Why $1.7 Trillion Franklin Templeton Went All in on Tokenization! | Roger Bayston

the information based economy. We think of these as just utility rails, So we want to be on as many of those ecosystems as we can because that's where we're going to find customers eventually.

go to. And they support a variety of coins, all your top crypto tokens, your big coins, your x rp Ethereum, Solana and much more, and even new coins, even black Rock's Biddle token, so they support coins on the institutional side where you have tokenization of different assets and much more. And they even offer a great service that helps you to get your treasure device set up. You get one on one customer support from their team, so you can check that out as well. So once again, I'm a

big fan of this hardware wallet. So if you'd like to learn more, visit the link in the description. Hey, everyone, welcome into the Thinking Crypto podcast. I'm your host Tony Edward and we're recording at Station three in New York's Financial District. And joining me today's Roger Bastin, who is the head of Digital Assets at Franklin Templeton, which is one of the largest investment firms in the world, managing over one point six trillion dollars in assets. Roger, great

to have you. Yeah, thanks for having me, Roger. I'm excited for this conversation. Franklin Templeton is leading to charge in many different ways as it relates to your assets. So I have lots of questions for you. Awesome, but I'd love to start with your backrop tell us a

bit about yourself. Where are you from, where'd you grow up and how'd you end up at Franklin Templeton.

at UCLA. Once I got to UCLA in the wonderful California and sunshine, I was like, well, this is going to be a good place to be ended up being hired out of business school what then was known as Franklin Group of Funds. Wow, in nineteen ninety one. And I've actually been at Franklin and then, you know, as we've been a net acquirer of asset managers over time. Franklin Templeton, Yeah, since nineteen ninety one. Who do you have on your show who's been at the same firm that long?

a lot of those CFA people had investment. There were investment people right in the investment community, and so I had a lot of exposure to a lot of different investment professionals having been around that CFA institute early in my you know, when I was you know, in junior high, in high school and those you know, college formative years, and so I had a pretty good idea that I

wanted to be doing investment investment related things. And so when I went to graduate, when I came to New York, I actually was working for a company that was then called Banker's Trust Company, and we were you know, in several locations in the city, but I was I was

in the index fund group. So like think about the you know period in nineteen eighty six toward nineteen eighty nine, which is when I was there explosive activity in the number of pension funds who were thinking about, hey, maybe I can you know, put some lower cost index fund passive investment strategies in our portfolio at a lower cost rather than paying high cost active management fees. So that's kind of where I cut my teeth. And it's been

a great career. I've seen a lot of things over almost four decades of experience now in these markets.

know who want that, and anything else in between. And the intermediary role in between that take out rents between those two that prevent the have capital for getting the most return on their capital, and they want capital to get the lowest costs of capital. Inside of all that are a number of different actors, and what we've seen is keep hollowing out of those actors and those rents

in between. And I think you know where we've arrive now with blockchain technology, because a lot of those rents in between those two actors are really a legacy of like we have this record, you have that record. It's gonna take us five days to settle a stock. I mean that's when I first started, right because we have to get these records moved back and forth. And this whole distributed ledger technology where you have a record, I have a record and that's the same record, really dramatically

changes all of that. So I've seen that whole path, you know, keeps shrinking down, and I think that's ultimately to the benefit again of the the owners of capital to get higher returns on capital. I think there's a whole bunch of other things happening with blockchain and distribute ledger technologies that expand the opportunity set uh for those investors as well. But those are some of the themes I think I could point to.

funds because the law was written in nineteen forty. And so you know how we did things in nineteen forty where we were passing paper certificates around to each other and you needed to self custody you know, this particular asset by holding the piece of paper and you had some sort of fire safe or we started having these big custody businesses who are like, well, we'll take care of that for you, so you don't have to worry about that that is all just rapidly changing because of

these technologies. And yes, it might have been the Internet and the networking of you know, businesses and planets and entities all over planet Earth, but it's arrived at a pretty exciting time. In those forty some years that I've described in my career, I've never seen more opportunities in asset management than i've you know, ever, So it's pretty exciting time to be able to be in the space base and exploring.

this blockchain stuff? What does tokenization matter? So I'm curious if you can answer that question from a perspective of what Franklin Templeton's building. Is this in a test? Is this an R and D project or is this something you are looking to build that's going to.

over planet earths. We have a number of different Benji's that we have a US Benji, we have a ce keV use it's eligible. We have a Singapore Benji. You know, we have a number of those things. And you know we have been and we we have you know, over a billion dollars of customer client assets in it. That doesn't feel like a proof of a concept really, but I think what we've really uncovered because the question gets

asked a lot. You should call them skeptics, but tuality like the current system seems to work, so why are we doing That's differently, but what we have uncovered and Benji, we just had this idea. I had this idea, Hey, how do we use distributed ledger technology in our business? I mean ledger? That word ledger is really important. As I mentioned, the whole industry is full of records. Yes, whether it's asset management, whether it's capital markets records is

what I'm honing in on. And this idea that this technology would be disruptive disruptive means it could you know, impact your current business. It could also create opportunities for you. Meant that we were just like, hey, let's start and do something. And now we started that some eight years ago, so at that point I think it was a proof of concept. But what we unpacked was being on these new rails created new utility, and that utility accrues to

the users and the shareholders and the customers of the product. Now, in Benji's case, that utility kind of is into form one. You and I can I can transfer Benji back and forth to one another, literally as fast as a new block can be appended onto a blockchain. So those times are you know, fractions of a second. So I can move an interest bearing asset back and forth between economic actors, individuals, companies, whatever, in less than a you know, in fractions of a second.

Number one. But because the blockchain is composable, we have been able to take the twenty four hour cycle of interest, decompose that into seconds, and for however many seconds and minutes or hours you hold Benji, I can pay you for those portions of the day, rather than it's being

on this twenty four o'clock. Now, that may, you know, for you and I as individuals, I don't know if that's you know, super interesting, but for the tremendous the billions and trillions of dollars that flow through the capital markets and financial system every day, an interest bearing an asset that if I hold it for five minutes, my asset is sweating big thing, so big new type of markets that unfold because of the utilities of using these

new blockchain rails in order to build products and services on top of that's what we've discovered.

interesting and vastly improved, you know, data record systems. This idea that we both have the same copy of the ledger at any given time, let's experiment and do things on those. And we we found efficiency gains in the part of the securities business that we call transfer agency. So if we're in the business of issuing securities, we have rules and responsibilities wrapped around transfer agency to receive permission to issue those securities. And those those are records

that we have to maintain forever. Those are records of who you are, where you are, and those are kept in more private database systems that you know, don't expose personal identify information out into the marketplace. But it's the transaction records. So it is the things that say, hey,

you subscribed, you redeemed, you reinvested dividends. These transaction record keeping systems are large and large, and they grow and we have to keep them forever, and so we were just kind of thinking maybe the blockchain would be a better place to house those records rather than in our centralized, monolithic database system that we head inside of our transfer

agency system. And so in that experimentation, you know, we covered big efficiency gains and that gave us super big confidence that this wasn't something that was just a fad, but these were going to be rails. These were going to be new infrastructure for the capital market. It's asset management moving forward, and so we kind of put more chips on the table to develop what those outcomes would be.

winners here. Blockchains are technologies, they'll continue to iterate. There's in the information based economy. We think of these as just utility rails and pipes for the information based economy. So we want to be on as many of those ecosystems as we can because that's where we're going to find customers eventually. And so it's not you know, it's not one winner takes all. In our environmvironment. We think

of these as kind of digital nation states. They have their own economies, they're aggressive and pursuing and growing their own economies. We want to grow in there with their economies, alongside of them. Whatever we may decide to bring as a you know, securities you related product or service on top of those rails. And so that's kind of where our journey, So our journey actually permates a across a

number of different blockchains. I think we may be on either ten or eleven blockchains currently with our products and services, where we are in the process of building a tokenization factory, and we are doing that and we're deploying toward that end specifically because we have massive confidence about all of these legacy partners that we know that have we worked with in traditional financial service firms over time are going to be coming onto the web three wallet ecosystems, and

of course there's just hundreds and hundreds of millions of web through digital wallets all over planet Earth already, and we want to be able to provide products and services into that existing ecosystem as well.

handful of them, and it seems it's going to be a multichain world, as you alluded to, But are you also looking at building your own internal permission blockchain. It seems like that's a hybrid model. Is kind of the what some people are doing where they're bridging public chains.

You know. The previous kind of construct was, let me choose a custodian where I know my assets are saving trust and usually they have relationships with these entities over decades quite frankly, our institutional investor communities and clients have. And then let me work to find where I can get best execution because in my fuduciary responsibilities for these clients, I have to make the lowest transaction costs. Where can I get the best execution on whatever the idea is

that I'm offering advice on to them. But all of those are kind of subdivided different actors. And now you know, you have somebody like coinbase who's like, well, we're the change you're gonna custody with us, and oh and as our blockchain that you might be evolved into. So it's a real interesting conversation when you're describing this ecosystem to institutional other institutional investors and adopters who are so used to being like, well, all of these things are separated out.

How can they be all knitted together? And clearly we're seeing large cases where you know, people like Robin Hood are saying, hey, we want we want our own chain. You know, I think that's a really interesting strategy. Franklin Templeton is not diving down to that strategy. We want to be part of a bunch of people's chains, quite frankly, and ride inside of those kind of like I said, digital nation states. As they grow, some of them will

grow faster, some of them may become obsolete. We don't know, but we do know that there's a lot of capital deployed by these legacy chains, and some of those actors like Ripple have really fantastic plans to be able to take that capital that has grown an XRP over time and be able to redeploy that to build quite frankly substantial businesses. And they have a lot of money to be able to deploy to make those ends come about. Oh.

You know, our journey started with money funds, but you know, with our one point seven trillion and we cover you know, basically every asset class on the planet. How can we take those our services of offering advice around those things and bring them delivery into the new have wallet ecosystem. Simultaneous, you have all of these legacy actors who are just over the past year quite frankly, have permissions to be

able to seek wallets. Those are our legacy business partners for decades, quite frankly, and we know they're going to

be coming into space. And so we are firmly firm believers that we will meet customers large and small in a web three point of wallet you know service somewhere and so yeah, we're going to you know, over time, and it will take time sure, transmit all of these other things into this type of you want to call them tokenies, but really what they are is just a new kind of form that clients are holding the asset,

but there's still a security. They're still you know, they're wrapped in securities or they're wrapped into commodities type of wrapper. Those are at least that's what our experience is showing so far.

partnership with Finance. Tell us about that and how you'll be working together.

the time. It's pretty simple. In that construct, there's there's a number of different exchanges that are they're doing that. We've we've been doing that with Okax as well, and we're having conversations because you know, what we have done specifically with Benji is that we have worked hard and persistent, invested a lot of time and money to work with their regulators so that Benji is actually natively on chain. We're not a shadow record keeping, We're not a you know,

digital twin of any sort. We're actually a native on chain and that gives a lot more permissions for these ecosystems that are absolutely on chain as opposed to relying on the legacy transagency processes and systems. And so that makes Benji a perfect candidate to be brought into these kind of constructs.

You know, this idea that for for the near term, while certain stable coins have achieved this ability to offer rewards depending on top of which platform that they're riding on top of this idea that that a money fund which offers you know, full transparency of whatever the clateral may be, and it you know it, you know, by concert, it kicks out all its yield. You know, we don't kind of have to determine what we're going to be

paying out. It's all a function of the underlying you know, collateral that we own, the assets that we own underneath it. You know what that means is we are you know, in this phase right now where we are trying to find liquidity between stable coins and money funds. That's a new thing, right stable coins are relatively new and there's obviously a lot of transaction activity and stable coins. I mean, I think we could point and you'd probably know this

is better than anybody. The biggest killer app and all

these blockchains. If you think about the number of records being you know, appended If you think about blockchain as an as an nty that you know sells block space, the vast majority of block space that they sell is stable coin moving from you know, Party A to Party B by and large, and the idea that that there's this other now new, complementary and kind of similar, but the benefit of the yield component on it can come and begin to interrupt, operate and collaborate, be a substitute

for number of word choices if you want to come up. The idea that there would be markets between tokenized money funds and stable coins is something that we're aggressively pursuing. Now. The financial system is going to continue to lurch forward from five business days and seven business days, you know, and we're seeing that kind of begin to come about. But you know, we're talking about a heavy lift on a whole bunch of things to get to that space.

Whether you and I are both you know, you know, around to focus on these things by the time that comes about, maybe have some uncertainty on that.

you can share on this, you know, from a risk mitigation standpoint, are there any risks when it comes to tokenized assets and stable coins, like maybe things that haven't been proven as yet, or still we still need to test the waters because we don't have the full network or all players on board. Are there any risks that you know keep you up at night.

and all that kind of stuff. Fast forward to a couple of years ago when in one weekend, Silicon Valley Bank and First Republic went under right, and so velocity of bad outcomes has definitely increased. And what we're talking about when we're talking about blockchains and these economies, we're talking about networking, right, it's a network economy and the goal of financial crisis. One of the words we were all feared was contagent. Yeah, where is it? Contagent? And

the word contagent implies that there's networking. You know, something happened here, but it's linked somehow. Networked is something over here And if this domino falls, is that's going to tip over a domino over here. Well, think about that blockchain and the networking and the contagion impacts. You know, something happens and it permeates across the system pretty quickly. Is a real live factor. And we started to have

conversations with the SEC about these things. It became clear and neutral wisened grizzly old veteran myself, just because we can do something, should we be doing something? I mean,

I remember being on a trading floor. In the fall of nineteen eighty seven when the stock market dropped by twenty five percent, what was the response, then, Well, let's put in circuit breakers, stop the activity, Let's let you know, rationality return, or let's have the market particistants evaluate the situation and come in and make a decision about where to go. You know, when we get to twenty four to seven constant velocity, you know, will we have those

same circuit breakers. Will we have to implement those type of things. It's possible because these are what's happened in the past, by and large. The other thing that I just get a little bit concerned about is the fact that a lot of this ecosystem and digital assets and blockchain have developed post the global financial crisis. Now I say the global financial crisis, and what I really mean

was a full born credit cycle. Right, so when we have companies going under, when we have more bankruptcies on individuals, when history shows when we have credit cycles is when the weakest links find themselves. Now, we could have had a credit cycle dur the pandemic, but monetary policy authorities all over the plan that flooded the planet with liquidity and prevented a full credit cycle from developing. So we've developed this whole new ecosystem. It's about networking and possibilities

of linking contagion and a more aggressive way. And we've done that without having any credit cycles. So, uh, you know what happens when the credit cycle comes about, and you know, do we have enough kind of watchdogs and firepower on the other side to kind of help solve those problems as they come together? Again? I sleep, I sleep all night, but I just I have been at

business long enough. Yeah, I've been student of things long enough to know that it's really credit cycles that are going to cure any sort of you know fallaties that are you know, that don't exist, any sort of you know failing points that might exist currently. They're good, they'll be exposed in that and then we'll well, you know, it will right set the environment for you know, another huge expansive wave of growth. But you know, those would

be the my wisdom. Sure you invite me here to share kind of years and decades of wisdom to you, those would be the things that I would kind of share with you.

a regulator, i'd be have an AI. The beauty of the public blockchains and when we were actually beginning to talk with regulator friends, you know, years and years ago now and to seek these permissions, what we're doing the idea that many of these blockchains are public blockchains, and with the right tool sets you can surveil them in the activity. If I'm using these blockchains in my transfer agency process, you can kind of surveil that transfer agency process.

You're not going to know names of people again, because we will never expose customers and clients' names in any sort of public place. We protect that. But the idea that you know, the movement, the transactions that are happening, you can do that. I mean previously, if they if some regulator thought there was bad acting going on, they would go to judge, they get a subpoena, they come into you, and they say, Okay, we're gonna come in,

We're gonna look at all those records. But like literally now you can surveil and observe them with the right tool sets. So you know, yeah, I think. I think because of the public nature and the massive amount of information that's available in these public blockchains, of course AI are the tools to be that's used to be able to understand all that in a pretty efficient way.

market look like? What does the markets look like? Is it all like you mentioned earlier, running a blockchain rail is the convergence of crypto and TRADFID there's just one market.

it called blockchain? I don't really give a crap quite frankly, I just know that it's there, it's protected, and it's there for my use and for you know, to grow my assets in portfolios. I think in twenty thirty five, what we're likely to see is blockchain to be able to allow a whole new array in different types of assets to flow. And this is where I actually kind

of sunk myth in this whole thing. Many years ago. Yes, I was focusing on Ledger distribute Ledger technology, but I also was aware it had spent a lot of time in my career trying to figure out how I could

keep expanding the opportunity set of investments for clients. So I had a friend at Franklin Templeton who went on to work at the biggest pension fund in the country in Sacramento for a period of time, and then he came back to Franklin Templeton and he was describing to me one time about a project that they had done

at this super large pension fund in Sacramento. And the study that they'd done had said that if you examine all of the assets on planet Earth again the super large public pension planet and Sacramento, had they see every investment opportunity possible. They have every manager coming in and saying what about this, what about that? So they see all investment opportunities. But in this study that they had commissioned, they had come to determine that they really only touched

about half of the planet's assets. And this was only about ten years ago. That's pretty interesting, right, You see every investment opportunity, but you were only seeing half. Quite frankly, so is there a possibility that these blockchain technologies create more fungibility for maybe that remaining half of assets, whatever the case may be. And so can we raise the

efficient frontier? Will we raise the efficient frontier that you know that curve that we draw a tangent to to say, this is the mix of assets that I want that gives me the best risk adjust returns over time, or maybe we do away with the idea that we don't live in a two dimensional world of risk and return. People want other things from their portfolios. They want outcomes,

they want impact. So maybe there's third or fourth vertices, quite frankly in dimensions, and so now we're optimizing client's portfolios across a plane rather than across a curve and a tangent to that curve. I think that's what we're gonna end up unpacking. I think we're going to end up having more and different type of assets. I think for individuals those assets will have emotional appeal. When they

have emotional appeal, they're sticky. And if you're an advisor and you're offering advice to customers and clients, and you're drawing in things that aren't just financial assets, but there are in investments and other things that have an emotional appeal, you have a better chance of counseling and keeping that client for a long period of time. So this is I mean, all of these things is what I speak

to you about. Why it's such an exciting time because of these technologies to allow you to be able to focus more intently on customers and what they want and when you can deliver. We know from any business, if you can deliver to customers what they want, then you're going to have a customer for a long time.

I may be a little bit too far afield to talk about this, but when I talk to my kids about what the best investments are there investments and experiences in my book, Yeah, I mean you can have a good pile of money and you might be able to have more experiences. That's true, But it's this idea that there's more to investment than just financial returns lots of times and so you know, this is all, you know,

changing and folding in front of us. And so yeah, if you're focused on those opportunities and you're doing some R and D activity, I mean, I think that's what we found ourselves doing. It's just like we had support to do just basic R and D activity in distributed ledger technology, and it's now unfolded this whole, you know, interesting world of the things that I'm talking to you about. You know that feels pretty good, even having spent you know,

almost forty years in the industry. In the industry.

airplanes are really owned by somebody else. But the idea that there's this big sticky I mean, I'm flying United at home tomorrow and my wife won't book me on another flight besides the United flight, you know, anytime soon for a long period of time. So yeah, they you know, take that model and apply as their creativity to apply to bring that to other type of industries. For sure, that we see those possibilities unfolding as well.

Franklin Templeton building crypto wallets. What can you tell us there are you building moreph at the institutions for retail and things like that.

in our building of that. We see a world of inner operability of blockchains. We have to be able to you know, we talked to the regulators. You know, in the very very very remote chance that blockchain A goes down, all of our customer experience has to be on blockchain

B immediately. So I mean, I think you can think of us as had problem solved some interoperability sure issues already, but this idea that we've that we have built digital wallet ecosystems wrapped around a number of blockchains and in a securities permission space. Right because there's a lot of digital wallets on planet Earth. I in my I have

two phones in my pocket over there. That means I have two digital wallets on my Apple phones right now, those aren't those aren't wallets that hold securities by and large, right, I mean again, my United ticket tomorrow is held in

one of those digital wallets. But this idea that we have three point zero digital wallets where you know, you and I can control ourselves and where we can actually you know, we get the outcome of what's in the wallet, as opposed to you know, somebody like Apple just taking that information and use it for their own benefit to

provide us goods and services. You know, those are the futures that we see, and you know, we've had to be and we've developed digital web through printal wallets, and we have a lot of in qorey and discussions with folks who don't want to go through the brain damage that that they've gone through to you know, is there a way that you know, we can leverage Franklin Temple's

a digital ecosystem. You know, I have nothing really to report about that specifically other than that, yes, we have built digital wallets across the number of different blockchains with our kind of proof of concept and yet commercially viable and expanding Benji array of assets. You know, we expect to have you know, digital representation, tokenized representation of a

wide variety of products and services in the future. They'll have to be held in a wallet, whether they're in our wallet or where they interoperate with somebody else's wallet. You know, we're an advice we're an advice business, not necessarily the infrastructure business, but we see the future needed to be in the wallets, yes for sure.

data and your information. That's so that's a we see that world. Yeah, you know, unfolding in front of us. So, yeah, lots of opportunity, oh for sure.

kind of stuff inside of that digital wallet. And now, all of a sudden, the first time you had well, I don't have to have a digital wallet. I already have a relationship. I already have a broker dealer account for granted, and I probably have four or five of them. And now I can buy this exposure to this emerging thematic story about the expanding block chain and the importance of being able to invest in networks into my own broker dealer, and and you can do it at really

low cost. We have a a passive market product that we call easy pz easy, So we're making crypto easyps, make investing in crypto easyps. It's kind of a nice little jingle to say, but I mean we're offering that at like nineteen basis points. We're kind of out loud, so I mean calling out a lot of cost to

allow that to happen. I think that was a big watershed moment because a lot of investors that either had to be I got to do this and figured it out myself, or institutional investors would be paying, you know, private funds with private fund fees, a lot of money to make that happen. So I think I think there's gonna be a lot of change because of the ETF themselves. Now, the second part of your question.

an ETF work. Whether this technology supplants replaces some of those is an interesting thought process. It wouldn't surprise me that it doesn't dramatically change in some way shape ETFs. I mean, ETFs are the most successful you know product in you know, on the planet bringing money. And this is and we do have a great ETF business, and we're and we're focused on expanding our ETF business as

it currently exists. But we're also smart enough and aware enough to know that there are technologies that come along in every industry that's a plant, whatever the current form is, whether that's albums and CDs and then MP three's, you know type stuff, it's like all of that gets impacted in some way, shape or form. So our eyes are always forward about how to make sure that we're prepared to deliver those services as the technologies allow us to do so.

Clarity Act to pass. So I'm curious, you know, what are your thoughts you expect that to pass this here and that's a tough question. But also what would that mean for Franklin Templeton's digital asset business.

securities probably should be considered securities. At the same time, we understand, again, these technologies have come together and some of these laws you know, are literally eighty five years old now their law is because they are protecting consumers right by and large, and you know, I think that's a that's a great idea. Quite Frankly, We're going to see time and time again new things come about and if consumers get abused in some way, shape or form,

that is not our desired outcome. We're in the business of trust right, We're in the business of trust. Everything we build and do has to be around promoting and expanding that trust. We even refer to our blockchain engineering not as software but as trustware, and so that business of trust is and that brand of trust is hugely, hugely important to us. Any sort of you know, new laws that are coming about need to keep emphasizing consumer

protections and promoting trust in the overall ecosystem. However, it comes forward as opposed to, you know, displacing that trust and losing the confidence. I mean, I think that's what makes our capital market in the US, some of them robust on planet Earth, and you know, the great promise, so that you can accomplish lots of things. There's lots of different markets that have developed in the US that haven't developed in other parts of the world because we

have that robust ecosystem. So any of the type of new laws that wrap around these things, we do have to recognize that there are new things though. The idea that you can invest in a network is a new thing, right, and so we don't want to constrict that behavior. We want to just modify it toward the benefit for all users. I didn't answer your question, did I.

make big carve outs. Look, we know there's a geopolitical strategy for the US to be able to expand US dollar stable coins deeper across planet Earth. For the retain US dollar is the currency of reserve across the planet. And so there's a lot of you know, momentum in Washington, not just by the crypto or digital asset community, but you know, anything that keeps the US dollar in that position is going to be massively supported by and large.

I think that's the big thematic reason to pay attention to this fight over about you know, whether stable coin can offer yield and whether that imperils community banks that sit in every corner you know, on main Street and every town by and large, and they may not not have their name JP Morgan Chase on them, but they might have you know, your your state state bank type of situation. Those I mean, those are real things, right, I mean, I think what you want to be careful about.

Going back to the global financial crisis, what did we learn We learned from the Global financial crisis that if the banks aren't operating, the economy doesn't operate, right, and if you're going to be doing things that remove a tremendous amount of the revenue and or profit potential for

banks themselves. I mean a stable coin does it. When you put money into a stable coin, there isn't a multiplier effect that they lend it out into the economy and fund mortgages or fund you know, small businesses in any way, shape or form. They take it, they earn the yield on the t bills, and they pocket and

put it their shareholders. So there is you know, we found in the global financial crisis that banks, you know, their utilities, they're important utilities, and we need them to function on function properly in order for us to have a vibrant economy. This is again the difference between the US economy and a whole bunch of other economies on planet Earth that have very fragile and unstable you know,

financial systems. I did a lot of work in Argentina many many years ago in South America, and my visits would be, you know, one day in Argentina and like two or three days in Montevideo, Uruguay. You know, why is that the case? I mean, Argentina is a big country, Uruguay is a big hunt it's got a lot of people, it's got a lot of cows. Love both countries, by the way, just difference between the population base. Why is

that the case. I'm in Montevideo, Uruguay. I'm there because the Argentines learned a long time ago that if your money's in the banking system, it's possible that the government's gonna come in and take your savings account and convert it into long term Argentine bonds and right, and so the confidence in the financial system themselves that eroded, so they wanted to move money out of the country. I mean,

we don't want those things outcomes in the US. And so there's gonna be a dynamic at play here because of the way banks do. I think it's naive to think that banks just you know, come in and charge interest. And so therefore, if we have a new form of money, we should be able to you know, pay interest as well, and we're gonna have the same We're gonna have the same you know, operate in the same economy and helping expand the economy as banks have done for literally decades.

That that's probably a somewhat naive position, to be honest with you, Yeah.

that was just a freeze ray on everything. And so we do want to unleash the creativity and opportunities exist within the financial systems, you know, here in the US. I think we I mean, I think that's a noble and you know, good idea. By and large, how they crypto industry, you know, lobbies against bank. We do know also that there's a lot of money deployed by the crypto industry in super PACs prepared for the mid term election relative to what the you know, legacy financial community

is doing as well. So yeah, we'll be super interesting to see who comes out on the right side of that.

so we have to recognize that as well. And so it's likely if you have these big if you have a if you have some institution that has some sort of systemic risk associated with it, with a whole bunch of money from businesses and or you know, consumers, you know, associate with it. Then they are going to need to have lines, you know, maybe even just like credit lines with the FED as well. Put those things type of

things in place. Those are things that don't necessarily exist currently, right, I mean we talked about that with money fund as well. I mean, we'd love to have Benji be big enough that the that the FED is like, we need to have you to have a credit line associated with that.

Those are going to be important things as well. Right, You don't want to grow up this thing by its own with you know, being permissious, permissionless, and and and deregulated without understanding how it potentially gets woven in again, because while the genius acts certainly for the vast for for the US specific stable coins defined what that collateral pool could be should be and limited it kind of in the same way that two A seven money funds in the US have a very limited types of assets

that they can hold. You know, that's just one step of that. When you think about that, we haven't had a credit cycle unfold. You know, let's let's make sure that we're making sure that we have all of the appropriate safeguards in place for all actors moving forward. So those are also going to be important things to be thinking about.

like really an asset class. But we kind of you know, just kind of solve that problem an opportunity coming forward. So how do we get this experience of other assets into the h the both the existing kind of digital ecosystem as well as kind of our legacy customers and clients who are exploring those. That's a lot of our heavy lift that we're involved in over the next couple of months. But it's an exciting thing to be doing.

As I mentioned very early, you know, of the forty years that I have been doing this, the idea that we're going to meet customers and clients in a new environment We're going to be receiving assets, by the way, in these new environments, right, we know the projects by the Treasury obviously NASDAC, New York Stock Exchange. So the raw materials of asset management that are coming to us

are becoming on these you know, blockchain rails. That changes a lot of the underpinnings of the operations that we have to think about. And then that third component I talked about, can we bring more differentiated type of asset experiences into clients portfolios? Those three things that's a lot of would to chop quite frankly. Oh.

if you could create your own metaverse.

I have a whole family female basketball players. I have. It took the Midwestern boy put them in some alpine communities for a while. I love sliding down slick things at high rates of speed, not as you know at my age, maybe not as high rates speed I used to. My metaverse involves a lot of explorations and mountains and different type of topographies. I guess the other thing is I'm hoping and then not too distant future as I get to experience, you know, not just my own children,

but another generation about how to grandparent through that. I don't know. Has that really a metaverse? So I grandchildren, snowsports and basketball.

punch down all that premiation of that. But yeah, Doug Collins was my childhood hero. Is the best call.

love spending time with my family. Of course, I have very very great long term friends from when I was you know, even in first grade that are still really good friends of mine, and so I you know, I've taken up golf in the past several years. I used to think of golf as like kind of a well, is it an old person type of game? I don't know. But I started experiencing golf with my wife and her family,

and it was such an enriching experience. It was just like I when I was a younger guy and I was playing golf, it was all about like, you know, trash, talking about oh crab shop. But what I really learned is like it's a whole bunch of enriching people. Might my wife might totally like long breakdown laughing when I totally miss and swing a shot whatever, but almost always there's something complimentary to say to somebody like you know, good ball strike, or like you know night direction. Oh

you're in the fairway. You only might be thirty yards forward in the fairway because you mishit it. But I found it to be an enriching thing and it's very humbling situation, right, And so that's you have to pace through life on like that. Life is not. You have to be able to enjoy the journey through life. So you have to be able to enjoy the journey of the nine or eighteen holes, not just what the outcome is. I found that to be true in lots of life.

It's not about the destination where you're getting to, but it's like the everyday journey that gets there. And I found that to be a nice humbling thing about golf. That puts you out there. You know, you got to wipe away what just happened, and you got to try it, you know, try for something else, and every once in a while, like a real miracle happens, and then you hope to keep doing it. But that's a that's a new pastime for me.