Latest / CRYPTO 101 / Ep, 719 KPMG's Vision for Crypto in The Future of Finance

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Ep, 719 KPMG's Vision for Crypto in The Future of Finance · CRYPTO 101

0:08
[SPEAKER_02]: All right, everybody, welcome back to another action packed episode here at the crypto 101 podcast and might I even say welcome back to me.
0:19
[SPEAKER_02]: Brendan, thank you for holding down the fork.
0:22
[SPEAKER_02]: I know it's been it's been a lot that you've had to to bite off while I was enjoying a paternity leave with my new born and my wife and a toddler.
0:32
[SPEAKER_02]: So it was crazy, but it's been a lot of fun.
0:35
[SPEAKER_02]: It was really rejuvenating.
0:37
[SPEAKER_02]: And, uh, man, I've been chomping at the bit to get back on the desk, though.
0:41
[SPEAKER_02]: The markets have been moving fast.
0:43
[SPEAKER_02]: You, we've just had an incredible list of just guests that've come on.
0:48
[SPEAKER_02]: So, Brandon, I've been a little jealous to be honest of you, uh, that you've been in the driver's seat, getting to interview all these great guests.
0:56
[SPEAKER_02]: How have you been before we introduce our incredible guests for today?
0:59
[SPEAKER_02]: Uh, what's the update by you, man?
1:02
[SPEAKER_01]: It's been great.
1:03
[SPEAKER_01]: I know I was going to say, I felt like I should be the one welcoming you back.
1:06
[SPEAKER_01]: Um, right.
1:07
[SPEAKER_01]: No, it's good to have you.
1:08
[SPEAKER_01]: I know the listeners have missed you.
1:10
[SPEAKER_01]: It's been good over here.
1:11
[SPEAKER_01]: I mean, shout out to Super Producer Tevo.
1:14
[SPEAKER_01]: The guests have been just nonstop bangers.
1:16
[SPEAKER_01]: We've talked to different as managers.
1:18
[SPEAKER_01]: different ETF providers.
1:20
[SPEAKER_01]: We just got off with Solana Foundation.
1:23
[SPEAKER_01]: There's so much going on and I think the only way that we could one up this is by bringing in the guests that we have here today and this is going to hit home for a lot of
1:33
[SPEAKER_01]: people out there because we get questions like this all the time and you know what Bryce, I'm not a tax person, you're not a tax person, when it comes to accounting and all this stuff, I can gladly, maybe not gladly, but I can say that's not our forte, that's not our expertise, but we pay people for that, right?
1:52
[SPEAKER_01]: We do.
1:53
[SPEAKER_01]: We do.
1:54
[SPEAKER_01]: And the cool thing is though, we get to talk to people from all different areas, and I don't want to spoil it, but I'll hand it back off to you because you can't tell them a little bit hyped up about today's episode.
2:04
[SPEAKER_02]: Yeah, everybody who's listening, this is going to be one where you're going to want to, you know, click slow down, maybe pause it here and there, bring a note pad, have your iPhone notes app ready, because there's going to be a lot of golden wisdom.
2:19
[SPEAKER_02]: I'll let Tony say his disclaimers and disclosures and all that kind of stuff, but I'm so excited.
2:25
[SPEAKER_02]: Tony puts welcome to this show.
2:28
[SPEAKER_02]: KPMG's Senior Tax Partner and Global Leader of the Digital Assets Tax Team.
2:34
[SPEAKER_02]: KPMG's one of the big four accounting and professional services firms.
2:39
[SPEAKER_02]: Tony, thank you for joining us today and how are you?
2:41
[SPEAKER_00]: very good yeah and thank you price thank you Brendan for having me on and yeah a little disclaimer everything I say here it's my own view my own opinion doesn't represent the view KPMG but yeah I'm happy to be here as you might notice it's tax season so it's busy for us we're pumping out tax returns trying to help our clients skip filed on time
3:02
[SPEAKER_00]: and accurately and so yeah, no really busy and as you guys were noticed it's very busy in the digital asset industry as a whole and so there's been a lot of transactions this year.
3:12
[SPEAKER_00]: There's been a lot of trading this year and so now comes the time where we got to collect that information and report it to the government.
3:20
[SPEAKER_02]: Absolutely, no.
3:21
[SPEAKER_02]: Well, first off, we just appreciate you taking the time out of a very busy season.
3:25
[SPEAKER_02]: And yeah, I think we've all anybody who's listening to this show is probably noticed the rollout of the new 1099 DAs.
3:33
[SPEAKER_02]: So that's something maybe we'll pick your brain on, but first let's just zoom out and get it you acquainted with us and our audience.
3:40
[SPEAKER_02]: We just want to know a little bit about you personally and particularly.
3:44
[SPEAKER_02]: uh uh you know with the backdrop of how did you come into crypto and lead i mean the big four uh accounting firm in kpm g how do you lead the um the digital asset tax uh uh arena there yeah you know uh funny story the um
3:59
[SPEAKER_00]: never really had an interest in crypto to be quite honest, but my I am a tax lawyer by background and before I came to KPMG when I was working in law firm life my specialty was financial products and so when crypto first came on the scene and we're talking like this is back in 2010, 2011 and people say wow well you know someone's got to take a look at this so that we can advise clients you have to know what it is.
4:24
[SPEAKER_00]: So it looked felt smelled like a financial product, so they gave it to me and they said here, figure this out.
4:30
[SPEAKER_00]: And so I just, you know, I figured it out.
4:33
[SPEAKER_00]: I took an interest, I read a lot, but I never really spent that much time with it.
4:38
[SPEAKER_00]: Until about 2016, 2017, our clients, KPMG clients just started asking.
4:44
[SPEAKER_00]: And so it started ramping up by 2018.
4:47
[SPEAKER_00]: It was taking off like you wouldn't believe by 2019.
4:50
[SPEAKER_00]: And I couldn't do anything else.
4:52
[SPEAKER_00]: So that's how we got here.
4:54
[SPEAKER_02]: I like it to me.
4:55
[SPEAKER_02]: And as it become as it become a pretty substantial part of KPMG's business or is it still a smaller emerging area.
5:05
[SPEAKER_00]: It absolutely has become its own separate asset class and its own area within the firm.
5:11
[SPEAKER_00]: That's for sure.
5:12
[SPEAKER_00]: But true, as you compare it to the mortgage marketer, you know, capital markets in general or some of our other industry groups,
5:22
[SPEAKER_00]: But when you look at growth it is the fastest growing section of our firm.
5:27
[UNKNOWN]: Yes
5:28
[SPEAKER_02]: I bet there's a lot of folks at KPMG, they're jealous of your role.
5:33
[SPEAKER_02]: But I'm curious, just from like a philosophical and personal standpoint, you could have done any sort of role and what made you hone in on crypto.
5:46
[SPEAKER_02]: What was attractive or fragrant about the crypto and blockchain ecosystem that made you say, hey, I kind of want to dedicate my career to this particular asset class.
5:58
[SPEAKER_00]: Yeah, the real thing that's interesting to me is we don't have a lot of rules.
6:04
[SPEAKER_00]: And so trying to figure out how things ought to be treated from attacks and accounting perspective when we don't have rules from a regulator or a government telling us you do this.
6:14
[SPEAKER_00]: Well, that's exciting.
6:15
[SPEAKER_00]: It's interesting to be able to come up with that policy yourself.
6:17
[SPEAKER_00]: And then, on the other hand, once the government does come around to start looking at it, which they do, there are always a few steps behind industry.
6:24
[SPEAKER_00]: But once they do, we're then having that ability to feel sitting front of regulators and legislators and teach them and help them and help them form what the, what the, what the,
6:35
[SPEAKER_00]: The laws are going to be and the regulations are going to be in the future that are going to guide this space, that's really exciting to me.
6:42
[SPEAKER_00]: And you know, just like when I first came into this world, professional world, that is after law school, it was a time in history, I'm dating myself, but it was a time in history when derivatives were really becoming a big, big thing on Wall Street.
6:55
[SPEAKER_00]: And the same thing, we did not have rules about how derivatives ought to be treated in different situations, how they ought to be taxed, what
7:02
[SPEAKER_00]: you know what the collateral requirements should be.
7:05
[SPEAKER_00]: All these kinds of things we didn't know we had to make it up as we went along and then we taught the government how to do it.
7:09
[SPEAKER_00]: And now we're seeing that again, same cycles happening again here in digital assets.
7:15
[SPEAKER_01]: How I guess should listeners and I guess there's two ways to look at this right because you have retail and the everyday people and then you have companies and institutions, but how should I guess both sides be looking at crypto taxes and crypto accounting because even between those two groups right if you institutional and you have retail.
7:36
[SPEAKER_01]: I'd say that the retail side has become fairly easy, meaning that if you're going through a centralized exchange, they typically send you a form, but a lot of people get confused about their on-chain transactions, where they're using wallets, and you know, their software is out there for it now, but I guess just generally speaking, as much into the weeds on this as you want, but how should people be looking at crypto taxes in accounting right now?
7:59
[SPEAKER_00]: I think for most retail people, the accounting isn't that difficult, but what's difficult is getting all the data, I mean if you trade regularly, it piles up as a year goes on.
8:13
[SPEAKER_00]: And if you're not keeping track of it, it's really hard to compile it and synthesize it at the end of the year in order to be able to do your taxes and report it.
8:20
[SPEAKER_00]: Now, in the in the regular, uh, uh, track five space, I don't care which of your favorite bank brokerage, whatever it is that you're trading on, they send you a really nice, complete report.
8:31
[SPEAKER_00]: Yeah.
8:32
[SPEAKER_00]: And everything is outlined, you know, here, this, this type of transactions, here's your total.
8:36
[SPEAKER_00]: Here's your trades, here's your total gains of loss in income.
8:39
[SPEAKER_00]: You don't really get that yet, like as you were saying, Brendan, yeah, if I only traded on a centralized exchange and I only bought and sold, sure, maybe I can make sense of that, but if I go a little bit further and a little bit deeper and if I go to defy and I go off the exchange, all of a sudden all bets are off, I need to be keeping track of my trades, my income, what's happening.
9:03
[SPEAKER_00]: And one day, we will get reports like that from every day, but until then, it's up to the actual trader, the taxpayer, to keep track of their own data and then be able to report that.
9:15
[SPEAKER_00]: By the way, even once I do get all the data, well, it's not still not all that easy.
9:19
[SPEAKER_00]: If I'm doing a lot of different types of trades because there are some things I don't know, right?
9:23
[SPEAKER_00]: I mean, I do know if I transfer tokens between my two wallets, that's not taxable.
9:28
[SPEAKER_00]: But if I send my token to some defy protocol and I get a defy token and exchange, some of those are taxable.
9:36
[SPEAKER_00]: Some of them are not.
9:37
[SPEAKER_00]: How do you figure that out?
9:38
[SPEAKER_00]: Where's the rule to tell you that?
9:40
[SPEAKER_00]: And so, a lot of those kinds of things are difficult.
9:43
[SPEAKER_00]: And then when I do get rewards from some of these protocols.
9:48
[SPEAKER_00]: When was it taxable?
9:49
[SPEAKER_00]: What was a value of that token when it did become taxable?
9:52
[SPEAKER_00]: And where is that data?
9:54
[SPEAKER_00]: Where is that record?
9:55
[SPEAKER_00]: You know, so some of this is just a data problem.
9:58
[SPEAKER_00]: Some of it's a rule problem.
10:00
[SPEAKER_00]: But yeah, I think for retail people, that's the just of it on the institutional side.
10:06
[SPEAKER_00]: And there it's the exact opposite, right?
10:08
[SPEAKER_00]: I think the institutions need to to the extent that they're dealing with retail customers.
10:12
[SPEAKER_00]: They need to do this reporting for them.
10:14
[SPEAKER_00]: They need to figure it out and put it into very understandable format.
10:18
[SPEAKER_00]: and put it in a way that can be downloaded electronically.
10:22
[SPEAKER_00]: So I think for them they're on the other side of that.
10:24
[SPEAKER_00]: And then of course the other thing on the institutional side is not so much on their tax reporting but just being able to use it in their own business operations because that's where the real value of this comes in for the broader institutional world.
10:38
[SPEAKER_00]: Absolutely.
10:40
[SPEAKER_02]: And, excuse me, I definitely remember April, I believe it was last year, Trump signed something, you might have to correct me on a specific, something to repeal this IRS DeFi broker rule.
10:58
[SPEAKER_02]: And maybe you could just give us, give our listeners a little color on what that was.
11:01
[SPEAKER_02]: I think it was the congressional review act that was proposing.
11:06
[SPEAKER_02]: that uniswap and radium and, you know, cow swap, all these different decentralized protocols that don't know your social security number, they don't know your name, they don't know you from Adam, you're just a random user, you could be anywhere in the world anytime and you could use these open source internet protocols.
11:24
[SPEAKER_02]: The IRS was trying to basically make it so that they would have to have all of this KYC information and reporting, but that was repealed and I just wanted a little color on how you're viewing that.
11:36
[SPEAKER_00]: Yeah, it's good and bad and so good in a sense that as you were saying, I don't know, it should be all have to identify ourselves and put our personal identifying information into every DFI protocol we touch just so that we can get some sort of tax reporting back.
11:52
[SPEAKER_00]: So perhaps good on that side, but bad in this sense of, I am a taxpayer.
11:57
[SPEAKER_00]: I do want to do the right thing.
11:58
[SPEAKER_00]: I'm trying to comply.
11:59
[SPEAKER_00]: I need the information, but now there's a whole bunch of information missing.
12:04
[SPEAKER_00]: And worse than that, much worse than that, if you asked me.
12:07
[SPEAKER_00]: These 10, 99 DA reporting rules came out.
12:11
[SPEAKER_00]: They got passed in two parts.
12:13
[SPEAKER_00]: One was the centralized exchange piece, one was the D5 piece.
12:16
[SPEAKER_00]: Centralized exchange piece still exists.
12:18
[SPEAKER_00]: But the D5, as you said, the Congressional Review Act, they repealed it.
12:22
[SPEAKER_00]: Well, that leaves a gaping hole, and it affects the centralized exchange part.
12:27
[SPEAKER_00]: So now what happens is you go on some centralized exchange and you buy a token.
12:32
[SPEAKER_00]: Great, and your cost basis is $10.
12:35
[SPEAKER_00]: If you stay on that centralized exchange and you trade things in and out of there, at least that $10 based tax basis, he's known and it'll get reported and it can travel around to your other assets as you move around.
12:48
[SPEAKER_00]: But if you take it off that exchange, I don't care where you put it, you put it in your own self-cusseted wallet or you sent it to a defy protocol and then it comes back.
12:57
[SPEAKER_00]: Now we have a problem, because those D5 rules got repealed, there's no information coming back from them.
13:03
[SPEAKER_00]: So now your centralized exchange has no idea what the basis is.
13:07
[SPEAKER_00]: That's why everybody this year, they got their 1099 DAs, well there was two reasons, but one, the basis was missing because of that, but also this year, even the centralized exchanges didn't have to report tax bases, some did, they didn't have to.
13:20
[SPEAKER_00]: Next year they have to.
13:22
[SPEAKER_00]: And so, but where is it going to come from?
13:24
[SPEAKER_00]: It must that as a state on the centralized exchange from start to finish.
13:29
[SPEAKER_00]: The second and left, the basis was gone.
13:31
[SPEAKER_00]: What does that mean?
13:32
[SPEAKER_00]: Well, fine, you know you bought it for $10.
13:34
[SPEAKER_00]: And you know you sold it for $12.
13:35
[SPEAKER_00]: So your gain is too.
13:37
[SPEAKER_00]: If you remember that and you have those records with you, but the centralized exchange does not because you moved it off exchange and you brought it back on, they put the basis as zero.
13:46
[SPEAKER_00]: So, and you sold it for $12.
13:47
[SPEAKER_00]: They're going to report $12 a game.
13:50
[SPEAKER_00]: They're not doing anything wrong to doing exactly what they're supposed to do.
13:53
[SPEAKER_00]: What was supposed to happen was when that token went off the exchange to some defy protocol, the centralized exchange was supposed to report out to the defy protocol.
14:04
[SPEAKER_00]: Here's what the basis is, $10.
14:05
[SPEAKER_00]: Remember that?
14:06
[SPEAKER_00]: And when it came back in, they were supposed to defy protocols, supposed to tell the centralized exchange, basis is $10.
14:12
[SPEAKER_00]: Remember that?
14:13
[SPEAKER_00]: Now it doesn't exist.
14:15
[SPEAKER_00]: Bases goes away.
14:15
[SPEAKER_00]: The whole system is broken now.
14:20
[SPEAKER_02]: Yeah, lack of continuity there.
14:22
[SPEAKER_02]: But I mean, so the taxing authorities are then relying on your self-reported, is that right?
14:30
[SPEAKER_02]: Your self-reported transact, I think it's the form 8943 correct if I'm wrong.
14:34
[SPEAKER_00]: 8949 is the one you use to correct what's broken on the 1099.
14:40
[SPEAKER_00]: Well, now, I'm usually on your 8949 for an individual.
14:44
[SPEAKER_00]: there might be a couple of items now for the you know normal trader it's pages and pages because it's all wrong and you're trying to fix it you know it gets it gets very messy and as you might imagine I hate to say this to me nature though when we're self-reporting sometimes our memories a little fuzzy and we self-report a little better number than maybe reality had
15:09
[SPEAKER_00]: You know, so it's not a good situation to have and so I do believe that some point down the road we're going to get to a place where we're all going to say, we can't do it this way, we've got we have to have a better method of tracking tax basis.
15:24
[SPEAKER_00]: Yeah.
15:24
[SPEAKER_01]: And I think that that's been a big part of what you all have been working on.
15:29
[SPEAKER_01]: I think from a public eye from a public perspective, everyone's seen the crypto industry grow.
15:36
[SPEAKER_01]: They've seen adoption increase.
15:38
[SPEAKER_01]: And to your point, there has been a lot of changes.
15:41
[SPEAKER_01]: And people naturally have questions about this stuff.
15:44
[SPEAKER_01]: But what have you noticed, maybe more from like, I guess both, the retail and the institutional side, what have you noticed the most?
15:52
[SPEAKER_01]: Because if you've looked at, or I've priced, we've referenced this before, but if you look at the total number of companies with their private or public that have put crypto onto their balance sheet, I mean, that number has skyrocketed over the last several years.
16:06
[SPEAKER_01]: I'm sure you've had plenty of conversations about audits and taking care of some of these accounting needs,
16:11
[SPEAKER_01]: I mean, what have been some of the top standouts or revelations that you've come to as you've seen this whole thing kind of rise into popularity?
16:22
[SPEAKER_00]: So one of the main things we've seen is that, you know, trying to track the data around movements of tokens.
16:30
[SPEAKER_00]: Even though the tech-mount blockchains and awesome technology, right?
16:34
[SPEAKER_00]: I have this immutable data.
16:35
[SPEAKER_00]: Trails right there.
16:37
[SPEAKER_00]: I can go back and use it But there's no quick and easy way to do that.
16:42
[SPEAKER_00]: That will change in the future.
16:43
[SPEAKER_00]: I'm sure and that's the trick of that all of this.
16:46
[SPEAKER_00]: I believe is We have to actually use the blockchain Technology itself to help us solve this problem and we will
16:53
[SPEAKER_00]: But in the meantime, what we're doing is, you know what, let's stop hurting ourselves.
16:58
[SPEAKER_00]: There's plenty of off-the-shelf software we can use that help us track this and organize it.
17:04
[SPEAKER_00]: And so let's try to use that where we can.
17:07
[SPEAKER_00]: And so I think everybody who is a sophisticated player in this space who's doing anything more than just buying a token and holding it.
17:15
[SPEAKER_00]: is using some form.
17:17
[SPEAKER_00]: One of these software platforms where they can basically track this stuff and make sense of it because that's really what you need to do until one day, all the protocols and all the centralized exchanges start reporting to us in a nice clean day to the way tradify does currently.
17:35
[SPEAKER_00]: This is what we have to do.
17:36
[SPEAKER_00]: It's a little self-help, but it works.
17:39
[SPEAKER_00]: And when use properly, I think it works great.
17:42
[SPEAKER_02]: Yeah, and, you know, not sure if you'll be able to answer this question, but we'll keep it anyway, anyways, because there's so many softwares out there, and they're not all created equal, right?
17:53
[SPEAKER_02]: Some are, you know, high calibers, some are just piece together.
17:57
[SPEAKER_02]: Some people are probably, you know, building their own with, you know, cloud code and all these kind of stuff to track all their wallets.
18:04
[SPEAKER_02]: So who knows what's out there, but do you or discapium G is a firm?
18:11
[SPEAKER_02]: tax softwares that retail folks can use to prep.
18:15
[SPEAKER_02]: I mean, maybe, you know, you guys recommend them.
18:18
[SPEAKER_02]: Or is it, you know, everything that you guys do is just in house and how does that kind of work?
18:22
[SPEAKER_00]: Well, personally, I recommend KPMG.
18:25
[SPEAKER_00]: Of course, we do offer this as a service to clients and so KPMG does do it.
18:29
[SPEAKER_00]: KPMG also goes in and verifies the tax engine, that a lot of the large software providers use.
18:39
[SPEAKER_00]: So I don't want to name people and say it's better than the other, but you do want to look for the bigger ones that institutions use because it might not have been KPMG, but some large accounting firm has gone in and verified their tax engine to make sure it's
18:59
[SPEAKER_00]: Because the last thing you want to have happen is already I use this but it's conflating my dating giving me the wrong tax basis Or it's picking out these transactions that and then calling them taxable when they really shouldn't have been taxable We see that a lot sometimes.
19:13
[SPEAKER_00]: So there's just things like that.
19:15
[SPEAKER_00]: We want to watch for but I think a lot of the You know the big names in this space have all been tried and tested and so I think you can use most of those with confidence
19:24
[SPEAKER_01]: Yeah.
19:25
[SPEAKER_01]: Well, you know, kind of going back to a point that we made earlier, there's been a lot of changes over the last several years.
19:30
[SPEAKER_01]: You've seen all sorts of different regulations and new bills, and the big one on everyone's mind here, the big ones that we've seen is the Genius Act last year, and now everyone's looking towards the Clarity Act this year.
19:46
[SPEAKER_01]: What are your big takeaways from those?
19:48
[SPEAKER_01]: What changes the most kind of came out of that?
19:53
[SPEAKER_00]: Well, on the genius stage with which was really focused on stable coins, that is really, really useful.
20:01
[SPEAKER_00]: You're not seeing the impact quite yet and the reason for that is all the regulations that implement the genius act.
20:08
[SPEAKER_00]: They're due in July of this year.
20:10
[SPEAKER_00]: So following July, you'll start to see it happen.
20:13
[SPEAKER_00]: They'll be popping up all over the place and you'll see them designated as payment stable coins.
20:19
[SPEAKER_00]: And you will start to see many more retailers accepting stablecoin is payment because really what we're talking about, we don't have that CBDCs centralized digital currency in the US.
20:34
[SPEAKER_00]: But so stable payment stablecoins that are verified under the genius act, that's what's going to be our digital dollar in the United States.
20:43
[SPEAKER_00]: And so very rapidly you're going to see mass America through the retailers,
20:48
[SPEAKER_00]: make this the official currency of the U.S. and this is how you'll buy and sell things while you're already seeing it in the sense that some of the payment processors that you very well know the big the big credit card firms in the U.S. that you're probably using all the time it's in your wallet right now they are they are using stable coins now in behind themselves right so there's still the
21:16
[SPEAKER_00]: if you want, but behind the scenes is going to be a stable point that moves across the rails because it's faster and cheaper.
21:22
[SPEAKER_00]: And so that's one way you'll see it, but the other way is you will also start to see retailers just accept stable as payment, you know, consumer to retail or payment without any intermediary at all.
21:38
[SPEAKER_00]: That'll be next.
21:40
[SPEAKER_02]: This could be a little bit like the Trojan horse, if you will, for Bitcoin and Ethereum, and all these different, you know, more volatile assets is, you know, people are getting, gonna get more comfortable, right?
21:52
[SPEAKER_02]: They're gonna be checking out at Target and, you know, they'll see, pay in USDC as an option.
21:57
[SPEAKER_02]: What's that, you know, or stablecoin, or whatever it's gonna say?
21:59
[SPEAKER_02]: And they're just like, oh my gosh, like, if I could pay with GAT or pay gas, with stablecoins and buy stuff,
22:05
[SPEAKER_02]: You know, groceries, then maybe this stuff isn't just an outright scam, because if you go and you talk to, you know, the majority of, you know, when you think about demographically, who has most money, it's not my generation that has most of the money, it's the older generation, right, just by demographic trends, you know, like the boomer generation, they've got all the money, but they're like the most skeptical of crypto because you can't use it anywhere.
22:29
[SPEAKER_02]: Whenever I talk to my dad's friends, well, where can you use Bitcoin?
22:32
[SPEAKER_02]: You know, done.
22:33
[SPEAKER_02]: If you can't use it anywhere, it's not going to work.
22:35
[SPEAKER_02]: You know, like, oh my god, okay, just I'll have a conversation with you a little in a different day.
22:39
[SPEAKER_02]: It's, and so like once you could say, okay, well, the crypto technology is now validated by Visa validated by MasterCard.
22:45
[SPEAKER_02]: They're using it.
22:47
[SPEAKER_02]: And it's just going to make people more comfortable.
22:49
[SPEAKER_02]: And so that July date is a really key inflection point, I think.
22:54
[SPEAKER_02]: that mass America is going to start to get exposure to this and it's going to be in a sense a little bit of marketing for crypto.
23:03
[SPEAKER_02]: So I'm really looking forward to that and I really appreciate you kind of putting that on our radar.
23:09
[SPEAKER_02]: And if we shift to the clarity act,
23:11
[SPEAKER_02]: I'm not sure if it has much, you know, about stable coins or tax implication and you could speak to that, but how are you kind of keeping tabs on the clarity act and what are the key tenants of that that you think are most important?
23:26
[SPEAKER_00]: Yeah, so we really do need the Clarity Act.
23:28
[SPEAKER_00]: So, you know, Genius Act was great because, you know, that allows for stable coins when it comes into full force after this summer, you'll see a lot of stable coin usage among people and retailers, but we needed to be at the financial institutions as well.
23:44
[SPEAKER_00]: So, if I'm going to be paying people with stable coin, for example, do I, obviously, I can do it in my self custody wallet where I can use, you know,
23:52
[SPEAKER_00]: when the large centralized exchanges, but what I would really love to happen is have all my money and my favorite bank that I normally use or my normal app on my phone and I want to send money from there and sometimes I want to send real money.
24:05
[SPEAKER_00]: U.S. dollar sometimes I want to send U.S. D.C. U.S. D.T.
24:09
[SPEAKER_00]: out of that.
24:11
[SPEAKER_00]: But I can't write now because the banking system doesn't feel comfortable using it, even though the O.C.
24:19
[SPEAKER_00]: C, the Fed and the F.I.C.
24:22
[SPEAKER_00]: have all already come out and said, go ahead, you can do it.
24:26
[SPEAKER_00]: We still need rules.
24:27
[SPEAKER_00]: Who's my, who's my primary regulator for this asset?
24:31
[SPEAKER_00]: That's what's in the clarity act.
24:33
[SPEAKER_00]: That's why we need that.
24:35
[SPEAKER_00]: Once we have it, then the banks will say, I know exactly the registration, the license, whatever it is that I need to go get, and I can do this, and they will do it immediately.
24:44
[SPEAKER_00]: And so the clarity act is being held up a little bit right now, however.
24:48
[SPEAKER_00]: big, big applause to the CFTC and the SEC.
24:52
[SPEAKER_00]: They put out their own memorandum of understanding and they're putting out their own rules right now about which branch is doing what and they're starting to write their own rules ahead of the Clarity Act.
25:03
[SPEAKER_00]: So normally you get the legislation first and then the regulators write their rules.
25:07
[SPEAKER_00]: This one's going in reverse.
25:09
[SPEAKER_00]: The regulators are hopping out in front of it and they're writing their rules and I think that's really great because
25:18
[SPEAKER_00]: That's going to be the primary regulator for most of what the banks need to do.
25:24
[SPEAKER_00]: And it's not good or bad, but as long as the banks know, fine, I'll go register, I'll get the license I need to have, and this is how we're going to do business.
25:32
[SPEAKER_00]: So that's fantastic.
25:34
[SPEAKER_00]: So that is moving forward right now as we speak.
25:36
[SPEAKER_00]: So I hope the Clarity Act gets passed anyway, because the real fear of just letting the regulators run the front of it,
25:44
[SPEAKER_00]: is that that's great.
25:45
[SPEAKER_00]: It'll work for now, but as soon as we get the next administration in the White House, things just means those rules.
25:51
[SPEAKER_00]: But if it gets passed into law, that's much harder to change.
25:55
[SPEAKER_00]: So that's why we want this.
25:57
[SPEAKER_02]: And I know you've been tracking a lot with the Senate Banking Committee and everything that's kind of going on there.
26:04
[SPEAKER_02]: So are you saying that's kind of the sticking point?
26:07
[SPEAKER_02]: Because I think the Senate Agricultural Committee, who's the commodities, they're kind of already rolling through and past their version.
26:14
[SPEAKER_02]: So it's really maybe the banking lobbyists that are fighting this the most.
26:19
[SPEAKER_02]: They don't wanna give up their net interest income.
26:22
[SPEAKER_02]: It seems like a big sticking point.
26:26
[SPEAKER_02]: pretty much go knock down, drag out war with everybody who's on the opposite side.
26:33
[SPEAKER_02]: What are some of the just, again, speaking from personal standpoint?
26:36
[SPEAKER_02]: What are some of the dynamics there that you find most interesting and worth the discussion?
26:42
[SPEAKER_00]: Yeah, I think.
26:43
[SPEAKER_00]: The thing that I find incredibly interesting is that the banking lobby is still pushing for keeping this mode around or regulated castle and saying, well, you have to be a bank to be able to do this or that.
26:58
[SPEAKER_00]: And I
26:58
[SPEAKER_00]: Obviously, you know, economics, I completely understand why they want to do that, right?
27:02
[SPEAKER_00]: But they have to realize, though, that they've lost that fight already, right?
27:07
[SPEAKER_00]: I mean, eventually, I mean, right now today, if people felt comfortable using crypto on a daily basis, they don't need the bank.
27:18
[SPEAKER_00]: Everybody can pay everybody else with their phone and it doesn't have to go through a banking institution.
27:24
[SPEAKER_00]: So they know that that's coming for them.
27:27
[SPEAKER_00]: So the only thing they're doing here is delaying that, but that is coming.
27:31
[SPEAKER_00]: But what I would say to their favorite is that, all right, if they can delay it, maybe they can get out in front of it, they can harness it, maybe they can use it, what have you.
27:43
[SPEAKER_00]: pushing back on this whole yield thing though does raise one important point for the crypto lobby which is, hey, there are rules.
27:53
[SPEAKER_00]: You might not like them.
27:54
[SPEAKER_00]: You can go get them changed if you want them, but to try to sit there and say, well, you know, my stable coin can pay yield.
28:02
[SPEAKER_00]: And I don't have to register that as a security.
28:04
[SPEAKER_00]: I don't have to go register under the 40 act or anything.
28:07
[SPEAKER_00]: because mine is different.
28:08
[SPEAKER_00]: It's new.
28:09
[SPEAKER_00]: That's unfair because, you know, we do have, you know, if you think about what a stable coin is, right?
28:17
[SPEAKER_00]: You buy this thing that links to a collection of treasuries over night repose, things like that, and that all pays interest, and now they want to pass that yield on to you, well, I already have something like that, right?
28:32
[SPEAKER_00]: It's called
28:36
[SPEAKER_00]: You know, and by the way, I'm all for saying, you know, things that are backed by treasuries shouldn't have to register on the 49.
28:43
[SPEAKER_00]: Should be freely transferable.
28:44
[SPEAKER_00]: Well, go change the rule, go change the rule.
28:46
[SPEAKER_00]: Change it for money market funds, change it for you with stablecoin, do that.
28:50
[SPEAKER_00]: But don't just sit there and say, mine's new, mine has a different name.
28:53
[SPEAKER_00]: So I don't have to use these rules.
28:55
[SPEAKER_00]: That seems unfair.
28:56
[SPEAKER_00]: I get that.
28:58
[SPEAKER_01]: you've seen a little bit of a back and forth here.
29:00
[SPEAKER_01]: I've enjoyed it.
29:01
[SPEAKER_01]: I've kind of cooked up some popcorn as I've been watching to hang the crypto companies do get out exchange common, sometimes exchange insults.
29:10
[SPEAKER_02]: It's almost like a a paper view event, but yeah, we don't you don't watch reality TV or sports, but by God, do we love watching the politics of crypto unfold?
29:20
[SPEAKER_01]: It is, and especially when you have like what Kraken has been doing in Coinbase has been doing compared to what like JP Morgan has been saying in some of these, some of these banks, man, it's entertaining watching the timelines, but to some of the, I mean, I can understand the frustration of the crypto side, because they're saying, hey, this has been our industry, and then the banks are trying to come in and make all the rules and regulations and say, well, we know it's best, and we've done this, the financial space, the longest.
29:48
[SPEAKER_01]: Um, and it gets the crypto people frustrated because they're like what in the world like why is an outer opinion being valued as much?
29:55
[SPEAKER_01]: And then the bank side are saying in the banks of the asset managers are saying well, we have the most capital.
29:59
[SPEAKER_01]: We have the larger industry.
30:00
[SPEAKER_01]: So we get to make the rules and so you have this budding of heads.
30:04
[SPEAKER_01]: about which group thinks their idea is the best, and obviously they're going to have disagreements.
30:10
[SPEAKER_01]: The way that I look at this is that there's going to have to be given take from both sides.
30:14
[SPEAKER_01]: The crypto people are going to get some things that they're going to really want, and then the banks are going to say, hey, these are non-negotiables for us, and I see us meeting towards the middle.
30:22
[SPEAKER_01]: I've seen a lot of people saying, well, no, it's going to be all this side or all that side.
30:26
[SPEAKER_01]: I don't see it as so black and white.
30:28
[SPEAKER_01]: Eventually I see both sides coming together.
30:30
[SPEAKER_01]: I think the Clarity Act is probably being pushed back a little bit right now because there's so much other stuff going on.
30:36
[SPEAKER_01]: But I do see this coming back into full view as something that is going to be a priority again.
30:42
[SPEAKER_01]: But you know, you have Larry think, right?
30:43
[SPEAKER_01]: The world's...
30:44
[SPEAKER_01]: Or, you know, head of BlackRock, which is the world's largest asset manager, saying that the future of all assets is on chain and that, you know, he's basically saying, hey, get with this or get lost and there's been a lot of talks about tokenization and real world assets and all these things.
31:02
[SPEAKER_01]: How do you think that these fit into the financial world?
31:06
[SPEAKER_00]: Yeah, I think Larry think is right on one point, which is, he said everything in the financial world will be tokenized.
31:15
[SPEAKER_00]: And that's true, right?
31:16
[SPEAKER_00]: I mean, you can't really deny that.
31:18
[SPEAKER_00]: And by the way, you shouldn't care because back in the day before all of us were born, if you bought a share of XYZ company, yeah, to actual piece of paper,
31:29
[SPEAKER_00]: There was a piece of paper you could put it in a safe deposit box or whatever, you know, and at some point we decided that silly, we should just have, you know, non-papered shares and it's held on for you at DTC.
31:45
[SPEAKER_00]: and all the banks got together.
31:46
[SPEAKER_00]: They formed DTC.
31:47
[SPEAKER_00]: They made it for this purpose.
31:49
[SPEAKER_00]: When that happened, no one cared.
31:50
[SPEAKER_00]: You don't care how your stock thing is held.
31:53
[SPEAKER_00]: You just have stock.
31:54
[SPEAKER_00]: Now that your stock is going to trade on a blockchain, do you care?
31:57
[SPEAKER_00]: Should you care?
31:58
[SPEAKER_00]: No, it's faster and it's cheaper.
32:00
[SPEAKER_00]: And so I think that's fine.
32:02
[SPEAKER_00]: And so Larry think is absolutely correct.
32:04
[SPEAKER_00]: That is happening right now.
32:07
[SPEAKER_00]: you may not realize it because again, you don't yeah, their banks aren't telling you that you know, your deposit is going on chain or your bond is going on chain, but it is.
32:16
[SPEAKER_00]: And the reason for that is again, it's faster and it's cheaper.
32:20
[SPEAKER_00]: And you can fractionize these things.
32:23
[SPEAKER_00]: The real big big event for banks here in the reason they push for it internally.
32:28
[SPEAKER_00]: is when they do trade with each other, between two banks, they're always collateralized and normally today without being on chain, what do you collateralize things with?
32:40
[SPEAKER_00]: It's got to be cash, it's got to be treasuries.
32:43
[SPEAKER_00]: Well, except tier one capital for a bank, which is the most important thing they have, the most expensive thing they have.
32:50
[SPEAKER_00]: They hate wrapping it up like that.
32:52
[SPEAKER_00]: If they could post other assets, they would love to, but it's too hard to move other assets.
32:57
[SPEAKER_00]: But now if it's on chain and it's freely transferable, I can post that up as collateral.
33:01
[SPEAKER_00]: And so for them, this is a really big deal.
33:04
[SPEAKER_00]: Capital efficiency is the name of the game for them, and that's where real world
33:07
[SPEAKER_00]: asset tokenization goes but them and the same thing actually will play out for people too which is you know take a clunky asset like a private equity fund you know if you buy a private equity fund sure but you got to fill out all these documents you've got to transfer money and ask grow you got to get the things in back from you're the sub-dough back from your lawyer and then finally your money is tied up into this thing that you can't get alone against and you just wait
33:36
[SPEAKER_00]: Well, and by the way, the minimum investment on that was $5 million, it's been now.
33:41
[SPEAKER_00]: I put it on chain.
33:41
[SPEAKER_00]: You can buy it for as little as $25 a fractionalized piece of it.
33:46
[SPEAKER_00]: You know, I need to post it to the bank as part of my collateral package to get a loan.
33:49
[SPEAKER_00]: I can, you know, it's just a wonderful thing to allow kind of clunky assets like that, to trade a little more freely and be a little more disparate in the financial system.
33:59
[SPEAKER_01]: Yeah, it seems as if that's the natural way that things should move.
34:04
[SPEAKER_01]: And that's nothing like what you just said is nothing too different from what we've already experienced, generally speaking.
34:10
[SPEAKER_01]: I think even if you look outside the world of crypto, you see the world trying to do two things, right?
34:15
[SPEAKER_01]: How can we increase liquidity and how can we remove the barrier to entries that more people can get involved, which then contributes to more liquidity?
34:23
[SPEAKER_01]: And I think that's one of the biggest strengths here of tokenization.
34:26
[SPEAKER_01]: And people always hear these headlines, right?
34:28
[SPEAKER_01]: They always hear, oh, it's going to be this multi-chillined dollar industry.
34:31
[SPEAKER_01]: And everyone's always talking about it.
34:33
[SPEAKER_01]: But I think it's reassuring to hear it from the mouth of people like yourself, right?
34:37
[SPEAKER_01]: Coming from a big for accounting firm and saying, hey, this stuff is actually happening.
34:43
[SPEAKER_01]: There's actually interest in this.
34:45
[SPEAKER_01]: And there's benefits.
34:46
[SPEAKER_01]: There's real benefits.
34:48
[SPEAKER_01]: exactly huge benefits.
34:51
[SPEAKER_01]: So yeah, thanks for speaking on those benefits.
34:55
[SPEAKER_01]: What asset classes do you see tokenization benefiting the most?
35:01
[SPEAKER_00]: Yeah, so well, two things one on one end of the spectrum, it's currencies, right, just a dollar or a euro, just to be able to make that move much faster and much, much cheaper, and they, and also by the way, do not forget, I mean, we happen to live in.
35:19
[SPEAKER_00]: a very rich country and we have all of the financial systems prowess at our fingertips all day, not every country is like that.
35:27
[SPEAKER_00]: And so being able to take dollar assets or euro assets and give them to people who are living in countries that don't have the safety of the FDIC around them and letting them use that asset.
35:40
[SPEAKER_00]: The democratization of finance is a big thing outside of the United
35:48
[SPEAKER_00]: Like I said, it's the things that don't trade cleanly.
35:52
[SPEAKER_00]: The things that are clunky, like private fund interests, CLO's, secure decisions.
35:59
[SPEAKER_00]: By the way, even whole bank loans, the bank loans trade in the United States.
36:05
[SPEAKER_00]: There are people who trade in them.
36:06
[SPEAKER_00]: They tend to be hedge funds, though, and other banks.
36:08
[SPEAKER_00]: But you have to buy this entire loan.
36:11
[SPEAKER_00]: By the way, the loans not by itself.
36:12
[SPEAKER_00]: It's an old package of all.
36:14
[SPEAKER_00]: thousand loans.
36:16
[SPEAKER_00]: So people, unless you're in that business, you tend not to go near it.
36:21
[SPEAKER_00]: But if I tokenize it, everybody can.
36:23
[SPEAKER_00]: Everybody can.
36:23
[SPEAKER_00]: Everybody can have a piece of a CLO, if they care to.
36:26
[SPEAKER_00]: Everybody can have a piece of a bank loan, secureization.
36:30
[SPEAKER_00]: And by the way, real estate portfolios too.
36:34
[SPEAKER_00]: back in the 60s, the United States thought it was a really good idea and it was, by the way, to create something called the REAT, which is, you know, a real estate investment trust.
36:44
[SPEAKER_00]: And now, all of a sudden, the everyday person who was trading stocks could also get exposure to actual real estate.
36:50
[SPEAKER_00]: But the way REATs work is they come in this basket of mixed up properties that you don't get the peck, right?
36:55
[SPEAKER_00]: You can pick the manager, but you can't pick the actual properties.
36:58
[SPEAKER_00]: But now, if we say all the properties get tokenized, which they will someday,
37:02
[SPEAKER_00]: Right, fine, now you can buy a little piece of some property out there that you thought was meaningful and you can share in that and that again It's democratization of finance shouldn't everybody have a little commercial real estate in the portfolio I actually think that maybe other people don't but if that's your view Here's a way to express that view without 10 million dollars and so I think it's you know for those type of assets that come in big size and trade clunky Real value in tokenization on those things
37:29
[SPEAKER_02]: totally.
37:30
[SPEAKER_02]: Could have said it better.
37:31
[SPEAKER_02]: And Apollo is one of the groups that is really making inroads into this industry with their tokenization of one of their private credit funds.
37:41
[SPEAKER_02]: And I think BlackRock has the Biddle Fund, which is a little different.
37:45
[SPEAKER_02]: But, you know,
37:46
[SPEAKER_02]: big name asset managers, $100 billion asset managers, trillion dollars, they're stepping into this in a big way and it's really exciting to see and there is also one of the other things and this wasn't on an outline that we talked about but it's just been on CNBC and Bloomberg and all this kind of stuff recently has been this bubble that might be percolating up in private credit.
38:11
[SPEAKER_02]: And, you know, it kind of ties in here to tokenization because if they were all tokenized and had live marks and transparency into what were in all of these private credit funds, maybe there wouldn't be this huge emergence of fear and so on.
38:29
[SPEAKER_02]: So I don't know if we could get a hot take on anything going on with the private credit bubble.
38:35
[SPEAKER_02]: If there is one, again, personal opinion would be appreciated.
38:39
[SPEAKER_02]: but I've seen blue owl and cliffwater and some of these other funds have very alarming levels of revampions of their capital.
38:50
[SPEAKER_00]: Yeah, so I wouldn't exactly call it a bubble, but what I would say is that you have investors with different longevity views for their investments.
39:03
[SPEAKER_00]: And so typically in private credit, just going back just a few years ago, five years ago, the only people that would get involved in private credit at that scale would have been a private investment manager, like a professional hedge fund or private equity fund.
39:19
[SPEAKER_00]: or an insurance company or a pension fund.
39:24
[SPEAKER_00]: That's who would invest in that because they have a 10-year 20-year 30-year investment outlook, and if things go up and down in the middle, it's okay.
39:31
[SPEAKER_00]: They know in the end, it's a good asset, and it's going to pay.
39:35
[SPEAKER_00]: What happened five years ago or so, we started to make
39:40
[SPEAKER_00]: you know what we call retail funds, right?
39:42
[SPEAKER_00]: These are 40 athletes.
39:44
[SPEAKER_00]: And so now you're every day American can go buy into these things.
39:47
[SPEAKER_00]: And the way we're trying to balance the 40-act fund requirements, which there is some liquidity requirement to that, right?
39:54
[SPEAKER_00]: until we say fine, every quarter you can redeem up to five percent.
39:58
[SPEAKER_00]: You know, all right, that sounds perfect.
40:00
[SPEAKER_00]: All of a sudden it's working for us, retail, people can buy in the private credit, we're all from running.
40:04
[SPEAKER_00]: But then you get macro events like what's happening in the world right now, and people get a little scared.
40:10
[SPEAKER_00]: They say, well, I want to take something off the table, so they put in their redemptions, and they hit the 5% cap.
40:16
[SPEAKER_00]: Of course they do.
40:17
[SPEAKER_00]: Well, you know, if you're going to have some private credit, you probably should have been looking out a little further than six months, you should be looking out, you know, six years, 12 years, 15 years.
40:26
[SPEAKER_00]: So, that's why you're seeing this, that's why this is happening.
40:30
[SPEAKER_00]: And, you know, it's a feature, not a fall, you know?
40:33
[SPEAKER_00]: you're hitting the 5% cap.
40:34
[SPEAKER_00]: That's why the 5% cap is there.
40:36
[SPEAKER_00]: Now, you might be right, maybe we should change the rules around these 40 act funds.
40:40
[SPEAKER_00]: Maybe that shouldn't be the rule.
40:41
[SPEAKER_00]: Maybe there should be some other rule.
40:43
[SPEAKER_00]: And we can, that's certainly worth thinking about as we go forward, but right now that's what it's happening.
40:48
[SPEAKER_00]: So it's a little more of this, this,
40:52
[SPEAKER_00]: creation of these 40-act funds, these retail funds that's causing this glitch, what you see as a glitch, but it's really a feature.
41:02
[SPEAKER_00]: More than, hey, I have this real problem in the credit market and everything's defaulting.
41:07
[SPEAKER_00]: It's not that.
41:08
[SPEAKER_02]: Yeah, credit spreads still seem to be generally pretty tight across the market and yeah it's just kind of been yeah an interesting little phenomenon that's going out with with the retail folks but and interestingly if you had tokenized those funds.
41:24
[SPEAKER_00]: And you changed the rules a little bit and allowed people to transfer them person to person.
41:30
[SPEAKER_00]: Well, maybe I wouldn't care so much about the 5% redemption rule.
41:33
[SPEAKER_00]: Maybe I could actually transfer it to another person who took a different view of the market at that moment in time.
41:38
[SPEAKER_00]: It may be that would be the liquidity that would help me and it can actually be done on Jane.
41:43
[SPEAKER_00]: And so that's another avenue to look, look down in the future that maybe we saw that by tokenizing it.
41:49
[SPEAKER_02]: Yeah.
41:50
[SPEAKER_02]: No, actually, to that point, I think I'm, you know, maybe some of these are getting so, you know, sold off and redeemed and all that kind of stuff because in the public markets, you know, the software stocks, you know, if you look at IGV, right, that's been completely hammered.
42:03
[SPEAKER_02]: And most of the private credit and stuff, the way I'm learning about it, from the public discourse, right now, is that a lot of these borrowers are, you know, software stocks and stuff like that.
42:14
[SPEAKER_02]: or software private companies.
42:16
[SPEAKER_02]: And so if you're looking at the public market, you're like, oh my god, you know, all the best public stocks are down 25, 30, 40%, then what about these private companies that are, you know, leveraged borrowers and, you know, all this kind of stuff shouldn't they be down, but then you're looking at these marks.
42:32
[SPEAKER_02]: And they're stale, right?
42:33
[SPEAKER_02]: You know, they update them once a year, once a quarter or whatever, and it's, you know, they're, they're checking their own homework in a sense.
42:41
[SPEAKER_02]: Of course, they have fiduciary obligation.
42:43
[SPEAKER_02]: I'm sure they got auditors and all that kind of stuff.
42:45
[SPEAKER_02]: But it seems like a little bit of a quagmire, maybe.
42:52
[SPEAKER_02]: about to unfold.
42:54
[SPEAKER_02]: Well, look, Tony, while we still have you for a couple of minutes, we just want to round out the discussion with kind of an open-ended question.
43:01
[SPEAKER_02]: Look, is there anything that we didn't ask you that you wanted to highlight, whether from a firm level, from something that you're studying right now?
43:09
[SPEAKER_02]: Anything that we didn't ask that maybe we should have, or something that you wanted to highlight?
43:14
[SPEAKER_00]: You know, one of the things I would highlight though, you know, people love to talk about crypto and, you know, my personal view is maybe crypto's here in 10 years, maybe it isn't.
43:23
[SPEAKER_00]: But blockchain is definitely here and I love to see what it's doing with traditional assets.
43:30
[SPEAKER_00]: You know, think just, if you think about it, yeah, we talk about democratizing some some of the aspects about asset management and, you know, being able to own things that maybe you could known before.
43:44
[SPEAKER_00]: You know, some of the things that we could have always done, but we didn't, because there's operationally too difficult, and, you know, things like, you know, when you get a, when you get a nice stock that you like, pick your favorite, you know, tech stock, you know, that's got a nice dividend and you believe in it, right?
44:02
[SPEAKER_00]: We could have always stripped the dividend right off of the stock and sold them separately.
44:07
[SPEAKER_00]: So the dividends would become like a bond almost.
44:10
[SPEAKER_00]: And then if you didn't want the dividends, but you'd love the stock, but not the price.
44:13
[SPEAKER_00]: Well, if I stripped the dividends off of it, now the stock's a lot cheaper.
44:17
[SPEAKER_00]: And you can buy the stock a lot cheaper.
44:18
[SPEAKER_00]: We could have always done it.
44:19
[SPEAKER_00]: But we don't, because it's very operationally difficult than to track everybody who has the dividend and pieces, but I'm blockchain, I can do it pretty easy, right?
44:28
[SPEAKER_00]: And so you're starting to see that out there.
44:30
[SPEAKER_00]: Things like that, you know, we're also seeing, you know, I love it, micro finance and emerging markets, love it, right?
44:38
[SPEAKER_00]: Sure, I could have always gone around and given loans between $10 and $150.
44:42
[SPEAKER_00]: It's operationally difficult.
44:45
[SPEAKER_00]: So I don't do it, but I'm blockchain all of a sudden I can do it.
44:47
[SPEAKER_00]: It's not that bad, you know.
44:49
[SPEAKER_00]: So I just love the things that this makes capable, you know.
44:54
[SPEAKER_00]: And of course you got in the asset management area.
44:56
[SPEAKER_00]: You guys might have even seen there's some big, big time asset managers that just started offering what they call vaults, right?
45:04
[SPEAKER_00]: But really what it is, right?
45:05
[SPEAKER_00]: It's a smart contract run.
45:07
[SPEAKER_00]: You know, Hassan Manageman platform, you dedicate stablecoin to it, and it goes off, and it's trading under its algorithms.
45:15
[SPEAKER_00]: Some of them are curated, so they actually do have a person as a manager back in the background.
45:19
[SPEAKER_00]: Some are do not, some are fixed.
45:21
[SPEAKER_00]: I algorithm's, but I love that.
45:22
[SPEAKER_00]: That's the future of Hassan Manageman.
45:25
[SPEAKER_00]: And if you think about that, if you take it just one step further,
45:29
[SPEAKER_00]: If I locked people, if I did it per person rather than co-mingling funds, well, then I wouldn't have a fund at all, right?
45:36
[SPEAKER_00]: Night of the separately managed account, which again, I could always do people do separately managed accounts now.
45:41
[SPEAKER_00]: They hate them, but they do them, and the reason they hate them is they're operationally difficult.
45:45
[SPEAKER_00]: But if I put it on chain, it becomes a lot easier.
45:48
[SPEAKER_00]: Maybe I just do that instead of having co-mingled funds.
45:51
[SPEAKER_00]: So I just love the, what it opens up to us, the availability of different options and
45:57
[SPEAKER_00]: Maybe we're there but really weren't there before and now I can do them.
46:02
[SPEAKER_02]: love it.
46:02
[SPEAKER_02]: Yeah, it's going to completely make the the financial industry much more personal and much more customizable both for for us on the receiving end and for folks who are providing those professional services.
46:14
[SPEAKER_02]: So, look Tony, we can't thank you enough for for the hour that you spent with us here today on the crypto 101 podcast.
46:20
[SPEAKER_02]: We want to make sure all of our listeners know where to find you, you know, digitally online, of course, after this episode
46:29
[SPEAKER_02]: Do you blog anywhere?
46:30
[SPEAKER_02]: Do you have any sort of links that you want us to put in the show notes or potentially just KPMG dot common and send it start there?
46:39
[SPEAKER_00]: KPMG dot common is great.
46:41
[SPEAKER_00]: You've also find everything I love to talk about.
46:43
[SPEAKER_00]: I talk about it on LinkedIn.
46:45
[SPEAKER_00]: I have, so if you follow me on LinkedIn, you know, you can learn all about taxation of all kinds of digital assets and little fun little things on there, and if you want to call me bad names, I'm also on Twitter, and you can get me on there if you want to, but sure, LinkedIn is a great way to follow me.
47:04
[SPEAKER_02]: Awesome.
47:05
[SPEAKER_02]: Well, thank you so much.
47:07
[SPEAKER_02]: Thank you to KPMG as well.
47:10
[SPEAKER_02]: And most importantly, thank you to all of our amazing listeners who tune in each and every week to hear from the best and brightest that are on the frontier of digital assets.
47:21
[SPEAKER_02]: Look, Tony, thank you and everybody at home watching will see you back.
47:24
[SPEAKER_02]: Same time, same place next week with some more incredible guests.
47:28
[SPEAKER_02]: Have a good one.