On The Brink with Castle Island - Moiz Kohari (Manetu) on Building Software to Enable Data Privacy (EP.73)

Episode Date: April 28, 2020

Moiz Kohari, the co-founder and CEO of Manetu, a company building a Consumer Privacy Management (CPM) platform for enterprises to manage personally identifiable information (PII) joins the show. In this episode we discuss: Moiz's recent experience contracting COVID-19 His motivation to start Manetu after holding high profile roles at State Street, London Stock Exchange and Novell Data privacy and the challenges enterprises face complying with upcoming regulations The state of blockchain and cryptoasset projects at large financial firms Learn more about Manetu at www.manetu.com

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and as a special offer, use the coupon code Castle to get 10% off. Head over to keys.casa to get peace of mind that your Bitcoin is safe. Today's conversation is with Mois Kahari, who is the co-founder and CEO of Manitou, a company that is building a consumer privacy management product that allows its customers to effectively manage customer PII across their enterprises. PII is personally identifiable information. In full disclosure, we're investors in the company. Data privacy is a topic I'm very passionate about.

I think it's clearly a big problem. And this is notable in the sense that we see a new breach almost every single week. I think this past week we saw one with the Small Business Administration. And there's a good deal of regulation happening right now that is going to put this top of mind in the months to come with GDPR and California's Privacy Act, which is the CCPA. So we talk about all of this with Moise, in addition to talking about how. How his product leverages public blockchains for time stamping and audit logs. Moise has a great perspective also on the pace of adoption for blockchain and crypto assets from his experience at large enterprises like State Street and the London Stock Exchange.

This conversation was a lot of fun. So without further ado, here's Mois Kahari. Brought down by bad mortgage investments, Lehman, which has 25,000 employees will be liquidated. The federal government loans American International Group, AIG, $85 billion. This is a different kind of market, and the Fed is asleep. The federal government is stepping it to stabilize Fannie Mae and Freddie Mac, the two mortgage giants that have been threatened by the housing crisis. The Bank of England has pumped 75 billion pounds more into Britain's ailing economy

with a new round of quantitative easing. And print a couple trillion dollars, and all of a sudden, people start to worry. So out of this worry, we have something called a Bitcoin. Bitcoin. Mois, thanks so much for joining the podcast. Thank you. We'd love to just start it off with how are you holding up during this time of lockdown. and what's the past few weeks been like for you?

It's been very interesting. I experienced COVID-19 personally, so I'd come down with the virus. Thankfully, my experience was mild, so I was able to recover from that quickly. But as you know, the lockdown has impact across the country and the world. One thing that we are very fortunate on is the fact that Manitou has always been a virtual company, where our team has operated actually as a virtual team, not only at Manitou, but prior to that while we were at State Street or even the London Stock Exchange,

most of our team members were virtual. So we have been working in that type of an environment where you leverage Slack and Zoom and GitHub and all those tools. And the entire team has been operating as such for, I'd say, over 10 years. So it was very fortunate that in this environment, we did not need to take any steps back or pause before we could pull our delivery team together. Yeah, certainly a blessing to already have that infrastructure in a distributed way. It's crazy. A lot of the COVID thing is starting to hit a lot closer to home. We've had a few portfolio company CEOs now that have had it, including you, obviously.

What was your experience like in terms of the length of your symptoms and how scary things got? So obviously different people have different experiences and not to minimize that in any way because it is extremely serious. But normally speaking, the media scares us so much that when I had the virus, for a second, I was pretty concerned that this could be it. But that being said, personally, I came down with the virus. I had a fever for one day. The next day, I had a very slight fever. I was fortunate that they tested me immediately, and I ended up taking a Z-pack for just to be preemptive on any type of inflammation that could occur in my lungs. So I took a Z-pack immediately,

and within days, I was feeling back to normal, albeit my breathing wasn't exactly 100%. I'm reasonably active. I ride and hike and run. So I wasn't able to do all of those things for a couple of weeks, but it didn't take too long, thankfully. Well, really glad that you're back to normal now. That's certainly a really scary thing to go through. We'd love to spend a little bit of time talking about data privacy and Manetu and get into blockchain. But before we do, it would be great if you could just set the stage a little bit and

give your kind of quick background and career story to date that led you to founding Manetu. I'm a computer scientist. I've graduated from Rochester Institute of Technology. in the late 80s. And one of my first jobs out of school, I actually was fortunate to work on NASA's shuttle launch and control systems.

So real-time programming was kind of embedded in my DNA from the beginning. I started a company called Mission Critical Linux in the late 90s. That was one of the first enterprise Linux teams and capabilities that were being created around the Linux operating system. Most of that team and our capabilities were ingested as part of Red Hat Enterprise Linux and their

CTO and many of their REL folks are X Mission Critical Linux team members. I went on from there to be the CTO for Nobel. We brought their cloud solutions, their real-time Linux distribution. My team and I created all of that. And then from there, I was in a global role as Executive Vice President for the London Stock Exchange. where all group companies and exchange platforms were being developed and supported through my team. So that was a fantastic opportunity to see how asset movement occurs in the types of systems that need to support hundreds of billions of dollars in asset movement across the planet.

I moved from there to become the global chief technology architect for a state street bank. That was my last role where, again, I was. very lucky to see firsthand how one of the globally systemic financial institutions operates and the seriousness of trillions of dollars worth of asset movement across those platforms. My team has been with me for almost two decades now. They moved with me from Novell to LSEG to State Street. We decided that this data privacy space was very interesting and we started this journey last year, a little over a year ago now. It's an awesome story.

Having 20 people that have moved around with you for the past 18 to 20 years is quite a Pied Piper story. I was recalling last night when I was thinking about this interview that when we were looking at the investment in Manitou, we made a few phone calls to some State Street folks just to ask them, we're trying to zone in on this idea of having distributed in virtual teams and how we feel about that, which who would have known that about a year later we'd be kind of in a world where every single one of our portfolio companies operates remotely. But we're trying to understand how that works.

And I remember I spoke to one pretty senior person at State Street who said, oh, no, like, Moyes has been doing this with his team for like 20 years. He was doing it before it was cool to be doing it. So what has been your kind of philosophy on managing teams that are not all centrally located and how did you kind of make that work before it was really a popular idea? First of all, almost all of my team members are some of the most senior, amazing technologies on the planet. We have been working on open source software projects that pretty much impact every organization on the planet today, such as the Linux kernel, the Linux scheduler, the real-time scheduler, you name it, virtualization technologies.

the HyperLedger project came out of some of our team members, the founder of that HyperLegger Fabric Project, blockchain project is Bin Noya. He's our chief scientist. If you work in the open source community and you are developing products and projects, you are working virtually. There is not a single impactful open source project

that is ever coming out of one single company or one single group. So you are, actually used to operating in a virtualized environment and being effective. Because again, like I said, if you just look at the Linux kernel, well, 90 plus percent of the infrastructure on the planet today runs on top of that kernel. And the way that the development of that has occurred is to these virtual teams. So we've been very blessed that we have operated at a very high degree of productivity in that

environment from the beginning. And then once you drill down this particular team that has been with me for a very long time, we have always had a very enterprise focused approach to those projects, how we deploy some of these projects within the enterprises and how we support, again, our financial services background, how we support trillions of dollars of asset movement on top of these platforms. So having had that experience, this team, Once we focused on the particular problem of data privacy, there wasn't much handholding that was necessary. We were all running in the same direction very quickly. That's great. So the team is quite seasoned. Obviously, you've had this team with you for a very

long time. And the team has had some really senior roles. For example, David was president of CBOE. What made you guys decide that it was time to do a startup versus going to another kind of large enterprise. These big enterprise gigs are pretty good gigs. What made you want to do a startup? Insanity might be one word, but no, you're correct that, look, we've been both David, myself and the other team members, we've been very blessed throughout our career. We've had some very significant roles. Like you said, David was CEO for CBOE stock exchange for 10 years and national stock exchange and other very senior roles. And I've been lucky myself. But if you look at, the types of things that we worked on in the past, they were all, I would say, they culminated

to bringing us to this particular point in our careers, where we are now looking to establish and develop a platform that at least we believe to be as impactful as any project we've ever worked on in our lives, where the impact of this particular project not only from a individual and consumers' identity perspective is very critical. Even from an enterprise perspective, it is one of those things that is absolutely necessary for almost every single enterprise that operates on the planet. So when you have a problem set that is this impactful and visible, and you have a team that has operated at a very high degree of productivity, we felt that this was the right time to actually take the step and move away from some very, very nice

jobs to this reasonably stressful endeavor. Yeah, as any startup certainly would be. We're really glad you did. And certainly the time in place for data privacy right now, you can't say enough about it. Give us a little bit of background on Manette 2, specifically the product. So what specifically are you trying to solve? What does the product do?

We were dealing with data privacy issues in some of our previous jobs, where how you provide GDPR and CCPA was just starting to come on the scenes. How would you provide compliance against some of these regulations? And what we saw, not only within the organizations that we were working at, but across the board in most organizations, the data privacy solutions that existed were providing companies with the ability to go out and get consulting services to help understand where sensitive information may be sitting, leverage some tool sets to understand how to discover and map some of that sensitive data, and then create process workflows through what I will call request response models, where data subjects may come in, fill out a form, request information, which kicks off a workflow,

normally speaking, a manual workflow. And you would have engineers go out and collect information from multiple target systems to satisfy that request. That process is a very lengthy process, and on a per request basis, ends up taking some number of hours. One of the larger institutions out there told us that on average they spent 20 hours per request. And our own experiences were no different at the institutions that we were at. We felt that as volumes of those requests start to increase, it would be impossible to be able to manage those volumes

and be able to respond to those requests within the allotted time that these regulations require you to be able to respond to. So the specific differentiator that Manitou brings to this particular problem set is we have written a whole host of artificial intelligence machine learning algorithms that go out and help companies do data discovery, data mapping, and we can pull that data into a control plane. And this is where our differentiator is, where we bring a self-service platform to these organizations, these enterprises, where they can actually, after they've discovered the data, they can actually put that data in a platform that allows for the data subjects to actually control certain aspects and attributes of their own data directly, such that they don't have to go into that request response model that I explained. And they can actually do that in a self-service fashion.

So the type of response time you provide to your clients is almost instantaneous. So there is that gratification. On the other side, the enterprises don't carry the burden of needing to go out and spend a whole bunch of resources on collection, editing, and revocation of that data. And it takes that burden away from the enterprise and saves them time and money. That's really the approach we've taken. So it sounds like it solves a few problems. One would be if you're an enterprise and you have personally identifiable information in disparate locations, this sort of bundles it up and lets you get a full view. Secondarily, you might have some inbound request as a result of some of these new

regulatory things that are going into effect with GDPR and California's Act, which we'll get into more. And you might need to just act quickly on something. And this will allow you to do it. But I guess the third thing that you're saying is that you envision a word. world where the end consumer would eventually have the ability to see who has access to their data and perhaps have some role in that permissioning. Would that be accurate? Absolutely. So we do provide consent management. The platform out of the box provides for consent management. So how that data is shared, whom that data is shared with is visible to the data subject directly. On top of the three things that you mentioned, I will actually add one more additional.

component. What we have done is we have created a platform that takes security and cryptography and presentation of those principles from the ground up. It's been architected into the product from the ground up. And what I mean by that is we are leveraging concepts that are state-of-the-art cryptographic concepts like post-quantum cryptography, post-quantum key distribution, things like multifactor authentic. biometric authentication, we have combined all that in a way such that this system ends up becoming one of the most secure systems for data access and data management on the planet. So not only do we provide direct access to the data subjects into this data, we provide one of the most secure

platforms for the enterprises to actually store their sensitive information and these vaults can only be accessed by the appropriate permissioned entities that should be accessing that. We think that aggregation of data into that one singular secure vault is something that is significantly different than what might be happening within these enterprises today because, as you know, data is scattered throughout multiple what I will call target systems, which are data stores, whether it be a structured data store such as Salesforce and Oracle and other structured data stores or unstructured data stores where you have just a whole host of unstructured data that's sitting out there. This data is scattered throughout hundreds, if not thousands of databases within

companies. What we do is we help them actually identify and aggregate that into a singular store that is one of the most secure platforms that you can find. You get under the hood at some of these enterprises and it's kind of scary to your point is they have personally identified all information in all sorts of different locations. Why is that? I mean, is this just a function of a lot of these architectures were built in a time when this wasn't a central focus for their kind of buildout? Obviously, there's probably M&A that plays into that where you have disparate systems being

pieced together. but what's the overarching reason for why these architectures are not really designed for managing PII? First of all, PII concepts evolved over the last few, right? So we've always had sensitive information scattered, but some of these regulations have brought attention to personally identifiable information and how it applies to the data subject, the data owner of that information. But to your point, we have never had the luxury unless you're a brand new business of saying, okay, I'm going to start with a data architecture that is holistic and I have a blank slate.

Most of the time you're coming into it. Some of these organizations are hundreds of years old. They're coming into it. They have gone through tons of M&A activities. They've clumped together, tons of different systems. and now these systems need to operate together. So what they concentrated on normally was how you end up providing connectors between these systems and how you move information from one system to the next, which ends up actually creating a bigger problem

because now you're copying that data into multiple spots and now you have to manage the same data in multiple places because you're moving it around. So you end up with hundreds of systems having different data attributes that are present within those systems. And even if you want to go and drive intelligence out of these systems, what do you do? You end up now thinking about creating a data lake, which creates another copy of that data, and you try to aggregate that data into a data lake. And now you can drive intelligence from there. So our architectures have evolved in a way where they needed to have information be copied from one system to the next.

What we're trying to do is say, how do you aggregate, how do you discover at least sensitive information out of these systems, and how do you start to pull that into one commonplace such that you can actually have control over that data? That makes sense. So data privacy is obviously such a critical issue. and we've seen so many high-profile hacks over the past few years. I mean, Equifax, Home Depot, J.P. Morgan. I think just this week, the Small Business Association had one. So I guess my first question on this topic is,

why don't we see more outrage just at a personal level, just a groundswell of people caring about this? I mean, if people were walking into our front door and just taking our food out of our refrigerator would be furious. But kind of the equivalent is happening on the Internet where people are just absconding with our PII. Do you think that awareness and outrage will start to build, or maybe it's already happening and I'm just not noticing it?

There is research coming out of many firms such as Gardner and EY and others, Forrester, that seems to indicate that approximately 50% of consumers have actually moved from one service provider to another based on privacy information and how those companies handle privacy data. So some level of that is actually happening today. And consumers do make decisions based on how firms are handling their private data and what level of trust they can place in that firm. And if they don't have that confidence,

then some of these firms are showing that 80% of consumers do not want to do business with that particular brand. At a certain level, I would suggest that it is happening. On the other hand, because services are necessary, these virtualized services are necessary for consumers, consumers find themselves in a spot where they don't have too many options. So they have to take a service. This is where regulations actually step in.

Regulations such as California Consumer Protection Act that require enterprises to respect consumer rights or GDPR that require that consumers have certain rights, these regulations are putting the whole privacy issue front and center. Under the CCPA, California Consumer Protection Act, the California Attorney General's Office estimates that just the compliance cost to CCP this year is $57 billion, and it impacts 400,000 enterprises that have any level of operation in and out of California. So we will suggest that that groundswell is happening.

It obviously always new concepts take a certain amount of time. To give you an example of that, right? In the late 90s, when I was walking into some of the larger financial institutions and others, and I was talking about Linux and how these companies may want to leverage an open source platform, I was literally walked out the door because they said they would never trust an open source platform to carry sensitive information. Those same institutions today, I would suggest 90 plus percent of their data centers are running Linux. So things take a little bit of time. Some of these concepts are forward-looking.

However, once they do take a hold, this becomes one of those core things that organizations simply cannot live without. Yeah, the Linux example is a great one. And certainly the public internet is probably in the same category as you had companies that were trying to build internal systems for quite a while. So, Moise you spoke about GDPR and the California Privacy Act. Talk a little bit about just what these laws are intending to do. And curious your perspective on if we're going to see more of this and what the second order effects are. What does this actually mean for a big company to comply with some of these things? certain companies of size, meaning in California Consumer Protection Act, any company that has $25 million in revenues or have California residents on their platform must comply with data privacy laws. And for the most part, if you think about the commonality between these laws, what these laws require enterprises or companies to do for the data subjects that are on their platforms is to allow for those data subjects to request, first of all, what information does this company hold on them? Secondly, to be able to edit parts of that information based on changes

that may have occurred. And third, have the right to revoke parts or all of that information from these companies. Now, in certain cases, let's say for a financial institution, revocation still means that that financial institution must carry information for FINRA purposes and other purposes for a certain period of time. However, that information, once the consumer has asked who revoke it, must be purged from their common systems such as their Salesforce systems so that marketing and sales teams don't hit that particular consumer who asks to be removed. So these privacy laws are not only in California, but many other states have already picked up different types of privacy laws, and these are being discussed at a federal level. These are not only in European Union under GDPR, but are also present across the planet

in Japan and Australia and Canada and other countries around the world, albeit at different levels and different requirements. What Manitou brings to the table is we have created a data management platform that allows for companies to operate in and out of all of these different jurisdictions, and we provide for controls over how data management should occur based on these jurisdictions. So we provide reporting services. We provide what we call a data vault, which is a regulatory vault where we can actually store information that may have been edited. or revoke. However, for FINRA's purposes, you may need to continue to maintain a record for seven years. We provide temporal storage based on certain signatories who should have access to that information for a certain period of time in an automated fashion. So companies and enterprises can actually

show that they have developed their environments with privacy in mind and privacy as a core component of the architecture that they are deploying. It's going to be interesting to see what the reaction is from enterprises once some of these regulations really start to get enforced. And I'd imagine we'll see some more of them. I think the first phase will be, oh, my God, I need to get into compliance because not having some sort of a software system in place that allows me to comply with this is just just going to be very costly. I'm going to be paying fines. I'm going to have all sorts of headaches.

But maybe the second order effect will be just a rethinking around what type of data you even need to collect in the first place. I love the example talking about showing an ID to get into a bar. I mean, the bouncer at the door doesn't really care what your exact birthday is, but you're giving it to them every time you're entering the bar. They really just need to know, are you over the age of 21? on. And you could imagine that being the case with a variety of financial transactions, for instance, as well. I mean, if you're sending a wire, you need to know that that person on the other end is not on a sanctions list, but how much information do you actually need to collect? So I'm sure that there's just a rethinking around what we need to actually own as an enterprise. How realistic do you think it is for

consumers to actually own their own data in the future and be able to just permission off specific pieces of it as opposed to kind of an aggregate capture onboarding experience? So I think that some of that is happening today when you think about some of the crypto platforms that exist out there. So you have a digital wallet that allows you to have certain attributes associated with that digital wallet. But I would start even before that digital wallet is created. How do you actually identify a particular human and associate that physical identity with their virtual presence on the internet or within that virtual platform. That identity management capability is something that Manitou has really

taken very seriously from the beginning and it's actually one of the starting steps of what we're doing. So how you identify in no uncertain manner a particular person is that. person, we leverage all kinds of concepts like I mentioned, including post-quantam key distribution and others, in such a way such that that identity simply cannot be spoofed. Once you can guarantee that, and now you can start to associate attributes with that identity, you start to create that digital wallet that you're speaking of. So when you're walking into a bar, that digital wallet may simply have an attribute that says over 21, period. And as long as that wallet is something that has been signed off by, let's just say,

in this particular scenario, by an organization such as the state of New York, so that you know that you have the signature of state of New York, that wallet, digital wallet, is no different than your license. So there are concepts that are starting to come to life, which absolutely will be present and are starting to. to be present today that start to give us the ability to have that digital experience, the no-touch experience that the Amazon's and others that are really touting. Yeah, that's a future that I definitely want to live in.

I think the ability to only disclose as little as you possibly have to is something that's very appealing to me personally. Obviously, some of these things are a long way away. And one of the things that really attracted us to your product when we first saw it was just the fact that you're using blockchain now for what it's good at, which is basically maintaining records being a public notary system in some cases. Obviously, there's a grander vision here and other projects maybe that are seeking to incorporate a crypto asset earlier on. So you decided to take this discrete path where you're just using a blockchain for audit logs

and for some of the vault functionality. What guided that decision to just sort of, I guess, not lead with blockchain, but just use it. it in a discrete way and really leave it up to the enterprise in terms of what they want to use for a blockchain timestamp on the back end? So much of our team has been engaged in the distributed ledger technology world, blockchain world, pretty much from the beginning, where folks like our chief scientist, Ben, Noyan, he is the founder of the Hyper Leisure project. We have multiple maintainers from the Hyper Leisure project that are actually managed to employees

today. So we have, I would humbly suggest, some of the most significant talent in that space that is actually working for Manitou today. And the decisions, the architectural decisions didn't come from myself. These decisions came from the team that has developed these products and projects where we were looking at the problem set saying what exactly is necessary for this problem set to solve, and how can we scale this product in a way where billions of transactions can happen on this product without really hitting scalability issues? So what we decided, or the team decided, was that what's most critical were the concepts of some of the digital ledger technologies that we touched on already, such as cryptography,

consensus building, how you actually identify and create identities and associate them with the digital wallets. Those are the core concepts that are really critical. How you leverage a blockchain to go from one transaction to the next, at least in this particular enterprise solution that we're creating, was not the most critical thing. And in our humble opinion, would have taken us a very significant an effort to scale that to be able to do what we're trying to do. So what we did was we actually created the platform where we leverage many of the concepts of blockchain. However, the platform is not based on a blockchain.

Yeah, there's this concept of a minimum viable ecosystem really for any product. And it's always better to be able to launch something with this small of a minimum viable ecosystem of participants. And some of these solutions that require. many parties to all be on the same blockchain and doing things. It's hard to imagine some of those. They might happen at some point in the future, but it's easier to imagine just a blockchain being a notary system on a back end. Switching gears maybe a little bit. So you've been at the forefront of blockchain technology in your role at State Street prior to this. And I know Manetu doesn't

have a crypto asset, but you're personally interested in crypto. And we've seen large incumbent companies in financial services like Fidelity and CME move more aggressively into crypto infrastructure, so specifically around custody offerings and futures trading and things like that. And so from your perch having worked at some of these large companies, at what point do you think we start to see more aggressive movement into this space from like the custodian banks and some of the larger broker dealers and things like that into crypto assets specifically? Bottom line is until, at least in my humble opinion, until there is a stable coin that is backed by the Fed, many of these institutions where they are taking custody of these assets, however, on-ramp and off-ramp off of those

crypto assets are not directly available within these jurisdictions such as the United States or others, it's a very interesting thing to take custody of those assets and not have the full life cycle of that financial asset. So in my opinion, we will start to see more and more of this as the Fed starts to move towards some type of a stable coin, a Fed coin, or other this, which may happen maybe sooner rather than later. In the meantime, there are platforms that are operating out of certain jurisdictions, such as Bermuda or Singapore or Malta and other places, where these jurisdictions are friendly to those types of assets and are actually granting banking licenses, once you have those jurisdictions grant banking licenses and have those

relationships established with custodian banks and others, we believe that this is certainly going to happen. There's no question about it and is happening. And with what velocity is the only question, I would suggest that in the coming months and years, we will most likely start to see that velocity increase, especially given some of the other things that are happening in the world today. We have a lot of stimulus packages coming on into the forefront. So it starts to give credence to Bitcoin and gold and other asset classes that may or may not have been as pretty. So people will start to demand and move in that direction, maybe more aggressively, in my humble opinion.

You're speaking my language now. So I want to dig into the stablecoin thing because I think this is a really underappreciated thing, particularly in the retail sort of crypto-focused worldview. So there's stable coins that exist, obviously, for trading crypto assets. We have the tetheres, the USDCs. But what you're referring to would be more of a wholesale stable coin. It's something that we discussed a lot when we were doing R&D on this type of thing in the early days at Fidelity. You'd look at one of these transaction types, whether it be a corporate bond issuance or even a repo transaction.

And you look at the billions and sometimes trillions of dollars of cash and collateral that need to move between financial institutions on a given day. And so you could imagine a world where one end of that transaction is maybe a U.S. Treasury that's digitally issued or maybe you have a corporate bond that it's put onto a blockchain by a company, and that's fine. But what you're referring to is the cash leg of that transaction. And if you still need to go through a traditional Fedwire system, an off-chain movement, you can't have that delivery versus payment settlement. So you really can't appreciate the true benefits of a blockchain until the other side of the leg is represented on chain. There've been some proposals to have sort of consortium issued cash. There are a couple projects out there that are trying to do that. Do you think that that would work or do we really need

to see the Federal Reserve actually put a dollar onto a blockchain? Do you think we could see banks individually do this or as a group try to do these dollars on chain? Well, there were some projects out there that were working on this State Street and others. We're part of JP. We're part of some of those projects. I would suggest that while banks may have the ability to do that, they may get stuck behind many of the regulations that kind of guide them in this space. So I would suggest that at least from what I have seen, jurisdictions that allow for banking licenses in this space might be more at the forefront,

and we may start to see on-ramp, off-ramp, off of those coming in, and then how you really take custody of those assets and whether that could happen within other jurisdictions, such as the U.S. or would those banking license require custody to happen only out of, let's just say, Bermuda, would be an interesting point. To your point where we do have trillions of dollars of asset movement that happens, the one thing that is a little scary in the crypto world with that level of DVP, RVP activity happening is it can occur very instantaneously. if you're looking at certain infrastructure, some level of anonymity still exists within those infrastructures, that's simply not going to be allowed, in my opinion, by the regulators that regulate our banking systems. So those structures have to change and how you start to, whether that's

off of a public chain or a private chain, how you start to have identifiable KYC AML capabilities coming onto the chain and who operates on that chain and how those operations are recorded, all of those things are going to be extremely critical before we truly get to that level of pvt like activity that you were referring to. Yeah, it's interesting to think about some of these large wholesale financial services transactions because they don't need any of this anonymity to begin with, right? It's a pseudonymous bearer asset is not something that anyone in that transaction Life Cycle is asking for. They're asking for a more efficient settlement process is really what it

amounts to. You look at some of the work that even DTCC is doing in this space with the Fed, with a lot of support from the community. They are trying to drive at least the educational process in this space pretty aggressively. We know many of the participants there. I'm sure you do. And maybe an organization like that, which is not a single company, but it's a consortia, it might be better suited to really drive the types of activities that we're talking about. Yeah, I think you kind of read my mind there, because the logical kind of thought process would go to if you have various banks that are issuing U.S. dollar back stable coins, they probably won't all trade at $1 even.

They'll trade as good as the credit risk of those banks. So a Deutsche Bank dollar is probably not going to trade at the same level as a JP Morgan dollar on any given moment, especially when the balance sheets are just very, very different. You would think that maybe the DTC could play a role there in intermediate phase. I mean, they have all of the titled securities already. So they would be in a really good position to just represent those on some sort of a closed loop system and maybe even cash if the Fed wasn't willing to do it. Do you think it's, I mean, is that crazy to think? Not at all. I think you probably know some of the participants at DTCC like Robert Platnik and those guys. These are really good questions to bring them into this conversation. I actually had a parallel conversation with those guys recently.

And there's a lot of activity there with the Fed. Boston Fed was extremely engaged when I was at State Street. We had multiple conversations with some of the leaders there. They have been aggressively educating in many different organizations. around what their stance could be, albeit none of them have actually come out and taken a very aggressive stance on this subject yet. Right. So I guess there's sort of two angles to this, right? Because everything we just talked about for the last few minutes is really on the efficiency side and really has nothing to do with public blockchain assets, but it's a way to make the financial plumbing better, so to speak. And there's probably less people that get super excited about just kind of a cost savings initiative, if we're being honest with ourselves, you and I

could geek out on that, but it might not get others all that excited. But something like Bitcoin and other crypto assets really represent just a new business unit that a bunch of these firms are going to be in. And depending on your thesis, it could be digital gold, it could be digital compute. I mean, there's all sorts of reasons to be excited about the crypto side of this. And it has the benefit of being something that you can charge trading fees on, you can charge custody fees on and you can build asset management product on. So there's going to be a larger market developing here potentially. Do you think that this is valid and do you think that this kind of increased awareness for just a new product line could get more firms excited about

building in this industry? So I was going to touch on something which is actually public knowledge because we have spoken about this by we. I mean, my previous employer had spoken about this publicly along with myself. So I'm not touching on any sensitive information here. But I will suggest that there are two ways of thinking about the technology that you have been referencing, right? Blockchain.

One is all around asset movement and how you create an infrastructure that allows for that asset movement to be frictionless. Absolutely. And there are many factors that go into that particular equation, including when the Fed is ready to do some of these things and what other institutions are part of that chain. That's one thing. However, on the other side of the equation, which is what we were driving at

in the past, is the fact that one of the biggest friction points that exists for some of these large institutions is the knightly reconciliation that needs to happen amongst themselves and almost every one of their clients. And that reconciliation, process is a very onerous process takes hours, hundreds and thousands of man hours on a nightly basis to go through that process, both on the bank front as well as on the client front. So how you may be able to leverage these types of concepts and technologies to create frictionless systems where you don't have to go through that level of reconciliation because a trade is a trade and that is recorded across the ledger and it's visible to all participants

at the same time, these are extremely strong concepts in my opinion and can have a very significant role to play within these institutions in the coming months and years. There are two ways of thinking about it. The crypto assets is one, and the core technology and how you leverage that technology to create a better environment for all participants is the other way of thinking about it. That makes sense. So maybe just teasing the last point on this topic out on the crypto asset custody front. So just take Bitcoin, for instance, you see a company like BitGo that is sort of running away with this market from a custody perspective. They're adding a tremendous amount of AUM. They're onboarding institutional customers. The likes of BitGo and Fidelity and Coinbase are

really doing quite well on just holding the underlying. What point does it make sense for a global custodian to start to care about this? Is it just too small and they'll care once the total addressable market increases? I mean, is this, how would you be thinking about this? Well, tough question, right? These guys are living in a tough time to begin with when they think about some of these aggressive moves, what is the total addressable market and when is that aggressive move appropriate. I will leave those musings to some of my colleagues from the previous institutions to really go over, but I don't envy that position. The coin bases of the world and Fidelity, they, given their structure, might be able to move a little more aggressively than some of the

other institutions that you might reference in this space because their structure demands that there are multiple public decision makers that are present. Yeah, certainly the regulatory environment plays a huge role there. So do you see a world where data could actually become traded as an asset? Is this kind of a pipe dream? I would suggest that actually it is happening. And one of the largest clients of Manitou is actually partnering with Manitou simply because of the data bent and experience that we bring to the table. And many of the institutions that I have worked with in the past do leverage data to be one of the core assets. For example, if you look at one of the highest rated businesses within the London Stock Exchange,

it is the data business. That is where they drive most of their profits from. So how you leverage that data across multiple organizations, how you may need to watermark it for different purposes, such as ownership and other things. These are really critical issues and problems. And I think that there is no question that is data an asset class. I would suggest that data is already an asset class and it is being traded as an asset class today. How we may be able to leverage that asset class at a higher degree is a different question. And I would suggest that almost every single organization out there that is doing anything with data today can probably improve their leverage.

of that particular asset class, regardless of how good it might be today. That's really exciting. That's a great place to leave it. Moise, where can people follow Manetu and stay in touch? We have a product launch coming up, and our website is www.manetu. That's M-A-N-E-T-U.com, and we would love to hear from that. That's great. Thanks so much for joining the podcast today. My pleasure. Thank you. Thanks for listening to another episode of On the Brink with Castle Island. To find out more about Castle Island, visit castle island.Vicc.

To listen to all of our podcast episodes, please go to On thebrink dashpodcast.com or just click on the tab in our website. Thanks for listening.