Maurice:

Hello everybody and welcome to the latest edition of C&F Speaks. This is a series of video interviews in which we interview speakers at some of our forthcoming events, and today it's my great pleasure to be interviewing Katie Koller who's Head of Custody Products at Ripple. Katie's going to be speaking at our Tokenisation and Digital Assets Summit which is taking place as part of City Week at Guildhall on the 21st of May. Katie, welcome.

Thank you very much for inviting me.

Very nice to have you with us.

Maurice:

Let's start if we may by asking you to tell us a little bit more about Ripple. I mean it's quite a well-known name now, but can you tell us about the company's mission and what it is you're seeking to achieve?

With pleasure, thank you.

Ripple is a leader in enterprise blockchain, and crypto solutions and I think that's also what it's mostly known for and we are transforming how the world moves, manages, tokenises and stores value. And since the beginning we always focused on how enterprises can take advantage of blockchain and crypto in general, and we started off with cross-border payments.

We built a global cross-border payments network which is called Ripple Payments and that has brought us millions of transactions worth billions of dollars, and we work with financial institutions to address the pain points with the vast cross-border payments markets which today operates mostly very slow, expensive and is very error prone. And in recent years we've moved beyond payments to offer additional crypto native services such as custody technology and also we help developers, of course, build on the XRP ledger.

Maurice:

Fantastic, so in terms of digital asset custody, I'm quite familiar with traditional custody. How does it differ in the crypto world, digital asset world?

Yeah that's an interesting one, and I think to talk about the custody differences it's also interesting to first look at what's the differences between the assets themselves.

Digital assets, how they differ from traditional assets and with cryptographic keys which are required to access and move the digital assets they actually represent the assets themselves so safekeeping these assets is what we actually mean when we talk about digital asset custody. And thinking about the differences another crucial difference is that when you have blockchain transactions they're immutable once they are concluded and immediately executed once they hit the blockchain. So, transactions cannot be reversed once they are on the blockchain and what this means compared to traditional custody is, you have to think about your checks and balances, which in today's world are performed between triggering a transaction and its actual execution, and you have to think about this time period and what you normally do within, that before you actually trigger a transaction. Or simplified, you just have to make sure that once you trigger a transaction it's really the right one and everything is correct so it can straight away be executed.

So there's no reversing it it's immutable once it's been executed?

Yes absolutely, so the, this idea in the traditional world where you have reversals or you can roll back things, this doesn't really exist in the blockchain world but you have to think about then countermeasures or what happens when you really want to make sure that everything is correct which hits the blockchain.

Yeah, I can see that.

Maurice:

So, due to the increasing institutional adoption of digital assets, the digital custody market is becoming quite saturated most commentators saying, so how can Ripple step ahead in this particular race?

Well I see it probably a bit differently, I don't think the market is saturated at all. I do think the crypto market opportunity is quite large and even growing bigger as we speak, because major global institutional players are still leaning into crypto and developing quite heavily on it. Especially thinking about fundamental infrastructure services like custody payments or also tokenisation. The amount of crypto assets custodied is expected to reach about 10 trillion by 2030, or if you think about it differently for example, Northern Trust and HSBC anticipated that up to 10 percent of all financial assets will be tokenised by 2030. Most of this adoption will actually be driven by institutional players and they will need a place to safely store and manage or orchestrate assets, and they need technologies for that. And through custody through the custody technology offering of Ripple, we will be able to provide those customers a tech stack where they can build on to actually bring their services then to market. And Ripple is quite well positioned as it is the leading enterprise solution provider in the space, with a very strong crypto DNA but with also this very strong history of building with institutional players in the market.

So, with their increasing adoption you think it is going to go sky high in terms of capacity and demand for your services. So, a good market very good market to be in, I guess.

Maurice:

What are the other specific use cases your clients are using to when they use your custody product?

Yeah, in terms of use cases it is interesting because again there you see a different a vast range of different use cases on the one hand side of course everything related to cryptocurrency use cases when you think about exchanges, trading, also custodising by custodians, or also just banks offering us as retail customers the possibility to do anything with cryptocurrencies is still evolving.

But then on the other side, we see a plethora of different assets being tokenised, when we think about traditional financial instruments like bonds or equity shares, structured notes but also real-world assets like actual luxury goods physical goods. Which are tokenized or also completely new innovative business models which are invented when you think about new FinTech’s or crypto native companies. And the reason for that is really that the digitization of assets and processes can give you efficiency gains and can help you reduce your costs, which for certain asset classes even makes it easier, available to a broader investor base, which makes it attractive then for different companies as well to provide such services.

When you talk about, sort of, new areas for tokenisation you're getting outside traditional financial markets, where is the next sector is that, is that going to be real estate one or is there another sector you think that's most likely to be the next one?

Without a crystal ball it's a bit difficult, but I think-

We need to look in your crystal ball!

Haha, I’m not sure I have it handy right now. I do think we will, what we are seeing at the moment is much more in the traditional financial space, also thinking about larger companies like BlackRock, Fidelity and Goldman Sachs getting into the space. It's, a lot of it is driven by digitisation and tokenisation of financial products and reinventing existing value chains, where we do see it in the western market at the moment.

Yeah, I know those are huge markets, aren't they.

Maurice:

Looking towards the future how do you think that the digital market will evolve, and what are the likely challenges to this growth that you foresee?

Yeah, I think there are there are two very interesting trends or very interesting developments which we see already for a while, on the one hand side of course stable coins are absolutely required to enable many use cases. To be able to transact not only against traditional fiat rails, but to actually have the whole processing on chain but the second piece is also that regulation is evolving around the globe, giving us much more clarity and guardrails, creating a more secure environment for everyone for service providers as well as service consumers.

And we have and we still believe always believe that for crypto and blockchain to become an integral into our global financial infrastructure, you absolutely need to build with regulation and within the compliance, and not around them and therefore I think that is one of the most important topics which currently we can look at.

One final question if I may, in terms of regulation, do you think that there's going to be global regulation or are you going to have to operate in national markets you know the approach here in the UK, the FCA and so on, versus the approach in Europe and the approach in the US. Do you think you'll simply have to operate allowing for the fact there are different systems in different countries, or do you think there will be a trend towards a more joined up convergent approach to regulation?

I think we would all love to see that. I think it is a very long-term goal. If we also think about traditional markets it took a very long time to have standards across different markets, even nowadays it's not fully harmonised, and thinking about the digital asset regulation, I think we first have or first we will see in the different countries emerging regulation before we can think about harmonising it again.

Yeah, and I’m sure that's absolutely right.

Well sadly our time has run out, Katie, so for our viewers just to let you know that if you wish to hear more about these issues and related ones please do attend the Tokenisation and Digital Assets Leaders’ Summit which is taking place as part of City Week at the Guildhall, London on 21st of May. More information is available on our website www.cityweekuk.com.

Katie, thank you so much for joining us today.

Thanks very much for having me.