Why Wall Street Is Building on Blockchain

Now it's no secret that traditional finance is embracing decentralized finance.

There's now an institution side to crypto which contains the invisible infrastructure for banks and institutions, and there's still a native side which remains the permissionless ecosystem built for open financial innovation.

Now joining me to discuss this and more is Annabelle Huan, co-founder and CEO of Altis Labs.

Annabelle, thank you so much for joining us.

How are you today?

I'm good.

Great to be on the New York Stock Exchange floor today.

Well, we're happy to have you, but so let's go ahead and talk about crypto because crypto has definitely been top of mind.

So when we look at the crypto industry right now, we see two sides.

We see the institutional side and we see the native side.

So what's going on with the institutional side right now?

And how important is it?

Of course I remember crypto was all about taking over Wall Street, but as the industry evolves, as there's more regulatory clarity and more involvement on the development of infrastructure side, the space is becoming increasingly institutional, and that really means embracing regulatory changes, allowing blockchain to become the underlying infrastructure that powers financial markets.

It's almost as if the Web 2.0 where paper trading becomes electronic trading and are there ways to optimize the database that houses all the financial markets better and that is where the blockchain technology, the distributed ledger technology come into place.

So let's talk about the other side of permissionless ecosystem that is built for open financial innovation.

So how has that side remained intact and how does it stay relevant?

That's a great question.

Um, over the years there's a lot of innovations, uh, within crypto that's pretty unique to the space because it was built on an open decentralized, almost like a experimental ground for new financial primitives.

Um, so for example, perpetual futures, it was an idea that came about decades ago but was really popularized within crypto trading markets, uh, essentially a futures market that never settles.

And it was really thriving in crypto because of the 24/7 nature of the market, because of the instant settlement, and now as we see more tokenized equities or tokenized commodities or other assets being traded on chain, it's really adopting the 24/7 nature and also in the form of a perpetual futures.

So I think crypto itself on the native side will stay relevant because it is the perfect ground to test out.

And to experiment on new asset classes and new instruments, new primitives.

So I think this is the million dollar question.

How do you think the two sides will grow together and what will that combo look like?

Yes, well, like I said before, it almost was in competition before.

Crypto native side is competing with the institutional side, but as the industry matures, as all the builders mature, it's clear that it is going.

Protracts but also converging so in my mind I see crypto native side really leading the way in terms of innovation as a testing ground and the institutional side will stay compliant will stay secure, stay as the main the main arena where most of the financial assets, the liquidity, the volume will be traded on and they will continue to grow in a dynamic.

Feature and way.

So let's talk about the native side now.

At this point we're not seeing the creation of new assets anymore.

Instead we're seeing the creation of new markets like prediction markets that's been top of mind.

So expand a little bit more on this before, I think when Bitcoin came about in 2008 and Ethereum a few years later, the focus on crypto has always been the fact that we created new cryptocurrencies for people to own. in a different way.

So think of Bitcoin versus fiat assets versus other types of assets, and that's been instrumental in getting everyone to understand what cryptocurrency and what blockchain is about.

But as we evolve, as infrastructure continues to be built and as there's more regulatory clarity so that there is more convergence between open finance, open decentralized finance, and traditional finance, it really.

Uh, becomes, um, it becomes, it's definitely something like you said it's becoming top of mind, so exactly, and I think one thing I also want to chat with you a little bit more about is we're seeing these creations of new prediction markets we're seeing all this go on, but the other thing that's been top of mind for people is the Clarity Act because the Clarity Act has been something, especially this week, it's a big thing, a big topic this week.

DC.

So are you paying attention to any catalysts like the Clarity Act to potentially help crypto break into this bear market?

Exactly.

So prediction market is also popular because it is a way for users around the world to really get access and to express their opinion on the platform, and it's again 24/7, easily tradable, and Clarity Act is more focused on how to bring.

Traditional assets on a chain, for example, if you look at tokenized equities, it really grew from $0 volume to billions of dollars of volume today, and that's just the first iteration of it.

Of course there's still a lot of uncertainty around the Clarity Act.

We would all like more clarity, but it is a sign that the industry is growing and the two tracks are converging.

And last question to wrap this up.

So in your thoughts, what are you expecting in the next 5 to 10 years?

How, how could we see this, uh, uh, kind of transforming and evolving?

Uh, it's interesting because I started my career on Wall Street.

I literally here on 60 Wall Street.

Um, and, uh, really see this, uh, changes within crypto itself, uh, as we become more mature and adopting the institutional mindset and from the institutional perspective also being open to innovation to try out blockchain as an underlying technology that powers financial markets and also adding new instruments like prediction markets like um on chain, uh, money market funds or props on chain so.

It really is a convergence.

I think this trend will continue in the next 5 to 10 years.

Uh, there's still a lot of things we need to work on like you said, clarity Act and all the regulatory clarity from going from now and also a lot more investments around security and compliance uh before this convergence can become more mainstream.

Awesome.

Well, Annabelle, thank you so much for joining us.

It's a pleasure to have you.

Thank you so much, Johnny.