The following transcript was created using artificial intelligence. There will be some grammatical errors below. 

00:00:03:06 – 00:00:13:07

Richard Carthon: Hello everyone. Welcome to another episode of Crypto Current, your host here, Richard Carthon, and today I’ve got a very special guest all the way up from Connecticut, we’ve got Douglas with INX. How are you doing today?

00:00:13:21 – 00:00:15:21

Douglas Borthwick: I’m great. How are you? Thanks for having me Richard. 

00:00:15:23 – 00:00:28:04

Richard Carthon: Of course, I’m great. I’m really excited to learn more about what you have going on. And we have a really great interview lined up for everyone listening today, but before we get started, how about we learn a little bit more about you. Tell us a little bit about your background. 

00:00:28:06 – 00:01:06:13

Douglas Borthwick: Sure, I’m Douglas Borthwick. I came to America at 16 from Scotland did Carnegie Mellon University, a couple of years at Lehman Brothers then went off to Yale business school then ran some foreign exchange trading desks at Morgan Stanley, ran a proprietary trading at Merrill Lynch, went to Standard Chartered, ran a Latin America trading book and started up a company called Chapdelaine under the TP-ICAP, which is the largest inter-dealer broker umbrella, where I created a way for folks to trade currencies electronically and then I was kicking the tires about finding a way that used the Blockchain that looked into Crypto, but did in a very regulated manner. 

00:01:06:15 – 00:02:14:19

Douglas Borthwick: One day I was you know, talking to some people, went over to Tel Aviv to talk to Shy Datika that had started up INX and that’s what we’re here to talk about today. And really what Shy did is he surrounded himself with folks from the legacy world and folks from the Crypto world to create what we believe is going to be you know, the future for U.S. equities in general and all assets that trade in the U.S. we believe in the next five years will trade digital. We created an exchange for the trading of digital currencies, but also digital securities. And we also created the actual product or the security and registered with the FCC for the last two and a half years, creating a security that allows retail investors for the first time to get invested in digital securities and that’s you know, part of what we’re here to talk about, which obviously is the IPO that’s ongoing right now. There’s an F1 that’s registered at the Edgar database. That sounds boring, but the FCC has a thing of the Edgar database, where our F1 is posted and if your listeners want to go there and check it out, that’s really the statement of record concerning our company and our IPO.

00:02:15:17 – 00:03:01:18

Richard Carthon: Which is really exciting and definitely want to dive a little bit deeper into that and to just quickly elaborate on that, so for everyone listening, of course in the Crypto and Blockchain space, you have your ICOs, your Initial Coin Offering, or your SGOs, IEOs, all kinds of ways that in the Crypto space you have these either projects or coins that come into the market, but they are going the traditional route. IPO, Initial Public Offering, going to the S.E.C. United States, so very official, very exciting and definitely want to learn more about how y’all were able to get to this point, but before we kind of dive into that, what was your first introduction into the Crypto and Blockchain space, like what year was it? And then of course as you learned about it I know that you decided that you met with your friend in Tel Aviv who was working on INX, so give us a little bit of background on that. 

00:03:01:20 – 00:03:25:13

Douglas Borthwick: Well you know, I think early on I was working at Morgan Stanley and I think I remember seeing Litecoin sort of coming over the tapes and that was Charlie Lee and I thought you know, that’s an interesting thing that he’s doing there. And Charlie actually is an investor in INX, as is you know, Ricardo’s Spagni for Monero and a couple of other you know, luminaries within this sort of business.

00:03:25:15 – 00:03:26:00

Richard Carthon: Nice.

00:03:26:02 – 00:04:17:17

Douglas Borthwick: But really Crypto to me, sounded like I was more attracted on the payment side because I was working in FX and foreign exchange and I liked the idea that FX takes two days settlement, sometimes it’s one day, but the same day or in the matter of minutes is just unheard of. And so you know, like Ripple is something or SRP at the time I found interesting, I find it less so now, but at the time it was sort of like, here’s someone that’s going after the payments business where I can buy something and transfer it to my friend abroad in seconds. And to me that just blew my mind and it made me realize that this is incredible, but then I started thinking about, How do you take something like this and make it broader for the rest of the world? Because you know, maybe .2 percent of the population talks about Bitcoin, but everyone else in the population, maybe 80 percent really talks about securities.

00:04:17:19 – 00:04:18:04

Richard Carthon: Yeah.

00:04:18:06 – 00:04:34:15

Douglas Borthwick: Now securities that we trade today are sort of very old and go back you know, to the 20s. In that they open up at 9 o’clock in the morning, they close at 4:30, if there’s bad news, you can’t do anything until the next day at 9 a.m. and that to me is crazy, it’s not 24 hours trading. 

00:04:35:05 – 00:04:35:20

Richard Carthon: Yeah.

00:04:35:22 – 00:04:51:05

Douglas Borthwick: Well that doesn’t make any sense. Millennials today, according to a Charles Schwab study, in their top five holdings, one of them is GBTC. Well let’s face it, that means that they’re you know, they’re digital oriented, they think digital is important and this is the Amazon generation that wants something delivered in an hour, not in a week’s time. 

00:04:51:07 – 00:04:51:22

Richard Carthon: Right.

00:04:51:24 – 00:05:03:11

Douglas Borthwick: And so security’s something that you don’t get the ability to trade in and they look at their data gets bad news on Nike at 4 o’clock on a Friday and they laugh at it and then he says I’ll get out of it at 9:30 on Monday, are you kidding me? 

00:05:03:23 – 00:05:04:08

Richard Carthon: Right.

00:05:04:10 – 00:05:16:26

Douglas Borthwick: You’ve got to wait for a whole weekend to get out of something because there’s bad news? So our belief is that securities are going to move to the digital space because the younger generation demands that and that younger generation is about to inherit the largest wealth transfer in history.

00:05:16:28 – 00:05:17:13

Richard Carthon: Yeah.

00:05:17:15 – 00:05:35:18

Douglas Borthwick: So the last thing that isn’t digital that we know of, music’s gone digital email’s gone digital, pretty much everything you know is gone digital, except for equities. There’s so much inefficiency and waste in the way the system is done and we said at INX, “Well let’s find a way to make it efficient.” 

00:05:36:19 – 00:05:37:04

Richard Carthon: Yep.

00:05:37:06 – 00:05:54:25

Douglas Borthwick: If you want to list on multiple exchanges around the world and once, you’ve got to be digital. If you want to trade 24 hours a day seven days a week, you’ve got to be digital. And if you want investors that are the retail general public to be able to trade these, you’ve got to create the products and the product didn’t exist before us. There were security tokens, as you’ve talked about.

00:05:54:27 – 00:05:55:12

Richard Carthon: Right.

00:05:55:14 – 00:06:00:08

Douglas Borthwick: But these security tokens were only for accredited investors or wealthy individuals. 

00:06:00:10 – 00:06:00:25

Richard Carthon: Exactly. 

00:06:00:27 – 00:06:05:26

Douglas Borthwick: And our view was that there’s no way that that’s ever going to go mainstream if there’s only a thousand people that can look at it at a time.

00:06:05:28 – 00:06:06:13

Richard Carthon: Create more access.

00:06:06:15 – 00:06:37:14

Douglas Borthwick: So we had to actually create the product over two and a half years or 950 days with the S.E.C. creating this product, that is the INX token, which is incredible because it’s for the first time someone that’s a retail individual in certain states can invest in an early stage project that’s on the Blockchain. It’s the most transparent IPO in U.S. history because you can watch as we’re selling tokens, you can see it live on the Ethereum Blockchain. 

00:06:37:19 – 00:06:38:04

Richard Carthon: Yeah.

00:06:38:06 – 00:06:44:04

Douglas Borthwick: It’s the first ever security that has built in KYC AML. And this is something that the regulators really, really want. 

00:06:44:06 – 00:06:44:21

Richard Carthon: Right.

00:06:44:23 – 00:07:15:28

Douglas Borthwick: If you own Nike stock, you can take it and you can give it to someone in ISIS and they can sell it and they get the money. And Nike doesn’t know that you own it, they can’t tell that. With our security, the way we’ve set it up, you can’t sell that to someone else unless they’ve already been white listed through a KYC platform. So every holder of INX tokens can prove without any doubt that they’ve gone through a KYC AML to the highest standard, but they also can’t sell it to a bad actor. And at any time, INX, our company, we can see exactly who’s holding.

00:07:16:00 – 00:07:16:15

Richard Carthon: Yep.

00:07:16:17 – 00:07:40:10

Douglas Borthwick: And let’s say we need to pay a dividend or there’s a distribution, I can pay it directly into their wallets. If you’re Nike and you pay a dividend, you’ve got to go through three or four different third parties. The cost of that is astronomical. And so what we’ve created is a token that makes securities trading make a lot more sense, it’s much more efficient and we’re the first to do it. It’s very exciting. 

00:07:40:12 – 00:07:57:23

Richard Carthon: It is. And I mean, there’s a lot that you just said that I definitely want to unpack and one of the places I want to start before getting back into the security tokens, you brought up the point that we’re about to go through the largest wealth exchange in recorded history, can you kind of expand on that and what do you mean by that?

00:07:58:07 – 00:08:51:22

Douglas Borthwick: Sure. Well I mean, the baby boomers, which is the population that’s made up of my parents. I’m 50 years old, you know, my parents are in their 80s and those folks, that was the largest generation. It was sort of the generation that was born post-World War 2 or during the World War 2 and you know, as they move on in years, the assets that they’ve accumulated passed down on to the younger generation and the younger generation is one heck of a lot more astute when it comes down to technology, when it comes down to how digital’s important, how next time delivery that happens automatically and right now makes sense and they’re certainly not fearful of digital or of electronics. I don’t know about you, but my kids grew up with an iPad in their hands since they were three months old. So, younger generations understand tech to a much greater understanding I think and this is the same all the time.

00:08:52:09 – 00:08:52:24

Richard Carthon: Yeah.

00:08:52:26 – 00:09:25:10

Douglas Borthwick: I remember helping my parents out with a VCR and at the same time, now my kids teach me how to get a virus off my computer, but the reality is, as we go down and generations and as wealth moves from one generation to another, there’s an expectation of what folks want. Now Nike right now, the issuer, they’d love to go digital, they’ll save a lot of money doing cross-border listing, they’ll save a lot of money paying dividends, they’ll know exactly who their consumer is. The consumers want folks to go digital because guess what? By going digital, I can trade at 24 hours, seven days a week. 

00:09:25:15 – 00:09:26:00

Richard Carthon: Right.

00:09:26:02 – 00:09:40:10

Douglas Borthwick: And the regulators want them to go digital because of one, efficiencies, but two, the KYC AML aspects of it. And the fact that they can freeze at any moment, any person that owns Nike stock let’s say and that’s very, very important when it comes to AML. 

00:09:40:20 – 00:10:29:11

Richard Carthon: Yeah and kind of going into the next phase of a question that I have was you know, the importance of security and thanks for expanding on that. And I would say that the newer generation’s the people that are more aware and better with technology as it continues is the security aspect and just making sure that because we live in a digital age, we are very mindful of our data and like what that means and being able to have more control of our own information, but also access to financial information in ways for us to know what’s going on in the financial world. So I think what y’all are doing with having transparency, as transparent as y’all are being with the KYC and with security tokens is very powerful. So, can you kind of break down a little bit like what the use of a security token is and how powerful that is?

00:10:30:01 – 00:10:49:17

Douglas Borthwick: Let’s talk about transparency and I think how our offering relates to any other offering in the Blockchain space. So you talked about ICOs before, IEOs. You know, with these, it’s sort of like someone writes a white paper they’re asking you to you know, trust me, I’ll do what you say and send me some money. 

00:10:49:20 – 00:10:50:05

Richard Carthon: Right.

00:10:50:07 – 00:11:29:23

Douglas Borthwick: When you register with the S.E.C., what you do is you say this is exactly how much we expect to make. This is Ernst and Young who’s going to audit every single time that we do something, this is how much everyone internally makes in terms of compensation, how many tokens they already own, how much equity they own. This is our business plan, how we expect to make money, when we expect to make money. You lay yourself naked in front of regulators and you publish that through this F1 prospectus on the Edgar database and if we beer from this in any material way, it’s not sort of like, Oh sorry guys, catch me next week, it’s jail time.

00:11:30:03 – 00:11:30:18

Richard Carthon: Right.

00:11:30:20 – 00:12:16:16

Douglas Borthwick: And so when someone buys a U.S. regulated security, they understand that it’s not just sort of like, Trust me it’s also that the S.E.C. is watching over us to make sure that we do things the way that we’ve said we’re gonna do. Now the way that we structured our security token in terms of transparency, there’s no other exchange operating in the Crypto space that offers quarterly numbers that are audited by Ernst and Young and are printed at the S.E.C. so everyone can see it. There’s no other exchange where the absolute ownership who owns what, there’s no other exchange that has advisors and says, “These are our advisors, this is how much they’re getting paid.” Lots of guys talk about other exchanges on Twitter and elsewhere. You have no idea if they’re getting paid by those exchanges or not. 

00:12:16:20 – 00:12:17:05

Richard Carthon: Right.

00:12:17:07 – 00:12:50:29

Douglas Borthwick: With us, you know exactly who’s getting paid and why they’re getting paid, so we’re allowing folks to sort of open up the door into exchanges and see what they are and the transparency is absolute. And even when it comes to the IPO, it’s the most transparent IPO in history because of the fact that normally the allocations are done behind closed doors, as CoinDesk pointed out in an article last week. You can go on Etherscan and you can actually watch as tokens are transferred from our firm treasury into individual wallets as people participate in the IPO, this has never been done before, it’s absolutely unheard of. 

00:12:51:08 – 00:12:51:23

Richard Carthon: Yeah.

00:12:51:25 – 00:13:03:18

Douglas Borthwick: And what we’re doing is we’re shining a light on an area of the world that folks traditionally have said, “Hmm, it’s a little bit dodgy” and we’re shining a light out on it saying, “You know what, if you think it’s dodgy, here’s absolute transparency.”

00:13:04:14 – 00:13:25:05

Richard Carthon: Yeah and it’s needed, especially in the financial world. And one of the things that came to mind when we first started talking about this, the timing of everything right now, even with COVID, the wanting more transparency into everything that’s going on is definitely where this next decade is going. And it’s absolutely everything with COVID, it’s shining a light on the digital space.

00:13:25:07 – 00:13:25:25

Douglas Borthwick: For sure.

00:13:25:27 – 00:13:38:08

Richard Carthon: And especially when it comes to I believe Crypto and everything else. Like what I think would have taken a decade to get to, I think we’re getting there a lot faster, maybe in the next three to five years just because there’s such a gigantic light on everything that’s going on in this space. 

00:13:38:10 – 00:14:38:00

Douglas Borthwick: COVID for sure has pushed things towards that digital way. In the old days, we thought you needed someone running around on the floor of the New York Stock Exchange in order to get equities to trade. Well guess what? No one’s been running around for quite some time and everything’s doing quite well. Nasdaq does well, New York Stock Exchange does well, we don’t necessarily need that sort of thing. So, we can trade things digitally now. It’s not that important, but one thing that’s important, if you are going to trade digital products you’ve got to put in the time to make sure that what you have is sort of audited and sound. There’s some exchanges that will list something that’s maybe been around for 11 days and say like you know, “Caveat emptor, buyer beware.” The view that we have at INX is not similar. The view we have at INX says, “Look we’ll list things on our security token platform that we believe are registered correctly with the right institutions.” That’s number one. And on the Crypto trading platform, if it’s registered as it’s been seen as a Cryptocurrency by the U.S. government, we’ll allow it to be able to be traded on our Cryptocurrency site. 

00:14:38:02 – 00:15:09:24

Douglas Borthwick: So for us, it’s much more important. It’s not about caveat emptor, buyer beware. For us, it’s much more important that the folks that register to trade in our platform, the folks who get involved in our IPO, that they understand that their interests are certainly at heart and that’s why we’ve got 200 plus pages in this F1 prospectus that lists all of the things that could go wrong. And notably we’ve had a lot of folks that have come to us and said, “What, this could go wrong?” And sort of like yeah, things could go wrong in any sort of issue.

00:15:09:26 – 00:15:10:11

Richard Carthon: Right.

00:15:10:13 – 00:15:29:07

Douglas Borthwick: But the difference is, no one else has had to tell you that because they’ve done an ICO and in the ICO, people just stand there and say they have a rocket ship and they have someone screaming about how it’s going to the moon. Well you know what, with the U.S. securities you don’t do that, you have to say these are the risks. And it’s very important I think that people understand there are risks, so. 

00:15:30:00 – 00:15:56:25

Richard Carthon: Yes, but also identifying them and just being again going back to one of the things you said earlier about transparency, a 200 page. So for people who aren’t very like, used to researching and doing all this stuff and like, just go and do whatever, a 200 page document is very, very, very thorough on all of the things that could possibly go wrong. That is incredible in the Crypto and Blockchain space. Got it, like it’s pretty remarkable. 

00:15:56:28 – 00:16:36:00

Douglas Borthwick: And it’s taken I think about four different law firms to put that together with us with the back and forth, with the regulators, on all regulators. Now before us, the term security token really hadn’t been sort of worked through with regulators. So there were regulation A+, there were regulation D, but nothing to the extent of a full F1 prospectus, which is the prospectus or similar to what a Nike stock is in the amount of regulatory hurdles that we had to walk through, but also the effort that we put in to make people understand the risks, it’s unheard of in this space. 

00:16:36:02 – 00:16:54:05

Richard Carthon: Yeah and one more thing that I want to kind of touch on and I know you’ve brought it up a couple of times for security tokens and I’m sure a lot people listening have a really good idea of like what it is, but for some of the newer people who are coming on listening to the show, can you just give a basic overview of you know, a security token versus a regular Cryptocurrency?

00:16:54:07 – 00:17:30:21

Douglas Borthwick: Yeah sure. So a regular Cryptocurrency is something that you use for you know, payment back and forth to someone or storing wealth. A security token, as we’ve built it, has a number of different things, really it’s fractionalized ownership of something. It could be of equity. Not for us though, with us, it’s a factionalized ownership of potential future cash flows. So, net operating cash flows or profit I think would be the non-legal term. What we say is, “Look we’ll pay out 40 percent of our profit going forward forever.” It’s not like a dividend that could be changed by the board of managers, but there’s actually a contractual right for the buyer of the security token to get on a pro rata basis 40 percent of our payout every year. On top of that, we say, “Look, you know, we’re raising 170 million, but 70 million of that goes into a cash fund.” That’s because if you want institutions to trade with you, have to have a big pile of cash sitting there, otherwise you’re not worth trading with, but if we don’t execute on our mission and our vision and if we have problems that cash fund, the first lean on that or the preferred preference goes to the token holders, so they get that back. So there’s a downside protection inherent in the security token.  

00:18:01:16 – 00:18:51:24

Douglas Borthwick: So, really what we’re saying is, “Give us 70 million to put into that cash fund, give us 47 million dollars and let us use that as the capital to buy some more licenses to go out there in the market and market, to open up and start trading.” Now 47 million sounds like a lot of money, but that 47 million is buying 40 percent of the upside or the profits of our firm going forward. I remember two years ago, Binance did an ICO, they raised 15 million dollars. Today their market cap’s something like 2.8 billion. I believe that what they make is something like 500 million dollars a year, 20 percent of that would be what? Two hundred million dollars a year. Multiply that by 10, you’re talking about two billion dollars a year would be the equivalent of what they would be valued at if they were to take 40 percent of their profits. 

00:18:51:26 – 00:18:52:11

Richard Carthon: Right. 

00:18:52:17 – 00:19:30:14

Douglas Borthwick: Okay. So we’re asking for 47 million, you know and we’re a startup, but we’ve had the technology we’re just ready to pull the trigger. So that’s around 2.3 percent of the Binance valuation. So that’s sort of like you know, what we’re valuing ourselves at and it’s not really a valuing at, it’s what we’re saying this is how much we need to raise in order to execute on this vision and our vision is different from others. Whereas someone like a Binance or Coinbase lists Cryptocurrencies like Ethereum and Bitcoin, they also list utility tokens. And some of these utility tokens you’ve got to say are questionable, are people buying them for utility or buying them because they think they’re gonna go up in price like a security?

00:19:30:29 – 00:19:31:14

Richard Carthon: Right. 

00:19:31:16 – 00:20:44:05

Douglas Borthwick: What we’re listing is Cryptocurrencies and then separately we’re also listing security tokens. And security tokens are registered with the S.E.C., a security just like a Nike stock or an Amazon stock, with the same sort of rights and obligations behind them. And so, our view is in the old days, you’d have some companies that just do security tokens, an example would be like a tZero. And they list three security tokens, two of them are their own self and the other one is I think it’s ASP, it’s a real estate concern. Now, they’re limited to or at least were limited to accredited investors, so maybe of a 1,000 people, 2,000 people watching these tokens trade, it’s really not a lot. And that’s because security tokens before we came along, were limited to just accredited investors. What we’ve done is created a product that can be bought and traded immediately by the retail investor. So the millions of people that are trading Bitcoin on our platform, should we get that many folks involved will turn around, click a switch or click a tab and suddenly be able to trade security tokens, a whole list of security tokens that can be traded by them immediately. So now you’ve gone from a 1,000 people looking at something to millions of people looking at something and now you’ve got liquidity.

00:20:44:07 – 00:20:44:25

Richard Carthon: Right.

00:20:44:27 – 00:20:50:29

Douglas Borthwick: Cause now you’re looking like Nasdaq or the New York Stock Exchange and that’s what we want to create. And before we came along, that product didn’t exist.

00:20:52:05 – 00:20:52:20

Richard Carthon: Yeah.

00:20:52:22 – 00:21:01:27

Douglas Borthwick: And neither did the exchange. And we went to the New York Stock Exchange and Nasdaq, I would like to list here. They said, “Sorry, we can’t list digital tokens.” That’s a great opportunity for us then isn’t it?

00:21:02:13 – 00:21:15:02

Richard Carthon: Yeah to be a first mover in there and to bring access to the security tokens to the greater Crypto trading community. Just like you said, having access to these security tokens is going to be very powerful.

00:21:15:04 – 00:21:15:20

Douglas Borthwick: Yeah. 

00:21:15:22 – 00:21:17:20

Richard Carthon: And provide a lot better opportunity and liquidity.

00:21:18:18 – 00:21:22:23

Douglas Borthwick: But it’s not just the Crypto trading community, the Crypto trading community may be .2 percent of the population.

00:21:22:25 – 00:21:23:10

Richard Carthon: Right.

00:21:23:12 – 00:21:29:14

Douglas Borthwick: That really gets into Crypto, that talks about it, that tweets about it all day long. Eighty percent of the U.S. population has equities.

00:21:29:16 – 00:21:30:01

Richard Carthon: Yes.

00:21:30:03 – 00:22:12:14

Douglas Borthwick: Either in their pension fund, in their 401K or they actually take positions themselves on Etrade or Ameritrade. One of our board members actually was the CEO of Ameritrade, but you know, so 80 percent of the population hasn’t heard of INX yet, but for them, this is a huge leap forward for securities. If Nike could trade 24 hours, seven days a week, have AML KYC and do dividend payments directly into people’s wallets, this would be amazing for them, but they haven’t heard about us yet. Because you know, you knock on mainstream media’s door and say, “This is what we’re doing,” and it’s sort of like when Katie Couric did that interview way well way back in that she said, “The internets, has anyone heard of the internets?” That’s what it reminds me of here. 

00:22:12:17 – 00:22:40:25

Douglas Borthwick: And yet for folks in the Crypto community, they look at our token and they say, “Hmm you’re putting handcuffs on Crypto here because you’re doing KYC AML.” So .2 percent of the population looks at us and says, “Maybe this is the future, but you’re putting handcuffs on what already is a good thing.” The security side, 80 percent of the U.S. population is saying to us, “This is the most incredible thing we’ve ever seen.” The FCC would talk about it as being a new asset class. Well think about that, a new asset class, there’s debt, there’s equity and no security tokens. Now that gets back to what is a security token? 

00:22:41:25 – 00:23:17:05

Douglas Borthwick: Well let’s say you’ve got future earnings and I went to fractionalize you and I say you know what Richard, going forward, I think maybe you could make you know, tens of millions of dollars, so I’d like you to sell 40 percent of your future earnings to me. Now all your future earnings have to be paid into a trust and that trust is going to give me 40 percent of it and then from that, I’ll buy to date a net present value of something, maybe be a little bit less than that. And then as you start doing better and better, then my security in you starts going up in price. Now there’s NBA players already trying to get to tokenize their contracts.

00:23:17:07 – 00:23:17:22

Richard Carthon: Yeah.

00:23:17:24 – 00:24:06:02

Douglas Borthwick: Let me put it something else, someone on Fifth Avenue, they’ve got a Van Gogh on their wall. They love that Van Gogh, they’d never sell it, it’s been in their family for a 100 years or however many years you can have, but their house is crumbling around them, but they can never sell the painting. So they tokenize the painting, it can still stay on their wall, they get money up front today, they can do up their house. The owner of that token now has a position in a Van Gogh and if Van Gigh starts selling all around the world for higher prices, the price of that security token is going to go up in price. Now that’s just simple things like paintings or people’s careers and people’s earnings, but also Nike I mean, overall, let’s look at overstock, the stock, that equity now is trading in a tokenized format 24 hours a day over it tZero. All equity’s going to trade 24 hours and that’s a multi trillion dollar opportunity.

00:24:06:04 – 00:24:06:19

Richard Carthon: Right, already.

00:24:06:21 – 00:24:17:24

Douglas Borthwick: Because as every single equity is told by the millennial I want to trade you 24 hours or I’m not buying you, they’re going to move over, it’s gonna be a tidal wave of business and INX is going to be sitting there saying, “List here.”

00:24:17:26 – 00:24:57:01

Richard Carthon: Yeah I mean, y’all positioned yourself in a really opportune place and it makes a lot of sense. So, a final question I have for you is, Where do you see this industry headed in the next three to five years or even the next decade? Like how soon do you think realistically that you’ll start to see not only the equities side of trading start to really dive into getting into the 24 hour trading standpoint or like when do you think the Crypto community’s really going to start to like build on this side as well? And where do you see this headed?

00:24:57:03 – 00:25:06:06

Douglas Borthwick: Well I see this is less the Crypto community getting excited about it and more the rest of the world getting excited about Crypto or certainly Blockchain.

00:25:06:08 – 00:25:06:23

Richard Carthon: Yep.

00:25:06:25 – 00:25:59:23

Douglas Borthwick: Because the rest of the world doesn’t understand what Blockchain can do for them and the efficiencies that can create. A lot of people say sometimes that folks are looking for, with the Blockchain, people are looking for problems in order to say that this is the solution. And the problem is the way that equities trade right now isn’t very efficient, but it will be if it’s done on the Blockchain and we’re proving that right now. Now in terms of five to 10 years, this reminds me of The Graduate, I don’t know if you’ve ever seen that movie. Dustin Hoffman, I think someone pulls him aside and says, “You know what? I’ve got one word for you, plastics, plastics is the future. And that was back in what? The early 70s or something where plastic suddenly became this was the high tech of the world and I think that today digital digital assets is the plastics of today and that folks that get into this kind of area are gonna see a tremendous move of assets towards that area. 

00:25:59:26 – 00:26:06:24

Douglas Borthwick: I’d say in the next five years, you’re gonna have the first digital currencies. China is already working on that, Europe’s working on that, the UK is working on it.

00:26:06:26 – 00:26:07:11

Richard Carthon: Yeah.

00:26:07:13 – 00:26:08:03

Douglas Borthwick: And even the U.S. is working. 

00:26:08:05 – 00:26:08:20

Richard Carthon: Yeah. 

00:26:08:22 – 00:26:55:17

Douglas Borthwick: I think Jerome Powell said a couple of weeks ago what he likes about the Blockchain is the KYC AML aspect. Well I’ll tell you something, we’re the only security in the world that has that today. On top of that, so you have currencies moving under the Blockchain, you already have digital commodities. So I mean, you could think of Bitcoin as a digital commodity you could think of Ethereum as that, but also you could think about gold, the way that pax gold is trading right now and others that are trading a digitized format. It makes sense because you’d want to be able to transfer one thing from one person to another without it being in a suitcase and then after that you’re going to have equities. There’s already been one equity that’s done, there’s also fixed income, there’s treasuries already in a digitized format that Archive Fund came out with. So we’re already seeing first movers that are making these adjustments and making these changes and it starts with one and moves to another. 

00:26:55:19 – 00:27:46:24

Douglas Borthwick: The word has to get out because here’s the thing, the securities market is a huge behemoth, it’s like trying to turn a tanker that’s been going for 50 years in one direction. It takes a lot of push and pull and we’ve talked to 30 act and 40 act mutual funds and they said, “Look, we love your idea, but you know, our back office isn’t ready to accept security tokens yet.” So what do you mean? They said, “Well, prospectuses that are given out to folks that buy a mutual fund, they say stocks and bonds.” And this isn’t a stock and it’s not a bond and that’s what we’re up against, you’ve got millions of prospectuses around the world that have to be updated to include security tokens. Now will they do that? Absolutely because as we’ve talked about, this millennial generation is going to absolutely demand it. No one is going to wait a Friday at 4 o’clock until Monday at 9:30 to get out of a crummy stock.

00:27:46:26 – 00:28:35:00

Richard Carthon: I think you bring up a lot of really interesting points and I appreciate you diving into that. And I really do think that our industry is moving in that direction and our generation that’s what we’re seeking is to have access, the 24 hour access. And we’re already starting to see people capitalize all over, even even with people using other exchanges right now that give you more access and can quickly buy things. Just like you said, if someone’s stuck at 4:00 p.m. on a Friday, they don’t have to wait till Monday at 9:00 to fix it, so it’s only a matter of time. Thank you for putting this all on our horizon. INX is definitely on some really, really cool things as he brought up, IPO is coming up real soon.

00:28:35:07 – 00:28:56:10

Douglas Borthwick: Right now, it’s happening right now. We put out PR on Friday, we’re now the first ever U.S. security IPO that accepts Crypto for payment. It’s never been done before and we accept Crypto for payment starting on Monday at 10:00 a.m.. So that’s something very exciting.

00:28:56:12 – 00:28:56:27

Richard Carthon: Awesome.

00:28:56:29 – 00:29:14:04

Douglas Borthwick: But if you want to learn more about security tokens, I think we talked about this before the program you know, we have a YouTube channel, INX Limited. Go there, we’ve got four out of five videos that we’ve already dropped that really go through what security tokens are and help people understand you know what they can do for you. 

00:29:14:06 – 00:29:19:29

Richard Carthon: For sure. And I was going to ask what are some other ways that people can learn more about INX and also learn more about you if they want to connect?

00:29:20:01 – 00:29:43:21

Douglas Borthwick: For sure. Well, you can go to INX.Co, you can go to See oh you can go to Token.INX.Co, you can check me out at @DCBorthwick on Twitter. Look, we’re trying to be everywhere right now, look me up on LinkedIn, look me up on Twitter, wherever you want. I’m certainly open to discuss this and very, very happy to be here with you Richard. 

00:29:44:02 – 00:29:47:08

Richard Carthon: I appreciate it. And before I let you go, What is a final thought that you want to leave with everyone here today?

00:29:47:18 – 00:29:50:29

Douglas Borthwick: Plastics.

00:29:51:11 – 00:29:51:26

Richard Carthon: Plastics, awesome.

00:29:53:08 – 00:30:13:26

Douglas Borthwick: That’s what security tokens are. Whereas plastics in the early 70s was the exciting thing to get into, I think that security tokens, digital assets are absolutely where the future’s moving and where there’s a huge amount of assets that have to transfer onto the Blockchain and that’s going to be the future. 

00:30:13:28 – 00:30:22:25

Richard Carthon: Excellent. Well that’s a really great last thought. Everyone again listening, plastics, A.K.A., security tokens. Be on the lookout. Again Douglas appreciate your time here today. 

00:30:22:27 – 00:30:23:12

Douglas Borthwick: Thank you. 

00:30:23:14 – 00:30:24:03

Richard Carthon: For everyone listening, Stay Crypto Current.