Transcript
The nation's favorite car buying site, Dundeehl Motors, is home to the largest range of new and premium used cars from all of Ireland's trusted car dealerships. That's why you'll find Frank Keane BMW on Dun Dundeele. Visit the Frank Keane BMW showroom on Dundeele to find your next car. Dundeele Motors, for confident car buying and deals to feel great about from all of Ireland's trusted car dealerships. Visit dundeale.ie today. This isn't your average business podcast, and he's not your average host. This is the James Altucher show. First off, thanks for having this conversation. I know we're gonna take it in interesting places because I have a lot of questions. And as I was saying to Ben earlier, Kevin, I'm very bullish on crypto, but I wanna play the role of the skeptic because everyone asks me questions all the time. And as you know, sometimes it's stressful figuring all this stuff out. And and crypto is a is a complicated subject. We like to think it's simple, but Main Street world, it's not simple for the average person to use crypto. So, anyway, let's go on with WonderFi. I'm a fan, but describe it to the listeners, and I have tons of questions. I think you're bang on. It's we're at a point where we haven't got full on mainstream adoption yet, and there's there's a few key issues that are keeping people out. So that's what that's really what we're focused on at at Wonderfy. So I think there's 2 key issues. 1 is people are afraid of dealing with platforms that are are gonna get them in trouble or they could lose their money. So it's kind of the security and compliance side of things. And then the second is just how complex and fragmented the space is. So that means you're using many different wallets, accounts, passwords, platforms to achieve 1 or 2 things, and that just gets unwieldy. Even for people that are tech savvy, it's it's a it's an absolute nightmare. So what we're doing with Wunderfy is creating this unified access to digital assets in a compliant way. So that really means we've got centralized exchanges, so platforms that are similar to, like, a Coinbase or a Binance that are licensed, regulated by, currently, by the Canadian regulators, but we're expanding it into many other jurisdictions that gives people the peace of mind of not just retail, but also high net worth institutional, you know, investors and traders that they're dealing with a regulated entity. So we have those centralized platforms. We have a decentralized app, which focuses on DeFi, this high growth segment within crypto that more of the advanced side of the market is, working within. And then we also touch on gaming and and NFTs, which is another big area within digital assets. And so we're bringing all of those opportunities together under one banner, allowing people to access them with a single sign on, and giving people the confidence that they're dealing with compliant regulated platform. And, Kevin, how did you 2 guys meet? How did you guys get involved? We met through, you know, a mutual friend, I guess, when we were starting to explore increasing our operating company's portfolio to crypto. And, we do that 2 ways. You know? We we either buy the, the projects themselves and invest in something like Polygon or FTX or Circle. I have investments in all of those. And then, of course, I was very interested in decentralized wallets. But my premise of all of this and the challenge a lot of investors have is I'm already in the financial services industry. I have many different operating companies that are required to operate under a compliant mandate, both by the SEC, the OMF, the a AMF, I mean, the OSC. And so all of these companies are are are operating companies. And so there's no concept of rogue cowboy crypto for me. I don't I don't have that option. I can't trade on, rogue exchanges. I have to be a 100% compliant. And most institutional investors don't own any crypto for the reasons I'm talking about. So what what I found interesting when we met Ben and the team was that the whole mandate was around compliance and working with the regulator. So that was really refreshing because my thesis is the regulated exchanges are going to, in the long run, win the race because the banks are only gonna operate with them. They're not going to work on platforms that aren't a 100% compliance in the geographies they're in. So if you're in in United Arab Emirates and you're the FAB Bank, the largest bank in the Middle East, you don't touch crypto right now because you have to find someone that's compliant. Even though even though your all your clients want it, they can't do it yet. Same with the Canadian banks. They'll eventually come on board here, but they're only gonna do it with someone like WonderFi because we're a 100% 100% compliant, whether it's a centralized or decentralized wallet. So that's the investment thesis and why I I invested. So so but I I wanna I wanna take it back one step further because in order for them to fur to to touch crypto, I think these regulated banks or or or exchanges, they have to actually want to be involved in crypto. And, you know, like, the the this is still a big question. Like, the the head of the Bank of England just said he can't see any intrinsic value in Bitcoin. And how would you respond to that that's kind of the top level question, and then it gets you know, I get more, rarefied. But what do you respond to that? Like, where do you see the intrinsic value? Let let let me let me answer it. I mean, that's an interesting opinion, but it's one person's opinion. I deal in a different universe. One of the businesses I'm I operate is indexing. So we index for sovereign wealth funds, pension plans. And I'll give you an example. Let's say you're a oil rich Middle East sovereign fund, and you're running a $900,000,000,000 mandate. You're making $250,000,000 a day. That that's actually the United Arab Emirates. So they don't need more exposure to oil, so they go to the indexing industry, and I'm just one participant. There's many indexers. And they say, look. Design an industry for us that is the S and P 500 less airlines, less foil. We don't wanna own either of those. We own our own we have our own airline. We own it. We have unlimited quantities of oil, so we don't need any more. So design indices. And so bottom line is, I asked them, what do you wanna do on crypto? What what index? And what they were doing for a while, they stopped doing it now, and I'll explain, is they said we can't own crypto because the SEC hasn't ruled on it yet, and BlackRock hasn't ruled on it yet. BlackRock's our largest manager. BlackRock is the largest money manager in the world and does most of the sovereign work outside of the indexing. And so, what we will do is design us an index of US trading mining companies. And for a while, they traded in proxy with Bitcoin. So if your Marathon had a Hive, we indexed all these things, and they would trade an exact proxy with the price of Bitcoin. It would go up, it sucks to go up. Go down, they go down, because they were keeping all their coin on their balance sheet. And then the SEC order came out with the memo saying, we're gonna we're gonna ask these companies to do carbon audits because all of these Bitcoin miners, are using carbon offsets, which everybody knows carbon credits are bulls**t. So the SEC is calling their bluff on it. You can't say you own an acre of the Amazon forest, and you're spewing out, you know, coal generated electricity of Bitcoin mine and say you're clean. It doesn't work. So we had to unindex all those shares. And the reason I'm telling you this story is in those dialogues, I started asking them, if you could own Bitcoin direct, how much would you put would you take down? So a typical index, let's say you're running a 100,000,000,000, which is a really small fund for sovereign wealth. That's the smallest. There's 18 funds in United Arab Emirates. That's the smallest. The largest is a trillion. So they said we would probably start at 75 basis points. 75 basis points of a $100,000,000,000 is a s**tload of Bitcoin. And once they put in the 75 basis point order, if it goes up, they sell it down to 75 bps. If it goes down, they buy it back up to 75 bps. They maintain their prorated position. That's what's missing in the entire crypto industry. Because it once you get the allocation to the sovereign wealth, then there's always a bid. There's always a bid. There's always a market. There's either they're selling it or buying it, and you have liquidity and get less much less volatility. And so what we have now is a situation where, you know, people are saying, oh, Bitcoin's great. It's $800,000,000,000. That is nothing. Nothing. That's a rounding error. It's nothing. And the potential and the reason I wanna be an investor is at some point in the next 2 to 3 years, the SEC will put policy out on Bitcoin, Ethereum, and stablecoins. And I know that because I was with senator Lummis yesterday in Washington, and I looked at her bill. A lot of other private people are advising on her bill. Toomey had dinner with Danes last night in Washington, also putting forward a bill. These guys are moving forward. And so you wanna be on the right side of this, because the minute it gets indexed with the real money, that's when Bitcoin goes to a 100,000, 200,000, 300,000, whatever it's gonna go, because the halfing is in 2 years. So that's a lot of that's a lot of information that you may find interesting or not, but but that's sort of my thinking on. Look. And I and I totally agree. I mean, there's not only the sovereign wealth funds. There's the the cash reserves of the entire s and p 500, which is not in Bitcoin at all right now, but, eventually, some percentage of that will will go into Bitcoin. So it's easy to kind of get to the numbers when you start throwing around facts like that. But what I'm interested in it, crypto really is an evolution of currency and this notion of trustless currency. You don't you don't have to trust any intermediary in the middle. The outcome's guaranteed. If I send you money, you'll get it. And there's not 16 banks in the middle and fees all around, and there's no central bank that's playing with the value of your money. You understand completely the economics of it. Is this enough to support it as not just an investment as but as viable as either a store of value or a currency? Like, what's what's your view on is on how this is an evolution of money? Well, I let's just stick with let's stick with, stablecoins for a moment because that's that's already policy is is already being proposed. So I agree with you on the payment system side. I'll give you a real use case. I do a lot of real estate investing and often in other geographies. And, I won't mention the bank because I have a relationship with them, but we were closing a real estate transaction in our portfolio in a different country, in a different currency. And we, we sent 1,000,000 and 1,000,000 of dollars 4 days ahead because usually, you know, an ACH transfer takes 36 hours. It's so inefficient. And they lost it. They lost it. They lost it for 24 hours. Now first of all, that's unforgivable, but it also raises a bunch of questions. When it's, you know, $10,000, that's one thing. But when it's 1,000,000 and there's interest involved for 48 hours it's 48 hours, actually. Where's the money? Who pays the interest? So I actually called the board member on that bank and said, you know, have you ever heard of USDC? Because I would prefer to transfer USDC from your branch in Canada to the other countries, same same bank. But there's the use case, as you suggested, that would have taken 2 seconds. Fizz would have been 100 times less, would have happened immediately, and I wouldn't have had to done in any effects. Wouldn't have had to bought Swiss francs. Could have just done it directly. So there's so much potential there that I really think that this whole thing will be the 12th sector of the S and P in about 10 years. And so if that's the case, I might as well invest now in the infrastructure. I mean, WonderFi is really an infrastructure deal. It doesn't care what the price of Bitcoin is or any other token. It it has exchanges. All it cares about is trading volatility. So I don't care if Bitcoin goes to a 100,000 or goes down to 1,000. It doesn't matter to me as long as it's being traded on one of the exchanges that WonderFi owns. No. I I agree. And and one of the one of the problems I see with crypto is that there really and and, Ben, you were alluding to this also. There really are It's too complicated. Like if you want to buy a handful of all coins that you think are interesting, you might have to go to gate. Io. You might have to go to crack and Binance coin base, different wallets for different blockchains. You know, then which kind of cross blockchain protocol do you use? It gets complicated. And I think thing it's sort of like when e trading first started, like with e trade or or interactive brokers or these these early digital traders, people didn't really trust them, but they made it so easy. It became the norm for, for trading stocks. And I kind of think crypto is not going to be fully accepted by main street until it's easy. Like people ask me, should I have a wallet in a safety deposit box or on Coinbase? And I'd rather not keep all my holdings in a safety deposit box. What if you know, that's that feels more scary to me than keeping it with a trusted institution, to be honest. Yeah. I and I think the early adopters of crypto have a very different persona than than the mainstream, and we're we're we're definitely seeing that. That's something that that we honed in on and and was the thesis of, of of Wonderfy when when we started the company and and continues to be. It's that the early adopters are people that are, you know, engineers. They they they have, you know, trading experience. They, you know, they have that sort of background and interest to really get into the weeds and you use these multiple platforms, optimize, do all of these things that, that, that are that are more sort of advanced, mechanisms and and, and and opportunities. Mainstream users the first thing that we found when we started canvassing people that were interested in crypto but had never opened an account was that they don't care about 95% of the stuff that people in, like, really in the crypto space care about. It's, just just like you talked about with E*Trade. It's it's it's it's more just focused around, can I trust this, and is it simple enough for me to use it? If it's more than, you know, if it takes them more than 10, 15, 20 minutes to get onboarded or to understand what they're doing, like, your drop off of users is is astronomical. So it really comes down to being able to make it a simple experience and then also help people understand why they need to care about this. Like, what what's the reason to, you know, to to be using one of these platforms in the first place. So there's we there's still a lot of hurdles to overcome there. You know, again, that's where that's where Waterfy really fits in. But, I think what you'll see if you look at the market right now in terms of different platforms there, there's a very clear distinction between, platforms that are catering towards this advanced crypto trader and then platforms that are really trying to dumb it down and get more on the sort of mainstream knowledge and understanding so that they can bring more people into digital assets. Because the and and, you know, the last point I'll say about it is, I think there there is a big risk with digital assets with crypto that it becomes this insular asset class that only, people that have a a a certain amount of knowledge or experience can can access, and then that does away with the whole premise of what this has to offer, which is really democratizing finance. So that's a it's a huge point and and something that's really important to us. So so what what do you what do you guys see as as tipping points? And, like, as an example, I'll take the Internet again. People work uncomfortable putting their credit cards into the internet and up to 2 1,002,002, maybe even 2,003, I would hear people saying, you know, oh, this internet thing is a fad. You know, same types of things people say about crypto right now. Yeah. Well, you know, and, and I would say 2,005 the year, the, the, the web had a 1,000,000,000 users worldwide. That was kind of the tipping point or one of the tipping points where no one was saying, and this is a fad anymore. So what do you see as some of the tipping points for for not just Bitcoin, but but all of crypto? I'll give a couple, from my side, and I'm sure Kevin will have a couple. I do think getting to, you know, a milestone in terms of global users would would just just like you look at the the Internet, would will be significant. On the way to that, it's definitely regulation and compliance. I think when you talk to your average person about crypto that doesn't have any, you know, background, The first things that come up are fraud, money laundering, scams. You know, those are those are the types of, things that are sort of, you know, in the media, because, obviously, they get eyeballs and and there's obviously been some of that in the past. But what regulation solves and when the securities regulators get involved, Canada, US, UK, Australia, all these jurisdictions that, that, are in stable economies and and are are well respected, them laying the the groundwork and and framework for how to regulate digital assets and is really a big step in accepting these into the economy. And so that's that's a big step, and we're seeing that right now where WonderFi owns Bitbuy, which was the 1st licensed Canadian, crypto marketplace. Actually, the fur really the first in North America and the Canadian regulators, the Ontario Securities Commission has, you know, has a a very good reputation globally. So there's a lot of global regulators that are looking to what Canada has done to regulate and see how that's going to be able to follow suit. And and then, obviously, everybody's looking at the US, and I know Kevin will have thoughts on that as he's been involved, with with various parties in in those types of conversations. But as the US starts to indicate that they're gonna regulate and that this is this is crypto is here to stay. Everybody else across the globe is getting ready to, to follow suit. So so as that starts to happen, you're gonna start to see more acceptance, and and start to see, you know, usage continue to go up and become more diverse. So you're gonna see a lot more retail come into, come into the mix. So so, again, outside of regulation, I agree that's very important. Everybody wants to know what's safe. They're not gonna get ripped off, but that whole thing. What what's what's and and other than number of users, because I agree also that's gonna be a big tipping point. What would be a reason where a tipping point where now everybody says, oh, okay. I need some I need some crypto in my life, not just as an investment, but for x, y, and z. Like, what are some tipping points there that you guys see? I think it's gonna happen with payment systems. You know, the Zells and everything else that are being used now by banks are very, in my view, very inefficient, very slow, and very expensive. And when the regulation comes down on stablecoins, and it looks very simple, it looks like it's going to be no different than on money market for Fidelity or Schwab. They're slightly different, but they're regulated and FDIC insured. I think the same thing's gonna happen, because we saw this big blow up on LUNA, and, that's algorithmic. And everybody's figured out that doesn't work. And the one the only one that didn't break a buck, even Tether broke a buck, but the one backed by the US dollar, USDC, stayed right through the chaos at a buck. And so there's others that that also, are gonna be denominated by dollar. But if that if that becomes and and, you know, I we use that in our operating company's payment system. However, because it's not regulated, our compliance department only allows us to treat it as an equity. So that means we can only have 5% in it, which we do. And we have a corporate circle account, and we basically stake it on a rolling 30 days at today's contract is 4.2%. So instead of holding cash, which makes 45 basis points in an environment where inflation is 7 a half percent, at least we're making 4.2 rolling 30 day contracts on USDC, but not allowed to call it a money equivalent or a dollar equivalent yet. So when that becomes an equivalent, I would rather pay all of our operating costs and our employees. I've already asked them, would you take USDC? And they said yes. Because then I don't have to transfer you know, I've got people working for me in different countries. And if everybody's saying they'll take USDC, why do I have to f**k around with local banks in, you know, Zurich and in Boston, and they're such a pain in the a*s. Excuse my French, but it's the last time I transferred money, I spent 18 minutes as some person read disclosures to me for 18 minutes from a transfer from the US to Canada. What a waste of time. I wanna go 1 or 2 steps further. Like, let's take Canada as an example. Trudeau and and this is not a political statement, but Trudeau sees the bank assets of some some of the people involved in, like, this truckers protest, which I barely know anything about other than that. But it seems to me that things like that, and that particularly happens in many other countries with much more authoritarian regimes. Someone goes into your bank account and takes your assets. The first thing you think of is, how can I move my assets into something that can't be taken? And it seems like that potentially is a use case for for Bitcoin or other crypto. Yeah. No. I I I I get that, but that's not the big money. I mean, I you know, Trudeau's thing, actually, was only one account at the end of the day. I dug into that story, and I actually asked the bank to close the account. There was there was other reasons for it, but the brand damage he did to himself and the country was brutal. You're absolutely right. That was a huge mistake, but he does that quite often. Not that savvy at figuring out. You know? But but I actually think, not to get political, we'll be swapping him out soon. So that's okay. But, you know, at the at the end of the day, the the payment world the the FX market is multitrillion every week. And so that's the one where I you you asked what the tipping point is. The tipping point is when my employees tell me they'll take USDC in every country. That, to me, is a whole game changer. I mean and I I I'm happy to be compliant. Now you're right. There's always gonna be the rogue. I wanna have some, you know, some Bitcoin and decentralized wallet and my with passphrases on a key somewhere. I get all that. I get it. But I'm in the institutional world where the demand for this stuff is ever increasing, waiting for policy. So is it the demand for Bitcoin or for stablecoins? Because in a world of stablecoins, do you need Bitcoin as kind of, like, just a a currency to transfer from one to another, or or what's the role of of other Well, I I I had a conversation with the head of compliance at the FAB Bank, this this week, and also on that call was the head of compliance, for Bitbuy. And we talked to the bank for an hour, and what they said was their demand at their customer level is insatiable for Bitcoin, Ethereum, USDC, Polygon, and Solana. And why Bitcoin and Ethereum and Solana? And and I'm asking not because I'm doubtful of those investments. I think they're great investments. But are they doing it just to invest because they think it's the future, or do they need those funds? No. No. They're just doing it because their clients are asking for a 5% allocation in their investment accounts to crypto, and they only want to have and they're only going to give governance to large cart large market cap, highly liquid crypto assets. And those are the ones that they've chosen. So we you know, we're talking to them as a service provider, and they're saying, look. You've got the Canadian order. We know you're compliant. Do you have the software to support the transaction for us? And we're saying, yes. We'll design it. This is the kind of conversation we're having with banks. And the only reason they'll take the call from us is we're compliant, and we're operating under an order. They're not talking to anybody else because they it has to be compliant within the the framework of their government license. ADGM is the name of the governance there. And so, you know, we we're we're planning on going global with this, and we're we're talking to lots of countries. Ben can elaborate on the other ones, but this I'm talking as an investor. I'm not just interested in the Canadian market. I want more. I want I wanna be the largest compliant exchange business in the world. That's what I'm investing for. I want every geography I can get from the compliance side. Now that will you know, that we won't be as big as Binance, but they're not compliant. Right. No. But what what I'm asking is, why do all these investors want it other than as an investment? So so what is what is the demand outside of, hey. This is an asset class that's gonna go up? Well, it's it's guys like you telling people that they should have some money in crypto as just a diversified portfolio, and a lot of people are starting to believe that. I know. So but starting to believe that. So is it a perception thing, or or is there a real world you you mentioned one real world use cases as payment systems, and and that's important. And, again, there are the skeptics. Like, is is Bitcoin a valid currency? Is Bitcoin a valid store of value? But what's what's the tipping point where people see it as a store of value or as a currency? Like, why not use just stablecoins? I think when it gets regulated like, right now, Fidelity has got a whole bunch of people loading in Bitcoin into their 4 0 one k's in the in the US. They're allowing it. I know. Because because people view it as an investment class that could go up. But but I'm just trying to figure out why do they want Bitcoin. You mentioned that in a world of stablecoins, what do we need Bitcoin for? And that's what I'm I'm curious with the answer. You know, because they believe that Bitcoin is a long term store of value. You either do or you don't. So I'm I'm in the camp that says store of value, wanna have some, wanna go through the having with that. You know, the whole thing is I think this will be long term, a very good investment that will keep pace or even better than the s and p 500. So if I can, in the long run, over 10 years, make an average of 9, 10% a year, that'd be great. So I and I'm just one guy. There's lots and lots of people. But, you know, just learning how to buy some Bitcoin, just learning how to get a centralized wallet or a decentralized one is such a so hard that it's not ready for prime time yet. So, you know, we've gotta get make it easier and easier and easier. Now let let's take, for instance, Ethereum. So Ethereum is great as almost like a software platform for developing other crypto projects. But why do I and and again, I'm a big holder of Ethereum. I love Ethereum and many of the coins that have derived from it. But if I'm a skeptic, I'm asking, why do I really need this blockchain based decentralized focused software platform? Why can't I just use a centralized database and regular code to make the projects I wanna make? Why do I need Ethereum? Well, right now, Ethereum is still the number one way to pay, so it's gas. I don't particularly find it very attractive. It's too slow. But it'll get faster after Ethereum 2 point o, supposedly. Supposedly, it's gonna handle up to a 100,000 transactions. 4 years. You know, that's I don't think there's gonna be Ethereum 2.0. I think that that's that's the story du jour. Every year we hear about that. I think what'll happen is one of the other projects will surpass it or, you know, level 2, like a Polygon, will become more useful because you can aggregate transactions. Who knows? That's my whole point. I mean, if you're an investor, you gotta you gotta invest in a bunch of projects. Bitcoin is not a coin software. I keep telling everybody that. And so you might as well own, you know, Solana, helium, pollen, serum. I mean, I I own 32 positions, because I have no idea which one's gonna make it. But I I I don't need them all to make it. I need 2 or 3 of them, and it and I'll do very well. So that's sort of the investment thesis. No different than buying a an ETF with a 100 stocks in it. Same idea. No. I I I agree, and particularly as as it becomes more valid as a an asset cla*s. But in terms of valuing them, you're gonna value just like a company is valued on its real world use cases, not on whether it's gonna go up or down. What real world use cases do you see coming up in the next 1, 2, 3 years where everyone's gonna say, oh, yeah, I'm so glad they made this just like, I'm so glad they made Amazon. So then now I could buy things online and just have it delivered to my doorstep. What are what are the things that people are gonna say about crypto, you know, 5 years from now in terms of that? I I think what will have will happen is the authentication of real world assets in jewelry and in watches and collectibles. I mean, I I'm a very large watch collector. I'm working with a company in Switzerland, to produce NFTs of all of my watches so that I can be selective in which ones I insure. So I'm gonna save a lot of money in insurance by just simply telling Chubb all I wanna self insure all my watches except these 12 I'm traveling with. Here's the NFT on 12th to authenticate them. Here's the cities they're gonna be in. Quote me by the day. So Adresta is doing that out of Zurich, and they have the Chubb link already. It's all, you know, it's all chain based, and I'm gonna pay them to transfer the images and all the papers and everything into the into the NFTs. I want to do that because I'm gonna save a ton of money. And, plus, it's kinda cool to show everybody your watch collection on your phone in 3 d and, you know, with really high resolution rendering. So the that's a really use case. And so the same for jewelry. Once my wife saw that, she said, I want all my jewelry that way too. So, I mean, all of this stuff is coming. It's all chain based. And, you know do I need it to be chain based? Like, why can't I just use a centralized database and and say, look. This is Google says this is valid, so it's valid. Because there's no audit trail. I need to have a transparent audit trail, that can be looked at by the insurer and the owner and the watchmaker who's going to ask for a royalty to allow that brand to be put into a digital form, all of that. And you can't do that in a centralized database. And so, you know, there's a really use case. HBAR is being used by Boeing right now, supply chain management. It's a quasi, you know, half centralized, half half decentralized chain. Deloitte's looking at it. I mean, look. There's so many case studies of of of opportunity here, and we're I'd say we're in the 1st inning. I mean, in the case of what Ben is doing, he's focused on providing to consumers and businesses. I just opened up I don't know if you know this, Ben. I just opened up a, institutional account with Bitbuy and, went through the whole thing, and I'm transferring, as we speak, some of my AbEx and Algo and, you know, I'm gonna I'm gonna consolidate so that PwC, which is very happy with this, is saying, I want can I get a statement from those guys each month? So so there's a real use case. I'm using our own product because it's more compliant than these random wallets I have floating out all over the net, and I can now have, the the the auditor look at the chain every month without I don't give a s**t. I'm I'm happy that for them to see it. It cost me less money for them to do it this way. It's so I'm I'm every month, it's getting better. You know, and and what seem what it seems like you guys are are aiming towards with WonderFi is not only easy access to trading of crypto, but I personally am really excited about the tokenization of everything. So the the the aspect that everything could potentially be an asset cla*s. So, Ben, like, let's say you just graduated college and you tokenize 10% of your next 20 years, future earnings. So people could buy Ben coin. And the, you know, this helps you pay back your student loan debt and the Ben coin rises and falls as your career prospects rise and fall. And then using a defy exchange, I could potentially trade that for other unusual or, or, you know, non, you know, formal asset classes. So I see this as a potential tipping point when, once other things start to be tokenized and traded. Have you guys encountered that at all? Yeah. I think the tokenization of assets is definitely one of the longer tail big potential areas for for for blockchain and for crypto, so to speak. So I I I think areas like real estate, like collectibles, like Kevin's talked about watches, those are sort of more tangible and understandable for people. And this all comes back to the same problem that you talked about right at the start of our conversation, which is around people being able to understand and grasp the ideas. So the more we've seen you know, I've been in the crypto space for, you know, 6 6 years or or so and have definitely seen, surges in more advanced ideas and and, and and really, like, some of these types of synthetic assets and, and they while there's a lot of potential there, and I I I'm with you that there, you know, there there's a lot of room for growth. I think it's it's still very difficult for people to kind of wrap their heads around some of those more advanced, opportunities. So I think the more kind of concrete tangible things like real estate collectibles, those are the reason why we're seeing, tokenization of those assets be more successful than other things is because they're your average person can understand. Okay. I can own, you know, 11,000 1,000th of this, home and, you know, be able to provably show that, that I I own that, you know, on chain, in something that's not that cannot be manipulated and and do that in a trustless way. So I think there is there's definitely opportunity for that. But I do, I I I definitely think that the, you know, the the evolution is is really adoption of Bitcoin and and crypto assets, you know, first, that that that's gonna really kind of get like like Kevin said, having people just be able to try, you know, opening a wallet or opening an account and, you know, buying a little bit of Bitcoin, selling it, really kind of seeing what that actually means and what what that process looks like. That's sort of the, you know, gateway for people to get into, digital assets in a more, you know, in a more kind of involved way. I totally agree. And you guys are I'm hoping you succeed in being the the front window to all things crypto because that's what it basically needs. I don't wanna have 17 different wallets on all these weird exchanges with different regulatory issues. And, you know, potentially, another real world use case that gets into the common imagination is is NFTs. And now, Kevin, you were talking about, you know, collectibles and and your watch collection and NFTs around that. But I always think of NFTs as maybe, you know, it's not just a digital image or representing some collectible, but it provides access to something. So for instance, a ticket to a sports event could be an NFT. And then, you know, when you're buying from a scalper, whether this is real or not real ticket and, and, and the original issuer of the ticket, like a sports team could make royalties on every secondary tertiary sale. Do do you see where do you see NFTs coming in other than as digital collectibles? Like, do do you see that rising up as a potential, tipping point? I I think what's needed with NFTs that have utility is a ruling on whether they're commodities or securities because, right now, the most exchanges like FTX won't do them if unless the regulator I mean, if you have an NFT and it pays you a royalty, that sounds like a dividend to me. If it's an ape, I get it. You know, that's fine. It's just a piece of digital art. That's a commodity for sure. But that debate is ongoing and is being contemplated in the policy being, you know, put forward. And I don't think we're gonna get it till after the midterms, but it's discussed in the Lummis bill. And she's proposing that they are commodities, which is a good ruling if that happens. But you gotta have the ruling. So I don't see NFTs really getting big. Most of people screwing around that stuff are doing it on a rogue basis. And I don't think any companies will be doing NFT tickets until they get a ruling on it. I'm not the big guys, you know, like Live Nation or something. They won't do that. So everybody's waiting for compliance and policy and the potential. Meanwhile, the the technology is getting advanced. You know, it gets better and better each quarter. Better ideas come out. Unibail Holdings has just launched their nft.com site, and I think they've got $6,000,000 in the 1st day from all of these corporations that wanted to license NFT forward slash Nike, and if, you know, forward slash Procter and Gamble, that kind of thing. So they're just getting the infrastructure set up. And and, again, it reminds me of the the Internet. Like, nobody was really sure in the nineties how, for instance, ecommerce sales were gonna be taxed. And once the regulations, you know, were were fixed on that, ecommerce, of course, exploded. And what what do you see as a timeline for this tipping point to happen? I think 36 months, 3 years. It's not going away. I mean, you know, the executive order out of the president's office says, okay. Crypto's here to stay. Let's start putting policy on it. So we're we're at the we're at the beginning, so it's I think we're, you know, it's a really good time to be an investor. That's why I look at it. You know? And the and the other use cases, again, a a lot of countries where their citizens don't trust their own currency, not only do they need a store of value, they can't use gold. It's not like you can trans transport gold from Argentina to, you know, some other country. It's Yeah. But I I don't I think I don't think the gold market goes away. It just gets supplemented with crypto. You know? And I I just I happen to think Bitcoin will always be the granddaddy coin, and there's a lot of institutional interest in it as soon as it gets regulated. And the way you'll know it's regulated is when the US allows the first spot priced ETF, which Canada already has. So you can buy, you know, an equity. You can buy a Bitcoin ETF. You can buy Ethereum ETF. It's, same thing will happen in the US. And and with WonderFi, which by the way is public on various exchanges, public in Canada. Right? What's the exchange in Canada it's public on? The Neo. It's on the Neo exchange, which is not which is in in a transaction with the CBOE. So it'll be a much it's a very liquid market. Your goal essentially is to to provide this this platform where it really is one stop shopping. I could buy my crypto. I could create my NFTs or buy my NFTs. I have this window into the world, and I and I could trust it. It's not it's not gonna just disappear or collapse. Oh, it's more than that. It's one stop compliant shopping. So, you know, that's why I'm moving my AveX and Algo into my Bitbuy wallet so that I can be compliant with my Otter. Because we were each month, it was such a pain in the a*s. These are you know, to spread separate wallets out there. It was just a hassle. Total hassle. You guys are also doing stuff with gaming. What are you doing with gaming? So, Sam Venkman Fried, who's the founder, CEO of FTX, is a investor and and adviser to the company. And one of the things that Sam has has really focused on and and been outspoken about is bringing people into digital assets. There's there's really a couple of major on ramps. 1, the the the biggest one to date has been trading, which is, you know, that's what our business is. That's what FTX's business is. It's people coming into to buy and sell crypto. And, the second one, which he sees as potentially bringing in the next 1000000000 users into crypto is is play to earn gaming. So that's targeting people that aren't looking to trade, but they can earn, digital assets through playing games that they that they love and enjoy. And it's what that brings is a lower customer acquisition cost for those users, and it allows us to to give the users the ability to claim rewards that they earn, NFTs or other digital assets through their wallets. So through a Wunderfi wallet, through a Bitbuy wallet, and and then that sort of a, you know, a a very smooth segue into trading and other products. So it's really you know, the gaming side is, is focusing on high quality games that we can use to on ramp peep more more and more people into digital assets. And and the the whole ecosystem, you know, you can look at trading in in a silo, but it really ties in with with all of these other evolving parts of of the digital asset landscape. And so our view is the more we can create this simple, unified access to everything that people are are focused on within the space. You know, the more users we're gonna be able to retain, the better experience we're gonna be able to provide. And, and and that's that's really kind of the thesis behind this. And and the purpose of using crypto and play to earn gaming, why don't people just use dollars? Why don't they earn dollars in play to earn gaming? Is it because they wanna transfer digital assets from maybe one game to another, so it's it's interoperable? Yeah. Interoperability is a big one. There's, going back to payments, it it can be pretty inefficient for people to be using dollars in gaming versus digital assets. There's a bunch of advantages just from a efficiency, cost, transparency standpoint so that if a company goes under, for example, you don't lose all of your assets. They're, you know, verifiable, and you can only control those assets. So I think that autonomy is really important, especially for people in the gaming world. And any interoperability, like you said, is is a key one. So you can for example, you know, one of the things that we're doing is is partnering with a couple of providers that have these really vast, metaverses. So you can earn assets within a Wunderfy game, like, for example, a Kevin O'Leary character, and then you're able to actually go and take that, NFT character and take it into more of a metaverse game or or opportunity and and roam around and then go and play different games with it. So the interoperability is really interesting because it then expands the utility of for somebody outside of just that solo game. And so will you be operating some games or just kind of, providing the payment system so the currencies can go back and forth between the games? We're doing a little bit of both. So, definitely, the the focus is is around being the access point, sort of the the picks and shovels that goes back to our exchange business and providing the wallets. There are some good opportunities for building games and and also acquiring existing games that don't have the NFT and play to earn components. So that's that's kind of our launch, of of WonderFi Interactive is is with a game that we're acquiring, which is called Godzilla versus King Kong, and it's based on the the, the IP from Legendary Films. And it's a really it's actually a really fun game. It's it's in the, Apple and then Android stores, and you just basically go around, smash buildings, and your character grows bigger, and then you get to earn different, you know, new characters or pieces of equipment or things like that. And then when you do, you can claim them through your Wonderfly wallet. So that's a that's a very it's a great asset. It's a very high quality game, and, and it's also something that's really repeatable. So we can do that with all kinds of different IP. When do you think I'll be able to, like, log in to my Chase bank account and maybe see a a a white label wonder if I in there to manage all my crypto assets? Because I just want I just wanna deal with Chase. I think it could be within the next 18 to 24 months, and and I say that because there's a lot of banks that are looking very closely at digital assets and are, with us having these first licenses for crypto exchanges, we're getting a lot of, you know, interest, and banks really want to explore what they could do to really key demographic of Gen z and millennials that care about digital assets. Right? They're looking at money differently than than sort of their elders. The bank knows this is a key demographic, so they're trying to stay ahead of things. So I've I've had conversations with major, you know, banks in the US and in Canada. How can they offer a stable coin that generates interest for their customers without really saying, hey. This is Defy or this is a stable coin or whatever. Just making it really simple. Hey. This is a, you know, a high yield savings account. And then in the background, you you know, you've got a stable coin that's being lent out, or things like that. So banks are actively looking at that, and I think the quicker we can get more comfort around regulation and the more time you have as a regulated exchange. Because part of the the bank's risk profile is they wanna be able to see somebody's accountable, risk profile is acceptable, but they also wanna see that there's time that's elapsed, so nothing bad has happened. And so you need a a bit of lead time, but I I could see in the next 18 to 24 months for sure something like that happening. I think Wunderfy sounds great. So where can people find out more about Wunderfy? Where can they invest in it? How do they learn more? So our our website is wonder.fi, and that has, information about, the WonderFi app, bit by. We've got an investor relations section. As you mentioned, we're we're publicly traded. So, there's, you know, all of our investor deck and financials and and things like that there. And, that's the that's the best place to go, to to learn more about the company. And and we've got a lot of, yeah, a lot of great content online for people wanting to learn more about crypto, you know, sort of get educated and and really just kind of look to dip their toes in the water. So, I think that's probably the best starting point for people. Excellent. Well, alright, you guys. Thanks so much for for coming on the podcast, and and I really hope and it sounds like you're succeeding in your mission, which is gonna definitely bring, ease of use to to hopefully 100 of millions of users, which is I I believe is the most important part of this tipping point that's going to happen. Thank you. Thanks so much, James. Great conversation. The nation's favorite car buying site, Dundeele Motors, is home to the largest range of new and premium used cars from all of Ireland's trusted car dealerships. That's why you'll find Brady's Mercedes Benz on Dundeele. Visit the Brady's Mercedes Benz showroom on Dundeele to find your next car. Dundeele Motors, for confident car buying and deals to feel great about from all of Ireland's trusted car dealerships. Visitdundeel.ie today.
Comments