{ "episodeId": "SLP678", "speakers": { "stephan": { "name": "Stephan Livera", "role": "host", "tag": "STEPHAN" }, "pascal_eberle": { "name": "Pascal Eberle", "role": "guest", "tag": "PASCAL" } }, "segments": [ { "speaker": "stephan", "time": "00:11", "start": 10.51, "text": "Hi everyone and welcome back to Stephan Livera podcast brought to you by Bold. For American listeners, you can buy Bitcoin at the best rate in the industry and you can also get SAT back using the Bold debit card. Now, joining me on the show today is Pascal Eberle. He is the chief of staff over at Signum Bank, as I understand, based in Switzerland, but As a, as I understand, sort of like a crypto neo bank, and I thought, would be interesting to get you on for to hear some of your perspective. So first off, welcome to the show, Pascal. Thanks a lot, Stefan, for having me on. So, tell us a little bit about yourself, and, what Signum Bank is doing these days." }, { "speaker": "pascal_eberle", "time": "00:50", "start": 50.22, "text": "Sure. So I'm Chief of Staff at Signum Bank, I'm leading the CEO office, so working on a range of strategic projects with our executive board and the board of directors. I also co-led the Bitcoin at Signum initiative, which is a strategic, project we launched to, you know, get a bit further entrenched in the Bitcoin space, meaning, to build, business relationships, but also educate internally and externally about Bitcoin And then develop more Bitcoin related products and, Bitcoin tech. my background basically prior to Singum, I was in management consulting. So I worked at, Boston Consulting Group in, Zurich and, Dubai for almost seven years. And I think my Bitcoin journey, I mean, I had several touch points with, Bitcoin, but, never really took the time or interest to get it, which I obviously regret now. But, then really fell into the rabbit hole, I think, in twenty twenty-two. had the chance" }, { "speaker": "pascal_eberle", "time": "01:42", "start": 102.15, "text": "to More than, also your podcast amongst many others. and then Signum, basically, so yeah, yeah, yeah. But go and tell us a little bit about," }, { "speaker": "stephan", "time": "01:53", "start": 112.59, "text": "Signum's offering and as I understand, you're more like a high net worth and maybe institutional, Bitcoin kind of banking and fiat banking." }, { "speaker": "pascal_eberle", "time": "02:03", "start": 122.98, "text": "Yes, correct. So we're a global digital assets banking group founded in 2018. We're basically a fully licensed Swiss bank, but also hold licenses and registrations in Singapore, in Abu Dhabi, Liechtenstein, and Luxembourg. And basically what our core value proposition is that we offer an integrated fiat and digital assets banking services to institutional and private accredited investors. So that's no retail business, but definitely on the, on the more- Wealthy clients and then institutional side, basically we serve individual clients, family offices, external asset managers, we do have funds and hedge funds, corporate and DLT firms, including many Bitcoin miners, for instance, and then also other banks, which we serve in a B2B or bank-to-bank model. and in terms of offering, it's, you know, like any bank, right, at the core is really the safekeeping of your assets, be that fiat, traditional securities or digital assets, and around that we do have a trading offering," }, { "speaker": "pascal_eberle", "time": "03:02", "start": 181.54, "text": "Team, and then the dedicated B2B solutions for our banking partners." }, { "speaker": "stephan", "time": "03:07", "start": 186.72, "text": "Yeah, so I guess like account, typical, you know, transactional account aspects of it, you have lending. So I, I presume then if people wanna borrow against Bitcoin, that kind of thing, you have that kind of product also?" }, { "speaker": "pascal_eberle", "time": "03:18", "start": 197.65, "text": "Yes, exactly. I mean, that's our, our main, I would say, offering in the credit lending space. We, also in the, in the past offered hash rate backed loans, which is obviously a very specific product for, for Bitcoin miners, and The next space. we also do some educational programs. I see, yeah. And as you mentioned, you" }, { "speaker": "stephan", "time": "03:34", "start": 214.08, "text": "have, offices around the world. So then, are you restricted in where you can take clients, or is it mostly global with the exception of like certain jurisdictions, or how does it work there?" }, { "speaker": "pascal_eberle", "time": "03:44", "start": 224.37, "text": "so I mean, of course, we, we always follow the local, jurisdictional laws, and that also limits us in terms of, you know, which, which, countries we can serve. But broadly speaking, our clients come really from, from all over the world, and, with a, with a certain exception of countries that are just outside of our risk appetite. Gotcha." }, { "speaker": "stephan", "time": "04:02", "start": 242.32, "text": "Okay. Yeah. and so, yeah, let's talk a little bit about what's happening in the industry. I think, there's a lot of things going on. I think probably the-- As I look at it, obviously there's, there's tons of things always going on in Bitcoin land, but what I'm seeing nowadays, there's a ton of interest in things like treasury companies, and there's a ton of interest in lending. These are kind of big, big topics nowadays. so what are you seeing on the, let's say Asset side of things, what are you seeing either at Signum or just in general?" }, { "speaker": "pascal_eberle", "time": "04:37", "start": 276.72, "text": "Yeah, I think the, the Bitcoin treasure companies are definitely, I think the hottest topic in Bitcoin right now. I personally probably fell into this specific branch of the rabbit hole in October last year and just found it really interesting, maybe a bit from my personal interest because I studied business administration, so I also had my fair share of, of corporate finance classes. to me personally, I think it's really, you know, the next step, I would say, in, in Bitcoin adoption, Sailor so eloquently put, the transformation of capital from the twentieth century into capital for the twenty-first century, digital capital, being Bitcoin. and I do think it, it will, you know, in Trafalgar circles, it's basically dubbed the financialization of Bitcoin. I think it's probably rather the Bitcoinization of finance, because essentially, there's tons of capital that is locked up, so to say, by specific forms or pools of capital, and what these Bitcoin treasury companies do, they basically make, these pools of capital accessible To get, some kind of, Bitcoin exposure by creating financial instruments, be- equity or debt products that cater to those investors that are in line with those mandates and risk appetites of those investors, but offering them, superior risk-return profiles than other products in these categories. and so I think it's really like-" }, { "speaker": "stephan", "time": "05:49", "start": 349.45, "text": "Yeah, I was just saying, I was just gonna talk about the different types of these, right? Because obviously you've got, you know, at the, you know, the top dog, MSTR, the big public companies, and then you've got And then you have the, let's say, companies who hold Bitcoin, but they're not doing kind of the aggressive balance sheet financial engineering side of it. And then as you go further down, you've got, you know, private companies and other people who are just doing their own Bitcoin treasury play, and so do you wanna just- I guess maybe without, you know, doxing individual clients or things like that, but what are you seeing in your client base? What are they interested in? Has there been a lot of interest, is this f-with-in the Bitcoin as corporate treasury asset story?" }, { "speaker": "pascal_eberle", "time": "06:39", "start": 398.74, "text": "Yeah, I think there's, I would say there's like three kinds of, of, of, cases, so to say, right? You have one, you have just regular companies that are, close to Bitcoin and get it, and so they decided to, to have part of their treasury allocated to Bitcoin, and or often actually non-listed companies that, that don't announce it even and just, you know, maybe, you know, were years ago already in the space and just built up a stack and so they became clients of us because the, at that time, there was no other bank, that, that would, want to bank them even. then the second type of companies are, probably, you know, the Bitcoin treasury companies or those who are really very, I would say, open about the strategy and also, you know, want to drum because as a, as an institutional grade custodian and, and broker, brokerage firm, we can, we can help them in safekeeping their assets. And then the third type of company is probably, you know, the large part of, of companies that, is actually not yet declined and doesn't yet have Bitcoin exposure and, hopefully will sooner than later realize that, you know, just holding a little bit of Bitcoin might be smart just in case it catches on." }, { "speaker": "stephan", "time": "07:47", "start": 467.3, "text": "Yeah. So let's talk a bit about those companies who don't have Bitcoin yet. Now, obviously, this is We're all pro Bitcoin, but, and many of us are highly allocated to Bitcoin, and so it's just funny when, you know, we talk to people who aren't in Bitcoin at all, or they have a very, very small allocation, and to us, it seems like, \"What are you doing, man? Like, you're just getting wrecked by fiat debasement, right?\" What do-- What are the common misconceptions that you find when you talk to, like, fiat, companies and fiat people who really haven't gone down the Bitcoin rabbit hole" }, { "speaker": "pascal_eberle", "time": "08:21", "start": 501.47, "text": "yet? Yeah As, as with, with our friends who aren't, aren't non-coiners or non-bitcoin boxes, right? you will hear like, \"Oh, wait, it's way too volatile, then the, you know, it's, it's a Ponzi scheme, it, it's not good for the environment,\" or all these, you know, the usual fluff is out there. And then I think an additional layer of complexity, since these aren't individuals that can just take their decision on their own, but it's institutions, so you have governance layers, right?" }, { "speaker": "pascal_eberle", "time": "08:52", "start": 531.85, "text": "So To be open to the idea to, you know, formulate this in their treasury strategy, then you need to have a, your C-level, your CFO who understands it, gets it, so there's various layers of additional complexity that make, I think companies being slower than, than us individuals, and that's basically, I think, what we feel, and so it will, it might take still longer, until, until just the regular company will hold, Bitcoin, on their own." }, { "speaker": "stephan", "time": "09:18", "start": 558.5, "text": "The other big one nowadays is they'll say, The past floodlines have now diminished a bit, right? The environmental line, I think that's actually diminished a lot in recent years, especially with AI, right? Now that there's all this AI use, it's kind of everyone's just gone full steam ahead, let's have energy, we want it because we want AI, and now the Bitcoin energy concern is almost, I haven't heard anyone really making that argument now. I mean, I'm sure there are people out there, but it's not that much. Nowadays, what we're seeing is maybe people saying, you know, volatility, they're Or maybe, we're hearing the line, \"Oh, it doesn't-- Bitcoin doesn't have cash flows.\" So what do you answer to that when they give you this line about, \"Oh, Bitcoin has no cash flows?\"" }, { "speaker": "pascal_eberle", "time": "10:06", "start": 605.89, "text": "Yeah, that's a great one, right? I mean, my personal opinion is like the Bitcoin isn't made to have cash flows, right? It's, it's, it's digital capital, it's money, and on its own, it shouldn't generate cash flow as, as same as gold doesn't generate little gold coins, if you just keep it together. and so in that sense, it's the same with fiat, right? If you just hold fiat, fiat per se doesn't produce cash flows, you have to put it at work, you have to People, it's just very hard for them to grasp, right, that, that Bitcoin is actually a much, much better form of capital or money than what they usually see as the usual money." }, { "speaker": "stephan", "time": "10:45", "start": 645.46, "text": "And then in the world of, I guess, treasury companies, this is kind of a big-- even in the Bitcoin world, there's like a lot of debate, and I would say there's, there's a range of opinions. I'm personally bullish on them, but of course, I still see there are risks there, like it's not that there's no risk, but I've seen a, Kind of cypherpunk maximalist kind of self-custody only view, in the middle is maybe someone saying like, \"Oh, look, I'll tolerate this, I don't really sup-- I'm not like actively supporting it, but, you know, I can't stop them. Bitcoin is the money of enemies.\" And then on the other hand, you have people who are like full steam ahead, you know, treasury company maxies. where are you at there? And, you know, what's your per-- what's your stance?" }, { "speaker": "pascal_eberle", "time": "11:31", "start": 691.23, "text": "Yeah, I mean, first and probably between two and three, although I have a lot of sympathies for the, for their original Bitcoin ethos, right? So I think this by no means a Bitcoin treasury company. I mean, this is a security, it's a stock, right? So you can, if you say this is the same as holding your own keys, then you definitely didn't get it. So I'd say, every, every individual miner should be a, a self-sovereign individual, custody their own Bitcoin. but having said that, again, Become self-custodied Bitcoin in a hardware wallet. So, and then the question is, what's, what's good for Bitcoin at the end of the day, right? I think having these companies that manage to access these pools of capitals and actually deliver superior returns for investors who are looking to invest in these kind of, forms, of capital is, is a very legitimate thing, and, and I think what I really love about the Bitcoin Treasury Company is actually how, how grossly misunderstood they are, mostly by Wall Street, unfortunately also to a certain extent by, by Bitcoin circles It's really, you know, the Venn diagram where you need to understand Bitcoin and you need to understand corporate finance, and that's really a very, very small, I would say, number of people who really see both, both sides in that sense." }, { "speaker": "stephan", "time": "12:43", "start": 762.7, "text": "I see. Yeah, and there's this big, you know, it's almost become a meme of \"paper Bitcoin\" or \"paper Bitcoin summer.\" Now there are some of the treasury guys like, you know, Stephan Luber and others who are, let's say, embracing that meme and saying, \"Yeah, it's, it's paper Bitcoin summer, like, let's go, it's paper Bitcoin summer.\" As, as that's a positive thing for them, from their perspective, and others see that as like, \"No, that's a put-down. You guys are dealing in paper yeah, but I guess that comes back to, again, that same kind of where on the gamut are you. But let, let's still manage it a little bit. If they said, \"Well, look, all these people are gonna use custodial Bitcoin, it's all gonna end up being captured by the state or regulated by the state,\" does that challenge the decentralization of Bitcoin? What, what do you think?" }, { "speaker": "pascal_eberle", "time": "13:27", "start": 806.86, "text": "Yeah, absolutely, I think so. I mean, you know, like Jeff Booth always says, right? As long as Bitcoin remains decentralized and secure, and I Aspect, right? If people don't hold Bitcoin, and also if Bitcoin is just used as a store of value but not as a means of exchange, that's what Jack Dorsey always says, it will fail, right? And I, I'm 100% personally also of that opinion, but I also think that, you know, there's a right for both to coexist, and what I really hope as well is that many people who probably get exposure to Bitcoin through the Bitcoin Treasury companies, do also their own proof of work and dig a bit deeper and then get asset that you can custody as yourself, that is permissionless, and that you don't need to ask anyone, and seeing the advantages of this over, security that holds Bitcoin for you as part of their, treasury stack." }, { "speaker": "stephan", "time": "14:19", "start": 859.08, "text": "Yeah, I see. And so, yeah, I mean, some of this is what we're talking about is at the, like, at the public level. So if we bring it back to just, as in, sorry, just to be clear, the public level who are, you know, issuing equity and debt to, let's say, you know, do financial engineering, quote unquote, and then you've got the other class of, you know, just normal businesses, whether they're public or private, who just wanna, they just wanna huddle, right? Like they've That said, it could also be that some of these businesses are private or even public ones who want to borrow against, you know, some of that, stack to, you know, to get more Bitcoin. are you seeing much of that? Like, are you seeing large institutions who, let's say, they wanna borrow against their stack, but not like hundred x, you know, DeGen style, but, you know, more like one point one or one point two x? Are you seeing that kind of thing?" }, { "speaker": "pascal_eberle", "time": "15:15", "start": 915.2, "text": "Yeah, absolutely. I mean, we've seen tremendous growth and interest in, in the, in the lending, business, where, you know, Bitcoin is clearly the asset that is the, the most, widely used as collateral because it's, it's, it's twenty-four-seven available, it's liquid, it's a global market, so I think it's really-- it is the pristine collateral. And it's also natural that, you know, if you as an individual or as a company, if you have a certain stack that you start thinking, okay, you" }, { "speaker": "pascal_eberle", "time": "15:45", "start": 944.62, "text": "You know, as you mentioned right in the past, I do think that, you know, lending, again, on Bitcoin or yield, it, it did have a very negative connotation because there were a lot of, bad actors in the space, and so I think many people unfortunately had to experience, through a very hard way what it means if you have a non-trusty counterparty and, you know what counterparty risk means, or also duration risk if you have a, a term loan and you, you know, it expires in the wrong Basically, regulated, the well-regulated players already in the last bull market, they made it through the bear market, they survived, and that's clearly the players that will continue to survive going forward. and I also think that, you know, what you mentioned the, the, the degen ways of over-leveraged Bitcoin trading, that's obviously, I mean, you get wrecked if you do that. so for instance, at Singum, our LTVs, loan-to-value ratios, they're, anywhere between forty percent for private clients to maximum sixty-five percent for Would never be to go above ten percent or max twenty percent if you're really good with keeping your risk and have some extra, I don't know, your securities or other, other collateral you could, shoot in in case that Bitcoin really drops. but at the end of the day, it's really everyone's, own decision. and yeah, it's just important to really go with, with, I think, with a good regulated counterparty and then not over-leverage, don't let the greed get the hold of you basically." }, { "speaker": "stephan", "time": "17:08", "start": 1028.09, "text": "The lead sponsor of this show is Bold, the banking platform designed for Bitcoiners. 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And now, I guess we are going to hopefully see some evolution there, because up until recently, the rates have been kind of high, right? and the terms available for this kind of thing have generally not been like longer term loans. It's often been like one year loan and you're, you're trying to roll it over. So can you outline at least from the Signum case, what kind of interest rates are on offer here for the people who wanna borrow against? Their stack. And then, how-- what's the loan term? You know, is it one year, two years, three years? Like, what, what are you offering there?" }, { "speaker": "pascal_eberle", "time": "19:30", "start": 1170.15, "text": "Yeah, sure. Maybe first, if you step back, you know, the reason I think why this was, was because so far, you-- there was very limited lenders, who were willing to lend against Bitcoin, right? Most banks still today don't do it, 'cause they don't understand it yet. But, once we see more and more banks, being open to, to" }, { "speaker": "pascal_eberle", "time": "19:53", "start": 1192.79, "text": "Banks that are very close to the money printed, we have fractional reserve banking, so they can obviously lend out fiat, to advantageous terms. at Sigma, as a Swiss bank, I would say we also profit, so to say, from the existing fiat system in that sense. So, our rates are typically anywhere between five and a half to nine and a half percent, depending on which currency that you, that you draw and if you reinvest, the, the loan with us or if you take it out, of Sigma. And then in terms of the, For us, I think that's a remarkable difference between, other, other typically the non-bank lenders is that for us, the loan word loans that we offer, they, they don't have a term, so it's basically a standing credit line that you have, it, it works like an overdraft facility on your account, you can just call it or also pay it back as, as you want, so it's very flexible in that sense. Which then takes away also the duration risk that you might incur if you have a fixed term loan, twelve, twenty-four months, whatever you see there, right? And then I think as well as a last point, what, what's, probably, you know, depending on which lender you choose, we, we at Signal, for instance, are, are margin call procedure, there's always a human in the loop, so it's not like, you know, on, on some of the large exchanges, we just get auto-liquidated at three AM on Sunday morning to, to not have many margin calls or reduce them because it just, you know, gives you much better touch point and feeling of the client where they stand, whether they can top up collateral, and you really de-escalate a lot of, I would say, tight margin call situations, even in, in the, in the craziest, hours of the markets, and so that I think is an, an advantage for both the lender and the borrower." }, { "speaker": "stephan", "time": "21:32", "start": 1292.09, "text": "Interesting. Okay, and so the summary of that then is you can get lower rates this way with, let's say, more flexible loan term periods, whereas in some of the other situations you- Maybe now a-and that maybe also be kind of a trade-off of like this more self-custodial on-chain style versus more trad-fi style. so there are other lenders out there where maybe they allow the lend-sorry, the borrower to hold one key in a multisig, maybe one out of three or one out of four or something like this. but then there might be some trade-offs around that, that, you know, it's only a one-year loan term or the rates might be more like twelve to fifteen percent. but I, so can you outline-- so I guess, do you see that as, that's a fair summary of like where things are right now, or how would you distinguish" }, { "speaker": "pascal_eberle", "time": "22:26", "start": 1346.1, "text": "there? Yes, absolutely. I think those are very good points because also like, of course, if you go with a bank, then this is, you're, you're gonna be KYC, your assets are with the bank, right? and so, I mean, then again, it depends also on jurisdiction, right? In Switzerland, for instance, with the DLT Act in twenty twenty-one, The stowaways of this asset, they have to keep them segregated, not necessarily on chain, but, in a case of a bankruptcy, these assets are bankruptcy remote, they're for the banks in Switzerland, they're off-balance sheet, they also the banks cannot rehypothecate your Bitcoin, that's also, I think, a misbelief that, or well, let's say a, a caution that many Bitcoiners warn, which is correct. But for instance, as a Swiss bank with a concept of your client, you cannot rehypothecate and so I think that that's a fair summary of what you said. I think what's also very important is this, the segregation that we have, let's say, in a bank by law. I think that's, you know, something that I, I would expect a trend to come more into the traditional finance space as well, because Bitcoin offers, as you said, multi-custody or, you know, you could have, w-with script, you could even have certain conditions programmed into, into the contract. and so I, I expect that these things should" }, { "speaker": "pascal_eberle", "time": "23:45", "start": 1424.91, "text": "Transparency and, and, and make it more secure, and I, I think that's an also in the spirit of, of, of Bitcoin, you know, and, you know, if you then wanna go with a regulated bank or not, because you want KYC or not, that's still up to you, and I think there, there should be a plethora of solutions for a plethora of needs." }, { "speaker": "stephan", "time": "24:02", "start": 1442.25, "text": "Interesting, okay. And I'm curious then, for Signum's case, there might be, like, I could imagine there might be listeners who are, you know, either whale or high net worth, and they might be looking at, \"Hey, can I borrow against some of my coins, get some fiat, and then spend that?\" So would-- do you have like a card to off-ramp it, or is it more like they would borrow against to get some fiat and then have to send that fiat to another bank or to a card somewhere else for them to actually- Fiat off-ramp when they're buying things, you know, day to day." }, { "speaker": "pascal_eberle", "time": "24:33", "start": 1473.15, "text": "Yeah, absolutely. So if you decide to, to, to not reinvest, let's say the fiat, the loan, then you can, with your Signum bank account, you can just send it out with any, fiat payment to whatever bank you want, or you can use Signum, our bank account to do your payments. We also offer, credit cards, so that's in, you know, that's in really the advantage of being, a bank and a" }, { "speaker": "pascal_eberle", "time": "24:59", "start": 1498.91, "text": "You know, you can also draw it in, in stable coins if you want and send those out, 'cause we also have, digital asset transfer, transfer out. So in that sense, you're then really free to, to do with your money as you please." }, { "speaker": "stephan", "time": "25:10", "start": 1509.69, "text": "Gotcha, yeah, okay. And so," }, { "speaker": "stephan", "time": "25:14", "start": 1514.06, "text": "coming back to that, I guess, distinction or trade-off, let's say, of The kind of on-chain DeFi kind of, style of loan versus, let's say, the more tradFi style of loan where you, you know, you custodially just deposit your Bitcoin in, borrow some fiat and use that to, you know, if you-- let's say, either for your daily living expenses or because you want to lever up and buy more Bitcoin. So out of those two worlds, let's say the kind of the on-chain lending world versus the, let's say, the tradFi style, how do you see those markets? markets evolving. Did you see them as both growing, or do you see it like, you know, the tradfi market today is just so much bigger, and therefore the tradfi side of that is gonna be a lot bigger than the, let's say, the on-chain lending world?" }, { "speaker": "pascal_eberle", "time": "26:03", "start": 1562.99, "text": "I, I do think there will be some kind of, I don't know, maybe almost a conversion of the two, right? because I think the, the on-chain lending side, that's, you know, has unique advantages that the TradFi system couldn't offer to date because there were no digital assets, in that sense. so I do think, as I said, I think that banks should go into more multisig and these technologies, 'cause it just makes a lot of sense. I think personally, I think the future of institutional custody will be And for instance, we already today we have like, you know, multi-custody architecture where we also have vault wallets, where you have your own, your assets are then not only segregated in our books, but also on chain. So you have your own public key and you can oversee and monitor your collateral, even if you, like, if you took the loan, you, you can see that we don't move them away, we don't re-hypothecate them away. and I think that, I expect that just to be even more pronounced in the future. And likewise, I Regulations because, you know, sometimes they have to in order to operate in certain jurisdictions. And so that's really at the end of the day, you will have, in that sense, a, a kind of a more of a melting pot with maybe fifty shades of gray that hopefully also then serve all the needs of different clients. And I really hope that there will also be the total anonymized, you know, randomness, lending and borrowing market because there's those people who want that as well." }, { "speaker": "stephan", "time": "27:25", "start": 1644.55, "text": "Yeah, it's interesting how this, we're seeing this kind of big spectrum of things, and the way, at least I'm seeing it, now, of course, I wanna see more and more people just use Bitcoin in general, but I see some of these loans as helping them achieve some of their goals, right? In some cases, that's if they wanna lever up per se, or they want to not sell, right? They wanna be able to borrow against some of their fee, some of their Bitcoin to get some fiat to then spend that for living expenses so that they don't Then it kind of also facilitates certain Bitcoiners' goals, but of course there's a, there's a range of, you know, how cypherpunk and no KYC and peer-to-peer you wanna be versus how, you know, if you're You know, not say pro KYC, but at least you're kind of, you can stomach some KYC, which is, the unfortunate reality of today with AML and sanctions laws and all of this, But I guess what I would say though, is also that if I think about where most of the wealth of the world is today, most of it is in tradfi platforms, on like, you know, stock broking platforms, and held by boomers. And so what are many of those people gonna be comfortable with? Probably more tradfi platforms, at least for now. But like you said, I think it is, it's sort of going to merge and mesh in some weird and wacky way over the next, you know, decade or two." }, { "speaker": "pascal_eberle", "time": "28:48", "start": 1727.56, "text": "Yeah, I think so too. And, you know, honestly personally, I think it's actually smart if you're a Bitcoiner, you know, this is the best asset you ever have. And so I, I think, you know, I, I do agree that leverage isn't good because it basically feeds your internal greed, but in a controlled way, it really allows you to keep your Bitcoin, and, for instance, you know, to buy a house, and that's nice, 'cause then you have a house to raise your family with, and you don't have To be, I think, then it's actually, it's great and it allows you, in a way, to, to drive your own speculative attack on fiat, right? And that's what, if you're honest, what all the wealthy people today already do, right? They just don't hold Bitcoin, but they hold probably, houses, apartment complexes, and they lend against those or, or art objects or whatever other random valuable items that exist." }, { "speaker": "stephan", "time": "29:37", "start": 1776.83, "text": "Yeah. and, and just, you mentioned, the rates are basically in the single digits, can you give us like a rough" }, { "speaker": "stephan", "time": "29:48", "start": 1788.42, "text": "can you give us a rough idea?" }, { "speaker": "pascal_eberle", "time": "29:51", "start": 1791.02, "text": "Yeah, sure. So obviously being a Swiss bank, the, the cheapest rates we can offer are in Swiss francs, so those really start at five and a half percent and go probably six and a half. and then you have euro and, US, is, is the most expensive, the highest rates right now, so there you definitely in the eight to nine and a half percent range. Gotcha." }, { "speaker": "stephan", "time": "30:08", "start": 1808.0, "text": "Okay. And then, what are the, like, is there an origination fee on the loan or some other, you know, loan fees? So" }, { "speaker": "pascal_eberle", "time": "30:17", "start": 1817.07, "text": "we do have, I think a one or two percent fee that, only kicks in in case you don't, you don't have any, well, if you don't draw the loan, let's say, right? So it's basically counter-calculated against the interest payments you have on your loan, and that's basically just to compensate for, for the effort that we do have, In that sense, if you, if you draw your loan, then this origination fee is counted, calculated against your actual, quarterly interest payments and, so you don't feel it." }, { "speaker": "stephan", "time": "30:47", "start": 1846.79, "text": "Okay, I see. yeah, okay. And so- and then I guess you're, you're straddling some of these worlds, right? Because you're coming from like this kind of Bitcoiner sense of like, you know, the typical, you know, like we talk about not your keys, not your coins, but then on the other hand, in order to access some of these services, especially with, in this style, it requires you to give up some of your custody. So how do you think about that, or how do you, some of your clients even think about that? Is it that they, like, just thinking it through? They keep, do some of them keep most of their stuff, you know, in their cold card or their multisig, and they only deposit into Signum what they need for the loan, and then maybe you've got the less tech savvy ones who just keep everything on the platform with you. Is that how it works or what do you see?" }, { "speaker": "pascal_eberle", "time": "31:31", "start": 1891.4, "text": "Yeah, I do think we have everything, right? I mean, we probably have some people who come more from not even the Bitcoin space and just kind of got exposure to it and have their coins with us, and, and that's where they keep all their, their corn. And then you probably have the Bitcoin Maxes who, you know, only with a heavy heart, went to a bank and gave, part of their keys, because they wanted to lend against the Bitcoin. and I do think, you know, that, that's probably the, the adequate picture of" }, { "speaker": "pascal_eberle", "time": "32:01", "start": 1921.18, "text": "Many clients in the mining space and those, they have a mix between self custody and, then, you know, probably using Sigma as a custodian for, especially if they draw against, their stack because their day-to-day expenses are in fiat, yeah." }, { "speaker": "stephan", "time": "32:16", "start": 1936.46, "text": "Yeah, and so other obvious questions people will have is, look, if, if they wanna use Signum as the custodian, can you tell us a little bit about the technology and the custody stack you're using? Like, is it multisig? Is it MPC? Like, can you outline a bit about the security that you have there?" }, { "speaker": "pascal_eberle", "time": "32:35", "start": 1954.81, "text": "Yeah, sure. So we have, I mean, our custody stack is, institutional grade, so we do have a, a multi-custody strategy as well that uses different platforms. We have, some of, of them are, are developed in-house, others, for others, we use the best, best-in-class providers, I'd say, worldwide. and then we basically have two types of wallets, right? We have one that we call the trading wallet, that one is, so to say, more hot. There, it's Between the two, basically with no fees, in our sigmum, in your sigmum banking account and in your wallet wallet, you know, it's segregated on chain, and then you have your public address that, that, points toward, towards it. the custody team is also very busy looking to, into, additional, you know, types of custody, so potentially cold storage, that's also a requirement in certain jurisdictions where we want to operate in, and then we're also starting to look into how multi sig works and" }, { "speaker": "pascal_eberle", "time": "33:34", "start": 2014.49, "text": "Which I, I'm very excited about as well." }, { "speaker": "stephan", "time": "33:37", "start": 2017.49, "text": "Gotcha, okay. and so, like, I, I presume you'll, you'll have, maybe there'll be, there'll be some American customers or others who, or where from around, wherever around the world, they might have certain legal requirements about how their coins have to be custody. So can you talk to us a little bit about what are the main legal requirements on that? Like in some cases, it's like it needs to be like a qualified custodian or they need, their auditor will wanna check that you have SOC 2" }, { "speaker": "pascal_eberle", "time": "34:06", "start": 2045.55, "text": "Yes, sure. So we, we see that especially in the B2B space because we, you know, we enable other banks basically as a white label service provider to offer their clients, custody of digital assets and brokerage. and so obviously there we have the, you know, very tough, let's say, onboarding is like, this, this famous Wolfberg questionnaire. They're, they do audits, with us, there is regulatory requirements, sometimes even that their regulator could, access, our, our basically internal documentation and audits. You know, the, the regular ISO and ESIA, reports that are done annually to, to test your, your stack, we have internal, in-house, penetration testers as, as part of our, security team. So there's a lot of, of, I would say, you know, regular, just for, for institution, in, in the institution-to-institution space, regular and normal procedures that are in place to ensure that those other institutions, that you're even eligible, let's say, to be a material outsourcer" }, { "speaker": "stephan", "time": "35:04", "start": 2103.71, "text": "I see, yeah. And now, there's different regulation, you know, obviously coming in around the world. now I know Switzerland isn't part of the EU, but MiCA is like a big deal in EU. What, what, what, what's happening, for you on the, the Mica front for your European customers?" }, { "speaker": "pascal_eberle", "time": "35:25", "start": 2124.66, "text": "Yes, it's a great question. So, I mean, currently European customers that bank with the Swiss Bank, they're obviously, you know, they just, they use the Swiss Bank, but as I mentioned at the beginning of our, discussion, we have, a subsidiary as well in Liechtenstein. currently it has the local license from Liechtenstein, and we're in the process of converting that one into a M Allow us to actively also, serve clients in the EU. So far, we only serve clients in the EU on a reverse solicitation basis, meaning that those who approach us proactively, we're happy to, to, to serve them, but we're not allowed as a Swiss bank to actively, service or, or go out into the EU and, and acquire clients. And so that's why we, we bought, or we built, sorry, we built the, the entity in Liechtenstein and, will get a license there that will then allow" }, { "speaker": "pascal_eberle", "time": "36:17", "start": 2176.96, "text": "I see. And then it'll, it'll be that," }, { "speaker": "stephan", "time": "36:19", "start": 2179.26, "text": "it'll be that story of, of, depending on what country that customer is in, that will determine what products you can offer them, right? Whether, you know, there might be, you know, some customers where you can offer them a trading, like a normal transactional account, but not something else." }, { "speaker": "pascal_eberle", "time": "36:37", "start": 2197.14, "text": "Yeah, yeah, very often times it depends, like the, the cross border will depend on the country the customer is from or resident in, the country that you as a service provider are in, and even the country in which the interaction happens. So it's, it's actually incredibly complex sometimes if you're an RM and you have to look at all these different country manuals. but that's just, you know, part of the deal of playing in the, in the regulated space, so to say. But as you said correctly, it really depends on a bit where, which jurisdictions you're from. So if currently US clients or Russian clients or Chinese clients, just because that's outside of our risk appetite, that's very normal. Oh, right. So you actually don't have US clients, okay? Gotcha. No, no. I mean, Swiss banks, probably know had very bad experiences, with the US, with the US market. Oh, right. Yeah. Sorry. Yeah, I forgot about this. Yeah, this is like a big deal. Yeah," }, { "speaker": "stephan", "time": "37:24", "start": 2243.59, "text": "yeah, yeah. This is, this is like the famous thing of like how" }, { "speaker": "pascal_eberle", "time": "37:36", "start": 2255.78, "text": "Yeah, basically as a US, citizen, you're almost debanked if you're in Europe. I mean, even at Sigmon, we have some colleagues of ours who are, who are US citizens and they, they unfortunately can't even have an account with us, so it's, it's not that fun, yeah." }, { "speaker": "stephan", "time": "37:48", "start": 2267.74, "text": "Yeah, damn. Okay. So would you say most of your customers are in Europe or Asia or Middle East or like where? Give us a-- Can you, can you say?" }, { "speaker": "pascal_eberle", "time": "37:58", "start": 2278.27, "text": "Yeah, sure. So I would say definitely the majority, is, is, Switzerland and Europe, then we also have quite a client base in Southeast Asia, because, I mean, we've always been, born global, so to say, and Singapore is, is always kind of, you know, at par with Zurich, and then also the UAE, where we, where we opened up a branch, that we've seen a lot of inflow because, I mean, it's a jurisdiction that attracts a lot of, of," }, { "speaker": "pascal_eberle", "time": "38:28", "start": 2308.43, "text": "A proper branch of the Swiss bank, meaning that you can, as a UAE citizen, or resident, you can, you can bank with the Swiss bank and have a local RM in the UAE, which is quite nice, because also from a jurisdictional point of view, it's probably, it's nice to have a bank, in Switzerland, I guess. I, I, I lived in Dubai myself, a few years ago, and, I, I, yeah, I was always, happy to, to keep my Swiss banks," }, { "speaker": "stephan", "time": "38:59", "start": 2338.65, "text": "Gotcha, yeah. And so, just, I guess a few other things you were touching on, kind of the rehypothecation question as well. So, I mean, you were touching on this before saying that, You know, it has to be maybe not on-chain segregated, but legally segregated and bankruptcy remote. So can you explain a bit about what that would mean in the case of a bankruptcy?" }, { "speaker": "pascal_eberle", "time": "39:24", "start": 2364.3, "text": "Yes. So, let's say, yeah, a Swiss bank if they go belly up, right? there were, there were some examples in the past as well. what happens is that basically the, the, the bankruptcy procedure kicks off, immediately as of the, you know, we don't have a Chapter 11, but the equivalent of that, basically aft-- as of the filing, all the assets, are, so to say, frozen and the client's assets, they-- all the client's assets are clearly separated away" }, { "speaker": "pascal_eberle", "time": "39:54", "start": 2393.72, "text": "This of the bank side, and that's, you know, true for traditional securities, so if you have an apple stock or whatever stock that's always yours, it's true for digital assets because they're treated the same way. And, what's interesting, and I didn't know that before I started working in the bank either, but in Switzerland for cash, there you only have, you have a what's called in German Einlage Schutz, the, the customer deposit protection, I think it's like this equivalent as the FDIC insurance in the A thousand swiss francs in cash with the bank would actually be part of the bankruptcy state. and so if you hold a lot of cash in Switzerland for whatever reason, if you wanna hold a lot of cash, then you should actually also, diversify it across several banking relationships so that you don't go over one hundred K in cash. But yeah, just going to Bitcoin is better anyways." }, { "speaker": "stephan", "time": "40:44", "start": 2443.9, "text": "Right, yeah. But so would that, so you're saying if that would be fiat held in a Swiss account, but Bitcoin held in a Swiss bank account would be different. Always bankruptcy remote," }, { "speaker": "pascal_eberle", "time": "40:58", "start": 2457.98, "text": "yes. Because it's treated like an asset, so it's always direct the ownership of that client and, yeah, so it's never, never part of the bankruptcy state. It's also not on our bank's balance sheet. I think that's a different as well with, with other banks, sometimes they have large balance sheets where you actually see the client's deposits on it. In Switzerland, that's not the case, so we say it's off balance sheet and it's bankruptcy remote." }, { "speaker": "stephan", "time": "41:22", "start": 2481.5, "text": "Oh, interesting. Okay, yeah, so it just provides like a different legal, I guess, structure, and that can have, you know, advantages. okay, yeah. And then, as we kind of, as this space, let's say, evolves out and more and more people come into either using Bitcoin or even they- I've been an existing Bitcoiner for a while, but never went into any of the borrowing or collateralization aspects of it, and that starts to grow. What do you foresee as more people start to do this? Like, do you think it's gonna become popular for people to use these collateralized lending products now that they are sort of becoming more popular and maybe the interest rates are coming down a little bit on that?" }, { "speaker": "pascal_eberle", "time": "42:07", "start": 2527.37, "text": "Yeah, I think, it's a natural evolution, right? If you think for a bank, if they start, dealing with Bitcoin, I mean, the, the base offering is for sure just, custody and trading, then you will have transfer in, transfer out of, of Bitcoin, that, that is operationally complex for a bank, right? Also from a compliance point of view, you have the travel rule and all these, legislations that apply on digital assets transfers. and then the next step beyond that is logically, okay, what I think, lending is the, the next thing. I think a Lombard loan is the, the, you know, the plain vanilla lending product where you really give your Bitcoin as collateral and you get cash against it. But I do think there will be many, many more lending products where, a Bitcoin sliver will be inserted, for instance, mortgages, right? It would make a lot of sense if you, let's say, wanna buy a house, you, you give the house as collateral, and then, you know, as part of this mortgage, It's, it's a twenty years mortgage, so you know, you have a long time horizon to invest, and then that gives basically, it de-risks the whole house, right? Because, you know, your house might be flooded, it might burn down, you might lose your job and not be able to pay back, the loan, but the Bitcoin is still there, so it gives security to you as the borrower, but as well to the bank as the lender. Leon Van Koomen, Germany is actually, pioneering a lot in this space, and I And, Saudi Arabia worked on a project where we advised, a, an entity that did project finance. So those are really large investments, let's say, to finance a chemical plant, and, then basically the loan is paid back through the profitability of the proceeds of this plant. here as well, you have a lot of execution risk and, the same logic as with a mortgage for the house, I think it would just make a lot of sense to put part of this loan into Bitcoin, park it for the whole duration of the project, because then you have really" }, { "speaker": "pascal_eberle", "time": "44:06", "start": 2646.49, "text": "And blows up, or if the products just don't have product market fit or whatever, right? You still have that Bitcoin at the end of the day. So we think that if you start thinking in that sense, I do think that Bitcoin should- Over the long time span, let's say, permeate all of, all of different kinds of lending products because it's just a great, great hedge and, and the de-risking factor in them." }, { "speaker": "stephan", "time": "44:28", "start": 2668.48, "text": "Yeah, I think that's, definitely something, I've had Leon Van Cuylenburg on before, and also, also interesting are the battery finance guys, Andrew Hones and, his team. they've been talking a lot about this kind of idea of sort of loans, but cross collateralized with Bitcoin, so they might be doing a commercial Bitcoin or, we're starting to see, I think in the US, I think we're starting to see some of these products where it's like draw out your home equity and, you know, buy Bitcoin with that. And we're starting to see these different ways of like putting Bitcoin as part of- Like reverse mortgage is- Yeah. Right, yeah. Putting in Bitcoin as part of different products or lo-the loans associated for different products. And because, you know, Bitcoin has NGU technology, it sort of, it can kind of help, help you weather- The other storms that happen in other assets, and just in general, it can, it can make a lot of sense, right? Just to, if you are thinking, okay, there's the Cantillon effect, those people who are near the money printer benefit from that, well, using some of that Cantillon effect to buy Bitcoin can also be beneficial to you. Now, I understand there'll be objections from that, maybe some people have a religious objection or a cypherpunk objection to that aspect of it, but for people who- you know, are not, let's say, not hel-held up by those particular objections, then that's the system, that is likely to be, that they're gonna use." }, { "speaker": "pascal_eberle", "time": "46:02", "start": 2761.74, "text": "Yeah, I'm fully with you. I think it really, in some, some way, right, lending against Bitcoin democratizes a bit, the, the speculative attack on fiat that you can drive even as a, as a normal pleb if you hold, you know, even a part of a Bitcoin, of course, I would never give out my whole stack, but you can decide to give out part of your stack and lend against it, reinvest it in Bitcoin, then you drive your own leveraged, let's say bet on Bitcoin if you, if you're It's actually a great thing, and it's fair because before you could only do that if you had, you know, a whole, house or several houses or, or other massive goods. So if you were just a normal person, it was just impossible. You were-- the money printer was far away, you were far away from it. So in that sense as well, it, it really levels the playing field and, and I like that a lot about it." }, { "speaker": "stephan", "time": "46:51", "start": 2811.38, "text": "I see, yeah. And so, in terms of people who want to sign up with Signum, what are the typical minimum thresholds? Like, is it an income threshold or a number of coins or net worth threshold? Once you're above that, then you can, be a customer. What are, what are those thresholds?" }, { "speaker": "pascal_eberle", "time": "47:11", "start": 2830.62, "text": "Yeah, so basically, according to this, FinSA regulation, it means that it's either, you know, a certain, wealth that you have, and now, now I should obviously know that number by heart, I think it's, one, one or two million, in, in, in investable, either total wealth, and then you have a threshold for investable wealth, and then there's a third, condition, like or basically, if you are, you know, a professional Or qualifies a qualified investor. so yeah, I'm sorry I come quoted by heart, I'm not part of the sales team, but it's basically a combination of, of, or an option between, those different factors." }, { "speaker": "stephan", "time": "47:51", "start": 2871.42, "text": "Yeah, and then at the business or corporate level, is there a threshold or is it just like if you have a business entity, you can sign up as a customer?" }, { "speaker": "pascal_eberle", "time": "48:01", "start": 2880.73, "text": "I mean, you basically can sign up, we, we do have minimum fees, so then, depends, right? You, you probably calculate yourself whether it's worth it or not. and for us as well, during the onboarding process, because legal entity onboarding is, is a complex process, and there of course we prioritize as well to, to see which, which customers have, you know, more potential in terms of the business relationship we can, we can, help them with, yeah." }, { "speaker": "stephan", "time": "48:22", "start": 2902.4, "text": "Yeah. And then are there like minimum balance requirements or things like this that you need to put on, I don't know, like a million dollars or a five hundred thousand worth or like what's the, what's the, what are some of the thresholds there?" }, { "speaker": "pascal_eberle", "time": "48:34", "start": 2914.29, "text": "so for private clients, we don't have any, any minimum fees for, for, for an account, But of course, you know, if you see that it's an unfunded account, then at some point, we will, we will probably gently ask to close the account because again, it creates a lot of, operational and compliance hassle. Let's say, I mean, we have regular periodic reviews that we have to do on all accounts, and then for corporates and, Corporate clients have basically charged minimum fees, and, yeah, basically there. Then that's, I think all in our pricing sheets and the, the, the RM teams, they're happy to, to explain that to all interested clients." }, { "speaker": "stephan", "time": "49:10", "start": 2950.12, "text": "Gotcha. Okay. Yeah, well, I think those are the key kind of points I, ha- that came to my mind at least. so I guess any closing thoughts you've got on where things are going or what people can look out for in terms of products and services that are coming, and then, tell people where they can find you online as well." }, { "speaker": "pascal_eberle", "time": "49:30", "start": 2969.97, "text": "Sure. So I think, well, definitely at Signum, if you're a Bitcoiner, but also interested in, let's say, the, the banking space and banking services, then I would, highly recommend to check us out on Signum dot com. we will, soon launch, as well, an asset management product that is really geared towards Bitcoiners. That's all I can say so far. I'm working on exciting, I think, product solutions in the lending space that, go more On, on your keys. again, that sounds very cryptic, but, as soon as we're ready to disclose more news, we will do that. as I said, check us out on signum dot com, we have, our Twitter handle is signum official in X, and, I'm always reachable as well, on LinkedIn with my name Pascal Eberle." }, { "speaker": "stephan", "time": "50:18", "start": 3017.89, "text": "Excellent. Well, thank you for joining me, Pascal. Thank you so much," }, { "speaker": "pascal_eberle", "time": "50:21", "start": 3020.85, "text": "Stefan. It was great to be on." } ] }