0:08 Jonno, thank you very much for joining
0:09 us here today.
0:10 >> Thank you for having me.
0:15 >> Of course. So, Wisdom Tree is one of the
0:18 few asset managers that didn't just talk
0:19 the talk, but you really walk the walk,
0:23 right? You have tokenized uh funds. You
0:24 launched Wisdom Tree Connect and
0:26 recently you even expanded to a chain
0:28 like Salana with all of your tokenized
0:31 funds. So when you look at the industry
0:34 today, do you feel like tokenization is
0:36 still at the experimental stage or are
0:39 we starting to hit more of a mainstream
0:41 and a a full rewrite of financial markets?
0:42 markets?
0:45 >> It's still early days. Um but it's not
0:47 an experiment. Now we have conviction.
0:50 So we believe eventually everything will
0:55 go on chain. Um, and you're seeing it go
0:57 beyond just the cryptonative community
1:00 to firms, trady firms like us, more than
1:02 just asset management, banks and
1:06 everyone. Um, but you can really see the
1:10 energy building and what drove ETFs was
1:13 better functionality and it is possible
1:15 to have better functionality on chain
1:18 and so um, we we're sure that it'll
1:20 continue to grow. Oh, I love I love that
1:23 analogy. We're personally a very big fan
1:25 of the analogy that ETFs is a better,
1:27 you know, form function almost and being
1:31 the same for tokenization. Um, but many
1:33 of your peers are still kind of catching
1:36 up to that view and that vision, right?
1:38 Uh, you are pretty advanced relative to
1:41 some of your peers. Looking back at your
1:43 own journey, what kind of lessons would
1:45 you have for other fellow asset managers
1:46 that are just getting started?
1:47 >> Well, one, I don't want to give them any
1:49 advice. I couldn't care less what they
1:54 did. Um, but the um, how we got here I
1:56 think is interesting. We were asking
2:00 ourselves the question internally maybe
2:03 8 years ago now. What could do to ETFs?
2:07 What ETFs did to mutual funds? And we
2:09 eventually came to the conclusion that
2:11 potentially it could be tokenization on
2:15 the blockchain. Now our perspective, you
2:16 know, when you think about ETFs, they
2:20 are the least friction on the old rails.
2:24 So it when we approached it, you needed
2:26 to have the opinion to make it better
2:28 than the ETF. How do you make it better
2:30 than what's best in the world today? And
2:32 it wasn't so obvious. So one thing that
2:35 Wisdom Tree did, we went big every step
2:39 of the way. So the fir I we couldn't at
2:40 first figure out how to make it better
2:43 than the ETF. So we did something very
2:44 much out of characteristic for
2:48 ourselves. We invested in a blockchain
2:51 infrastructure company called currency
2:55 which we ended up selling to DTCC but
3:00 that was um an unusually aggressive sort
3:03 of bet my career and my team's career on
3:06 doing this in a small public company. Um
3:08 but they had a vision for
3:12 complianceaware tokens where so you that
3:16 means programmable value right you can
3:19 so it's not just the underlying asset
3:21 that's important but the technology that
3:24 wraps it so the tokenization a digital
3:27 wrapper has functionality that is just
3:30 can potentially be much greater than the
3:32 ETF. So once we sort of saw that, we
3:36 went sort of all in on this and um it
3:37 served us well.
3:39 >> Awesome. Yeah, I think actually Naen I
3:40 don't know if she's in the audience
3:42 right now, but she's definitely here. So
3:44 you know, lots of friends uh in the
3:45 audience and I remember that investment.
3:47 I remember the TCC taking it over really
3:50 almost as a hallmark of oh okay now
3:51 people are getting a lot more serious
3:53 about these things in traditional
3:56 finance. Um but you know as much as
3:58 people are starting to take the
4:01 technology a lot more seriously uh when
4:04 you look at the total value in real
4:06 world assets on chain it's still a drop
4:09 in the bucket compared to you know the
4:11 total aum of asset managers I mean even
4:15 yourself you guys are are at 5060
4:17 billion I mean that's bigger than all
4:19 the tokenized assets combined in a way
4:23 so um part I think of that reason has
4:25 been that the tokenization efforts so
4:28 far really have focused slightly more on
4:30 retail I mean that's at least where has
4:32 focused also with their tokenized stocks
4:35 and ETFs should players be focusing a
4:36 little bit more on institutional
4:38 adoption and if so what would it
4:40 actually take to get to that hundred
4:42 billion dollar number so what I loved
4:45 about ETFs was it gave both retail and
4:49 institutional anal playing field if it's
4:50 either better or not better if it's
4:52 better then it's going to bring both
4:55 institutional or retail in. So, um
4:57 that's just the bottom line. Now, what
4:59 the thing about retail is they make
5:01 their own decisions. They can go
5:04 quicker. So, for Wisdom Tree, this is
5:08 about serving the onchain community and
5:10 because of the performance of crypto
5:12 notwithstanding the last couple of
5:14 months, but you know, crypto the best
5:16 performing Bitcoin asset class for the
5:18 last 15 years, you know, it's a couple
5:20 of trillion dollars. So you're going
5:23 after a large market, a lot of retail.
5:28 And for Wisdom Tree, we our vision was
5:31 one that the the platform DLT or
5:33 blockchain is better, could be better,
5:36 could be global. Um, but the crypto
5:40 investor, they didn't have any access to
5:43 banking or any other services. In fact,
5:45 over the last administration, they were
5:47 really shunned and put in a corner. and
5:48 they also didn't have any other assets
5:51 that they could uh invest in. Now, the
5:54 crypto community themselves, they're
5:55 full-on believers, so they don't really
5:57 diversify much. So, we're very in the
6:00 very very early stages. I would say
6:02 they're not interested in everything.
6:04 They're interested right now in yield to
6:07 offset their crypto speculation and
6:09 investing. That's really where it is
6:12 today, but over time it'll be more than that.
6:14 that.
6:15 our uh our firms have had the pleasure
6:19 of uh working together on OSG and the
6:20 Wisdom Tree to Tokenized Treasury Fund
6:22 and I think it's a good example of how
6:25 cryptonative players can partner up with
6:27 legacy asset managers that are really
6:30 forwardleaning. How do you think about
6:33 that distribution to that cryptonative
6:34 audience? You mentioned, you know, this
6:36 is about retail. We really want to make
6:38 these products better. um how do you
6:40 think about distribution and beyond
6:43 distribution how else do you think you
6:45 can partner with the crypto ecosystem
6:47 and with companies like um
6:49 um so
6:51 so
6:53 you know it'll be a number of things I
6:55 mean you could do marketing traditional
6:56 marketing it's a lot of business
6:59 development you know we had to start
7:02 with something called wisdom tree prime
7:05 because there was no place to place
7:08 tokenized securities so we had to create
7:11 something so that we could house our own
7:15 um assets. Um Wisdom Tree Connect is
7:17 allowing us to take our assets and
7:20 letting them travel to institutions or
7:23 to um self-hosted wallets. So, you know,
7:26 that's real in our opinion responsible
7:30 DeFi. Um I think um we for wisdom tree
7:33 also one of the other things that we got
7:38 very very early from secury was the need
7:41 for interopability. Um so we didn't want
7:43 to build our own chain. We just wanted
7:46 to have the best exposures that could be
7:48 on all chains. You just mentioned Salana
7:50 that we have I think that's our eighth
7:52 chain and I'm sure there will be more
7:56 over time. Um, and as long as you have a
7:58 value proposition,
8:01 um, that they want and what you want to
8:02 work with them, I mean, you you'll find
8:05 the way to do it. I mean, you're using
8:08 our products and, um, not cuz you like
8:09 me. So,
8:11 >> I do like you, but
8:13 >> he doesn't really mean it. So, the uh,
8:16 at le
8:17 you you know that you're we've come together.
8:19 together.
8:21 >> 100%. No, your products have been great.
8:23 Um, don't get me wrong. [laughter]
8:27 Um, what does success look like for
8:29 Wisdom Tree in the digital asset space
8:31 in 2026 and 2027?
8:35 >> I keep my job. That would be great. Um,
8:37 we want to continue to scale. So, last
8:39 year we went from like 30 million in
8:42 assets to about 750 million in assets.
8:45 Um, we want to get to obviously, um, it
8:48 right now we're still not making money
8:52 on our digital asset efforts, but we're
8:55 in line of sight of taking this to a
8:57 profitable business. It doesn't take
9:00 that much scale. Um, and I imagine that,
9:02 uh, so we just want to continue to scale
9:06 what we're doing. Um, and you know what?
9:09 When I think about my journey in ETFs,
9:13 um, I was not late. I launched in June
9:16 of 2006, but I was 13 years behind the
9:18 spider and seven years behind
9:22 Eyesshares. For Wisdom Tree, it was
9:24 important that we were actually first
9:27 through the regulatory door. We wanted
9:30 to be first and that and we accomplished
9:32 that really. I think you are, like you
9:35 said, others are experimenting. you
9:37 know, we're founder-ledd, we're entrepreneurial.
9:38 entrepreneurial.
9:40 In these big institutions, it can be
9:45 very very hard to um align
9:48 um the different FIFOs within a uh
9:50 within an organization, but we are
9:53 completely aligned on doing this. Um one
9:55 thing that we recently got from the SEC
10:00 was the ability to trade and settle our
10:04 money market fund 24/7. So that's a true
10:06 innovation where you have a real world
10:10 asset or a real world fund that is a
10:12 exhibiting the characteristics of
10:16 crypto. Um so it's a tremendous
10:18 a tremendous accomplishment many many
10:20 years in front of the SEC.
10:22 >> Oh I agree and and congratulations on
10:23 all the growth that you mentioned that
10:25 you guys had with the tokenized treasury
10:27 fund enabling it as collateral. I I feel
10:29 like we're probably starting to enter a
10:32 point and we talked about this Honda did
10:33 it a little bit in their keynote where
10:35 there are enough tokenized assets almost
10:38 available on chain. What's next is
10:39 really what can you do with them, right?
10:41 And what are the services that you can
10:43 build on top of those things? Is there
10:44 anything from Wisdom Tree that we should
10:47 expect in the next call it 12 to 24
10:48 months on that front?
10:51 >> Um I mean we're going to I mean we we're
10:54 we're tied to the banking rails. We're
10:57 um we have a stable coin. We have gold,
10:59 we have funds, we have model portfolios,
11:02 we have a we are offering a lot for us.
11:03 We actually have to attract more
11:05 customers. Um I mean that's really the
11:08 number one thing but really this is
11:12 bigger than asset management. This is
11:14 really about financial services. Um
11:17 financial services some of these banks
11:20 go back a couple of centuries.
11:24 So they built on legacy on top of legacy
11:26 on top of legacy. there is that
11:28 modernization that has to happen and
11:30 when it does happen then you'll really
11:34 see um all consumers would prefer to
11:36 stay on chain they'll have better
11:39 experiences in general whether it's um
11:42 getting interest on a second by- second
11:45 basis or things like that I mean these
11:47 are the trends that are happening better faster
11:48 faster
11:50 uh cheaper
11:52 >> could not have said it better myself
11:54 thank you so much that's a wrap
