The First Institutional Bull Run Has Begun

Transcript

We can calculate interest intraday. So you know if you hold it for 3 hours and 6 seconds, you get 3 hours and 6 seconds worth of interest. >> Nobody can do that today. >> Welcome to the rollup. Our mission is to educate, empower, enrich so that you can be more bullish. Like, comment, subscribe, and enjoy the show. >> If you never heard from Sandy Call, then you're gonna have a laugh, a smile, and we're gonna have some damn fun today. I'll tell you that much. um tokenization is simply accelerated. Uh I cannot say the direct quote or the brokerage or the firm, but maybe somebody affiliated with Sandy said that they're trying to do a yard onchain of tokenized money market settling almost I think a day uh by the

end of 2027. So we're we're moving. We're talking about yards now. Sandy, she's in the house. I love Sandy so much. She's amazing. Sandy, great to have you back. >> It's so fun to be here. One of my favorite interviews always. >> Yes. Amazing. We'll catch us up, I guess. Yeah. >> I'm the new one here. I have It's good to meet you all. Yeah, you did. >> No, no, no. You have interviewed hotel room at least two or three times in Bermuda. I think I stepped out for that one too. >> Oh my goodness. How about that set up, Sandy? >> Yeah. And you missed the fan. I haven't heard so much about you. So, it's great to meet you. And uh I I want to I'd love to get catched up.

>> Yeah, catch us up. I mean, Bermuda was what, four months ago? >> Um we were kind of deep in the bear. uh vibes were down but institutional side from your side has been a constant progress. Um catch us up. >> Yeah. So look, I've been thrilled that the markets have been a little like uh low key because we are accumulating some of the best talent in the industry. We are huge believers that this is going to be one of the best investment opportunities for people's portfolios probably for the next two generations, right? And we are so at the beginning of this new period of investing and so we are putting together the top crypto investing team across the street that's going to continue to grow and build and

we'll have some exciting launches next year. >> Here we go. >> Um but this is our time to build because this is the moment that I think we see mainstream understanding that crypto is as important a set of technologies as AI. Every institution in the world is well positioned to benefit from AI growth in their portfolio, but they are way underpositioned. >> Extremely underexposed. Extremely underexposed. >> And so it feels like where we are right now is, you know, we're on the heels of the Clarity Act, not reaching closure, but we're on the precipice of tokenization, super cycle, and institutional FOMO. And and so given that that is sort of the flux that we

find ourselves in, what excites you the most? Where do you find yourself spending the most attention? What are you focused on? >> Yeah. So, what excites me the most is this new potential that I am going to be able to move the point of advice to the wallet, right? That my wallet is going to become my interface to the world. >> It's going to merge my payment wallet, my crypto wallet's going to become one and the same. It's going to be my interface that I use in the world just like I use my smartphone as my interface to the world today. That wallet is going to be as critical as my smartphone. And everything comes to me in my wallet. My investment advice, my portfolio advice, the agents that are going to be

rebalancing my portfolio, my half, the agents that are going to be optimizing every asset in my portfolio and my app. All of that is going to come to me because this is going to be the way I succeed in an AIdriven future. My data is worth money. My wallet is worth money. And people are going to service it. and that's how I'm going to make my living. >> Do you think the wallet solutions that we have available to us right now are adequate for the future that we're faced with. >> They are evolving and they are they see the picture, right? They see the vision and they understand what needs to happen to get us there. And that's why even with the Clarity Act having filed, I don't care because it failed because of ethics. It didn't fail because people disagree about how we should operate

with the assets themselves. So that's just a matter of time. >> Yeah. All right, Sandy, let's get bullish. Let's get bullish here. Franklin Templeton's got a ton of assets onchain. Market looks great. You know, what are your north stars here for Franklin Templeton goals-wise? Let's talk numbers. What are you trying to get onchain by the end of the year? What's your outlook for next year? How many assets? What asset types? Let's get Let's get kind of Let's get you know. >> Yeah. So, we're just over three trillion three billion. Sorry. Just over three million. >> Exactly. We got it, guys. We got it. >> Just over time. just over 3 billion in assets, right? Uh I would like to see that well over five by end of the year.

I think that we could potentially double or triple that number by this time next year. >> Wow. And what drives that growth? >> What's driving that growth is the combination of a trusted brand name with an 80year history that operates globally and 1.8 trillion I'm using trillion correctly this time. Trillion of assets globally um with a firm that operates digitally native. Don't forget we launched our first tokenized fund and have been running it 24/7 since April of 2021. >> No way. I didn't know that.

>> So, we are a digitally native player who happens to sit within a highly respected, globally known $1.8 trillion global asset manager. So, that's what's going to attract the assets to us. Let's go. >> What do you think of the learning moments like over the years given that you were one of the first ones, if not the first one, to tokenize these funds? You've had the experience that others will face as they start to tokenize and enter the market, but you've been here for a while. So, what have been the learning moments that you think others will soon face and realize that you know everyone will come to understand? So it sounds so elementary but like one of the biggest learnings is in crypto everyone subscribes and redeems to investments

using stable coins or crypto >> right >> for a regulated investment product you need to use fiat cash >> so moving the stable coins or crypto into cash is like a critical part of being able to run a crypto investing business >> right that's so elementary right but I'd say some of the other lessons we've learned is that you got be creative, right? Because we are digitally native and we were the absolute first to ever do this. We have already started to reinvision. So our money market fund, we can calculate interest intraday. So you know if you hold it for 3 hours and 6 seconds, you get 3 hours and 6 seconds worth of interest. Y >> nobody can do that today.

>> That's huge. >> So there's no no such thing as idle capital now. >> No such thing as idle capital. >> Sandy calls world. There is not a single scent in her portfolio that will be idle. I'll tell you that right now. Not only that's not idle, it better be earning me a lot, >> right? This is the productive asset piece. This is and I think everyone sort of it's a huge light bulb moment once we understand the programmability of what's possible on chain because we take all of this idle capital, we turn it into productive assets and that goes for assets all across the risk. >> That's right. And with AI, right? And this intersection of AI and crypto is something we should talk about every day from now on because with AI agents, >> I can trust that my agent is scanning every single collateral pool, every

single DeFi pool, every single exchange, every second of the day to find me the best possible deal. And it is then executing on that on my behalf. I do not need to be managing my portfolio. I just need to set the goals and set the expectations and then this is going to selfexcute for me. It's really going to be so exciting. You'll see. >> And I got to ask you just kind of thinking about like putting your investor hat on. Um you know we've gone through this bare market, right? You guys have grown your assets under management on chain throughout the bear, right? Obviously bull markets bring more speculation. I think we're very firmly in a bull market. We've got a Fed rate hike today potentially. I don't think it

matters. higher by the end of the year. I think next year is going to be very positive. We have too many catalysts, too many tailwinds. What can we think about from the investor perspective to make the most of this upcoming cycle or bull market? How do we think about optimizing portfolio and optimizing positioning for this kind of what I consider crypto's first institutional bull run? So as someone who has managed money for many many years in my career, you know what you have to understand is what has just occurred in the past year. We have washed out the speculators in the market. The market has moved from what they call weak hands, which are people that were going to move their money quickly into strong hands, which are

people who are going to leave that money in because they now have great entry points. Right? So you need to understand that when the markets are the most quiet and boring is the best time to get into those markets because otherwise you end up chasing the market as the market goes higher. If you only start establishing positions once the bull run has begun, you put yourself at a real disadvantage. Whereas if you can position and be patient now, the rewards you get on the other side of that are going to more than make up for the weight. Right? So understand where we are. We have put a bottom or are making a bottom into place

into strong institutionally established positions that they are not going to get shaken out of. I totally agree and that that's what I was going to get to is I just think that the capital now is stickier, less swayed by volatility and more willing to zoom out. Would you agree with that? >> 100%. Right. And as people have been like getting excited about prediction markets, which are super fun, I love them myself. They've been getting excited about tokenized securities which is really I think a harbinger of how big this space is going to become. They've been ignoring crypto and this is not the time to ignore crypto. This is the time to position.

>> Yeah. And so as we think about positioning and outperformance, one of the things that I think is most lucrative, as we think about a long-term time horizon is compounding. What do you think are the parts of the industry, the facets or the or the little pockets of the industry that are most ripe for exponential compounding as we go forward? >> Look, I am a huge believer in certain new decentralized business models, right? So I think anything that has to do with decentralized digital identity, huge opportunity space.

Anything having to do with agentic AI and micro payments, huge opportunity space. Anything having to do with postquantum computing and codes, right? Being able to strengthen the security infrastructure, huge opportunity space. So we are moving past the Bitcoin leads and Bitcoin is the predominant asset. Bitcoin is going to be an important asset always. But what we need to understand is that the fundamental investment case for other parts of the ecosystem has strengthened to such an extent that these are becoming really important growth opportunities that you should have in your portfolio. I I want to double click on the first one that

you mentioned, these decentralized identity protocols feels particularly relevant based on everything that we've heard about around transfer agent regulation and the upgrade and modernization of the SEC rules is the KYC identity verification as these things become regulated and they need to pass KYC across blockchains and across different assets in a tokenized way. >> What are you seeing? What are you hearing? What is the best approach as we literally build this out for the first time? Because it feels like this is maybe the one technical gap. We have a lot of work to do on the regulatory front, but when it comes to a technical solution, it feels like this is a missing piece. How should we think about

this? So I was the co-chairman of the CFTC's digital asset subcommittee and this is a critical thing that we are advocating for in the industry which is to go to this idea of an eventbased KYC AML right so why wouldn't I store my KYC AML information with my key that I need to sign a transaction and when I sign that transaction I should be able to do an instant on the spot check of my KYC AML eligibility which in turn should be a prerequisite to the transaction being verified >> right and so I think we need to change the whole thinking about where in the process it occurs when in the process

occurs and how it acts as a gating item because don't forget today all these firms do KYC AML and if they update it once every 18 months that's shocking right >> right so it could be so stale if we can do it as an eventbased process it becomes a more secure system >> and the last point I have on that is composability. How do we achieve composability of KYC AML across assets and across chains? >> This is where standards become so critical. This is where having the industry getting behind certain smart contract templates being able to really agree that we are going to use common language, common data fields, common processes. This is the unlock that's

needed. I was talking in the presentation I just made. We are moving away from a system where Franklin Templeton builds its own infrastructure, Black Rockck builds its own infrastructure, Fidelity builds its own infrastructure. We're moving into a world where we all plug into a network and we need network infrastructure. And that network infrastructure for financial services has to be these smart contract templates that allow us to do the regulatory checks that are needed to really open up the entire 150 trillion of assets that trade gloit. I always appreciate our conversations because not only do you bring bullishness, which I think this industry needs, and optimism, but also actual depth and educational kind of power to just understanding how Franklin

Templeton and just really this institutional allocator space is thinking about this asset class. Um, something in the air today. I don't know if it's the Avalanche Summit, if it's just the market, if it's whatever it is, but it's on. So, thank you so much. Thank you guys so much for see.