William Fong joins Amy-Rose Goodey on The House is Digital for a conversation on institutional investment, tokenisation and the future of digital finance.
Drawing on more than two decades across global banking, investment management and digital assets, William shares his perspective on how traditional finance and blockchain technology are beginning to converge.
The discussion explores tokenised assets, stablecoins, superannuation, financial infrastructure, custody, cross-border payments and the opportunities for Australia to build a more efficient and globally connected financial system.
A thoughtful conversation on innovation, investment and the next generation of financial markets.
speaker-0: Thank you for the invitation.
speaker-1: You have been on the coal face of both sides. So you’ve you’ve been a startup, you’ve been involved and working with banks. Take me on a a bit of a journey. How did you get from there to here?
speaker-0: Okay. ⁓ started a long time ago, very long time ago, almost thirty years now. ⁓ I began as an ethics trader, HSBC in Hong Kong. Since then I’ve kind of jumped from one area to another, but mainly staying within the investment universe. I was a fixed income trader with Citibank. ⁓ I managed a proprietary portfolio for Deutsche Bank during the GFC. ⁓ And we know their role basically during that period of time. ⁓ and then I ran regional. ⁓ I spent a small period of time Westpac in Sydney, where I managed a global ⁓ trading team of emerging market currencies so forth. And I actually went back to Asia and went worked for ⁓ the largest Malaysian bank, ⁓ May Bank, ⁓ on the credit portfolio management. I’ve also worked in the Bai Sai. ⁓ hedge funds and so forth. But it was when I came back to Australia in twenty seventeen, to escape literally ⁓ going overseas and and just traveling and bobbing around everywhere. And I came back to study. So I began my PhD study ⁓ in twenty eighteen, ⁓ which I’m hopefully finishing off now. ⁓ but during the pandemic I was just at home Playing with my fingers while trying to work out what sort of features I’m gonna generate. someone offered me a package idea saying they’ll teach me digital assets and they’ll pay me for it, and I can just do it while staying home. And
speaker-1: This sounds very twenty seventeen.
speaker-0: I I kinda like I looked around every single risk I could think of and I just couldn’t think of any. So I entered the the arena ⁓ around the pandemic ⁓ period and since then I’ve helped to both develop and integrate the traditional finance investment universe into this side of the fence. And at the moment We’ve worked with a number of universities on academic achievements, trying to help them with guest lecturing on the digital universe, helping them on curriculum advisories, ⁓ on the next set of ⁓ new digital economy type ⁓ academic curriculum. And we are trying to be a good corporate citizen working with DECA and so forth. And and really moving towards institutional institutionalization of this particular asset class.
speaker-1: And how would you say that’s progressing? Like historically, you’ve obviously been in TradFi for a very long time and since 2017 in in digital assets. And might I say, in 2017, I was also paid to do some research on a on a particular digital asset and went over to Dubai and it was to do some research on this particular coin. It’s very 2017 your story. What was it about digital assets that because it’s been since 2017, you’re still in it? I’m still here. You’ve moved out of TradFi into digital asset. You’re still here. W what is it about it?
speaker-0: Don’t actually know if I actually move out of Tri-Fi into here. I’ve always viewed digital assets as something that requires a bridge between the two to make it scalable and become adoptable. Right, total equity market cap. ⁓ Globally is about $90 trillion. Fixed income is much bigger, between $130 to $140 trillion. We crossed over $4 trillion on the DJ SSI last year and we’re falling back behind it. But the growth prospect and the amount of generation of interest into this space are are phenomenal. But if you are able, which we are doing right now, to link between all three universe together, then basically you don’t have to reinvent a totally new asset class to grow into that kind of scale. Right? That you’re talking about having a digital asset that if by itself needs to go 100x to even become relevant. But what we’re seeing now, the tokenization of stock markets, fixed income, even foreign exchange, real estate, private credits. That’s all progressing faster than what we could even predict 12 months ago. So what what I see this is it’s literally requiring that particular bridge. When you speak to many institutional investors nowadays, they know what’s going on. I mean, obviously every single day they’re involved with headlines and and how the the the progress of migration between the the traditional asset. into digital universe. And many of them are thinking, I don’t need a new product. I don’t mind having atomic settlement. It took us decades to go from having a settlement on bond contracts, physically transferring from one place to another, to maybe T plus five into T plus three, and then now a bit
speaker-1: Yeah.
speaker-0: better on the settlement side. But if you tell me tomorrow exactly the same contract settles before you go after lunch, I’m certain many of the traditional finance investors will say that I would love that. Where do you assign? Yeah.
speaker-1: But but what’s holding holding things up then? Because y you can br ⁓ I agree, TradFi is is looking at it and there’s agreement. There’s definitely an opportunity here. But in your view, what’s the hold up then?
speaker-0: There is a lot of there there’s always gonna be inertia and barriers to entry when you try to disrupt an entire industry. A lot of people rely on custodian control. Stock market clearing houses require private, centralized membership type of ⁓ control in order for them to make sure that counterparty was ⁓ reduced. Now You can’t just walk in the door and tell them that tomorrow it’ll be decentralized and basically you’re going to lose every single bit of control over the settlement side. So I think that there’s definitely a lot more confidence and a lot more government driven initiative that’s required to make this legitimate. And I think that’s one of the reasons why here in Australia, the super funny industry has been sitting on the sideline. Forever. I mean, for them, it’s like, hey, we’ve got what, the fourth or third biggest ⁓ asset pool in the world. Yeah. Despite the fact we only got 27 million on population. But I don’t see any single allocation into this universe right now. Now they’re look they’re looking at ETFs, obviously, but ETF doesn’t give you the kind of scale and efficiency of natural digital assets. They can’t hatch themselves 24-7. They rely on a T plus two stock market settlement system. There’s a lot of things that doesn’t really take up the benefits of natural digital ⁓ economy. So so I think that it needs to move, but there are definitely a lot of incentive that needs to come from the regulators and government as well. I don’t mean just licensing and and just basically ⁓ criteria relating to rules, but s as well as initiative to promote this particular efficiency. And and that I haven’t seen as much from Australia. Right. I’ve seen overseas where I’ve seen huge seminars arranged by the think tanks that’s part of the the the government. And basically they’re promoting ⁓ atomic settlements. They’re promoting the the tokenization of some of these existing ⁓ assets, but making things ⁓ more ⁓ efficient, but also slowly a semi ⁓ decentralized platform where the government still have oversight, but then you’re not kinda giving the keys basically to the DeFi space on day one.
speaker-1: I agree on all of those points. Actually, there are other jurisdictions who are more friendly ⁓ to innovation. And I know going over to Japan in particular, it is quite a different world when when you have the regulators at actually they run their own crypto events and they walk around in hoodies. ⁓ they have a hotline that that you can call and and to seek advice if you’re a fintech startup. So there’s a very different culture, I think, in different jurisdictions. But it doesn’t take away from in in Australia, the there is an opportunity there for our regulators to be just as as engaging as a reflection of the Australian adoption and the Australian interest in digital assets on the self-managed super fund side of things. And you sp you spoke to the opportunity with with super funds. And the US is very aware of our pool. ⁓ and they would like to, I think, copy and paste it. What very it’s it’s it’s a good setup. But the self-managed super funds in particular are a very good reflection of Australia’s appetite because the the most recent ATO reports, two trillion dollars in in digital assets ⁓ allocated to self-managed super funds in Australia. So that’s a really good indicator of where Australia sits. So there is an opportunity for the Australian government. To look at that and think about that, see the opportunity if you were to embrace it like you say. But how do we how do they go about that? Because they’ve also got to weigh up the risk, Will. ⁓ because as, you know, we’ve th they’re they need to consider the safety of Australians. So how what would be your advice?
speaker-0: I think there’s there’s two main ⁓ issues here. First issue is that we could be trying to reinvent something from pure zero ground. Like I mentioned, is that you don’t need to create brand new asset class from beginning. You can actually breach everything. You can re reuse your existing protocols, your existing regulations and legislations for the digital asset class, right? If we look at, for example, Hong Kong, SFC has their type one, type four, type seven, so forth of regulations, similar to SX, AFSL. What they did was they had this type one was dealing insecurities. What they simply implemented was that as long as you’ve got the experience as an RO relating to those assets, you can actually enhance and uplift. the type one into a virtual asset, type one. Right. They didn’t try to reinvent everything. They just simply tried to improve and monitor the the existing financial regulations and see how they could trigger it in order to accommodate virtual assets. Because even if we look at today, you’re looking at stablecoin payments, look at cross border transfers, you might be looking for securities, you might be looking for well, Bitcoin is considered to be a commodity, but all of those has existing regulations. Right. Why are we still waiting to see that what comes out in six, twelve months time? We can simply implement those and try to refine it to accommodate. Right. If you say custody is very different because you don’t have a clearing house, fine. Then just only improve on the custody. Have the existing custody rules enhance on that to make it ⁓ basically guarantee that the security of decentralized custody, for example. I think that’s the first part that we might be overlooking at the risks rather than trying to refine on on the benefits. The second part is I think Australia has its unique advantages, right? Even amount Asia Pacific, right? Because if we just go about it and look at it from the financial investments point of view, they are much better, more efficient and bigger financial hubs around the region. Tokyo, Seoul, Hong Kong, Singapore, Dubai, so forth. But what they lack, it’s what we have and what we have as in Australian dollar has been one of the top five. trading foreign exchange currencies in the world historically and until today. This is a market that trades six trillion dollars per day. Now, when we reflect that to the Australian stable coins, it’s like elephant to N. We’re not deploying the foreign exchange of cross border market at all using stable coins. When we look at the Australian basically economic model, We are a huge current account exporter of minerals, commodities, so forth. We are importer of commercial goods. We’re still looking at this payment product as a domestic transfer of Australian dollars to Australian dollars. We’ve got pay ID, we’ve got tap and go. We probably don’t need atomic settlement to improve on that. Or there is an initiative, right? What is the benefit? Many would ask. But if you say that a Australian importer will be able to pay a Brazilian exporter and don’t rely on multiple banking, multiple currency exchange, and you’d be able to settle the entirety using multiple stable coins, that is the biggest export. revenue that the entire country has experienced. Now, one of our largest ⁓ exporting customers is China. China last year came out with their own CBDC cross-border payment system. They signed up the entire Gulf states as well as the 12 Asian nations to settle in ECNY. Now okay we’re not probably won’t be able to tap into that Because it’s actually private blockchain anyway. But the fact is we weren’t even invited to the table to discuss when we export thirty percent of our goods to this particular region. So I think there are many items we do need to explore in order to take advantage of our own beneficiary advantages, which we are.
speaker-1: Do you think there’s other opportunities? I know that we weren’t invited to that table, but with respect to the US and the UK and Canada, we are at those tables. And there are ⁓ there’s people alluding to the possible sort of same setup as what we’ve seen in China. so do you know much about that? And can you share?
speaker-0: Definitely. I mean, obviously the US dollar stablecoin has been the dominant, or just slightly the offshore US dollars. The current administration in Washington is attempting to re-dollarise the US dollar using stablecoin initiative, which is potentially a great idea. Because in order for you to follow the Stablecoin Act, you need to purchase short term US Treasuries, which has been something of a a debate for reserve currency status. And if you can get enough people to look at your programmable US dollars as in import export settlement, then basically there is a natural demand for the fiscal policy to fund themselves in a much cheaper universe. Now this whole project is actually a great idea. We’re just monitoring it. I don’t think any politicians here, especially not our particular administration, has look at or explored this as a potential benefit. Now, have we even thought about using a domestic stable coin or in that case A A C B D C to perform part of our minerals exports?
speaker-1: Great. Yeah. And so we’re we’re currently I think just ⁓ watching on the sidelines what’s unfolding across the world. And we do have a tendency to do that as a nation. And we wait and see and fast follow or slow follow in a lot of r aspects actually. We haven’t adopted some of what the rest of the world has adopted. As things progress, stable coins, you know, there’s a few that have been licensed, there’s a lot of innovation happening, you’re innovating, the DFCRC is innovating, you’ve been involved in some of those projects. Do you think that ⁓ that that waiting on the sidelines with caution is warranted for now? Or do you think that it might just be time to take that action? And what does that action? look like? Is it another DFCRC project? Is it something that the RBA does or the, you know, our local MPs?
speaker-0: My ambition for domestically ⁓ are probably way beyond well, seems a bit braggy, but I feel that it’s way beyond what the current status of research is. Cause I look at stablecoin C B D Cs and even the the entire digital economy as in a full transformation of our monetary fiscal and literally the entire banking system. ⁓ we are ⁓ rebranding into Signify next month and then we’ll be publishing one idea that we have which literally ⁓ changes the money supply of the RBAs and the money ⁓ velocity multiplier through the banking system by an incorporation of a two tier system. using a C B D C issue government bond on the fiscal side and then a private through the the existing inner circle ADI ⁓ system using C B D C issue by RBA and then a second tier system managed by both banks as well as any financial institution that is up and coming on issuance of stable coins in order to generate a Completely migration of the existing monetary and physical system into digital space.
speaker-1: Okay, so I see that as inevitable. Okay, there’s a lot of ⁓ the the graduation of our current financial system appears to be cashless, seamless, ⁓ programmable, C B D Cs and stable coins. But what you just said was ⁓ for the average punter, would you be able to break down ⁓ in a few different parts how you your theory or ⁓ what your product that you might be launching, can you break it down in a few parts? What what role does the RBA play? And then what does that mean for the consumer?
speaker-0: No, no, definitely. I I won’t go through the entire article obviously, but on the brief it’s it comes from the point of fiscal policy match by the government who issues debt. Now part of this debt they will be issuing it in CBDC. This particular triple A commonwealth debt will then be circulated to the banks and so forth. CBDC will basically be still controlled by the RBA and the inner circle of financial institutions. But on the second layer, banks and basically issuance of stable coins will purchase this government debt, which is triple A rated onto their balance sheet. The issue of the debt will be tokenized version. Okay. So the on the back of this tokenized debt, it will basically Be able to issue their own stable coin, which needs to be fungible throughout the entire money supply chain. So because of the AAA rated status Commonwealth Bank, ⁓ Commonwealth government, banks will be able to use a 1021 and issue this particular money into the supply, but elevating the credit profile. So basically any type of lending. or investment they they they use the stablecoin usage will actually have the credibility of a triple A back Commonwealth government ⁓ status on the back of one on one.
speaker-1: It sounds transitionary ⁓ and and compatible with the system that we already have, essentially. ⁓ some of the resistance that we’ve seen is around I guess we, you know, we have our traditional banking system and th there’s concern around, you know, ⁓ it enabling some of this innovation because it might destabilize our current financial system. What you’ve posed there is quite a shift. It is transitional. It can be integrated into our current financial system. But what would be the the consequence of of some of what you’re talking about? Because I know that there’s innovation happening. There’s sandboxes. There’s the research project acacia. There’s other things that different, ⁓ I think ASIC has its s s enhanced sandbox. What what needs to happen because that sounds like a very big project.
speaker-0: No, no, definitely. And it can’t be done by us or or anybody on the private sector. It has to be initiated, perhaps investigated by DFCRC and RBA so forth. But what we see as a downside is that we’ve gone through many, ⁓ I even personally went through many financial crises myself in in almost the front line. You know, went through the Asian financial crisis, the the European financial crisis and the GFC so forth and and then the pandemic. Almost all of them were related to banks. Right. Yeah. And and in many cases, it’s not just commercial banks, investment banks, and so forth. In many cases, it’s because of that trust in the credibility of the banking system. And that just outright hundred percent trust has led to many shortfalls. of how we could actually ⁓ protect consumers, right? Especially like what we see in the GFC, where investment banks were able to issue such as credit profiles on the back of what they assume to be a hundred percent backed by mortgage. But then up what we realized was no, you’re basically just taking I IOU from the banking sector and they didn’t actually come back and pay you. So I think that in order to avoid in the future, we just keep jumping back into the economic credit crisis. Something needs to change. And that trustness of the banking system could potentially mean that, well, instead of transferring from bank A to bank B on an IOU between the two, you’re basically transferring atomically, right? There’s no going back. Once this particular token goes from A to B, ⁓ on the blockchain, then he can’t default. I think that it’s what’s needed in order to take out some of these credit issues that we’ve seen over the last decades keep occurring.
speaker-1: Opportunity to implement that would be to mitigate some of the risks. There are, you know, some a lot of people are saying that there’s a financial crisis on the horizon and there’s an expectation that we’ll see that soon. I’m not quite sure, and don’t quote me, I’d I don’t agree or disagree, but we have seen them, like you say, time and time again. Apart from the paper that you’ll be releasing, what are the I guess if if we’re expecting some sort of infrastructure collapse, other technologies are I mean, I know that digital assets and stable coins and tokenization, there are opportunities there. But what sort of infrastructure would we need?
speaker-0: Yeah, I think that one of the new products on on regulation discussion for the new AFSL comes down to custodian of digital assets. Now that’s a a major topic obviously, because from my point of view is that when you have traditional finance assets, geographically you can actually place them on a clearinghouse domestically. Or with a nation that’s supposedly friendly to to your particular needs, such as maybe your clearing house and custody in the Nasdaq in the in US through ClearStream so forth, or in EuroClear in in France and Germany, so forth. But what we’ve seen is many of the there’s definitely hot wallets and even warm wallets currently, especially if you’re placing it your assets on our exchange, you don’t actually know where the keys are. That those keys could be in a in a basically in an adversary jurisdiction anytime. Yeah. And and when you actually say that, let’s say that if we’re allocating 10% of our super fund’s custodian asset into this particular wallet, then at the time, if there is geopolitical tension between the two, they could literally just cancel the keys or or hide it or not give it back to you. Right. So that hasn’t been addressed at all, I don’t think. And I don’t think that we’ve actually got many large domestically custody providers at this moment that’s actually addressing that.
speaker-1: I think you’re you’re right. I think that is ⁓ I don’t think we’ve got any local custody providers.
speaker-0: Even domestic exchange and providers are using offshore custodian where they’re actually sharing some of the keys with them. Right. ⁓
speaker-1: Yeah, that’s that’s that’s difficult to think about, isn’t it? Because I mean we we talk about risk and we talk about opportunity, but every single day, particularly those who are dabbling in digital assets, don’t think about that, you know? But I mean, we’ve always heard if you don’t if you don’t have your keys and it’s not it’s not your crypto. You you have some things that are in the works. You’ve got a rebrand, you’ve got 30
speaker-0: Exactly. Right.
speaker-1: something years under your belt across multiple verticals. So what I imagine is that you have this little pot of something amazing brewing. which is the, you know, the intersection of all the things that you’ve experienced over your career and you’re building something ⁓ quite profound. You you touched a little bit on it before, but over the you you’re rebranding for a reason. What’s in the pipeline and and why? What what how does it serve Australia?
speaker-0: Yeah, I think vertical is actually a good good idea ⁓ of labeling. ⁓ our company started with multi-altronnetwork family office. What we found was that there was actually a need for us to have our own in-house capabilities on the infrastructure to perform investments so forth. Now we spent about fifteen months or so building that infrastructure. And then what we realized was We’ve got too much infrastructure for our own family office usage. So we started to look see that how we could actually expand this in the universe. Now, this year we’ve actually also launched our private wealth brand. So so we are actually trying to tackle and help provide service from high net worth all the way out to institutional. I’ve done about two to three workshops with our super funds trying to be on the table for communication, education, et cetera, relating to when they’re ready to deallocate into this particular universe. ⁓ But my last conversation was literally that, well, they actually don’t really need to learn anything about this space. We can just invest in ETFs instead. But I think that going forward, when the infrastructure and the regulations do come out in a much better space, they will be wondering Okay, well, now that we can say that we invest in ETFs, but if all the ETFs and stocks are getting tokenized and be able to trade it on blockchain through the exchange twenty four seven, do we still want to stick to ETFs only? ⁓ what happens if we are purchasing, allocating 10% of our our investment into tokenized bonds, but then we don’t have a management custod custodian that’s looking after this with a geopolitical safety for us and as well as the ability for us to minimize our risk when geopolitical headlines comes out on Saturday evening.
speaker-1: ⁓ my goodness. That’s yeah, because it’s your super. That’s your retirement fund right there. And if you’re investing in something off offshore, that not your keys, my goodness, Will.
speaker-0: So I think there’s still a lot of work to do for not just us, for the entire industry as in the super, the SMSF, even the SMF are moving much faster because they’re using their own cold storage wallets and so forth and they’re learning much easier because all they have to do is just watch some YouTube or even just read about some of the Ford leadership, et cetera. But on the institutional side, I I don’t think they’ve realized that.
speaker-1: So much to do.
speaker-0: They can’t just look at this as a simple a new stock that they can just allocate into the ETF. This is gonna be a big change on the way you actually invest, you manage your risks and you transact and where you actually place those assets. ⁓ and that is gonna be a huge educational path.
speaker-1: So too, but also there’s demand, right? There’s demand from Australians who are looking to that’s why there’s a couple of trillion in self-managed super funds in in digital assets that they’re looking to their super funds to allocate to this asset. ⁓ but but they’re coming up obviously headwinds, and you’ve talked about those headwinds and ⁓ you know, their remedies, ETFs. We’ve got the custody consequences there. So there’s lots lots to think about. Will. We’ve we do I mean, this is actually a scary conversation because I was quite optimistic leading into this this talk. But I guess it will we’ll need an episode two.
speaker-0: ⁓ but ⁓ you know, on the horizon there’s actually a lot of opportunities. ⁓ there is and improvement on on security, minimizing risks a and so forth. I think that if we are able to manage our super funds twenty four seven, that means that basically the the Monday collapse risk would actually evaporate. There’d be a lot less trying to get off everything on Friday evening. Because you can basically monitor and and still manager throughout the the the weekend so forth. But it could mean that many people will actually have to work over the weekends.
speaker-1: ⁓ look, and there’s also like we’re we’re global and and so th there’s also there’s all these geopolitical influences as well that that we need to manage and that’s where the the super fun custody stuff comes in.
speaker-0: No, definitely. Yeah, that there’s there’s gonna be a lot of benefit. I mean, ⁓ you know, have a look at our article. It’s only a short version, but we can we would love to work with the authorities and regulators on on on expanding it. Because it means that not just simply making it more efficient, but it actually will help us. It helps us in a way that imagine that you’re doing a a a new bond issuance. At the moment The only people who can actually tap into your new issuance are maybe banks or domestic institutions. Imagine someone in Kenya who’s got a digital wallet and he can actually apply for your a small piece of that token, but also imagine a company that’s doing an IPO in ASX that’s able to tap into this particular investor on a global sense and they’d be able to settle into the They’re basically smartphone without going through the entire banking resources. The the supply and the it’s a new stage of globalization that hasn’t been seen since maybe China entered WTO.
speaker-1: Yeah, but I just I just see it always it being inevitable because th we’re we’re building or you’re building infrastructure so that this future state exists and it seems hard right now, but you can’t imagine our current state or being the always state. And so you need people like yourselves and and other Australians to build our sovereign infrastructure. It’s a work in progress.
speaker-0: Definitely, definitely. And and I think we are on the edge of potentially if we grab this and do it right, we can actually just promote this in to the entirety of the global south. Because many of them are also watching us as a leader.
speaker-1: Well, it’s good to have you on. Will, it’s a pleasure. Thank you for joining us on the House is Digital. You’ve been listening to The House is Digital, where policy meets innovation. Stay curious, stay inspired, and be part of the movement building Australia’s next economy. The future is happening now. See you in the next episode.
speaker-0: Yeah.