No One is Ready for What the Tokenization of Assets Will do For Markets! | Sandy Kaul

Sandy Kaul (0:00)

When I think about real estate, I think that some of the operational processes will move on chain before ownership moves on chain. So my title might be recorded on a blockchain. What I pay in from my properties might be recorded on blockchain. The ownership and the deal might take longer because you need someone willing to make a market price every single day on an asset.

We just don't have that infrastructure to do that kind of pricing on real estate.

Tony Edward (0:38)

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Hey, folks, welcome into The Thinking Crypto Podcast. I'm your host, Tony Edward, and joining me is Sandy Kaul, who's the head of Digital Assets and Innovation Strategies at Franklin Templeton. Sandy, it's great to have you back.

Sandy Kaul (1:35)

Great to be here. Nice to see you again.

Tony Edward (1:37)

Yes, Sandy, I always enjoy our conversations. You have a plethora of knowledge and I love your perspectives on markets and technology. We have lots to talk about, Sandy, because it's never a dull moment in the digital asset crypto space. I would love to start with Franklin Templeton Crypto or Franklin Crypto.

The firm had made an acquisition and launched this respective section of the business. Tell us about what's the latest there.

Sandy Kaul (2:05)

Yeah, so we really believe that we're at a pivot point, Tony, in terms of how we're going to be seeing institutional interests in investing in decentralized businesses really begin to accelerate. If you look at what's happening in re-platforming the financial market infrastructure, if you look at micro payments and the way that AI agents are going to be utilizing blockchain-based rails to really be able to operate in the new economy, both of these we think are huge macro trends that are going to cause this collision of AI investing interest with blockchain and decentralized business model protocol investing interest.

We really want to be positioned to deliver a one-stop shop for the next wave of institutions who are starting to come into the crypto domain. We believe that the way to do that is to have a multi-strategy platform, so liquid opportunities, which is basically like fundamental long-only, macro-quite opportunities, market neutral opportunities, beta plus opportunities, venture capital, private credit. We want to be able to offer all of these different investment strategies around crypto as the investment target. And so the team we brought over from 250Digital with other steps that we are taking, we're really looking to build this multi-manager, multi-strategy platform so that we can be that one-stop shop for large institutions.

Tony Edward (3:46)

That absolutely makes sense. And on that note, Sandy, are you seeing increased demand for such services which you're looking to build for? And are there still any skeptics on the institutional side? Or we've pretty much crossed the chasm where they're like, we need to have a strategy. Sandy, Franklin Templeton, can you help us?

Sandy Kaul (4:05)

Yeah. So I think it's in stages, right? I think we're hitting the tipping point on skepticism, right? I don't think that, you know, I'd say that we're starting to see the tip over where more people are now interested in learning more and understanding why it should belong in their portfolio and how it works and how it will operate in their portfolio from a diversified return stream.

So I think interest is tipping over. I think then interest leads to education and we're getting more and more requests for that education. And as you educate, you build trust. And as we build trust, we believe allocations will fall. So I think that, you know, we're in the early stages of this shift in regime and this shift in interest from early stage institutions who are more typically edge funds and some very aggressive endowments and family offices to a more professional institutional investing class of pension funds and sovereign wealth funds and corporates. And I think that we're in the early stages of that pivot, but I see it starting to happen more and more rapidly every month that goes by.