0:06 all right wonderful it's good to be back
0:09 here um why don't you each take 30
0:11 seconds very briefly to introduce
0:13 yourselves and what your firm is doing
0:15 on chain and then we'll take it from
0:18 there great hi guys Sandy call I'm with
0:21 Franklin Templeton um we are very
0:23 invested in this digital asset space
0:25 we've been working in the space since
0:28 2017 uh we have a tokenized government
0:32 money market fund we have multicoin smas
0:35 and portfolios we have private uh funds
0:37 and Venture Capital funds and we have
0:40 several ETFs um we've built our own
0:42 infrastructure we're deployed across
0:45 eight different public blockchains uh
0:47 and we do our own node verification
0:49 across 12 different chains so uh I'm
0:51 very excited as someone who gets to be
0:53 part of the leadership of this group uh
0:55 and I'm thrilled to be here with some of
0:57 the people I've worked uh with for many
1:00 years in the industry today
1:03 hi uh I am uh with the digital Asset
1:07 Management business um at Fidelity uh we
1:10 at Fidelity have been um in this space
1:13 uh for over a decade now and and as we
1:17 look back on um The Journey uh what you
1:21 know we can um look to is um where we
1:25 started which was um with Bitcoin um and
1:27 and a big part of you know that journey
1:30 and and why Bitcoin was um really just
1:33 understanding um blockchain technology
1:35 and and what the um you know overall
1:38 possibilities um are for um the capital
1:41 markets ecosystem and in financial
1:43 services um and then from there how do
1:46 we actually harness um this technology
1:49 and and deploy it uh into um Capital
1:52 markets and and so infrastructure uh is
1:54 is where we started um in building out
1:57 our own custody solution uh and then
1:59 from there as we continue to expand over
2:02 the years um Asset Management uh was a
2:04 very natural extension and and a couple
2:08 of years ago um we built out uh a um
2:10 Investment Management um business which
2:13 included um research um building out
2:15 data uh infrastructure uh to make that
2:18 data uh compatible with uh many of our
2:21 traditional back offices and what that
2:24 did was it really set us up um for being
2:27 able to bring um traditional investors
2:30 into um uh getting exposure into um the
2:33 digital ecosystem uh what we are working
2:37 on more recently uh is um the other side
2:41 of um the liquidity um and capital flows
2:42 between traditional markets and and
2:45 digital markets um and and this is you
2:47 know being able to bring um uh
2:50 traditional instruments uh on chain uh
2:53 in order to allow for um digital Capital
2:55 uh to be able to flow um the other
2:58 direction so while we have um helped
3:00 facilitate with others um in this space
3:02 bringing traditional Capital into
3:05 digital markets um Capital needs to flow
3:07 both directions and and that um is a
3:10 really exciting um part of of U this
3:12 journey that that we're going to be on
3:15 together hey everyone I'm uh will peek
3:16 I'm head of digital assets at Wisdom
3:18 Tree uh Wisdom Tree is uh the world's
3:20 largest independent ETF sponsor managed
3:22 something like10 billion do in assets
3:25 management uh so with that we do have a
3:27 suite of uh crypto exchange tra products
3:29 uh here in the US and also out of Europe
3:31 that's one part of our digital assets
3:33 efforts and uh the other part is around
3:35 tokenization as you could tell by the
3:37 panel uh so we've got a suite of uh 40
3:39 act uh mutual funds that are tokenized
3:42 here in the US stable coin gold token as
3:44 well and then some products and services
3:46 around those so for retail that's Wisdom
3:48 Tree Prime here in the US and then we've
3:50 got a B2B platform we call Wisdom Tree
3:52 connect so great to be with you
3:55 today I everybody Mark gabian pleasure
3:57 to be here today I am the director of
3:58 digital assets and tokenization for
4:01 Wellington I have not done nearly as
4:03 many cool things as the people to my
4:05 right here uh they are pioneers in the
4:06 industry and I'm pleased to be sitting
4:10 next to them but uh uh we have uh made
4:11 some progress in the space we've been
4:13 partnered on a lot of the proof of
4:15 Concepts that have um hit the airwaves
4:17 and and made a splash in many different
4:19 areas and we've been exploring
4:21 tokenization particularly of the fund
4:23 vehicles uh we view that as an
4:26 opportunity to democratize access to uh
4:29 Financial products to be able to uh put
4:31 our Al Al into the hands of more people
4:33 across the world and uh give them a
4:36 better end decline experience and so um
4:37 we've made a lot of progress in the
4:38 space and continue to do some research
4:41 in the area awesome well one of the
4:43 topics of the day is that we could be at
4:46 a pivotal moment in the tokenization of
4:48 assets and moving financial markets on
4:50 chain it certainly kind of feels that
4:53 way to be honest but that has not always
4:55 been the case right and I know you
4:57 alluded to it uh you guys started a
5:00 while back uh can you just elaborate a
5:02 little bit on what was it like over the
5:03 years to kind of pursue that
5:06 tokenization agenda does now actually
5:09 really feel different uh what is that
5:12 like sure I'll I'll get started I
5:14 Cynthia has been in it longer so I feel
5:15 like I should I don't know about that
5:18 but but um yeah I I mean look it has
5:21 been a very interesting Journey because
5:23 there's really two sides to this
5:24 business right you need to engage with
5:27 the crypto Natives and really understand
5:29 the businesses they're building the
5:31 thinking behind the businesses they're
5:34 building because I am a a absolute
5:36 believer that crypto natives are
5:39 disrupting the industry in ways that no
5:41 one from within the industry could have
5:43 done themselves right we grow up within
5:46 a system it's very hard to think outside
5:50 the boundaries of that system and so you
5:53 know making those efforts to really meet
5:56 to accept on their own terms to listen
5:59 with open ears to the digital natives
6:01 has been a critical part of the journey
6:04 because you know you can't improve the
6:06 Innovation if you don't understand the
6:08 Innovation and a lot of people's
6:11 knee-jerk response to all of the changes
6:14 that are enabled by these new crypto
6:16 Technologies is to say no bad don't want
6:20 it not real why would that have value
6:22 right and so you have to get over that
6:24 internal hurdle I I've been in the
6:27 industry 40 years right 40 years in an
6:28 industry you're pretty steeped in the
6:31 industry thinking um so you have to make
6:33 a conscious effort to get outside that
6:36 thinking and then it has been a very
6:37 difficult and slow slog with The
6:40 Regulators particularly here in the US
6:42 um we have made a tremendous amount of
6:44 progress with The Regulators even during
6:47 the recent regime but it has taken an
6:49 amazing amount of effort right we have
6:51 an entire team who does nothing but
6:54 create materials for The Regulators so
6:56 that The Regulators can have frequently
6:58 asked questions answered that they can
7:00 see the same presentation over and over
7:03 and over till they get it that we can
7:05 meet regularly with them to answer
7:07 questions that we can stage out the
7:08 enhancements and improvements we're
7:11 asking for so that they're comfortable
7:13 at each stage that they're not going too
7:16 fast so on one side you've got to go
7:18 very quick and be very open-minded and
7:20 be very willing to disrupt yourself and
7:22 on the other side you really need to
7:25 take The Regulators on a journey with
7:28 you and use your reputation as someone
7:31 they Trust to get them comfortable that
7:34 it's okay to move forward and so I I do
7:36 love what you and what Nathan were
7:38 saying Ian and that it is a pivotal
7:41 moment I think mostly because some of
7:43 that Journey on the regulatory side does
7:45 feel like it's going to get a little
7:47 easier uh and I think that there's
7:49 growing and more acceptance and
7:51 excitement about the innovations that
7:53 are available I couldn't agree with
7:56 everything that you said more and um
7:59 such appreciation for um you know your
8:01 your and Franklin's work and and will
8:03 and and the work with um with Regulators
8:06 I think more of um you know voices
8:08 coming from um you know traditional
8:10 Financial world and and thinking about
8:13 how we can help translate um uh the the
8:16 utility we talk a lot about um instant
8:18 settlement and we talk about um you know
8:21 cheaper transaction costs but but that
8:23 alone doesn't really resonate with most
8:25 everybody that you know we talk to um in
8:27 in traditional markets because I think
8:28 what Sandy just said um you know a lot
8:30 of people will say things work really
8:32 well in public markets um you know
8:35 Capital flows um but I think they missed
8:39 the point that um there is still um a a
8:40 demand um that outstrips the
8:43 availability of capital to fund um you
8:45 know businesses and and that's even here
8:46 in the US and and we see that with the
8:49 growth of um you know alternative um you
8:52 know Bank financing options um and and
8:55 so you know from the asset manager lens
8:57 um when we talk about what this
8:59 technology can do and I you know very
9:01 much love um the framing that you know
9:04 in talking to um entrepreneurs and and
9:07 developers in this space um they're able
9:09 to think about Capital Flows In in ways
9:12 that are not in any way um you know
9:14 guarded by um the way that traditionally
9:16 things have happened this way and
9:18 traditionally this is what we do um and
9:20 so therefore why do we need to change
9:22 things um but they're coming at it from
9:24 a completely different way and and being
9:27 able to provide that translation uh into
9:30 real life use cases um is is really I
9:32 think what we are now um able to have
9:35 those conversations and and deploy um
9:37 not just in proof of concept but right
9:41 live market um um whether we call them
9:45 live market um Pilots but but putting um
9:48 these Technologies into actual practice
9:51 to move um and allocate Capital
9:54 differently anything to add uh I'm
9:56 reminded of uh some dangerous words in
9:58 finance This Time It's
10:00 Different I uh I think a lot of like
10:02 I've been coming to conferences this is
10:03 probably the nicest one of these but
10:05 conferences and tokenization you know
10:07 for the past I don't know five years and
10:09 like some people have been working on
10:10 this for a long time like really banging
10:12 their heads against the wall and at each
10:14 one of those they said oh it's this is
10:16 time it's time now uh so I'm like a
10:18 little you know like I don't know that
10:19 everything's going to change
10:21 automatically overnight I think there is
10:23 more recognition and I couldn't agree
10:24 more with what Nathan said earlier it's
10:26 like so everyone used to say like oh you
10:28 should do this with private assets right
10:30 like let's tokenize this hotel and it's
10:33 like well does anyone want to buy the
10:34 hotel right like it's not like the
10:36 existing financial markets
10:38 infrastructure is so bad that if people
10:39 wanted to buy the hotel they couldn't
10:42 right like what actually is tokenization
10:44 doing it on public blockchains doing for
10:46 you anyway um so I think there's more of
10:49 a recognition of like well we see stable
10:50 coins right stable coins now at $200
10:53 billion I think coinbase put out a stat
10:55 recently that they uh stable coins did1
10:58 trillion in uh volume in transaction
11:00 Volume last year so like clearly there's
11:03 something there and I I think the next
11:05 question is being be what can you build
11:06 to like serve additional users like
11:08 people who are using stable coins it's
11:11 solving some need for them can other you
11:13 know tokenizing other assets solve more
11:15 of those needs as well so that's the
11:18 approach that I at least take towards it
11:19 um I think it is different than like ah
11:20 things don't work over here so we're
11:22 just going to Whole Hog rip it out and
11:24 like do something else I say that like a
11:28 little factiously uh but that's um if
11:29 it's going to be different this time I
11:30 think it's a combination of that
11:32 recognition and also like a more
11:34 constructive regulatory environment
11:36 around that but even that you know could
11:37 take a little bit more time that I think
11:39 people are
11:41 expecting I'll go quick uh everything
11:43 everybody said was excellent uh you know
11:45 we've had two Endeavors in the space one
11:47 uh was through proof of concept and it
11:50 was uh simulating token tokenization of
11:53 uh a private vehicle the other one uh a
11:55 sub-advisory relationship with an issuer
11:57 out of Singapore funbridge uh and
11:59 they've you know published out a uh
12:02 issued out a fixed income fund um both
12:04 of those were pivotal within the
12:06 organization and I think with a lot of
12:07 our peers and partners that I've had
12:09 conversations with particularly because
12:11 when we started through this journey the
12:13 question that I would often get is how
12:15 are we going to afford the technology
12:17 costs and the operational costs to go
12:19 out and put a tokenized fund into the
12:20 marketplace and there's going to be all
12:22 of these compliance issues that we're
12:23 going to have to comply within
12:26 everything and in reality when we went
12:28 through both of these processes the
12:29 entire firm and again our peers and
12:32 partners uh recognized that you can
12:35 Outsource a lot of that to uh you know
12:38 platforms uh particularly you know in
12:41 the case of um where we are in Singapore
12:43 with funbridge Library we've partnered
12:45 with you know they handle all of that
12:47 technology capabilities that you need
12:48 and from the asset manager perspective
12:50 the investment manager perspective we're
12:52 just focusing on what we do best we're
12:54 picking the best assets to put into the
12:56 portfolio delivering what we call
13:00 business's usual uh product and service
13:03 and now having open up um access to to
13:05 New Markets and new client segments and
13:07 so I think as more and more people start
13:10 to get used to uh that potential where
13:13 where it doesn't take a huge budgetary
13:14 outlay in order to access this
13:16 technology um that that's going to
13:19 really move the needle forward wonderful
13:21 well as you all know uh Ando is building
13:23 out a platform to facilitate the
13:25 issuance of tokenized assets and
13:27 bringing more institutions on chain and
13:29 probably very bored with it at this
13:31 point because I feel like I spoke to you
13:33 guys a lot about it um but as you all
13:35 have moved on chain already in various
13:38 shapes and forms um what has been the
13:41 main hurdle that you have faced or I
13:44 guess put differently what is really
13:47 still needed in order to move trillions
13:55 chain um yeah I someone asked me the
13:58 other day um do I think it's um Supply
14:00 or demand um that's going to drive the
14:04 next wave of of tokenization um and and
14:05 I said I don't think the answer is
14:08 either one of them um uh there's you
14:10 know no shortage of the supply of of
14:12 tokenized assets uh that people have
14:14 been trying to tokenize there's lots of
14:16 tokenization platforms that say if you
14:17 bring me your asset I'm happy to
14:19 tokenize it for you and and I think
14:22 that's not the hard part of of um seeing
14:25 this next wave of adoption Supply or
14:28 demand I think of um as there's nobody
14:30 um you know that's calling up um anybody
14:32 at Fidelity saying um I really want to
14:35 buy a tokenized asset um and I think
14:36 will um you know mentioned this uh
14:40 earlier um the the the tokenized asset
14:42 or buying that asset on chain is not in
14:44 and of itself what people are looking
14:46 for people are generally looking for um
14:48 you know Financial Solutions to help
14:50 them manage their financial lives and
14:53 and so um I think it's really utility
14:55 and and you know what I liked about um
14:57 you know Ian what what you and Nate uh
15:00 are are talking about is is not just
15:03 bringing assets on chain um but building
15:05 the applications to allow people um to
15:08 deploy those assets to be able to get
15:10 access to Capital or to be able to right
15:13 generate yield um in in ways that you
15:15 know make it easy and seemless for them
15:17 and and I think that's really where um
15:19 we're going to see more adoption and so
15:21 you know why there hasn't been a lot of
15:24 adoption um and and you know we've got
15:25 lots of folks in our organization who
15:27 say this is definitely not the first or
15:29 even the second time they've heard that
15:31 This Time It's Different um and and that
15:33 this time it's different um the the
15:35 answer as to why you know they they
15:37 would point to as to why this didn't
15:40 work so well was um there's just not um
15:42 that that utility that is is going to
15:45 cause people to um build the um
15:47 infrastructure to be able to plug into
15:49 and get access to those tokenized assets
15:51 and and I think without that
15:53 infrastructure um you know there there's
15:55 not going to be this um wave of adoption
15:57 and and that infrastructure isn't going
15:59 to get built until people right find
16:02 that um there is utility that is worth
16:03 them making that investment to build the
16:06 infrastructure for yeah I I would add to
16:08 what Cynthia said which I think is
16:10 spoton I would add there's two
16:13 foundational mindset shifts that have to
16:17 happen in our financial ecosystem for us
16:19 to really get to Broad tokenization and
16:21 as particularly of real world assets and
16:24 the first is don't
16:26 underestimate how difficult it is going
16:30 to be to move from an an account based
16:32 system to a wallet based system right
16:35 you need a wallet to hold a token you
16:37 need a wallet to enable many of the
16:39 benefits that blockchain provides and if
16:42 you don't have a wallet infrastructure
16:44 it's very hard to really get excited
16:47 about tokenization and all of these
16:48 traditional Financial firms are
16:51 traditional intermediaries the financial
16:55 Market um in entire ecosystem everything
16:59 has been built around accounts there is
17:01 no such thing as a real portfolio a
17:03 portfolio is a virtual construct of
17:05 different accounts and therefore the
17:08 idea that I could commingle assets and
17:10 use assets interoperable is completely
17:13 foreign to anyone coming from a
17:15 traditional background so we need to
17:18 make this pivot from accounts to wallets
17:20 which is going to take time and more
17:23 importantly we have to unwind everything
17:25 that we did in the early
17:29 1970s right prior to the early 1970s we
17:32 traded one trade at a time right this
17:35 was the problem this was why we had the
17:38 paper crisis because you had to exchange
17:40 your paper certificate to get paid for
17:42 having a transaction and we couldn't
17:44 keep up with the volumes that were
17:47 starting to grow and so we put together
17:48 committees just like we're putting
17:50 together committees now there's an
17:52 amazing parallel in what's happening to
17:54 the early 1970s but we're putting
17:55 together committees we're working with
17:57 The Regulators we're trying to come up
17:59 with a new system but the system system
18:01 they came up with started to have
18:04 Central counterparties started to have
18:06 Central depositories we started to have
18:08 clearing organizations acting as buyer
18:10 to every seller and seller to every
18:13 buyer we started netting portfolio
18:16 positions we started doing book order uh
18:18 entry and ownership right we have to
18:20 unwind that whole system to make this
18:24 new system work um and until we really
18:26 recognize that and embrace that it's
18:28 going to be a hard slog I think from the
18:31 real World asset side and the motivation
18:33 right and the motivation right that's exactly
18:34 exactly
18:37 it yeah I think a lot got well covered
18:39 there I you know we think about things
18:41 in ETFs a lot you know wiry was kind of
18:43 founded on the premise that you could
18:44 have a better index and also in the
18:46 better structure so ETFs are better than
18:48 mutual funds and uh that's really been
18:50 true board has to be true over time
18:52 where ETFs have taken in you know tens
18:54 of trillions of dollars uh and mutual
18:56 funds relatively flat at least on a flow
18:59 basis or down um so you know for us that
19:01 was the attitude that we brought towards
19:02 it but you got to remember like the
19:04 spider the first ETF sat there for like
19:07 seven years not getting used so like
19:08 it's not always so obvious like what's
19:10 going to be this great or these things
19:12 just take time as I guess part of and
19:13 it's not a Perfect Analogy but maybe
19:15 it's helpful so despite my joke about
19:17 this time it's different like sometimes
19:18 these things do take time I completely
19:21 agree with uh things that uh Cynthia and
19:22 Sandy were saying around you got need
19:24 wallets we got there's a lot of stuff
19:26 that needs to change for like the model
19:29 of like hey instead of buying you know
19:31 the S&P 500 in my Robin Hood account I'd
19:33 buy it like in a wallet different like
19:36 maybe that's not actually how it goes um
19:38 so um yeah I don't know that's my only
19:41 additional color on that H so I'll Echo
19:43 the wallets are are definitely key
19:45 proliferation of wallets I think um
19:48 building in more use cases for wallets
19:50 you know digital identity Frameworks
19:51 embedded in a wallet that you can use
19:54 and you know I was at the airport today
19:55 it' be nice to not have to carry my
19:58 physical license on me um you know and
20:00 still be able to to get onto a plane so
20:02 so the wallets are really key
20:04 integrating that into um into people's
20:07 lives Nathan talked about it earlier uh
20:08 and I I love the way he said it but
20:10 today you know you have multiple
20:11 different accounts that hold your
20:12 financial assets you have password
20:14 protected websites you go in you know
20:16 your assets are segregated over here for
20:18 that account your assets are segregated
20:21 over here for this account uh what this
20:22 technology allows you to do is sort of
20:25 bring those assets together in Under One
20:28 Roof and that enhances the utility of
20:30 those assets asss the utility of those
20:33 assets we all experience through defi
20:36 today it's a beautiful system you can do
20:38 a lot with those assets the
20:42 infrastructure is phenomenal the ux is
20:45 difficult it's very hard for me to get
20:47 uh the general person on the street to
20:49 want to go explore defi they're they're
20:53 afraid Frank Frankly and so um I think
20:55 the next Paradigm for solution and again
20:57 you know innovators building platforms
20:59 are obviously doing this but but um
21:00 building a better user experience
21:03 something that uh your general public
21:05 feels really comfortable going in
21:07 accessing and can do it in a confident
21:09 and safe manner but be able to get that
21:13 defi experience yeah no well very well
21:15 said um I want to shift gears a little
21:19 bit and talk a more about why are you
21:21 tokenizing Assets in the first place
21:23 feel like you were starting to go there
21:26 a little bit uh mark But like why do
21:28 this in the first place what are some of
21:30 the results that you have seen to date
21:32 with your broad digital asset efforts
21:34 and the tokenization of assets and maybe
21:36 this time I'll actually start with Mark
21:38 because you guys are the most recent
21:41 entry I think into the space at least on
21:44 this panel thanks absolutely uh so you
21:46 know it's a barbar approach that we've
21:49 looked at right now um and so starting
21:51 on the uh private side private markets
21:54 and alternative funds uh that's an area
21:55 that you know we expect to be growing in
21:59 the marketplace uh you know for the for
22:02 next few years um and you know there
22:04 there's a large segment of the public
22:07 that is locked out does not have access
22:10 to those Investments uh so you know
22:12 everybody wants to have uh a private
22:13 Equity allocation potentially private
22:15 credit allocation within their
22:18 portfolios those uh you know both are
22:21 attractive Investments it's um regularly
22:24 be being considered as as part of proper
22:28 asset allocation now however um due to
22:29 uh the way way that those vehicles are
22:32 set up and uh account minimums funding
22:35 minimums for getting into those vehicles
22:36 um you know and some of the other
22:38 restrictions again large swaps of
22:41 society get uh restricted from access
22:42 tokenizing them being able to
22:44 fractionalize them being able to use
22:47 digital identity being able to add uh
22:50 additional liquidity mechanisms through
22:53 secondary trading really opens up access
22:54 for a large swath of the public
22:57 democratizes access to those uh to those
22:59 investment opportunities and so you know
23:01 from that side it's exciting uh on the
23:03 other side of barbell you know you talk
23:06 about traditional funds uh you know
23:08 short duration and and other money funds
23:10 that are out there um there's a lot of
23:13 different uh areas of applicability if
23:14 you just think about you know
23:16 traditional finance and and traditional
23:20 business um the whole process today of
23:23 pledging assets as collateral within the
23:26 traditional uh Financial ecosystem
23:28 pledging assets as collateral in order
23:30 to take a borrow for overnight loans and
23:33 or you know lending money overnight um
23:35 uh it's somewhat inefficient it's a
23:38 myriad bunch of systems you you know end
23:42 of day settlement um uh it's clui lots
23:44 of different reconciliation using
23:47 tokenized funds within that
23:49 ecosystem uh could add a ton of
23:52 efficiency and um we're already starting
23:54 to see it with the pioneers there that
23:55 you know now you're able to bring that
23:58 to intraday borrowing and lending uh
24:00 which just frees up more liquidity into
24:03 the market which benefits everyone so um
24:04 yeah no two two pronged approach where
24:06 the benefits
24:08 are uh you know I alluded to some of
24:10 this earlier I think this idea of like
24:12 what could be this like next disruptive
24:14 rapper and um also I mean asset
24:16 management is incredibly competitive
24:18 like uh you know we're up here with a
24:20 bunch of people who manage trillions we
24:21 don't manage trillions and like we had
24:23 somebody managing trillions speak before
24:25 like it is a highly highly competitive
24:27 space and I'd say the ETF industry in
24:31 particular has has like ruthless fee
24:34 pressure and competition uh and that's
24:36 great for customers right it's also I
24:38 think for all of us who are in this
24:40 business you're trying to find ways that
24:42 are able to like do right for your
24:44 shareholders kind of solve additional
24:46 problems for people uh maybe not not
24:47 even charging more fees but kind of
24:49 growing the addressable market for stuff
24:51 that you're able to sell products into
24:53 and so that was kind of an attitude that
24:55 that we took towards this which was like
24:57 hey we think this could be like the next
24:58 rapper or maybe it's not going to be
25:00 that simple but like part of the next
25:03 wave of innovation and asset management
25:05 and uh we think it grows the pie for
25:06 people that were offering our products
25:10 and services to and um over time right
25:11 that may not happen today but like we're
25:13 talking about like a global world of
25:15 billions of people who are able to get
25:17 access to like us Financial products and
25:18 things like that over time using this
25:20 infrastructure that's a big deal uh and
25:23 so for us um that was kind of the reason
25:25 we approached it um and I think you can
25:27 point to things which frankly have not
25:29 totally been born out out yet about
25:30 liquidity transparency standardization
25:31 you know peer-to-peer native
25:33 peer-to-peer transfers being things that
25:35 are better about tokenized re World
25:38 assets versus like Legacy systems again
25:40 those need to be borne out more and more
25:41 over time and hopefully with you know
25:43 changes in regulation and some other
25:45 stuff more developments they will be uh
25:47 so it should be a good customer
25:48 experience for people who want these
25:51 things uh and also hopefully for all of
25:52 us doing this from a business
25:54 perspective good business to offer these
25:56 products to
26:00 them so um I think a couple of things
26:02 maybe I I would add to everything else
26:04 um that's been said which I I very much
26:07 agree with um looking at it from from
26:09 the asset manager's lens and you had
26:12 just said this will about thinking about
26:15 um tokens as maybe just another delivery
26:17 vehicle or another um you know way to be
26:22 able to um deliver in in a right one um
26:26 uh one token one um uh stop fashion a
26:28 particular investment experience and and
26:31 you can do that and deliver that um in a
26:34 more cost effective and efficient um and
26:37 highly customizable way um and these are
26:39 all things that as asset managers have
26:42 evolved over the last several decades um
26:45 we've struggled with this idea of um how
26:48 do we pull um client assets um in ways
26:51 that you know we can scale um the
26:53 offering of of the different exposures
26:55 that that we can create um but then
26:57 still be able to deliver and offer a
26:59 customized able individual client
27:01 experience and and managed accounts
27:04 right is is one way that um has sort of
27:07 gone beyond what right uh comingled
27:09 Vehicles ETFs and and U mutual funds
27:11 have been able to do um but then of
27:13 course that is still subject to all of
27:15 the same um you know traditional Capital
27:18 markets challenges around now we're into
27:20 t+1 settlement and I remember back in
27:22 the day right it was t plus three and
27:25 there was t+ 5 and and and so each time
27:27 we've you know shaved a day off of the
27:30 settlement period everybody's like hrah
27:33 um but you've like massively changed the
27:36 back office processing um because you
27:37 know a lot of these back offices have
27:40 hardwired right the expectations of
27:42 settlement times um and and if we now
27:45 have um this technology that can speed
27:48 the settlement um yeah know you're
27:49 massively going to have to change
27:52 people's back office processes again um
27:54 but you know from our standpoint you
27:56 know we think about it as you know
27:58 reducing the risk of of these extended
28:00 settlement times you're improving the
28:02 capital efficiency of of not having
28:04 Capital tied up right over the um
28:05 periods of these settlement times and
28:08 and so when we talk about um you know
28:10 what the benefits of tokenization are
28:12 it's not we can suddenly move it
28:13 everything on chain and and it's going
28:17 to be great um uh the the value of um
28:20 you know reducing risk the value of
28:23 capital efficiency and managing your um
28:26 collateral um more efficiently and your
28:28 balance sheet Capital right is is put to
28:31 more effective use um those are themes
28:33 that really resonate more with people um
28:35 than just simply saying um you know we
28:37 can do instant settlement and and
28:39 cheaper transactions um so so when we
28:41 talk about it from that standpoint it is
28:43 truly revolutionary how it is that we're
28:46 going to do all of this um but it is a
28:48 massive journey to get there yeah and
28:51 the only thing I'd add to all of that is
28:54 the economics of this for asset managers
28:57 is very important right I mean we have
29:00 seen over over the past just 13 years
29:02 there was a recent report out that said
29:05 operating expenses have gone up 85% for
29:08 the asset management industry at a time
29:11 when average fee revenues are down 15%
29:15 those are not workable long-term trends
29:17 right um and so we were very fortunate
29:19 at Franklin Templeton because our CEO
29:22 had run Ops and Tech for many years um
29:25 and we were our own transfer agent and a
29:27 transfer agent basically keeps the
29:30 shareholder record every mutual fund has
29:33 two records it has a record of all of
29:35 the Securities that are owned by the
29:37 fund and then it has a record of all the
29:39 people who own shares in the fund so you
29:41 know you've got two shareholder you've
29:44 got two ledgers for every fund we have
29:47 thousands of funds on our platform so
29:50 you can imagine the bookkeeping expenses
29:53 that we had in just that one function um
29:55 and so we began our blockchain
29:57 experimentation to try and see can we
30:00 save costs that was a very simple um
30:02 kind of value proposition we were
30:07 testing and we found a 50x savings uh in
30:10 our cost that's a huge shift that starts
30:14 to really wake you up to how costly and
30:16 inefficient and stagnant a lot of these
30:19 firms have been to manage all of these
30:21 operational processes uh but what it
30:24 also woke us up to was oh my God these
30:26 blockchains are great they're cheap to
30:28 work on they're
30:30 developers can come to the table they
30:33 get things done so quickly right it also
30:35 showed us the value of the ecosystem and
30:37 that's why we always tell people do
30:39 something in the ecosystem even if it's
30:41 a proof of concept because once you work
30:44 in the ecosystem you really start to
30:46 understand the power of what these new
30:49 technologies can do so I think it really
30:51 in addition to everything they said the
30:53 capital efficiencies the settlement
30:55 deficiencies it's going to also allow
30:57 firms that have been in business for
31:02 decades or more um to remain competitive
31:04 and and reassess our own cost structures
31:06 to be here in another 50 years sitting
31:08 on a stage talking about the next wave
31:11 of Wall Street
31:13 3.0 can I just jump in really quickly
31:14 because we danced around something the
31:16 the four of us here but we didn't call
31:18 it out specifically super important uh
31:21 it's crossborder distribution and so you
31:22 know we've seen this with stable coins
31:24 like one of the big successes of stable
31:25 coins is it goes into every single
31:27 country you know seamlessly when you're
31:29 talking about tokenized uh Securities
31:31 tokenized uh comingled vehicles and
31:34 stuff like that there's obviously uh
31:36 compliance and jurisdictional
31:38 restrictions that are required to be uh
31:40 complied with in in every single country
31:43 that you issue it into that leaves a lot
31:46 of underserved markets because it's hard
31:49 for uh an investment manager to deploy a
31:51 vehicle directly into one jurisdiction
31:52 and then be able to generate enough
31:54 assets for that vehicle to be profitable
31:56 within that jurisdiction serving the
31:58 clientele uh
32:00 tokenization uh you can embed those
32:02 compliance controls directly into the
32:05 asset itself revolutionary revolutionary
32:07 right there in our industry uh that
32:09 makes that asset capable to cross
32:11 borders go into each one of those
32:12 jurisdictions pick up the assets that
32:14 are within that jurisdiction and have a
32:17 profitable vehicle as a game Cher yeah
32:19 100% I love it uh I loved where you
32:21 started going too about partnering up
32:22 with the ecosystem and I love where
32:23 you're going with the like new
32:25 technologies that are enabled with this
32:28 new infrastructure uh we actually had an
32:29 announcement Ando Finance had an
32:31 announcement this past week with a lot
32:34 of the asset managers on this panel um
32:37 where we announced Ando Nexus uh we have
32:39 Diversified the backing of USG Beyond
32:41 Biddle to include a lot of the assets
32:43 that are being issued or managed by
32:45 these entities on chain so that
32:47 ultimately we can build towards 247
32:49 redemptions against stable coins of
32:52 these tokenized funds uh 247 over time
32:54 right that to me is a perfect example of
32:57 these like new types of innovations that
32:59 a crypto native company like Ando can
33:01 build towards and then offer it to other
33:03 asset managers so I guess building on
33:06 that point what are some of the things
33:09 that Crypt native companies do very well
33:10 what are some of the things that the
33:12 asset managers do really well and how do
33:14 we bring together The Best of Both
33:18 Worlds freefor all go for it well I I
33:20 think that uh and Mark had started to
33:22 touch on it I think that the thing that
33:24 they've done really interestingly well
33:26 in the crypto ecosystem besides invent
33:30 the ecosystem so thank you um is I I
33:32 love the solutions that we've started to
33:34 see around digital identity and I think
33:36 identity is still one of the biggest
33:40 hurdles to us transforming the financial
33:42 ecosystem um the way the rules are
33:46 written now today Cynthia will mark my
33:49 firm we could each have the same
33:51 customer and we could be trading with
33:55 the same customer and we cannot share
33:57 our know your customer anti-money
33:59 laundering uh rules with that customer
34:01 this is a huge burden every single one
34:03 of our organizations has to do all the
34:06 work to do the investigation of that
34:08 customer we can't share the work there's
34:10 no Central ledgers that we can go to to
34:12 update data we all have to update that data
34:13 data
34:16 independently uh there's sometimes uh
34:18 instructions attached to that data that
34:19 gets out of sync and we have to spend
34:22 days trying to reconcile with each other
34:24 what our instruction systems say it's
34:28 just a mess right um and so one of the
34:30 things I'm most excited about is this
34:34 opportunity to completely rethink how we
34:36 identify uh and enable a transaction
34:39 identify the the participants in a
34:41 transaction and enable those
34:42 transactions and there's lots of
34:44 interesting solutions from soulbound
34:48 tokens to centralized uh ledgers that
34:49 everyone can share and update and
34:51 centralize the risk in The Ledger but
34:54 there's so many potential Solutions and
34:56 and I if I had to pick one spot that I'm
34:58 super excited about it's what's going to
35:00 be possible with digital identity and
35:02 how that will open up the system so much
35:06 more effectively yeah um I can add on to
35:09 to that part um because absolutely 100%
35:12 there's a customer experience um as well
35:15 and and you know on on some larger you
35:18 know Financial platforms um you end up
35:19 you know as a customer having to give
35:22 your AML kyc information multiple times
35:24 to the same organization because even
35:26 within those organizations um they have
35:28 not figured out how to share
35:30 um I'm not calling anybody out here um
35:33 but I I think to add to that what what I
35:35 really you know have appreciated about
35:36 the way in which the developer
35:38 communities and and you know the the
35:41 crypto natives as as we've been saying
35:44 um is is this focus on um you know
35:46 public um infrastructure and standards
35:48 and and when we explain to you know
35:51 people um about why it is that you know
35:53 public infrastructure is important
35:54 versus private infrastructure and I'm
35:57 not saying that um there's not a place
35:59 for for for both types um but in order
36:02 for a market to really truly function um
36:04 you need to have right trust in being
36:07 able to facilitate transactions and
36:09 where um I think Sandy talked a lot
36:12 about uh the the different centralized
36:16 um you know counterparty uh clearing um
36:18 agencies that have formed that's all
36:21 about how do you get the large um you
36:23 know counterparties in the um industry
36:25 and in the market um to agree on some
36:27 centralized standard for how they can
36:30 trust one another um in transactions and
36:32 and what you know the blockchain and and
36:35 what smart contracts enable is um not
36:38 the need for this you know centralized
36:39 group of people you can agree on a
36:42 standard um and have that embedded in
36:44 the code and and that have that right
36:47 available Market wide um and building
36:49 with that standard embedded versus each
36:50 person building their own thing and then
36:52 realizing hey wait a minute in order for
36:54 me to be able to trade more freely I
36:55 need to get everybody together in a room
36:57 and we need to set up another Committee
36:58 in order figure out what the standards
37:01 are um so this is an opportunity I
37:04 think yeah I mean I think kind of laugh
37:05 I think the cynical way to say this
37:06 would be like oh like the crypto
37:08 Industries found a great way to monetize
37:10 like gambling in a certain way right
37:12 like I don't no I'm serious like well
37:14 I'm joking but I'm also serious I think
37:16 Nathan alluded to this earlier like yeah
37:18 a lot of the stuff is like price token
37:20 price goes up I want to buy it that
37:22 draws a lot of you know it's volatility
37:24 attention more Capital comes in chasing
37:26 those returns companies have figured out
37:28 ways to monetize it although you know
37:30 some certainly better than others um so
37:33 that's one thing but I the kind of
37:35 better answer is uh what cynthy was
37:36 saying around these Open Standards and
37:38 kind of permissionless natures of
37:39 blockchains like I think it is
37:41 interesting like if you did one of these
37:42 conferences five years ago you would
37:44 have talked a lot about like private
37:46 blockchains or these big Consortium that
37:49 did like these you know big things and
37:51 like or trying to do these big private
37:52 blockchain things where they brought a
37:55 lot of people together and like that was
37:57 kind of a concept aour at the time and I
37:58 think that's faded away a little bit and
38:00 people recognize that no like the
38:02 permissionless nature of these
38:04 blockchains the fact that you have kind
38:06 of Open Source stuff going on that
38:07 people have a set of standards that
38:08 allows it to communicate and that's
38:10 really where the advantage comes around
38:12 I think that's been a uh you know a
38:14 really important development that I
38:15 think something that a lot of
38:16 traditional Finance firms can learn
38:18 because I think one of the concerns with
38:20 you know not just more the big Banks
38:22 than the big asset managers is that
38:24 people are building these little fums of
38:25 like oh this is like my little
38:26 blockchain over here that I'm using for
38:28 this stuff which to me is kind of an
38:31 athma to like the the ethos of like
38:32 what's trying to happen here or what the
38:35 benefits are coming from so um I I guess
38:37 that'd be something that trafi could
38:39 learn from crypto
38:43 here uh so I'll round it out um prior to
38:45 to stepping into the role that I'm in
38:47 now my background was trading and Market
38:49 structure and I was in that space for uh
38:52 for two decades and um really I've
38:55 traded everything every which way all
38:57 across the globee the first time that I
39:00 used uh the Unis swap application I was
39:03 blown away I what I received was no
39:04 counterparty risk no credit risk no
39:06 settlement risk yes there was platform
39:09 risk but something with which um I could
39:11 digest and an immediate increase in the
39:13 velocity of money because the
39:16 transaction was uh was instantaneous uh
39:17 and not only that but the way that the
39:19 platform is set up is I could move from
39:23 any asset to any asset those are all
39:25 huge game changers for our industry as
39:27 well I mean again increasing the
39:29 velocity of money that's a huge game
39:32 Cher not having to go uh from an asset
39:34 to a cash leg back to an asset uh that's
39:37 a game changer um you know we've been
39:40 trying to solve uh in traditional
39:41 financial markets we've been trying to
39:43 solve the the sort of retail orderflow
39:46 dilemma for a very long time uh
39:47 commissioner Pierce has touched on this
39:50 herself but you know it's perhaps these
39:52 um decentralized exchanges the protocols
39:55 that are like uniswap and the evolutions
39:57 since Unis swap has come out uh that
40:01 could be the best way to to solve um you
40:04 know the the retail trading Paradigm and
40:05 um you know to give that liquidity the
40:07 best shot that it deserves uh other
40:09 applications you know I we could talk
40:12 about a uh a also great Innovation just
40:14 in terms of collateralized borrowing
40:17 lending and opening that up um as a
40:19 platform you know GMX a couple of other
40:22 ones that have really re revolutionized
40:24 uh leverage trading and uh you know done
40:26 it in a way where it's not sort of adversary
40:27 adversary
40:30 um and so yeah I think crypto has done a
40:33 lot of those Innovations very well and
40:36 it's coming upon us to sort of figure
40:38 out how to institutionalize and you know
40:41 make that uh make those um applications
40:43 something that we can take advantage of
40:45 on behalf of clients I love it you could
40:47 have been the introduction to the D5
40:49 panel later on I love it all right we
40:51 have four minutes left so probably time
40:52 for one more question and there will be
40:55 you know short answers um it's been
40:57 mentioned a little bit before that the
40:59 the past couple of years has been I
41:02 believe you mentioned a slog with The
41:04 Regulators uh clearly this new
41:06 Administration has a more favorable view
41:09 towards the industry um we'll hear from
41:11 some Regulators later in the day but if
41:14 there was one thing that you would
41:16 prefer to get clarity on in the next
41:19 couple of years what would it be well
41:21 for us the one thing we'd want Clarity
41:23 on is we want to be able to trade
41:26 tokenized real world assets in the same
41:29 Exchange changes and through the same
41:31 market makers that we can trade crypto
41:33 assets right I think it's the
41:35 interoperability between the systems
41:39 that's going to really be the spark that
41:41 allows for these new models to really
41:43 take hold so that would be I guess it's
41:45 the special purpose broker dealer rule
41:46 or I don't know what the official rule
41:48 that limits us is but getting rid of
41:50 that rule very
41:53 good I honestly wish for the same and
41:57 and maybe the U the coral are to um you
42:00 know having intermediary Clarity um you
42:02 know as an asset manager i' I'd like to
42:05 know um that I can put um tokenized
42:07 assets and traditional Assets in a mixed
42:10 asset portfolio um and know who I have
42:13 to call in order to get that product
42:16 register please that too that too right
42:18 sounds reasonable I'll pick a different
42:19 one just to pick a different one I think
42:22 uh banking Regulators right like I think
42:25 um I think to some extent like the
42:27 difficulty in banking crypto crypto
42:30 related businesses was real and um I
42:32 think seeing change from kind of the
42:34 various you know different Bank Federal
42:36 Banking Regulators out there giving
42:37 people more clarity you know doesn't
42:39 need to be everything but stable coins
42:41 right like how are stable coins going to
42:42 feel are they going to feel more
42:43 connected to the existing Financial
42:46 system here in the US um I think would
42:48 be a big
42:50 development I talked a lot about uh the
42:52 defi applications so I'm going to stick
42:54 with that theme uh there was uh an
42:57 update uh proposed to Reg ATS and and it
42:58 doesn't seem like that's going to go
43:00 forward it would have swept up protocols
43:02 like Unis Swap and I think that would
43:04 have been a loss for the industry um and
43:06 you know and now we're looking at uh
43:10 again both uh the SEC and the cftc that
43:12 seem like they want to find ways with
43:14 which these applications can be brought
43:16 into more of the regulated sphere and so
43:19 that's a welcome change wonderful thank
43:21 you so much for joining this panel and I
