Franklin Templeton's Sandy Kaul on wallet-based finance and tokenization

Transcript

Even with all the excitement that has built over the past 18 months with crypto and the markets being at record highs in many cases, we've only seen the amount of money in the crypto markets increase from 3 to 4 trillion. There is a hundred trillion dollar of money invested in the broader set of assets that are today not on crypto rails. Just think if 10% of that money moves into crypto and token based investments, we are increasing the size of the crypto markets by 2 and a halfx. GM. Good morning. Welcome to the Milk Road Show, the daily crypto show where we decode headlines so you can sound smart and

munch. I'm your host Jay Hamilton. It's Tuesday, September the 9th. Today we are joined by Sandy Call, the head of innovation at Franklin Templeton. Sandy might have the best resume we've ever had on the show. Guys, just listen to this for a second. Co-chair of the CFTC digital asset subcommittee on the World Economic Digital Assets Advisory Board. Also sits on the DTCC's digital asset advisory board. Former City Bank, former Leman, former Goldman Sachs, former JP Morgan, and in between here, she also became a technologist, which is why she is pushing so hard on the adoption and innovation of blockchain. In this episode, we're going to talk about why Sandy describes this moment as adapt or

die for finance firms. You need to get onto the train of tokenization and blockchain because it is going to rewire the global financial system. Also, we're going to talk about yesterday the NASDAQ filed to list tokenized equities. We've seen Kraken has tokenized equities. We're seeing a real move for tokenized equities to come on chain. We're talk about that, what Sandy is seeing from behind the scenes. And finally, we're going to talk about why Sandy believes that we're moving from an accountbased financial system to a wallet-based financial system. What does that mean?

And why she thinks that you can expect the most change to come in the next 5 years between now and 2030. She predicts there's going to be more change in the next 5 years than there's been in the past 50 years in the financial system. And then finally, as always, how do you as investors get your edge, get your alpha, whether you're retail or you're institutional, how do you position yourself to capture the upside of this new era? Before we jump in and hear from Sandy, if you guys are making trades right now, I want you to make sure you before you make your next trade, check out Milkroad Swap. It's at swap.mmillroad.com.

I'm not telling you to check it out because it's my product. I'm telling you to check it out because we built it not to make money. We built it to give ourselves a place to trade. This is where I trade because it has some of the lowest fees in the space. You can trade on Ethereum, Base, Arbitum, and Salana all in one place. Check it out today. Today's episode is brought to you by Figure Markets. Grow your cash like a bank. No lockups, just real returns. It's also brought to you by Ken, the verified distribution protocol, changing the growth game. With that, Sandy, welcome to the Milk Road Show. >> Thank you so much, Jay. H pleasure to be here. >> Absolute pleasure to have you. Uh, okay, let's start to I want to start broad as we frame this episode. You've spent decades in finance. You've seen multiple

innovations of technology come and go and change the change the financial system. And right now you're staring down at blockchain and saying okay this is next. And recently you wrote an article titled the tokenization of assets is an adapt or die moment for finance firms. How does blockchain rewire the future of finance? Yeah, it's it's so fascinating because you can really rewind all the way back to where we began as a financial system, which was we used to trade one transaction at a time, right? From the time that New York Stock Exchange was established and we began trading in the US, we would trade one transaction at a time and we would settle one transaction at a time.

And this was the way we operated from the 1800s uh 1700s all the way until 1960s. And it was in the 1960s that volumes grew to be so substantial that we could not keep up with the rate of trading. Literally, there was what they called a paper crisis. Uh it was so bad that for almost an entire year, they closed the New York Stock Exchange every Wednesday to be able to catch up on paperwork. And they still were not able to catch up. And what ended up happening was they had to redesign the system, right? we could not keep up with the volumes or the velocity of trading and so they designed a new system in the early 1970s and that

system has been in place for almost 55 years now. Uh but what has happened is blockchain provides the opportunity for us to go back to trading one transaction at a time. Uh, and this is important because the new system that got designed in the 1970s created all sorts of frictions that made it hard to settle a transaction quickly. Right? Even 55 years later, the best we can do, the very best product we can do is an equity. And it still takes at least 24 hours to settle an equity. Whereas, if we're doing this on chain, on blockchain, we can settle that equity transaction within seconds. Right? Think about the increase in efficiency and

volumes that we're going to be able to foster globally if we can go from taking 24 hours to do something to seconds. That's why I think blockchain is such an important technology. And it's not just blockchain, it's the tokenization, uh it's the smart contracts, it's the oracle networks, it's the whole ecosystem that comes into play around blockchain. >> Yeah. What I loved in your article, uh, my my takeaways from it was there's there's really three themes that I see that you keep talking about in this article and and and everywhere that you're chatting is that smart contracts make blockchain very unique. The this ability for assets and contracts to move together is you is new. We've never had

usually it's assets on their own and the contract over here managed by a middleman and it creates all these friction points as you mentioned. So we can remove a lot of that backend middleman things move faster network rewards usage and ownership and that's the you the way that token economics can work is very powerful right you can fund growth like software not like a static balance sheet so the way we build these networks is also very interesting and then there's also this concept of wallet first customers and that is I don't think we fully grasp yet even even myself as a crypto native who's been working in the industry for five years.

I don't even really fully grasp what wallet what a wallet financial system will look like. Can you can you break down sort of where we are right now? And you call it this accountbased economy and then how we're going to move to this wallet-based econ financial system. What does that look like? >> Sure. Yeah. It's so important and it it it's so foundational. It's almost like the difference between what did you have when you had a mobile phone and what did you have when you got a smartphone, right? So today, think about it. You know, most people have at least one checking account, sometimes a checking account at two or three different banks.

They have maybe a savings account at those banks. Uh they might have a brokerage account uh on a platform like a Robin Hood or a Schwab where they're doing their own trading. They might have a wealthmanaged account either in their 401k uh or in uh a platform where they've signed up and have an advisor be that a robo adviser like through someone like Betterment or Wealthfront or an actual person advisor at a firm like Meil Lynch or Morgan Stanley right and on top of that they're going to also have accounts for uh insurance policies that they might own. They might have accounts for health care accounts and flexible spending accounts, right? And who is

responsible for aggregating and working across all those accounts? It's the individual, right? And so think about when you put together uh a net worth statement for your mortgage or if you are trying to uh explain and understand what is your total wealth picture, you have to personally go and aggregate the information across all of those different accounts. Right now, if we shift that to the future where we believe you're going to have one wallet and all of your different assets will sit in that wallet in some kind of tokenized form. All of the sudden that entire need for aggregation goes away.

All of my spendable cash will be sitting in my wallet. Be that in the form of stable coins, be that in the form of tokenized money market funds, tokenized gold, tokenized deposits, central bank digital currency, cryptocurrencies, all of my investments will be sitting in my wallet. Be that in the form of tokenized stocks, tokenized funds, cryptocurrency, investments, um physical investments in NFTts, right? All of that will be in my wallet. And all of the documents that manage my life, my driver's license, my passport, my insurance policies, the titles to my home, the titles to my car, all of that will be sitting in my wallet as well.

Think how much easier life is going to be when everything is aggregated for me, right? I become the center of my financial life rather than me having to go out across a whole network of financial providers and piece it together myself. That will be incredible when that happens. And and what's what's interesting is I I I talked a lot about this in the last cycle and 2021. This was a especially when NFTTS were so popular and we were thinking about I don't just mean NFTTS for this for the purpose of speculation. I mean NFTTS for uh the purpose of identity or the

purpose of ownership of a car. And and I feel like we kind of lost the momentum. I don't talk about that stuff anymore as much as I used to just because NFTTS kind of became a dirty word. A lot of people lost a lot of money on them. When do you think this what's the timing for this to actually happen? Like when will we get to this future where our wallet is our central bank account and identity source versus where we are now?

Is it is it still close or is it decades away? >> Oh, no. It's getting very close. And I I think the trigger here was the Genius Act that was passed this summer. Uh and let me explain why, right? Because I'm not going to move everything into a wallet until I can really confidently operate out of that wallet, right? And having the stablecoin bill passed now allows me with confidence, right? I've had access to stable coins, but there weren't the protections in place. Uh there weren't the regulatory oversightes in place. There weren't the there wasn't the permissioning in place that really allowed me to confidently move big amounts of money into stable coins. Uh but that is changing and you've seen

major organizations, you've seen City Bank, my old employer, you've seen JP Morgan, my old employer, right? You've seen these big institutions now saying, "I'm going to issue stable coins." You've seen companies like Amazon and companies like Walmart say, "I'm gonna issue stable coins." Right? Why is Amazon going to issue a stable coin? Well, they're going to issue it to save money on credit card fees, but they're going to also issue it because they can embed their loyalty points. They can embed the Prime program in the wallet tokens in the Amazon stable coin, right?

And that is what's going to open the door to people putting more and more of their assets into their wallet. Uh because now I have stable coins. I can sweep those stable coins into tokenized money market funds and get yield. I can uh get benefits and I'm going to be able to hold more in my wallet than just crypto, right? I'm going to be able to hold all of these different forms of payments. I'm going to be able to start to hold more and more as you noted at the top of the uh session, right? More and more equities, more and more real world assets. Everything is going to start to migrate to the wallet. It's kind of like 2008 all over again. And

people are talking about these crazy things called apps. And you're like, why would I need an app, right? You're going to need an app because you're going to want to be getting the convenience of doing everything via your smartphone. today, you're going to need a wallet to get the convenience of being uh able to do everything out of one location and have one consolidated view of your wealth. When when you say that the the Genius Act was a tipping point, is that a a feeling that you have or do you did you notice a difference in who was thinking about blockchain and who was calling you? like was there a meaningful change in chatter within your ch within your echo chamber within people in your

circles? >> Yeah. And that that is why you know it started as a feeling that this would be a tipping point but now I I'm really starting to see the evidence come in. Right. What has been so fascinating is I've been publishing research uh about the implications of of moving on to blockchain having wallets using smart contracts using tokenization. I actually published my first piece of thought leadership on this Jay back in 2017, right? For eight years I've been writing about this. Uh >> finally people are listening.

>> Well, um you know, but but what I never got was incoming, right? Like I would go out, I would tell a lot of people what we thought were going to be happening. I'd help people understand it. We could build interest. They'd start to explore it. But it was always it was always me pushing, right? It was always me pushing people to think about it. What has been fascinating is, you know, Franklin Templeton has been very outfront with the strength of the technology that we've built for our own proprietary use. Right? We have built our own digital asset stack that does everything from trading to portfolio management, risk management to being able to do fund administration through our transfer

agent and run our own wallet system. Right? We've built this to be able to operate our own business. And what's been fascinating is now the phone calls are coming into us, right? We're getting that pull from the industry and people are calling up and saying, "Hey, I really am realizing I need to introduce a walletbased system and I don't have any kind of technology to do that. Could we talk to you about how you've created your system? Is there a way that you might be able to share some of this technology?" Right. and providing technology to >> and would this be competitors >> uh essentially competitors even some competitors are asking right but this is typically you know the folks that we distribute investment products through

the wealth networks um the online brokerages the uh independent registered investment advisors right the people who channel money out into everyday people's pockets and allow them to invest they're realizing that they need a wallet. And I think that has been a brand new phenomena. We have not been getting those kinds of calls until literally the last few weeks since the passage of the Genius Act. >> Why do people invest in real estate? Because it spits off cash flow. But I'm not here to manage rental properties.

That's why I'm looking at Figure Markets. Their new democratized prime product backs your money with real cash flowing assets and returns up to 9% APY. It's the first real world asset for lend pool built for everyone, not just institutions. Ready to lend like a bank and get more than the 5% A is offering you? Download the Figure Markets app today and get 9% on your idol funds. Go to milkroad.com/figure markets. The best audience to distribute your product to your super fans. Duh. But what if you haven't found them yet?

That's where KGN comes in. They help businesses scale digital distribution at a price that makes sense. Ked's verified distribution protocol identifies the best users for your product and connects you directly to them. Ready to find real meaningful users for your next big product? Join the KGEN network today at milkroad.com/kgen spelled kgn. Very interesting. So there is because it's so hard as an investor to make a delineation between um the the impact on markets that can come from news versus the impact of the actual results that come from that news months and years

later. And we're in one of those periods right now where in the last year we've gotten so much positive news for crypto in in America and around the world. Truly a completely different place than we've ever been for the setup of adoption from a regulation standpoint, from a uh from just an a opportunity to be involved and an excitement around it to a government level support all these things. But we haven't necessarily seen that come yet in in the in the market in terms of the products and what's available for the consumers to use. So it's always we're in that weird period where I wonder do you have thoughts on

how quickly will all of these different players act? Like are we going to all of a sudden see let's talk about stable coins because that might be the best example to use. Are we going to all of a sudden see every you mentioned before that you know Amazon's going to launch a stable coin and all banks are gonna have like how quickly is that going to happen in terms of these old finance firms entering the space? >> Yeah. Well, I think one of the big clues there, which I thought was super fascinating, was I don't know if you caught it, but there was a recent announcement uh that MetaMask has now created a deal with both Google and Apple Wallets that they're going to allow you to use your Google and Apple Wallet sign on to access your MetaMask, right? That to me is like, woo, here we

go. Right? Because now everything I do in my Google and Apple wallet and let's face it, everybody is doing more and more via those wallets today, right? The everything I do there now I can start to flow that through to my actual crypto wallet. And this is what we need to see. We need realworld use cases, not crypto use cases. Right? Everybody inside the crypto ecosystem is already super excited about these technologies and understand how to use them. But what we need is people outside the crypto ecosystem. People who have never thought about crypto, but who suddenly like the idea of, oh wow, I can have a stable coin in my wallet and I can transfer my

cash uh anywhere I want without having to go through a bank to do that, right? Or I can use a stable coin and buy tokenized money market funds and get yield for it. And the bank isn't taking its cut of my interest rate through my high yield savings account. Now I get all the interest, right? I think that people are going to start to recognize that there's lots of use cases that are beneficial to them that they haven't been able to access. And that's what we need. We need people who have never thought about Bitcoin, never heard of Ethereum or Salana uh or Avalanche or many of the other chains that we talk about every day. We need people who have no clue what's happening in crypto saying, "Hey, I kind of like this idea that I can manage my own assets out of

my own wallet without having to go through an intermediary." >> And we and we need them to do it without they don't even need to know crypto, right? With crypto, right? >> Exactly. Yeah. Which is key, right? Because you know technology is intimidating for a lot of people and we don't need to give them that friction of oh you need to understand this new technology in order to use this product. It's like no you want to send money around the world and you want to do it faster and at a cheaper rate you can you can do it. Here's how you do that. And so the simplicity of it is key. Let's just talk about okay so >> let's talk about how how how our money will be managed in the future. So if we took if we look at like three simple buckets, so you have cash, you have

savings, things that you put into low yield products and then you have your your investment portfolio. If we look at those three buckets, let's start with with first with investments. What will how do you see the future of portfolio management when you think about AI and blockchain and the the role that they will play? >> Yeah. So first off, I think you know that there's a lot of investment products that I own today that I get a lot of great return from, but I don't get much utility from them. Right? If I'm a big institutional player, right, I can get money for lending out my

securities and I can get other people to lend those securities on my behalf and I get extra money and extra return in my portfolio for lending out those securities. If I'm a big institution, I can create liquidity uh and be willing to stand in between buyers and sellers and let the size of my holdings allow me to get extra fees, take a little fee on that spread between the buyers and the sellers. But if I'm an individual, I don't get those opportunities today. So I think one of the most important reasons that we are going to see investment portfolios move into tokenized form and into wallets is because it opens up all this new utility

and all these new ways of making money through DeFi models. I can pledge my investments into a liquidity pool and get fees. I can stake my assets and get fees. I can lend my assets and get fees. I'm going to take my investment portfolio that today is earning me certain returns and I'm going to be able to add to those returns with all sorts of additional uh kinds of income that can come in around that. So number one, I think that's going to be the most important reason we see this migration is that it allows everyday people to do what institutions have been doing for decades in the in investing market. So

that's why I think you're going to see investments move in that direction. >> I I truly hope that retail takes advantage of that opportunity. I agree with everything you're saying from the perspective of it's going to happen. It's going to be available. The thing I just never know is, you know, the the financial knowledge of the majority of the world is is pretty low. And in order to understand even basic things like staking or various yield generating products is is a step that a lot of people don't take and I you know I don't I don't expect you to speculate on what we need to do

to educate the world on financial education like that's an important thing that everybody needs to do. I just hope that they take advantage of that because I just don't know that they will, especially when so many people have cash sitting in, you know, their their savings account and they could click one button right now and put it into a treasury. And a lot of people don't even do that. And that's not even using blockchain or crypto, right? But this is where I do think that AI is going to be super helpful because just like what we were talking about with MetaMask allowing you to now use your uh Google or Apple wallet signin and not have to remember your seed phrase, right? I am not going to have to make these personal

decisions right today. If I want to take advantage of all of these different yieldbearing opportunities around my investment portfolio, I have to actively manage the use of my tokens in that manner. In the future, when I buy an investment portfolio, my onboarding document may have a little clause in it that says, "Would you like us to optimize the use of your assets?" And if I just click yes, this may all happen automatically without me having to take an action. Right? That is the beauty of smart contracts and the ability to automatically execute based on pre-programmed contract terms. A lot of this may just happen automatically on my behalf. And the same is true for cash,

right? We talked about cash and what's going to happen with my cash and my savings, right? Today, every institution in the world, every hedge fund in the world, every corporate treasurer in the world, every single day, they sweep all of their undeployed cash into yieldbearing market money market funds. And that that money sits in those money market funds until the next time they need that cash at which point they can sweep it out of the money market fund, put it back into cash and spend it. Right? This is too going to become an automated function that every person is going to have in their portfolio. Why would I sit with a stable coin in my account where I am not earning yield on

that stable coin? I would sweep that stable coin into a tokenized money market fund and if I need that cash back, I can sweep it out of that tokenized money market fund and have that cash available within seconds. We already offer this at Franklin Templeton. This isn't some future nirvana that we're talking about. This is something that our uh funds do every single day. We already have these capabilities and have built them, right? So, this is going to become a common offering as well. Again, it's a benefit that institutions have used for decades, but now it's becoming available to you and to me and to everyday investors.

>> It is truly hard to grasp the power of having two technologies combined the way AI and blockchain are going to combined in the future. It was it's funny because in crypto uh we have all these narratives that come out that everybody gets excited about and AI had a really big narrative at the end of last year which was a little bit uh it can be dangerous when these narratives take take uh take the stage because from a speculative standpoint everybody gets so excited and you have so many tokens that become super overvalued very quickly and there wasn't a lot of meat behind a lot

of these projects. Uh, a lot of them were pretty basic AI. You could even call them chat bots to be honest. Um, so I think that a lot of people in crypto kind of were fel felt a little bit like is AI really going to have a place within blockchain. But when you for fast forward to the future of what you're saying is AI managing our assets. And the thing you have to realize is the only way AI can manage our assets is if they are in a digitally native way where AI can interact with them. Well, you know what? That's what blockchain does, right? If it wasn't for blockchain, then AI couldn't really get involved with our money in the same way that it can because of blockchain and because of a

wallet-based system. It feels like I I when you when you when you paint that picture, I don't even know what the world the finance world looks like 5 10 years from now. >> Well, and this is where and to your point about needing to be careful is just because a technology can do something doesn't mean that the people trying to launch a project in it understand what the technology should do. Right? This is why instead of going to a cryptonnative firm, I did choose to go to Franklin Templeton because it is a wellestablished firm with a deep sets of expertise in portfolio construction, in active management, in being able to build effective goals outcomes for investments, right? They

need that pool of expertise. I need that pool of expertise to create the AI and the blockchain based tools that are going to do what a investor needs. Right? So when we build a portfolio construction algorithm using AI which our solutions team has already done at Franklin Templeton, right? that AI has been trained by the best minds in the industry who do nothing but manage portfolios as they're living to achieve those results for individuals, right?

And so I think this is why you need to see tradi and crypto come together. The innovation coming from the crypto side and the innovation coming from the AI world is critical to creating new capabilities, but the expertise to deploy those capabilities and to really achieve the outcomes that you and I and their listeners need as you know things that are going to enhance my daytoday life. That's where you need the experts that have done this for their entire careers and really have that depth of understanding.

>> If we if we look at where institutions are and we look through look at it through two lenses. One is their participation in the crypto economy. So buying selling the assets and then the other and and then offering those products to their customers and then the other is their actual adoption of the technology in the ways that you've talked about Franklin Templeton building out their own blockchain crypto stack to be able to offer all the various uh parts of the stack that you need for the tech. Where where are we through those two lenses in terms of institutional adoption?

Yeah. So, institutions are always going to be slower to move than individuals, right? Um, institutions have this fiduciary duty, right? They are acting on behalf of their members uh or their employees or their constituents and therefore they are always going to move slower because they have to be very cautious because they could get sued, right? They have to rise to a very high standard before they can take too innovative a move. uh throughout financial history we see that it is individuals and and wealthy individuals in particular who are willing to take risk sooner to get the higher reward.

Right? by the time a big institution is there uh oftent times that that stage where you can get the really massive returns has passed right and I think you're seeing this play out in the marketplace today in that Bitcoin which has become much more institutionally acceptable is having a much more muted trading pattern than any other cycle of Bitcoin that we've seen in the past. It's still rising. It's still strong, but it's not having the explosive upside that we've seen in the past in Bitcoin.

And in a sense, that's because there are more and more institutions who are participating, and institutions have a very different pattern in how they enter and exit markets that tend to dampen that extreme volatility. Um, but I do think that you are seeing more and more interest now moving into altcoins. you're seeing more and more interest moving into new projects. Uh, and this is coming from the more retail and the more risk-taking side of the house. And I think they will open up these models and create that institutional acceptance. And to go back to the point we were talking about earlier about all this incoming interest coming from traditional wealth managers and

financial firms, they're starting to see it, right? There was an announcement a few weeks ago from Charles Schwab that they are going to introduce wallets and allow people to hold Bitcoin and Ethereum in the crypto wallets on Charles Schwab and trade uh those uh assets for themselves. Right? This is a sign that it's now, you know, becoming commonplace. As soon as millions of retail participants have wallets on a platform like Charles Schwab, it's going to become much easier for institutional pensions to then say, "Oh, well, I'm going to put uh I'm going to hold my own wallet and I'm not going to own Bitcoin via an ETF. I'm going to own my Bitcoin directly and manage my Bitcoin

directly." Right? So in a sense the retail participation and the retail willingness to take risk opens the door and creates the conditions for the institutions to follow. >> When when are we going to see the next catalyst? So you talked about the Genius Act being a big catalyst this year and recently. What's the next coming catalyst? >> Yeah. Well, this filing by NASDAQ to get approval to trade tokenized equities on the NASDAQ exchange, right? You know, you also had Coinbase go in recently.

They announced to the SEC to ask for permission to trade tokenized stock, right? This is going to be a catalyst that makes the Genius Act and the ability to trade stable coins look minimal by comparison, right? That is to me, you know, once there are rules in place that are going to allow us to begin moving our traditional financial products onto these new rails with confidence, uh I think that is when you're going to just start to feel this whole pace of acceleration, uh this whole pace of change accelerate. Uh and you know, when I say you're going to see more change in the next five years than in the past 50, this is why, right? that that legislation, that permission to

start to tokenize our real world assets uh and use blockchain to administer them. That's probably coming within the next few months, right? At most another 18 months, right? And once that happens, it's going to become mandatory that you have a wallet to be able to handle these assets. It's going to become mandatory that you have payment methods that work on chain to be able to settle assets immediately. Right? It changes the playing field in such a profound way. Uh, and it's going to, I think, really open up lots of new potential for people. The ability to trade 24/7, right? The ability to, you know, >> it's a massive like massive utility. We don't talk enough about that one, right?

Like 247 trading is is like one of the best and simplest use cases that blockchain provides that nobody seems to really nobody seems to discuss that. I The last person that talked about the show was um was Vlad Tennum, founder of Robin Hood, was so excited about that because he spent and their team spent so long trying to get 245 trading and they were super excited that they got 245 and it was not easy and he was like now I can do 247 in the future. It it's not it's not discussed enough in my mind. What is when what's the um at what point are we going to see an actual uh adoption from the user side of tokenized equities and

tokenized let's even say RWA because here's here's what we're seeing right now is it's been stable coins have had this slow gradual climb even during bare markets just a consistent climb why because it's a great great use case incredible product market fit everybody loves stable coins once you once you use them you basically you would never send money any other way or use money in any other way. So but it's still slow and RWA has not had that same type of tipping point whether you're talking about tokenized stocks or you want to go into other real world assets. Is there going to be an adoption of is is the adoption going to pick up at some point and all of a sudden everyone's going to be using tokenized equities?

>> Yeah. Well, I think that there's a real reason that Robin Hood went to Europe first. Not just a regulatory reason, but a demand reason, right? And to me, the biggest demand reason is it is really tough if you live outside the United States to get access to US stocks, right? Just like it has been really tough if you lived outside the United States to get access to US dollars until there was a stable coin. Now, if you are outside the United States and you want access to US stocks, you're going to be able to get it via these new tokenized instruments. So, just think about that for one second, right? Uh I saw an estimate out the other day that there are 5 billion people of investing age

that live outside the United States, right? Just think if if 10% of those people decide they now want to buy US equities because it's available to them easily with a simple account set up. Think of the money that's going to start to come into the US equity markets from overseas, right? That demand is going to cause a huge spike in the markets. That huge spike in the markets is going to create more and more speculative interest in the markets. People are going to want to invest in this, but they're going to want to be able to invest in it 24/7 uh and be able to get out if there's a problem. It's ridiculous today that if a piece of news comes out after 400 p.m.

on a Friday and it's a three-day weekend, I can't do anything to fix my portfolio until Tuesday, no one's going to want to go in that direction. And so I think that it's going to be this wall of money that comes into US equities from outside the United States. And that wall of money is probably going to be kicking off these impacts, Jay, right when we get legislation allowing us to trade tokenized uh assets here in the United States. So I I think there's going to be it's lining up very nicely for fiscal for 26 2026 and 2027 to be very explosive years. I think for both the real world asset industry and the crypto industry.

>> Yeah, it's uh I I couldn't I couldn't agree more. There is a uh a combination of factors happening right now that feel like a setup is coming um that we have we've never had a setup like this in crypto before. Uh certainly you your point around institutions dampening the volatility uh might might make people in crypto think oh this is this is different than it was before. But I think that there is this this major adapt adoption is just going to lead us to new heights and new levels that we have not experienced before. Before before we wrap up, Sandy, just want to wrap with

for for our listeners who are investors in the space, what would be your advice to them in terms of what they should be watching over the next for the rest of this year uh to in give them insight and give them the confidence and conviction that they need in their crypto investments. >> Yeah. So, I have to say this to myself every day too. So this is advice I give myself Jay is stay calm stay patient right uh there as we've just discussed the setup for what is coming is powerful it's so powerful that if you wait until it's happening you're going to be chasing returns uh that you are probably perfectly position to get today right so

just be patient um the other thing I always try and remind myself is even With all the excitement that has built over the past 18 months with crypto and the markets being at record highs in many cases, we've only seen the amount of money in the crypto markets increase from three to four trillion. Right? There is a hundred trillion dollar of money invested in the broader set of assets that are today not on crypto rails. Again, just think if 10% of that money moves into crypto and token based investments, we are increasing the size of the crypto markets by 2 and a halfx,

2.5x, right? So, be patient because the wall of money is going to come and you do not want to have liquidated and stepped aside before that wall of money hits. Be patient. Sit back. Sit tight. Trust that all of these developments are leading to inevitable behavioral outcomes. >> Fantastic advice. Couldn't agree more. Sandy, thank you so much for joining the show today. >> Great conversation. Thank you so much for having me.

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