Coinbase’s Abu Dhabi License Opens New Doors : Here’s Where Bridgeport Fits In

We are speaking about Bridgeport.

They have middleware that allows trading companies to be able to keep their assets safely with a custodian of their choice and move it to trade at any exchange near instantly or through an API.

So it's a very exciting solution.

And here to discuss it with me is Zane Surin.

He is the chief revenue Officer of Bridgeport.

So welcome to the show, Zain.

Thank you for having me, Lucy.

Perfect.

So, Let's kick off with what Bridgeport does exactly, if you wouldn't mind explaining, what's the big problem in crypto markets that you guys are solving?

So in traditional markets, trading firms keep their assets in custody.

They would then trade on an exchange of their choice and then settle, and that happens like magic.

Now in crypto markets, the norm seems to be to pre-fund an exchange, which means it's a very inefficient way to operate that capital.

And so Bridgeport connects custodians to exchanges.

So an institutional trading firm can choose any custodian of choice, store their dishwasses securely with that custodian.

And then trade on any venue of their choice, exchange, OTC desk, etc.

So we perform two functions, a credit allocation function and post-trade, the settlement netting function as well, uh, purely as an API layer.

I mean that's, it's a really big problem, right?

So I think the number was 60 billion worth of funds that are sort of captured and the inefficiency that's built into the system.

So you're effectively unlocking that 60 billion and letting it flow far, far, far faster, right?

Yes, we actually think it's a significantly higher number because this is trapped capital, and what that means is, let's say a trading firm trades on 8 venues, they would pre-fund each of those 8 venues.

Most of the time that capital isn't being put to work.

So 60 billion is, is probably on the lower side.

Um, and we can really, once we unlock the connectivity between the various players in the market, um, it, it should be allowing capital to flow a lot more efficiently.

And let's talk a little bit about this DAA.

DAMA, D A M A, um, really an ISDA for digital assets, so that's pretty.

Revolutionary, I would say, because it's very needed in crypto markets to have these traditional finance sort of standards and guidelines, and ISA, as we all know from the GFC in 2008, is an incredibly long, comprehensive set of rules and and guidelines.

So tell us more about DAMA.

Yeah, one of the, uh, one of the biggest challenges I think in the, in this space right now, the digital asset space is, um, even if the technology is there connecting custodians, exchanges, and trading firms to be able to trade, even if the regulatory approval is there, um, they still need to have legal triparty agreements which allow them to put in place things like dispute resolution, settlement frequency, uh, and so on.

And we noticed that um.

All different client types were having the same issues.

They would take 2 to 6 months to negotiate these terms, and it would be very painful.

And then when they brought on clients aside from the trading exchanges and the custodians, they would renegotiate.

And so even though we're not in the.

Legal agreement, the Digital Assets Master Agreement DAMA is a set of frameworks which uses the ISDAS as a base to help standardize across the industry, and we hope that, you know, it's part of the industry's growth.

We hope that the participants would support that.

Now we've actually seen to date a lot of support by a working group.

So if you are a trading firm, we'd love to have you shout out for those to contribute.

Yeah, I mean it takes, it, it takes a village, right, to, to come up with these things, but great initiative from, from Bridgeport and I guess sort of seeing that gap, uh, and there's just many problems that's still to be worked on in crypto to really close that gap between traditional finance and crypto markets.

So um let's talk about digital asset growth in the MINA region.

You you guys obviously have a front row seat in what's going on here, all the trading activity.

Tell us about what's happening in ADGM, the trading of crypto, the trading of digital assets.

What, what's your take on it all?

So I think ADM has been one of the few regulators globally that has demonstrated from a very early period in the digital assets ecosystem, a forward thinking attitude, stance, and actual action with regards to the frameworks around digital assets.

I think 2018 was the first.

The framework set out and that's effectively providing clarity for firms.

Entrepreneurs, especially in a new tech era, want clarity.

They want settled rules around how they can build because this is a 1020, 50 year infrastructure bet.

And so that bet has now recently paid off with a lot of firms coming to the region to set up, to set up hubs here.

And we obviously saw Coinbase's news earlier this week, and it demonstrates that the the the the collaborative attitude that the FSRA has always demonstrated for the last 8 years has been one that the market has received very well.

So we have, we're very, very bullish on the region.

And Abu Dhabi and the UAE as well as a whole will be the hub for digital assets, ecosystem growth on the institutional side, certainly in this region.

Yeah, I think when we have, you know, a name like Coinbase setting up the international tokenization hub right here in ADGM, I mean, it's giving a very strong signal to the.

Market.

Do you see that sort of kicking off a chain reaction of activity?

Is that really sort of a flag in the sand, and we're going to see a lot more players and maybe US players actually come and set up shop for tokenization purposes, infrastructure purposes.

Absolutely.

So regulation is the regulation of an asset is the first step.

The approval is the first step.

The infrastructure being able to enable capital to flow effortlessly is the second, and I think.

The fact that Coinbase has planted resources, commitments here to the region, to Abu Dhabi in particular, demonstrates a proof point that the regulator was correct in their bet.

Now, naturally what happens then is the plumbing catches up, and that's what we're looking to support the ecosystem with.

Um, I think definitely we're going to see more folks come here and, you know, utilize the, the, um, regulatory clarity that we have here.

Yeah, because speaking of regulatory clarity, it's what's desperately needed in the US, right?

I think everyone went, a lot of the very impressive US crypto companies then felt very comfortable being back in the US, given that Trump is, I can, I can still say is a pro crypto president and actually.

There has been a big lag in the sentiment of the president to actually what's being passed into law.

Do you think that's really having an impact?

How are we seeing that play out between what's happening here and the clarity that players are getting in in Abu Dhabi and Mina more generally versus still the gray area in the US?

I think they're very different markets.

The US, you know, stock market cap is probably about $70 trillion right, so dollars, US dollars, so.

And that represents about half of the global stock market cap.

There is a lot of legacy infrastructure to protect.

Um, and when you're ushering in a new wave of technologies, that's critical.

Um, you know, NASDAQ approved tokenization, uh, by utilizing DTCC, uh, clearing and T+1 settlement, um, and then they're tokenizing effectively the record in Abu Dhabi, and this is a first for, you know, uh, Coinbase globally, is, is to be able to.

Um, have the tokenized assets sit in the wallet with full rights, and that's, that's the piece.

So I think different markets, different considerations, but no doubt that, you know, all regulators look at each other and see what's going on.

I think we're moving to a very bullish period for not just the technology, but the market as a whole.

Yeah, so final thoughts, Zain, Bridgeport, what's on the roadmap?

What's coming up next?

What's the exciting next step?

So Bridgeport, our aim is to be the connective tissue, the middleware for institutional crypto.

Now if you think about, you know, with this approval of tokenization here in Abu Dhabi, that multiplies the places where pre-funding capital is sitting.

It makes the existing inefficiencies a number of times larger because there aren't going to be, let's say bilateral integration.

So we are here to support the multiple market participants.

Um, to be able to trade effortlessly.

Now, like I said, regulation is the first step.

Infrastructure has to catch up, and so on the roadmap for us, um, making sure that our, our trading firm clients, our custodian partners, exchange partners, um, can all support the growth that they're looking for, um, by being, uh, there for the next stage of evolution of our asset class.

Perfect.

Well, I'm excited for you and for Bridgeport.

Thank you for coming on the show today and sharing these thoughts with us.

Thank you for having me.