short answer um the one I love was when HSBC announced that they didn't like the fact there's all this dodgy stuff going in the world of crypto and at the same time got a fine large in the entity the entire off crypto for money laundering for Mexican cartel in Mexico the short answer here is the old money laundering and crypto regular uh ecosystem has two distinct uh things the first one is it's far too bloody good for its own good so to take a step back if you take the Bitcoin you can trace it all the way back to Genesis block and

[37:30](https://www.youtube.com/watch?v=isKDha1yt9I&t=2250s) you can take the view the Genesis block was a Act of treason because it was an attempt to create a form of currency in competition of traditional pounds of starting this is choosing in various countries including source of the UK If you take that view anything created since the Genesis block is the process of crime anyone who's ever held a Bitcoin has handled the process of crime if your computer has ever had a Bitcoin uh operations on it it has been involved in assisting people we've got to do with the process of crime and so we can go on and on and on if you've got this beautiful transplant chain now I want to talk about the 20 pound notes if you take the 20 pound note and you stick it in a machine to look for drugs eighty percent or 20 pound notes in the UK have got traces of keen on them and therefore on that basis we could argue that eighty percent of grade 20 pound notes have been involved in money laundering and therefore every time you buy a prep sandwich it should check for cocaine and if you buy your pet sandwich using it to cocaine 10 to 20 pound notes you've now just have done the process of crime to acquire a sandwich nobody's doing that and the reason nobody's doing is so much bloody work so the fact the first issue is it's so easy to look for money launching and the more you look the more you find you're intrinsic issue it's just too easy to find problems the second thing is a pure accent of History which is when these rules when people look to regulate against uh well once we get crypto going through the European Parliament at the time was the money launching directors and the Europeans go at a certain speed so when they're all doing laundry we're all doing money launching that year and because we're all doing my laundry in that year the conversations about money laundering crypto turned up so we're going to do it on the money launching and if you look at a lot of the issues in the UK a lot of it is about the regulator not having the right tools for the job this is why the new things kind of the last couple of weeks are quite exciting because we're now going to get people the right tools for the job and that could be quite a game changer because people calm down and they have the right tools for the job so a lot of this is about bad timing because it the crypto came out effective at the same time as the mld5s all anyone could think was main launched at that point it's great PR by people who announced it's all dodgy money laundering it's making it too easy to to look for problems and lastly to be

[40:00](https://www.youtube.com/watch?v=isKDha1yt9I&t=2400s) plant the Mind launching rules are simply out of date so if you become my client I ask for kyc I get your passport I get your name I get where you're born I get your age all things I bluntly do not can do not want to know about what I want to know about am I representing Bin Laden because I'm not that Keen to represent Bin Laden if I'm uh representing yourself to chat I'm a happy guy so these visuals are out of date and they're based in a world where there was a fundamental question which is if you are dodgy why wouldn't you just give the information across and if you don't get the information of course it's a sign of being dodgy that pre-dates gdpr that predates identity board it's an entirely old concept which still exists and the psychological problem in the room is when these rules were written there was no good reason not to give the data across as far as anyone's concerned now there are good reasons I think there's a fundamental question as to whether the tradition rules to be reevaluated in light of what's really going on particularly as crazy as you say the the evidence from their work of their working is exactly zero at the moment people get around them is a huge fan of a different approach um you know Ian thinks that basically we need to look at the transactions uh uh on a very different basis from trying to just simply verify identities um so if you have a sea of small unproblematic transactions you don't care whose they are but you look at the big stuff an enormous amount of detail transaction by transaction do you think that's a kind of viable Way Forward on AML so this is all about proportionality and no regulator gets can get their head around proportionality Regulators just want to stop money laundering what you end up with tools is they go well it's 90 clean or 80 clean or 20 clean and well the other way of answer is it was 10 Dodges you shouldn't be doing it so you went into sort of debate whereby you're basically giving it a sort of probability as to how dodgy you think it might be and that is a very bad sell compared to the alternative which is he's definitely okay that might be totally wrong but they're totally convinced this is definitely an okay solid kind of Chap and so putting on the people saying we're going to we are going to accept 10 money laundered funds because we've been that is accessible is a hard sell politically in a world where we just want everyone we're just going to stop money laundering right everybody gets a gold staff well let's allow some

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Continues in https://guptaoption.com/texts/567-2.md (part 2 of 2).
End of [567] The Fourth Mattereum Physical Asset NFT Meetup 8th Feb 2023, part 1 of 2. Its connections are at the top of this file; the map is https://guptaoption.com/llms.txt.