How Institutions Are Being Forced to Tokenize with Theo Golden

**Robbie** (0:00)
The tokenization lead at Baillie Gifford, live from DeFi Day at ECC. And so we're gonna be chatting about RWAs, why they're not at $1 trillion yet, and how we're going to boost these numbers up. We were coming off of Digital Assets last week, Digital Asset Summit in New York City, and now we're here in Cannes. We've got Theo Golden right here with us now. Theo, welcome to the show.

**Theo Golden** (0:24)
Great to meet you, man.

**Robbie** (0:25)
Yeah, absolute pleasure. How you feel?

**Theo Golden** (0:27)
Yeah, great. It's great to be here. It's, well, like people keep on saying DeFi is dead and look at this crowd. I mean, it's absolutely heaving. It's very much alive and kicking, and we're having a lot of fun. So it's great to be here, and thanks for having me.

**Robbie** (0:38)
Absolutely incredible. I mean, can't agree anymore. I'm just curious, maybe for anyone who's unfamiliar, Baillie Gifford has entered the Digital Asset space, the tokenization space. Why don't we get a primer on Baillie Gifford for anyone who's unfamiliar, and then we'll get into what exactly Baillie Gifford is doing in the tokenization space.

**Theo Golden** (0:54)
Yeah, absolutely. So yeah, Baillie Gifford, we're kind of one of the biggest UK asset managers in, we run about $300 billion of assets under management across like public equity, private equity, fixed income, multi-asset. We're kind of we're based in Scotland, which is beautiful, but kind of less familiar. But we're kind of firmly a very active, active house. So we only run active products where we're adding value through our investments and our kind of investment process.
We kind of particularly specialise in high kind of high growth equity investing. One of the kind of most famous like investors in SpaceX, early in Tesla and, you know, we're in the Thropic Revolut, etc. But BG as a whole, we kind of, you know, we tend to we have we tend to think in decades, not quarters. And that's really our edge. We have a very, very long term view. And for us crypto digital assets, that's firmly within that. And we seek to invest in the most innovative companies. And, you know, really with crypto, we're looking to almost like disrupt ourselves and bring that innovation in house and be kind of a really, I guess, positive influence in how we can help like crypto native teams really scale up in a way where they're kind of building products that, you know, institutions are going to not just know and use, but also love and time.

**Robbie** (2:07)
And as the tokenization lead at BG, Baillie Gifford, what is your day to day look like? Are you helping more crypto native teams? Are you educating a lot of the traditional financial institutions, helping bridge the gap, bring them on chain?
What is your day look like on a normal basis?

**Theo Golden** (2:22)
The day is long, but it's very fun. It's a bit of everything. So I also run a bit of money as well myself. So I run a bond portfolio as well. And, but in my tokenization role, I'm very much focused on building kind of tokenized funds. We can talk about that for like fully native tokenized funds, what that looks like and how we do that in a way, which is kind of both defi native, but kind of regulatory compliant. And it's in a way which, you know, our existing client book not only would be applicable to, but also would, you know, is better to the extent where they would want to move over from traditional product. The other side is working with crypto native teams, helping them think about how they go from just being kind of a point in time product to being a scalable platform across and, you know, basically cannibalizing, you know, ingrained, intermediated parts of the Tradify market and really taking them into the regulatory clear area and thinking about how do they beat the incumbents. And yeah, as you say, you know, talking to our existing client base, helping them educate, like, what, why use a tokenized product? Why, you know, what do you need to go and buy a tokenized product? Like, what's the utility beyond just simply, you know, owning a mutual fund or something like that and taking them on that journey. And because BG is a kind of, you know, we're a private partnership, we don't have any external shareholders, there's kind of a trust element. We're not really trying to extract anything from them. We're just simply being kind of subject matter directors and taking them on that journey.

**Robbie** (3:41)
So let's start here with the sophisticated investor, that end user, that customer. Why is it better, right? Because we've talked a lot about how tokenization can help make a lot of these markets more efficient, lower settlement times, ultimately provide some value in terms of understanding better risk topology as far as where the money is at any given time. Lower settlement times unlock a lot of item capital. But a lot of those efficiencies happen at the enterprise level. They can save a lot of money, increase their bottom line. But ultimately, from the end user perspective, it may still look like the same security through a broker dealer that they're used to purchasing. So what is the benefit of tokenization for the end user?