Speaker 1: Bloomberg Audio Studios, podcasts, radio news. One product, though not
Speaker 1: seeing outflows lately, is black Rocks Tokenized Funded Biddle. The VON,
Speaker 1: which is exclusively on Securitize, is more than one point
Speaker 1: seven billion dollars in assets under management. Joining us for
Speaker 1: an exclusive conversation is Securitize CLO Michael Son and Shein. Michael,
Speaker 1: good to see you. Welcome back to Bloomberg Crypto. How
Speaker 1: are you.
Speaker 2: I'm great, Thanks for having me.
Speaker 1: Yeah, thanks for joining us. Hey, we're going to talk
Speaker 1: about securities in just a minute. First, I do want
Speaker 1: to talk about this moment in crypto because it has
Speaker 1: been a while since we spoke. When you were at Grayscale,
Speaker 1: you led the battle to create a spot at bitcoin ETF.
Speaker 1: Fast forward to today, you've got those spot bitcoin ets,
Speaker 1: You've got this new crypto friendly administration, potentially more crypto
Speaker 1: friendly sec We'll see what happens later this week. What
Speaker 1: is the opportunity that you see at this moment?
Speaker 2: I mean, it really is night and day. Right. When
Speaker 2: I was last here a couple months ago speaking to you,
Speaker 2: I would say that as an industry, crypto was still
Speaker 2: operating here in the US under a regime of regulation
Speaker 2: by enforcement. By and large, I think the crypto ecosystem
Speaker 2: is breathing some sigh of relief that perhaps that.
Speaker 1: Has ended right.
Speaker 2: We've seen a lot of lawsuits be dropped against crypto businesses.
Speaker 2: We've seen more businesses come to the US wanting to
Speaker 2: offer crypto products and services. We have a Head of
Speaker 2: Crypto at the White House, we have a Crypto task
Speaker 2: Force at the SEC that's meeting collaboratively with crypto businesses.
Speaker 2: And so to me, that combined with the executive branch
Speaker 2: of government that continues to come out publicly and say
Speaker 2: we want to make the US a crypto hub, a
Speaker 2: bitcoin hub of innovation, means that the opportunity around this
Speaker 2: assa class is going to be here in the US.
Speaker 3: I think there's a pretty direct connection to be made
Speaker 3: here in what might be possible in terms of tokenization.
Speaker 3: Executive after executive that we speak to speak to the
Speaker 3: idea of accredited investors and even a broader set to
Speaker 3: be able to have more access to companies or projects
Speaker 3: that are raising money in a tokenized manner. Private equity funds,
Speaker 3: venture capital funds. How big is that opportunity? How fast
Speaker 3: does it come?
Speaker 2: It's coming very quickly. So at securit Ties we sit
Speaker 2: in a really interesting place. We are the largest tokenization
Speaker 2: platform out there. To date, we've brought almost two and
Speaker 2: a half billion dollars worth of assets, real world assets
Speaker 2: onto public blockchains. So we sit between asset issuers like
Speaker 2: black Rock and Apollo, KKR, Hamilton Lane in public blockchains, Polygon, Ethereum, Avalanche,
Speaker 2: et cetera. And so for those that want to bring
Speaker 2: their investment offerings on chain in a compliance secure way,
Speaker 2: they're often coming to Securititize. Now the real question is
Speaker 2: why right. For a lot of folks, it could be
Speaker 2: democratizing access to the investments, Like you mentioned private credits,
Speaker 2: something that historically has only been available to a small
Speaker 2: subset of investors. But I think we share a burden
Speaker 2: in the tokenization space that we want to make the
Speaker 2: investor experience objectively better. So that could be daily dividends,
Speaker 2: it could be instant liquidity. It could be things that
Speaker 2: investors aren't getting in their traditional counterparts that only this
Speaker 2: technology allows it.
Speaker 3: To be on your partner Really over here, black Rock,
Speaker 3: when it comes to this tokenized treasury fund, Blackrock CEO
Speaker 3: Larry Fink at Davos said this, it caught a lot
Speaker 3: of attention. My god, if we can tokenize bonds and
Speaker 3: stocks tomorrow, it would democratize investing in all ways we
Speaker 3: can't imagine. And I think that just shows you part
Speaker 3: of what he's seeing down the road. Sure, but let's
Speaker 3: just start what you have right now. I mean the
Speaker 3: idea of tokenized treasuries. Why why buy into this fund
Speaker 3: relative to a money market fund or even a stable coin.
Speaker 3: There's a spectrum of investments to choose from.
Speaker 2: Sure, So there's a couple of dimensions to look at this.
Speaker 2: So if you take a money market fund today, for instance,
Speaker 2: investors maybe only getting their dividends monthly. Investors have to
Speaker 2: submit in order to buy or sell the money market
Speaker 2: fund or treasury fund by a certain cutoff time each day.
Speaker 2: The fund may not be open obviously, usually on weekends,
Speaker 2: et cetera. By contrast, you look at the product that
Speaker 2: we have with Blackrock Fiddle, there's twenty four to seven
Speaker 2: three sixty five liquidity, daily dividend accrules, instant subscriptions and redemptions.
Speaker 2: You know, this is objectively a better investor experience, and
Speaker 2: we're starting to see people really think about money market
Speaker 2: funds in a different way, using it as collateral things
Speaker 2: that they just don't typically think about when they think
Speaker 2: about the traditional counterpart.
Speaker 1: But how does that open it up to more people?
Speaker 1: How does it democratize this because it's pretty easy to
Speaker 1: use any sort of app be it robin Hood, Schwab,
Speaker 1: Fidelity and more, and go and buy any of these
Speaker 1: assets that you're talking about, Sayer Venture Capital.
Speaker 2: So I think in the terms of a tokenized treasury
Speaker 2: or money market fund, it's actually about connecting that collateral
Speaker 2: in a way that people aren't typically used to using it.
Speaker 2: So today I think a lot of investors' mindsets may
Speaker 2: be I have some spare cash, I'm going to make
Speaker 2: it interest bearing by putting it into a money market
Speaker 2: fund or put it into treasuries. But today those assets
Speaker 2: in those products aren't connected or utilized in the world
Speaker 2: of DEFIVE, for example, Whereas if you're doing this on chain,
Speaker 2: it allows you to use that collateral to post on
Speaker 2: an exchange, to post as collateral with an OTC desk,
Speaker 2: or even link it to the world of DeFi.
Speaker 1: So how far does this go in your view? What
Speaker 1: ultimately gets tokenized? What do you want to get tokenized.
Speaker 2: Well, it's a small but growing market. Right. The world
Speaker 2: of RWA's has more than doubled in the last year,
Speaker 2: and within that tokenized treasuries have actually expanded over five
Speaker 2: hundred percent. We've recently tokenized public equity on New York
Speaker 2: stock listed company Exodus. So we're starting to see movement
Speaker 2: beyond tokenized treasuries, movement beyond tokenized money market funds into
Speaker 2: things like public equities. But again, it's small, and you know,
Speaker 2: a lot of that momentum I think we'll continue to
Speaker 2: carry throughout this year.
Speaker 3: You know, I also want to just take another big
Speaker 3: picture of you for a moment, because you have the
Speaker 3: confirmation hearing for the incoming SEC chair Paul Atkins this week.
Speaker 3: From the seat that you're in, what are you looking
Speaker 3: for in terms of how he might lead the SEC?
Speaker 2: So again, it seems like gone are the days of
Speaker 2: regulation by enforcement, and so I think as long as
Speaker 2: we are continuing to proactively work as an industry with
Speaker 2: our regulators, we are unlocking new use cases around crypto
Speaker 2: every single day, and so it's really a burden that
Speaker 2: we have to share as an industry to continue to
Speaker 2: educate them. Right, if we're going to continue to expand
Speaker 2: access to our WA's, if we're going to revisit things
Speaker 2: like the accredited investor definition. All of these are the
Speaker 2: types of engagements that we certainly want to have with
Speaker 2: our regulator.
Speaker 1: Do you ever get a little concern that this administration
Speaker 1: is too close to crypto? Given World Liberty Financial their
Speaker 1: entry into stable coins announced today, and then of course
Speaker 1: meme coins as well.
Speaker 2: I wouldn't say that's a concern. I think it's certainly
Speaker 2: an area that has been nice and welcomed by both myself,
Speaker 2: my peers and peer businesses to see that level of collaboration.
Speaker 1: All right, Michael Sunshine of Securitized, good to see you,
Speaker 1: Good to see you.
Speaker 2: Thanks for having me.