Anthony Woolley is the Head of Business Development at Ownera, he's a banking executive with expertise in Capital Markets at Citi, Societe Generale and HSBC. Co-Chair of the GDF Private Markets Steering Group and the GDF FI Standards working Group.
Ownera is a leader in digital securities, they have a mission to enable a digital private market, by interconnecting the global financial industry.
We caught up with Anthony Wooley prior to his attending of Digital Assets Week Singapore conference this September.
Prior to Ownera you had worked 25 years in public capital markets, how did this experience help transition you to blockchain and digital assets?
Over the last three decades I lived through the digital transformation of capital markets – from the advent of electronic deal entry in the 90s through to recent developments in automated algorithmic trading. However these changes were only ever optimising how trades were negotiated and not actually transforming the full life cycle of transactions through to clearing and settlement. This has resulted in massive operational and technology complexity and a proliferation of market intermediaries all compensating for the risks of delayed settlement and the potential default of a counter-party.
In my previous role as UK CIO of a major bank I got interested around 2014 in the way in which blockchain could automate the whole lifecycle of a financial transaction in real-time and support the peer-to-peer transfer of value without intermediaries. This led me to get engaged in multiple industry initiatives in the digital assets space working with literally hundreds of fintechs. It also taught me the futility of trying to rewire the public capital markets from the inside. Ultimately I made the move to Ownera where I saw the potential to actually execute on the vision of a full digital transformation of our financial system.
Could you discuss Ownera’s vision for the digital transformation of financial markets?
Our vision for the transformation of financial markets is that ultimately every account will be replaced with a digital wallet. Today our whole financial system operates around the need to update records of transactions in one institutions account database and reconcile these with entries in the account databases of every counter-party to every transaction. This is true whether those accounts hold cash or securities. By replacing accounts with digital wallets it is possible to cryptographically bind the record of ownership of an asset held by an investor in a wallet to the actual golden-source record kept by the owner of the asset. Once you can do that you can strip out massive complexity and open up the potential for new and exciting financial products and investment opportunities.
Real estate seems to be a core focus for Ownera, what’s needed for more real estate to become tokenized into digital securities?
Ownera is actually deploying a global distribution network for digital securities connecting regulated institutions that manage those securities. This works equally well for any type of security whether that be equity, real-estate, bonds or funds. However we are currently involved in a lot of projects focused on real-estate. There are a number of reasons for this – It is arguably the largest market on the planet, it is currently almost totally offline and there is massive investor demand for this product in these uncertain times – it is an inflation hedge and largely uncorrelated to the public capital markets. What is needed to really make this take-off is institutional engagement and global distribution such that investors can access those real-estate investment opportunities wherever they might be. Aside from real-estate we are also seeing a lot of interest in pre-IPO companies and private funds.
You’ve spoken before about the need for a unified API to aggregate and normalize access to all digital securities from multiple sources. Could you discuss the importance of this and how it fits into the Ownera business model?
The last few years have seen a proliferation of digital asset venues running on disparate and incompatible blockchain technologies. I would argue that none of these venues can or will achieve the level of distribution required to unlock liquidity in these digital securities on their own. Even if a venue had hundreds of high-quality assets and thousands of active investors it would still only represent an insignificant fraction of the global private markets. A unified API such as FinP2P can solve this problem by enabling digital venues to distribute their assets to investors of other institutions, wherever they are in the world and whatever blockchain technology they are running. Ownera has taken a very open approach to solving this problem by actively supporting the development of FinP2P and by building commercial implementations of FinP2P network nodes working with a multitude of institutional partners.
What are the challenges of building a wallet for digital securities in comparison to regular cryptocurrencies?
Cryptocurrencies are actually very simple. All the information about the cryptocurrency is held on chain and they operate like bearer instruments. When I transfer bitcoin to you, you hold the private key that then asserts ownership over those coins on the blockchain and there is no recourse back to me as the seller, nor the ability to recover those coins if something goes wrong. Digital securities on the other hand are very complex – there is a lot of data associated with the asset that underlies the security and they do not operate as bearer instruments. Every digital securities transaction is subject to regulatory oversight and there are significant ongoing fiduciary responsibilities on the part of both the asset owner and their nominated registrar.
So, building a wallet for digital securities must address all of these concerns and enable it to hold a securities portfolio that securely and provably asserts ownership over those assets in real-time. The wallet we have developed does all of this whilst also enabling assets in its portfolio to be held on disparate venues and blockchain technologies. It is also compatible with multiple digital custody solutions. It is an exciting and transformative technology and it has been a privilege to be involved in its development over the last few years.
Could you share some details regarding the FinP2P, an open source, decentralized protocol?
Yes, FinP2P was developed under a not-for-profit working group run by Global Digital Finance – now recently merged with the Global Blockchain Business Council. It was born around a vision of a peer-to-peer network of financial institutions wishing to transact in digital securities in real-time. Any institution running a FinP2P node can establish a connection to any other institution running a node. They can then use this connection to distribute assets they manage to the investors of the other party. This works in both directions so each node on the network brings pools of assets and/or investors. Nodes can be run by any institution holding the appropriate regulatory licences whether they be banks, asset managers, exchanges, wealth managers or other distributors.
You’ve previously stated that this is the biggest market in the world, how big of an opportunity do you believe digital securities will eventually become?
We believe that digital securities will eventually transform all global securities transactions whatever the type of asset. It will start in the private markets that are currently largely offline – a blank sheet of paper if you like. Ultimately I believe that it will also transform the public capital markets but untangling that massive spaghetti of legacy infrastructure will take quite some time.
You’ll be participating in a panel discussion at the Digital Assets Week Singapore Conference on September 27th and 28, 2022 that is titled ‘Institutional Access to Private Market Assets’. Can you briefly touch on what you will be discussing?
Yes, I will be making the case for why we believe that institutional engagement is key to the opening up the global market in private digital securities. I will expand on what has been holding back their participation up until now – whether that be external forces such as technology and regulation, or internal institutional barriers such as culture, the misplaced preconceptions of traditional finance and indeed vested interests that may not want to see this transformation happen in the first place. I am sure it will be a lively debate.
You’ll also be participating in a fireside chat titled ‘Bringing Global Distribution to the Private Markets’, what should we expect from this?
In this discussion we will be expanding on everything we have covered here and how we think that global distribution will come about in a practical sense. As you might expect, FinP2P will be an important part of that session.
Is there anything else that you would like to share about Ownera?
Yes. At Ownera we have always taken a very open approach to interconnecting the global market in digital securities. We do not believe that digital securities venues will success by building ‘walled gardens’ – hoping to control enough assets and investors to achieve market dominance. Rather we believe that rails are needed to interconnect many institutions and venues. One of my passions is sailing and this approach often reminds me of the phrase, “a rising tide floats all boats”. So if you represent an institution looking to take an open approach to the transformation of the private markets, come and talk to us.
Thank you for the great interview, anyone interested in learning more should visit Ownera or should attend the Digital Assets Week Singapore conference which will be held in Singapore on September 27th and 28th, where Anthony will be discussing in more details the above issues.