Carlos Domingo: Why Tokenization Goes From Billions To Trillions (Full Thesis)

Carlos Domingo (0:00)

What kind of controversy are we going to get into this week? Whatever one you want, Carlos. No, I don't know. You come up with one.

Robbie (0:05)

We'll catch us some, man.

Andy (0:06)

You were just in DC yesterday, talking to the SEC, obviously.

Carlos Domingo (0:09)

I was. I go there.

Robbie (0:10)

Unfortunately, I didn't go through.

Carlos Domingo (0:12)

I think it's very refreshing to talk to this administration. Paul Atkins and the team are great, and we had really good meetings there.

With the uncertainty of what was going to happen with Cliday or not, which we didn't know yesterday. But I think irrespective of that, I think we're looking at a very bright future for the industry.

Andy (0:29)

Yeah, I mean, I think the industry was somewhat disappointed. But as you saw, we had kind of tipped off about this tokenization exemption, possibility for transfer agents to allow you-

Carlos Domingo (0:42)

You seem to know more than me about that.

Robbie (0:46)

Carlos, we had Taylor Lindman, the Chief Counsel of the Crypto Task Force on the show.

Carlos Domingo (0:51)

He told us about Red Crypto.

Robbie (0:53)

He told us about some exemptions, whether it be innovation or tokenization exemptions. You know, fundraising as well as 24-7 markets that New York Stock Exchange, NASDAQ are working towards. And then he talked to us about the modernization of the rules specifically around transfer agents.

Carlos Domingo (1:09)

Which is great, by the way.

Robbie (1:11)

And so maybe you can help us understand where we're at today in terms of what is real and what is not real. Because I think the rumor mill gets a little bit blurry around the engines. So maybe you can just help us clarify any sort of misconceptions that are out there.

Carlos Domingo (1:27)

I mean, the things that are real for sure is the modernization of transfer agents.

The proposal from the SEC is already out there. It's open for comments. I think the comments closing November will be for sure commenting on those. Because obviously we're a very opinionated company when it comes to that. It's something that at the tail end of the J. Clayton era, they tried to do it. It never happened at that time. Then Gensler, I think as I posted, I actually pitched that to him and he didn't think it was important. Commissioner Peirce was very supportive back then and she's now in a more leadership position at the SEC today. I think it's great to see that this is moving forward. We'll see what end up coming out. Obviously, there is some controversial aspects of things there.

But nevertheless, it's actually a very positive. So that's real. It's going to happen.

Andy (2:14)

Yeah.

Carlos Domingo (2:15)

Recrypto is also out there. Again, open for comments, for people to comment. It's actually, I like the way they've done it because it kind of mirrors the crowdfunding rules. Rec CF and Reg A+, we have 5 million tier, 75 million tier depending how much you raise. You have to have more disclosures, etc. Which is very similar to how crowdfunding industry work. From the job site, that was done in 2014, I believe. So that is also real, but again, it's open for comments. Now, the innovation exemption for tokenized securities is not real yet. It's something that I know the SEC wants to do, and they've been working on it for a long time. It's a controversial one. Yeah. More controversial, I would say, than the other two.

Because obviously, it's going to allow, we don't know exactly what's coming out, but it seems that the path will be that it will allow you to do certain things with decentralized infrastructure that will not require licenses. So obviously, the more trust by companies in the space, they are pushing back saying, why do we need to be regulated and these guys are using a different technology and they have a lighter regulatory framework. I believe it will be somehow limited at the beginning, which is maybe the right thing to do, to be able to experiment without blowing anything up.

Hopefully, now that Clarity unfortunately died, that opens up a door for the Securitize to go and do something on that front. So I'm hopeful that we're going to see it coming out in the short period of time.

Andy (3:41)

Yeah, I agree. And I think, honestly, Carlos, it should be a bit more nuanced and have a bit more depth to it than the breadth that Clarity had, if you will, which, you know, we'll see what happens. We'll see what comes out. But I think the context here that we've kind of splayed over, that we need to address, is Robinhood's stock tokens. Because if we're being honest, Vlad going on TV saying tokenization is the future of finance is driving a lot of the conversation right now.