00:00Okay, I just want to start with you, Sandy, and just hear from you what you're hearing on the ground
00:05right now at the conference,
00:07especially as this dueling conference is happening across the country, and really, you know, how crypto, how tokenization, how digital
00:14assets are a theme there right now.
00:18Yeah, great to be here. Thank you guys so much for having me.
00:21This is very exciting. What we're hearing here on the ground at the crypto conference at ConsenSys is this complete
00:28convergence of the innovation of the crypto natives
00:32and the experience and the institutional knowledge of the traditional financial industry coming together
00:39and really reimagining what capital markets are going to be for the future, and that future feels very tangible right
00:47now.
00:47We're very excited about all the developments we're hearing and seeing here at the conference.
00:52Danelle, as the volumes continue to grow, where are the bottlenecks you're seeing?
00:55Is it settlement? Is it speed, interoperability? Is it compliance?
00:59And how do you think institutions can solve those?
01:01Because we have a lot of critics of tokenization saying that it's just creating a more fragmented world.
01:07Thank you so much, and I'm happy to be here. It is absolutely not creating a more fragmented world.
01:11I think the real issue here is distribution, and it's making sure that there are parties who are distributing,
01:17all of this out in the right way, and making it so that retail can get it, so that small
01:20to medium enterprises can get it,
01:22and also that institutions who are already involved in this are getting it.
01:25So I don't see that there's a bottleneck with respect to anything other than speed to market,
01:30which is what we're seeing. A lot of folks are trying to get their assets tokenized as quickly as they
01:34can.
01:34And I think the blockchain world is ready for it, and the crypto world is ready for it.
01:38And traditional finance has been hesitant until probably the last year.
01:43So other than Franklin Templeton jumping in on this five years ago, which is really, they were a leader in
01:48this space.
01:48Others are taking their time and, I think, trying to follow on with what Franklin has done.
01:53So I want to go to you, Sandy, and just weigh in on the tokenization part of this,
01:57because Franklin Crypto, the dedicated crypto division, you acquired the company, 250 Digital, reports into you.
02:03You paid part of the deal in Benji Tokens from your on-chain money market fund,
02:07a tokenized asset to settle an M&A transaction.
02:10Is that the future of how M&A deals are going to close?
02:16100 percent. Why not transfer your yield with your payment, right?
02:20These are funds that are going to get deployed in a strategic manner,
02:23and being able to have them accumulating interest every single day, right,
02:29is going to be completely beneficial both to the acquirer and to the target company, right?
02:34So I think that this really is the beginning of a new re-envisioning of how do you use money
02:41in a world where transfers can be instant,
02:44where you have this increased flexibility and velocity of using tokenized forms of payment.
02:51I think that this is a harbinger of where we're headed.
02:54Tanya, with BlackRock, Fidelity, and J.P. Morgan now in this space and just really racing to jump in,
02:59I'm curious whether you think we'll see a price war or more a raise to scale.
03:03Which will give in first? Is it going to be fees or is it going to be margins?
03:08No, I think it's going to be hard to beat what's already in the market
03:11in terms of what Franklin Templeton has developed.
03:13They made it so that you can get into their money market fund at a $20 price tag,
03:17which is pretty significantly different than it used to be,
03:19maybe $2,500 or even, you know, larger than that for that.
03:23And then the fees in terms of peer-to-peer transfers,
03:25they have already had over 200 million peer-to-peer transfers with the asset on Stellar,
03:31and that's a pretty remarkable thing, and that's a fee-free transfer.
03:34So I think that what we're going to have to see is scale.
03:37I think that the fight here is going to be for scale,
03:40and we're already seeing a lot of players focus on distribution so they can hit scale.
03:44So I think that this is going to be really beneficial to retail
03:47and also to small to medium-sized enterprises in terms of what we see here
03:51because fees are going to have to be low, entry points are going to have to be low,
03:54and then it's just speed to market.
03:57Sandy, we know that Benji, it's fifth anniversary, it's surpassed a lot of milestone,
04:02it's really one of the first in the market, and it continues to be the biggest in this space.
04:06What's one thing, in your opinion, that has yet to happen
04:08that will really unlock a huge wave of institutional buying that you're still waiting for?
04:15Yeah, so I think the biggest unlock that we have coming has been the revision
04:20of the special purpose broker-dealer rule
04:22and this ability now for us to be able to start third-party distribution of Benji.
04:27We have been the sole issuer and sole distributor of the Benji product
04:32as we have been working through the regulatory clarity on how to broaden that distribution network,
04:37but now we see these new rules coming into place, and that's going to really open up the use cases
04:43and open up the venues where we can be offering Benji more broadly.
04:48So we are very excited about what the next 12 to 18 months are going to bring.
04:52We think that you're going to see volumes in this space and the total assets held in this space,
04:58not just for Franklin Templeton, but for all the entrants in this tokenized money market fund space,
05:03really explode tremendously, particularly since the CFTC has approved
05:07tokenized money market funds as collateral for derivative transactions and swap transactions.
05:12That's going to open up all new use cases.
05:15Our intraday yield and being the only tokenized money market fund able to offer intraday yield
05:21at an institutional level, I think is going to be a unique differentiator for us
05:25and is going to really see us become the preferred collateral across the street.
05:31So we're very optimistic about what the next year is going to bring.
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