The Wolf Of All Streets - Wall Street’s Big Crypto Bet – The Truth About Tokenized Securities | Michael Sonnenshein

Episode Date: May 18, 2025

I sat down with Michael Sonnenshein, now COO of Securitize, to explore how institutions like BlackRock and Apollo are going all-in on tokenized assets. We talked about how this could reshape finance as we know it - from daily yield, to DeFi integration, to even tokenizing public equities. This episode of The Wolf Of All Streets dives deep into the future of institutional DeFi and the unstoppable momentum behind tokenization. Michael Sonnenshein: https://x.com/sonnenshein ►► JOIN THE FREE WOLF DEN NEWSLETTER, DELIVERED EVERY WEEKDAY! 👉https://thewolfden.substack.com/ ►► Arch Public Unleash algorithmic trading. Discover how algorithms used by hedge-funds are now accessible to traders looking for unparalleled insights and opportunities! 👉https://archpublic.com/ ►►TRADING ALPHA READY TO TRADE LIKE THE PROS? THE BEST TRADERS IN CRYPTO ARE RELYING ON THESE INDICATORS TO MAKE TRADES. Use code '10OFF' for a 10% discount. 👉https://tradingalpha.io/?via=scottmelker Follow Scott Melker: Twitter: https://x.com/scottmelker Web: https://www.thewolfofallstreets.io Spotify: https://spoti.fi/30N5FDe Apple podcast: https://apple.co/3FASB2c #Bitcoin #Crypto #Securitize Timecodes 0:00 Intro 1:13 Are We Tokenizing Everything? 2:11 Inside BlackRock’s Tokenized Fund 3:50 Daily Yield and 24/7 Liquidity 5:22 Why Tokenization Actually Matters 7:23 Wallets vs Brokerage Accounts 9:11 Making Onchain Access Easy 10:36 What Gets Tokenized Next 13:43 Public Equities on Blockchain 16:04 Merging TradFi with Web3 18:46 From Grayscale to Securitize 20:03 A New SEC Attitude 22:12 Regulation Without New Laws 24:30 Connecting RWAs to DeFi 27:11 Launching the Converge Chain 29:54 Tokenizing Private Credit 32:20 Wall Street Yields for All 34:26 Tokenized Sovereign Debt? 35:47 Why Real Estate Is Hard 37:33 Institutions Finally Jump In 40:06 Settlement Speeds Revolution 42:10 TradFi vs Crypto Ideals 44:22 The Risk of Overreach 47:12 Bitcoin On Balance Sheets 50:10 Nation-State Bitcoin Strategy 50:55 Final Thoughts & Outro The views and opinions expressed here are solely my own and should in no way be interpreted as financial advice. This video was created for entertainment. Every investment and trading move involves risk. You should conduct your own research when making a decision. I am not a financial advisor. Nothing contained in this video constitutes or shall be construed as an offering of financial instruments or as investment advice or recommendations of an investment strategy or whether or not to "Buy," "Sell," or "Hold" an investment.

See, here's where I'm going to disagree with you. You said you've been in crypto for 10 years, which is 70. It's dog years, right? So you're 70 years old in crypto. More than 10 years. This is where the conversation starts to get a little bit tougher because Bitcoin good, blockchain bad, blockchain good, Bitcoin bad. You know what? It was a big fight.

Tokenizing real world assets has been one of the hottest narratives of this cycle and is driving blockchain technology and the industry forward. No company is doing that more than Securitize. Today I spoke with their chief operating officer Michael Sonnenschein about everything that Securitize is doing with the largest institutions in the world like BlackRock and Apollo. Well, spoiler, they've got a lot more coming and this is just the beginning. You don't want to miss this conversation. Let's go.

Let's go. Let's go. Let's go. Let's go. Let's go. Let's go. Let's go. So last we spoke, you were not at Secureitize,

but here we are, and now not to securitize, but here we are. And now you've gone from, obviously, from grayscale to tokenizing everything. So I guess we'll start with the most broad topic. Are we going to tokenize everything? We are not going to tokenize everything, right? And I think when a lot of folks think about tokenization, hopefully more folks are thinking about securitize than ever. But we actually just focus on tokenizing securities. That's really our area of the sandbox. To date, we've tokenized everything from treasuries to private credit to venture

to public equities. We are certainly continuing to broaden the types of products, So we are certainly continuing to broaden the types of products, the types of securities rather that we are tokenizing. But ultimately, will we tokenize everything? I don't know. We'll talk about it. Maybe as an industry, we'll try to tokenize everything, but not securitize specifically. Correct. Correct.

So let's talk about what you have tokenized so far. You just mentioned a few of those things. There's some that have obviously made huge headlines. We can just start right at the top with BlackRock, obviously, and their BUIDL. I never know if I'm supposed to say build or BIDL, but I think it's BIDL. You can say BIDL. BIDL is correct. I like BIDL.

It's very colloquial for crypto. It's like a HODL, BIDL. So talking about BIDL, it's obviously grown tremendously, multiple billions in AUM and with the largest asset manager in the world. So I think, you know, in my eyes, I saw that sort of really opened my eyes to what Secureties was doing, because it was such a big headline. But maybe talk about how that BlackRock sort of a partnership actually happened, how you're working with them, what that actually means.

Yeah. So I don't want to take too much credit for it because I've obviously only been with the team over the last couple of months, but we started working with BlackRock, call it about 18, 24 months ago. And really the thought was working on bringing a tokenized treasury, money market like fund to market. And I think because BlackRock is obviously the world's largest asset manager,

they have extensive, extensive experience in managing these types of products. I think for a lot of reasons, there was talk about Treasuries being a great asset to tokenize because it's liquid, it's priced very, very consistently, and it's interest bearing. know, price, you know, very, very consistently, and it's interest bearing. And in a world in which we really used stable coins as the substrate to collateralize all of our trading across OTC, desk exchanges, you name it, there was thought as to whether or not we could see investor behavior move to perhaps tokenized treasuries where they'd still have this stable high quality form of value, but that was actually yield bearing. And so the Biddle product launched about a year ago and again, just holds primarily short dated treasuries, securitize focuses on serving as

the funds tokenization partner and broker dealer, but it is BlackRock's product. So we are a service provider to the fund itself. And I think over the last year, the team has really focused on just improving the product. And this is kind of a broader theme, which I hope we'll talk about, Scott, which is not tokenizing for the sake of tokenizing, but tokenizing because we can actually provide investors with objectively something better, a better attribute, better liquidity, better experience, whatever it may be. And so like in the case of BIDL, it offers daily dividends, right? You compare that to your average money market fund or even just owning Treasuries directly, you're not going to get access

to capital daily. You're going to get it quarterly or maybe even monthly. So the fact that you can own BIDL and get that payout on a daily basis means you get immediate access to capital as an investor. You also get 24-7 liquidity. So when you think about owning a money market fund, or even owning Treasuries again directly, their dates, fixed income markets are closed. There are order cutoff times for money market funds usually around 2 p.m. Eastern on most days. But owning an asset like this, you actually have the asset on chain in your wallet to use as you see fit, and you can get liquidity 24-7. It doesn't care about holidays, it doesn't care about order cutoff times, etc. So we're really starting, I think, to define, and bring to life rather what the on-chain investor demands

out of their securities tokenized investments. What is it functionally about it that allows for that daily dividend? What about the process? Why does tokenization unlock that ability when it doesn't exist elsewhere? Well, it's really a function of knowing where our holders are in real time

and in what quantities they own the product. And so because it's mapped to each investor's wallet, we're able to spit out dividends to each investor on a daily basis, right? There's nothing kind of in flight at any one time. The blockchains which the product resides on knows who owns what and how much.

Does that improve the compounding in any way, shape or form? Or does it end up being the same amount that is gained based on the yield of the treasury over time? No, it improves the compounding. If you reinvest those dividends on a daily basis, for sure. That seems like a humongous improvement over just buying a treasury because I think everyone who has bought treasuries or money markets, their first question is, okay, I can buy treasuries or money markets, although that is not frictionless and it's not available

to everyone, obviously, but that's a meaningful improvement. It is. And listen, I think it's really important that we capitalize on the experience we have with Fiddle and some of the other products I'm sure we'll talk about to keep pushing the limits of what tokenization can offer us when it comes to our investments. Because I'll be honest with myself and you and your listeners, it's not always easier to buy a tokenized security as compared to just logging into your brokerage account and buying something immediately or things like that. There are additional hoops and additional complexities, but if you have value

already on chain for an increasing number of investors, keeping that value on chain and moving it into assets like Biddle or into some of the other products that we offer increasingly makes sense for them. And I think the numbers speak for themselves and the kind of growth we've experienced. So that's, it leads to an interesting question. So you have these institutional products with the biggest institutions in the world, but primarily being accessed

by people who are already on chain. So there has to be some sort of bridge there, right? Because people who are on chain are not necessarily the largest institutions who would be interested in these products, like natively, they're crypto natives, and you want to unlock the bigger wall of money that is not yet on chain. Well, I think that's just a function of where we are today.

There's a pretty consistent comparison between the growth of stable coins and the earliest days of their entrance into the crypto ecosystem and the growth of tokenized treasuries and where they are today. Tokenized treasuries are growing 20 some odd times faster than you saw the growth of stablecoins in the earliest days. I think some of that is because we are a mocking utility like we just talked about, but it's also because we do have the support and very public participation of household names like BlackRock, Apollo, and all these types of institutions bringing these products online.

Ultimately, though, what we have seen is it has become orders of magnitude, both for stable coin usage, but also crypto directly for more and more users to access it. So just because today RWAs and tokenized securities are really mostly being accessed by the on-chain investor, doesn't mean that over time that that won't continue to be a market that opens up to more and more investors. In fact, I think we're banking on it, and most people are as well. Right. So I looked through your primary listings

on the website and it seems like you actually run the gamut of who has access to different products. So BlackRock product minimum investment, 5 million, you have to be a qualified purchaser, right? That's not for your average person. But the next one you have Arca, $1,000 minimum investment retail. So you are covering everyone here.

We are and I think where we are today as you know, compared to maybe we talk again in a couple of months, I think you're going to see both securitize innovating as a service provider to the asset issuers and the asset issuers themselves innovating as well in both not only the product structures that they want to bring on chain and into tokenized format,

but also the underlying investment exposure that they believe may bring on chain and into tokenized format, but also the underlying investment exposure that they believe may be good candidates for being tokenized securities. Right, that makes perfect sense. So obviously beyond the tokenized treasuries, you're offering quite a few different products. Maybe we can talk about what those are, but even more interestingly, how you choose,

how you decide what's gonna be next, what the roadmap is moving forward from the products that you have now. Yeah. I think that there are some historical products that were very early within the securitized ecosystem that were probably a little bit more about democratizing access to otherwise difficult areas of the market for investors to have access to. So things like venture and maybe even things like healthcare that really was probably reserved for those that have those types of relationships, private bankers, et cetera. I think more recently what we've been able to do is really tap into things like public

equities and there's a project I definitely want to make sure I hit on, tokenized treasuries, and then private credit, which as I know you know all too well, has been a really popular area of investment amongst institutions and investors in general. When we look at the criteria, as we said at the beginning of this chat, there's an almost endless number of things we could tokenize. But generally speaking, the attributes, the qualities that probably make something a better candidate for tokenization are those investments that are liquid in general, have the most frequent ability to buy and sell them or subscribe and redeem from them. And then these days, I would say the on-chain investor, the investor looking for these types of instruments

generally wants cash blowing or yield bearing products. Those are kind of the most high level criteria I can share with you. Yeah, and interestingly, we're sort of going through the throes of stable coin legislation as we speak. And yield has been probably the largest sticking point, at least between the industry who wants the yield and legislators who have been pretty outright against it.

It doesn't look like yield is going to be included in that. So I don't think that's going to happen on stable coins. But if it did, would that in some way become competitive to your products? Well, I think it's a different product altogether. I think one of the trends we're starting to see, and we started to see over the last couple months is places within the crypto ecosystem where stablecoins had historically been the only contra asset or collateral asset. And assets like Biddle are now beginning to show up.

So you could be an OTC desk that was maybe only letting users that transact with them collateralized trades with stables, now being able to accept BIDL as a form of collateral. And as an investor, as a user, it's kind of undeniable or almost unquestionable why you would obviously want to maybe move away from collateralizing with a non-interest-bearing asset to collateralizing with an non-interest bearing asset to collateralizing with an interest bearing asset. Right. And so I do think you're going to see this trend continue where the listing venues and

the counterparty acceptance rate of tokenized treasuries as that ecosystem expands is only going to grow with it. And so investors are going to start to have more choice in what is that ultimate common denominator that underpins a lot of the investments they make. Can these be used like stablecoins? In many instances, yeah, because they're highly liquid, they're redeemable, they're backed by US treasuries. In traditional rails, treasuries are what some of the largest institutions in the world are consistently posting and reposting to be able to collateralize the trades they're doing on those types of rails. So it's hard to see a world in which that narrative and that investor behavior

wouldn't also take hold on crypto rails as well. So then let's talk about more of the longer term vision, not how you've chosen what you have, but where you see the puck sort of going. What do you think will, maybe even a more interesting question is like, where does it stop? Where do we go? This is ridiculous. We don't need to tokenize this next thing.

Do we need individual equities tokenized, for example? Yeah. In many instances, I think we do. Securitize tokenized the first public equity here in the US of crypto company called Exodus, which now trades on the New York Stock Exchange. If you hold shares of Exodus, you can actually put the shares back to your transfer agent and take back tokenized shares of Exodus. I think that type of investor behavior, that ability to do that is really, really interesting. There's some benefits that I think issuers are going to be excited to

see where it gives them much more direct line of sight into who actually owns their stock and what else you can do communicating with investors, corporate actions, all kinds of things that maybe you can speak to using blockchain technology and wallet infrastructure, and also to the investors themselves, because then they actually have direct control of the asset. It's not being rehypothecated without them knowing about it. And perhaps they can take it to other places, whether it's into the world of DeFi or trading it on other venues. So if you shrug off for a minute, Scott, the very US-centric view of the world that we often have where we just have access to all these different assets at all times, and certainly between 930 and 4, and you look at all these other places around the world that don't necessarily

have access to the same securities, you could see a world in which tokenizing assets here that are US listed and giving them on-chain accessibility to other jurisdictions could potentially be a really large unlock and really good use case for tokenized equities. Now do we think that this gets then beyond the accredited investor and beyond the institutions? Because obviously you're still doing this in a regulatory compliant manner, which usually means that it's accredited investors and only certain people have access. So it's starting the process of democratizing access, but it's not giving it to everyone yet.

Well, I think over time, we'll see what that looks like and it may differ jurisdiction by jurisdiction. Ultimately though, where we are today mid 2025 is you have an increasingly large number of investors that are amassing wealth and activity in wallets and they continue to have amassing wealth and investments in a brokerage account. And so like, is the brokerage account gonna merge closer towards the wallet or the wallet gonna merge closer to the brokerage account going to merge closer towards the wallet or the

wallet going to merge closer to the brokerage account, right? You know, if I was a betting man, and because I've worked in crypto for over a decade, a lot of people would say I am, I would bet that the opportunities today that are available to you in a brokerage account are going to be sooner made available to you in a wallet than the other way around. And that's just, you know, that's just my personal view. Right. I agree. And so what does that look like? That means that your Biddle and your Solana and your stocks are sitting in one wallet. You can cross collateralize all of that for margin and for taking loans and same kind of loans people take across. Right. So this is going to unlock

massive potential for everyone, but definitely for wealthy people who are on the buy, borrow, die schedule, right? Who sell nothing, but if you could borrow against everything in one place, that's a huge, huge hack. 100%. And I'll take it even a step further. I was talking with my friend, Christine Moye at Apollo, and we can talk about the product we did with Apollo earlier this year. She and I were at a conference, and she was actually speaking about a future state

that actually sounds almost realistic because the infrastructure is there for it, where perhaps you're like, you have a job, you're a W-2 employee, you get your paycheck every two weeks or monthly, whatever it is. And when the money drops into your wallet rather than your bank account, that perhaps there

are smart contracts that automatically allocate that money into a pre-programmed set of on-chain investments. That's possible. And it sounds awesome. I would sign up for that. I'm sure he would. I would sign up for that in a second. Yeah. It's like a much cooler 401k.

Exactly. So, you know, these aren't maybe as far-flung ideas as maybe we might think that they are. So, actually I'm curious on a personal level, this was a pretty big pivot for you. Sure. Why, why take on the role here as COO of Securitize? I mean, it is in line, obviously, with what you were doing.

It's the same industry. But I mean, this is a very different focus, I would say, than what you were doing before. See, here's where I'm going to disagree with you. It actually feels like a natural next step or it's been a natural next step or linear path for me. The last 10 years that I spent at Grayscale, essentially, the mission was taking crypto assets and putting them into traditional wrappers. Everyone knows we were perpetually on the hunt for bringing Bitcoin ETFs to market and fought that good fight. And now what I'm doing at Secureties is actually the exact opposite flow, taking

traditional investments and bringing them onto public blockchains. So in many ways, it's a lot of the same rules and regulations, same acronyms, same players, same flows. It's just directionally going the opposite way. So it actually has been a really natural fit and work candidly that has brought me a little bit closer to the underlying technology itself, which has been really rewarding so far. And when you were at Graysdale, it could be argued that the suit that you guys won effectively unlocked the ETFs for everyone and opened this entire path. Yeah, you could say that it did. It was certainly a team effort.

I look back on that time and just think about, how many people in the industry rallied around us, lobbyists, investors, the crypto community as a whole. And yeah, ultimately we persevere. It was a big fight. But interestingly, I mean, you joined Securitize when we were still under the same administration, right? We still had the same anti-crypto army

and we still had a very contentious, I guess, relationship with the government. Talk about what it's like to see the transition to a less contentious government, not from a political perspective, just where it seems like you can do more with less fear, which seems to be the situation now. Has it made it a lot easier?

Well, I think there's two things there. So one is, you know, publicly, you know, I'm not disclosing anything that isn't already out there. I've been down to visit with the SEC since joining Securitize, and it's been, you's been very different conversations. It's been great to meet with the crypto task force. First of all, it's great to even have a crypto task force.

Let's start there. Instead of crypto enforcement, right? It's a pretty big pivot. Yes. And so it's been really great to be able to have that open dialogue and be able to Talk openly about projects and spitball ideas and it's very clear that their posturing Is in fact in person What it is publicly which is come in talk to us talk about your projects talk about the things you want to be doing

You know writing to us follow, you know the the you know respond to be doing, writing to us, respond to the request for information we're putting out. Those are the types of things that type of engagement that in my over a decade of being crypto, we've kind of heard those calls, but we've never had them answered in this kind of way. So it really is been night and day, and it's been wonderful. I think what's interesting about Securitize's role in the industry is that while yes, we'd certainly like to see further clarity on certain areas, crypto commodities from crypto securities, things like that, things that the industry as a whole has been waiting a long time for, there's actually nothing within the existing rule set or legislative set, rather, that

we're waiting for or that securitize needs in order to continue doing what it does. We're a broker-dealer, we're a transfer agent, we're a fund administrator, we're a technology company, and we bring all of that together to be able to package up this fulsome us, you know, any tailwinds we get, commentary, legislation, et cetera, we support for the industry as a whole. But it's certainly not stopping or prohibiting the kind of growth that we're experiencing. Well, it's interesting. The industry has been embattled in this commodity versus security versus

whatever other definitions they may come with, you are tokenizing things that are very clearly securities outside of crypto. So it doesn't really affect you. These are like- And I want to be clear about that. These are securities. They were always intended to be securities. These are not assets that are born that then morphed into securities. These were always meant to be securities and always intend to stay securities. It's just that we, it's securitized rather than using a mainframe system to monitor who owns what or the DTCC, we're using the power of public blockchains to maintain the record and ownership of the assets that we're issuing, the tokens that

we're minting. And it's really our opinion that, and there is no rules around what technology you must use. So as long as our regulators remain technology agnostic, we would certainly be proponents that this is the most robust, most secure, most important innovation that really should be utilized for the tracking transfer ownership of things like securities. It's simply a technological advancement. It's hard to argue with.

Correct. Let's talk about the other benefits. We're talking about obviously, with BIDL, you can get daily yield. That's incredible, but there are other huge benefits. I would imagine that being 24-7, 365 to some degree means that you can trade these when even the underlying asset maybe can't be traded. I would imagine for liquidity, it's huge. What other benefits are there? Well, I think a big focus of ours as we move into the middle part of 2025, is really establishing an important linkage that today doesn't really exist

between tokenized securities, or just securities in general, but yes, in our case, tokenized securities, and the world and opportunities that exist for investors in DeFi. I think by and large, investors, and certainly your institutional investors who often participate in our products haven't really participated in DeFi. They understand there's opportunities for

decentralized exchanges to lend, to borrow, to you know, there's certain strategies out there, but they haven't really participated and so some of the things that we're working on and have been producing at Secureties are making those opportunities available. So we established a construct a couple of months ago called S-Tokens, where investors are essentially buying assets from Secureties. It could be Biddle. It could be the Apollo product, Acred, and they're able to actually vault that asset to be able to then mint a tracking asset or another asset on top of it that then allows them to engage in different DeFi strategies. It could be looping, it could be leveraged, different strategies that may exist depending on the DeFi provider they're using.

The acceptance on this has actually been really strong because a lot of these investors have long-term views for the underlying on-chain investment they made. And if they can take the 4% or 5% on Biddle and then go earn another 10%, 11% on top of it in DeFi or engage in a looping strategy on top of the diversified Apollo credit fund, all of a sudden, what is, let's call it what it is, tokenized treasuries, they're kind of boring. It's just treasuries. But if you can make it interesting and actually then again, make it worthwhile for someone to make these investments and then go enhance their return, then it becomes something really

interesting. So a lot of our focus on kind of where this is going is increasing the utility and having tokenized securities take on, I guess, new roles or new ways of thinking about them or new ways of using them that would just never be available to investors in a traditional Rails ecosystem. So you can take a yield bearing instrument

and send it into DeFi and earn yield on your yield bearing instrument in a relatively safe manner, assuming you understand smart contract risk and such. And as that becomes safer and evolves, it's going to just become an everyday way to earn more yield. Exactly. And so one of the projects that we're working on in addition to S-tokens, we announced a couple of weeks ago that we were actually working on in addition to S tokens, we announced a couple weeks ago

that we were actually working on a new blockchain with our friends at Ena. Yeah. The blockchain is going to be called Converge and we're hoping next couple weeks we'll have a test net and hopefully Q3 main net. But ultimately, we think Converge can really be this kind of substrate, this common denominator for institutional DeFi, kind of capitalizing on what SecureTies does with RWAs and what the Athena team has really captured in terms of DeFi. That's interesting. I didn't even ask and most people probably don't know the existing products. Are they blockchain agnostic?

Are you minting on multiple chains? Is everything on Ethereum? I know the answer, a bit of obviously is the multiple places, but are you generally focused on certain chains and then how do you deal with interoperability? Yeah, so we are blockchain agnostic. So we work with and have integrated with quite a few public blockchains today, everyone from Solana to Ink to Avalanche, Arbitrum, Optimism, Ethereum, ZK Sync. I'll stop there because then I'll start repeating blockchains because I can't remember them all. But yes, we are blockchain agnostic, and we work with wormhole on interoperability. So, for instance, you can make an investment on Ethereum and Biddle or whichever share class it may be, and you can bridge across to other

blockchains. And again, this is that functionality that, again, can only be unlocked in a non-chain environment, but that's pretty exciting to a lot of investors. Yeah. Let's talk more about Converge. Why build your own blockchain? What advantages does that give you over utilizing these already accessible blockchains that we just mentioned? Yeah. I think that there's a lot that we can certainly bring to Converge, which is the asset issuers that we're already working with, folks like BlackRock, Apollo, Hamilton Lane, KKR, et cetera, that are looking to expand their distribution and move into additional ecosystems. And certainly with Athena and some of the native tokens that they've been able to create, whether it's USDE, USDTB, et etc. And all the integrations they have with DeFi, we wanna build something that's highly performant

and that's well suited for these types of applications. And it's not to say that these assets won't continue to engage in DeFi activities on other chains as well. They certainly will. But we believe there's an opportunity to work closely with the Athena team to build something that is specifically for this use case, really institutional DeFi. Makes perfect sense.

You said that you want to talk a bit more about the actual Apollo product. So I would love to hear more about that. Yeah. So I touched on it earlier, but private credit is an area that a lot of investors have been trying to get focused on. I believe there might already be, or there soon could be, a private credit ETF. So I think you're starting to see this making its way

into more and more retail hands as well, just because it's a hot area of investment. And we have two credit funds. One is with Hamilton Lane, which is called Scope. And then we launched this fund with Apollo, which is called Acred. And for a lot of investors, they're looking for these yield bearing opportunities. And if they can get comfortable with tokenized treasuries, which most of them can, for some part of their treasury or some part of their balance sheet, they want to move a little bit further out on the risk spectrum and maybe do so and be compensated for that additional risk with a little bit more yield, such as private credit offers, could be 8%, 9%, 10%,

maybe in some cases almost 11%, depending on what's going on in the space, but still do so from some really high quality asset issuers who have a strong track record of delivering on these types of returns. So we've been really excited with the reception in both the Hamilton Lane and Apollo products. And I think you're going to see more of those types of strategies coming to market. And largely who is interested in this exposure to private credit that doesn't have it otherwise? Or is it the same people? It's a lot of similar people. So again, if you have X amount of treasury as a DAO, as a crypto centric organization

or whatever you may be, there's certainly some assets that you want to have in a super liquid, underlying super liquid format into assets like Biddle tokenized treasuries. But there's probably some other portion of your balance sheet that you may be comfortable with perhaps being not as like it could be monthly, it could be quarterly redemptions and that give you a little bit of a higher yield. So it's really a diversification play, I think, for a lot of those folks. But at the end of the day, this could eventually unlock this for your average person, it's kind of like bringing Wall Street style returns to everyone.

Right. I mean, these are the things that your average person doesn't even know exists probably, but doesn't certainly doesn't have any access to. Correct. And, and, you know, accessibility is, I think a really important part of investment product structuring. We've obviously seen the unlock that has occurred as a result of Bitcoin ETFs coming to market and just how many more people could access them in a familiar traditional format.

Much of the same, I think, can be true with tokenized product structuring, where we'll be bringing opportunities that perhaps investors could in access before. Do you think that we'll see a change in accreditation laws like potentially under this administration? And what do you think that that would mean for secure ties? I think it's possible. I think anything's possible at this juncture. I think there are certainly calls, not just from the crypto industry, but from other arts of the broader investment management ecosystem that would like to see

the accredited investor definition relaxed. I think there's some movement on that in the last few years where those, I believe, if you hold securities licenses and you don't meet net worth accreditation standards, you can be qualified as a credited investor. But perhaps there are other ways to assess people's investment prowess or acumen, and that would just unlock the ability for more investors to participate. Our regulators, and we learned this through the gray scale lawsuit, or showed this really rather through the gray scale lawsuit, is that they're not and should not be in the business of deciding what is and

isn't appropriate for people to invest in. Provided all the risks are disclosed and people know what they're getting themselves into, investors should have the wherewithal to deploy capital into the places where they want to. That may include things like private credit that they haven't historically had access to. You're obviously focused right now on large institutions and working with them on tokenizing securities. Do you think there's a world where we start seeing like tokenized sovereign debt and working

with the governments in ways to tokenize their FX reserves and debt? Yeah. as their FX reserves and debt. Yeah, it's funny you say that because I think some sovereign at some point, sooner than maybe we think, is going to be almost duped into that kind of a project. Because I think oftentimes when we say tokenized treasuries, people immediately think that we're working for the US government.

And like when treasuries get auctioned, they're being directly auctioned and minted onto a public blockchain. So if folks want to take that as what we're doing, sure. But in fact, what we're doing is creating funds, tokenized funds that hold treasuries. The treasuries themselves are not tokenized. So yeah, who knows? I mean, we have stable coins, we had tokenized treasury funds,

we could have tokenized dollars and that could mean tokenized direct, you know, debt instrument from sovereign nations, why not? Yeah, outside of specifically what Securitize is focused on, obviously, you're looking at the entire tokenization world as a broader conversation. Where else does this make just a ton of sense in your mind? Where is this a layup to focus on tokenizing?

A lot of people obviously point to real estate or mortgages or a lot of things we talked about for NFTs many years ago. Yeah, well, I think this is where the conversation starts to get a little bit tougher because when I think about Scott and Michael finding a piece of real estate that they want to jointly own and all the paperwork and the entities and the this and who owns what percentage, I think there's a role that blockchain technology could play in making that faster, simpler, less paperwork intense, less intermediaries and whatnot. But that doesn't necessarily mean that it needs to be a token or a tokenized security. So historically, and I think generally a lot of people feel this way, is that like real

estate isn't necessarily the best or kind of lowest hanging an opportunity for tokenization, just because again, it doesn't meet a lot of the criteria I talked about. Doesn't mean it can't be done or shouldn't be done, but it's generally speaking, not valued all that often, right? Real estate doesn't typically move in prices meaningfully day to day, week to week, or even sometimes month to month. It's not always super liquid. And so it doesn't necessarily hold itself out from an attribute perspective as the best

candidate for tokenization. But could real estate transactions, real estate ownership or things of bad nature be probably augmented by blockchain technology? Sure. But it's not necessarily the same thing as fractional investing or things like that where tokenization may actually play a role. You got yourself on mute, Scott. I did because I was sneezing. I'm like coughing in the background.

But for you, really, that's the reason you're focused on securities. Correct. It's just so obvious. And for now, that's why we're focused on securities. Correct. So are other institutions knocking down your door? I know you can't give away any of the secret sauce,

but I've got to imagine that when BlackRock is doing this and other institutions are seeing this massive success, billions, as I said, as you said, growing faster than stablecoins even did, you have to imagine that that's getting the attention of everyone else. It is. And I also think to your earlier point, the regulatory environment and this administration's posturing towards the crypto ecosystem has certainly caused a lot of people to move off of zero and want to have more of those conversations. So we're talking to a lot of folks trying to figure out what their strategy is going to be. Is this a proof of concept? Is it a MVP? Is this something they're ready to bring back to their risk committees and their legal councils? And ultimately, do they want to stake their, pun intended, their careers on it? Because for some people over the last decade plus, I've seen this, I've seen a lot of people

grapple with that. Do they, they're personally invested, they're personally believers, et cetera, but do they want to stick their neck out there on this stuff professionally? And increasingly so, they're doing it. And I think you will see us hopefully come to market with a couple of other asset issuers over the next couple of months with some new product offerings. I mean, there are larger institutions that have somewhat been doing similar things internally, right? As much as like Jamie Dimon speaks aggressively against the industry, there's JP Morgan coin and they've and they've done tokenized bank deposits,

you know, between BlackRock and others and the Onyx platform. So you do have even competitors within these institutions, I would imagine, to some degree. Some might partner with you, some might build this themselves. Right. Yeah. And the funny thing about a lot of those projects, and I'm not speaking about any one of them in this, what I'm about to say is that they've often, what I'd seen, at least kind of hedge themselves by making sure that these kind of federated blockchains and projects they've set up are positioned for future growth to be able to be capitulated over to a public blockchain.

So if they ultimately do part ways with this walled garden they've created, they can actually ultimately utilize the security and the transparency of public blockchain. So I think that's also a pretty telling aspect of ultimately where I think we believe a lot of this will go. We talked obviously about tokenizing individual securities. There's reasons you would do that, as I said, to democratize access around the world, people who don't, who can't buy Tesla stock in a foreign country, for example, one of the biggest arguments this industry has made is for the

instantaneous settlement effectively, right? So and obviously having 2437 365 markets. Nasdaq has already said they're going to probably go 24 five. Right. So it looks like maybe with an hour off to for the janitor to come in and clean out the trash cans. But it looks like block chain is forcing other markets certainly to be available more often and to more people. But what about I mean, the instant settlement side of this, even the DTCC

just did a, like a whole panel and study on using blockchain technology. It feels like it's really happening. Yeah. I mean, listen, the proof will be in the pudding. I mean, in, in, in my, you know, career, I've seen us go from T plus three to T plus two to now T plus one. These are leaps that took a very, very long time. Again, it goes back to what I said earlier, and it's, are those investment opportunities going to make their way into a wallet faster than they're

going to see crypto assets from wallets make their way into brokerage accounts. We just saw announcements from, I think it was Schwab and a couple of other folks that they're going to turn on spot Bitcoin trading in the next 12 months. You've been around this long enough to know, Scott, where is this industry going to be in 12 months? So far beyond, hey, we can trade Bitcoin now on Schwab. As important as that is, because it is, I don't want to diminish it. It is important. But 12 months from now, there's going to be something that is going to be some innovation that we were not thinking about, talking about, or even ideating on

that is going to be become part of the vernacular and something that's going to be actionable. And that's what this industry does. And that's why it's so great to be a part of it. So I don't get all sentimental, but that is the God's honest truth. No, it is. And it makes you wonder if some of these larger institutions are going to become the blockbusters and Kodaks of the future. If we're going to see even some crypto natives step in, I guess the bigger question there is, as crypto natives and believers

from the beginning, we have this weird cognitive dissonance about cheering the Black Rocks and Goldman Sachs is and JP Morgan's coming into the industry when you I certainly first bought Bitcoin because I was trying to opt out of all that. It does come down to a little bit of a philosophical question. But you walk down the street and you survey a couple of people, most people probably still don't own crypto. And most people then certainly almost do not own that tokenized security. So to me, that spells more opportunity than kind of failure or characterizes where we are today as plenty of room to grow for sure.

And it is, however, still the participation of the Black Rocks, the Apollos, the Hamilton Lanes of the world that are giving investors increasing comfort that make this on-chain economy actionable for them. And quite frankly, I don't think there's anything wrong with that. I agree.

I mean, listen, Bitcoin, even if you're the most diehard Bitcoiner in the world, you can't really believe that it becomes a global reserve asset, which I don't necessarily believe, although Larry Fink apparently does now because I heard him say that, which blew my mind. But without it being adopted by everyone, you can't get to the Bitcoin endgame without institutions in the big wall of money participating. Correct. Correct. So, time will tell, but I think that 2025 is definitely shaping up to be a very exciting year for growth across the ecosystem, tokenized securities, and certainly beyond.

Is there anything in your mind at this point that's glaring that could stand in the way or stop this progress or that could throw a hitch in it, at least? I mean glaring that could stand in the way or stop this progress or they could throw a hitch in it at least. We've had our, I'm not speaking specifically to tokenizing, but we've had our ups and downs in this industry where sometimes when we least expect them, right? So you never know. Yeah. I mean, one thing I would say, and because I've seen it before, you know, I had a front row seat to see the ICO boom and bust and, you know, countless other things over the years is, you know, just because our, you know, here in the US, we are holding ourselves out to be a jurisdiction that wants to be the hub of crypto innovation. And our regulators are calling upon us to come in and talk to them

and participate and help shape and craft narratives and new legislation. Let's as an industry not take that inch or two inches they've given us and somehow take a foot or a yard. Let's continue to work collaboratively with them to create sound frameworks. This is an industry has been what we've been waiting for, this level of engagement, this need or desire to engage in constructed dialogue. My fear would be that folks in the community take this level of optimism and this loosening attitude and just run too far afield with

it. We still have to comply with existing rules and regulations, and there's really just no reason to repeat mistakes of the past. The president did it the weekend before he went into office. So let's go ahead and launch meme coin. We know that people, when given the opportunity using crypto, will push the envelope as far as humanly possible. Right. So I guess that, if anything, is my fear, right? Let's make use of frameworks we have when we have questions. Let's go and let's ask about them and let's try and get the answers that we need. Let's keep building this together and

kind of not capitalize too quickly on this newfound optimism. I wouldn't say it's a fear, but I have concerns about almost 180 degrees from that, which is that we have the attention of the legislators and regulators, but maybe in some way, even if totally unintended, they'll get it wrong. Like they'll put something into law that will have some unintended consequence in a few years

that will be contentious or confusing because it's, I mean, it's, as you said, like, who knows where we'll be in 12 months, how can they possibly craft sensible legislation? That's possible. But I think as an industry, we've seen those types of curveballs show up in legislation. And I think, you know, our industry groups and associations have done a really good job of very quickly addressing those to make sure that they don't, in fact, become law. So I worry less. I worry less about that, perhaps.

Yeah, that makes sense. Obviously, I think what we hope for is just a very basic framework. And then, you know, people can kind of operate in those guidelines and the regulators will maybe give more clarity down the road, assuming we have favorable regulators who understand it. You, I mean, you said you go into the SEC now, Hester Perce, it's incredible. I mean, she proposed safe harbor years ago,

which still is the best system I've seen proposed for determining what is or is not a security and the path to not being one. Correct. Correct. But you know, these are frameworks that now can get further developed and hopefully we get some additional clarity on them in this Congress. We'll see.

You said you've been in crypto for 10 years, which is 70. It's dog years, right? So you're 70 years old and crypto more than 10 years. Okay. So you're in years old in crypto. More than 10 years. Okay, so you're in your 80s, congratulations. Exactly. There has to be some level of satisfaction and vindication to see where we are now versus where it was even a year ago,

but much less two or three years ago and 10 years ago. I mean, even your probably wildest dreams is about as good as it could be in 2025. Oh, for sure. And I think even more importantly than that, I sat in seats where it was Bitcoin good, blockchain bad, blockchain good, Bitcoin bad, you name it, regulators saying insane things, sovereign nations saying insane things, influential companies saying insane things, sovereign nation saying insane things, influential companies saying insane things, you know, massive volatility, three crypto winters. Yeah. And so as an industry, we've just continued to kind of persevere and keep building.

So yeah, I think we're infinitely further along than anyone could have even dreamed. And I think it still feels early. Even as a 70 or 80 year old, it still feels early. Well, I'm 48. I still feel like I'm 20. So I'm good in real world, you know? And so outside of specifically your role at Secureties, having been in this industry so long, is there anything else that you're looking at that's just exciting to you personally that's being built in crypto?

Outside of Secureties, I think some of the things that I've been paying attention to is the way that a lot of companies are really starting to capitalize on putting crypto on their balance sheets. You know, you started to see now actually even whole ETFs created to help investors with a single investment access all the companies that have Bitcoin or other crypto assets on their balance sheets. It's obviously been a massive tailwind, very smart strategy on behalf of, of strategy, um, and Michael Saylor. And I think you're seeing a lot of people begin to mimic some of those behaviors. And it's, um, it's going to be fascinating what that ultimately does to kind of those that do and

those that do not, right. Um, and whether or not it's, it's really going to be that binary, um, how much that sets certain companies on different paths over time. And I wonder when we extend that to nations, what that will look like, because if the United States actually actively pursues a strategic Bitcoin reserve, you'd have to imagine you have the same game theory with central banks around the world. 100%. It'll be very interesting to watch, but that's definitely, I think, one of the things I'm just watching closely outside of Securitize.

That makes perfect sense, Michael. And thank you so much for the conversation. Where can everybody check out what you're doing? Follow you? Yeah, follow me at Sun and Shine on X and certainly follow us at Securitize. We're constantly coming up with new products, new ways of engaging with investors. And hopefully we can be a resource to anyone thinking about tokenized

securities and come back and chat again. So thanks for having me. Anytime. Absolutely anytime. I love talking to you in this new role. You seem very invigorated. It's exciting. I think you're on the cutting edge once again. Cool. Thank you, Scott. Thanks, Michael. Let's go.