Maurice:

Hello, everybody. Welcome to C&F Talks. In today's edition, I am interviewing Sam Mudie, who's the Founder and CEO of Savea. Sam's going to be speaking at the Digital Assets Innovation Summit, which is being held as part of City Week on the 2nd of July at the Royal Garden Hotel, in London. Sam, welcome.

Good morning, thank you for having me.

Great to have you with us.

Now, tokenisation is often talked about as a game changer, but real use cases are still emerging. How is Savea applying tokenisation in a way that delivers tangible value to users and businesses?

As with most innovative technology, the early days are filled with solutions to problems that don't really exist. A lot of entrepreneurs jumping on the hype because they know that it's something without maybe quite knowing what it is yet. Private market securities are a major use case so far.

Private equity, VC, debt markets, notoriously inaccessible and illiquid. So, tokenisation in simple terms allows for fractionalisation, faster settlement, and broader investor access. We've applied tokenisation to where these inefficiencies, access, scalability, liquidity, are greatest.

So, luxury or passion assets, wine, watches, whiskey, fine art, classic cars, all the fun stuff. These are an incredible use case for this. Traditionally, these markets are the preserve of a few, but they're massively opened up. Larger, more efficient market through a thorough or well-developed tokenisation process.

Very interesting. By the sound of it, the applications are huge, the potential applications.

Now, you recently closed a successful fundraiser and many congratulations on that. What does this funding enable Savea to do in terms of growth, product development, or market expansion?

Well, firstly, thank you. It's a huge, very long process.

Our product was actually ready to launch a year and a half ago. But when we started Savea three years ago, we decided quite early on that we were going to be maybe different to the rest of the crypto or the blockchain sector and not only seek regulation but aim to be part of the conversation and aim to shape it around us. So, the last year and a half have been really deep in the regulatory process across Singapore, Dubai, Jersey, the UK, over the EU. So, we've had some pretty huge, huge legal and regulatory innovation.

And with that comes massive cost. So, our most recent funding has really enabled us to go down that route. It will next permit us to go to market, which should be in the next several weeks and onboard our first users.

Fantastic, exciting times.

There's growing interest in tokenised assets from real estate to loyalty and digital identity. What specific problem is Savea solving with tokenisation? And how is your approach different from others in this space?

Okay, so Larry Fink of BlackRock, not that long ago, maybe only three years ago, four years ago, was very anti-anything crypto blockchain and has done a huge U-turn. And last year quite famously was making comments like Bitcoin is the future digital gold. Any asset can be tokenised.

This is a really important thing to pick up on. Just because any asset can be tokenised does not mean that it should be. I've seen a huge amount of tokenisation projects, tokenising something just because it can be without actually really understanding what the user wants or needs, what the challenges are that it's potentially solving and missing what the opportunity is.

So firstly, there needs to be a proper problem that it's solving. Secondly, most projects I've seen so far, particularly with the tokenisation of physical real-world assets. So, you mentioned real estate.

Obviously, my background is in wine investment. So, let's think physical assets. Most projects just mint a token and then claim that it represents ownership of a physical asset, which is 99% of the time, not the case.

There's no legal recognition. There's no legal link between these two assets. All they've done is create a duplicate, which means that one person can do two separate things with these assets. So, it's certainly not institutional grade. It's not scalable. It's a really underdeveloped product and project.

So, we have two stages. One is a legally enforceable link between the digital asset and the physical asset. And we do that by having a third-party custodian where the digital asset has got a legally, sorry, an embedded legal contract, which acts a little bit like a perpetual call option, meaning the owner of the digital asset is the only person that can legally claim the physical asset. But at no point can one entity own those two.

The second stage, once you've got this legally enforceable digital version of a physical asset is then what to do with it. How do you create something meaningful? So, we have our hopefully soon to be regulated scalable products, which are sort of ETF style product built on the Ethereum network, which is backed by 100% physical wine. So, in short, ETF simplicity, blockchain efficiency, but with the performance of wine, for example.

Yeah, very interesting. I mean, that legal connection between the token and the physical asset is absolutely key, isn't it?

As regulations evolve and investor appetite grows, how do you see the market for tokenised products or services maturing in the next couple of years or so? And how does your company fit into that vision?

Regulation is key. It gives consumer confidence. And that's something that's really missing from the whole blockchain ecosystem.

It wasn't really necessarily in the early days because it was, as an ecosystem, it's populated by the people that created it. It was the DGENs and the Bitcoin Maxis. And everything about it was to be anti-governance, anti-centralisation or decentralisation.

But you can only go so far before you need, and you want mainstream adoption, and you want the everyday consumer. And to get that, there needs to be an element or quite a big element of regulation. And these last year, two years, has been massive for that.

Unusually for technology or financial technology, the US is really lagging here. Jurisdictions like Singapore and Dubai have been very proactive. So has EU with its MICA.

And the UK just put forward a pretty big proposal two, three weeks ago now, which has kind of positioned itself as being, if all goes through properly, a global leader in this, which is a huge, huge opportunity because there's masses of value creation and the UK is in need of that, if we're honest. So, if we're thinking, where does this market go in 12 to 24 months? Pretty credible projections would say that a conservative, maybe 10 to 25 billion market cap for tokenised real-world assets is reasonable.

Bullish predictions put that 50 to 100 billion. This is still within a two-year timeframe. I think if the US regulatory clarification comes through and say what you like of Trump, he certainly appears to be very pro-crypto, then we could be looking towards the upper end of those predictions.

For us, we've got two target markets really. One is the traditional investor. So, family offices, ultra-high net worths, they are looking for a more efficient product. And that's what we can do through tokenisation.

In the long term, you've got this crypto ecosystem who are trying to make that their whole financial rails. At the moment, this kind of product does not exist there. There is no wine to invest in in a scalable regulated manner in that ecosystem. So, the potential there is huge, but regulation is gonna be the key to unlock that link between the two markets.

Yeah, and it's at the conference, at the summit, we have a lot of those regulators present, including the FCA and the US as well. So, we'll have a chance to talk about that in more depth.

For our viewers, it'd be great to have you attend this summit, the Digital Assets Innovation Summit, part of City Week being held on the 2nd of July, as I said, at the Royal Garden Hotel. Further information is available on our website, www.cityandfinancial.com. We very much hope you'll be able to join us in person.

Sam, thank you so much for those very interesting thoughts. And we look forward to seeing you at the event.

I look forward to being there.