Speaker 1: Hey, folks, we're recording at Chainlinks smart Con event and
Speaker 1: joining me is Will Peck, who is the head of
Speaker 1: Digital Assets at wisdom Tree. Well, great to.
Speaker 2: Have you, Great to be with you, Tony.
Speaker 1: Well we met, we were talking before the recordings at
Speaker 1: the ONDO event, and crypto seems to be booming. You know,
Speaker 1: what are your thoughts on how this market has grown?
Speaker 1: The industry has grown?
Speaker 2: Yeah, I mean it's great.
Speaker 3: It's also it's interesting you mentioned the ONDO event smart Con,
Speaker 3: which is you know, about much more than just like
Speaker 3: crypto exposures on blockchains. Right, it's about using blockchains as
Speaker 3: kind of infrastructure for financial services.
Speaker 1: Right.
Speaker 3: Crypto is infrastructure. Blockchain is infrastructure for more and more
Speaker 3: real world finance. You know, maybe real world is not
Speaker 3: like the perfect term, but like that's exactly what we're
Speaker 3: seeing more and more of.
Speaker 2: That's what wisdom Tree is focused on.
Speaker 3: So feels like a lot of energy you know, at
Speaker 3: these conferences in New York around that topic generally.
Speaker 1: And then you have a lot of trad fy now
Speaker 1: looking to build with blockchain rails. They're launching et as,
Speaker 1: they are tokenizing, they're launching stable coins. What are your
Speaker 1: thoughts on how TRADFI has kind of taken over cryptow.
Speaker 3: Yeah, absolutely, so, I mean my role, I'm head of
Speaker 3: Digital Assets at Wisdom Tree. So Wisdom Trees a global
Speaker 3: asset manager ETF sponsor. We manage north of one hundred
Speaker 3: and forty billion dollars globally today and the division I
Speaker 3: head up is focused on tokenization and stable coins, stable
Speaker 3: corn orchestration, and we manage about almost seven hundred million
Speaker 3: dollars I think six hundred and eighty million dollars in
Speaker 3: tokenized products. Our largest product is a tokenized money market
Speaker 3: fund wtgxx that's available on seven public blockchains, which really
Speaker 3: the use case is like providing a stable, yield bearing
Speaker 3: alternative to stable coins, for example, where somebody might have
Speaker 3: a lot of stable coins that aren't earning yield and
Speaker 3: they've got you know, certain treasury management workflows or needs
Speaker 3: that they might have, and our money market fund wtgxx
Speaker 3: provides a great option for them to you know, diversify
Speaker 3: get yield in this regulated exposure. So that's like kind
Speaker 3: of the prime example today and we see it growing
Speaker 3: quickly from here.
Speaker 1: Are you seeing a lot of demain and from clients
Speaker 1: for crypto assets?
Speaker 3: Yes, I mean so you know, Wisdom Try is a
Speaker 3: kind of the ETF business. We have, you know, a
Speaker 3: bitcoin ETF here in the United States, and then we've
Speaker 3: also got a suite of crypto exchange tare of products
Speaker 3: in the European market, where we actually have a very
Speaker 3: we were an early mover in that market, have a
Speaker 3: very strong position there. So certainly there's demand from our
Speaker 3: traditional clients in terms of crypto assets.
Speaker 2: That's a very competitive space.
Speaker 3: And then what we're seeing more and more what my
Speaker 3: group kind of does is takes traditional exposures and brings
Speaker 3: them into the kind of digital assets ecosystem right and
Speaker 3: meets the needs of the on chain community who are
Speaker 3: looking for kind of yield diversification, a host of services
Speaker 3: that fund managers like ourselves can provide.
Speaker 1: What are your thoughts on the Trump administration opening up
Speaker 1: four to one keys to be able to invest into
Speaker 1: different assets, including crypto What does that mean for your
Speaker 1: business from an ETF standpoint?
Speaker 2: You know, it's interesting, kind of it's funny.
Speaker 3: ETFs have been talked about going four to one k's
Speaker 3: for a long time. It's definitely happened because the things
Speaker 3: that ETFs kind of solve for weren't necessarily relevant in
Speaker 3: the four one k which is historically been dominated by
Speaker 3: mutual funds, and cis kind of getting very into the
Speaker 3: specifics there.
Speaker 2: So it's interesting what is happening the d L.
Speaker 3: I guess opening up four one k's for kind of
Speaker 3: crypto and other assets. Not like a huge impact for
Speaker 3: Wisdom Trues business today, necessarily sure, but just kind of
Speaker 3: a signifies the kind of openness to innovation that we're
Speaker 3: seeing now from the federal kind of administration and regulators.
Speaker 1: Absolutely. Now you mentioned you have a bitcoin et P product.
Speaker 1: I'm assuming you have a theory M.
Speaker 3: And in Europe we've got off suite of products.
Speaker 2: In the US, we just have a bitcoin ETF.
Speaker 1: So my next question will be are you planning to
Speaker 1: expand beyond bitcoin?
Speaker 3: Yeah, I mean I can't really comment as a matter
Speaker 3: of policy on our product development pipeline, but you know
Speaker 3: we're certainly you know, you could read filings out there,
Speaker 3: things like that that Wisdom Trees involved in. But I
Speaker 3: think big picture, you know, it's certainly a very competit
Speaker 3: space in the US, and you know we want to
Speaker 3: put our you know, both good product development for the firm,
Speaker 3: good things for the firm, and also good things for
Speaker 3: our clients in terms of stuff we do.
Speaker 1: What are your thoughts on the SEC's recent update to
Speaker 1: the generic listing for the ETFs? Is that good?
Speaker 2: Bad?
Speaker 1: Oh?
Speaker 2: I think that's good.
Speaker 3: I mean, I think it's kind of funny the ETFs
Speaker 3: you dated back historically. So I've been at Wisdom Tree
Speaker 3: for eleven years, like I was saying before we got
Speaker 3: on the air, and certainly seen a lot of changes
Speaker 3: in the ETF industry in that time, and I think
Speaker 3: generic listing standards are certainly helpful. Means that people don't
Speaker 3: need to go through kind of the nineteen before process
Speaker 3: like they historically need to do in the pasture, which
Speaker 3: was just a limiter in terms of doing things that
Speaker 3: didn't meet these generic listing standards. So I think that's
Speaker 3: good for crypto ETFs. I think the more and more
Speaker 3: that the ETF industry and the regulators can get around
Speaker 3: these sorts of standards that allow products to be list
Speaker 3: it just levels the playing field and allows you know,
Speaker 3: like innovative ETF firms to come up with product I
Speaker 3: meet consumer needs and they can compete on the merits.
Speaker 2: Otherwise it can become hard to behind the scenes.
Speaker 1: Now you mentioned you're handling or doing tokenization of assets
Speaker 1: as well, right, and assistain clients to do that. Does
Speaker 1: it make sense for tokenized assets eventually find our way
Speaker 1: into ETFs or not necessarily?
Speaker 2: You know, it's a good question.
Speaker 3: I mean, I think we're seeing a convergence between these
Speaker 3: two things, and it'll be.
Speaker 2: Interesting exactly how we get there.
Speaker 3: I mean, what youuts really are is there a rapper
Speaker 3: that allows, you know, a investment vehicle to be listed
Speaker 3: on a national securities exchange trade in the secondary market
Speaker 3: that invests in some sort of underlying asset, right, and
Speaker 3: that the price between the ETF share is kept kind
Speaker 3: of in line with the value of the underlying asset
Speaker 3: through the creation redemption mechanism, through arbitrage by market makers,
Speaker 3: and that vehicle, that rapper has proven incredibly powerful in
Speaker 3: terms of bringing kind of liquid exposures to investors just
Speaker 3: investors within the workflows that they have. In fact, it
Speaker 3: actually brings even more liquidity to certain exposures like corporate
Speaker 3: bonds for example.
Speaker 2: So you know, the ets has been very powerful.
Speaker 3: I think it's interesting with tokenization, where you know, in
Speaker 3: what you need to think about the specific use cases
Speaker 3: and problems you're solving for. But there's no need, Like,
Speaker 3: there's no reason to think that, Like, if you're bringing
Speaker 3: a novel asset that's tokenized, let's say it's a digitally
Speaker 3: native issued company in the future, there's no reason a
Speaker 3: ETF couldn't hold that if it were liquid.
Speaker 1: I recently read that wisdom Tree debuted fourteen tokenized funds
Speaker 1: on the Plume blockchain. Yep, tell us about those funds
Speaker 1: and why to Plume block.
Speaker 3: Yeah, so wisdom Tree's got fourteen tokenized funds total. We've
Speaker 3: tokenized them now on seven different public blockchains. So these
Speaker 3: are the same funds that are now available on Plume
Speaker 3: as well. Got it, and so Plume Railroad asset focused
Speaker 3: EVM blockchain that's really trying to drive adoption of real
Speaker 3: world assets within kind of crypto workflows. Kind of a
Speaker 3: nice mapping for wisdom Tree as well. So there was
Speaker 3: you know, we saw the kind of synergy there, the
Speaker 3: streets of alignment, we had customer demand for it, and
Speaker 3: so we tokenized our funds on Plum and we're very
Speaker 3: excited about it.
Speaker 1: That's awesome. And then recently you appoint it be and
Speaker 1: why the world's largest custodial bank and oldest bank in
Speaker 1: America for digital assets infrastructure. Tell us about that partner.
Speaker 2: Yeah, so B and Y is actual Wisdom Tree has
Speaker 2: a long history with B and Why.
Speaker 3: They do a lot for us as kind of a
Speaker 3: fund manager as they're and they do like custody you know,
Speaker 3: backend servicing, sub advisory for us. So this is an
Speaker 3: expansion of our overall relationship with B and Why. And
Speaker 3: really the reason we did it is that, you know,
Speaker 3: we've got a retail app in the US, wisdom Tree Prime,
Speaker 3: that allows people to onboard through kind of a traditional
Speaker 3: onboarding process and then access all of wisdom trees tokenized funds,
Speaker 3: tokenized assets in there, and you can also move them
Speaker 3: off platform. So you could open up a wisdom Tree
Speaker 3: Prime account, buy that money market fund like I said,
Speaker 3: and then move it into your own meta mask while,
Speaker 3: which to me is a very cool new user experience,
Speaker 3: sets up peer to peer transferability, defied composability, things like that. Sure,
Speaker 3: So what B and Y is allowing us to do
Speaker 3: now is providing the banking rails within that ecosystem. Now,
Speaker 3: within wisdom Tree Prime, you've got both banking connectivity, so
Speaker 3: you can move money from your chase, your ba A
Speaker 3: account into wisdom Tree Prime. You also can move money
Speaker 3: over blockchain rails like USDC PY, USD into wisdom Tree
Speaker 3: Prime and out of wisdom Tree Prime. So that kind
Speaker 3: of connectivity between the fiat rails and the blockchain rails
Speaker 3: is really what we're unlocking there. So I'm extremely excited
Speaker 3: about it. We're looking forward to continue to grow this platform.
Speaker 3: It just grows the number of people that can hold
Speaker 3: and invest in our products.
Speaker 1: And I'm sure having the caliber of a b and
Speaker 1: Y Melon as an infrastructure partner helps bring in a
Speaker 1: lot more of the traditional investors. I mean, not trust
Speaker 1: certain crypto native firms, not necessarily that they're doing anything wrong.
Speaker 1: But there's bny Melon, it's been around for a long
Speaker 1: time versus others.
Speaker 3: Yeah, I think big picture, you're seeing a convergence, right,
Speaker 3: Like I've heard the line, it's not trad fy, it's
Speaker 3: not DeFi it's just fine now. Yeah, where you're seeing
Speaker 3: innovative but established firms like B and Y like a
Speaker 3: Wisdom Tree is kind of maybe a more startup e
Speaker 3: field than that. You know, we've only been in our
Speaker 3: current for twenty years, but we're a listed company, you know,
Speaker 3: traditional finance institution and you know, trying to innovate, move
Speaker 3: things forward. And I think you're seeing more and more
Speaker 3: of that as I stare at like fidelity banners all
Speaker 3: around us, right, Like there's very much that attitude that
Speaker 3: like traditional finance rooms are here to play in this
Speaker 3: in a real way.
Speaker 1: For sure. What are your thoughts on the tokenization market
Speaker 1: and how that's growing and expanding? It seems as a
Speaker 1: race going on right now to tokenize equities, money market funds,
Speaker 1: and so forth, like what you guys are doing, but
Speaker 1: gold and other precious metals and even real estate.
Speaker 3: Yeah, so we're focused on the liquid side of things.
Speaker 3: So we've actually have our own gold token, we've got
Speaker 3: the money market fund, we've got equity funds, we've got
Speaker 3: some alternative vehicles like private cred and alternative income done
Speaker 3: in a liquid way. So like really doing what we've
Speaker 3: done well with ETFs and kind of bringing similar type
Speaker 3: exposures to the on chain market where there are real
Speaker 3: benefits that come with that twenty four to seven liquidity.
Speaker 2: So look, this is.
Speaker 3: What I you on a daily basis, Like, uh, tokenization
Speaker 3: we think is the future, and you know, right, now
Speaker 3: really serving the crypto native community. I think going forward,
Speaker 3: we're to see more and more people coming on chain
Speaker 3: and tokenization is going to serve them in ways that
Speaker 3: they just wasn't possible before. So, you know, like I said, managed,
Speaker 3: you know north of six hundred eighty million or thereabouts today.
Speaker 2: And in a year, could we be at five billion dollars?
Speaker 3: I don't know, Like there's a there's an immense opportunity
Speaker 3: in this new rapper, with this new technology. So we're
Speaker 3: fully committed to it and looking forward to continue to
Speaker 3: grow the market.
Speaker 1: When you're thinking about tokenization and the assets that you
Speaker 1: want to participate with, and then you think of crypto
Speaker 1: as a global asset class, real time instant settlement and
Speaker 1: all that jazz runs twenty four to seven, are you
Speaker 1: also thinking about what other markets can bring in liquidity
Speaker 1: and things like that. Oh?
Speaker 3: Absolutely, I mean I think it's kind of funny, like
Speaker 3: you think about like the an S and P five
Speaker 3: hundred ETF for example, like there's actually it's interesting, there's
Speaker 3: a different ETF and like the US versus the European
Speaker 3: market versus like the Japanese market, that I'll invest in
Speaker 3: the same S and P five hundred, right.
Speaker 2: And that's just naturally how this developed.
Speaker 3: But I think what you've seen with bitcoin stable coins
Speaker 3: is you can have the same asset that can trade
Speaker 3: globally twenty four to seven three sixty five, and so
Speaker 3: I think that's the future and that's the direction of travel, right,
Speaker 3: is can you bring global liquidity where the same asset,
Speaker 3: the same markets can have somebody from the US trading
Speaker 3: in them at ten am, you know, on a Friday,
Speaker 3: and still open for somebody in you know, South Korea
Speaker 3: to be trading at like eleven pm on a Sunday. Right, So,
Speaker 3: like these are that's the direction of travel. It's what
Speaker 3: Crypto's shown that things can be done very well. I
Speaker 3: think there's a lot more market infrastructure that can come
Speaker 3: into power that. But it's very much the direction of travel.
Speaker 1: And the other asset to Alrea. The other side of
Speaker 1: that is we need clarity, We need the market Structure bill.
Speaker 1: We know government is shut down right now, we're waiting
Speaker 1: for that to open up and the Senate to pass bill.
Speaker 1: What are your thoughts on the impact that we'll have
Speaker 1: on the market in innovation?
Speaker 3: Yeah, it's a good you know, I think a lot
Speaker 3: of people here have been talking about Clarity Act, and
Speaker 3: you know, I think the general thing you're hearing from
Speaker 3: people is that, particularly for traditional institutions, that clarity just
Speaker 3: like having that regulatory clarity, gives them a lot of
Speaker 3: ability to actually do more beyond just the POC stage.
Speaker 2: But like for a lot of us.
Speaker 3: We're all not just like sitting around waiting for something
Speaker 3: to pass right, Like things have evolved such in a
Speaker 3: way that to the Genius Act kind of just greater
Speaker 3: kind of comfort around innovation that there's more you can do.
Speaker 3: So like for Wisdom Tree, like our products are live today,
Speaker 3: you can sign up for Wisdom Troup Prime. You can
Speaker 3: if you're an institution, you can onboard with this stim
Speaker 3: we connect access to these products. We think they are
Speaker 3: a provide a great user experience for that sort of
Speaker 3: on chain investing experience.
Speaker 2: And you know, we or off to the races.
Speaker 1: Well you probably can give all the details, but what's
Speaker 1: on your road map? But what can we expect in
Speaker 1: twenty twenty six?
Speaker 3: Yeah, I mean I think we spoke spoke a little
Speaker 3: bit about this on my panel this morning. I mean,
Speaker 3: at some level, I think getting our exposures to fit
Speaker 3: more and more into crypto native workflows in a very
Speaker 3: native way is of critical important for us, and I
Speaker 3: think we've made a lot of progress there.
Speaker 2: We can keep making progress.
Speaker 3: And then also like I think there's a whole universe,
Speaker 3: like these are all permissioned products right now, right like
Speaker 3: they're not available for like permissionless products.
Speaker 2: But I think that I don't know if it's like
Speaker 2: that barrier's dropping.
Speaker 3: But like the ability to serve more and more people
Speaker 3: within the regulatory perimeter and doing it in a responsible
Speaker 3: way and also a very user friendly use, good user
Speaker 3: experience way is completely possible.
Speaker 2: So you know, there's gonna be.
Speaker 3: Panel tomorrow that Chain Links putting on around compliance and
Speaker 3: things like that. So I think those two things going
Speaker 3: forward is really what we're focused on.
Speaker 2: And also just continuing to grow AUM and adoption of.
Speaker 1: Our products well great stuff, looking forward to the future updates,
Speaker 1: and we're gonna have to do a longer form conversation
Speaker 1: at some point.
Speaker 2: I love that.
Speaker 1: But thank you so much for joining me, my.
Speaker 2: Pleasure, Thank you for having me.
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