Tokenized stocks can open U.S. markets to overseas buyers

Transcript

Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there.

1. 45:26

   Yeah. So the main reason is that it's actually really hard to get access to U.S. stocks if you're overseas. And, you know, in some markets, it's relatively easy and they have robust local capital markets and exchanges. If you're in South America, in a lot of places, it's just tough, right and it was also tough to get dollars for a while you know if you're in a south american country for example with a hyper inflating local currency those people were buying american express traveler's checks right and that's why stable coins became so popular a lot of the usage of stable coins was overseas from people that just wanted a better cheaper way to get access to us dollars because they would keep their money in it. So in the same way, a lot of people want access to U.S. stocks. It's companies that they've heard of. You've got SpaceX, you've got NVIDIA, so many

2. 46:26

   others. And tokenization allows them to have access with actually some better properties, 24-7, fractionalizable. So you can break up the token into little itty-bitty chunks. You don't have to buy a full share. It can be in your wallet. So in particular, nobody can confiscate it from you. It's not in some local account. It's some financial system that maybe isn't as developed with as strong protections as we have here in the US. So in a sense, I think the companies will be very, very happy about this because it creates net new buying of their stock from a global market.

3. 47:11

   Robinhood chain with our stock tokens are live in over 120 countries where, you know, people probably wouldn't have been buying these U.S. stocks. They don't really have an easy mechanism. So it just cracks that wide open and opens up an entirely new pool, capital pool of buyers that didn't exist before. But then you've got the AMCCO and others pushing back. And I do think there's a fair pushback that I don't know you've gotten asked.

4. 47:37

   Well, but you kind of saw he reversed yesterday, right? Well, yeah, sure. But I think a lot of the AMC thing, you have to take into account that there's like meme activity. Yeah. And there's, we have a little bit of a history with AMC dating back to 2021. A little bit. That's a little bit idiosyncratic. So I'm actually not sure how much of it is confusion about what tokenization. exactly is because this is like a complicated new technology and you know you can imagine best case scenario I'm running my business why do I have to deal with like changing technologies around capital markets it's like not high on my list I'm trying to sell movie tickets and popcorn right or also how much of it is just you know appealing to a retail base that you know gets excited when there's just people fighting. Yeah. But I think the fair pushback I've heard is the

5. 48:32

   voting. How do you solve the governance aspect of not actually owning the stock? Oh, yeah. I mean, we have a solution for that. We announced that we intend to add voting. The reality, too, is not a lot of people vote their shares. No, they don't. I think it's a nice box check to be like, I actually have it. I actually have exposure that way. If you're in Venezuela and you're looking to get exposure to U.S. stocks. Voting is nice, but it's probably not the higher order bit. So I think, yeah, you can find all sorts of little nitpicks. People had this about electronic trading of stocks as well. They're like, well, I don't get the real certificate. It's really nice to have the real certificate. That's a real share. What is the seed and company thing? It's not even in my name. It's in street name. So all of these same criticisms actually landed when stocks

6. 49:22

   started being traded and brokered electronically rather than physical certificates. So I think the cat's out of the bag. Like this is not reversible. Now it's just a question of how do we make all of these issuers and stakeholders and, you know, the exchanges in the U.S. comfortable? Yeah. How do we make them feel that this is like, this is good for them? And understand because actually, if you look at this, if you're an issuer like a AMC or others, it's, it's basically all upside, uh, next to no downside. Um, so it's, it's just very clear that it's going to be a thing and it's innovation and change is, is never just uniformly accepted, but, but it's also inevitable. So, uh, yeah, and we're working with, with all the stakeholders to make sure everyone's kind of brought along, But yeah, it's it's it's happening. So, yeah. And now the SEC is is behind tokenization. So, yeah. And part of the reason we actually started with Europe and when we were in our event in south of France, we said we want to deliver great products for our international customers like that's we're immediately adding value.

7. 50:39

   we're shipping product we don't want to just like talk about tokenization you know some people like to talk about it it's kind of become a buzzword and you know they have interviews and stuff like that we we ship we want to ship real product put it in people's hands and that's really the most persuasive thing sure because yeah i could tell you tokenization is the future but uh maybe you won't believe me how about i ship it people use it we see a demonstrating value and and if it adds value to these customers outside the US, maybe that also demonstrates to folks here that, hey, we should adopt this technology and figure out a path for it to work in these markets.

8. 51:20

   And I think that's basically what's happened. I mean, we kind of called our shot many years ago and we're doing what we can to kind of push the industry forward, not just overseas, but here as well. And I'll tell you the future. It's going to happen to every asset. Private markets coming. You'll be able to, we'll have tokenization of privates. It's an inevitability. We'll have any wealthy person's asset base of tokenization of wine, of real estate, right? It'll all trade 24-7 on permissionless networks like a stock. Yeah. And I think it'll be you.