1 00:00:00,280 --> 00:00:08,760 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. One product, though not 2 00:00:08,800 --> 00:00:12,880 Speaker 1: seeing outflows lately, is black Rocks Tokenized Funded Biddle. The VON, 3 00:00:12,960 --> 00:00:15,680 Speaker 1: which is exclusively on Securitize, is more than one point 4 00:00:15,720 --> 00:00:19,079 Speaker 1: seven billion dollars in assets under management. Joining us for 5 00:00:19,079 --> 00:00:23,560 Speaker 1: an exclusive conversation is Securitize CLO Michael Son and Shein. Michael, 6 00:00:23,640 --> 00:00:25,920 Speaker 1: good to see you. Welcome back to Bloomberg Crypto. How 7 00:00:25,960 --> 00:00:26,200 Speaker 1: are you. 8 00:00:26,360 --> 00:00:27,520 Speaker 2: I'm great, Thanks for having me. 9 00:00:27,640 --> 00:00:29,200 Speaker 1: Yeah, thanks for joining us. Hey, we're going to talk 10 00:00:29,200 --> 00:00:31,520 Speaker 1: about securities in just a minute. First, I do want 11 00:00:31,520 --> 00:00:33,839 Speaker 1: to talk about this moment in crypto because it has 12 00:00:33,880 --> 00:00:36,400 Speaker 1: been a while since we spoke. When you were at Grayscale, 13 00:00:36,440 --> 00:00:39,320 Speaker 1: you led the battle to create a spot at bitcoin ETF. 14 00:00:39,360 --> 00:00:42,320 Speaker 1: Fast forward to today, you've got those spot bitcoin ets, 15 00:00:42,360 --> 00:00:46,159 Speaker 1: You've got this new crypto friendly administration, potentially more crypto 16 00:00:46,200 --> 00:00:49,239 Speaker 1: friendly sec We'll see what happens later this week. What 17 00:00:49,400 --> 00:00:51,520 Speaker 1: is the opportunity that you see at this moment? 18 00:00:51,720 --> 00:00:54,000 Speaker 2: I mean, it really is night and day. Right. When 19 00:00:54,000 --> 00:00:56,200 Speaker 2: I was last here a couple months ago speaking to you, 20 00:00:56,520 --> 00:00:58,960 Speaker 2: I would say that as an industry, crypto was still 21 00:00:59,000 --> 00:01:02,560 Speaker 2: operating here in the US under a regime of regulation 22 00:01:02,640 --> 00:01:05,759 Speaker 2: by enforcement. By and large, I think the crypto ecosystem 23 00:01:05,840 --> 00:01:08,920 Speaker 2: is breathing some sigh of relief that perhaps that. 24 00:01:08,920 --> 00:01:09,640 Speaker 1: Has ended right. 25 00:01:09,720 --> 00:01:12,760 Speaker 2: We've seen a lot of lawsuits be dropped against crypto businesses. 26 00:01:13,400 --> 00:01:15,720 Speaker 2: We've seen more businesses come to the US wanting to 27 00:01:15,800 --> 00:01:18,760 Speaker 2: offer crypto products and services. We have a Head of 28 00:01:18,760 --> 00:01:21,759 Speaker 2: Crypto at the White House, we have a Crypto task 29 00:01:21,800 --> 00:01:25,920 Speaker 2: Force at the SEC that's meeting collaboratively with crypto businesses. 30 00:01:25,959 --> 00:01:29,720 Speaker 2: And so to me, that combined with the executive branch 31 00:01:29,720 --> 00:01:32,920 Speaker 2: of government that continues to come out publicly and say 32 00:01:33,160 --> 00:01:35,160 Speaker 2: we want to make the US a crypto hub, a 33 00:01:35,160 --> 00:01:38,640 Speaker 2: bitcoin hub of innovation, means that the opportunity around this 34 00:01:38,720 --> 00:01:40,560 Speaker 2: assa class is going to be here in the US. 35 00:01:40,640 --> 00:01:42,800 Speaker 3: I think there's a pretty direct connection to be made 36 00:01:42,800 --> 00:01:45,120 Speaker 3: here in what might be possible in terms of tokenization. 37 00:01:45,800 --> 00:01:49,400 Speaker 3: Executive after executive that we speak to speak to the 38 00:01:49,480 --> 00:01:52,520 Speaker 3: idea of accredited investors and even a broader set to 39 00:01:52,520 --> 00:01:55,520 Speaker 3: be able to have more access to companies or projects 40 00:01:55,560 --> 00:01:58,920 Speaker 3: that are raising money in a tokenized manner. Private equity funds, 41 00:01:58,960 --> 00:02:03,880 Speaker 3: venture capital funds. How big is that opportunity? How fast 42 00:02:03,960 --> 00:02:04,440 Speaker 3: does it come? 43 00:02:05,040 --> 00:02:08,200 Speaker 2: It's coming very quickly. So at securit Ties we sit 44 00:02:08,280 --> 00:02:11,799 Speaker 2: in a really interesting place. We are the largest tokenization 45 00:02:11,919 --> 00:02:14,799 Speaker 2: platform out there. To date, we've brought almost two and 46 00:02:14,840 --> 00:02:18,160 Speaker 2: a half billion dollars worth of assets, real world assets 47 00:02:18,200 --> 00:02:21,520 Speaker 2: onto public blockchains. So we sit between asset issuers like 48 00:02:21,560 --> 00:02:27,200 Speaker 2: black Rock and Apollo, KKR, Hamilton Lane in public blockchains, Polygon, Ethereum, Avalanche, 49 00:02:27,200 --> 00:02:30,360 Speaker 2: et cetera. And so for those that want to bring 50 00:02:30,400 --> 00:02:33,680 Speaker 2: their investment offerings on chain in a compliance secure way, 51 00:02:34,040 --> 00:02:37,440 Speaker 2: they're often coming to Securititize. Now the real question is 52 00:02:37,480 --> 00:02:39,680 Speaker 2: why right. For a lot of folks, it could be 53 00:02:39,720 --> 00:02:43,400 Speaker 2: democratizing access to the investments, Like you mentioned private credits, 54 00:02:43,400 --> 00:02:46,560 Speaker 2: something that historically has only been available to a small 55 00:02:46,600 --> 00:02:49,760 Speaker 2: subset of investors. But I think we share a burden 56 00:02:50,560 --> 00:02:52,800 Speaker 2: in the tokenization space that we want to make the 57 00:02:52,880 --> 00:02:57,799 Speaker 2: investor experience objectively better. So that could be daily dividends, 58 00:02:57,919 --> 00:03:00,400 Speaker 2: it could be instant liquidity. It could be things that 59 00:03:00,440 --> 00:03:03,440 Speaker 2: investors aren't getting in their traditional counterparts that only this 60 00:03:03,520 --> 00:03:04,760 Speaker 2: technology allows it. 61 00:03:04,600 --> 00:03:07,600 Speaker 3: To be on your partner Really over here, black Rock, 62 00:03:07,680 --> 00:03:12,000 Speaker 3: when it comes to this tokenized treasury fund, Blackrock CEO 63 00:03:12,040 --> 00:03:14,160 Speaker 3: Larry Fink at Davos said this, it caught a lot 64 00:03:14,160 --> 00:03:17,720 Speaker 3: of attention. My god, if we can tokenize bonds and 65 00:03:17,760 --> 00:03:21,400 Speaker 3: stocks tomorrow, it would democratize investing in all ways we 66 00:03:21,440 --> 00:03:24,840 Speaker 3: can't imagine. And I think that just shows you part 67 00:03:24,880 --> 00:03:27,920 Speaker 3: of what he's seeing down the road. Sure, but let's 68 00:03:27,919 --> 00:03:29,600 Speaker 3: just start what you have right now. I mean the 69 00:03:29,639 --> 00:03:33,280 Speaker 3: idea of tokenized treasuries. Why why buy into this fund 70 00:03:33,400 --> 00:03:36,240 Speaker 3: relative to a money market fund or even a stable coin. 71 00:03:36,440 --> 00:03:38,440 Speaker 3: There's a spectrum of investments to choose from. 72 00:03:38,480 --> 00:03:40,560 Speaker 2: Sure, So there's a couple of dimensions to look at this. 73 00:03:40,680 --> 00:03:43,360 Speaker 2: So if you take a money market fund today, for instance, 74 00:03:43,400 --> 00:03:47,120 Speaker 2: investors maybe only getting their dividends monthly. Investors have to 75 00:03:47,160 --> 00:03:49,480 Speaker 2: submit in order to buy or sell the money market 76 00:03:49,480 --> 00:03:52,360 Speaker 2: fund or treasury fund by a certain cutoff time each day. 77 00:03:52,680 --> 00:03:55,280 Speaker 2: The fund may not be open obviously, usually on weekends, 78 00:03:55,280 --> 00:03:57,920 Speaker 2: et cetera. By contrast, you look at the product that 79 00:03:57,960 --> 00:04:01,040 Speaker 2: we have with Blackrock Fiddle, there's twenty four to seven 80 00:04:01,080 --> 00:04:06,080 Speaker 2: three sixty five liquidity, daily dividend accrules, instant subscriptions and redemptions. 81 00:04:06,400 --> 00:04:10,320 Speaker 2: You know, this is objectively a better investor experience, and 82 00:04:10,520 --> 00:04:13,920 Speaker 2: we're starting to see people really think about money market 83 00:04:13,920 --> 00:04:16,520 Speaker 2: funds in a different way, using it as collateral things 84 00:04:16,520 --> 00:04:18,520 Speaker 2: that they just don't typically think about when they think 85 00:04:18,520 --> 00:04:19,760 Speaker 2: about the traditional counterpart. 86 00:04:19,839 --> 00:04:21,240 Speaker 1: But how does that open it up to more people? 87 00:04:21,240 --> 00:04:23,680 Speaker 1: How does it democratize this because it's pretty easy to 88 00:04:23,800 --> 00:04:27,120 Speaker 1: use any sort of app be it robin Hood, Schwab, 89 00:04:27,160 --> 00:04:30,080 Speaker 1: Fidelity and more, and go and buy any of these 90 00:04:30,120 --> 00:04:32,760 Speaker 1: assets that you're talking about, Sayer Venture Capital. 91 00:04:33,279 --> 00:04:35,840 Speaker 2: So I think in the terms of a tokenized treasury 92 00:04:35,880 --> 00:04:39,320 Speaker 2: or money market fund, it's actually about connecting that collateral 93 00:04:39,400 --> 00:04:41,720 Speaker 2: in a way that people aren't typically used to using it. 94 00:04:42,000 --> 00:04:44,520 Speaker 2: So today I think a lot of investors' mindsets may 95 00:04:44,560 --> 00:04:46,680 Speaker 2: be I have some spare cash, I'm going to make 96 00:04:46,720 --> 00:04:48,719 Speaker 2: it interest bearing by putting it into a money market 97 00:04:48,720 --> 00:04:52,200 Speaker 2: fund or put it into treasuries. But today those assets 98 00:04:52,200 --> 00:04:55,320 Speaker 2: in those products aren't connected or utilized in the world 99 00:04:55,360 --> 00:04:58,760 Speaker 2: of DEFIVE, for example, Whereas if you're doing this on chain, 100 00:04:59,000 --> 00:05:01,159 Speaker 2: it allows you to use that collateral to post on 101 00:05:01,200 --> 00:05:03,720 Speaker 2: an exchange, to post as collateral with an OTC desk, 102 00:05:03,960 --> 00:05:05,440 Speaker 2: or even link it to the world of DeFi. 103 00:05:05,760 --> 00:05:08,839 Speaker 1: So how far does this go in your view? What 104 00:05:09,000 --> 00:05:12,600 Speaker 1: ultimately gets tokenized? What do you want to get tokenized. 105 00:05:12,240 --> 00:05:15,520 Speaker 2: Well, it's a small but growing market. Right. The world 106 00:05:15,600 --> 00:05:18,000 Speaker 2: of RWA's has more than doubled in the last year, 107 00:05:18,040 --> 00:05:21,480 Speaker 2: and within that tokenized treasuries have actually expanded over five 108 00:05:21,600 --> 00:05:26,040 Speaker 2: hundred percent. We've recently tokenized public equity on New York 109 00:05:26,080 --> 00:05:30,839 Speaker 2: stock listed company Exodus. So we're starting to see movement 110 00:05:30,960 --> 00:05:34,720 Speaker 2: beyond tokenized treasuries, movement beyond tokenized money market funds into 111 00:05:34,760 --> 00:05:38,920 Speaker 2: things like public equities. But again, it's small, and you know, 112 00:05:39,000 --> 00:05:40,839 Speaker 2: a lot of that momentum I think we'll continue to 113 00:05:40,839 --> 00:05:41,719 Speaker 2: carry throughout this year. 114 00:05:41,960 --> 00:05:43,720 Speaker 3: You know, I also want to just take another big 115 00:05:43,760 --> 00:05:45,359 Speaker 3: picture of you for a moment, because you have the 116 00:05:45,400 --> 00:05:49,600 Speaker 3: confirmation hearing for the incoming SEC chair Paul Atkins this week. 117 00:05:49,720 --> 00:05:51,640 Speaker 3: From the seat that you're in, what are you looking 118 00:05:51,720 --> 00:05:54,440 Speaker 3: for in terms of how he might lead the SEC? 119 00:05:54,880 --> 00:05:57,760 Speaker 2: So again, it seems like gone are the days of 120 00:05:57,839 --> 00:06:00,520 Speaker 2: regulation by enforcement, and so I think as long as 121 00:06:00,520 --> 00:06:03,720 Speaker 2: we are continuing to proactively work as an industry with 122 00:06:03,800 --> 00:06:07,480 Speaker 2: our regulators, we are unlocking new use cases around crypto 123 00:06:07,560 --> 00:06:10,400 Speaker 2: every single day, and so it's really a burden that 124 00:06:10,440 --> 00:06:12,520 Speaker 2: we have to share as an industry to continue to 125 00:06:12,640 --> 00:06:14,640 Speaker 2: educate them. Right, if we're going to continue to expand 126 00:06:14,720 --> 00:06:17,400 Speaker 2: access to our WA's, if we're going to revisit things 127 00:06:17,480 --> 00:06:20,599 Speaker 2: like the accredited investor definition. All of these are the 128 00:06:20,600 --> 00:06:22,640 Speaker 2: types of engagements that we certainly want to have with 129 00:06:22,640 --> 00:06:23,160 Speaker 2: our regulator. 130 00:06:23,240 --> 00:06:25,040 Speaker 1: Do you ever get a little concern that this administration 131 00:06:25,120 --> 00:06:27,800 Speaker 1: is too close to crypto? Given World Liberty Financial their 132 00:06:27,920 --> 00:06:30,080 Speaker 1: entry into stable coins announced today, and then of course 133 00:06:30,120 --> 00:06:31,000 Speaker 1: meme coins as well. 134 00:06:31,360 --> 00:06:33,719 Speaker 2: I wouldn't say that's a concern. I think it's certainly 135 00:06:33,920 --> 00:06:37,640 Speaker 2: an area that has been nice and welcomed by both myself, 136 00:06:37,720 --> 00:06:40,880 Speaker 2: my peers and peer businesses to see that level of collaboration. 137 00:06:41,760 --> 00:06:44,840 Speaker 1: All right, Michael Sunshine of Securitized, good to see you, 138 00:06:44,880 --> 00:06:45,359 Speaker 1: Good to see you. 139 00:06:45,480 --> 00:06:46,240 Speaker 2: Thanks for having me.