Why banks are building for Web3 in silence

0:00when you're managing trillions of dollars of customer assets, you can't just see a demo from a crypto bro and go, "Yeah, that looked really cool, man. Let's move forward to production."

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You have a lot of weight on your shoulders and a lot of red tape on purpose.

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Ashton Addison from the Crypto Coin Show, and today on Blockchain

0:22Interviews, we have Dr. Jordan Connect, Head of Strategic Integrations at Crises, building infrastructure that banks, funds, and platforms use to offer crypto wallets, tokenized assets, and stablecoin payments, and much more. Jordan, welcome to the show.

Pleasure to be here. Thanks so much for having me on, Ashton. Excited to chat through some things today.

0:41

Likewise. And there's so much adoption happening thanks to these kinds of technologies and the legislation and the green light and probably the prices of digital assets going up. We're seeing a lot of enterprise and business adoption, and Crises is acting as that execution layer for digital assets and bringing them into the traditional

1:02economies. Can you start off with a little bit on how exactly that works and what you're doing to be that connector to bring digital assets to everyone?

Yeah, of course. So, great point. Yeah, Crises describes itself as the execution layer for digital assets. And really the thought process behind that, I'll expand on in a second, is we

1:23have a lot of different capabilities. So, we can help with enterprise tokenization, which is a real hot topic in the market today. Stablecoin workflows is a pretty big topic. Wallet infrastructure and overall blockchain development. But I'd say the reason why we phrase it that way is if you're a bank or an enterprise or an asset manager, and you're starting to explore,

1:44does it make sense to work with blockchain? Should we tokenize something? Do we need to work with wallets? What happens is these departments that are doing the research behind the scenes will go out into the market and they'll get pitches from multiple different companies, and they're trying to piecemeal all these parts together. And as we both know, PowerPoint

2:03presentations and then ultimate production, there can be pretty big gaps. So, some of your vendors may be able to actually go gangbusters and knock things out of the park, but then other aspects of that pipeline that you need to connect different vendors to satisfy different pieces just fail and fall through. So, the goal of Crises is that we can help with all of that or

2:24some of it depending on what the actual institution needs. So, think of things like if we go to tokenize it, Crises helps the company walk through who holds it, who custodies it. Well, once it's tokenized, where does liquidity come from? How are we going to do settlement networks? How are we going to connect this to your core banking system? We think through

2:45things holistically and not from a "Hey, what's the physical blockchain we should pick first and let's start building on that blockchain." It's mostly a "Let's identify the core business need and then let's figure out how to build upon that." Hopefully, that helps.

No, definitely. That paints a good picture and I'd love to give an example of some sort. It can be fictional or can

3:05be one [clears throat] of the customer integrations, if possible. There's so many traditional businesses that are running, you know, payments and a little bit of technology, but blockchain is just on the other side of the world for them. But, there's a lot of benefits to be had. And you're right, they see it and they're like, "We need to integrate

3:24either blockchain or tokenization or stable coins or something because we see value, but we don't really understand how that fits into our business and we know it's going to help."

Yeah, so one specific example would be there's a lot of different jurisdictions, but let's pick two specifically, the UAE and El Salvador. Both jurisdictions that are

3:44exceptionally forward-leaning into Web3 and cryptocurrency in general. And it allows banks and institutions there to play a little bit more freely and type of and kind of experiment. So, one use case would be a form of tokenized deposits and that would be certificate of deposits specifically. There's a couple of institutions are working with and I'll I'll just keep it

4:04high-level for now so I don't give anything away that are exploring, hey, how do we make our own background treasuries far more efficient, but also still help customers move things forward. So, there are areas in the world where if something is tokenized, it is tax-free. So, for the end consumer, there's now a reason for something to be tokenized and for the

4:25business behind the scenes, they want to tokenize to help with their own capital efficiencies with their treasury management. So, a specific use case would be by tokenizing a certificate of deposit, so one financial instrument, it allows that end customer to now have access to it. They can move it around, use it as collateral. They can sell it, lend against it, do what do what

4:46have you, earn additional ways of yield, mess around in DeFi, but also allows the institution behind the scenes to use it as a proving ground for other areas of their maybe their own internal treasuries or other financial instruments that they'd like to tokenize and explore in the future. So, that's an exciting one that's actively being deployed right now.

5:04

It does sound very exciting, especially when the end users hear tax-free. I'm sure the adoption we kick up pretty quickly.

Yeah. [laughter]

And you know, with traditional banking infrastructure, there's normally lots of levels of bureaucracy and things don't move that quickly, but in blockchain and tokenization, things can move very quickly.

5:26

[clears throat]

And you know, you're you're looking at integrating and then software gets better and faster, especially with AI now. What does that look like in terms of timelines and making the integrations easy for these traditional businesses?

It's a great question. One of the first things I want to highlight is kind of the first wave of RWAs is just

5:49tokenizing assets in general. I think we're still living in that land, but the second wave, which is also happening in real time right now, is the actual execution. So, once I have the asset, can I now trade it? Can I move it? Is there liquidity for that? And one of the things that we try and help institutions understand is does the asset itself even need to be

6:11tokenized? There are institutions that will come in and say, "Hey, like we really just think like we should tokenize this asset and all of a sudden it's going to make things far more efficient and this guy behind the scenes in our department is really excited about it and we have to calm them down and say, 'Listen, something like a municipal bond, just because we tokenize

6:29it, yeah, it's now available 24/7, but it doesn't mean there's liquidity and a desire to buy it at 3:00 a.m. So, our goal is to really help shape, and I know there's a lot of other institutions in the ecosystem that are helping to do this as well, but Curis is goal is to help customers and financial institutions understand the full life cycle of what

6:50we need to build. And what I mean by that is we come in, we hold their hand and we say, 'Hey, why don't we start with an MVP? We'll start really small. Let's build something together. Let's make sure it solves a core business need that you have behind the scenes and then we'll build upon it to the areas that we need to get to.' Once you get through the MVP

7:07stage, you can get internal buy-in, we get to production, we obviously go to launch things, but Curis helps hold your hand the entire way. We don't just hand an SDK over and tell somebody to figure it out. But ultimately that last piece there is really what I want to highlight is today 24/7 trading is what's interesting and people are liking that aspect of tokenizing an

7:30any type of an asset, but what's going to be real interesting long term is when you take all of the plumbing behind the scenes and modernize that. And not tokenization per se, but modernize it so that collateral can now be used for a tokenized asset. Atomic trading and swapping can be done. Settlement, all the above. That's the actual infrastructure that's going to

7:52matter long term, not necessarily 24/7 trading.

Definitely. And yeah, a municipal bond tokenized is still a municipal bond. It doesn't sound that appealing to me to me. And you know, you mentioned liquidity a few times. That's been a huge factor for the last 10 years. You know, I mean, I went to security tokenization converses in 2018. We're

8:14almost coming up on the on the 10-year mark. And it sounds great, but the issue has been liquidity for in nine of those 10 years. Is that something that Crusoe can help with or how can we solve that liquidity issue once it becomes tokenized?

Yeah, so a good example of that would be we have a client who is actively trying to figure out how and why they should tokenize real

8:39estate. And it's less about us convincing them because we're also on the same page of like, do we really need to tokenize real estate? But it's a them saying, I have this lazy asset in an area in the world that's exceptionally difficult to get access to liquidity. While we can walk them through the concept of building an MVP, orchestrating the whole entire layer,

9:00We also need partners along the way for things like liquidity to your point. So, one way that we go kind of outside of that is connect with banks ahead of time. We work with our ecosystem partners. A perfect example would be one of the customers building on an EVM, Solana, or Canton, we'll go to those networks themselves directly. So, I'll use Canton in this ecosystem and say,

9:20who are the major liquidity providers right now? These are the ones that I'm aware of. Who else can you think of? They connect us with those and then proactively we're going to them and saying, hey, does this type of an asset make sense? And the specific example I was just giving you, prior to maybe 2 months ago, the answer repeatedly to our customer was, "No, we'd love, you

9:41know, obviously to help you with this and I think it could be an interesting use case for tokenizing, maybe fractionalized ownership of real estate in the future, but today there's no liquidity." Well, fast forward, there's now an institution that has a very large balance sheet that wants to be the sole buyer and provide full liquidity for up to a probably

9:59several billion dollars worth of real estate. So, is it the type of liquidity that we actually need to your point from 10 years ago that we're still talking about? No, but there is liquidity players that are starting to show up that are more interested in helping to support and grow the ecosystem of 24/7 interoperability.

Definitely. And it is a great example,

10:20real estate being able to micro investors or sell a little bit or just have liquidity for real estate investors that they're stuck in investments for, 10 plus years. But, we understand that the tokenization of real estate is a little bit more down the line than the more semi-liquid traditionally financial instruments and bonds and money market

10:47and moving to equities. I feel like real estate's a it's a great example to understand, but not it's not going to kick up as quickly. There might be more steps to make it happen. In terms of other types of where other products where people do have the ability to sell or buy and invest in smaller amounts, is there ways to improve liquidity through tokenization

11:14in that aspect?



[sighs]

I would say that there probably is. It's one of those like crawl before you walk before you run. So, I would agree. By really starting to narrow and drastically improve equities, which seems to be why most of the tokenization market is running in that realm. You have players like DTCC that publicly it looks like they're trying to pivot

11:39away from trying to be the main underlying supporter for equities because they understand that tokenization's coming in, a lot more liquidity's coming in to help support that for the end consumer. And they're trying to themselves, DTCC, support maybe more corporate treasuries. That's kind of where they're pivoting to. So, walking before you run in regards to

11:59yes, as liquidity starts to really come in and people become more familiarized with digital ownership, token tokenized ownership of a of an equity, things will naturally expand and there may be like insurance contracts, annuities, other types of financial instruments where liquidity will will eventually trickle into is what I'm getting at. But, I would say crawl before you before

12:21you run is going to start with equities.

Definitely. And you know, everyone says institutional adoption is coming, it's here, and sometimes it's hard to quantify that or to have a bit of an inside scoop on the rate of adoption. You know, is it actually happening very quickly? Is it happening slowly? You know, what's your take on the speed and the appetite for

12:46the amount of different institutions and enterprises that Crusoe's speaking with right now?

Also a very good question. So, it depends. If it's a corporate that leans a little bit more kind of on the fintech side, they're the ones that are coming to us that are thinking way outside the box that are trying to come up with like crazy ideas. I'll give you an example.

13:09It's kind of real estate related, but not necessarily. It's a group of and I'm trying to figure out how to phrase this without giving it away too much. It's a group that owns a lot of retail space, and they're trying to figure out a way to use their old NFT infrastructure that obviously kind of collapsed after the NFT boom, and take rewards and bring that into the

13:31tokenization space. So, you have people like that are being like way outside the box, trying to like revive NFTs, and they want to go gangbusters. Does it necessarily make sense? Is it going to be successful? Time will tell, but that's kind of a fun box to play in. On the other side, you have banks and you have large financial institutions or insurance companies that are moving

13:52very, very slow. And one thing that I find very interesting, especially in 2026, cuz a lot of us, I'm assuming yourself, have been in the Web3 crypto space 10 years plus at this point. We're starting to run into people who their entire careers now are only in crypto. People that never worked in banking prior and then jumped to crypto, they're just in crypto. So, there's

14:14people and I don't mean that in a negative way, but there's some people that you come across that are super DeFi oriented. They would consider themselves a Degen, and they have this badge of everything needs to be moving fast, and we're breaking the future, we're breaking the past of how modern banking worked, and we're pioneering the future, and this is how it should go, and people

14:33that work in banks are just dumb, lazy, and they don't understand the technology. On the contrary, people that we're speaking to in banks and financial institutions very well understand the actual technology, but they're moving slow on purpose because of regulatory needs, other internal constraints, even something as obvious as when you're managing trillions of dollars of

14:57customer assets, you can't just see a demo from a crypto bro and go, "Yeah, that looked really cool, man. Let's move forward to production." You have a lot of weight on your shoulders and a lot of red tape on purpose. And banks are exploring this. Banks behind the scenes that we're meeting with, are are doing a bunch of RFPs, trying to really take things slow and find

15:20specific MVP use cases for ways that they can improve their capital efficiencies behind the scenes that will still meet these regulatory requirements, still meet their customer needs, but also still allow everything to operate kind of as intended because the winner of this whole blockchain narrative in this push over the next 10 years is going to be

15:44one where the end consumer doesn't even notice anything's running on blockchain. Their lives are the same, the bank looks the same, but everything's just far more efficient behind the scenes for the financial institutions to keep the world operating.

So they are to also finish your question, sorry. They are very interested. They're just doing it slower

16:02but on purpose.

Yeah, now they always say that it's going to be behind the scenes and you mentioned there about the regulatory bodies and the difference of like the crypto bro saying move fast and break things and try things out and maybe go a little slower or at least figure out if this is actually worth it and provides value for

16:26your enterprise and institution. And further to that, I have a question about that balance and what potentially might slow down these integrations and or put a halt to them. You know, you talked about working in UAE and El Salvador, pretty forward-thinking countries, but you know, the regulatory bodies are diff- that's one aspect, are

16:49different in every country working globally. That's probably one factor. Maybe you can touch on that and is there anything else that might slow down the integration from actually happening for enterprises?

Yeah, regulatory is definitely a very large piece and one thing that I think some people fail to remember, especially you can see in the news

17:08lately, people are talking about the Clarity Act not completely coming to fruition and it's being tabled. The Genius Act was obviously passed last year, but if you look back in history, you'll see that when securities first kind of became a thing, it wasn't solved in one act, either. It wasn't solved in two. It took three, and it took over a decade to get

17:27to a point where every aspect of a security was fully understood, fully regulated, and had clear rules and guidelines. So, yeah, there are aspects of the genius act, for instance, where today, banks and financial institutions feel comfortable, at least in the US, to play around with stablecoins. They have some some rules in place that they understand how they can kind of

17:50implement, start working on maybe some tokenized deposits. You'll see you see JP Morgan has launched their own tokenized deposits themselves of their own bank deposits, which is different, obviously, from a stablecoin. Stablecoins are backed by the a third party, such as like a US Treasury, whereas tokenized deposits are backed by your own internal collateral.

18:11But, you see that area happening. But, then to your point, overseas, like the UAE or El Salvador, some of these far more aggressive markets, they're giving people a little bit more leeway to say, "Okay, well, there might not be rules yet, but what we're going to do is we're not going to penalize you for testing. Feel free to go test, go out in

18:30the market, don't connect it yet to our end customers, and to actual real-world production, but feel free to play with it in its own sandbox that customers can choose to interact with, but don't connect it just yet to real-world production, and we'll see what works, what doesn't work, and if it starts to break, we'll shut it down, we'll we'll add clarity and regula-

18:49regulatory boundaries around it. That's also very interesting, and I think you see a lot of US banks that are watching from a distance, that are saying, "Okay, either one of two things is happening, at least that we're seeing with our customers, as well. One is we're watching, we're going to see what happens in these other jurisdictions, so we can be prepared for that clarity to

19:08naturally come to the US, or two, we have an offshore entity that is over there doing MVPs and messing around and experimenting so that we can then backtrack and help our legislators kind of understand where the future is going and the next components that would make sense to help regulate.

Mhm. Yeah, with the genius act passing last year and you know, green lights for

19:34the regulatory bodies in the US, are you seeing banks actually using stable coins for payments and settlements yet or is it still mostly pilots? Is this a crawl versus a walk scenario?

Definitely crawl before you walk. Stable coins are definitely something that banks are talking about that they're wanting to use, they're kind of experimenting with. We're not really

19:55seeing anybody deploying it just yet. Another aspect would be tokenized deposits would be the next logical area for banks to go to now that they're understanding stable coins. But even some banks and it's an it's a natural argument to have internally is well, do we really need to tokenize our deposits? Everything kind of is working relatively efficiently behind the scenes with

20:19the central bank, but what aspects of our internal treasury and our deposits could we tokenize that would make sense that they're starting to explore with. But one thing I will note here with the stable coin use cases, there's a lot of like media banter out there that says stable coins are going to drastically like upheave banks and they're going to

20:39create far more efficiencies. Banks have to adopt stable coins. Yes and no, I don't think they're competing against each other per se, but what it's doing is the stable coin architecture is starting to force banks to look at tokenizing their actual deposits and they're eventually going to come together and they'll find a way to work together cohesively going

21:00forward, but they ultimately solve two different problems that most media kind of fails to point towards.

Yeah, with the with the higher interest rates that crypto companies, crypto exchanges were offering stable coins and digital assets like Bitcoin and Ethereum was pretty enticing and I think that's brought at least a few parties over from

21:25those that are just holding USD in their bank and getting almost nothing in interest. With that, you know, with that balance of crypto exchanges almost becoming like banks and adding in that functionality versus banks becoming partially crypto companies, do you think that's a race that one of the parties wins?

It's a good question. I don't think

21:51crypto native firms necessarily or banks will win over each other. Think ultimately they are two scenarios will happen. Either they're going to continue to service two different needs where today there's some overlap or they're eventually going to come together and it's just going to be finance going forward as we know it. Yes, the end consumer that is a

22:10little bit more digital native is saying, "Hey, I can go get higher yields over here. I'm going to go jump ship and put a bunch of stuff in Coinbase and earn higher USDC yields." banks are obviously seeing that in real time. They're trying to navigate and figure out how they can offer more aggressive yields, but at the same time this isn't a new problem that banks

22:29are dealing with. Stable coins just a different flavor for a fintech or a neo bank. There are a lot of online banks. I could use American Express for instance that for years have offered higher yield savings rates for customers. And so it comes down to convenience to the end consumer has been the main argument that banks have always utilized. Yes, you can go to Amex and

22:49earn 4% versus the 1% we're offering, but it's going to take you two business days, three business days to get access to your funds. They can make the same argument with stable coins. Yes, trading is 24/7 today. Yes, sending that payment to someone else who has a wallet is 24/7, but what do you do on a Friday night at 8:00 p.m. when you have let's say a loan closing tomorrow and

23:13you have a hundred thousand dollars in USDC. You can't pull that out of Coinbase and have it land in your account. You have to wait until Monday morning for them to process the wire and actually send it out.

Yeah.

So, ultimately, yeah, they're still solving two different problems, but they'll eventually converge.

Yeah. Yeah, I would love to see at least

23:30those that those overnight and those and those multi-business day weights with, you know, people like us that have have been in crypto for 10 years and you go back to that, it's painful [clears throat] when you see confirmations in digital assets taking seconds versus a week. So, I would love [clears throat] for that to be solved.

Agreed.

23:53

[laughter]

Agreed.

Yeah. And what do you think is the timeline for the if you know, if we do see a convergence on that, where do you see us in two to three years from now in the tokenization from banks and institutions merging more in into digital assets? Is Do you think it's going to be pretty quick?

with regulatory clarity, I think it'll

24:19expedite tremendously. So, it's kind of like the joke that people say the government has a lot of hurry up and wait. I think banking's going to be the exact same way. From the outside looking in, people are going, "Well, banks are just moving slowly. There's not regulatory clarity. Nothing's happening." But people fail to understand that everything's not happening from the

24:40headlines in. Banks are fixing the plumbing outward. So, you might not be hearing what they're doing, but everybody's building silently. They're preparing. They're getting things online for when there is regulatory clarity, and then the rest of the world will sit up and they see things happen like this, when we all know that it's not actually happened like that. Things are being

24:59teed up and built slowly behind the scenes.

Definitely. And why do you think it's a good time for more institutions to reach out to Cruces and explore this? Is it that if you wait until the till the green light then you'll be behind or, you know, it there's no there's no downsides to experimenting with this right now?

yeah, all those are great points. You

25:23definitely don't want to wait until there's a green light because then you are are you set yourself back probably at least 12 months if not 18 months, a full build cycle. So, yeah, while a company like ours can get an MVP up and live in 90 days, you have to think about your own firm's internal infrastructure, your own firm's internal red tape, and your own firm's processes

25:44to get to production. Most banks take 18 18 months to 24 months. So, you don't want to wait and then all of a sudden be behind and fail to connect to the greater ecosystem and all the above. But, I mean, to your other reason why banks or other financial institutions are coming to us is we're wanting to help hold their hand through the entire process. We're essentially stating,

26:05"Hey, your team's trying to figure this out in real time. This is something that we have a group of people that are experts on. We've been doing this for 10-plus years in this space. All of us are former TradFi as well. We understand the constraints you have, the problems you have. Let's really find the use case that makes the most sense to start tinkering with. It No harm, no foul.

26:24It's not going to cost hardly anything when you're doing an MVP, but let's figure it out. Let's get the people in your firm aware that you're doing this and what it would look like so they can start thinking about the stuff conceptually and getting things in place for when clarity starts to actually come out. When I say clarity, I don't mean the act. I'm just referring to like

26:42clarity in general.

Yeah, no, I agree. I feel like I know so many people, you know, just individuals that they keep hearing about digital assets and Bitcoin and they there's no way to really understand it until you actually dive in, get a wallet, and then and then it starts clicking. And then after you've been in the MVP stage, it's like, "Oh, I just

27:03realized these other business avenues that which we can use tokenization and you know, until you're in it, you don't you don't think about it holistically and all the ways that it can actually help your business."

Completely agree.

Yeah. Amazing. I appreciate all the insights on this, Jordan. For institutions that are thinking about this right now, what is the first steps

27:24that some of them should take to look to integrate this tokenization?

That's a good question. My favorite thing and I chuckle just a little bit. I don't mean it in a mean way, but my favorite thing is when we meet with prospects or clients, they almost always show up excited by saying like, "Don't worry, we picked our layer one." And it's like, "Guys, let's let's take five

27:43steps back." So, the first thing to answer your question is you don't need to be out there trying to run the mill of figuring out your layer ones, your layer twos, understanding what they all do. It's helpful, don't get me wrong, but you don't need to come to the table to a tokenization partner or more importantly, let me rephrase this, a web 3 infrastructure partner who can help

28:01assist with wallets, tokenization, kind of all the above. You don't need to come to them with that pre-picked because that's the job of your partner. That's the job of them to say, "Hey, okay, let's figure out the actual use case that you're thinking of. What are the major friction points within your company that you can see could be improved with capital efficiency. Let's

28:22take that and then let's build upon that. So, what is the actual asset we're trying to fix here? Who who owns that asset? Who holds that asset? What rights are associated with that asset? How how are we going to have transfer restrictions? Once we kind of identify all that, a partner like us is somebody that then says, "Okay, for your use case, it might be privacy specific

28:44and might need to operate in silos. Let's go with Canton." Or it's privacy specific, but you really need deep liquidity layers, let's go with an EVM based chain. It's our job to kind of piece that out and then architect everything behind the scenes. So, the same way today that when you reach out to firms to help you with web one and web two, you don't even know what

29:04protocols they're using. Like when Netflix goes to do major improvements, the end consumer or even Netflix themselves isn't sitting back and thinking, "Well, what's the modern protocol that we need to use to make HD streaming work?" it just they rely on their vendor and their partner to assist with that. So, I'd say the first thing is to just have a

29:24willingness and an idea of, "Hey, we want to explore tokenization, we want to explore web three infrastructure. Let's have a partner kind of walk us through how this can how this could possibly help our business."

Amazing. Thank you so much for the time, Jordan. All the best to you and the team and the pushing forward of digital assets, web three infrastructure

29:46into the mainstream. I would love to follow up again in the near future.

Yeah, likewise. Thank you so much. Really appreciate the time, Ashton.

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