Money Reimagined
Gulf News' podcast series in association with Rostro Group, Money Reimagined unpacks the future of finance, innovation, and opportunity through the lens of a new generation of investors.
Money Reimagined
How digital assets go beyond the hype
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Mark Foulger, Managing Director of Digital Assets at Rostro Group, explains how crypto is evolving from speculation into infrastructure, with payments, lending and institutional adoption driving its next phase.
The young people today don't need an account with JP Morgan, they don't need to have an account with Barclays, they can simply have their MetaMask wallet and they can participate in global finance by simply utilizing these coins and using the money markets or lending markets that are provided. If you're in Asia, you're generally trading on Binance. If you're in the States, you're generally trading on Coinbase. Well, we can take liquidity from both of those, plus other OTC providers, and provide a better deep liquidity pool than you can from simply going to one singular source. It's the back-end infrastructure that's being built on these rails, and it's our job to make it as easy and efficient for our clients as possible.
SPEAKER_01Hello and welcome back to Money Reimagined, Investing for the Next Generation. The podcast where we explore how the next generation is reshaping finance, technology, and investing. I'm Lochland Kitchen, and today we're discussing digital assets going beyond the hype. In this episode, we're turning our attention to digital assets, a space that's moved rapidly from the fringe to the mainstream, yet still raises big questions around safety structure and also the long-term value. Young investors have played a major role in driving adoption, but as the market matures, the conversation is shifting from speculation to sustainable digital wealth. Joining me today is Mark Fulger. He is the managing director of digital assets at Rostro Group. Mark works at the intersection of traditional and digital finance, helping build secure institutional great infrastructure that allows investors to participate in digital markets with confidence. Mark, thanks very much for joining us on the podcast today. Thank you for coming in. Thank you for having me. We mentioned there at the start that a lot of the digital assets that driving force has been these young investors. But when it looks at the digital asset adoption globally, what are you seeing in terms of how I guess Gen Z and millennials are approaching crypto today? What's changing today compared to even just a few years ago?
SPEAKER_00I think is the usage. If you look at the TAM or the toilet adjustable market of crypto these days, you're looking at nearly a billion people. Now they're doing two things. One, they're using it to buy, to basically that memeability of buying a meme coin, hoping it goes up. They're also doing something a little bit more intrinsic, and that's payments. If you look at the payment rails that crypto have brought to bear, a young person today is much more likely to have a wallet with a USDT, pay their friends using crypto rails, etc. So they've grown up with it. As opposed to even my generation, the Gen X's of the world, the youth have grown up with the just the idea of Bitcoin, the idea of Ethereum, the idea of using stable coins as payment rails. Um so they're they're they're more comfortable with it than I would say my generation is.
SPEAKER_01Yeah, you you touched on that billion mark. Yeah. Uh so are you saying that's not a billion people that are actively trading? There are a billion people that own some sort of currency. They're using it, exactly. Yeah. Yep. And and the famous story, I guess, about when it comes to the payment was that I think the guy that spent 68,000 on a pizza or something a couple of years ago. Yep. Um, and everyone sort of bought it and he said he was, he would have he'd do it again. He he was that confident. Um, when it comes to payments, what are most people using their bitcoins for payment on? Are there particular services or companies that are taking Bitcoin more than others?
SPEAKER_00So I I think crypto has evolved. Before, yes, Bitcoin was the only crypto. That was the the the payment reel and ever. Bitcoin's moved to more of a uh the idea of a digital gold. So people today will put their money into Bitcoin and they'll hold it. Why? Because the Bitcoin blockchain isn't the most efficient for actually um doing payments on it. It takes them an hour to settle. Whereas opposed to USDC or USDT, that's what the youth and people today are actually utilizing for those payment rails. Why? It's instant settlement. It's the finalities in at most 13 seconds, as opposed to Bitcoin, which is uh an hour. Um so you've also got the idea of Bitcoin, let's be honest, for in his life, has gone up and down quite a bit. So it's not a very good store of value as opposed to USDT. So if you look at the youth in places like Turkey or Venezuela, etc., they're more likely to put their money into a USDT contract and transact with that. Because if you look at like Turkey, for instance, like 50% inflation, right? Are you going to keep your money in Turkish lira when you know the government's like going to inflate your money away by that amount each and every year? So the youth and people uh you go to the bazaars in Turkey. They are using USDT for actual transactions.
SPEAKER_01Crypto often gets framed as a speculation or as a specy, as we would say, in my country. How do you distinguish between some of the short-term hype or what we often hear at dinner parties is the next coin to get on, or building long-term digital wealth?
SPEAKER_00Well, I think that goes to on-chain stuff. Um, so on-chain infrastructure that's actually being built. For instance, the tether, which we've just mentioned, tether, USDC, the stablecoin rails are actually there. And they're a much better rail than the actual swift payment rails that people utilize today. But if you look beyond that, you want to have usage. You don't want to just have your USDT sitting there doing nothing. So things like Aave, which is a decentralized, almost like a lending market where people can borrow and lend um stable coins and earn interest without leaving the decentralized world. What does that mean? That means for the young people today, they don't need an account with JP Morgan. They don't need to have an account with Barclays. They can simply have their MetaMask wallet and they can participate in global finance by simply utilizing these coins and using the money markets or lending markets that are provided.
SPEAKER_01And is that probably the most attractive thing about it? That you're sort of navigating your way around from those more centralized banks and newer technology, probably with less government restrictions, is able to provide uh a more faster service.
SPEAKER_00Uh yes, much quicker service. Um it's just the idea of you're able to generate more. Think about JP Morgan, for instance, right? Those big banks and 200,000 plus employees um don't come for free. So you become the product, your money becomes the product. Um, whereas with Ave, for instance, which is the largest money market or lending market, I should say, on Ethereum, it has somewhere in the region of $66 billion that's being borrowed or lent through it at any one time. Now that makes a very large protocol, but it has 10 developers. Literally, it's run by code. So there's 10 people that are running the code in the background, there's smart contracts that are verifiable. I will tell you that Ave is 10 times more transparent because you can actually audit every line of code that sits in those smart contracts. With JP Morgan, there is no way that you will able to audit what any one department is doing at any one time. So, anyways, back to the point. Because it is such a small team, small infrastructure, you're generally able to generate more yield off of your money than you would through a centralized entity.
SPEAKER_01So if I was explaining it to my dad, I'd say they don't have the overheads.
SPEAKER_00Yeah, basically.
SPEAKER_01Yeah, it it almost sounds like online shopping. They're not paying lease and rent in a in a in a store. So an online retailer can sell the product to me at 10% off. Exactly.
SPEAKER_00Compliance, um, management, you know, like people that just do paperwork, et cetera. Yeah, they're all disrupted.
SPEAKER_01For anyone um who is new to digital assets, um, whether that be someone who's come just coming out of school and is interested, maybe it's people like my parents that have always overlooked it as something, you know, as speculation and not wanting to get it involved, get involved. Um, security and safety tends to be the biggest concern. And maybe that's the fear of the unknown. But for someone who might have their crypto wallet, what is safe participation in cryptocurrency look like today?
SPEAKER_00Well, safe, there's two ways. Obviously, you can use custodial accounts. And when we talk about custodial accounts, we talk about people like Coinbase, Binance, et cetera, that will hold your keys. Your keys are the entranceways to your wallets, et cetera. And there's two ways you can do it. One through a custodial account, or two through a self-hosted wallet. Now, to be very frank, some people, like maybe the older generation, um, shouldn't uh aren't going to be so adept at key management. So the risk is of obviously losing your keys, et cetera. If you can, then great. Not your keys, not your coin is the saying that that the Bitcoiners always always hold.
SPEAKER_01Hang on, pause that because I haven't heard that before.
SPEAKER_00Yep. Not your keys, not your not your coin. So so the the the whole idea of crypto is being able to bank yourself. You are the bank, et cetera. However, that being said, many people shouldn't, in all honesty. So we do provide a custodial service for our clients that will allow them to be held safely within our uh multipart MPC structure.
SPEAKER_01For people that are hearing a lot about uh tokens, yeah, and they're also hearing about prices, but less about, I guess, the background or the technology, what sits underneath when it comes to the infrastructure, and we touched on it just briefly before, uh, custody and liquidity. Why are those things so critical when it comes to investing in digital assets?
SPEAKER_00Well, it's interesting. If you look at the large exchanges, people like Coinbase, Binance, et cetera, on the liquidity front, the prices diverge. And you think, oh, this is a digital market. This should be much more efficient, but it's not, et cetera. Um, so liquidity is super important, obviously getting the best price uh that you can get. And what we try to do is to marry, so to speak, the different liquidity sources. Like if you're in Asia, you're generally trading on Binance. If you're in the States, you're generally trading on Coinbase. Well, we can take liquidity from both of those, plus other OTC providers, and provide a better deep liquidity pool than you can from simply going to one singular source. On the infrastructure side, what you've seen is that the um the larger players are generally now getting to the space. For years, Jamie Diamond said, I'm never touching crypto, never touching crypto. Well, they are now. BlackRock is one of the biggest proponents. Obviously, the ETFs have come into play. Um, so these infrastructure, things like prime brokerage elements that have were missing uh for so long are now coming into play in crypto. It's making it a more efficient market.
SPEAKER_01When you look at some of those more traditional uh financial institutions like BlackRock, one of the biggest on the planet, I mean, they openly came out and said, yeah, they're not gonna support it. You know, you had generations of it, may have been JP Morgan or saying, or maybe Credit Suisse, one of them saying if they find out any of their employees are investing in it, you know, we're gonna have some serious words. Yeah. Um, how was it having to eat that humble pie for a lot of these big financial institutions to one now realize that they're investing? And two, what did the wider crypto community feel about oh, the the barriers are coming down now? This seems to be a bit of a breakthrough.
SPEAKER_00Yeah, I I to be fair, I've not seen anyone um from the Jamie Diamond downwards stating anything about um eating humble pie, so to speak. I tend to think they don't do that. You do have the price go up, brigade. And and generally what that did was since uh BlackRock made the announcement, you saw a massive increase in in price of Bitcoin. So they generally tend to like it. And that's what what tends to happen from you get the cascade effect. Bitcoin goes up, Ethereum goes up, Solana goes up, and cascading down the market cap of coins. So it generally was looked at positively. Um, however, there are some of the uh let's call them old heads um that look at this as not what crypto is about. Crypto is about holding your own wallets, your own keys, et cetera. So there there is a divergence in in thought uh between the two.
SPEAKER_01And you come from a wealth of experience because you've also come from uh, I guess what you'd more consider a traditional finance background, uh, but you've also, you know, an expertise in crypto. For you, how are those two worlds kind of starting to come together? Yeah, you know, the old and the new, and why is that important for investors looking to buy in?
SPEAKER_00Yeah, you're seeing everyone from the TradFi space, as we call it, come into the more crypto space. And what you're seeing is, at least on the institutional side, is the actual rails being created. Um things like price discovery were very difficult previously because you didn't have the credit intermediation. So when I say intermediation, I mean like the prime brokerage elements where I could trade with one person here, trade with another person here, and then get settlement. So everything was disparate. It was very difficult to get what the source of truth. Now that these elements are coming in, the prime brokerage, the custody accounts, some of the banks are now custody in crypto, um, you're starting to see more of that proper institutional structure that allow for deeper markets, better liquidity, and better pricing, all in all.
SPEAKER_01There's a lot of talk at the moment around tokenization, uh, stable coins. You mentioned before blockchain rails and the importance of it. Looking through the crystal ball, if you can, how do you see these technologies kind of reshaping what we know in finance over the next say decade or so?
SPEAKER_00I may be a bit biased to say this, but everything will be on blockchain rails. So the DTCC, which manages about, or sorry, custody is around 100 trillion. So does this explain that? The DTCC? Yep. Uh, DTCC is a custodian. So they hold assets, stocks, shares, bonds, fixed income, all that sort of stuff. They've announced that everything that they take custody for. So we're talking hundreds of billions in assets, um, uh, if not trillions, um, will be on blockchain. Well, they they call it digital eligible. What that means is it'll be on blockchain rails. So literally, if you trade stocks, shares, it will be on a at some point on a digital rail. Now, what does that give you? The ability to trade 24-7. You don't need to wait for the New York Stock Exchange to open to buy shares in Tesla because there'll be price discovery naturally outside um on blockchain rails.
SPEAKER_01So they're sort of almost reflecting consumer behavior now. We live in a 24-7 economy. Exactly. And that's the next stage. Um, for people that are looking to invest, and from the moment you're in high school studying basic business studies, you talk about diversity. Everyone always talks about diversity. So for anyone who is perhaps starting out but thinking long-term, where would you advise digital assets to fit in between a portfolio alongside FX and futures and property and other investments?
SPEAKER_00I mean, it it's depending on what they're they're trading, et cetera. I mean, I I tend to think BTC should be a small percentage. I'm hearing some people say 5% now because if you look at the the the five-year sharp ratios, etc. Yeah, is that because we're at a dip over the last five years? Yeah, I just think one or two percent. And that's what a lot of advisors that I understand I'm not an advisor, but if what the lot of advisors are are telling their clients to do, one to two percent of BTC andor ETH, I do think that something like ETH um in the long term, with its smart contract capability, it's if you think of Bitcoin as digital gold, you look at ETH as a world computer that any sort of financial transaction, et cetera, can happen on. I tend to look at, and this is not financial advice, I tend to look at that as something that will change the world. Wow. Yep.
SPEAKER_01That's um that's a big statement. We'll come back in 10 years. We'll see how, we'll see how it goes, but I know you're fairly confident. Mark, you touched on when you look at someone's portfolio. Um, your recommendation when it comes to uh, you know, some of the things like BTC should maybe be at this stage one or two percent of your entire portfolio. But what would you recommend for investors? How much should be in digital assets?
SPEAKER_00I would say even more. Um I would say upwards, up to 5%. Again, you don't want this being the bulk of your portfolio. And again, when we talk about these instruments, we're talking about digital native tokens, things like Solana, Ethereum, Bitcoin. It also depends on your age, risk tolerance, et cetera, right? If you're 20 years old, maybe potentially you look at ETH, as we said before, as the world computer. You still think you can earn that money back if you think exactly if you're 60 years old or whatever, potentially less. Um so and you need to look at them as instruments in themselves. So Bitcoin, digital gold, Ethereum, world computer, Solana, uh, a permissionless way to fast and easily transact, et cetera. What value proposition does that hold in your portfolio?
SPEAKER_01Uh, for investors that are looking to move between fiat and crypto, how important do you think is that seamless access? And for investors, how does that change the user experience? Yeah. Or is it that 24-7 thing you were talking about?
SPEAKER_00It's funny enough, that's always been the hiccup. How do you get your dollars onto digital rails, right? How are uh stable coins created or redeemed, et cetera? Um, and that is, I think, the sticking point that's finally coming to fruition now to make it a bit more seamless thing. Um, you've got companies like ourselves that are setting up a vast but payment rail entity where we would be able to take dollars or fiat and and pay out or redeem vice versa, because we'll have the liquidity. And that's always been the problem is not only getting the dollars on, but getting the liquidity there, especially in size. Um that's what we're looking to um kind of push out there for our clients.
SPEAKER_01Rostro, uh, where you're working, is preparing because it's got an upcoming VASP license. Yep. And that's going to offer institutional grade crypto liquidity with that 24-7 pricing. Um, for clients or people looking to invest, what does that really mean in practical terms?
SPEAKER_00In practical terms, it means two things. One is Rails for very quickly and easily um getting either dollars or fiat on and off. We will have banking rails that'll run 24-7. We'll have crypto rails that are run 24-7. So for payments entity, um, what we what will provide our clients is the ability to, oh, I need UST now because I need to pay this guy over here. Well, you can get yours the dollars, we can get that that within half an hour, get you the USDT out the door, so to speak, and vice versa. On the brokerage element, so where we provide a best of breed pricing, execution layer, and custody element where clients can come to us, get the best price that we we think we can derive in the marketplace that we can get from that dual source of liquidity I talked about earlier, but also the custody elements where we're holding your assets in uh military grade in these encrypted vaults.
SPEAKER_01So, so it's a two thing, it's the safety that you've got there, and also the pricing are kind of those two key drivers that you find. Um, you gave your predictions again, but I I want to know this time going ahead five years, what do you see digital assets playing in everyday investing? Is this something that we're gonna be doing a lot more than now? And how do you think Rostro is positioning itself for helping that change within five years?
SPEAKER_00It'll be interesting to see what's actually what you know as digital rails and what's obfuscated. So, for instance, PolyMarket, right? It's the big largest prediction market in the world. You would not know that that's crypto rails because it's not in your face. But it is what sits underneath. So, what we try to do is we will write a lot of um uh sort of implementations, whatever, utilizing crypto, but we you won't, the client won't see a crypto. The user experience will be okay, you come here, you trade, you buy, you sell, et cetera. Um, and that's it. It's very, very simple. It's the back-end infrastructure that's being built on these reels. Um, and it's our job to make it as easy and efficient for our clients as possible.
SPEAKER_01And you think it comes down to more that um younger traders that are coming in are just far more confident in the in the security and the technology than perhaps older investors.
SPEAKER_00Yeah. I would definitely they grow up with this. Like I was on the tail end, um, but uh a uh a zoomer, I think, as they call today. Yeah, yeah. They're getting MetaMask, which is one of the most prevalent Ethereum wallet bases, when they're 12, 13 years old, they're trading meme coins. They'll be much more comfortable than their parents will in your eyes.
SPEAKER_01And I mean, just going off, your thoughts on all these meme coins, because we see them continuously coming up. Does it discredit the industry to some degree?
SPEAKER_00I think it does. I think you know, if you see you see Dogecoin, which has no intrinsic value whatsoever in the top 10 of cryptocurrencies, I think it does um tarnish it a little bit. You have real things being built, things like Uniswap, which allows for permissionless swaps between any coins. Um, you have real assets, you'll have bonds on chain, you have you know tether, which is 160 billion in tokenized dollars on chain, you have Ave, which we talked about earlier, a $66 billion money market, in essence. And then you've got Doge. And there's a big dichotomy between the two of those. So, yes, unfortunately, a lot of people have gotten very rich off of trading meme coins, but very, very few. If you look at the percentages, there was something about um pump.fun, which was a meme coin generator, in essence, on the Solana blockchain. And it looked, it looked at all the different wallets that interacted with them, and it was something like one to two percent had actually made money. And when we talk about actually making money, we're not talking tens of thousands, we're talking about a hundred, two hundred because they got lucky once. So it's generally a fool's errand trading memes.
SPEAKER_01But that's just my opinion. Well, Mark, thank you very much for joining us here on the podcast. It's been great to share your insights from your experience of both traditional and also the digital tokens and get your thoughts on just where you think things are going in the future.
SPEAKER_00Thanks for having me.
SPEAKER_01Appreciate it. Again, my thanks to Mark for joining us here on the Gulf News podcast, Money Reimagined. And it's great to be able to hear those insights into a space that for so many is misunderstood. I guess what's clear is that digital assets are no longer just about price movement or speculation. They're really becoming an important part about how investors think about diversification, infrastructure, and the future of money itself. If you would like to learn more about Rostro and how it's redefining access to global markets, visit rostro.com. And for more details about this and any of our podcasts, you can go to the website golfnews.com forward slash podcasts. I'm Lofton Kitchen. Thank you very much. For joining us on this episode of Money Reimagined. Join me on the next episode where we talk about how partners make money. We'll see you soon.