In this episode of theCUBE's ongoing series "Crypto Trailblazers," Sandy Kaul, Senior Vice President and Head of Innovation at Franklin Templeton, joins the conversation at the New York Stock Exchange. Alongside the NYSE Wired team, the dialogue centers on the critical intersection of technology and finance within the crypto landscape.
Kaul, with extensive experience and thought leadership in the digital assets space, shares insightful perspectives. The discussion, hosted by Furrier of theCUBE, delves into the evolving regulatory landscape, the role of the United States as a leader in digital innovation, and the confluence of technology, finance and culture shaping today's crypto ecosystem. Analysts from theCUBE Research also provide their expertise.
Key takeaways from the discussion include the potential for cryptocurrency to democratize access to financial markets, according to Kaul. They highlight how new technologies are redefining assets, fostering a wave of creativity and innovation. Analysts emphasize the significant role of network effects and cultural shifts in transforming both financial and technological landscapes. The discussion offers actionable insights into leveraging assets in the emerging decentralized economy.
Find more SiliconANGLE news and analysis https://siliconangle.com/
Follow theCUBE's wall-to-wall event coverage https://siliconangle.com/events/
Learn about the latest theCUBE events https://www.thecube.net/
00:00 - Intro
00:06 - Bridging Perspectives: An Introduction to Digital Assets and Climate Dynamics
02:29 - Intersections of Innovation and Heritage
05:00 - Markets, Data, and Innovation: Shaping the Democratic Future
10:22 - Foundations and Entry into the Digital Asset Realm
15:02 - Self-Custody: Evolving Practices and Challenges
17:41 - Franklin Templeton's Infrastructure and Innovations
20:54 - Ecosystem Engagement and Strategy
24:19 - Partnerships and the Potential of Cultural Change
27:08 - Preparing for Tomorrow: Skills, Prospects, and Reflections
#CryptoTrailblazers #FranklinTempleton #NYSEWired #BlockchainInnovation #DigitalAssets #CryptoEcosystem
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Sandy Kaul, Franklin Templeton
In this episode of theCUBE's ongoing series "Crypto Trailblazers," Sandy Kaul, Senior Vice President and Head of Innovation at Franklin Templeton, joins the conversation at the New York Stock Exchange. Alongside the NYSE Wired team, the dialogue centers on the critical intersection of technology and finance within the crypto landscape.
Kaul, with extensive experience and thought leadership in the digital assets space, shares insightful perspectives. The discussion, hosted by Furrier of theCUBE, delves into the evolving regulatory landscape, the role of the United States as a leader in digital innovation, and the confluence of technology, finance and culture shaping today's crypto ecosystem. Analysts from theCUBE Research also provide their expertise.
Key takeaways from the discussion include the potential for cryptocurrency to democratize access to financial markets, according to Kaul. They highlight how new technologies are redefining assets, fostering a wave of creativity and innovation. Analysts emphasize the significant role of network effects and cultural shifts in transforming both financial and technological landscapes. The discussion offers actionable insights into leveraging assets in the emerging decentralized economy.
Find more SiliconANGLE news and analysis https://siliconangle.com/
Follow theCUBE's wall-to-wall event coverage https://siliconangle.com/events/
Learn about the latest theCUBE events https://www.thecube.net/
00:00 - Intro
00:06 - Bridging Perspectives: An Introduction to Digital Assets and Climate Dynamics
02:29 - Intersections of Innovation and Heritage
05:00 - Markets, Data, and Innovation: Shaping the Democratic Future
10:22 - Foundations and Entry into the Digital Asset Realm
15:02 - Self-Custody: Evolving Practices and Challenges
17:41 - Franklin Templeton's Infrastructure and Innovations
20:54 - Ecosystem Engagement and Strategy
24:19 - Partnerships and the Potential of Cultural Change
27:08 - Preparing for Tomorrow: Skills, Prospects, and Reflections
#CryptoTrailblazers #FranklinTempleton #NYSEWired #BlockchainInnovation #DigitalAssets #CryptoEcosystem
In this episode of theCUBE's ongoing series "Crypto Trailblazers," Sandy Kaul, Senior Vice President and Head of Innovation at Franklin Templeton, joins the conversation at the New York Stock Exchange. Alongside the NYSE Wired team, the dialogue centers on the critical intersection of technology and finance within the crypto landscape.
Kaul, with extensive experience and thought leadership in the digital assets space, shares insightful perspectives. The discussion, hosted by Furrier of theCUBE, delves into the evolving regulatory landscape, the role of...Read more
>> Welcome back, everyone, to theCUBE here. I'm John Furrier, your host. We are in our East Coast point of presence. That's our super access point. It's like theCUBE East, and we've got theCUBE West in Silicon Valley and Palo Alto connecting technology and Wall Street together. This is part of our Crypto Trailblazers ongoing series with the NYSE Wired team and community of bringing that all together. Sandy Kaul, Senior Vice President Head of Innovation at Franklin Templeton, certainly a pioneer, thought leader, has been writing white papers since 2017, involved in a lot of the action around digital assets, all the cutting-edge mainstream stuff that's happening is coming together. She's been there from the beginning. Cindy, great to have you on theCUBE podcast. Thanks for coming on.
Sandy Kaul
>> Thank you so much, John.>> Yeah.
Sandy Kaul
>> Pleasure to be here.>> We had a great little chat before we came on camera around writing a white paper in 2017. I mean, when you're early, you either you got glass in your face and you're spitting out nails or you're crazy. And every big wave... Amazon Web Services. I was just talking with the Otter.ai CEO. Years of like, "That's the worst idea. It's going to fail. Too many fatal flaws. It'll never work. Regulation will kill it." There's so many things that are supposed to kill crypto infrastructure and now decentralized infrastructure, but the climate's good right now. It kind of feels like a spring day. Not yet a beach day, but it's not winter.
Sandy Kaul
>> Nope.>> I mean, we had a bad climate. So we've certainly seen a turnaround. What's your perspective first on the climate? Because I think there's certainly buzz and excitement around the fact that finally it's not a hurricane force headwind.
Sandy Kaul
>> Well, I mean, so there's two pieces to it, right? Because we are a global firm, and we've been working on our digital asset strategy globally. And the excitement that you're now feeling in the US has been there, it's just been outside the US. So it's so nice to see it coming into the US because the US really can be such a leader in terms of where we're going to be able to head as in terms of global regulation, harmonization, attracting entrepreneurial capital, really stimulating the innovation and the creativity to take the whole ecosystem to the next level. So the US has been sorely missed, so it's so nice to see the level of excitement in the US now starting to match the pace of excitement and innovation we've been seeing around the world.>> We're back in the game there. It's awesome. I want to ask you about the confluence of tech and money. Obviously we're here at Wall Street and we have Silicon Valley, so obviously you'd see that. You're in that business of using that tech. There's a lot of money involved, assets. Now you have a third pillar culture.
Sandy Kaul
>> Yep.>> So you have the confluence kind of all coming together, like three streams forming a monster river of innovation. Tech, money, and culture all happening, kind of exploding in this innovation theater, right now. How is that impacting some of the big pre-existing institutions, like Franklin, that have been doing this and preparing? It's hitting.
Sandy Kaul
>> That's right.>> One, scope the magnitude of the change and kind of where we are, if you could.
Sandy Kaul
>> Yeah. So I think there's two big aspects to the change, John. The first is when you think about just the technology itself, we are operating... This whole floor that we're sitting on top of is operating on an infrastructure that was designed 50 years ago. And it was designed 50 years ago because the number of trades that were happening, the volumes were growing so fast that we could not keep up with the trading volume. When they were settling one trade at a time and needing to swap the paper certificates, we couldn't keep up, and so we had to devise this whole system that has really led the last 50 years. What is so cool about the technology is now we have technology that is going to allow us to go back to trading one trade at a time, but it's going to happen at such a velocity, and speed, and efficiency that we can really grow volumes almost infinitely. From a technology perspective, it's almost like everything old is new again, but now the technology has caught up to the way that markets can grow. The other thing that's interesting about it from the culture perspective is that we've been through multiple waves of tech innovation. First we had automation when computers first started coming into commerce. Then we had digitization when we got the internet. Then we got virtualization with the cloud. And now we're moving into decentralization. And with each of those jumps, we have actually seen the power of individuals grow.>> Yes.
Sandy Kaul
>> We are really democratizing access to all the rails of commerce so that you, and I, and every individual can access them as efficiently and effectively as any institution. And that has never been the case. And so we're really entering an era where this is the people's markets.>> Sandy, I think that is so well said. In fact, I'm almost tearing up because it's like unbridled capitalism at its purest form.
Sandy Kaul
>> Yep.>> And it's transparent. It's not bad capitalism.
Sandy Kaul
>> No.>> It's capitalism that is good-
Sandy Kaul
>> Yes.... >> because you have transparency.
Sandy Kaul
>> That's right.>> You have instrumentation. There's some things to fix, but it's close. It's close to being-
Sandy Kaul
>> It's close.... >> almost perfect capitalism.
Sandy Kaul
>> That's right. And all these rules that, "It's okay for a big institution to do this, but no, no, not you, John. You can't-">> No. Yeah.
Sandy Kaul
>> "... do that," those rules are going to be going away. Everybody is going to be able to use their assets to the absolute limit of what you can do with those assets to make a good living for yourself.>> If I own a home, why can't I leverage that home and-
Sandy Kaul
>> Exactly.... >> buy some Bitcoin?
Sandy Kaul
>> That's right.>> If I have a stable coin, theCUBE dollar-
Sandy Kaul
>> That's right. That's right.... >> I can have a bank. I got payment rails.
Sandy Kaul
>> If I've got home equity, if I've got equity in my home, why can't I use my equity to pay down my loans? Why can't I use my equity to be able to make purchases, right? I mean, this is an asset. It can be valued. It can be tokenized. It can be owned, right? So we're going to really see people's assets become very portable.>> I love that because that opens up the kind of the culture conversation of imagine the creativity, human creativity, that's going to come from what an asset is. Asset is the definition of something-
Sandy Kaul
>> That's right.... >> that's worth something-
Sandy Kaul
>> That's right.... >> has value.
Sandy Kaul
>> That's right.>> And now you've got the digital intrinsic value measurement, again, immutable and stable. What do you think that's going to do? I mean, just if you had to kind of throw the spear into the future, what would it look like? What do you see happening in your mind's eye about what kind of creativity might we see? I mean, you can't see everything, but I'm sure it's going to look different. Probably we're going to be like, "Oh, that's so obvious-"
Sandy Kaul
>> That's right.... >> when you look back on it, but there's going to be some weird things that might come out of this.
Sandy Kaul
>> Oh, yeah, yeah. Always.>> What would you see that might pop out that could be far-fetched today but like... Hey, Airbnb started out as selling cereal in an apartment and it became a big company because of the cloud.
Sandy Kaul
>> Exactly.>> So what you might see out there?
Sandy Kaul
>> So I see a couple things, right? First, I think that you're going to be able to use your data that you generate as an individual as a form of currency. I'm going to be able to either get direct money from my data or use my data to barter for goods and services because my data, in an AI-driven world, is the most valuable resource I have. So I think being able to control my own data is going to become really the foundation of my wealth. And then on top of that, I think intellectual property becomes so expansive. I was talking with someone the other day, and we were talking about this idea that my TikTok dance move can be a piece of intellectual property, right?>> Yeah.
Sandy Kaul
>> It's not just what I write or what I create, it's like who I am as a person. More and more of that is going to become assets. And basically, I will be able to use who I am as a person in multiple ways to make money and invest and live in the world.>> And if you think about intellectual property... Let's take that for a second. Because, now, if we go back 20 years ago, we had to get a lawyer, file paperwork, spend some cash, go through the-
Sandy Kaul
>> Wait for months, and months, and months.>> And then let's just say we want to enforce it. Hire another lawyer.
Sandy Kaul
>> That's right.>> So it's a concept that was abstracted because the mechanism of commerce at that time-
Sandy Kaul
>> That's right.... >> was the way it was. What you're saying is intellectual property is no longer a concept, it's just a feature of the system.
Sandy Kaul
>> That's right. That's right.>> And so therefore, all that intermediary's gone.
Sandy Kaul
>> Yeah. So if I film my little TikTok dance move, I'm going to be asked, as soon as I'm getting ready to post it, "Would you like to tokenize this and own it as IP?" And I'm going to hit yes, and that will sit in my wallet, and that becomes an asset.>> Yeah. And people are working on that right now. I saw a great start doing music.
Sandy Kaul
>> Yep.>> Art tech is coming big.
Sandy Kaul
>> That's right.>> I mean, I was talking to Edward Dang. He was telling me that people buy art paintings today, and most of the art's not even paintings anymore.
Sandy Kaul
>> That's right.>> They don't even know how to buy digital art.
Sandy Kaul
>> That's right.>> And so art's coming onto the scene, music, art.
Sandy Kaul
>> Right. We call it cultural assets, right?>> Yes.
Sandy Kaul
>> We are used to a world of financial assets, but cultural assets have only been collectible. They haven't really been investible and tradable.>> Yes.
Sandy Kaul
>> And now we're moving from collectibles to those becoming just everyday asset classes.>> I remember when I was in elementary school. I'm dating myself now. But we used to flip baseball cards, sometimes against the wall. Sometimes we'd throw coins around. But now you have coins, meme coins. And people freak out about them, but they're just another collectible, right? I mean, that could be worth something or nothing.
Sandy Kaul
>> Right. And I'd say meme coins are actually even more. I would say that meme coins are a manifestation of network attention, right?>> Yeah, yeah.
Sandy Kaul
>> We're moving into a new world where crowd behavior really drives value. And we're so used to being in institutional markets where value is driven by these very quantitative factors, but viral attention is a factor that can give value. And so we view meme coins as a way of really showing the value of a network. And they may have very short duration value, but that's still value.>> Going to say you bring up a lot of points that cross over multiple kind of disciplines, network effects and trading here... We're at Wall Street. They're trading all the options. I can see the board. They have some lot of green, some lot of red, NVIDIA, Tesla. But network effects, we're seeing the GameStop generation. You're seeing tokens measuring networks of people. That's a financial concept. That's a culture in the game. In-game currency has-
Sandy Kaul
>> That's right.... >> been a huge thing for many, many years. As these assets come online, how do you guys look at this? Because people don't even understand what an asset on-chain even means.
Sandy Kaul
>> That's right.>> So what is that definition? What is an asset on-chain? How should people think about assets in digital?
Sandy Kaul
>> That's right.>> Can you share just a quick definition?
Sandy Kaul
>> So the first thing we think about is the storage of assets. A blockchain is a place to store transactions. And to us, they are utilities. When I flip the lights on and I flip the lights off, that's a utility. I count on that service to be able to operate in my day-to-day life. We look at the blockchain as the utilities of the future, shared ledgers that everyone in the world is going to use that become the data-recording layer of the globe. So you've got this data-recording layer, and you need to own tokens to utilize and access the data-recording layer. Those tokens become more and more valuable as that network becomes more and more important to the operation of global trade. So when you're inside the system, you watch the value accumulate, right?>> Yeah.
Sandy Kaul
>> Then you see what's built on top of the networks and the applications, the DeFi applications, the trading applications, the gaming applications, the communication applications. This is the next layer of value. These are all native tokens built from the get-go in a token format, and they are issued to raise capital and to provide exposure to the network that they are able to attract. And so we're used to stocks representing the value of a company. We're still getting people used to the idea of tokens representing the value of a network. But that's really where we're headed.>> Yeah. So how should people prepare? Share your thoughts. Because a lot of people who are learning, they're getting into the game... Be my therapist/consultant. If I want to get into the game, what should I do to prepare? I want to make money. I want to leverage my assets. I have a huge network. I want to participate in the community, but I also want to make money. I could be an individual. I could be a company. I could be an institution. As mainstream connects into the new infrastructure, what should they do? What's the sequence of events? What's the best practice?
Sandy Kaul
>> So it kind of depends on where you are in the spectrum. If you're just starting out, you want some exposure, you want to kind of have a reason to watch this space and see how it grows, we've issued a whole set of ETFs at Franklin Templeton. ETFs let you use a familiar wrapper, sits in your regular brokerage account, and you can get exposure. Once you start to pay a little bit more attention to the space and you want to go beyond the coins that are in ETFs, you can start to open an account on a centralized exchange and begin to trade and let them host your wallet for you, right? Then once you get a little more sophisticated, you're going to want your own wallet because there's things you can do with those assets. You can lend them. You can stake them. You can put them into a liquidity pool and they can earn more for you. So that's kind of the third stage, is you make your assets... You take control of your assets, and you make your assets work for you. And for that, you need to get comfortable with this idea that you are going to have your own wallet.>> That's self-custody, basically.
Sandy Kaul
>> And that's self-custody.>> What are some of the best practices of self-custody? People often with Coinbase and some of these exchanges, essentially a centralized service. You're beholden to Coinbase or whatever. The big money is self-custody. So not to throw out a haymaker or an objection, not that I'm a fan of self-custody, by the way, for the record. Self-custody's the way to go. But let's just say I'm kind of a knucklehead and I lose my USB drive because it feels like...
Sandy Kaul
>> That's right.>> That's a fear.
Sandy Kaul
>> That's a .>> I mean, people have a legitimate fear like, "Oh, my God. All that assets."
Sandy Kaul
>> That's right.>> Share the best practices, because it's not always the case. There are ways to kind of preserve it.
Sandy Kaul
>> There are.>> Can you share how people are using self-custody effectively?
Sandy Kaul
>> So, self-custody has really advanced from some of these early years, right? There's always these scare stories.>> .
Sandy Kaul
>> And they do exist. I mean, it's true.>> Yeah, yeah. There are knuckleheads out there.
Sandy Kaul
>> But that technology is advancing, and you're starting to be able to see a lot of the complexity of operating in the wallet subsumed by the interface. You don't even know necessarily that you have a wallet or that you're doing a blockchain-based transaction because they're making it feel and look just like you're doing a transaction on Venmo or PayPal, right? Then what is happening is you're able to start to get insurance on your wallet, and you start to being able to have your keys distributed and a custodian managing your key for you as a separate backup, right? So there's ways that we're starting to see the wallet become more functional.>> Yeah, and financial markets know how to deal with risk management.
Sandy Kaul
>> That's right.>> So that's a risk management issue.
Sandy Kaul
>> Exactly.>> Okay. Talk about Franklin's area around the exciting areas. What are the coolest things you're working on right now?
Sandy Kaul
>> So the coolest thing we've done at Franklin is we've actually built our whole entire own infrastructure. So we issue tokens, we program smart contracts. We have built our own hot and cold wallet solution that is KYC, AML enabled. We built our own transfer agent, so we actually administer the funds on-chain. So with our tokenized money market fund, we're able to calculate our shareholder records second by second throughout the trading day, and actually do intraday yield, something that a traditional money market fund can't even think about.>> Quantify the value of the intraday yield. Because yielding or yields, I call it yielding, is different kind of my word, but is huge value.
Sandy Kaul
>> Yep.>> And compare what the alternative is. Quantify the value and scope it for us, because I think people don't understand that yields are a big deal.
Sandy Kaul
>> Yields are a big deal.>> Yeah.
Sandy Kaul
>> Well, just put it this way, right? In a traditional money market fund, if I own it first thing in the morning and I sell it halfway through the day, I get zero yield in a traditional money market fund. And if I still own that money market fund, any yield I am entitled to, I only get paid out monthly, right? So with our blockchain-based system, you would get credit for holding that money market fund for the half a day, and we are able to pay out yield every single day, including Saturdays, Sundays, and holidays, rather than monthly.>> Why even have a opening and closing? The market's always open.
Sandy Kaul
>> Right. We can look at 24/7 exchanges for stablecoins.>> So you're a full-stack managed service.
Sandy Kaul
>> We are.>> That's what I would call that. That's the definition. What's that compare like to the competition? How would you say others are doing? Are you way ahead? Are people catching up?
Sandy Kaul
>> I'd say we're pretty way ahead at this point.>> I haven't heard this story before.
Sandy Kaul
>> I think that there's other asset managers who are doing a great job. And they're doing that, but they're kind of cobbling together a few different providers and kind of using third parties. The beauty of us having built this ourselves is that we are really able to be a part of the ecosystem. We're not hiring other people to manage the ecosystem for us. We are in the ecosystem. We run our own nodes. We do our own transaction verification. We're on eight different public blockchains.>> So you guys are really connected in. All right. Since you brought up ecosystem, my favorite topic... You know, I've covered ecosystem. I go back multiple ways, even back in the old mini-computer days with proprietary. But when you look at all the key web and mainly cloud... Amazon web search is a great example. Ecosystem, they made their money. They didn't compete with them. But when you talk about ecosystem, there's the ecosystem in the industry, but you have a platform, so you probably have an ecosystem. We've had many people come in on the Crypto Trailblazer series and some of the quotes are, "It's a multiplayer game," meaning the interactions is multiplayer. How are you guys looking at your ecosystem? Can you share what that looks like, how it grows, what you guys do to nurture it?
Sandy Kaul
>> So we have a really cool kind of way of thinking about it, John. We think of each of these blockchains as its own digital nation state. So just like I would expand my asset management practice to new emerging markets, we kind of view these as new emerging market countries, right? So we feel that by->> With their own economies.
Sandy Kaul
>> Their own economies, their own currency, right?>> Yeah.
Sandy Kaul
>> So we are really thinking of each of these as a way of building our network so that we can really allow people to interoperate wherever they want to trade in the ecosystem. So we are trying to embed ourselves at the core of the ecosystem by being part of it.>> So your go-to-market strategy mirroring kind of traditional methods, but tailored for the environment you're targeting.
Sandy Kaul
>> For the new blockchain-based ecosystem.>> What's changed in that? Has anything been different?
Sandy Kaul
>> Oh my gosh.>> What's the similarities, and what's the differences?
Sandy Kaul
>> The biggest difference is that you really need to learn to operate as a digital native. We've got to stake our coins to avoid the deflationary impacts of coin token issuance. We need to be able to watch our wallets and monitor our wallets against dusting. We need to be able to->> Explain dusting so people don't .
Sandy Kaul
>> So, dusting is when people, who you have no idea who they are, deposit little, tiny bits of assets into your wallet, and you don't know where it came from. And so we're a regulated entity. We have to be able to report to the government what we're doing even in our crypto wallet.>> And what's the tactic on that? Just to kind of-
Sandy Kaul
>> I think the tactic is to-... >> be a pest?...
Sandy Kaul
>> be a pest, yeah.>> .
Sandy Kaul
>> Be a pest and see who the wallet belongs to. I mean, there's a lot of things that people could be doing with it. But they're all new practices, right?>> Yeah.
Sandy Kaul
>> We've really decided that running our own nodes is a form of due diligence, and that we can't invest in and we can't operate in networks that we are not a part of.>> Yeah. I have to ask you on the... The dusting thing reminds me. The new sales tactic on Venmo is I get a two-cent deposit.
Sandy Kaul
>> Yes.>> Can I have a meeting? Like gets in my email, like, "Get out of my face."
Sandy Kaul
>> Yeah.>> The privacy piece of it, so I've heard from a lot of whales, bitcoin whales, ether whales... Here we go. The options are getting ready to close. They're starting to yell. I love this part of the day. This is my favorite part of the day. It's like trading places. Say I'm a big whale. I'm not anonymous. I mean, I'm anonymous, no one knows who I am, but I can track every transaction. So I move something off, say, the Genesis block or I... There's real interest in liquidity, somewhat anonymously. Is that a problem that's never going to be solved or is that something that's going to be solved through a service like what you guys have? I heard a lot of people want to move a lot of Bitcoin, but they don't want anyone to know they're doing it. So there's no dark pools yet in crypto, but what's the... Because KYC would be flagged. I mean, what's the...
Sandy Kaul
>> I kind of look at it as a positive, right? I mean, we look at momentum, we look at relative strength, we look at lots of indicators to time markets and to inform our market opinions. I think movement out of whale wallets is like a new type of financial market indicator, and that it's like a new type of momentum indicator.>> But I might not want to know where my destination's going.
Sandy Kaul
>> Right. I think that that's harder because->> Is it harder? Yeah....
Sandy Kaul
>> I mean, that's the whole way the system was designed. We might find fixes for that in the future, but I think that it is also a way for them to really help grow the marketplace.>> Yeah. So I have to ask you, obviously, since you've been involved for a long time, what's the biggest surprise or learning over the past, say, seven years of action? Seven or eight years. It's been a couple waves. We've seen some underbelly activity. Obviously that happens in every growing market. But, it seems it's stabilizing. It's maturing. Money's involved. Big players are coming in. You're starting to see real retail investment interest, democratization, as you mentioned. Convenience is coming. So all that benefits stuff. But what have you seen and learned from your standpoint that's either surprised you or didn't surprise you? It could be, "Well, that is a bigger impact than I thought."
Sandy Kaul
>> Yeah. I think what surprised me is how little curiosity some people have. There's still so many incredibly smart, bright people who have been in finance their whole careers that are completely dismissive and don't take the time to really open their minds and think about what it might mean. And so I always love to ask people, "What was your aha moment?" Because I think anyone coming from a traditional financial background has that aha moment where the potential of the space really just becomes so apparent to you.>> The light bulb, so to speak.
Sandy Kaul
>> And you're like, "Oh my gosh. This is going to change everything.">> What was your moment?
Sandy Kaul
>> My moment was when Ethereum announced... And I started to understand what smart contracts were. And if you think about it, so many contracts exist separate from assets in Wall Street today, and people's entire careers have been reconciling contracts to assets. And if you can put the contract inside the asset and make it self-execute, think about all the efficiencies that are gained by being able to do that. That was my aha moment. But I think that the... It surprises me still how many bright people don't want to be open-minded.>> And that aha moment was mainly because you saw the operational carnage from a pre-existing-
Sandy Kaul
>> That's right.... >> mechanism that didn't need to be there.
Sandy Kaul
>> That's right. And I saw the potential of, "Oh my God. If I could put the contract inside the asset, I could start to blow up the number of assets that could become tradable." Because it's not going to matter how complex it is to trade it if I can administer the contract automatically.>> You know, you bring up a great point. And I think this is something that I've seen a lot but more acutely here ,that people who don't get it will probably end up getting it, but they'll be late to the party, for sure. But they get so hung up on the mechanisms of how-
Sandy Kaul
>> That's right.... >> things are, and instead of trying to think about what could disruptively enable them-
Sandy Kaul
>> That's right.>> Because it's not a disruption. Disruption is collapse.
Sandy Kaul
>> That's right.>> What you're getting at is it's a disruptive enabler.
Sandy Kaul
>> That's enabler.>> It's enabler of efficiency, which is profit.
Sandy Kaul
>> That's right. That's right. Well, and it amazes me like how many people say to you, "Well, what's a digital asset? A digital asset isn't worth anything." And I'm like, "Dude, do you check your bank account? When you look at your bank account, do you think that that's like physical dollars sitting there? That is a digital asset. They don't turn it into physical dollars unless you go to a bank window and ask them to give you money. It's a digital asset. You are really dealing in digital assets every single day.">> Yeah, but it's backed by something. Yeah. Stablecoin. Welcome to the party.
Sandy Kaul
>> Exactly.>> It's funny. It's interesting, because the big thing I've noticed is that, on Bitcoin specifically, I think people say, "It's bounded by power. What if it was like a grid?" Well, they got other problems.
Sandy Kaul
>> That's right.>> The grid goes down.
Sandy Kaul
>> That's right.>> Wall Street would go down, so like everything crashes. Is that they don't get the fact that the efficiencies between point A and point B is the innovation.
Sandy Kaul
>> That's right.>> But then to me, I think the real upside that gets it kind of metaled is that it then crosses over into the... I won't say conspiracy theory kind of fear, but the cultural reality of what this enables is social change.
Sandy Kaul
>> Social change.>> And that is not a swim lane that most financial nerds are in.
Sandy Kaul
>> No.>> Because they're in the moneymaking, "Someone else does that. When I'm rich, I'll do that," or whatever that the cultural impact is just phenomenal. And there's evidence around... I mean, that's a big deal, too. Do you agree?
Sandy Kaul
>> A hundred percent. And I think that the other thing that's surprising to me is that when people get it, the traditional financial people, there are so many amazing partnerships being forged right now between digital natives and traditional financial people. And that's what excites me, because it's the intersection of the two. It's the knowledge of customer protections, how markets have failed in the past and how we've mitigated those risks, how we've been able to grow new marketplaces. That's the traditional financial benefit that we bring to the table. And they bring this incredible open-minded thinking and innovative technology, and it's when they come together that it's creating something so exciting.>> You know, I look at this and I say theCUBE has a huge network effect. We're going to have a CUBE coin. We're going to have a CUBE dollar. I can have my own bank. I could transact in CUBE dollars. How would you advise us to do that? I mean, because is it easy? Would I just work with you guys? I mean, how do I turn my network into an asset?
Sandy Kaul
>> Yeah. So you could work with us. That's what our infrastructure enables, to issue the coin, to be able to manage the coin, to manage the wallet system around the coin, to be able to trade it, to be able to measure risk around it. This is becoming a service stack. Just like you would be able to access a shared services stack from Amazon Web Services, you're going to be able to access these services and really bring this to market in a way that you can engage your community and make them feel a part of it. And that's where I think this whole power of moving from a kind of a corporate-based economy to a network-based economy is going to be super powerful.>> You know, one of the biggest trends I'm seeing in cloud computing right now is the marketplaces.
Sandy Kaul
>> That's right.>> And what they're disrupting in a positive way is procurement.
Sandy Kaul
>> That's right.>> That also is connected to finance.
Sandy Kaul
>> That's right.>> So those have not connected.
Sandy Kaul
>> That's right.>> You mentioned contracts being with the asset.
Sandy Kaul
>> That's right.>> How do you see procurement roles... Because now you got now ecosystem of marketplace trend. I mean, our world's a marketplace, two-sided transactions-
Sandy Kaul
>> That's right.... >> as you're pointing out, so corporations are going to soon get there.
Sandy Kaul
>> That's right.>> What's your vision on how corporations will evolve from automating procurement through either marketplaces as they're still using dollars?
Sandy Kaul
>> That's right.>> What happens next there?
Sandy Kaul
>> Well, I mean, then it becomes, when you issue your own token, do you create incentives for people who trade with you as part of your supply chain to use your tokens or do you pay out incentives to other people to be able to use their tokens? The format that you actually enable procurement and trade-in is going to become something that is very flexible. I think we're moving to almost what I call a high-tech barter society.>> Sandy, I think I got to go back and dust off my macro and microeconomic books because what you're getting at is we have to be economists.
Sandy Kaul
>> Yeah.>> We're managing a currency.
Sandy Kaul
>> We are. Every person is going to be able to manage their assets like they are their own treasury.>> All right. So I have to ask then the next dumb question, which is, if I want to thrive in this space, do I have to study economics, math? What are the skill sets... I mean, obviously you're seeing skills gaps in all the tech, but if they get abstracted away with efficiency... Obviously problem solving because everyone says that, but are there a discipline? If someone's coming out of college or someone's pivoting in their career, there's no pedigree here.
Sandy Kaul
>> That's right.>> You could be instantly at the top of the list.
Sandy Kaul
>> Yep.>> What skills get me there?
Sandy Kaul
>> I believe behavioral analysis. That so much of what is going to drive our future is going to be to be able to dynamically model behavior and give people in-the-moment advice as they are about to act.>> I think theCUBE agent and the Franklin Templeton agents will be there. I'm sure agents are on your list too.
Sandy Kaul
>> A hundred percent.>> Agent technology?
Sandy Kaul
>> Of course.>> Any teaser there on what's coming?
Sandy Kaul
>> Well, my agent's going to manage my whole data wealth for me.>> We'll be sitting on the beach somewhere. Sandy, thank you for coming on theCUBE. The bell's going to ring soon. Such a pleasure. Great conversation, great thought leadership, and great product from Franklin Templeton. Check it out. Managed service for the entire new economy, faster intraday yield. I mean, the economic benefits to simplification on process, matching contracts to assets, assets on-chain. It's a highly new market. And again, the winners are going to emerge fast. Check it out. Thank you so much for coming on theCUBE. Appreciate you.
Sandy Kaul
>> Thank you so much.>> All right. We're all here as a part of the Crypto Trailblaze. This our West Coast... I mean East Coast office here at the New York Stock Exchange, NYSE Wired. I'm John Furrier, your host of theCUBE. Thanks for watching.
