[SPEAKER_01]: Welcome to the Crypto 101 podcast presented by Gemini your bridge to the future of money All right everyone.
[SPEAKER_01]: We are joined by Jesse Kenudson.
[SPEAKER_01]: He is the head of operations at bit the next securities Jesse welcome and it's good to have you great.
[SPEAKER_00]: That's great beer.
[SPEAKER_00]: Thanks for having me
[SPEAKER_01]: Absolutely.
[SPEAKER_01]: We appreciate you coming on here.
[SPEAKER_01]: It's fun.
[SPEAKER_01]: I was talking to Jesse just before we began and I was like, We're coming in from because I'm waking up at the time of of making this and it's it's morning times like 8 a.m. Over here and he's like, yeah, I'm getting ready to wind down.
[SPEAKER_01]: It's 10 p.m. over and there.
[SPEAKER_01]: So we really do appreciate you coming on.
[SPEAKER_01]: Let me promise it.
[SPEAKER_01]: Yeah, opposite hours man.
[SPEAKER_01]: All the way from Taiwan, right?
[SPEAKER_00]: Yeah, yeah, yeah, I've actually been in Taiwan now longer than I was ever in Canada.
[SPEAKER_00]: So I'm Canadian, I've been in Taiwan 25 years, so more than half my life, which is pretty cereal.
[SPEAKER_01]: Uh, what's keeping you over there, is it like the weather, the community, or the crypto freedom?
[SPEAKER_00]: Well, the wife, the kids, the dogs, the house.
[SPEAKER_01]: That'll do it.
[SPEAKER_00]: That's what it is now.
[SPEAKER_00]: Originally, I was too, when I graduated from university, it was to learn Chinese, so that was a long time ago and turned out to be pretty good advice from a professor that I had at the time.
[SPEAKER_01]: Yeah, wow, man.
[SPEAKER_01]: Well, that's awesome.
[SPEAKER_01]: Those are all really good reasons, too.
[SPEAKER_01]: And from what I've heard, it's a beautiful place to live.
[SPEAKER_01]: But, you know, nonetheless, we appreciate you hopping on with your later at night.
[SPEAKER_01]: For people who don't know, Jesse has a big background that comes to not only crypto and obviously playing a role in one of the, like, oldest, most popular names in crypto and being part of, arguably one of the largest ecosystems.
[SPEAKER_01]: which is kind of like the parent company to bit the next securities and bit the next the exchange and tether and all these other critical parts of the crypto ecosystem.
[SPEAKER_01]: And so it's cool because I think we get a view from a couple different perspectives given your background, but you know, just give us an intro, give us an intro to yourself and walk out you started and what brought you into crypto in the first place and we'll move from there.
[SPEAKER_00]: Yeah, I mean, my background, as you said, is in traditional finance.
[SPEAKER_00]: So I came over to Taiwan initially to learn Chinese as we said at the beginning on a recommendation from a professor.
[SPEAKER_00]: Did that end up working on both sides of the straight, so in China for a bit, studied in China in Taiwan?
[SPEAKER_00]: Kind of.
[SPEAKER_00]: found my way fell into investment banking, actually.
[SPEAKER_00]: So they needed people that could speak Chinese, they could talk to companies, and then also could talk to clients that were mostly overseas.
[SPEAKER_00]: So I worked for Barclays in sales and trading, and then later worked at Macquarie, was head of ECM from Macquarie here in Taiwan.
[SPEAKER_00]: And during that period, got into, got interested in big coins.
[SPEAKER_00]: So I guess a lot of it was around the fallout from the financial crisis and talking to clients, talking to co-workers and just constantly trying to figure out, you know what?
[SPEAKER_00]: How does this not continue to, how does this not end in tears eventually?
[SPEAKER_00]: It didn't feel like any of the problems that the blue-up during the financial crisis were actually solved.
[SPEAKER_00]: And so we were always kind of looking around for different assets and different interesting things that could kind of fit into that puzzle.
[SPEAKER_00]: And we just stumbled across Bitcoin.
[SPEAKER_00]: And I was lucky to have another coworker at McCquarie at the time.
[SPEAKER_00]: We are at Barclays at the time in a guy at JP Morgan.
[SPEAKER_00]: and we kind of dug into it together and began to learn about Bitcoin and understand it.
[SPEAKER_00]: And then eventually began to be the Bitcoin guy within the bank and pushing all of these ideas and doing different things.
[SPEAKER_00]: And through that I was able to kind of leverage the bank's name and meet a lot of people.
[SPEAKER_00]: You know, in 2016 or 17, we did a conference in Hong Kong in the Macquarie office.
[SPEAKER_00]: JP Morgan was doing blockchain, not Bitcoin, and we did Bitcoin, not blockchain.
[SPEAKER_00]: And we had, we had Adam back, we had the CEO of Tether and Bitfinex at the time, JL.
[SPEAKER_00]: We had a ton of people that were like really big names in the industry and came by and spoke to, you know, a closed door meeting of maybe 70 institutional investors.
[SPEAKER_00]: do a bunch of stuff like that.
[SPEAKER_00]: We made the first investment into a Bitcoin mining company, I think, by a Western bank in 2018.
[SPEAKER_00]: But after the market kind of peaked, it was clear that the appetite within the firm to do anything else in Bitcoin was just not there anymore.
[SPEAKER_00]: So I decided to jump into the industry.
[SPEAKER_00]: I found my way over to Blockstream.
[SPEAKER_00]: I was friends with Samson Mow.
[SPEAKER_00]: He introduced me to Adam, who had also added that conference previously.
[SPEAKER_00]: And joined there as VP of financial products.
[SPEAKER_00]: And we started putting together different products, built on Bitcoin and backed by Bitcoin and Bitcoin mining.
[SPEAKER_00]: The first of which was the Blockstream mining note.
[SPEAKER_00]: And then eventually found my way over to a bit for next securities.
[SPEAKER_01]: And it's funny, especially that J.P. Morgan story because they've come full circle with that Jamie Diamond interview a couple of weeks back where he's like, I was wrong, it's here to stay, it's real.
[SPEAKER_01]: And we had this kind of like aha moment where it's like even Jamie Diamond, who's been one of the biggest bears like even he's come around.
[SPEAKER_01]: And I'm sure you've seen a lot more of this.
[SPEAKER_01]: We've talked to a lot of these people.
[SPEAKER_01]: They weren't as interested, fast forward to the end of 2025 now.
[SPEAKER_01]: And it does kind of feel like they've come full circle
[SPEAKER_00]: Yeah, I think 100%, I mean, in those previous cycles, like, you know, 2017, those were kind of scary times around the Bitcoin fork and all of that because it did feel quite existential to Bitcoin and when Bitcoin rolled over hard in 2017, you know, people were still saying, you know, it's going to go to zero, it's over.
[SPEAKER_00]: Fast forward to 2021 and then, you know, since then, nobody says that Bitcoin is going to go to zero anymore.
[SPEAKER_00]: You just, you just, you don't hear that.
[SPEAKER_00]: So I think, I think, I think things have really changed a lot.
[SPEAKER_00]: And then on the security tokenization side, you know, we've been, bit for next securities.
[SPEAKER_00]: We've been in this business since 2021.
[SPEAKER_00]: We first got our license.
[SPEAKER_00]: And even then when we spoke to our regulator and we're kind of pitching the business, I think they like the idea, but they were somewhat skeptical.
[SPEAKER_00]: You know, they thought it was an interesting idea.
[SPEAKER_00]: And I was over recently in a static Kazakhstan, we're one of the jurisdictions where we're regulated.
[SPEAKER_00]: And the regulators are very happy that they now have a global leader in security token frameworks.
[SPEAKER_00]: So everything has changed a lot.
[SPEAKER_00]: And I think a lot of it is traditional finance has really kind of consensus has really caught up to this view that we had a couple of years ago.
[SPEAKER_01]: Absolutely, and I want to get into all of that and talk more about that.
[SPEAKER_01]: But let's first go through Bitfinex Securities because we have a global audience.
[SPEAKER_01]: We've had probably a handful of our users go through and use the Bitfinex Exchange.
[SPEAKER_01]: We've had a lot of our users probably interact with Tether at one point or another.
[SPEAKER_01]: But we're here to talk about Bitfinex Securities here.
[SPEAKER_01]: So give us the high level overview and how it fits into the whole iPhone X ecosystem.
[SPEAKER_00]: Yeah, Bitfinex Securities is the RWA and STO platform within the Tether and Bitfinex group of companies.
[SPEAKER_00]: And we do kind of two core businesses.
[SPEAKER_00]: We do primary offerings, and we offer secondary market trading.
[SPEAKER_00]: So our whole kind of very high level idea is to put investors and issuers in much more direct contact to kind of take out all of the middlemen and let them interact a lot more directly, efficiently, and faster and cheaper.
[SPEAKER_00]: And then kind of along that weather last year also announced the tokenization business haydron.
[SPEAKER_00]: So there are default for actually doing tokenization and for working with issuers to let the issuers manage their own tokens.
[SPEAKER_00]: Once those tokens are created, they come onto bitfinex securities and then we can do capital races and open up secondary markets for people.
[SPEAKER_01]: Yeah, I mean, tokenization has exploded.
[SPEAKER_01]: And it feels like every other interview we have, we have a guest from all over the industry saying, like, you gotta pay attention to tokenization.
[SPEAKER_01]: And, you know, obviously you have Larry, think talking about it and diamond and you have Vlad Tenet from Robin Hood and you have all these other big guys who are from the Tried Fight side.
[SPEAKER_01]: And they're all like, yeah, I mean, we think this is the future and we wanna get plugged into it.
[SPEAKER_01]: What do you think are the most impactful or important parts of tokenization to watch out for?
[SPEAKER_00]: Yeah, I think it's a no-brainer, really, I mean, and I think that this is definitely the way that markets move eventually.
[SPEAKER_00]: I think it's probably somewhat inevitable.
[SPEAKER_00]: You know, if you look at the benefits of tokenization for investors or for traders, for big guys, I think it's things like real-time settlement, you know, and 24, 7, 3, 65 trading.
[SPEAKER_00]: You know, my whole finance career was here in Taiwan.
[SPEAKER_00]: If you sell your TSMC on Friday, it's T-plus two settlements.
[SPEAKER_00]: So you don't get your cash until the following week, right?
[SPEAKER_00]: So if you're a hedge fund, you want to get your funds as soon as possible.
[SPEAKER_00]: If it's real-time settlement, that's great.
[SPEAKER_00]: Then you can go back and share it again.
[SPEAKER_00]: And part of the reason we've seen this with Bitcoin recently, people dump Bitcoin on Saturday because that's what they can sell, right?
[SPEAKER_00]: But I'm sure people would prefer to sell the stuff where there's actually news.
[SPEAKER_00]: So if it's, you know, whatever, it's something about, you know, China, the supply chain, they want to sell their Apple stock.
[SPEAKER_00]: They'd much rather do to trade that more directly.
[SPEAKER_00]: So I think those are the benefits.
[SPEAKER_00]: So probably pulling the big guys over time for investors.
[SPEAKER_00]: I think it's regaining more control over your assets, right?
[SPEAKER_00]: And I think this is one of the ways that we differentiate what we're doing with what a lot of the kind of the, the, the, the, the, the triadfight players are doing.
[SPEAKER_00]: You know, there's a lot of smoke and mirrors out there.
[SPEAKER_00]: I think there's a lot of token tokenization.
[SPEAKER_00]: I think one of the important things is that investors are able to take their assets off the platform.
[SPEAKER_00]: They're able to self-cast into that.
[SPEAKER_00]: You're able to trade a peer to peer, ping it to other platforms for arbitrage.
[SPEAKER_00]: I think these are all the benefits for investors and giving people more control over their assets.
[SPEAKER_00]: And then I think also inclusions a huge part of it, right?
[SPEAKER_00]: So for people, like a lot of your audience in North America, they have no problem getting access to U.S. public equities or stuff like that.
[SPEAKER_00]: Some parts of the world struggle, so I think, you know, just as tether was very, very successful by bringing a better alternative to a lot of emerging markets.
[SPEAKER_00]: You know, countries, small and mid-sized countries outside of the G7, I think that could be one of the big drivers for security tokens as well as that people just don't have access to higher quality investment products.
[SPEAKER_00]: And those jurisdictions, they also really are really hungry for capital like the banks just don't lend.
[SPEAKER_00]: And that has knock on effects throughout their whole economy.
[SPEAKER_00]: So I think that's kind of some of the interesting applications for going forward.
[SPEAKER_01]: Yeah, do you think that tokenization has like a different role depending on maybe where you are in the world?
[SPEAKER_01]: Is it kind of seems like that's the case?
[SPEAKER_01]: And I guess that makes sense, right?
[SPEAKER_01]: You know, there's all sorts of different needs depending upon where you're are, but it kind of sounds like that's what we're getting towards.
[SPEAKER_00]: Yeah, 100%.
[SPEAKER_00]: I think you've got like these different jurisdictions, right?
[SPEAKER_00]: So we're licensed in two kind of, you know, what people in traditional finance would say are like peripheral jurisdictions.
[SPEAKER_00]: We're in the AIFC, which is a financial center and a static Kazakhstan in Central Asia.
[SPEAKER_00]: And then we're, we have the first license in El Salvador.
[SPEAKER_00]: We have license 001, which is pretty cool.
[SPEAKER_00]: What both of those jurisdictions have in common is that they've got pretty smart leadership.
[SPEAKER_00]: The policy makers are familiar with the technology, the familiar with Bitcoin and Kazakhstan.
[SPEAKER_00]: You know, that was a huge mining hub for a number of years, right?
[SPEAKER_00]: They were I think number two or three for global hash rate.
[SPEAKER_00]: So people there saw, saw Bitcoin become very big, mining become very big, become a creative to the economy.
[SPEAKER_00]: So they didn't have those worries about like what if Bitcoin goes to zero that that kind of wasn't they're thinking on it and then of course El Salvador is a very very unique situation with a very young president who's got kind of a real view on how to how to how to pull his country out of the the troubles of the past.
[SPEAKER_00]: So they've got vision and they've got understanding of the technology which I think is pretty different than a lot of the G7 countries and then also they don't have capital markets so the capital markets and both of those jurisdictions are are not strong it's a really small percentage of GDP.
[SPEAKER_00]: So you don't get that push back from the really deeply entrenched incumbents that you get in most of the G7.
[SPEAKER_00]: So I think it is really different and then what's happened is that you get much more flexible jurisdictions and you get these kind of commercially viable, commercially viable regulatory oversight.
[SPEAKER_00]: So you can actually grow a business and get big and hopefully eventually become a creative to the economy.
[SPEAKER_01]: Yeah, you know, I'm interested to learn a little bit more about like how the corporate world in the rest, like, I mean, how do I say, like, what is the, the corporate structure from the rest of the world outside of the US kind of look at crypto like how do they look at it, what do they think of it because all the times over here, you know, obviously I'm from the US a lot of our teams from the US.
[SPEAKER_01]: we talked to a lot of people and they're like oh they're always trying to talk about how this effects or impacts or relates to the US market and I think you have a little bit more of like a decentralized review because you talked to a
[SPEAKER_01]: companies and countries from all over the world, especially on the other side of the planet from us.
[SPEAKER_01]: Like, what are their views?
[SPEAKER_01]: Do you think it kind of aligns with a lot of the stuff that we've heard from the US and the traditional financial side over here?
[SPEAKER_01]: Are they looking at different things, the same things?
[SPEAKER_01]: You know, what is the big in the smart money across the planet looking at?
[SPEAKER_01]: Is it relates to all this?
[SPEAKER_00]: Yeah, it's an interesting question.
[SPEAKER_00]: And I think there's been this kind of diversions in Bitcoin and crypto markets for a long time, right, for maybe most of the past decade.
[SPEAKER_00]: And that, you know, it's easy.
[SPEAKER_00]: We have a plethora of investment options if we're in Western most Western countries and also payment options, right?
[SPEAKER_00]: Like payments are not a problem.
[SPEAKER_00]: So we don't really need Bitcoin or Ted.
[SPEAKER_00]: They're probably in a lot of these markets, right?
[SPEAKER_00]: You can get by just fine without it.
[SPEAKER_00]: I think the approach from the rest of the world is extremely practical.
[SPEAKER_00]: You know, I guess maybe you don't get so much pushback on Tether now, but maybe, you know, five or six years ago there was quite a bit and most of it was from the English speaking world, you know, in Asia and especially in Chinese speaking Asia, Tether has been huge for a long time right.
[SPEAKER_00]: And that's because it's a very effective tool because people, to them, it's just a tool.
[SPEAKER_00]: They could just move assets around really quickly, really freely and with, you know, little hassle.
[SPEAKER_00]: And I think security tokens are the same thing.
[SPEAKER_00]: It's, you know, people are struggling to access capital, whether you're in Central Asia, or you're in Latin America, you want to start a business, the banks aren't lending.
[SPEAKER_00]: You know, Bitfinex security says they can put you in touch with investors, so they don't really care too much about the tokenization part.
[SPEAKER_00]: They just care that you can help them raise capital and I think investors are a little bit the same to investors look at the economics and they didn't you match those two together, you can, you know, you can earn a higher yield on some of these, you know, like the microbock financing bonds that we have on the platform.
[SPEAKER_00]: You know, those are the kind of things I think investors look at the commercials and some of these kind of niche assets and and that's what draws them to it.
[SPEAKER_01]: Yeah, I mean, so looking on the horizon, what do you think the most interesting thing is?
[SPEAKER_01]: Like, there's all these different catalysts.
[SPEAKER_01]: Like, everyone believes that there's gonna be a different catalyst that'll kind of cause us to have big, like, zap or effect on price or adoption or all these other things.
[SPEAKER_01]: From your view, what do you think that those biggest catalysts that are kind of yet to happen are?
[SPEAKER_01]: Because it would seem as if we're still in a lot of the build out phase, where a lot of these companies and countries and groups and banks and all these different people, they're like, hey, we're interested in this.
[SPEAKER_01]: We want to build towards this.
[SPEAKER_01]: And there's all these different ideas, but what do you think the most interesting catalysts that are yet to come?
[SPEAKER_00]: Yeah, I think part of this is just a grind, right?
[SPEAKER_00]: That is just a trend, and it's just showing up and doing the work every day.
[SPEAKER_00]: And I think it'll happen over time.
[SPEAKER_00]: Number one, because of what I said, that I think the significant technological advantages to what our product is, that I think investors will just pull them in eventually.
[SPEAKER_00]: The other part of it is the same argument and favor of Bitcoin as a demographic argument, right?
[SPEAKER_00]: as you know millennials and post millennials get older, they get more senior in their positions, they have more money, they'll just be more familiar with this technology and it's not as scary and that's kind of what they'll expect.
[SPEAKER_00]: If you're used to trading Bitcoin on Bitfinex and then you go and trade on the NASDAQ or something and you've got fixed trading hours and T plus 2 and whatever it is, the other restrictions and a myriad of intermediaries.
[SPEAKER_00]: It's just like a substrate user experience, right?
[SPEAKER_00]: So people have a higher benchmark.
[SPEAKER_00]: I think in a little bit more knowledge about what's up there.
[SPEAKER_00]: So I think part of this is just a trend that's going to play out over time.
[SPEAKER_00]: And is just going to slowly pull these two spheres, the digital asset world and the conventional securities world.
[SPEAKER_00]: That for most of the last 10 years have really been separate, is going to pull them closer together.
[SPEAKER_00]: I think in a lot of ways, they're already very overlapped.
[SPEAKER_00]: But think you're right like they're definitely will be like quantum leaps and exciting products that come to market, you know, I'd like to see more of the companies within the Bitcoin and the crypto space that are private.
[SPEAKER_00]: There's a lot of giant private companies.
[SPEAKER_00]: I'd like to see them do offerings rather than going to the NASDAQ.
[SPEAKER_00]: I'd like to see more of that.
[SPEAKER_00]: I think that would be exciting.
[SPEAKER_00]: The other thing that I'm looking forward to is
[SPEAKER_00]: You know, we used to do a lot of depository receipts in Asia.
[SPEAKER_00]: So if you're a big Asian public company like your TSMC or your FoxCon or whatever it is, you issue shares into the U.S. as a depository receipt so that you can get American investors to invest.
[SPEAKER_00]: I think that tokenization can fill that niche as well, but fill it better and more broadly because you can go deeper into more jurisdictions and to more kinds of investors.
[SPEAKER_00]: So I think another exciting thing is, you know, when publicly big publicly listed companies start looking to tokenization to kind of fill that niche and to issue tokens alongside their conventional equity, I think that'll be really exciting and we're probably not very far away from it.
[SPEAKER_01]: Yeah, and to a point that you said earlier, it really doesn't seem like anyone makes this argument any more of like, oh crypto could just be a dud it could all go away could all go to zero it's like no one's really making that anymore and it seems like the idea of that has kind of been tossed out the window because.
[SPEAKER_01]: They all believe like this stuff's here to stay until point that you just made like this is stuff that takes a little bit of time I think people in crypto are used to moving super fast and an extremely volatile manner.
[SPEAKER_01]: They have one things to happen overnight and like obviously we all want that
[SPEAKER_01]: But I think in the real world, things do take a little bit more time than I think a lot of crypto investors probably expect it to take it always takes more time than whatever is expected.
[SPEAKER_01]: And I think the same goes for a lot of this.
[SPEAKER_01]: It's like we're seeing all the right things.
[SPEAKER_01]: We're seeing the build out and the infrastructure and the adoption and especially when it comes to tokenization, however, this isn't something that's going to be all said and done and
[SPEAKER_00]: Yeah, I think it's going to play out for decades, right?
[SPEAKER_00]: And I think you're going to have conventional securities markets, operating in tandem with tokenized markets.
[SPEAKER_00]: So it's going to be more interaction.
[SPEAKER_00]: I think eventually the tokenized ones win.
[SPEAKER_00]: You know, I'm not sure which jurisdiction is going to win.
[SPEAKER_00]: I kind of think that the...
[SPEAKER_00]: In most of our competitors are focused on Europe, are focused on the US.
[SPEAKER_00]: We're kind of taking the Tether Playbook and we're focusing on the rest of the world.
[SPEAKER_00]: And I think that that's where tokenization can really get a foothold and you can make a difference because the regulators really want you to be there and there's a really deep need for tokenization in these markets.
[SPEAKER_00]: I think eventually what will see happen is, similar to, it's kind of like the whole world as the US is sandbox.
[SPEAKER_00]: You know, that Tether got big globally and then they look for a way to incorporate it.
[SPEAKER_00]: And I think the same thing could happen with security tokenization where, you know, because you have so much legacy pushback within the U.S. because it's such a big market that it's slower to develop in the U.S. and then, you know, it gets brought in when it becomes a really successful proof of concept outside the U.S.
[SPEAKER_01]: Yeah, absolutely.
[SPEAKER_01]: And if everything does pop off, then you all get market share for the whole rest of the world outside the US.
[SPEAKER_00]: And you'll have us, you need a market, right?
[SPEAKER_00]: Yeah.
[SPEAKER_01]: Yeah.
[SPEAKER_01]: Absolutely.
[SPEAKER_01]: Well, Jesse, we appreciate you coming on.
[SPEAKER_01]: If people want to get plugged in, they want to follow what you're doing in Bitfinex Security is and everything.
[SPEAKER_01]: Where can they follow you at?
[SPEAKER_00]: Yeah, look for Bitfinex Security's on Twitter.
[SPEAKER_00]: Come check out the platform.
[SPEAKER_00]: Yeah, all our information is up there.
[SPEAKER_01]: Perfect.
[SPEAKER_01]: Well, Jesse, once again, thank you for joining us and you'll have the keepers posted because like you said, this is the long game.
[SPEAKER_00]: Yep, look forward to speaking with you again.