Sandy Kaul: Tokenization, AI & Wallets Will Redefine Global Finance in 5 Years
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Markets evolve fast, your investing strategy should too. Get a free portfolio review with Wealthion’s Endorsed Financial Partners at …
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The next five years is going to see more change in the industry than you have seen in the last 50. [Music] If you have any questions about how to navigate the current environment, Wealthon can help connect you with a vetted advisor to get a free portfolio review. Just click the link in the description below or head to wealthon.com/free. There's no obligation and it will just take a few minutes of your time. Again, that's wealthy.comfree. >> Ladies and gentlemen, welcome back to the Wealthy podcast. I'm Chris Perkins and today I am thrilled to have a chat with my dear friend Sandy Call. Sandy is the head of innovation at Franklin Templeton where she focuses on Sandy, I love this. Like if you look at your corporate bio, it talks about disruptive technologies and innovation. So, she's the the disruptor chief at Franklin. Um, welcome to the podcast. >> Thank you so much, Chris. I love chatting with you always, and now doing it on a podcast is even better. >> Yeah. So, Franklin is what, a 1.6 to 1.7 trillion asset manager. Um, people also don't realize how advanced you are in crypto, which I can't wait to talk about today. But before we do, um, disclaimer, Sandy and I have known each other for years. We actually used to sit next to each other at Cityroup um where we actually like learned about crypto together. But like let me turn it over to you first Sandy. Tell us about your background u as we get the conversation started today. >> Great. Well, Chris is very modest because we didn't learn about crypto together. He taught me about crypto. Uh so he's very modest in that way. Uh yeah, so I I've been in the industry for a long time. um have really had the fortune in my career of having started as an a reporter um on the commodity markets and really then became an analyst. Uh when I became an analyst, it was the mid 1980s and uh they were giving the first personal computers out at Shears and Leman Brothers where I was working. And so, you know, I've seen technology advance from paper files that I was given as an analyst, 40 years worth of paper files to now talking about tokenization of every product under the sun and blockchain. So, I've had the fortune of really experiencing the disruptive technologies I talk about and and really witnessing firsthand throughout my whole career how technology kept changing. The way that I did my job kept changing. The nature of my job kept changing. Uh, and it's always fascinated me. Uh, I've always been excited about it. I started building technology uh, back right in the internet boom era. Uh, and have been focused on the future of the industry ever since. And as you know, Chris, I published my first report on blockchain and tokenization back in 2017 saying that tokenization would replace equities and bonds over time. So, uh, here we are. It's really interesting. >> Yeah, I had Robert Lesner on recently and we talked about how he started ising these canonical equities on chain. So, it's like we're right on at the we're right about to really scale this thing up. I'm really excited. C can you tell us a little bit about Franklin Templeton? Um, I I don't think people realize just how significant you are as an asset manager and then of course like how are you focusing on on building out your crypto practice? Maybe the story, the history because you guys have been at it for a long time. Yeah, absolutely. So, um I think the first thing to understand about Franklin Templeton is we are a publicly traded asset manager, but in many ways we're also like a a family office. Uh the Johnson family established Franklin Templeton. We're now 80 years old. Uh and Jenny Johnson, who is our current CEO, is the third generation of her family to be running the firm. And so Jenny takes I think a somewhat different view about what her role as the CEO is. She as every CEO is really focused on quarterly earnings. How are we doing? What is the messaging to the analysts? But in the back of her mind, she's always thinking, what do I need to be doing to position the firm for the next generation and the generation after that? And so she also thinks much longer term, I think, than many CEOs. And she worked her way up in the firm. And so Jenny actually ran ops and tech at Franklin Templeton for many years. So she understands technology. Um and so she was fascinated by blockchain when it came out. And and Franklin Templeton began its asset digital asset journey back in 2018. Uh with a simple premise of wanting to test the blockchain for recordkeeping on all of the mutual funds that we run as a firm. Uh and it's kind of snowballed from there. Uh and so today we have uh built our own technology. We've built our own uh crypto wallet-based technology that is patented at this point. Um it has been KYC AML uh enabled. It has been built in consultation with the SEC. Uh and we have been running a tokenized mutual fund on that infrastructure since April of 2021. So 24 hours a day, seven days a week, 365 days a year. Uh we have also built out that infrastructure to be able to launch any fund type globally. Uh we trade forc mutual funds, we trade US funds, we trade Singaporean VCC structures and we pay we trade private funds all tokenized, all digitally native tokens, not digital twins. and we trade them on this homebuilt infrastructure that we've now deployed across nine different public blockchains and one private blockchain. So, uh, we're out there. We run our own node operations. We do our own staking. Um, and so we are part of the communities that we are using for recordkeeping. And we have built an investment team that is very focused on investing both VC investing into seed and early stage blockchainbased ventures and into liquid tokens. So, uh, we're pretty engaged in the space and we're on a journey today to be tokenizing more of our broad product range and really being able to launch that on our infrastructure that we've created. So, we're all in on the digital asset space. >> Wow. There's a ton to unpack there. Um, I mean, I don't know of any other asset managers that that is as advanced when you talk about all of your capabilities. One thing you didn't mention was the intraday yield. now that you're now able to push out on the Benji product. Yeah. >> So, there's like innovation everywhere. >> Um maybe a bit of a of a challenging qu. How do you see Franklin Templeton versus your competitors and your peer competitors? Like how's your approach different? >> Yeah. So, I think we're different in in two big big respects, right? Number one, we firmly believe that blockchain and and these protocols are going to be the future utilities for the entire world. Right? I don't believe in 15 years, 20 years any organization, company, government, small business, individual. None of us are going to keep our own books and records, right? This is going to all be on public blockchain. these these uh L1s and L2s that are out today, they are becoming to us the utility ledgers for the entire world. And so we are moving our whole thinking towards this infrastructure which means no more accounts all wallet-based. We believe that the entire future is going to be operated out of cryptographically protected wallets and that means that every asset that sits in that wallet is going to be either a digitally native asset, a cryptocurrency or a tokenized asset. Uh and therefore they are going to be interoperable. They're going to be co-mingled. They are going to have greater utility. They're going to settle instantly. they are going to be able to be easily transferred and they're going to be able to be pledged in terms of collateral or liquidity pools or staking pools. There's going to be so much more that we believe people are going to be able to do with their assets. And so what we're doing is we're really building our future state infrastructure inside of our current infrastructure. And so we have committed to wallets and we have committed to this idea that products in the future are going to be digitally native. Most of our asset manager peers at this point uh are still working on this premise that blockchain is going to supplement their current accountbased mainframe based systems and so they're content using digital twins. Uh but we don't feel that digital twins fulfill the true purpose and utility of the blockchain and they don't have nearly the same number of use cases. So I think that's the biggest difference and then I think just the eariness of our journey and the fact that we've been engaged with not just the SEC but a global set of regulators uh for going on seven full years now and so we've built up a lot of trust and we've gotten a lot of permissions to do things that no other asset manager has. So I think that's been the big difference in why we're so far ahead right now. Wealthon together with SCP resource finance will be hosting a global silver conference this October in Toronto. Eric Sprat will be delivering the keynote and it promises to be a landmark gathering for silver investors. You can find out more in the details in the description below. >> Got it. So, where do you think we are in this revolution? I agree with you that in a few years everything's going to be digital. It's going to be on chain. You're going to have this wallet that's going to be your UI. But we're in this weird position now where you have all those legacy assets, those fiat assets. If you're an FA or you're a client, you know, how do you manage this interim period acknowledging that you're building, you know, the final product? Do you give a common, you know, experience? How do you deal with that? And by the way, there I think there's a lot of risk between the leg, the old and the new one's not settling very fast, the other one is. H how do you bring that this this weird interim period together for your clients? Yeah, and it's such a great question, Chris, and you we could probably spend an entire hour just debating this question, right? Um, my personal point of view on this is that you can't go slow, right? If we're going to really do this, we have to do this quickly. And that means that there is going to be an overwhelming mandate to get these wallet-based systems into place as quickly as possible. that there is going to be continued regulatory and legislative pressures to define all the rules around how to operate in these spaces and there is going to be surging demand from new inc from new entrance that is going to pressure incumbents to probably transition their build business models a lot faster than they would have ever anticipated. uh we like to say that we think that the next five years is going to see more change in the industry than you have seen in the last 50 and that's a scary process uh and it's a scary prospect but I think that it's going to be a very exciting journey uh and it's for exactly the reason you say you can't go slow you can't have this split system where some things are moving on a completely different time frame and other things are moving instantly because it creates all of these potentials for there to problem. So I think that the pressure is going to be to move to the more efficient set of rails as fast as possible. >> I'm not sure if I'm talking to someone who's at an asset manager or a tech company at this point, right? That's that's really what you're saying at the end of the day, right? >> Yeah. Well, I mean, I think superior technology always wins in the business model race. I mean, you and I have lived through two waves of this already, right? The internet came out and every firm we worked with was like, "We're never putting any functionality on the internet. It's not safe, right? Then cloud technology came out. Every firm was like, "We're never putting our data in the cloud. It's not safe." >> Blockchain comes out. We're never using blockchain. It's not safe. And in reality, the entire industry went on to the web. The entire industry is now in the cloud. And the entire industry will be on blockchain. >> And the internet wasn't safe in the early days. I remember in my college dorm room when it first came out, like there was no way I put my credit card on there. It would be gone. >> Yeah, that's right. But if you kept that view, right, if you kept that 1994 view of the internet in 2004, you were having a losing business proposition, right? That technology improved so quickly that you were way behind if you hung on to that view that the internet was dangerous. And that's the situation we're in today. There's a lot of firms that are hanging on to this view that Bitcoin, that blockchain, that these are dangerous technologies and they're not appreciating how much and how institutional these technologies have become over the past decade. >> Yeah. I mean, I talk to people all the time and they're like, "Crypto, Bitcoin, it's like one and the same." And there's just such a lack of knowledge. And it's amazing to see you so far out in front. You know, you talked about tokenization as a core part of your strategy. Can you explain to people what that exactly means? And then of course, why? Like what's the utility in all this? Why do we care about tokenization? >> Yeah. So, I'm gonna use I'm gonna use an equity because I think everybody kind of understands at this point what a stock is, right? We all buy stocks to own a share of a company. And today, when I buy that stock as an individual, it takes a minimum of 24 hours for that stock to actually settle into my account. Even though I may buy it and it may give me a a order fulfillment, that order fulfillment is not real for at least 24 hours, right? And if there was some kind of problem in my data and the person who was selling me that equity had different data on me, it could be way more than 24 hours until I actually owned that instrument. Right? So all tokenization is is it's saying I'm going to take that same asset, that equity, that stock in a company, and I'm going to put it in a new wrapper. And this new wrapper is able to be recognized by a new set of technologies. And because it is in this new wrapper, I can now instantaneously exchange a payment for that equity security. And so instead of having to wait a minimum of 24 hours when I buy that equity, I actually own that equity within seconds in most cases, right? And so that's a huge improvement. So that's one improvement. The next improvement is today I can only trade that equity between 9:30 a.m. and 400 pm Monday through Friday on days that the exchanges are open. Right? in the future, I can trade that tokenized equity 24 hours a day, seven days a week. Uh, and then the final thing is that if that equity is sitting in my account today, uh, and I want to post it as collateral or lend it out to get fees, right, that's a hard thing for me to do. I have to pay several intermediaries for that to actually happen. And once it's in that tokenized wrapper and it's sitting in my wallet, I can do that instantaneously myself. Right? Those are huge improvements in both the efficiency but also the utility of that equity. And that's all just by putting it in this new wrapper which is a token. >> And how does the Franklin Templeton business benefit from all this? I mean, I can see the benefit to your consu your is this just like a cost of doing business where you want to give your client a good experience or are you able to create new businesses and P&L and revenue around uh these innovations? >> Well, it's really both, right? I mean, on one hand, we're going to be giving our clients a better experience because their assets are going to be in their account faster. Uh they're going to be able to do more with it. And in many cases, they might even have to pay less in terms of fees because all the costs that I have to cover today to account for the risks that might exist in that 24 hours before I actually own the equity, I don't have to cover those risks anymore, right? So, it's going to be cheaper, I think, to trade. It's going to be easier for me to have my assets available immediately and do more with them. And I think it is going to enable new types of investment strategies and new types uh of passive income streams and new business models that just aren't possible today. Uh because it's too difficult to actually move these equities and these other investments around sufficiently easily for us to design new things. Right? So having this increased trans this ability to transport things more seamlessly uh is going to open up the creativity of us to design all new strategies and we're already seeing this with fixed income instruments right with uh yieldbearing instruments in we're seeing new models like looping which are actually allowing us to compound yields and to layer yields on a product which is something we were never able to do before this. So, it's a really exciting time to be thinking about what the future of finance holds. >> Yeah. So, let's let's talk about this looping example. I think it's really important because it's a it's an obvious benefit. Can you walk us through that? And are you now are you are are you do you plan to offer that strategy to your clients like a looping strategy, but maybe you can explain what that means for the listeners? >> Yes. I'm going to do my best. This one is this is getting into this is getting into very new cutting edge stuff. Uh but basically what a looping strategy is is that I buy an asset. I can put that asset into a uh a lending protocol and I can borrow another asset that I can then buy more of the original asset with that I can put into a pro a lending protocol and I can borrow and I can put more of the asset in. So I continue to reinvest with the borrowed funds and each time I get that additional leverage on the position to bring in additional yield on the portfolio. So in a sense it's uh some people call it recursive yield, right? I keep borrowing to the allowable limit until I've actually leveraged my original asset to its absolute utmost. And I've been able to lever that position all the way up to obtain the most maximal yield that I can get. And they call it looping because you have to keep going back through the process several times to get to that maximal yield. >> Yeah. So I guess you start with an asset like Benji, your money market fund, which is yielding somewhere around 4% or something like that. What do you think an achievable a real yield could be in a through looping strategy like that? What do you think? >> I mean, we've seen people getting that 4% yield up to around 10% or 9% which is really great when you think about a completely safe asset like a money market fund, right? I mean, this isn't Bitcoin or crypto. I mean, we're talking about a bog standard uh assets that's used by hundreds of millions of companies around the world every single day, right? So, I think that that's just a very exciting prospect and just a single example of what you can achieve with these new types of uh rails that allow you to do so much more so quickly and seamlessly. >> That's awesome. So, so obviously you've got a lot going on in the token token tokenized side where you're taking real world assets, bonds, securities, whatever. Tell me a little bit about the cryptonative side. Um are you looking to launch strategies there? I think you already have a number of different uh strategies. How do you approach that? And then is there a point where you bring them all together for your clients? >> Yeah. So, great questions as always. Um, so on the cryptonative side, right, we built our tokenized money market fund. As I said, we launched it in April of 2021 and of course we had to launch it on a blockchain, right? And by launching it on a blockchain, that meant we had to hold the cryptocurrency of that blockchain in our corporate treasury so that we had that cryptocurrency available to pay for the block space that we were utilizing in registering our transactions on the blockchain. And so we started holding these cryptocurrencies and then we were like, well, if we're going to hold these cryptocurrencies, we really need to be part of these verification networks and the nodes. And so we started verifying our own transactions and receiving the rewards uh which helped to minimate uh to mitigate any deflationary aspects of the coins that we were holding. And we were like these environments are kind of amazing, right? Like we were able to deploy technology at speeds that were just unbelievable to a legacy big enterprise organization. We had the support of the developers on these blockchains that came in with such creative solutions and were able to really coalesce around what we were trying to build and use smart contracts to help us in all of this coding. And we were like, "Oh my god, this is so efficient. Everything is going to be moving here." And so we became very convinced very early on through our own personal experience with what we needed to do. Uh and since then we have been building out as I said the investment team. But what we've also been building out is this whole set of knowledge around what are the key models, right? So staking, we're going to be offering staking in some of the ETFs that we're providing. Uh that's a digitally native function. Uh you look at things like the recursive yield, that's a digitally native function. We're looking today at digital asset treasuries and really understanding the role that digital asset treasuries play as a new type of entrance in the infrastructure uh of building out these treasuries and reserves because these are not companies today, these blockchains, they're protocols. And so having these companies now engaged gives more certainty to the demand side uh of the equation for the underlying assets. And so we're learning to work with new counterparties. Uh and yes, we're coming out with brand new strategies that really have not existed before. Um and you know, as I am allowed to regulatory, I will be happy to come back and speak with them individually. But we have a number of new things that are launching in addition to our our tokenized money market fund. But what we're also doing, Chris, is we're using these new rails to do things that nobody has done before. Right. So you had mentioned earlier uh intraday yield. So if you think about how a money market fund operates today, you have to own that money market fund at the close of the trading session to earn yield for that day's trading session. So if I own that position up until one minute before the yield before the close and I sell it before the close, I don't get any of the yield for the day. And that person who bought it one minute before the close, they get the entire yield for the day. That's not fair. And that's not right. And because we are compiling our own shareholder records second by second, because every trade we do settles almost instantly, we are able to divide the trading day up. And if you owned that uh money market fund position for 95% of the trading session, you would get 95% of the trading sessions yield even if you did not own it at the close. That's just not possible in today's system. We also pay out yield every single day. That is not possible in today's system. We pay out yields on Saturdays, Sundays, holidays, right? And when you think about how money market funds are such an important instrument for cash flow, having that certainty of getting the cash flow every single day really changes the nature of the game. So, it's not just the investment products we're building. It is also the operational enhancements that we are designing into the system that really set a new standard for what you're able to achieve with your assets. >> So crypto was traditionally a very retail type environment. Um and we used to say where are the institutions? Well, it's very clear based on our discussion right now that the institutions like Franklin Templeton are here but you know as you go out and you speak to ordinary people I I still think we're early. Can you tell me about your clients? Are you focusing on inst you know FAS you focusing on institutions retail >> and h how do you how do you work with them to to are there different product types for just walk us through the client base if you don't mind >> yeah where they are >> absolutely so it's it's such an interesting progression too right of the client >> so I'd say our primary client base right now are crypto digital natives right we are working extensively with the treasuries of the different protocols. Uh we're working with the venture capital funds who are investing into the space to help them manage their uh undeployed capital, right? We are working with the stablecoin issuers to help them manage their stable coin reserve pools. We're working with the exchanges on enabling their earn program so that people can exchange their stable coins for yield through our tokenized money market fund. We're working with the big uh derivatives exchanges uh and the hedge funds that are trading in the crypto space uh to facilitate their collateral postings because they can have lower collateral requirements by using our tokenized money market fund relative to posting a stable coin. Right? So these are where the biggest audience we see right now are the crypton natives, the people, the hedge funds investing in the crypto space and the cryptonatives operating the ecosystem. Where we are starting to see very strong emerging demand is from the independent registered investment advisors who are really seeing the demand from their own underlying clients and from the neo brokers like the Robin Hoods and the e Toros where they have a very cryptosavvy set of underlying investors. And in those two channels, what we've been finding a lot of success with is both our crypto ETFs, uh, but also creating model portfolios that combine equities and bonds and crypto exposure. And in the future, we'll be combining that with private equity and private credit exposure as well, so that you get a multi-asset class portfolio that can exist in a wallet, right, which is something that just doesn't exist today, or it can exist in a accountbased traditional system. So, we're straddling those two worlds with these advisor and neoker audiences. And then where the demand is starting to come right where we're in the early discussions and we're seeing growing interest is from the broader wirehouse uh and traditional advisor networks from corporate treasurers who are dealing with crossber trade um from supply chain uh and enterprise resource managers who are working across borders. uh these new technologies just make that a much much more efficient and easier process. So we we've kind of seen cascading sets of audiences and they're each kind of at a different point in their journey. >> Wow. Pretty pretty interesting. Um how long do you think it's going to take for the warehouses to get fully on board? I mean we just saw one of your competitors was saying, "Oh, we're going to finally get in the space." But do you think this is like a decade long journey? Do you think it's going to be a couple of years? How long is it going to take? >> Yeah, I don't think a decade. I definitely don't think a decade. I think that they will be at the point where they can facilitate crypto trading of the largest cap crypto products probably within the next two years. And then I think that you know depending on how quickly tokenized equities and bonds and ETFs move. They probably will be about on that same timeline for those tokenized products. Even though they haven't really started down that yet, I think that one's going to move very fast. And so I think within two years, you know, you're going to have your choice of of system to operate in. I could operate through an advisor in a completely wallet-based system with digitally native exposures or I could operate in an off-world off-chain system, the more traditional system using traditional funds and ETFs. And I think we'll have that parallel world for a little while within I'd say the next two to three years. >> Let's talk about the ETF space. And obviously you have you're a major ETF issuer. Um, we just saw the SEC come out with what we call generic listing standards, which make it much more seamless to list ETFs. How do you see that market evolving? Your competitors have said, "That's it. We're Bitcoin and ETH. Maybe we'll do a Soul, whatever." You mentioned staking earlier, which no one's been able to figure out. How do you see uh this market evolving? Yeah, I think I think you know that goes back to me to the statements like we're never using the internet or we're only going to keep our data private and we're never putting it in the cloud. You're not going to get away with only being able to offer Bitcoin or ETH or just a couple ETFs because this entire ecosystem is growing quickly and rapidly and there's going to be growing demand from people to want to be in these products. And until we're at that fully wallet based world, people are going to want to meet that demand through these ETF products. And so I think you're going to continue to see multiple product launches. I think they will get more interesting uh and more effective as we go on. Uh we're hoping to see soon inind redemptions which will open up new opportunities and allow people with a lot of of you know with a lot of profits in very longheld positions some new options on how to deal with that. Uh I think we're going to see multi-coin uh portfolios. We already have a multicoin ETF called Easy Peasy that we offer and others are coming out with multicoin portfolios. And I think that you're going to start to really get some interesting innovation uh getting embedded income streams through things like staking uh or through a different kind of lending protocol being built into an ETF. So I think that the ETF products will become more sophisticated with the generic listing standards. You have this great situation now where there are a set of objective criteria against which any coin that meets that criteria you can file on. And one of those criteria is having a futures market. And so you can have the basis trade and that starts to create an opportunity to structure the return streams that you're getting in an ETF. So all of these things I think point towards a thriving ETF ecosystem that will continue to grow, but it's going to be growing in parallel to direct wallet-based exposure. And because of the efficiencies of the wallet, I do think over time the ETF part of the industry winds down as the wallet part of the industry winds up. >> Oh, so you think we're going to migrate from ETF into just native token? >> I think you know that may be more on the 10-year horizon. >> Yeah. >> But I think that is the ultimate trajectory. >> Oh, that that that that's uh super interesting. Um wow. >> Well, let's face it, like just to to expand on that point for one second, what is an ETF, right? An ETF is a wrapper that holds different interior exposures, right? So, let's just take a super easy one to understand, the S&P 500. Yeah. >> Right. If I have all 500 of those S&P 500 stocks that are available as tokens, >> I can put together a proportionate share of 500 of those tokens and wrap all 500 of those tokens in another token that is my index token. and I can trade all 500 exposures with the index token. But if I have the index token in my wallet and I want to get at the underlying exposures, I can just burn the index token, right? And so I don't need an ETF to be able to do the things that I use an ETF for today. I'm going to be able to do that on a completely tokenbased product. And that's why we think over time ETFs disappear. >> I'm pretty obsessed with this whole basis trade you mentioned as well. And I think right now, like it or not, people, to your earlier point, they're going to have to probably stick to the rappers that they know, which could be an ETF, it could be a DAT. Um, by the way, we had Seth on here, our our mutual friend Seth Gins, my partner. He he did an entire episode on DATs, which was just amazing. >> That's awesome. Seth, >> yeah, he's cool. Um, but you could do um, you know, that on the spot end and then the futures. We just don't have futures. We're working through them right now. I know you're on the digital asset market subcommittee, the CFTC. We'll talk about that as well. But that trade is going to be huge. Do you think you're going to launch strategies around just basis trades? You see that coming down the line? >> 100%. I mean, and and I told you like I began my life in the commodity market. So everything is basis trading and commodities, right? So this is like home ground to me. I love this stuff. >> That that's amazing. So if you're going to step back five years from now, like right now you have this flagship Benji product. You have all this native uh development going on. You're building a pretty material tech platform, validators, you have the liquid strategies. What's Franklin going to be known for? Like like what what's what's what what what's going to define its brand? >> Yeah. What I would like to think defines our brand is that we are pushing the boundary on what's possible. >> Right. Uh and this is something I mean people don't know this a lot about Franklin, but Franklin had a lot of firsts in our history, right? Franklin was the first firm to ever offer um a a specific type of municipal bond in any kind of trading fund. They were the first to offer uh an ability to access like Jinny Mays, right, back in the day when interest rates were so high and everybody wanted access to this. They were the first to offer that in a fund form. We were the first to lower our money market fund minimum subscription size down to $500 at a time when it was $5,000 for everyone else. Today, you can subscribe to our tokenized money market fund for $20. Right? So I would like Franklin Templeton to be known as the firm that likes to use the emerging technologies of the day to push the model ever in the direction that is going to be the most beneficial and open up the most opportunities for our client base. >> Are there any risks that keep you awake at night in in trying to uh accomplish this dream? >> Yeah, I mean I think some of the risks that I always worry about. Number one, I worry that a lot of people still think private blockchains uh have some superior uh ability to offer protections over public blockchains. And that always worries me because I just do not believe that the development model where you have a very concentrated set of developers who are the only ones working on that chain can ever spot all the vulnerabilities that these public chains with thousands of developers are constantly looking for. So, I worry that there will be a big blow up on a private chain and that that's going to create a lot of problems for the industry. Um, I worry that regulators step in and protect existing intermediaries by mandating that people use these intermediaries even though they don't serve a function with these new rails. And I worry that that could be a real bad turn and bad direction for the industry because you should always go what the technology is capable of providing. Uh and I just also worry about you know the global economy where we're in a very uncertain time. There's a lot of geopolitical risk and you know you could see a lot of uh instability and and that is going to make it hard for anyone to grow. So these are things that kind of keep me out. So you talked about private blockchains. Do you have a favorite ecosystem? Um you know do you like Ethereum, Salana? How do you think about choosing the right ecosystem to build your products? How do you prioritize it? >> Yeah. Well, first of all, we have a pretty stringent set of blockchain evaluation criteria. Uh and and that evaluation criteria looks for some basic characteristics around blockchains that we think are very important. The foremost being how robust is the validator community and how fair is the trade allocation process for validating transactions. Right? We are big believers that if you have too concentrated and too centralized a trade verification process, you do not have as secure a chain. Um, and so we worry about some of these chains that are coming out that people are trying to be the sole validator on their chain. Those are things we worry about. Um, you know, and then we believe that different chains have different use cases and purposes, right? Not every order that comes into our trading systems are the same, right? If I'm using my tokenized money market fund and it's a small retail client and they're buying $25 worth of a position, we're not going to necessarily send that to the same chain that we might send an order from a sovereign wealth fund for $und00 million to, right? We're going to use different chains for different purposes based on their cost structure, based on our assessment of their security. And we have developed across the nine chains that we work on a pretty sophisticated order routing uh mechanism so that we're really optimizing where the trade is being sent. But we don't think it's ever going to just be one or two ecosystems. And I want to be really clear about that. We think that there is a need for multiple systems just for the redundancy and for the protection. And we think that the a robust system has competition. And so we would never want to see just one or two chains. >> That makes a ton of sense. Now, we have the privilege of serving together on the CFTC digital asset market subcommittee, the dams. Terrible name. Um, t >> tell us about what your areas of focus. What do you want to accomplish through that stream? Um, and like you know, you talked about some of the challenges of regulation. What are the opportunities as well? >> Yeah. So, look, I think and as you know, we've already accomplished some very important things, right? We helped to put into place a nomenclature that has been adopted by the global market advisory council that sets up a common way of talking about this entire ecosystem. You said in the beginning people are always mixing up crypto and bitcoin and blockchain right it's important that we define things and are using the correct language particularly in this new space where there's so many new things at once. So we put into place a nomenclature. Uh we really pushed the rules to foster this idea that you can use tokenized money market funds and stable coins for collateral just like you can use traditional money market funds as collateral. So that is something that has been being pushed by the industry and we make sure that the tokenized version of those products were treated equally in how they were applied for the market and and some of the areas that we'd like to push into is furthering this understanding of the different token types and what the rules should be about them and how you should classify them and how they should be regulated. We want to look at making sure that marketleading functions that are available outside the US like perpetuals are allowed inside the US. We want to you know explore some of the areas uh that are not as well defined. So that will give people more confidence about the system like bankruptcy remoteness and how that operates in the system. And we're going to look at new things like how does digital ID how does the opportunities around new digital IDs potentially open up new answers to the way that the industry performs KYC AML. Right? So these are just some of the things that we're going to do. But the biggest thing we accomplish is that this group brings together digital natives, traditional firms, industry influencers, industry uh organizations that are doing advocacy. It brings everyone together into one forum. And so all the arguments that we need to have as an industry, we can kind of have within this group. And when we come to consensus, that's a very powerful consensus because you've really talked to all the requisite players. >> Oh yeah. Consensus is very hard when you're talking to from crypto natives to the big banks to everybody in between. Not not very easy at all. um you know so the white house has David Saxs who is a crypto and AISAR we didn't talk too much about AI so far how does AI come together in this crypto world how do you think about it do you have a thesis around that are you building products around it >> yes >> how does that >> so first off you know AI is going to be an absolutely foundational part of the future ecosystem the way that we're most excited about deploying it in the space we're we're deploying it in many different areas inside Franklin Templeton The one that is touching digital assets most directly is this idea right that you have programmable smart contracts that are coded directly into the blockchain. So when I create a smart contract that contract's terms and cautisles and clauses uh are being selfexecuted by the blockchain based on the certain data trigger being provided. That's great. That is such a huge advancement. That was really what gave me my aha moment about the power of this new ecosystem. But there are always going to be situations where that may not be the right thing to do, right? We need some ability to have a circuit breaker or some conditionality around whether a smart contract clause should be being e automatically executed. Yeah. And so we are very excited by the potential of training these AI agents to be looking at these smart contracts and really determining you know is there any unusual or mitigating circumstance occurring that should cause me to pause on this automatic execution and I think that's a critical part of what we need to build confidence in the system and to have that ability you know to manage through a crisis if one were to occur. So that's I think the area we're most excited about. >> Interesting. I wasn't expecting for you to say defense and you're really describing defense. Um >> we know we announced a portfolio investment a company called Giza. Um and what they do is they provide offense I would say where you have the agent out there like finding optimization opportunities to drive yield and not investment advice for me. Um, what do you think about that? Like I hate to say offense defense, but you know that proactive yield seeking. Like the thing I've learned about agents is that they're incredible about optimization. Like >> almost to a fault. Like they will optimize and and and solve the mission no matter what. Like >> it's insane. Um, so how do you think about that angle? Well, do you see a world where you're partnering with these agents, they're programmable, and you're setting them loose to to drive that 10 20% yield, whatever they can find because that's what they're good at. Yeah, I mean look, we we are using I like offensive defense. We're using agents in that way, not just in our crypto investing strategies, but in our overall investing strategies, right? We have actually built an AI trader >> inside of Franklin Templeton that are a our existing investment teams consult with, right, to test their hypotheses, right? So this is a really interesting period because you know what you find is AIs think differently than humans think once you've set them loose and it it creates interesting tension where you can find good opportunity. So 100% I think that you know this idea because you are dealing with 247 365 markets you are not going to be able to have the same degree of human oversight at all times in these markets. So I think 100% you're going to program certain AIS to fulfill your own trading strategy that you have devised and then you let them lose. So to me that is the other function. I think that you know in that area we're thinking about investment management not only within the crypto space but at all levels of investing. there is this opportunity to use agents to optimize and to create good tension points with the humans overseeing investments to really get the boast of best of both worlds. So that's pretty fascinating. Can you I'd love to learn a little bit more. So you're saying that you have a PM, they have an agent. Um they have I guess you can load the agent up with the the parameters, the LPA, whatever of of the fund strategy. Uh the PM proposes a trader and investment and then the AI is like, "Hey, this is what I think about it." Is is that generally how it works? No, this is actually the AI investment team is completely independent of any uh portfolio manager right now and and it's actually doing its own market analysis. It's creating its own trading hypotheses. It's proposing its own positions and position limits and entries and exits. And then let's say a a traditional investment team is looking at that same investment. They can debate their point of view with the AI and understand why the AI might have a different point of view than they have. >> Have you have you done this long enough to understand the impact on returns? Um any kind of empirical analysis yet that you could share? >> Yeah. No, they're still working on this and I don't think they'd want me sharing any of their proprietary data right now. >> I'm just curious if the if you're seeing a outperformance since that that you guys implemented that. Really fascinating stuff. Wow. Um, what didn't we talk? We talked a lot about crypto, a little bit about AI. >> Yeah. >> What else is on the horizon that you're thinking about? You thinking about anything in quant I mean Sandy, you're like one of the You're a futurist, right? And you're always thinking about stuff before we before we anyone else is. Are you thinking about quantum? Thinking about anything else on the horizon? So the other thing I think about a lot and we're actually launching a new campaign on this uh very shortly at Franklin Templeton is everybody still thinks of an investment portfolio as something that is going to solely focus on investing. Right? And we are big believers that your investment portfolio is actually going to become your gateway to living a better life daytoday. Right? So I earn I earn loyalty points uh when I shop at certain stores. I get reward points when I use certain credit cards. I mean, nothing is more important to me from a financial engagement perspective than my investment portfolio. So, why aren't I getting the best rewards and the best opportunities through what I invest in? And so we are really big believers that you are going to start to get access to all sorts of of special access, discounts, new product access, um you know, the ability to engage in exclusive communities, the ability uh to influence product design, right? We believe all of these benefits are going to become accessible to you via your investment portfolio because your investment portfolio is going to sit in your wallet and your wallet is going to hold these assets and your wallet can hold the smart contracts within these assets. So just like I go to a concert today and I don't give them a paper ticket anymore. I show them my QR code from my wallet or I check onto a plane and I show them the QR code from my airline. I think I'm going to be able to show QR codes around what sits in my investment portfolio. And that QR code is going to open up all sorts of opportunities and benefits for me. And some of them exist today and people don't even know. Like if you own a hundred shares of Ford stock today in your portfolio, you get the for friends and family discount if you buy a car at a Ford dealer. >> But nobody knows that and nobody can prove that in the moment when they need it because nobody's telling them that they have this benefit. So, we really are excited about thinking not just about how do you improve the investing opportunity of the portfolio, but how do you make the portfolio something that actually makes your day-to-day life more enjoyable uh and easier. >> What you're talking about is um what I like to call social graphing, right? In that when we operate on a blockchain, a public blockchain, you create a series of transactions that can be traced back to a wallet, right? And now if you start looking at that those transaction history, you can start seeing what they hold in that wallet, how much money they have, what kind of assets you're punchy penguin holder. Wow, you must be special because you're you've been holding on to it since the beginning. Blah blah blah blah blah. I think that there's definitely really interesting opportunities you state with this wallet to kind of bring it all together because like if there's one thing that we do in digital asset and crypto is we put private property onto the internet and so now we can consolidate this digital value. But my question is like >> there's a problem with that because you have this privacy issue, right? Like I don't maybe I don't want people to know, you know, and and yes, you can kind of mask the wallet, not they don't know it's Sandy call, blah blah blah. H how do you think about privacy versus that that vision going forward like is that a problem or and again like regulatory wise people have been really struggling with privacy which is kind of problematic in my mind. How do you think about that? Yeah, I think people are going to be able to set their desired level of privacy, right? So, you know, if I don't want and you do it to some extent today, right? Yeah. I don't want certain like, you know, retailers trying to push things at me or I don't want, you know, roocallers calling me, right? I can opt out, right? I think that you know in your wallet you know you some of these benefits that we see that you can use Chris you're going to have chosen to purchase that asset and get that benefit right um you know now that's not to say if I my public wallet address were open and I didn't have a privacy control on it that people might want to market me things that they think that would work well for me and my lifestyle and I might want to add those to my portfolio. I think that would totally happen, but you could probably opt out of getting those offers. But think about it. Taylor Swift's new album is coming out, right? It just came out. If Taylor Swift wanted to offer, you know, even just special access to Taylor Games through issuing a token along with this album. When you purchase the album through a streaming service, you also get this token that sits in your wallet that gives you special benefits related to Taylor Swift. people are going to like that, right? That makes my investment in what I'm buying actually worth more to me. And so I think that we need to expand our concept of what is an investment. The things I buy are actually investments and I should be able to get more from them. I think we're going to see this very interesting blending of entertainment and investing. >> Awesome. Sandy, I could literally talk to you all day um and then some. uh always have so much so so many different insights. Um is there anything that I didn't ask you today that uh that's on your mind that we should have been t that we should talk about? >> I think we covered a lot of ground. >> Awesome. Um well, look, it's been an absolute pleasure to have you on. Um the head of disruptive technologies, I couldn't think of anyone better. And um again, uh good luck to you, the Franklin team, and and everything that you're doing. Thanks for coming on. Thank you so much for having me, Kristen. As always, a great conversation. >> Thank you. >> If you have any questions about how to navigate the current environment, Wealthon can help connect you with a vetted advisor to get a free portfolio review. Just click the link in the description below or head to wealthon.com/free. There's no obligation and it will just take a few minutes of your time. Again, that's wealth.comfree. Thanks so much for joining us. We'll see you again next time. [Music]
Sandy Kaul: Tokenization, AI & Wallets Will Redefine Global Finance in 5 Years
Summary
Markets evolve fast, your investing strategy should too. Get a free portfolio review with Wealthion’s Endorsed Financial Partners at …Transcript
The next five years is going to see more change in the industry than you have seen in the last 50. [Music] If you have any questions about how to navigate the current environment, Wealthon can help connect you with a vetted advisor to get a free portfolio review. Just click the link in the description below or head to wealthon.com/free. There's no obligation and it will just take a few minutes of your time. Again, that's wealthy.comfree. >> Ladies and gentlemen, welcome back to the Wealthy podcast. I'm Chris Perkins and today I am thrilled to have a chat with my dear friend Sandy Call. Sandy is the head of innovation at Franklin Templeton where she focuses on Sandy, I love this. Like if you look at your corporate bio, it talks about disruptive technologies and innovation. So, she's the the disruptor chief at Franklin. Um, welcome to the podcast. >> Thank you so much, Chris. I love chatting with you always, and now doing it on a podcast is even better. >> Yeah. So, Franklin is what, a 1.6 to 1.7 trillion asset manager. Um, people also don't realize how advanced you are in crypto, which I can't wait to talk about today. But before we do, um, disclaimer, Sandy and I have known each other for years. We actually used to sit next to each other at Cityroup um where we actually like learned about crypto together. But like let me turn it over to you first Sandy. Tell us about your background u as we get the conversation started today. >> Great. Well, Chris is very modest because we didn't learn about crypto together. He taught me about crypto. Uh so he's very modest in that way. Uh yeah, so I I've been in the industry for a long time. um have really had the fortune in my career of having started as an a reporter um on the commodity markets and really then became an analyst. Uh when I became an analyst, it was the mid 1980s and uh they were giving the first personal computers out at Shears and Leman Brothers where I was working. And so, you know, I've seen technology advance from paper files that I was given as an analyst, 40 years worth of paper files to now talking about tokenization of every product under the sun and blockchain. So, I've had the fortune of really experiencing the disruptive technologies I talk about and and really witnessing firsthand throughout my whole career how technology kept changing. The way that I did my job kept changing. The nature of my job kept changing. Uh, and it's always fascinated me. Uh, I've always been excited about it. I started building technology uh, back right in the internet boom era. Uh, and have been focused on the future of the industry ever since. And as you know, Chris, I published my first report on blockchain and tokenization back in 2017 saying that tokenization would replace equities and bonds over time. So, uh, here we are. It's really interesting. >> Yeah, I had Robert Lesner on recently and we talked about how he started ising these canonical equities on chain. So, it's like we're right on at the we're right about to really scale this thing up. I'm really excited. C can you tell us a little bit about Franklin Templeton? Um, I I don't think people realize just how significant you are as an asset manager and then of course like how are you focusing on on building out your crypto practice? Maybe the story, the history because you guys have been at it for a long time. Yeah, absolutely. So, um I think the first thing to understand about Franklin Templeton is we are a publicly traded asset manager, but in many ways we're also like a a family office. Uh the Johnson family established Franklin Templeton. We're now 80 years old. Uh and Jenny Johnson, who is our current CEO, is the third generation of her family to be running the firm. And so Jenny takes I think a somewhat different view about what her role as the CEO is. She as every CEO is really focused on quarterly earnings. How are we doing? What is the messaging to the analysts? But in the back of her mind, she's always thinking, what do I need to be doing to position the firm for the next generation and the generation after that? And so she also thinks much longer term, I think, than many CEOs. And she worked her way up in the firm. And so Jenny actually ran ops and tech at Franklin Templeton for many years. So she understands technology. Um and so she was fascinated by blockchain when it came out. And and Franklin Templeton began its asset digital asset journey back in 2018. Uh with a simple premise of wanting to test the blockchain for recordkeeping on all of the mutual funds that we run as a firm. Uh and it's kind of snowballed from there. Uh and so today we have uh built our own technology. We've built our own uh crypto wallet-based technology that is patented at this point. Um it has been KYC AML uh enabled. It has been built in consultation with the SEC. Uh and we have been running a tokenized mutual fund on that infrastructure since April of 2021. So 24 hours a day, seven days a week, 365 days a year. Uh we have also built out that infrastructure to be able to launch any fund type globally. Uh we trade forc mutual funds, we trade US funds, we trade Singaporean VCC structures and we pay we trade private funds all tokenized, all digitally native tokens, not digital twins. and we trade them on this homebuilt infrastructure that we've now deployed across nine different public blockchains and one private blockchain. So, uh, we're out there. We run our own node operations. We do our own staking. Um, and so we are part of the communities that we are using for recordkeeping. And we have built an investment team that is very focused on investing both VC investing into seed and early stage blockchainbased ventures and into liquid tokens. So, uh, we're pretty engaged in the space and we're on a journey today to be tokenizing more of our broad product range and really being able to launch that on our infrastructure that we've created. So, we're all in on the digital asset space. >> Wow. There's a ton to unpack there. Um, I mean, I don't know of any other asset managers that that is as advanced when you talk about all of your capabilities. One thing you didn't mention was the intraday yield. now that you're now able to push out on the Benji product. Yeah. >> So, there's like innovation everywhere. >> Um maybe a bit of a of a challenging qu. How do you see Franklin Templeton versus your competitors and your peer competitors? Like how's your approach different? >> Yeah. So, I think we're different in in two big big respects, right? Number one, we firmly believe that blockchain and and these protocols are going to be the future utilities for the entire world. Right? I don't believe in 15 years, 20 years any organization, company, government, small business, individual. None of us are going to keep our own books and records, right? This is going to all be on public blockchain. these these uh L1s and L2s that are out today, they are becoming to us the utility ledgers for the entire world. And so we are moving our whole thinking towards this infrastructure which means no more accounts all wallet-based. We believe that the entire future is going to be operated out of cryptographically protected wallets and that means that every asset that sits in that wallet is going to be either a digitally native asset, a cryptocurrency or a tokenized asset. Uh and therefore they are going to be interoperable. They're going to be co-mingled. They are going to have greater utility. They're going to settle instantly. they are going to be able to be easily transferred and they're going to be able to be pledged in terms of collateral or liquidity pools or staking pools. There's going to be so much more that we believe people are going to be able to do with their assets. And so what we're doing is we're really building our future state infrastructure inside of our current infrastructure. And so we have committed to wallets and we have committed to this idea that products in the future are going to be digitally native. Most of our asset manager peers at this point uh are still working on this premise that blockchain is going to supplement their current accountbased mainframe based systems and so they're content using digital twins. Uh but we don't feel that digital twins fulfill the true purpose and utility of the blockchain and they don't have nearly the same number of use cases. So I think that's the biggest difference and then I think just the eariness of our journey and the fact that we've been engaged with not just the SEC but a global set of regulators uh for going on seven full years now and so we've built up a lot of trust and we've gotten a lot of permissions to do things that no other asset manager has. So I think that's been the big difference in why we're so far ahead right now. Wealthon together with SCP resource finance will be hosting a global silver conference this October in Toronto. Eric Sprat will be delivering the keynote and it promises to be a landmark gathering for silver investors. You can find out more in the details in the description below. >> Got it. So, where do you think we are in this revolution? I agree with you that in a few years everything's going to be digital. It's going to be on chain. You're going to have this wallet that's going to be your UI. But we're in this weird position now where you have all those legacy assets, those fiat assets. If you're an FA or you're a client, you know, how do you manage this interim period acknowledging that you're building, you know, the final product? Do you give a common, you know, experience? How do you deal with that? And by the way, there I think there's a lot of risk between the leg, the old and the new one's not settling very fast, the other one is. H how do you bring that this this weird interim period together for your clients? Yeah, and it's such a great question, Chris, and you we could probably spend an entire hour just debating this question, right? Um, my personal point of view on this is that you can't go slow, right? If we're going to really do this, we have to do this quickly. And that means that there is going to be an overwhelming mandate to get these wallet-based systems into place as quickly as possible. that there is going to be continued regulatory and legislative pressures to define all the rules around how to operate in these spaces and there is going to be surging demand from new inc from new entrance that is going to pressure incumbents to probably transition their build business models a lot faster than they would have ever anticipated. uh we like to say that we think that the next five years is going to see more change in the industry than you have seen in the last 50 and that's a scary process uh and it's a scary prospect but I think that it's going to be a very exciting journey uh and it's for exactly the reason you say you can't go slow you can't have this split system where some things are moving on a completely different time frame and other things are moving instantly because it creates all of these potentials for there to problem. So I think that the pressure is going to be to move to the more efficient set of rails as fast as possible. >> I'm not sure if I'm talking to someone who's at an asset manager or a tech company at this point, right? That's that's really what you're saying at the end of the day, right? >> Yeah. Well, I mean, I think superior technology always wins in the business model race. I mean, you and I have lived through two waves of this already, right? The internet came out and every firm we worked with was like, "We're never putting any functionality on the internet. It's not safe, right? Then cloud technology came out. Every firm was like, "We're never putting our data in the cloud. It's not safe." >> Blockchain comes out. We're never using blockchain. It's not safe. And in reality, the entire industry went on to the web. The entire industry is now in the cloud. And the entire industry will be on blockchain. >> And the internet wasn't safe in the early days. I remember in my college dorm room when it first came out, like there was no way I put my credit card on there. It would be gone. >> Yeah, that's right. But if you kept that view, right, if you kept that 1994 view of the internet in 2004, you were having a losing business proposition, right? That technology improved so quickly that you were way behind if you hung on to that view that the internet was dangerous. And that's the situation we're in today. There's a lot of firms that are hanging on to this view that Bitcoin, that blockchain, that these are dangerous technologies and they're not appreciating how much and how institutional these technologies have become over the past decade. >> Yeah. I mean, I talk to people all the time and they're like, "Crypto, Bitcoin, it's like one and the same." And there's just such a lack of knowledge. And it's amazing to see you so far out in front. You know, you talked about tokenization as a core part of your strategy. Can you explain to people what that exactly means? And then of course, why? Like what's the utility in all this? Why do we care about tokenization? >> Yeah. So, I'm gonna use I'm gonna use an equity because I think everybody kind of understands at this point what a stock is, right? We all buy stocks to own a share of a company. And today, when I buy that stock as an individual, it takes a minimum of 24 hours for that stock to actually settle into my account. Even though I may buy it and it may give me a a order fulfillment, that order fulfillment is not real for at least 24 hours, right? And if there was some kind of problem in my data and the person who was selling me that equity had different data on me, it could be way more than 24 hours until I actually owned that instrument. Right? So all tokenization is is it's saying I'm going to take that same asset, that equity, that stock in a company, and I'm going to put it in a new wrapper. And this new wrapper is able to be recognized by a new set of technologies. And because it is in this new wrapper, I can now instantaneously exchange a payment for that equity security. And so instead of having to wait a minimum of 24 hours when I buy that equity, I actually own that equity within seconds in most cases, right? And so that's a huge improvement. So that's one improvement. The next improvement is today I can only trade that equity between 9:30 a.m. and 400 pm Monday through Friday on days that the exchanges are open. Right? in the future, I can trade that tokenized equity 24 hours a day, seven days a week. Uh, and then the final thing is that if that equity is sitting in my account today, uh, and I want to post it as collateral or lend it out to get fees, right, that's a hard thing for me to do. I have to pay several intermediaries for that to actually happen. And once it's in that tokenized wrapper and it's sitting in my wallet, I can do that instantaneously myself. Right? Those are huge improvements in both the efficiency but also the utility of that equity. And that's all just by putting it in this new wrapper which is a token. >> And how does the Franklin Templeton business benefit from all this? I mean, I can see the benefit to your consu your is this just like a cost of doing business where you want to give your client a good experience or are you able to create new businesses and P&L and revenue around uh these innovations? >> Well, it's really both, right? I mean, on one hand, we're going to be giving our clients a better experience because their assets are going to be in their account faster. Uh they're going to be able to do more with it. And in many cases, they might even have to pay less in terms of fees because all the costs that I have to cover today to account for the risks that might exist in that 24 hours before I actually own the equity, I don't have to cover those risks anymore, right? So, it's going to be cheaper, I think, to trade. It's going to be easier for me to have my assets available immediately and do more with them. And I think it is going to enable new types of investment strategies and new types uh of passive income streams and new business models that just aren't possible today. Uh because it's too difficult to actually move these equities and these other investments around sufficiently easily for us to design new things. Right? So having this increased trans this ability to transport things more seamlessly uh is going to open up the creativity of us to design all new strategies and we're already seeing this with fixed income instruments right with uh yieldbearing instruments in we're seeing new models like looping which are actually allowing us to compound yields and to layer yields on a product which is something we were never able to do before this. So, it's a really exciting time to be thinking about what the future of finance holds. >> Yeah. So, let's let's talk about this looping example. I think it's really important because it's a it's an obvious benefit. Can you walk us through that? And are you now are you are are you do you plan to offer that strategy to your clients like a looping strategy, but maybe you can explain what that means for the listeners? >> Yes. I'm going to do my best. This one is this is getting into this is getting into very new cutting edge stuff. Uh but basically what a looping strategy is is that I buy an asset. I can put that asset into a uh a lending protocol and I can borrow another asset that I can then buy more of the original asset with that I can put into a pro a lending protocol and I can borrow and I can put more of the asset in. So I continue to reinvest with the borrowed funds and each time I get that additional leverage on the position to bring in additional yield on the portfolio. So in a sense it's uh some people call it recursive yield, right? I keep borrowing to the allowable limit until I've actually leveraged my original asset to its absolute utmost. And I've been able to lever that position all the way up to obtain the most maximal yield that I can get. And they call it looping because you have to keep going back through the process several times to get to that maximal yield. >> Yeah. So I guess you start with an asset like Benji, your money market fund, which is yielding somewhere around 4% or something like that. What do you think an achievable a real yield could be in a through looping strategy like that? What do you think? >> I mean, we've seen people getting that 4% yield up to around 10% or 9% which is really great when you think about a completely safe asset like a money market fund, right? I mean, this isn't Bitcoin or crypto. I mean, we're talking about a bog standard uh assets that's used by hundreds of millions of companies around the world every single day, right? So, I think that that's just a very exciting prospect and just a single example of what you can achieve with these new types of uh rails that allow you to do so much more so quickly and seamlessly. >> That's awesome. So, so obviously you've got a lot going on in the token token tokenized side where you're taking real world assets, bonds, securities, whatever. Tell me a little bit about the cryptonative side. Um are you looking to launch strategies there? I think you already have a number of different uh strategies. How do you approach that? And then is there a point where you bring them all together for your clients? >> Yeah. So, great questions as always. Um, so on the cryptonative side, right, we built our tokenized money market fund. As I said, we launched it in April of 2021 and of course we had to launch it on a blockchain, right? And by launching it on a blockchain, that meant we had to hold the cryptocurrency of that blockchain in our corporate treasury so that we had that cryptocurrency available to pay for the block space that we were utilizing in registering our transactions on the blockchain. And so we started holding these cryptocurrencies and then we were like, well, if we're going to hold these cryptocurrencies, we really need to be part of these verification networks and the nodes. And so we started verifying our own transactions and receiving the rewards uh which helped to minimate uh to mitigate any deflationary aspects of the coins that we were holding. And we were like these environments are kind of amazing, right? Like we were able to deploy technology at speeds that were just unbelievable to a legacy big enterprise organization. We had the support of the developers on these blockchains that came in with such creative solutions and were able to really coalesce around what we were trying to build and use smart contracts to help us in all of this coding. And we were like, "Oh my god, this is so efficient. Everything is going to be moving here." And so we became very convinced very early on through our own personal experience with what we needed to do. Uh and since then we have been building out as I said the investment team. But what we've also been building out is this whole set of knowledge around what are the key models, right? So staking, we're going to be offering staking in some of the ETFs that we're providing. Uh that's a digitally native function. Uh you look at things like the recursive yield, that's a digitally native function. We're looking today at digital asset treasuries and really understanding the role that digital asset treasuries play as a new type of entrance in the infrastructure uh of building out these treasuries and reserves because these are not companies today, these blockchains, they're protocols. And so having these companies now engaged gives more certainty to the demand side uh of the equation for the underlying assets. And so we're learning to work with new counterparties. Uh and yes, we're coming out with brand new strategies that really have not existed before. Um and you know, as I am allowed to regulatory, I will be happy to come back and speak with them individually. But we have a number of new things that are launching in addition to our our tokenized money market fund. But what we're also doing, Chris, is we're using these new rails to do things that nobody has done before. Right. So you had mentioned earlier uh intraday yield. So if you think about how a money market fund operates today, you have to own that money market fund at the close of the trading session to earn yield for that day's trading session. So if I own that position up until one minute before the yield before the close and I sell it before the close, I don't get any of the yield for the day. And that person who bought it one minute before the close, they get the entire yield for the day. That's not fair. And that's not right. And because we are compiling our own shareholder records second by second, because every trade we do settles almost instantly, we are able to divide the trading day up. And if you owned that uh money market fund position for 95% of the trading session, you would get 95% of the trading sessions yield even if you did not own it at the close. That's just not possible in today's system. We also pay out yield every single day. That is not possible in today's system. We pay out yields on Saturdays, Sundays, holidays, right? And when you think about how money market funds are such an important instrument for cash flow, having that certainty of getting the cash flow every single day really changes the nature of the game. So, it's not just the investment products we're building. It is also the operational enhancements that we are designing into the system that really set a new standard for what you're able to achieve with your assets. >> So crypto was traditionally a very retail type environment. Um and we used to say where are the institutions? Well, it's very clear based on our discussion right now that the institutions like Franklin Templeton are here but you know as you go out and you speak to ordinary people I I still think we're early. Can you tell me about your clients? Are you focusing on inst you know FAS you focusing on institutions retail >> and h how do you how do you work with them to to are there different product types for just walk us through the client base if you don't mind >> yeah where they are >> absolutely so it's it's such an interesting progression too right of the client >> so I'd say our primary client base right now are crypto digital natives right we are working extensively with the treasuries of the different protocols. Uh we're working with the venture capital funds who are investing into the space to help them manage their uh undeployed capital, right? We are working with the stablecoin issuers to help them manage their stable coin reserve pools. We're working with the exchanges on enabling their earn program so that people can exchange their stable coins for yield through our tokenized money market fund. We're working with the big uh derivatives exchanges uh and the hedge funds that are trading in the crypto space uh to facilitate their collateral postings because they can have lower collateral requirements by using our tokenized money market fund relative to posting a stable coin. Right? So these are where the biggest audience we see right now are the crypton natives, the people, the hedge funds investing in the crypto space and the cryptonatives operating the ecosystem. Where we are starting to see very strong emerging demand is from the independent registered investment advisors who are really seeing the demand from their own underlying clients and from the neo brokers like the Robin Hoods and the e Toros where they have a very cryptosavvy set of underlying investors. And in those two channels, what we've been finding a lot of success with is both our crypto ETFs, uh, but also creating model portfolios that combine equities and bonds and crypto exposure. And in the future, we'll be combining that with private equity and private credit exposure as well, so that you get a multi-asset class portfolio that can exist in a wallet, right, which is something that just doesn't exist today, or it can exist in a accountbased traditional system. So, we're straddling those two worlds with these advisor and neoker audiences. And then where the demand is starting to come right where we're in the early discussions and we're seeing growing interest is from the broader wirehouse uh and traditional advisor networks from corporate treasurers who are dealing with crossber trade um from supply chain uh and enterprise resource managers who are working across borders. uh these new technologies just make that a much much more efficient and easier process. So we we've kind of seen cascading sets of audiences and they're each kind of at a different point in their journey. >> Wow. Pretty pretty interesting. Um how long do you think it's going to take for the warehouses to get fully on board? I mean we just saw one of your competitors was saying, "Oh, we're going to finally get in the space." But do you think this is like a decade long journey? Do you think it's going to be a couple of years? How long is it going to take? >> Yeah, I don't think a decade. I definitely don't think a decade. I think that they will be at the point where they can facilitate crypto trading of the largest cap crypto products probably within the next two years. And then I think that you know depending on how quickly tokenized equities and bonds and ETFs move. They probably will be about on that same timeline for those tokenized products. Even though they haven't really started down that yet, I think that one's going to move very fast. And so I think within two years, you know, you're going to have your choice of of system to operate in. I could operate through an advisor in a completely wallet-based system with digitally native exposures or I could operate in an off-world off-chain system, the more traditional system using traditional funds and ETFs. And I think we'll have that parallel world for a little while within I'd say the next two to three years. >> Let's talk about the ETF space. And obviously you have you're a major ETF issuer. Um, we just saw the SEC come out with what we call generic listing standards, which make it much more seamless to list ETFs. How do you see that market evolving? Your competitors have said, "That's it. We're Bitcoin and ETH. Maybe we'll do a Soul, whatever." You mentioned staking earlier, which no one's been able to figure out. How do you see uh this market evolving? Yeah, I think I think you know that goes back to me to the statements like we're never using the internet or we're only going to keep our data private and we're never putting it in the cloud. You're not going to get away with only being able to offer Bitcoin or ETH or just a couple ETFs because this entire ecosystem is growing quickly and rapidly and there's going to be growing demand from people to want to be in these products. And until we're at that fully wallet based world, people are going to want to meet that demand through these ETF products. And so I think you're going to continue to see multiple product launches. I think they will get more interesting uh and more effective as we go on. Uh we're hoping to see soon inind redemptions which will open up new opportunities and allow people with a lot of of you know with a lot of profits in very longheld positions some new options on how to deal with that. Uh I think we're going to see multi-coin uh portfolios. We already have a multicoin ETF called Easy Peasy that we offer and others are coming out with multicoin portfolios. And I think that you're going to start to really get some interesting innovation uh getting embedded income streams through things like staking uh or through a different kind of lending protocol being built into an ETF. So I think that the ETF products will become more sophisticated with the generic listing standards. You have this great situation now where there are a set of objective criteria against which any coin that meets that criteria you can file on. And one of those criteria is having a futures market. And so you can have the basis trade and that starts to create an opportunity to structure the return streams that you're getting in an ETF. So all of these things I think point towards a thriving ETF ecosystem that will continue to grow, but it's going to be growing in parallel to direct wallet-based exposure. And because of the efficiencies of the wallet, I do think over time the ETF part of the industry winds down as the wallet part of the industry winds up. >> Oh, so you think we're going to migrate from ETF into just native token? >> I think you know that may be more on the 10-year horizon. >> Yeah. >> But I think that is the ultimate trajectory. >> Oh, that that that that's uh super interesting. Um wow. >> Well, let's face it, like just to to expand on that point for one second, what is an ETF, right? An ETF is a wrapper that holds different interior exposures, right? So, let's just take a super easy one to understand, the S&P 500. Yeah. >> Right. If I have all 500 of those S&P 500 stocks that are available as tokens, >> I can put together a proportionate share of 500 of those tokens and wrap all 500 of those tokens in another token that is my index token. and I can trade all 500 exposures with the index token. But if I have the index token in my wallet and I want to get at the underlying exposures, I can just burn the index token, right? And so I don't need an ETF to be able to do the things that I use an ETF for today. I'm going to be able to do that on a completely tokenbased product. And that's why we think over time ETFs disappear. >> I'm pretty obsessed with this whole basis trade you mentioned as well. And I think right now, like it or not, people, to your earlier point, they're going to have to probably stick to the rappers that they know, which could be an ETF, it could be a DAT. Um, by the way, we had Seth on here, our our mutual friend Seth Gins, my partner. He he did an entire episode on DATs, which was just amazing. >> That's awesome. Seth, >> yeah, he's cool. Um, but you could do um, you know, that on the spot end and then the futures. We just don't have futures. We're working through them right now. I know you're on the digital asset market subcommittee, the CFTC. We'll talk about that as well. But that trade is going to be huge. Do you think you're going to launch strategies around just basis trades? You see that coming down the line? >> 100%. I mean, and and I told you like I began my life in the commodity market. So everything is basis trading and commodities, right? So this is like home ground to me. I love this stuff. >> That that's amazing. So if you're going to step back five years from now, like right now you have this flagship Benji product. You have all this native uh development going on. You're building a pretty material tech platform, validators, you have the liquid strategies. What's Franklin going to be known for? Like like what what's what's what what what's going to define its brand? >> Yeah. What I would like to think defines our brand is that we are pushing the boundary on what's possible. >> Right. Uh and this is something I mean people don't know this a lot about Franklin, but Franklin had a lot of firsts in our history, right? Franklin was the first firm to ever offer um a a specific type of municipal bond in any kind of trading fund. They were the first to offer uh an ability to access like Jinny Mays, right, back in the day when interest rates were so high and everybody wanted access to this. They were the first to offer that in a fund form. We were the first to lower our money market fund minimum subscription size down to $500 at a time when it was $5,000 for everyone else. Today, you can subscribe to our tokenized money market fund for $20. Right? So I would like Franklin Templeton to be known as the firm that likes to use the emerging technologies of the day to push the model ever in the direction that is going to be the most beneficial and open up the most opportunities for our client base. >> Are there any risks that keep you awake at night in in trying to uh accomplish this dream? >> Yeah, I mean I think some of the risks that I always worry about. Number one, I worry that a lot of people still think private blockchains uh have some superior uh ability to offer protections over public blockchains. And that always worries me because I just do not believe that the development model where you have a very concentrated set of developers who are the only ones working on that chain can ever spot all the vulnerabilities that these public chains with thousands of developers are constantly looking for. So, I worry that there will be a big blow up on a private chain and that that's going to create a lot of problems for the industry. Um, I worry that regulators step in and protect existing intermediaries by mandating that people use these intermediaries even though they don't serve a function with these new rails. And I worry that that could be a real bad turn and bad direction for the industry because you should always go what the technology is capable of providing. Uh and I just also worry about you know the global economy where we're in a very uncertain time. There's a lot of geopolitical risk and you know you could see a lot of uh instability and and that is going to make it hard for anyone to grow. So these are things that kind of keep me out. So you talked about private blockchains. Do you have a favorite ecosystem? Um you know do you like Ethereum, Salana? How do you think about choosing the right ecosystem to build your products? How do you prioritize it? >> Yeah. Well, first of all, we have a pretty stringent set of blockchain evaluation criteria. Uh and and that evaluation criteria looks for some basic characteristics around blockchains that we think are very important. The foremost being how robust is the validator community and how fair is the trade allocation process for validating transactions. Right? We are big believers that if you have too concentrated and too centralized a trade verification process, you do not have as secure a chain. Um, and so we worry about some of these chains that are coming out that people are trying to be the sole validator on their chain. Those are things we worry about. Um, you know, and then we believe that different chains have different use cases and purposes, right? Not every order that comes into our trading systems are the same, right? If I'm using my tokenized money market fund and it's a small retail client and they're buying $25 worth of a position, we're not going to necessarily send that to the same chain that we might send an order from a sovereign wealth fund for $und00 million to, right? We're going to use different chains for different purposes based on their cost structure, based on our assessment of their security. And we have developed across the nine chains that we work on a pretty sophisticated order routing uh mechanism so that we're really optimizing where the trade is being sent. But we don't think it's ever going to just be one or two ecosystems. And I want to be really clear about that. We think that there is a need for multiple systems just for the redundancy and for the protection. And we think that the a robust system has competition. And so we would never want to see just one or two chains. >> That makes a ton of sense. Now, we have the privilege of serving together on the CFTC digital asset market subcommittee, the dams. Terrible name. Um, t >> tell us about what your areas of focus. What do you want to accomplish through that stream? Um, and like you know, you talked about some of the challenges of regulation. What are the opportunities as well? >> Yeah. So, look, I think and as you know, we've already accomplished some very important things, right? We helped to put into place a nomenclature that has been adopted by the global market advisory council that sets up a common way of talking about this entire ecosystem. You said in the beginning people are always mixing up crypto and bitcoin and blockchain right it's important that we define things and are using the correct language particularly in this new space where there's so many new things at once. So we put into place a nomenclature. Uh we really pushed the rules to foster this idea that you can use tokenized money market funds and stable coins for collateral just like you can use traditional money market funds as collateral. So that is something that has been being pushed by the industry and we make sure that the tokenized version of those products were treated equally in how they were applied for the market and and some of the areas that we'd like to push into is furthering this understanding of the different token types and what the rules should be about them and how you should classify them and how they should be regulated. We want to look at making sure that marketleading functions that are available outside the US like perpetuals are allowed inside the US. We want to you know explore some of the areas uh that are not as well defined. So that will give people more confidence about the system like bankruptcy remoteness and how that operates in the system. And we're going to look at new things like how does digital ID how does the opportunities around new digital IDs potentially open up new answers to the way that the industry performs KYC AML. Right? So these are just some of the things that we're going to do. But the biggest thing we accomplish is that this group brings together digital natives, traditional firms, industry influencers, industry uh organizations that are doing advocacy. It brings everyone together into one forum. And so all the arguments that we need to have as an industry, we can kind of have within this group. And when we come to consensus, that's a very powerful consensus because you've really talked to all the requisite players. >> Oh yeah. Consensus is very hard when you're talking to from crypto natives to the big banks to everybody in between. Not not very easy at all. um you know so the white house has David Saxs who is a crypto and AISAR we didn't talk too much about AI so far how does AI come together in this crypto world how do you think about it do you have a thesis around that are you building products around it >> yes >> how does that >> so first off you know AI is going to be an absolutely foundational part of the future ecosystem the way that we're most excited about deploying it in the space we're we're deploying it in many different areas inside Franklin Templeton The one that is touching digital assets most directly is this idea right that you have programmable smart contracts that are coded directly into the blockchain. So when I create a smart contract that contract's terms and cautisles and clauses uh are being selfexecuted by the blockchain based on the certain data trigger being provided. That's great. That is such a huge advancement. That was really what gave me my aha moment about the power of this new ecosystem. But there are always going to be situations where that may not be the right thing to do, right? We need some ability to have a circuit breaker or some conditionality around whether a smart contract clause should be being e automatically executed. Yeah. And so we are very excited by the potential of training these AI agents to be looking at these smart contracts and really determining you know is there any unusual or mitigating circumstance occurring that should cause me to pause on this automatic execution and I think that's a critical part of what we need to build confidence in the system and to have that ability you know to manage through a crisis if one were to occur. So that's I think the area we're most excited about. >> Interesting. I wasn't expecting for you to say defense and you're really describing defense. Um >> we know we announced a portfolio investment a company called Giza. Um and what they do is they provide offense I would say where you have the agent out there like finding optimization opportunities to drive yield and not investment advice for me. Um, what do you think about that? Like I hate to say offense defense, but you know that proactive yield seeking. Like the thing I've learned about agents is that they're incredible about optimization. Like >> almost to a fault. Like they will optimize and and and solve the mission no matter what. Like >> it's insane. Um, so how do you think about that angle? Well, do you see a world where you're partnering with these agents, they're programmable, and you're setting them loose to to drive that 10 20% yield, whatever they can find because that's what they're good at. Yeah, I mean look, we we are using I like offensive defense. We're using agents in that way, not just in our crypto investing strategies, but in our overall investing strategies, right? We have actually built an AI trader >> inside of Franklin Templeton that are a our existing investment teams consult with, right, to test their hypotheses, right? So this is a really interesting period because you know what you find is AIs think differently than humans think once you've set them loose and it it creates interesting tension where you can find good opportunity. So 100% I think that you know this idea because you are dealing with 247 365 markets you are not going to be able to have the same degree of human oversight at all times in these markets. So I think 100% you're going to program certain AIS to fulfill your own trading strategy that you have devised and then you let them lose. So to me that is the other function. I think that you know in that area we're thinking about investment management not only within the crypto space but at all levels of investing. there is this opportunity to use agents to optimize and to create good tension points with the humans overseeing investments to really get the boast of best of both worlds. So that's pretty fascinating. Can you I'd love to learn a little bit more. So you're saying that you have a PM, they have an agent. Um they have I guess you can load the agent up with the the parameters, the LPA, whatever of of the fund strategy. Uh the PM proposes a trader and investment and then the AI is like, "Hey, this is what I think about it." Is is that generally how it works? No, this is actually the AI investment team is completely independent of any uh portfolio manager right now and and it's actually doing its own market analysis. It's creating its own trading hypotheses. It's proposing its own positions and position limits and entries and exits. And then let's say a a traditional investment team is looking at that same investment. They can debate their point of view with the AI and understand why the AI might have a different point of view than they have. >> Have you have you done this long enough to understand the impact on returns? Um any kind of empirical analysis yet that you could share? >> Yeah. No, they're still working on this and I don't think they'd want me sharing any of their proprietary data right now. >> I'm just curious if the if you're seeing a outperformance since that that you guys implemented that. Really fascinating stuff. Wow. Um, what didn't we talk? We talked a lot about crypto, a little bit about AI. >> Yeah. >> What else is on the horizon that you're thinking about? You thinking about anything in quant I mean Sandy, you're like one of the You're a futurist, right? And you're always thinking about stuff before we before we anyone else is. Are you thinking about quantum? Thinking about anything else on the horizon? So the other thing I think about a lot and we're actually launching a new campaign on this uh very shortly at Franklin Templeton is everybody still thinks of an investment portfolio as something that is going to solely focus on investing. Right? And we are big believers that your investment portfolio is actually going to become your gateway to living a better life daytoday. Right? So I earn I earn loyalty points uh when I shop at certain stores. I get reward points when I use certain credit cards. I mean, nothing is more important to me from a financial engagement perspective than my investment portfolio. So, why aren't I getting the best rewards and the best opportunities through what I invest in? And so we are really big believers that you are going to start to get access to all sorts of of special access, discounts, new product access, um you know, the ability to engage in exclusive communities, the ability uh to influence product design, right? We believe all of these benefits are going to become accessible to you via your investment portfolio because your investment portfolio is going to sit in your wallet and your wallet is going to hold these assets and your wallet can hold the smart contracts within these assets. So just like I go to a concert today and I don't give them a paper ticket anymore. I show them my QR code from my wallet or I check onto a plane and I show them the QR code from my airline. I think I'm going to be able to show QR codes around what sits in my investment portfolio. And that QR code is going to open up all sorts of opportunities and benefits for me. And some of them exist today and people don't even know. Like if you own a hundred shares of Ford stock today in your portfolio, you get the for friends and family discount if you buy a car at a Ford dealer. >> But nobody knows that and nobody can prove that in the moment when they need it because nobody's telling them that they have this benefit. So, we really are excited about thinking not just about how do you improve the investing opportunity of the portfolio, but how do you make the portfolio something that actually makes your day-to-day life more enjoyable uh and easier. >> What you're talking about is um what I like to call social graphing, right? In that when we operate on a blockchain, a public blockchain, you create a series of transactions that can be traced back to a wallet, right? And now if you start looking at that those transaction history, you can start seeing what they hold in that wallet, how much money they have, what kind of assets you're punchy penguin holder. Wow, you must be special because you're you've been holding on to it since the beginning. Blah blah blah blah blah. I think that there's definitely really interesting opportunities you state with this wallet to kind of bring it all together because like if there's one thing that we do in digital asset and crypto is we put private property onto the internet and so now we can consolidate this digital value. But my question is like >> there's a problem with that because you have this privacy issue, right? Like I don't maybe I don't want people to know, you know, and and yes, you can kind of mask the wallet, not they don't know it's Sandy call, blah blah blah. H how do you think about privacy versus that that vision going forward like is that a problem or and again like regulatory wise people have been really struggling with privacy which is kind of problematic in my mind. How do you think about that? Yeah, I think people are going to be able to set their desired level of privacy, right? So, you know, if I don't want and you do it to some extent today, right? Yeah. I don't want certain like, you know, retailers trying to push things at me or I don't want, you know, roocallers calling me, right? I can opt out, right? I think that you know in your wallet you know you some of these benefits that we see that you can use Chris you're going to have chosen to purchase that asset and get that benefit right um you know now that's not to say if I my public wallet address were open and I didn't have a privacy control on it that people might want to market me things that they think that would work well for me and my lifestyle and I might want to add those to my portfolio. I think that would totally happen, but you could probably opt out of getting those offers. But think about it. Taylor Swift's new album is coming out, right? It just came out. If Taylor Swift wanted to offer, you know, even just special access to Taylor Games through issuing a token along with this album. When you purchase the album through a streaming service, you also get this token that sits in your wallet that gives you special benefits related to Taylor Swift. people are going to like that, right? That makes my investment in what I'm buying actually worth more to me. And so I think that we need to expand our concept of what is an investment. The things I buy are actually investments and I should be able to get more from them. I think we're going to see this very interesting blending of entertainment and investing. >> Awesome. Sandy, I could literally talk to you all day um and then some. uh always have so much so so many different insights. Um is there anything that I didn't ask you today that uh that's on your mind that we should have been t that we should talk about? >> I think we covered a lot of ground. >> Awesome. Um well, look, it's been an absolute pleasure to have you on. Um the head of disruptive technologies, I couldn't think of anyone better. And um again, uh good luck to you, the Franklin team, and and everything that you're doing. Thanks for coming on. Thank you so much for having me, Kristen. As always, a great conversation. >> Thank you. >> If you have any questions about how to navigate the current environment, Wealthon can help connect you with a vetted advisor to get a free portfolio review. Just click the link in the description below or head to wealthon.com/free. There's no obligation and it will just take a few minutes of your time. Again, that's wealth.comfree. Thanks so much for joining us. We'll see you again next time. [Music]