Bankless - The Largest Securities Exchange in the World is Coming Onchain | Michael Blaugrund of NYSE and Carlos Domingo of Securitize

Episode Date: April 7, 2026

NYSE and Securitize are laying the rails to bring real, issuer-backed securities onchain.  Michael Blaugrund of NYSE and Carlos Domingo of Securitize break down how blockchain-native equities could work in practice: transfer agents, tokenized issuance, interoperable trading infrastructure, 24/7 markets, and what it will take for public stocks to move from legacy rails to crypto rails. T They also explore how onchain equities could unlock faster settlement, better shareholder utility, and new DeFi use cases without sacrificing regulatory compliance. ------ 📣SPOTIFY PREMIUM RSS FEED | USE CODE: SPOTIFY24 https://bankless.cc/spotify-premium ------ 🔮POLYMARKET | #1 PREDICTION MARKET https://bankless.cc/polymarket-podcast  🪐GALAXYONE | SOLANA STAKING https://bankless.cc/GalaxyOne 🦊 METAMASK | DOWNLOAD NOW https://go.metamask.io/BL-Pod-Download  🏅BITGET TRADFI | TRADE GOLD WITH USDT https://bankless.cc/bitget 🎯THE DEFI REPORT | ONCHAIN INSIGHTS https://thedefireport.io/bankless 🐇MEGAETH | 1ST REAL-TIME BLOCKCHAIN https://bankless.cc/megaeth ------ TIMESTAMPS 0:00 Intro 0:52 NYSE x Securitize Partnership 4:57 Digital Transfer Agent 8:39 Blockchain Infrastructure 11:07 NYSE Alternative Trading System 17:01 Every NYSE Asset? 22:30 Portability & KYC 33:38 RWA Decentralization Debate 38:47 New NYSE Paradigm 44:46 24/7 365 Markets 48:03 Clarity Act 52:21 Issuer Choice 57:08 Tokenized Securities vs Perpetuals 1:00:24 Securitize Going Public 1:03:20 When Launch 1:04:04 Closing & Disclaimers ------ RESOURCES Carlos Domingo https://x.com/carlosdomingo  Michael Blaugrund https://x.com/mblaugrund  Securitize https://securitize.io/  RWA Decentralization Debate https://www.youtube.com/watch?v=m-h-PeUOvDw ------ Not financial or tax advice. See our investment disclosures here: https://www.bankless.com/disclosures⁠

The tokenized treasury space that were biddle plays, which is still the largest asset, I think it's worth $2.3 billion or something now. It was like $300 million two years ago, and now it's $11 billion. I don't think any part of crypto has grown that fast. So it kind of fills that way for tokenization that we're at the end of the beginning. Now the beginning has happened. Now we need to get into the real growth because the space is so massive, as we discussed before, just taking 1% or 2% of stocks on-chain,

doubles the size of crypto, so that the fact that we have tens of billions of dollars still feels like very, very early days. Bankless Nation, I'm here with Carlos Domingo from Securitize and Michael Blagrin from the New York Stock Exchange. Carlos, welcome back to Bankless. And Michael, welcome to Bankless for the first time. Great to be here. Thanks for having me.

There was a announcement out of both of your guys, this neck of the woods from the Securitized New York Stock Exchange, neck of the woods, last week about a partnership between your guys' two companies about getting. tokens, securities, tokenized on public blockchains. Now, I want to drill down into the details of that announcement because I just want to learn a little bit more about what this partnership means, how it works, and like some of the net products are at the end of it. And so we're going to go line by line. I just want to start reading off some of the first lines in this announcement just because I want to get down to the actual nuances of it all. The first line is,

Securitize is named as the first digital transfer agent for the New York Stock Exchange. What is a digital transfer agent? What role does that do in the whole world of securities and trading them and all that kind of stuff? I guess I can take that one since this is about securitized. So every publicly traded company or every ETF, anything that trades on a national exchange, has a transfer agent, which is responsible for keeping. the books and records of who holds the securities, which in publicly trade companies,

most of the, the only thing you see is DTCC, because all the shares are under DTCC. Most people don't realize that when you are, when you hold shares on property, you actually don't own the shares. The shares are under the central securities depository. But in a case, you need a transfer agent.

So if you wanted to issue tokens outside of, you know, market structure on a blockchain that represents the same instrument, the same equity, the same QSIP, the same rights, sporting rights, splits, dividends, etc. the natural, let's say, entity to do that is the transfer agent. Security is a transfer agent since 2019. We refer to us as digital in the sense that we use for our ledger technology,

our public blockchains, as opposed to, let's say, more traditional, you know, database technology that all the transfer agents use. And all our procedures are all digital, right? We don't do anything with shared certificates or paper certificates or other type of, like, non-digital activity. So we have been accepted by the New York Exchange for the new venue, which I guess is the next thing that we need to explain what it is, to be able to then work with public trade companies,

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So as I understand it, what you just said is the digital is more. of just a word that you guys added. There's no such thing as like a digital transfer agent. No, transfer agents are transfer agents. The industry in general refers to blockchain-based transfer agents are digital transfer agents. Okay. And Carlos, just to we understand,

because we don't have this concept with our crypto-native assets, of course, right? There's no transfer agent. So what data does the transfer agent have? Is that sort of like an ownership cap table of who owns what? Well, basically, we are the transfer agent for Biddle of BlackRock and for other products. So it's basically the regulated,

It's an SEC register entity and that basically manages the securities on behalf of an issuer. So you basically issue securities, you know, control transfers to update the cap table. You pay dividends. You do, you know, conduct votes if you need to. You do sort of asset servicing if there's any type of, I don't know, somebody needs to move their shares or somebody lost access to their shares. In the case of a blockchain, somebody lose access to the private keys and you need to burn and reissue. like all that work is what a transfer agent does. Okay, and every security has to have a transfer agent.

It's in the regulations. And I guess moving this to kind of... Not every security. Okay. Securities is mandatory. Okay. Like registered securities, publicly trade securities are mandatory. Reggae Plus securities is mandatory.

Most funds is not private funds. It's not mandatory, but asset managers tend to use it because it's safer to use an entity to do that. But for instance, a private company, like let's say, you know, shares of bangles, you can just keep them in Carter and you don't have a transfer agent. You just have a like a piece of technology to do it, but not an entity that controls the cap table of who owns shares in Bangladesh. I'm so mean you have a company called Bangladesh somewhere.

Does that mean that all publicly traded companies or at least the vast, vast majority of publicly traded companies have a transfer agent? You can't go public without a transfer agent. Okay. Can't go. Okay. And so if we want the, the, so there are tokenized securities on chain. there are a bunch of different ways to do this.

One of the ways out there is like Ondo's model, which it's not a true native security. It's no equity. Yeah, it's, yeah, exactly. And so what we're talking about with a digital transfer agent is bringing the word native. So the token itself is, is the equity. It is not a representation of the equity.

It is not an IOU of the equity. It is the equity. And making it the equity is because of, the transfer agent. The Ondo and other companies model, the problem that does have, besides that they block the US, because the way they do it, probably not regulatory compliance here, et cetera, but it's also that every tokenized equity, because it doesn't represent the actual equity, you end up having five different versions of the same thing, which none of them is the real

equity. Like, you can go to Rw.org. You can see there's six different versions of tokenized coin, which none of them is actually equity on Coinbase. They all different derivatives issue from different. jurisdictions with different counterparty risks towards the company that is issuing different rights. Some of them give you voting rights. Some of the don't.

Some of them accrued dividends in a one way. Some others in another. They didn't track splits. Like I think I also had a problem recently where one of the shares in the public markets didn't split and they didn't do it a split. And it was trading at five times different price, etc. So I think that introduces a lot of fragmentation and obviously creates issues for market making, for, you know, investor disclosures and investor risks of taking counterparty.

This is just basically like buying a share through Robbikhood, but then you get it on your wallet and tokenized form. Securitize is named as the first digital transfer agent, eligible to mint blockchain native securities. I think we kind of just did a little bit of that. This is truly a native to the blockchain securities on IOU. It is that security. But the question I have for you is,

on which blockchains, is this chain agnostic? Are there specific chains under consideration? How are they, selected blockchains can mean a lot of different things. And so, like, talk to me about that, that nuance. From our tokenization point of view, and I'll let Michael answer the question about where the ATS, the trading platform sits, but we, we support most of the major public blockchains, obviously Ethereum, but we also support most of the L2s.

We support Avalanche. We support Solana, of course. We support Aptos, et cetera. So we will be able to tokenize once we work with Asia in any of the public chains and then being able to move tokens across chains it required to be able to then deposit them on the trading platform for trading. So your chain agnostic, but then who determines on which chain does the asset go? Typically, we work with the issuer. The issuer chooses that. We agree on that because we are a service provider, right? Like, we're not going to impose things.

We obviously have a view of which change to use. As you guys know, BlackRock launched on Ethereum first and it was only on Ethereum for a period of time. And then after that, they started like going to other change. We do a lot of also. So kind of due diligence on the chains to make sure they're sufficiently decentralized. They have, you know, they haven't had down times and things like that. So, but ultimately the issuer is their securities, right? Like we don't do things without the issuer permission as opposed to other tokenization models out there. Okay, so there's a preference on the issuer and the issuer can just choose based off of whatever their particular preferences are.

And quickly, the issuer here. Who is the issuer? Is that the company with the stock? That's the company of the stock. So every issuer could have a different preference around this, right? Like Exxon might have a different preference versus like Bank of America in terms of where their stocks might be issued. That's correct.

Could you do multiple places? You could just issue them. Yeah. There's no restraint here. There's no restriction for us. We can either do like we do on the case of BlackRock every ledger. Let's say every public blockchain is treated as a separate share class of the same fund or we can just aggregate tokens across multiple chains.

and the cup table span across different ledgers and we provide transparency for the issue with respect to that. Okay, let's get into the third part of this line that we're breaking down bit by bit. Okay, starting from the beginning, securitized, named as the first digital transfer agent eligible to mint blockchain native securities on the upcoming New York Stock Exchange-affiliated tokenized security platform.

Michael, this is where I'm tapping you in. What is this? What is the digital trading platform? Tell us about what that's coming down the pike. Yeah, happy to. Glad to finally get in the game. So we're launching a new trading platform. It'll be an ATS.

It stands for an alternative trading system. That will be adjacent to the existing traditional exchanges that will trade tokenized equities versus stable coins. We'll support what I often describe as kind of crypto-native user experiences. So things like 24-7 operations, things like instant atomic settlement, which are vastly different than the traditional exchange operations and rails. But we're going to conform with most of the significant market structure conventions of the SEC FINRA and the broker-dealer subscribers that will be participating on this platform. So it's going to use on-chain

settlement, but off-chain matching. So it'll be using the NYSC's existing matching technology, market data technology, order entry technology, allowing for the community of broker dealers who already trade on our exchanges to have a very, you know, low friction glide path into supporting the on-chain settlement that we believe a lot of retail investors will be excited to take advantage of. So with this platform and the tokenized securities that go on to the ATS, the alternative trading system, is it its own blockchain or is it aggregating the security tokens issued by secured by secure ties that are issued on Solana, Ethereum, all the public blockchains? Is it aggregating those or is it its own thing? Talk to me a little bit about the back end and infrastructure.

Great question. So the way to think about our system, is we will run a, you know, private permissioned, on-chain core ledger that's going to allow for inventory to be brought in or brought away from the platform, from either digital transfer agents like Securitize, or from DTC, which is the traditional book entry depository, that will allow for tokenization upon request for previously issued securities. In both cases, securities are tokenized, either natively minted, like Carlos was describing, or converted. They're moved into the custody of the broker-dealer operating our ATS, and then they're available for pre-funded trading and instant settlement versus stable coins when they're sold. Okay. I'm still looking for a

a little bit of clarity on where those assets actually live. That question makes sense. So in the example of a digital native, you know, issued token, let's say, you know, Carlos works with an issuer and they decide that they're going to issue natively on Ethereum. Carlos, through his broker dealer, can move those from that, you know, Ethereum wallet into a broker-dealer wallet in our infrastructure. I see. We will then, you know, make that available on our risk systems and our trading platform and it can instantly be sold on behalf of that client.

Okay. And so with the trading platform, the digital trading platform that you guys, I don't know if this was the first time that this was announced, but in this announcement with you guys in Secured Eyes, you named this digital NYSE affiliated tokenized securities platform, the ATS you talked about. It is what I'm hearing is it is an aggregator. of tokenized securities on Ethereum, tokenized securities on any blockchain,

any layer two that you guys choose to integrate, those tokenized securities will be sent to the wallet of a broker-dealer, and then that is the person, which is matching the Tradfai stack of equities, that then all of that gets pointed to the ATS. And so the tokens are on chain, they're on the public blockchains,

which is what I'm kind of excited about, And then for this NYSE affiliated securities trading platform, it is done through you send the assets to a broker dealer and then those get deposited into your account and you can go and make trades like that. Is that right? Yeah, I think you put it well. We haven't used the word aggregator before. I think that's a fair word to use. The way we've described it is that we're going to have, you know, fairly broad interoperability with a number of different blockchains for settlement purposes. having EVM compatibility to have broad access to wallet infrastructure and, you know, developer, you know, kind of community applications is important for us. But we know we're going to need to support a range of different solutions, as well as a range of different Genusat compliance stablecoins for funding purposes as well. So, yeah, interoperability will be, you know, a critical component of a solution.

Michael, the New York Stock Exchange, you guys have over 2,400. assets, will all of these assets be available at some point or is this going to have to be sort of an issuer by issuer conversation? I think it's going to be a dual track process. They're going to be crypto-forward, you know, tech-forward companies that are very interested in being early amongst the native issuers. And, you know, Carlos mentioned BlackRock. That's a great example of a company that, you know, actually wanted to take a fund and make it digital native to try to position it for access and utility amongst, you know, sort of the crypto-native investor community. And there are a bunch of both corporate and ETF issuers who want to be among that cohort.

At the same time, there are, you know, a bunch of traditional companies that may or may not decide that they want to actively engage in tokenization. Whether they choose to or not, the reality is that the DTC, which is the central securities depository for U.S. equities, has announced that they plan to make all of their securities available for tokenization conversion over time. They're starting with the Russell 1000, so the 1,000 securities that are in that index, plus a number of other ETFs. So eventually I'd anticipate that all NYSC listed stocks, you know, all stocks listed on other exchanges as well will be available for, you know, tokenized trading. But I think in, you know, at the vanguard, you're going to have companies like those

that are working with Carlos and, you know, prospects that haven't yet come to market that are interested in going public as tokens, really leading the charge. How long do you think that'll take to play out until the point at which we have basically all publicly traded companies or close to all 80% say all of them available on chain as well. So I think there are more than, you know, there are more problems to solve than just making the tokens available, right? There's a lot of complexity in managing the sort of recreation of all of the Tradfai infrastructure, the investor protections, the market structure conventions, that, you know, issuers have come to expect and that the SEC requires under the

law. So I think it will probably be the case that all U.S. equities could be converted into tokens, you know, within a couple of years. But I think your question is probably, when will tokenized trading become ubiquitous? And I think that's going to take longer because it's going to require not just minting tokens, but then creating the right infrastructure that those tokens have, you know, outstanding utility and can operate with an efficiency that's as, you know, excellent as the one that exists in the current market structure. So it's, it's companies like securitize, like NYSC, that are trying to build these platforms today to enable to, you know, sort of facilitate that migration over the next, you know, let's call it three to five years.

Okay, three to five years. Brian, but I just want to give you like some metrics so you understand even if not everything moves, how big this could become very quick. So first, I think a good parallelism is what happens with retail participation on IPOs. Because that was not available to retail people. And it started with Robin Hood five years, six years ago. And then every single IPO now has a retail trend, right? And at the beginning, it was some companies only the most tech forward ones like Mike can mention that had that allocation.

And it was only Robin Hood, but then you got SOFI and then you got E-Trade, etc. And then now you have SpaceX, which is apparently doing a 40 billion IPO that is saying that 30% will be retail, right, which is massive. So I think that the token is strange for IPOs and for trading for public equities will start small and then it will grow over time. But given that New York Stock Exchange only has 40, I think 44 trillion in market cap and the whole market, if you add, the compared this is like 100 trillion. Even if it's like, let's say, a 1% or a 2%, you're looking at 2 trillion, which is probably

bigger is like the same size of the entire crypto market today. Because this is like the largest, you know, asset class out there. And the most liquid and therefore the most suitable to put it on blockchain rails and make it even more efficient is an asset class that is very difficult to do things with it because it's all in this way, you know, kind of rigid infrastructure and market structure, etc. That, you know, you can go and invest in India five years ago and today you've made a few million dollars and you want to borrow against it and it becomes very difficult or, you know, somebody is doing short selling and is borrowing your shares and paying 35% to prime brokers and you're getting 3%. And like, there's so many inefficiencies that people don't realize that once this gets free of the existing market structures and put on blockchain, these things will open up.

And I do believe we'll start small with one insurer, then five, then 10, and then 100, and it will grow from there. That is a good reminder of how large this market is. So 100 trillion in U.S. securities, it sounds like something. And then New York Stock Exchange is like $44 trillion. I mean, these numbers are pretty astronomical relative to greater. The US market caps around like 60 trillion. I think global equities is about 100 trillion. And NYS is the single largest market.

Okay, okay, amazing. And obviously, so goes the U.S. I think so goes the rest of the world. I want to ask another point about sort of how this works from a user perspective. So retail investor, buying a tokenized security, let's say my co-host here, David, he uses Robin Hood, right?

I'm a little older. I use Fidelity. Let's say, okay, so Fidelity is my broker. And so if I want the, in the five years time, all of these tokenized securities on chain, if I want to buy an asset like Exxon, which is listed in New York Stock Exchange, and I want a, I guess, tokenized version of that so that I can have it in my non-custodial wallet. And I can, by the way, I can bring that wallet to another broker if I want, because I'm sort of the custodian of that wallet rather than the broker, so I'm not locked into Fidelity. I can switch at any point in time. But I should have the ability to do that essentially through my existing broker.

So I log into Fidelity, I go and I buy the tokenized version of Exxon, assuming they're an issue that lists their tokenized security. And then I can bring that into my crypto wallet. And I can go take that wherever I want. That's the future state we're talking about, right? That's exactly the future state. I think you're describing a future state that's probable, right? It's not the immediate reality.

And the immediate reality, these aren't likely to be permissionless, bearer instruments. I think that we know that that is the direction of travel. Some of the sort of wrapper products that, you know, you were describing before, David, that are in the marketplace offshore, those are permissionless because they sort of defer some of the complexities of complying with the U.S. regulation. So I think in order to find the solution that's going to blend, permissionless, you know, kind of self-custody and all the applications that we know are high potential with the sort of regulatory blessing in order to be within the sort of US perimeter. Like that work is still to be done. But it's, you know, kind of the rails that are

being laid right now by firms like securitize that can help us get there. But by the way, Today with tokenized securities, you can have it on your self-costary wallet. The only difference is that that wallet has to be whitelisted because you got KYC at some point, right? But you also KIC when you go to your broker-dealer, right? You also K-YC when you go to Binance. You go also K-YC when you go to Coinbase. Like there is this negative connotation about, you know, having to KYC. And in reality, we're being KIC every other day in any other venue.

And then the infrastructure is still permissionless, right? You can still interact then with, like, we, we, integrate with ABE Horizon or integrate with, you know, with oil or like lending markets where the market itself is a permissionless infrastructure for lending, but the asset itself that you post as collateral is permission and your wallet has been whitelisted at some point. But what you're saying, Ryan, about connecting to a broker-dealer and being able to take your securities with you, yes, the broker-dealer knows you. Okay, I see they can wireless the wallet.

They will allow you to then move the tokens to your own wallet. And then if you connect that wallet to another broker-dealer, then your securities have instantly moved. as opposed to today where if you're trying to move securities, good luck with that. It's going to take you. Oh my God, I've tried.

It's exhausting. It's actually like literally phone calls and at some points I've used fax machines in order to get securities from one broker to another. It's very different. It's very different than just like moving stable coins, let's say. And I wish for a world where it's as easy as that.

It will be as easy as that as far as you've done, wirelessed your wallet and you move this across whitelisted wallets because as Michael said, these are securities and the US and therefore permissionless tokens today, you know, do not necessarily comply with securities regulations

that force, you know, AML texts that force, you know, if you need, the transveragion needs to know who the holders are and there's certain obligations for a transveraging about knowing, you know, the name of the investor and things like that. So, Carlos, you bring up the defying composability conversation here.

So if, if I'm whitelisted on a particular asset. If I'm whitelisted, do I get access to the whole set of assets produced by this partnership or is it like issuer by issuer? How does that work? You white list ones with the transfer agent and we white list your wallet. Any security will be able to go there. And then I tell you what my wallet is and legally speaking, I am just claiming that this wallet is mine rather than like my friends who just wants to be able to my offshore friend who wants to own an as security.

Well, the way we do it is we actually ask you to connect your wallet to our platform. So we, we know that you, and sign a transaction. So we know that you have the private keys of the wallet. Right. Okay. And legally speaking is. Like a small amount of it or do wallet connect. Like we use the same wallet connectivity protocols that I need if I protocol uses to connect

to our platform. And then we know the wallet is controlled by you. and then we why listen. Right. And then you have, as the transfer agent, you have my identity. You have the security added to my name. And then you also have my wallet where it's all kind of held.

And so if I lose my wallet, I can go get the security on a new wallet, correct? Correct. Right. Because I am the owner. It's not my wallet. That's the owner. It's me that's the owner.

Correct. So this is not a better. As Michael said, it means not like Bitcoin or if that is a very asset that if you lose it, you lose it. This is a secure, this is a, an uncertificated security that is represented on our blockchain. And therefore, if you lose it, you can come to us, we'll verify that who you are, who you say you are. And then we'll then burn the security the tokens on the wallet that you've access to and remint it on a new wallet that you've connected with us. So the cost of the risk of this is much lower than the cost of the risk of digital assets. Right. Because this would apply, Carlos, the same thing.

Exxon shares were hacked or stolen or something like this. Correct. Or if you have shared certificates like papers, share certificates, which believe it or not, that still exist. And I don't know. And there's a fire in your house and they burned down. You can do that.

There's still your shares. You can go back to the transfer agent and get them back. What about if I want to take my shares and I want to put them in AVE? That gets a little bit more complicated. Ave, not a legal entity. You technically just need to whitelist the smart contracts and then it can work. Legally speaking, I guess it's a little bit more complicated. than that. What are the nuances here

that we need to understand? Okay, that's a very good question. So there's kind of two paths to integrate with defi and let's break defi in lending versus trading because these are two different things. On the lending side of things, you know, there's kind of

two paths. One is companies like ABE are basically building you know versions of ABE in the case of ABE is called ABE Horizon that are already designed to take, you know, tokenized security is as collateral. So they've already built

all the necessary hooks there for me as an investor that I hold, let's say, Exxon shares, as Ryan was saying, to be able to post them on ABE Horizon

and then borrow against it and then there's a liquidator that will take them like semi-structure as a normal defile lending protocol, but ABE has a separate marketplace called ABEHRhorizon

that works for permission assets. Then there is other, we've released something called the VOL register, which is basically a vault where any DFI protocol can integrate this bold technology to be able to take security as collateral on their DFI.

And we have some people like Euler, Loopscale, Zarta, that they are now integrating that. So it's the same protocol. They don't need to do anything. And they just need to keep the collateral on a separate vault that we provide to them because that vault basically does not change the ownership of the security

because you're posted as collateral, but you're still the owner until it gets liquidated. And then we have to wireless the liquidators because the liquidators might take position of the security. So it's not actually a lot of friction, to be honest with you. Whitelisting the liquidators is kind of similar to just like whitelisting a market maker. A market maker comes and liquidators are like to. So they're already known entities to any protocol, right?

Yeah, they are, they're already a professional organization. And they're always, et cetera. So no, I do believe that. And by the way, this is a massive opportunity, right? Because if you think about a stock lending, this is not something that is simple to do for people. Like as I mentioned today, go and try your shares in fidelity of Exxon, Ryan, and try to get a loan against them. Try and then next program, tell the audience the experience of doing that. It's going to be impossible for you to do.

I'm never going to try, honestly. You can take a margin loan against your entire portfolio to trade more. All brokers will give you that. But if you want to buy a house against your, you know, Exxon shares that have a preceded over time, we'll get luck with that. Yeah. So these are things that are going to open up big market.

Also, you know, equities are a good source of, collateral. Like a lot of training firms deposit equities as collateral. And again, a collateral moves very inefficiently because the securities move very inefficiently because moving securities from place to place is a cumbersome process. So tokenized securities will be able to trade there. Then there will be liquid because of the New York Stock Exchange venue, et cetera. So this is going to open a lot of interesting applications. So Carlos, basically what I'm hearing in summary is that while it's not a trivial thing to whitelist a defy app, it is all also not that complicated either, and that the idea is we will actually be able to have

tokenized securities under the condition that we are white-laced, whitelisted K-Y-C'd with the transfer agent. We will be able to have securities in DFI apps. We sounds like we also need some participation on the DFI app side of things. It has to be a two-way conversation, but ultimately doesn't sound like there's any fundamental roadblocks between here and there. I don't think so. I think it's more about educating the market towards that. I do believe that defy because it's a very, it's a very efficient lending technology and markets, has a very bad source of collateral for lending. So introducing higher sources, higher quality collaterals like tokenized equities or tokenized

treasuries or tokenize, you know, CLOs and bonds, etc. into defy markets is going to make the defy markets grow because there will be more, you know, institutional participation because from a borrowing, from a lending perspective, they are very efficient markets, right? but that's not what people are leveraging against in the traditional finance. So if we give them those tools, I think people will come and Defi will grow again. Because if we're still below 2021 levels. People don't realize that we pick at $180 billion and now we're $100.

So we need to do something about bringing institutions there and that's not going to happen if you're, you know, lending against Lodgecoin. Bankless isn't just a name. It's a genuine belief that you shouldn't need permission from an institution to use your money. Metamask has been around since the beginning of Ethereum and they carry the same DNA we do. Metamask was my first wallet. And well, if you haven't opened up the app recently, let me tell you, they've been shipping. Creating the one app to finally replace your bank and exchange. You can trade just about everything right from within Metamask. Leverage perps via hyperliquidion, prediction markets through polymarket, tokenized stocks like Nvidia. And you can swap tokens

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Search the Defi Report wherever you get your podcast, YouTube, Apple, Spotify, or find a link of the show notes. There's a new episode waiting for you now. One of the arguments that has been made recently on bank listeners is actually a debate we had with two professors, but maybe I'll give you Austin Campbell, who was on one side of the argument, he's a professor at NYU Stern. He's also kind of crypto-native, very familiar with this. He actually argues that open public permissionless ledgers,

the change that we all love, the Ethereums of the world, for instance, the layer twos, are not necessarily the right place to tokenize securities. And the reason he says is because, like, what happens in the event of a hack, there's no kind of rollback.

These environments are optimized for maybe more for bearer instruments. They don't have identity. They don't have AMLKYC. And so there has been a push for some real world asset activity to happen on more permissioned ledgers. This has been a debate that's ongoing. I'm wondering what your thoughts are on this. The Canton versus Ethereum.

Sure. Yeah. Way in. We end on this debate. What do you think? I don't think that's true. So public permission. So first, this debate to me feels like they and you guys are younger than me, but maybe Michael remembers.

This is the debate about American Online versus the Internet. Oh, no. American Online is safer. because we control who puts the content there and who is accessing it, blah, blah, blah. And guess what happened? It died and then the public permissionless infrastructure that is the internet is what flour is, right?

Because open innovation happens on open networks, right? Because anybody's allowed to create new stuff and that's why innovation happened there and didn't happen in American world. So that's my personal view of the world is respective of the blockchain debate. And now in terms of whether public permissionless networks are suitable for securities,

is I will tell you that if you do it through a regulated intermediary that has the ability, obviously you can't roll back what happens, right? But actually, in my opinion, that's a positive thing because it keeps track of what history has been. If there's something that goes wrong, but you can always burn and remint to reverse a transaction because the keys of the smart contract that, you know, means those securities

is in the hands of our regular intermediary, which is a transfer agent. And I know that people don't like the word intermediary, but this is a better intermediary than the intermediaries we had before in the sense that it's more less friction, you know, less things he needs to intermediate, etc. But this is still sitting there to provide that peace of mind to people. So I don't understand why this kind of happen on Ethereum, to be honest with you. Well, I mean, on this episode, we have a representative from the New York Stock Exchange.

And Michael, I ask you, I mean, is there anything scary about permissionless open ledgers? Any reasons for you to prefer more permission structures rather than something open like Ethereum? I think our regulatory obligations are going to be the same regardless of the technology choices we make. I mean, today we're working under securities laws that were written in the 1930s that didn't even, you know, begin to contemplate, you know, electronic trading. We still have to, you know, kind of meet those standards, even though we're employing much more advanced technology. And I think whether we choose to use, you know, a sort of private chain or a public permissionless chain, we're going to have the same. you know, responsibilities. How we meet them, how we manage, you know, kind of all of those will be different implementation choices. And frankly, between NYSC and our parent company

Intercontinental Exchange, we expect to use a number of different L1 and L2 selections across our six global clearinghouses as we begin to support tokenized collateral, the NYSE tokenized trading venue, some other projects that we're developing. So I think, you know, you're going to see us probably use a number of different architectures, a number of different technology selections. But I don't think that it's going to be, I don't think it's particularly fruitful for, you know, the community to sort of beat each other. One variety or another, you know, is going to be permissible. I think all of these could be used.

It's all about how you use them. But by the way, the SEC published a few months ago, and FAQ were they explicitly said that transfer agents are allowed to use public permissionless networks to keep what is called the master security holder file is a technical term that means the cap table, if you want, which is where the record of owners of the security. So they explicitly said it's okay to use that public permissionless network. So I don't know what this professor is and why he's saying that it's not possible

because the regulator doesn't agree with that. So I mean, as far as the regulator tells me, it's fine. I'm going to do it. We'll make sure to clip that and tag him on Twitter. Maybe I follow him on Twitter, and I don't know. I'm a reason to say that, but my point being the regulator doesn't agree with that. By the way, this was the argument on the Gensler time of, you know, saying whether, you know, because we were using a public chain, whether we could represent some security there,

and they asked us to have a separate license for them in custody. You remember this promissium guys that got this special corporate broker-dealer license, et cetera? And that has all disappeared with the new regime, right? Michael, I want to learn a little bit more about this NYSE-affiliated tokenized securities platform. Let me allow me to read between the lines and then you can correct me how far off course I get. So you have New York Stock Exchange, great business, been around for decades, decades, maybe longer. I don't know, actually.

230 plus years. Thank you. That's the centuries. Centuries. And then along comes blockchain, like a new way. to do a lot of very similar things that the New York Stock Exchange is doing. But you don't want to disrupt what you got going on.

TradFi is still basically all of finance. Don't really want to like shift that up. But we have this parallel financial system. It's got tokens. It's got blockchains. And you also need to kind of keep up with the times. And so you're building not a, you're not replacing or disrupting yourself.

You are building a new parallel trading venue to go along with this. the new parallel financial system that runs on blockchains. And it's kind of like it, well, we'll get growth over here. And if the tokenized thing and the blockchain thing really works out,

we've got our flag planted with this New York Stock Exchange affiliated tokenized securities platform. And the old New York Stock Exchange kind of just stays doing exactly what it's doing. It'll remain like trading with trading hours. Well, the new one has 24-7, 365 trading markets. and the new New York Stock Exchange's tokenized trading platform

will just grow, will grow alongside that market independently of the New York Stock Exchange. And if it gets to as big as the New York Stock Exchange one day, that's great if it doesn't also great. But we have now two independently moving parts of the New York Stock Exchange. This is kind of like my read on the whole thing. How close am I? Yeah, I think that's a pretty fair read.

The reality is the New York Stock Exchange, Exchange is, you know, the home of 2,400 listed companies who, you know, absolutely depend upon the liquidity and the, you know, kind of market infrastructure that ensures that they are priced at the right values, that they're, you know, able to support the capital formation and, you know, fund the entrepreneurial visions of those companies' leaders to the benefit of public investors. So it has a very important mission. It does that at great scale. You know, a single closing auction can be hundreds of billions of dollars of value transferred. So these are really, you know, significant markets that we expect to evolve, but, you know, will evolve, you know, very deliberately. Meanwhile, with an ATS that's running alongside, we can be more experimental. We can support the issuers that want to, you know, kind of dive in versus Dipatotow in into the space. And frankly, you know, I think we've grown up over those 230 plus years and certainly, you know, since

the 1930s when when the, you know, federal securities laws were enacted, we've grown up in a world that was very deliberately, you know, broken into swim lanes where there were segregations of duties where you had clients represented by broker dealers and broker dealers traded on exchanges and exchanges had market makers and those transactions were held by clearinghouses and custodians and like everyone had a distinct job on purpose. And from time to time, we've had, you know, reminders of why having those segregation of duties matters a lot in traditional finance. But we're now in a world where, you know, on-chain infrastructure can create so much utility for end investors that the risk reward of potentially like blurring those swim lanes

begins to be pretty compelling. And so I think it's not just NYSC can kind of run the traditional business and see if it works out with blockchain. And I think our expectation is like, this is going to transform. Like we are going to need to move this business on chain. There's some other market participants

who are sort of waiting to see if the existing utilities can evolve. And once they evolve, then that will be kind of the, the queue to begin to do things in tokens. Our view is that, you know, we need to be building. We need to get very familiar with the technology. We need to work with leaders both in the issuer community and in the infrastructure

community to become really, you know, conversant in that space. And so, you know, I don't know, you know, I don't know how quickly it'll be 1%, 2%, 5%, 10% of U.S. equity trading volume in tokenized. form. But by 2036, you know, 10 years from now, like, I'll be stunned if it's de minimis. And so I think it's crucial that, you know, given the pace of technology adoption and change and regulatory change, you need people to sort of stake out a leadership position and begin. And so we're really excited to do that. Admitted, you know, admittedly, you know, beginning in sort of a modest way with, you know, a reasonably narrow, you know, field of what's permissible,

but trying to build in a way that it'll be extensible and allow for that composability, self-custody, and, you know, greater utility that we know is the real promise of on-chain infrastructure. Yeah. Yeah. One thing I'm curious about is to what degree does successful innovation on this, alternative trading system, things like at 24-7 markets, you know, the tokenization in the back end, all the innovation that is being allowed to be unleashed in this alternative

trading platform, how much might we see actually float backwards into the traditional stock exchange? Like there is a big conversation. There has been ever since blockchains really became notable in Tradfive, like, oh, you know, the direction of travel is to 24-7-365 markets. is that something that the New York Stock Exchange wants? Is it open to doing that level of transformation for this 235-year-old business? Or is it just saying, hey, if the market truly values 24-7365 markets, it'll be expressed on this alternative trading system

and we'll just allow that to grow. And, you know, tradition, on the New York Stock Exchange side of things, tradition is tradition, and we just have two options here. Like, will there be a blurring of the lines or more of a separation of responsibility? Yeah, I think it's a really good question. Our view is this is going to be a long-term migration from traditional, you know, the same way that we moved from floor-based trading to electronic trading, I think we imagine, like, we will see 25 years from now we went from electronic trading

to digital on chain. I don't think it's going to move, you know, in kind of a consistent pace across all investors. I think retail will move faster than institutional. But you're already seeing the traditional exchanges expand their market hours to 23 hours five days a week. So, you know, some of the, you know, sort of, you know, agitation that began as kind of pesky retail, you know, desires has now already impacted things like, the consolidated tape and FINRA's, you know, trade reporting facility. These like very, very, you know, kind of trad-fi infrastructure capabilities. So I think it's, you know, question of when, not if.

I think, you know, Ryan gave his example of, you know, trying to move things, you know, in a fidelity account and like he's choosing to buy the tokenized version of Exxon, you know, in order to be able to have, you know, his sort of self-custody. I actually think of a more realistic example is like in the future, he won't need to make a determination to buy a token or not buy a token. People like NYSC, people like securitize, like we're going to abstract away all that complexity. You're going to own Exxon. You're going to have the ability to move to a different broker. You may have the ability to lend it yourself.

You're going to have, you know, kind of a much broader menu of capabilities as an individual investor. That will depend upon tokenized infrastructure, but you're not going to have to be an expert. in, you know, blockchain in order to make use of those types of capabilities. I think bringing those to a broad audience, like that's the work that's ahead of us. I'm not asking you a regulatory question because a lot of this has been brought about by a much clearer regulatory stance from Paul Atkins at the SEC and obviously the new CFTC chair, Mike Seelig. And including, you know, two or three weeks ago, they provided some fantastic guidance with respect to a taxonomy for which crypto assets might be securities and which are commodities. And surprise, surprise, by the way, if it was a security

before, it's still a security. So tokenized securities will be securities. I think I have a question about the legislative process and maybe like, do we still need the Clarity Act for the New York Stock Exchange and for securitize to proceed with tokenization? I know it would be nice, like acts of Congress can be nice and they're almost hard-coded into the United States operating system, so we don't have to worry about what regulators' regime shifts might bring in terms of changes. That said, we do have some pretty clear taxonomies and rulemaking and guidance coming from the CFTC and the SEC. It's hard to imagine, even in a future administration, it's maybe a little more dim with respect, dim in many respects maybe, but their view of crypto is more dim and they

try to reverse some of this. It's unclear whether much can be reversed. I guess what I'm saying is, do we still need the Clarity Act? Is that still important? Or can you guys proceed if we don't get that with the full tokenization plan as is? We can proceed with virtually no significant regulatory exemptions and no legislative change for the NYSC's tokenization platform. That being said, getting a bill done, I think is very valuable to the marketplace. You know, our parent company Intercontinental Exchange operates global futures markets, global clearinghouses, having a bill that enshrines the intention of Congress into law to ensure that we, you know, don't have, you know, kind of a, you know, let's say like kind of

arbitrariness in regulatory shifts, I think will be very, very valuable. I don't think if we need the Clarity Act for a tokenization. I think if you look at the Clarity Act, it's more about providing clarity about which digital assets are securities and which ones are commodities, which is being the main problem in crypto, primarily because most of the tokens in crypto are people are, you know, saying they're not securities and the previous administration took the view that everything about securities, including like ETH and Solana and things like that. And so that's why it's called the clarity act

because it's attempted to provide clarity there. But you started the discussion, Ryan, saying, tokenized securities are securities. So there's clarity already there. Nobody's arguing that if we tokenize Exxon shares, it magically does not become a security. By the way, some people in crypto are trying to do that to create regulatory arbitrage and going and do shenanigans offshore,

et cetera, with securities, to try to bypass securities regulations, but at least here in the U.S., a tokenized security is security. you need to follow the same security regulations. Now, are there other things beyond the Clarity Act that we could benefit from that will allow more things to happen on tokenized securities? That's a different discussion.

We certainly, as a transfer agent, you know, the Clarity Act actually talks about modernizing transfer agents as one of the mandates, but it doesn't actually say what they're going to do specifically. That's an interesting area. Like, you know, I don't want to have, as a transver agent, believe it or not, we need to cut the physical address of a person, which is completely unnecessary if I operate on the blockchain. I just want to have a wallet address and a name.

I don't need a physical address. So there is, you know, other kind of things that will require, you could modernize there, like, you know, some of the Regan-MS rules that apply to market structure like everybody should follow the same price, best price, best execution. Or maybe if you trade on a digital idea, maybe you don't need to do that and market makers both figure out how to make markets efficient, like it happens in crypto

where you don't have those regulations and markets are efficient across finance and Coinbase, etc. So there's other topics of improvement, but the clarity act, if it doesn't pass, I think it's really bad for the crypto industry, but it's okay for the tokenization industry. We talked about how in order for all these equities to become tokenized securities,

this is issuer choice. So if Microsoft wants security tokens on Ethereum, it has to make that choice. It's not going to be because the NYDIC said so, it's not going to because Securitize said so, it's going to become an issuer choice. How do we convince it? them to do that and whose job is it to do that?

Is that your job, Carlos? We're going to work together. It's not going to be my job. Obviously, that's my job for sure, but Michael, you can speak about that. But obviously, the one that has the relationship with the issuers is Michael. But to be honest with you, I think that once, like we've been talking to many issues about this, the moment we announced that there's going to be a venue, a legit venue, because obviously it's a nicer, right?

so it's as legit as it gets where this security is trade, the conversation has completely changed, right? Because the question before was like, yeah, sure, I'm going to talk about what I'm going to do with the tokenized equity. What is it going to trade? Like what am I going to be able to do with it? And you walk them through like a scenario, a future scenario of things you could be able to do that it was not a reality yet.

Now this becomes a reality. I think you will get more issues because there's no necessarily downsize, right? You know, they'll get more investors. They'll get more liquidity. They'll get, you know, more happier investors. They will come up with new ideas. I'll just give you one example. The beauty of tokenized equities

is that you can just prove the ownership because you hold it in your wallet, right? It's a irrevocable proof of ownership of a security. Well, today, it's impossible for you to prove that you bought Apple shares because, yeah, you might show an screenshot of Rowlinghood, but there's not under your name. There's like 100 different broker dealers

with different apps, except. Well, there's a wallet and a token is a token. You can always validate on chain that you own a particular security. This could open up different ways to interact with shareholders, right? Because they could say, okay, you hold my securities, then I'm going to give you a discount,

or I'm going to give you a preferential ticket for this event or for this other one which today is impossible to implement because it's impossible to verify a ownership of securities because there's no ledger that you can read and validate it, right? So I think that these will allow issues to, you know, become more creative, especially issues that have a lot of like retail following of what they could do with their securities to attract more investors. So, Michael, if you want to add anything.

Michael, Carlos is on, our side of the aisle here. He's a crypto person. I consider you to be on the other side of the aisle and the trap-fi person. So, like, do you agree with Carlos and our sentiment that, like, this is inevitable? Or is it going to be maybe a little bit more nuanced than that? No offense taken, by the way. No offense taken. He's pretty good. It's pretty far for our thinking. So, look, I, so our CEO, Jeff Brecker, you know, he has a great track record of seeing where the puck is moving.

And I think he has a tremendous amount of conviction that, you know, we are going to be in a world where on-chain infrastructure is the core of capital raising, of trading, of clearing, of settlement. You know, it's so, so I think we would, we would agree that it's, you know, when, not if. But, you know, I think you have to, you have to demonstrate utility because there is so much inertia, right? There's so much, you know, inertia in the existing system. And so Carlos just gave a couple great examples where, you know, if an issuer can get new benefit from instantly knowing who's on their cap table, instantly knowing if someone's buying or selling, you know, that's something

a CFO or an IRO would get really excited about. Now, institutional investors are going to, you know, do everything they can to obfuscate their activity in the market. And so it's, even if technology could solve this, there may be reasons that it won't immediately come to bear. But I think, you know, we're going to have to, you know, find ways to tokenize the existing inventory, not just new issuance if we want to really move tens of trillions of assets quickly. So I think it's going to be, you know, not just the sort of issuer by issuer progress that, you know, Carlos and his brethren are pursuing, but it's going to take industry-wide shifts. And that's where regulatory clarity, no pun intended, you know, can be helpful because you have these collective

action problems that really need a catalyst that operates at the scale of, you know, a nation state. Because of that inertia that Michael's been talking about, there is another way this could play out. And I'm interested in your take on this, Carlos. So love the idea of actual issue or back tokens on chain that are securities, right? Because this represents actual ownership. On bankless, we talk so often about the importance of property rights. And that gets you the closest thing to a property right as possible. There are these synthetic type token products. And even maybe perps as an example of this on platforms like hyperliquid. And that doesn't give you actual ownership of the security or asset, but it does give you price exposure. It seems like price exposure is what a lot of

traders at least are looking for, and a lot of the capital, quite frankly, is looking for. How does a digital transfer agent and kind of the slow path of getting all of these issuers and assets on chain one by one, how does that compete against the synthetic versions of these things that can just like be quicker, even if it's not giving you full ownership, it is at least giving you the price exposure, and maybe that's the product market fit. Maybe that's what people actually want. What do you think about this? I would not put perps and derivatives in the same category. I think perps are valuable because equity markets have future markets as well, right?

And they coexist. And future markets and perps is a kind of a variation of a future market where the futures do not expire, right? But they also need the spot markets because they need to take their price from somewhere. And I was actually the other day with a company building Perps infrastructure. And after we announced the project with the New York Stock Exchange, and she was saying, this is great because perps, operate 24-7, but equity markets do not operate 24-7. So during non-market hours, you don't have pricing reference for spot price for perps, right?

So I think that, you know, spot markets moving 24-7 helps perps. And I see them as completely different instruments. As you said, one thing is you want to own, you know, the stock, you want to hold it. If it goes up, you know, over time, you know, 10 times you benefit 10x. PURPS is a different story. You have a funding rate risk, you know, if you go up, but you go up, like this, you can get liquidated and lose all your money and you need to put it. It's kind of a completely different audience, right?

So it's not about the same type of investors. And I think perps and spot markets are complementary. It's in the way that future markets complement the spot markets. Now, the derivatives, I do think that once the native tokenization exists, why would anybody actually touch five different derivatives, all of them different, all of them with different counterparty risks, et cetera, when you have an actual asset, that is what you actually want to do. So that's because the derivatives is spot market.

those guys are trading spot markets. So that's why I want to separate them from prebs. They're just trying to compete for creating an spot market for derivatives of equities. So I think those disappear once you have the real asset. And instead of having six different versions of coins, if Coinbase tokenized coin and there's a token that is the native representation of coin, what would you actually buy the derivative? What would you actually take counterparty risk to a random company,

having to buy an offshore? You won't be able to access in the US, etc. So that does my view go down to zero at some point. Now, obviously, you know, because there's nothing else, that's what people are purchasing. Carlos, as we bring this to a close, and thank you, Michael and Carlos for joining us today. There has been some rumor about securitized, maybe it's more than a rumor. Actually, somewhat of an announcement at some point I may have seen, which is that Securitize was going to go public by route of SPAC at some point in time. Do you have an update on that, Carlos?

What are the plans right now? Yes, it's not a rumor. We actually announced that last year that we are merging with a Cantor-FITZERAL sponsor SPAC. It's called Counter Equity Partners 2. It's already a SPAC that is trading. We've announced that we're merging with them. At the beginning of this year, we filed the S-4, which is kind of the filing you need to do with the SEC to approve the public filing and the public listing. And then we're now waiting for, you know, unaddated S-4 and hopefully get the regulatory process towards the end and get listed in the next few weeks.

So I guess that brings the question. tokenize yourself and put your own sock on release we're going to be the first. It was part of when we announced that was a condition for any spot we talked to that, you know, we want to tokenize our own equity because we want to showcase all the coolest stuff that you can do with native tokenized equities and what best to do it with our own

equity. So 100%. Carlos, last time we had you on before this time was I think two years ago when we were talking about Biddle and this was the beginning of real world assets. You guys were the first one pouring it. Yeah. What's if we, if we, if we,

broaden this in the maximum view. What's been the progress in bringing real world assets on chain from two years ago until now? What significant milestones have we accomplished? Well, I think the growth of the entire space, and again, it's very controversial the metrics, because what do you count as tokenized assets? Do you count this closed networks or there or not? But by any metric, this has been growing faster than anything else. It's grown faster as stable coins that have been growing. It's certainly grown faster than crypto that has been declining. So this has been the fastest growing part of the market. I do believe that BlackRock entering the space was a catalyst for adoption because obviously they're not, they're very influential

company. The tokenized treasury space that were the middle place, which is still the largest asset, I think it's worth $2.3 billion or something now. It was like $200 million two years ago, and now it's $11 billion. I don't think there's any part of crypto has grown that fast. But that's it. I think we're still scratching the surface. I like last week, Adas, Chair Atkins in his speech, he said, we're at the end of the beginning. So it kind of feels that way for tokenization,

that we're at the end of the beginning. Now the beginning has happened. Now we need to get into the real growth because the space is so massive, as we discussed before, just taking 1% or 2% of stocks on chain doubles the size of crypto, so that the fact that we have tens of billions of dollars still feels like very, very early days.

Before we let you guys go, I want to ask about the timeline for this whole thing. So this was an announcement of a partnership. When does the actual product happen? Is this like a 2026 thing or a 28 thing? Michael, I think maybe this is a question for you. Sure. So subject to regulatory approval,

we'd expect to launch in Q4 this year. For issuers that are interested, that's right. For issuers that are interested in native issuance, they don't need to wait for our, are ATS to be live, they can begin to, you know, work with securitize and, and there appears to, you know, begin on-chain issuance. And then those products would be eligible for trading on our platform once it's approved.

Wow. Okay. So firmly in the 2026 timeframe. That's great. That's great. Well, congratulations, guys. Pretty cool to see some of the very early visions of tokenization manifest into into partnerships that we can go talk to you guys about. Yeah. Welcome on chain. Yeah. Welcome on chain to the York Stock exchange. It's a big deal. Great to be here. And it's bangless. They will not be banks there. It's only broker to be last and it changes. That's right.

Doing this to bankless way would be fantastic. Guys, we've got to leave you with this. Of course, none of this has been financial advice. You know, crypto is risky. Even the tokenized security form. You could lose what you put in. We are headed west. This is the frontier.

It's not for everyone. But we're glad you're with us on the bankless journey. Thanks a lot.