Thank you for joining us in Singapore at Token2049. We are here to talk about the future of finance. I'm joined by Arjun and Vugar. Maybe start for those who don't know, even though they probably do, a little bit about yourselves, the businesses you guys run, and we'll kick this thing off.
Sure. Welcome everyone to MEXC stage. I am the CEO of MEXC and today we proudly serve 40 million customers globally across 170 markets, and we are opening the gates to infinite opportunities for everyone here.
Arjun, co-CEO of Payward. We also started Kraken in 2011, but today we extend NinjaTrader on the trading side, and then we also have banking, asset management, and services.
Yeah. All right. So maybe to kick it off, it's going to be interesting because obviously MEXC is a bit more retail focused, Kraken's a bit more institu—or Payward, excuse me, a bit more institutional. What do you think the traditional exchanges or traditional finance in general is lacking currently?
The famous saying goes like money never sleeps, and unfortunately for many years exchanges would close at the end of the day. And what we are doing today is much different than any other time because onchain is becoming the new online. The same way we can go do our e-commerce shopping without waiting for shops to open or close, AIs now don't sleep, they can do our tasks all the time, and we are stepping into the agentic world. And I think when this modern finance comes together, we shouldn't be thinking about the times; we should have an opportunity that runs around the clock, globe, the same way we shop, the same way we live our lives. And I think traditional finance is getting reshaped slowly by the fact that onchain enables us to go around the clock. And it's the first time ever that I think, in this beautiful stage that for years we are coming and discussing, this is the first time we are actually seeing how truly the traditional finance is being challenged and changed. We have seen New York Stock Exchange and NASDAQ also trying to go 24/7, and I think that is a huge win for an industry that's been advocating for bringing opportunities for so long for everyone.
Same question for me. Yeah, please, maybe from a bit more institutional angle. Huh?
Look, I think that everyone spends time on, you know, 24/7 trading and or institutions versus, you know, what's going to happen with TradFi versus DeFi. I think what's more important is you've got about six billion people plus that are getting new access to assets. So we know what those look like. We've seen that in stablecoins. And so when you've got demand for assets worldwide that they didn't have previously, what are the mechanisms and the companies and the infrastructure and liquidity pools and the protocols that are going to help support that? And so I kind of think about it first, which is who are the customers and what are the types of products that we can have, regardless if they're speculative, deep, deposit-oriented, yield-oriented. And so the way in which we've structured our time and attention is how do we serve consumers? How do we serve our own competitors? How do we serve, you know, traditional banking-style products? But how do we minimize the friction that everyone has right now in order to get access to those products? And so I think you've heard this theme around tokenized assets, 24/7 trading, but it really means how do you bring all that collateral in one place where, you know, for someone who is a high-net-worth individual or an institution, let's just say in the United States or here in Singapore, they get access to a certain set of assets or speculation when they want, and how do you bring that all the way down to someone on an everyday basis? And so the parallel I like to think and use is Citadel has spent billions of dollars being able to do risk management across all types of asset classes and moving collateral as they need in a 24/7 manner. We're going to bring that to every person in the world through ourselves and our partners along the way.
So then I guess, Arjun, to continue down that path, when you think about the next five years for your users, what do you see them craving now, and how do you see that changing over time as they start to adopt modern financial infrastructure?
I think the question that you're like really trying to answer is how do you get people more money in their hands? How can they spend against it? How do they do that in the real world as well as have the asset appreciation regardless of what that may be? And on what we're doing today and moving forward, what are the regions that are going to be able to help best support those, you know, jurisdictional regulatory-wise, and who are the types of companies that are going out trying to figure out permissionlessly as like the guiding post, which I think is what everyone kind of forgets about. So how can I move this money just as freely as cash? And we've always talked about it. We always use a theoretical white paper for it, or a technical spec, but or, you know, we'll label something that just sounds really stupid, but it's just more about how do you just get more money in people's hands so that they can make the choice on what they want to do with this?
Yeah, well said. Well said. And now, Vugar, when you talk about the retail side of things, onboarding the next adoption wave, where do you really see that stemming from?
Actually, Arjun touched a very important point about friction, and today especially for the retail user, friction is much huge, right? If you want to trade a certain asset class, you need to jiggle between apps, platforms, probably go from your bank to neobank to come to an exchange. Maybe you have a broker participating, depending which tax bracket you fall in, do you have a wealth manager that can help you in this process? And I think next five years should be about minimizing this friction. And there's a very big difference between institutions and retail because retail adopts very quick, whether it's perpetual trades, whether it is tokenized assets, whether it's something new that is in the picture. Usually retail comes first, and that is what we saw is crypto itself, right? Peer-to-peer networks where the retail comes first, tries it out, and then institutions follow. And I think in next five years we will be seeing how much retail is driving this change of being frictionless and how institutions will come and benefit from this because there will be a huge demand because when the customer is where the actual user is. And I think next five years will be a lot of trials, errors, and coming to this convergence of a singular platform where asset classes can be and investment can be moved very quickly and very smoothly, and retail will be the main driver of this.
I mean, and with that, it's like a gamut of products that people want to trade at any point in time. It requires a very, very heavy, just like maintenance or even just infrastructure needs to be very, very well maintained. So how do you guys think about that actual scalability aspect, even maybe even modularity of that in your businesses? Maybe, Vugar, if you want to kick that off.
First and foremost, like we want to think not just as a trade, rather than we love to call it an opportunity and infinite opportunities, whether you want to save, invest, trade, even spend with our spending opportunities and cashbacks, and there's so many, so much more things could be done within the same ecosystem. But again, it comes to three most important aspects. First and foremost, it's trust. If you don't have the trust of a customer, you don't have anything. And since I took office, that was one of the priorities to make sure that we build an ecosystem that is transparent and trustworthy. And how we do it, we partner with Hacken Group and we continuously publish our proof of reserves, and this is the first and foremost to give reassurance to the user their assets are safe with us. Secondly, we have been heavily investing, and we had a pledge of $500 million to increase our Guardian Fund to make Guardian Fund one of the largest user safety funds across the industry. Today we sit around $100 million USDT holdings and around 2,000 bitcoins, and we'll be continuously increasing them once we have the trust. Second important aspect is access. We already mentioned how frictionlessness is very important, how building access to the user is important, and how we can bring all the opportunities within the singular platform, and that is where the trade-everything idea comes in. I think the main goal for MEXC in the next couple of years is to become this robust super platform where users' all financial needs can be met within the same ecosystem. And once you have both access and the trust, and the last thing is about building the future, and today future is about making the right decision and informed decision, of course with the help of AI and modern technologies. This is exactly where we crack the cycle for the user. We are bringing the institutional-grade opportunities to the users thanks to the technology and definitely thanks to the AI, whether it is the research capabilities or whether it is making the right decision or semi-automating. And I had this very bold prediction that in the next couple of years, by 2030, at least 40% of all the trades will be AI-initiated, whether it is purchasing, investing, or moving the funds, and that is what we are exactly preparing for.
And I guess, Arjun, on your side of things, when you think about building an exchange that's going to survive the test of time in the future, what are the things that you really pay attention to at Payward?
Look, I think that one of the most important pieces that we kind of miss is that when crypto started, right, like Bitcoin, people invested really early, right, at the lower price point. It's appreciated over time. And so the products and the financial instruments that you needed to build was for liquidity. Then you had your next asset class, Ethereum, next asset class, so on and so forth. So you've got this new set of population and constituents that need access to more capital, more products. And then at the same time, you've got the—I don't want to call it old world, but you've got the TradFi institutions saying like, we want to come in. Then vice versa, you want to be able to rotate your capital and do risk management. The reason I say these things is that, you know, trust is important, but at the same time, if you take a look at, you know, worldwide, you know, GDP per capita growth, wealth accumulation, it happens in emerging economies, but it's because they have access to some of those assets. So you take a look at China, you take a look at India now. Look, the only way they're going to be able to sort of self-sustain and have like a heartbeat of an economy is because they have a local liquid economy to be able to support. The great thing about crypto is you got global access, and we want to be able to give more and more people worldwide global access to these assets that are appreciating no matter where they might be. So for the US, post-World War II, you know, 70-year run, we'll see what happens over the next hundred years. And so when you've got like global access, global liquidity, then you have to start thinking about, okay, well, how do you partner and build trust with every fintech app that's out there as well? So it's not a zero-sum mechanism. And so the way we thought about building everything is how do we build and prove out vertically integrated products. So this is our first-party apps like Kraken, NinjaTrader on top of our rails. Now it's about, okay, how do we extend those rails to partners as well as creating more banking-angled products or depository products regardless of where they are in which jurisdiction. And the same thing we're doing with asset management. I think what's more important is you got about seven trillion dollars worth of private assets locked. So who gives a damn about tokenized equities in the public markets for the time being, which is like, yo, we'll give you access there. But then you've got all of these companies in all of these markets in Brazil, in Nigeria, in Tanzania—sorry, Tanzania—all of these places or here in Southeast Asia where we've got locked equity. So how do you lend against it? How do you tokenize it? How do you actually bring them to the public markets? I think the best liquid public markets of the future are going to be in crypto. And so that means Kraken, MEXC, Bybit, Binance, we all have to work together, OKX, etc., to figure out ways in which we can create a new mechanism. We already do it today listing a new token asset. Now, how do we bring out like equity tokens? And so these things are not far out. And then what you want to be able to do is then again build financial instruments on top of it. So all of the, you know, companies that are here today, they're building all these financial products and instruments. We got to find a way to be able to help promote them to be able to scale in their core markets, their core constituents. It doesn't matter if it's institutional or not. And like we're already at a large scale, but we're also small. Like we only serve, you know, about roughly 7 million funded accounts globally. There's billions of people to go to help support. The only way to do that is to partner with folks including MEXC to be able to help succeed in their core markets.
Yeah. Could you continue along that path, please? Because when you think about money Legos in crypto itself, it was designed to be interoperable collaboration, and now we're seeing traditional finance and crypto-native collaborations, I mean retail and institutional. I'd be curious—you both had an announcement. Can you talk about what collaboration may look like, without divulging anything confidential obviously, what would that look like on your guys' end potentially?
When we look into like modern data and research, around 74% of the people who are, especially in the retail end, who are active investors, they're planning to switch to a singular super platform similar to ours to meet their retail needs or investment needs. And I think that's a very important factor: how instead of competing, we can all collaborate in order to build on top of the existing infrastructure like Kraken's, and where MEXC can bring the retail end to the game. Today we proudly, as I mentioned, serve 40 million customers across 170 markets, and what makes us very strong is that retail-first approach when we build and innovate, whether it's perpetual markets that we bring in, whether it is the moving towards the tokenized asset classes. Today we list more than 7,000 pairs in the stock opportunities for our users, and recently with principal-guaranteed accounts and opportunities to get yield earnings and even spending through our card products. We're actually building this full retail ecosystem that our users don't need to move further whenever they need to make that investment decision or build a better future or chase that opportunity in the place. And when it comes to possible partnerships with giants like Payward that has an extensive investment into different infrastructure products and becoming the underlying infrastructure, I think this opens the doors and goes hand in hand where we can finally bring institutional-grade tools to the retail end, as I already mentioned, because retail is so forward-leaning in terms of testing new products and giving us the very important data and adopting the things that institutions usually are not as ready. That could be a very interesting opportunity. And a very big key point is also how strongly positioned Payward and Kraken is within the US market, for example, and there is an opportunity where we can take existing opportunities like the way people trade, let's say, digital assets and tokenized stocks, especially in perpetual markets, if the regulatory frameworks allow us in the near future, and that could open a huge gateway for also institutions to come and experience opportunities that were never available before.
Yeah, well said. Are there any additional commentary there? I think we're coming.
No, I think, look, to put a finer point on it, you've got a lot of innovation that's happened outside the United States for a long time. Asia has been on the forefront on derivatives and perpetuals. It's like it's the crypto-native form of trading or like the trading of choice. And so you have this continued innovation worldwide. And so when this innovation has to come to the United States or the UK or Europe, since that's where we started, what are all the ways in which we can help enable those partners to actually come to the US, even if it's competitive with us? Okay, well, what are those things? You can clear for them. You can deposit for them. You can lend against it. You can make sure that they have access to depository accounts. There's all these things that traditional finance is going to take forever to do. So we can wait for them or wait for the innovation to come, or we can say we'll just build it ourselves, since those are the biggest what I'd call counterparty risks to innovators from, you know, offshore to onshore and vice versa. And so that's why we've, you know, spent the last 10, 15 years building out our regulatory stack, clearing stack, deposit stack, lending stack, so that we can support ourselves. But then when we create an API for any of our partners, that means we can bring them to any of the shores and then create that innovation even if it's competitive. I think that's a really important piece is that they're competitive, but that means we open up the market to more choice, better products rather than just like, you know, one exchange versus another.
Yeah, well said. I will say even though in the US it came a long way from the draconian anti-crypto army era, it still almost felt like a meme to be the crypto capital of the world given just a lot of the restrictions and whatnot that exists today currently. But sorry, bit of a tangent. I digress. But for you guys, man, let's say three words that you think would describe the next, we'll say, five years in crypto, for example. What would you put on them?
