Wall Street Is Quietly Building the Next Way to Get Rich

[00:00:00]We're already enslaved to the system.

[00:00:01]The banking monopoly has finally come under fire. Your bank accounts can already be frozen. Hundreds of trillions of dollars basically operate through PDF and Excel. That is crazy to think about.

[00:00:13]The internet allowed you to move money, allowed you to move information.

[00:00:16]Blockchain allows you to do is move value. You have the world's largest asset manager. Acknowledging that this technology is again just so much better version of PDFs and spreadsheets.

[00:00:27]Finance doesn't care about this technology. They'll they'll safeguard their plumbing forever. Tether is one of the most profitable. They are the seventh largest buyer of US treasuries.

[00:00:38]By that 2050 mark, we will essentially see we're about to pay the highest price ever for a stock.

[00:00:45]>> In this conversation with Herwig, we discuss why the entire financial system still runs on spreadsheets and PDFs and how all of that is about to change. We also discuss how only the top 10% of Americans get the chance to invest into the opportunities with the highest returns and how tokenization is going to turn all of that around. We also talk about how important it is to get ahead of the changes that are coming with AI and how this moment right here will be really important for whether or not you're actually able to build wealth in the future. These are the highlights from our conversation with Herwig on our live show, Memes and Markets. Let's dive in.

[00:01:27]>> Welcome back to Memes and Markets.

[00:01:28]Keith, how are you, man?

[00:01:30]>> Today's the best day of my life. Ben, how you living?

[00:01:32]>> Today's fantastic. We got an awesome guest that you've talked a lot about a lot of great things. So, I'll throw it back to you, Keith, so you can intro this legend and we can get into it.

[00:01:40]>> Herwick, how's it going, man? Thanks for joining us.

[00:01:43]>> I am especially having a great day today, Kee. I'm excited to be here.

[00:01:48]Thanks for having me. Yes, sir. I'll uh I'll do a brief intro to who you are and the things that you've been working on and then uh correct me on anything if I if I misspeak. But uh her wig here is someone that I met what was it like 2019 20 2020 I think it was. Um and uh you were already very early in working on the security token space at that time.

[00:02:16]Uh so we'll talk a little bit more about the origins of all of that but the founder of the security token group uh been in blockchain since at least 2017 uh working in the space uh you've advised dozens of projects uh including even some of the largest banks and asset managers that are foraying their way into this space. uh you founded the real world asset foundation in 2024 to organize the industry's fragmented service providers and even launched Wall-E DAO the decentralized autonomous organization as its community arm. So also running tokenized this NYC which I believe is coming up not too long from now.

[00:03:00]>> Thanks.

[00:03:01]>> So we will chat about that as well. But Herwig, um, I'd love to like go back to the beginnings of you coming into blockchain cuz like right now tokenization and real world assets is talk of the town.

[00:03:17]Everybody's talking about this. It's in the headlines everywhere now. But, uh, you were doing this well before anybody was talking about it. So, can you bring bring us to like when did you find blockchain? Why did you think it mattered? And then how did you decide to go into security tokens in particular?

[00:03:34]>> Yeah, it's a great great question. Um I often call it the aligning of the stars for for what happened uh to me. But I will say just a slight correction that we have not yet launched the Wall-E dow, but we'll talk about it. We have announced our plans for it. The white paper is out as they say in the crypto world, but uh it is not yet live. So nobody get fooled by any fake tokens or or any kind of scammers out there. uh you'll just have to follow the project until we announce when it's actually live. But uh to go to your question, Keith, um it actually started, I guess, as early as 2013. Um so, uh I actually am a Belgian immigrant to the United States. Grew up kind of falling in love with the American dream. Worked for tech pretty early on. By the time I got to college, I was part of this program called the Launchpad. Uh this was at the University of Miami, so go Canes. Uh but uh you know one of the best decisions I ever made was because this program was one of the first of its kind designed to do career services for entrepreneurs right not just folks looking to get interview tips and how to get placement but how do you do the interviews? How do you start a business? All that stuff. So I had the fortune of working with dozens actually probably close to over a hundred different entrepreneurs both students and alumni from the program which makes you get the itch to want to be an entrepreneur yourself naturally.

[00:04:55]seeing all that and all all the different success and failure, but also um it also exposed me to one of the biggest problems that entrepreneurs have, which is raising money. And at the end of the day, uh one of the biggest changes that ever happened to raising money for entrepreneurs was this law called the Jobs Act, which is passed in 2012. And some components of it were codified and made in the law in 2013.

[00:05:19]And that's what set my journey off, if you will, because I saw this law get passed to enable what they called equity crowdfunding. Essentially, the ability for entrepreneurs to not have to rely on angel investors, on venture capitalists.

[00:05:33]It's actually illegal for most people who don't know, for entrepreneurs to just go to the world and say, "Hey, invest in my private company." Uh they they now can thanks to equity crowdfunding. And they made some rules.

[00:05:45]The SEC of course as a regulator came up with rules. And I realized that you had to verify investors in order to qualify.

[00:05:52]And the reason I understood this law and why I guess I even was looking at it was because I started a crowdfunding platform for entrepreneurs at the university or at least that was my plan so that alumni or even other investors could back student projects or even research or otherwise. Right? So, it was actually the precursor to blockchain, but really the equity crowdfunding industry is where I got started. And I ended up building a compliance company focused on investor verification.

[00:06:22]Essentially, had to become a lawyer without going to law school. I had to know the law. I had to know the rules. I was 19 when I started it. Uh, and so obviously to get taken seriously, you got to know your stuff. So I had to become an expert on sort of these private capital markets regulations, how money is being raised by entrepreneurs and how it's evolving with the internet, right? And with new technologies and and that put me into a place where around 2017, people started to knock on my door. And I actually was exposed to Bitcoin a little bit during college, but I didn't buy anything. I'm not a Bitcoin millionaire. uh that I got interested in again in 2015 when these altcoins when these new tokens similar application or new application came out right thanks to Ethereum and then by then by 2016 by 2017 thanks to my background with invest ready is the name of that that uh compliance company that I started essentially uh it was very easy for me as I said the for the stars to align back in 2016 even I was already rooting around uh but started to do my first advisory gig, if you will, in 2017 where I had the opportunity to finally convince somebody to forget about these ICOs. Forget about this crazy crypto thing that everyone's talking about and try to look at over here where instead of taking digital assets, right, we can put real assets behind the token. Let's do it by raising money for your private company via a token. Not as a crypto token, but as a regulated investment token. Hence your term that you mentioned, Keith, security tokens. That was what we called tokenization back then. Uh security tokens. So hopefully that answers your question. Well, >> yes. Yes. Super cool. And like so the thing that I took away from when I met you guys uh in 2020 uh going through the concept of tokenization but what really was important for me to understand at the time that changed my entire paradigm was understanding the regulations around raising money right um so I do want to dig into that a little bit because I think there's a big education piece around all of that and the other company that you founded was perfectly right. Um, also also tells us a lot about where we're at on the technology stack as well.

[00:08:47]>> So, so to fully lay it out for people as an entrepreneur, you might want to raise money for your business.

[00:08:54]>> And when you're doing that, uh, you have to follow certain rules, right? uh at least now there are rules that you can be able to raise money from the public in a way where basically you register what you're doing with the SEC. You say, "Hey, I'm I'm noticing I'm letting you know that this is what I'm doing. I'm raising money for my company and because of that, I don't have to fully register.

[00:09:18]I don't have to like uh go through the process of creating a broker dealer or go through the process of creating a investment advisor just to be able to raise money to fund my company from the public. So there's different ways in which you can do it. There's like uh regggd reggg A, reggg s, all of these different ways in which you can do it. Uh the reggg s is like you can raise from international investors or something like that. And then reggg a allows you to raise a larger amount of money but you have to do more verification. And I kind of forget exactly what all of them are but uh but essentially your company came in and said so there's certain uh regulations where for instance you need to verify that the people that are investing in your company are accredited investors right so what your company did was you guys said okay well we'll create the platform that makes it to where when someone needs to figure out if someone is an accredited investor or not they come to your platform the issuer does the person who's raising the money comes to your platform and says I need a technology solution that makes this easier for me cuz I'm not spending all day verifying people's identities or anything of that nature. So that's what you guys built out uh when you saw that these regulations were coming in and that this was going to allow a whole new world, a whole new industry of raising money. Can you talk a little bit about that industry as well cuz some people like yourself were looking at the next version of that which was tokenization but there's also these other entities that are playing in that space but don't necessarily take it to the blockchain.

[00:10:50]Can you break down more of uh that industry?

[00:10:53]>> Yeah, absolutely. We we'll call that industry once again equity crowdfunding and we'll separate tokenization which as you said it's it's really just the evolution of that leveraging new technology in this case blockchain to help fix some of the key problems that I think held back this market because today I think most people are still hearing this term equity crowdfunding probably maybe even for the first time and so maybe the idea of oh I can invest in a business over the internet makes sense to most people but most people don't do it because it's not really common thing due to one regulation restrictions. You mentioned this alphabet soup of stuff entrepreneurs have to go through in order to sort of like take public money, re retail as they call it, which is almost like, you know, a little bit um, you know, not cool to say it. But, uh, at the end of the day, these accredited investors are considered wealthy enough by the SEC to take the risk to make these private investments that do have a very high rate of failure. And that's why this is sort of the easy way. Uh this is not the right way. I'm certainly not endorsing it. But it is what in the 1930s when they made up these laws was their easy way of saying how do we make sure grandma doesn't lose her shirt? we can make sure we can control the public markets right they have tons of regulation even since then uh before the 1930s they had regulation there but you know even to this day obviously the public markets in the United States the stock market is the most competitive the most liquid the biggest by a a large factor uh capital market in the world is the most trusted but private capital markets which are actually three times bigger are much harder to regulate because they don't have all these rules.

[00:12:38]And so one of those rules is basically only these accredited investors, qualified investors can invest in these deals. But you know, part of the jobs act was legislators and lawmakers finally acknowledging us individuals saying we think it's ridiculous that you can't invest in these things unless you're only rich. Especially when you look at that the fact that as we all know with a lot of risk comes a lot of reward, right? So this is one of the best attractive asset classes to invest in and most average individuals really it's only the top 10% of Americans qualify to invest in this asset class private equity or private capital markets unless you get through these tiny little openings that have been created thanks to this law the jobs act this new law invented it but long story short it didn't really take off both for accredited investors even the top 10% aren't really investing ing online. And as far as the retail accessible deals, right, compared to IPOs, which is the real way that most of us get into these opportunities, it is like a minority fraction of the deals that came through reggg CF or a reggg A beforehand. Uh, and long story short is that, you know, again, it just didn't become a standard practice for entrepreneurs to say, I'm going to go to an equity crowdfunding platform and go raise money for my business because there's tons of investors that are ready to invest over the web and ready to accept my, you know, pitch opportunity. Uh, and, you know, I think one of the big reasons that tokenization solves, we're going to get into, is this liquidity and ownership component that you don't get when you invest over the web. people would literally wire for her credit investors a hundred grand even more or even as retail investors even a couple thousand dollars, right? Or even a few hundred. That's real money going over the web to a private company. So, you know, you don't have these protections of the public market. You really don't have a lot of transparency or insight to what's going on. Uh you're limited to what they kind of inform you to. And ultimately, the hold time for these investments is extraordinarily long.

[00:14:47]either somebody has to come and buy the company or they have to go and do an IPO. They have to go public, right? For for other people to come in and buy your shares. So, this is on average five 8 10 years for private companies uh as an investment period. So, you know, you got to be ready for the long haul. And for folks who are investing who don't have a lot of money, they don't have a way out, you know, this is not exactly the most attractive method. And I get why equity crowdfunding really never took off to that capacity. I don't know if you agree or disagree. Have any questions around that, Keith or Ben?

[00:15:22]>> No man. Um, makes sense. I' I'd love to now take it to the tokenization.

[00:15:31]What does uh tokenization mean?

[00:15:33]Everyone's hearing this term left and right, up and down. What does it really mean? And how does blockchain enable uh uh anything different than what we have today?

[00:15:45]>> Yeah, that's a that that is the the talk of town right now because as you mentioned, I've been talking about this since 2016, since 2017. uh only banks and asset managers really over the last couple of uh years are now agreeing that okay this this blockchain thing uh this tokenization concept is actually the next operating system of finance. So, if we go back to this equity crowdfunding model, completely centralized, right?

[00:16:14]You can kind of think of these websites as investment banks or brokers that basically say, "Hey, we've got deals for you. Come to us and we'll we'll give you a piece of them." Um, but these are all held and controlled by whoever the distributor is, whoever the investment bank is, right? At least with public markets, it's a little bit more fair and open and there's concentrated access.

[00:16:36]But with equity crowdfunding, it's a completely private market. There are no stock exchanges, right? There is like most of this activity, which by the way is the same for most of Wall Street, is managed by spreadsheets. PDFs and spreadsheets operate finance as a whole. Hundreds of trillions of dollars basically operate through PDF and Excel. That is crazy to think about. That is the operating system we deal with today. Uh tomorrow's operating system is blockchain. That's what everyone is saying. Look, at the end of the day, what we're talking about are ledgers. Back from the early days when people manually recorded things to actually on Wall Street, there was something called the great paper crisis because I kid you not, there were so many orders coming through. There were paper boys running around with all the stock certificates they had to swap for deals. And eventually there was just so many they had to shut down and figure out where goes what because there was just so much going on. And this actually helped lead to the invention of the NASDAQ which is an electronic trading system. uh and essentially the idea that we are now using right a lot of digital components to trade which again goes back to a lot of reconciliation a lot of back office a lot of that infrastructure a lot of it comes down to uh PDFs and spreadsheets as well as you know some centralized databases we'll call them that is what finance is today a bunch of people who don't trust each other that need to move people's assets around or or manage people's money uh and they need to work with middlemen as they call them, right? To basically in order to trust each other and make transactions happen with each other on the blockchain in the same way that you know you can just send somebody a Bitcoin and automatically I sent you the Bitcoin, it leaves my wallet, it goes into your wallet. That exchange is recorded on chain. That is a financial transaction just like any other financial transaction. Whether you swap out money for a stock or for a piece of gold or for a crypto asset even, right? The idea is you now can use the blockchain to have essentially near instantaneous settlement. The counterparty risk is completely gone. Imagine trade finance where it's like, hey, I'm going to put the order in and I have to wait two weeks for the goods to ship and then I give you the rest of my money. Like there's all these applications across finance that get ruined or bottlenecked or slowed down due to human people involved, right? Making sure that the PDF or the Excel is right or the identity information is correct for compliance. All these things that are getting streamlined and onboarded and automated. The key word here is automation that the blockchain allows.

[00:19:23]It is still just a ledger just like spreadsheets are, right? The difference with this blockchain ledger is what they call smart contracts. It's a fancy way of saying programmable spreadsheets. If you've ever met somebody who's like, I can make an amazing programmable spreadsheet. You're like, cool. You like maybe know macro on Excel and most people are like whatever. Nobody cares, right? But for blockchain, you can actually create entire, you know, applications that are publicly accessible. Think of it like apps in a way of sort, right? Instead of apps on Excel, you can now have apps on real platforms tied to a database that's much better than Excel because of this programmable capability is the way they like to say the internet allowed you to move money or the internet uh allows you to move information, right? What blockchain allows you to do is move value and that is a major gamecher. Uh so hopefully that is you know blockchain is not an easy topic. No one should feel like they have to understand it. Don't even bother trying to go down the rabbit hole of the technology of consensus mechanisms, but hopefully just understand that it's a better spreadsheet and it's a better operating system and it's one that is going to be better for every stakeholder involved.

[00:20:37]I'm talking about the banks and asset managers. I'm talking about us most importantly, but I'm even talking about regulators and governments and everyone that's involved in the pie of finance.

[00:20:46]they are going to be pro blockchain and most people are now finally there. I was way too early when we met, Keith, as as they would say. But, you know, I'm a believer and that's why I'm still here today.

[00:20:59]>> Totally, man. Uh, you're watching the highlights from a conversation on our live show, Memes and Markets. Be sure to subscribe to this channel to make sure that you don't miss the best parts of our conversation from our live streams where we go live every Tuesday and Thursday at 12:00 p.m. Eastern. Now, back to the highlights. When it comes to thinking about who's really going to stand to benefit from this, and you can be honest, her can be honest. Who do you think really is going to see the major benefit of this technology? And in what ways will people continue to still see see the benefits as well?

[00:21:39]>> Yeah. So the the good news is this is like you know a quality of life benefit thing. At the end of the day what's happening is these middlemen that are getting eroded out the the markets that are getting opened up is creating a fairer marketplace and is creating better opportunities for everybody involved in that connected market. Uh and and a great way to kind of look at this is, you know, um crypto is is an example of, hey, we're going to all go and create our own financial system, right? It's not tied to literally any money other than people bringing money in and out of it from from selling their assets, but otherwise it's its own decentralized finance, as I like to say, its own financial ecosystem. But then the thing called stable coins came along. For anyone who hasn't heard that term, it's a it's a way of saying tokenized money. You can get your money just like you can have a Bitcoin. And in this case, it means you can move your money just like a Bitcoin instantly and access these new applications that are being built. And so stable coins became a critical component of this world of digital assets where there was no access outside of off-chain money, right? fiat coming in and out through exchanges that were acting as the gatekeepers basically to money real money coming into crypto assets. But now that real money can go into stable coins and it can join the onchain system. It can now go into digital assets. Sure. But it can also go another way which is what I believe is the future of all of crypto. It's the future of all finances we're talking about. It's the idea that instead of having to go through a broker or instead of having to manage your money through a bank account, you literally have everything on your phone in a wallet.

[00:23:26]That is sensational for anyone who's growing up today. Uh, you know, under 18 or just turned 18, that's the way they're going to operate. Uh, when it comes to managing their assets and their money, they don't want to have to learn and get used to slow brokers. It's why Robin Hood has been so successful at making an easier way to invest in stocks, right? This is going to be across the board an easier way to access finance everywhere, not just for Americans, but for everyone around the world. And that is exceptional. Stable coins today are already disrupting massive payments businesses enabling new global you know crossber transactions settlement of massive assets and transactions that's all happening around all faster it's you know I think last year $5 trillion worth of um you know transactions that's a lot that's not nothing that's not just crypto that's real activity in the real world um and so that's what I'm excited about as I mentioned mentioned earlier, this tokenization element will bring new opportunities to everybody involved. Or even if you don't want to get excited about this technology or learn it, it will automatically serve you because now the banks, now the the folks that are on Wall Street that manage all of those functions, they're on board and they're saying if I don't adapt, I'm going to die because we are talking about again such an immense upgrade from spreadsheets to PDFs. It'll be like, "Hey, we're going to go use this logistics company. We have option A that uses horse and buggy. We have option B that uses trucks. Has anybody going to go use the horse and buggy company?"

[00:25:10]Right? No. So, this is the future rails of finance without a doubt. Uh, and you know what's going to happen is the banks and the the the asset managers, all the key players that adapt, they're going to benefit tremendously. That is capitalism. That is the the new market order. and fees will translate to those who are able to position themselves right around this opportunity and around this new infrastructure, this new market, this new onchain operating system. And there are those who are going to be first movers as us as individuals who look at this and say, why am I keeping my money in a bank account? And I'm not advising you to move all your money out of a bank account, right? There's FDIC insurance and thanks to the Genius Act, you're going to see some banks launch their own stable coins that are FDIC insured called deposit tokens. You know, there's all kinds of reasons why you might want to custody your money with a bank. But one really good reason to take some money out and put it into a stable coin is because you can literally go earn money with it right away. Uh as opposed to sitting in a savings account and doing nothing for you. and the fact that you can swap and instantly get your money back out. So you can go in and out offchain onchain onchain offchain whenever you want very pretty quickly instantly. Maybe some few fees right now that people are taking advantage of. But that speed that is the difference for so many folks not just in investments and in trading but for in life, right? When you have a serious situation come up and you need money. Remember that crowdfunding investment we talked about?

[00:26:46]Good luck selling that five grand you put into that VR company. But those tokens that you own today, you can go sell them or you can even go get a loan against them. You don't need to go to a bank. You don't need to go talk to anybody. You literally have your wallet.

[00:27:02]You have your asset. You can go to a protocol or an application, right?

[00:27:07]That's going to say, "Hey, here's a loan against your asset. Give me your tokens as collateral. here's some USDC or USDT, some stable coins. Go use it as you need. Cash it out for the off-chain world or go and use it in the onchain world. But these opportunities are going to improve finance for everybody, right?

[00:27:27]That that's sort of how I see it.

[00:27:29]>> Yeah, I think there's a ton of benefits that are fairly obvious when you start thinking about it, but people's minds typically do also go to the negative potential use cases of technology like this. Like Cross Central had a great question in the chat here. So, but to tokenization mainly has centralized issuers and have smart contract logic that can freeze the token like USDC. So, will it really benefit the average person or make us enslaved and own nothing? That's definitely a big point of concern that a lot of people come to.

[00:27:52]>> Yeah, I have um I have probably not the most fun answer for people that they want to hear and and frankly um you know it's it's if that's a real big reason that they're rooting on for Bitcoin, right? and for certain crypto assets to say, hey, we don't want to be tied or hedged to the US monetary system or to the global financial system in that way.

[00:28:13]But if you go back to what we're really talking about in a grand scheme of things, which is billions of people using money every day, and all of that ties back to the US dollar today as it as it backs the entire world's markets basically. Um, and so what we're talking about is really an identity question versus more of like an a political question in my opinion. And my answer is like today your bank accounts can already be frozen. Like we're already already enslaved to the system. And yes, stable coins today are also going to freeze action where there are hacks, where there are, you know, bad actors, etc. So if you are sort of in this camp that doesn't want to live in a world where those protections exist because you want to sacrifice those protections for your own freedoms that's why crypto is for you and it is has tons of problems which is why most people cannot exist in today's world only in the crypto world you have to play with the world economy and guess what unfortunately most people don't agree with the opinion of you know they agree with the opinion of okay I want my rights to certain things to my money, my assets, but at the end of the day, they also want those protections, uh, and when FTX scams happen and when all of these other issues are happening in capital markets that will improve, including fraud, including bad actors, right? People that are ripping people off in the markets, not because they are creating value or investing in value.

[00:29:44]Uh, that can all be tracked better on chain. That can all be managed better on chain. And in in a world where you find yourself where you like find yourself having the government needing to freeze your assets or money, I hate to break it to you, they're going to freeze your accounts anyway, whether they're onchain or not. Um, so yes, the best recourse you can have is digital crypto assets that you can truly own within a wallet that you self-custody that cannot be seized unless somebody takes it from you. Um, but if you want to then go to Walmart or go buy things and enable with the rest of the world, you have to play the game of we use the US dollar and the government controls it and we're inevitably going to be always going to be under the the sovereignty of that and the freeze functionality of that. Now, what I do endorse is like laws being passed to make sure we can support these freedoms and fight them in court to make sure that the government can't just randomly freeze things that it has to be under warrant and other things, right?

[00:30:46]There are legal steps that we need to take to make sure that we protect our rights and freedoms, but we shouldn't pretend that the government uh, you know, cannot freeze your bank account, and most people do not keep their cash in their mattress anymore. Um that's just you know that's just not a feasible thing.

[00:31:05]>> Totally. Um and and I I do understand the concerns. I mean I was just in uh uh Toronto a little bit ago and it was very clear that and this is happening all over the world. People are moving towards like the cashless society, right? uh everything going digital.

[00:31:25]There being uh with that obviously um the potential for very uh what's the word like um draconian sorts of measures that can be taken uh when someone is able to just potentially sit at the top of this technological system and decide who wins, who loses, who gets to pay who doesn't. Um, and crypto being a potential answer to that I think is is worth investigating. One of the things that I'm always watching for is how the rest of the system is kind of working its way back into making that even less likely of a thing. And I talk about this a little bit here and there, but one of the things that I think a lot of people overlook in crypto is that it actually does require internet access, right? to actually be able to use a lot of this technology. Even if uh you're running a Bitcoin node, right? You still are having to deal with AT&T or uh Verizon or one of these larger players who by the way, you know, you don't hear a lot from them, but they are 100% cognizant of what's happening in the world of digital assets and blockchain and and the different ways in which they have opportunities within it all. Uh but I will I will leave that there. But I did want to go over to um this piece about uh we talked about how the big institutional players are having to pay attention to what's happening with tokenization and they're having to actually you know address this now. And so I wanted to bring back an older clip here of Larry Frink talking about Bitcoin and then also uh his thing his uh his thoughts on tokenization that came out last year. But this is an older interview I think a few years back of Larry Frink who's the CEO of Black Rockck.

[00:33:12]>> Absolutely. Um as you know I was a skeptic.

[00:33:16]>> Yes. I you know I was a proud skeptic and I studied it learned about it and I came away saying okay you know my opinion five years ago was wrong. Here's my opinion today. This is what I believe in today. I believe the opportunity today. I believe Bitcoin is legitimate.

[00:33:36]I'm not trying to say there's not misuses like everything else, but it is a legitimate financial instrument that allows you to have maybe uncorrelated, non-correlated type of returns. I believe it is an instrument that you invest in when you're more frightened though.

[00:33:53]>> It is an instrument when you believe that co countries are debasing their currency debasing their currency by excess deficits and some countries are.

[00:34:03]I believe we have um countries where you're frightened of your everyday existence and have an opportunity to invest in in a a something that is outside your country's uh you know control then you can have more financial control and so I'm a a major believer that there is a role for Bitcoin and in portfolios. I believe you're going to see that as an as one of the asset classes that we all look at. I look at it as digital gold as I said before and I do believe there's a there's a there's a real need for everyone to look at it as as one alternative to I would say the optimism that I have in the world. If you want to hedge hope, Bitcoin is not a an instrument for hope unless you're hopeful you're going to make a lot of money on it. But I I look at it as a vehicle in which you're expressing your your financial acumen in something that you're more frightened of the world.

[00:35:02]You're more frightened of your existence. And I believe there's a great industrial use for it. And I and I think missing that I >> So this was 2024, July 2024. Any initial thoughts on that one, Herwick?

[00:35:17]>> One that the price of Bitcoin is like basically the same.

[00:35:21]>> This is pretty wild. But uh you know the initial takeaway is you I saw some of the comments pop up too, right? Black Rockck probably doesn't necessarily believe so much in the ethos of Bitcoin so much as they just understand it and recognize that there's a huge market opportunity in being a financial institution for it. uh they are making more money from the Bitcoin ETFs right now than they are making from like all the other ETF products or something like that. They they have they are creating new business segments that are not just for Bitcoin but also for tokenization to create new funds that are on chain and accessible. But going back to Bitcoin, I think it's just Black Rockck recognizing and that's a big deal. You don't need Black Rockck to believe in it to recognize that if you want Bitcoin to be treated as an asset class that most people take seriously because if you you're going to need to have full education of the entire planet, right, to truly understand how Bitcoin is this, you know, essentially private version of money controlled by the people, right?

[00:36:31]This private asset uh that can't be frozen at the end of the day as we were talking about earlier. But for most people to even consider buying it, they want easy ways to buy it or they want to know that it is legitimate. And Black Rockck has built a name within finance that people have kept their money with for decades now uh to say hey uh you know I trust this company to do the research to validate is this thing legit or not. The same way that you might you know look at a company to say hey is this this AI company legit? Sure, I don't know if I believe in their strategy, but at least it's not a not a fake thing or a scam, which is a really big deal that Black Rockck acknowledged that um and helped kind of bring in a load of money. At the end of the day, I don't like to speculate on the price of Bitcoin. I think inevitable to me is sort of, you know, so far the the data speaks for itself and where it's going to be headed eventually, which I think is probably another rebound, right? But I'll leave it at that. When, who knows?

[00:37:31]uh more so what I do think is going to happen is the more money that comes into the space that can buy Bitcoin easier and not just through ETFs but I'm talking through stable coins baby right if lots of stable coins are buying Bitcoin all day that's going to have huge market pressure globally uh and eventually we get back into the value of digital gold as as Larry think it right and you can believe in gold or silver or other things but it is just one of those assets that I think black rockck engaged and I'll end it with this Keith that maybe that that educational session that Larry Frink gave himself or at least had his executives teach him, right? Let him understand what blockchain is because I think a lot of people hear Bitcoin and they hear crypto and they kind of throw the baby out with the bathwater, right?

[00:38:18]Blockchain, this technology that underpins all that is is also useful in finance. And that must have clicked for him in a big way because then as we saw they started he started to go out and be be very bullish. So that's the key takeaway is educate yourself because before that he at least didn't even understand it and he called it a scam which is what most people are calling a lot of even tokenization projects today when it is in fact the most legitimate form of crypto as I see it depending on your definition of of crypto right but of blockchain assets of digital assets.

[00:38:53]>> Totally. And then uh last year he was at the um I'll see it right here real quick at this uh the future investment initiative and uh he was talking about uh how he really feels about tokenization uh from that point on. So let's hear him talk about that at the moment.

[00:39:12]>> Question from central banks is what is the role of tokenization and digitization? How quickly should they think about digitizing their own currency? What does that mean for the role of the dollar? If every currency digitizes and we have a you know what does that mean for bank payments what does that mean for the for the payment companies like Mastercard and Visa all these are being questioned right now I will make you know we I think we spend so much time talking about a AI we're not spending enough time talking about what how quickly we're going to tokenize every financial asset and the opportunity we're going to have to have a digital wallet and moving you know ETFs and other things through a digital wallet. And I think that's going to happen worldwide very rapidly. And I think most countries are illprepared for that. And I underappreciate how technology is changing that not not unlike how technology is changing AI and other things. It will be changing uh the technology around the plumbing of finance.

[00:40:24]Got you on muted, Keith.

[00:40:25]>> Yeah, you're muted, Keith.

[00:40:27]>> So, I saw that uh that ended up freezing up there, but um did you see this when this happened, Herwick? What did you think when you heard Larry Fank shouting to the rooftops about tokenization and comparing it to what's happened with AI?

[00:40:40]>> Same thing as I just said about Bitcoin, which is like finally they have validated this technology, right? since 2017 but really 2017 as I started in even 2018 as I raised some money for for my business right I was laughed out of rooms people were like ICOs of the future you know this you know finance doesn't care about this technology they'll they'll safeguard their plumbing forever as Larry Frink calls it right um but I was like no determined to say this is just so much better version of finance right that this is inevitably going to be the future uh and so finally uh you know nearly 6 years 7 years plus later you have the world's largest asset manager and you had others earlier including JP Morgan by the way same story of don't don't listen to what I say look at what I do um acknowledging that this technology is is again just so much better uh version of PDFs and spreadsheets and what it means for the world uh is going to be and what it means for markets and for finance is across the board. It's across the whole ocean. Everything's going to change from the the bank payments like he's saying, from market access, from the way you can access financial services to the costs and the rate that you'll be able to benefit to them. And then eventually AI, we haven't even gotten to the the endgame, the all roads lead to Rome when AI agents are able to move blockchainbased assets on your behalf and are essentially able to manage assets, manage your your wealth, trade, uh, make investments, create loans, and do everything with each other as opposed to relying on you to go and open up a wallet and load it up with stable coins and then go find your vaults or your investment. opportunities and then go trade them or manage them whatsoever. Um, but in order for AI to do that, they can't do that today. Uh, they need and for the in order for the financial system to be able to trust it, they need a system like blockchain that offers that trustless infrastructure that allows us to know who owns what, who made what trade, uh, and, you know, make sure that everything is being done proper. You're watching the highlights from a conversation on our live show, Memes and Markets. Be sure to subscribe to this channel to make sure that you don't miss the best parts of our conversation from our live streams where we go live every Tuesday and Thursday at 12:00 p.m. Eastern. Now, back to the highlights. For all the people that see this coming, a lot of people have latched on to specific projects and that's been their their bet on the evolution and growth of this. How do you look at benefiting from the change at large rather than picking like one specific thing?

[00:43:32]Yeah, that's a great that's a great question and it's it's sort of part of what we're trying to do with the RWA Foundation, which is the idea of just promoting this technology as a benefit for for everyone to start taking advantage of because is it just a better way to access finance and for many people who don't have access to US stocks, for many people who don't have access to US real estate, which is the considered the best version of real estate around, right? That that's a huge deal. let alone for us vice versa to be able to access investment opportunities all around the world wherever you are whether you're in North America or otherwise right um so how do you kind of get exposure to all this right there are so many different ways there's even now public companies you can even go to the stock market and invest in companies like figure securitize as their sexz if you think about some of these major companies that are leaning into this black rockck as we talked about but Franklin Templeton um investory and there are others that are moving into this space saying hey we recognize this future um you can invest in the actual infrastructure themselves. So some of them have tokenized their own businesses or some of these tokenization tangent companies have their own crypto token related to that infrastructure and that offers you exposure either directly via the equity or via the crypto component tied to this infrastructure, right? Um, and so those are the three different ways. And then there are real like you can even say there are some cryptos that are now becoming RWA companies or in my opinion always were right you've heard of Ripple I'm sure was top three asset all all the time right that essentially is to me one of the perfect examples of too soon because they were already on this train of hey the finance world banks they're all going to use Ripple. They were wrong because had Ripple invented a stable coin, they would probably be bigger than Tether today and they would be the most profitable company in the world. So in my opinion, they kind of fumbled it even though very successful obviously outcome for everyone involved. But that is what they were trying to do was to become Tetherly to become this financial services company that banks and traditional finance can come and embrace and say, "Hey, we want to use this blockchain technology." I see somebody noticed I'm wearing Salana. Um, Salana is another one of those chains, right?

[00:45:57]Exposing yourself to the crypto tokens or to the protocols where these assets are being stored, right? Just like a server, just like you would bet on Amazon or Google or Microsoft because of their web services business. You want to bet on a protocol for the amount of Black Rockck activity and stock market activity and commodities activity and money and payments activity are being managed on that chain because usually the the underlying token right has some kind of benefit tied to that chain being having activity. So you know whether it's Salana, whether it's Ethereum or whether there are, you know, Stellar or Avalanche or dozens of other chains and there are hundreds and there are even versions from the Wall Street banks that are or they're called private or permission chains, right? They're trying to create their own version of this. We can probably get to that in a little bit too, right? about Wall Street trying to build its own moes around this. But the pressures of this kind of decentralized technology, this kind of open- source, this movement, right, that everyone wants access to these stocks, it's massive. Um, it's absolutely a massive opportunity. Um so again if you can invest directly in equity or in the public stock or in the tokens tied to crypto to tokenization or rwas as we call it or just to simply the blockchains that have the most activity which today is Ethereum uh but Salana and others are trying to you know come up with that or you know there's first of all anybody can win this race because we're talking about hundreds of trillions of dollars across real estate across debt across stocks across commodities across you name it all kinds of assets that are coming on chain that will create millions of opportunities for people to make money on a small level or entrepreneurs who are building these rails on a very large level. Um, so hopefully that's a good answer for you, Ben.

[00:47:51]>> Super good. I said one thing I wanted to add on, Keith, before I'll throw it back to you. So the thing you said there was anyone can win this race. Is it a race where there is one winner or do you see multiple people winning or multiple chains winning whatever?

[00:48:01]>> Good, good question. It is definitely in my opinion the latter, right? There is no one winner because again we're talking about such an enormous force and actually there were monopoly type winners uh before there's a company called the DTC the DTCC they settle quadrillions quadrillions trillion quad not trillions quadrillions worth of stocks every year because they are essentially the global settlement exchange system not just for the New York Stock Exchange and for the NASDAQ for for the London stock exchange and for Singapore and for Switzerland and you name it, just about every other Japan, right? Every other major finance center relies on this company to manage that plumbing. As well as there are tons of big winners in finance that we've seen that have just been able to carve out large businesses owning a specific segment, whether it's custody or whether it's a certain asset class or whether it's a geography, right? which is another great example of what's happening here with geography is you're not just going to own one market. You're talking about all these global markets coming together. Stable coins were good for the US dollar because we enabled more people globally to buy into the US dollar, right? To buy US debt.

[00:49:17]Essentially, people are now realizing or at least lawmakers and legislators and folks in America saying, "Hey, if we tokenize stocks and we bring more people around the world as buyers into the American stock market, well, that's a good thing for the stock market, too, right?" And so, the the analogy of why tokenization works is is growing. Um, and so I I think I'm rambling a little bit here, but you know, you get the idea of of uh you know, hopefully uh there are going to be many many winners as far as chains. Um, you know, there are already so many. You can technically fork a chain and just create some new changes to it. The key isn't the technology always, right? The key is actually creating the network effects, creating the liquidity, having that battle down because that is why the New York Stock Exchange and the NASDAQ win today because everybody concentrates their liquidity there. And now for the first time ever, you have a new competitive force saying, "Hey, whether it's a technology company like Tether, by the way, Tether is a great example.

[00:50:22]Tether is one of the most profitable, more profitable than many, many most of Wall Street companies. and they are the seventh largest buyer of US treasuries.

[00:50:33]That list of the top 10 buyer of US treasuries every year, those are countries except for Teor, this guy uh you know Paul Paulo Arduino um an Italian guy that now is has incredible influence literally on on the US dollar through a technology company he created that tokenizes the dollar.

[00:50:55]And today there are hundreds of stable coin companies. There are stable coin companies that help companies make stable coins, right? So there's going to be so many stable coins uh and banks are now going to launch their deposit tokens. Uh and there are so many markets and geographies and now the ability to compete for liquidity or create to create liquidity that I think is is the future. You're going to obviously have some core winners, right, that that do concentrate a majority of it, I think, right? But you're not going to have one.

[00:51:26]You're not going to have two. Um there there will be more.

[00:51:30]>> I I wanted to ask you, Herwick, if we were to look at the security token industry and uh security tokens and the technology blockchain behind it all, if we looked at that in 10 years, what does that look like to you?

[00:51:46]>> Yeah, that's a great question. I mean, uh I I hinted at it earlier, right? And if we take kind of even further macro perspective, it's probably like 2040 2050 that as I mentioned, we're kind of going to have a full onchain world, right? The idea that basically every asset that gets created or issued or found in the physical world will be ledgered onchain. Uh and essentially, you'll call it 90 plus% 95% of the world's assets at that point will more or less be available or accessible in onchain finance. And you know I could be wrong by 10 or 20 years but I I would guess around 2040 2050. One of those massive accelerants and the reasons for that is AI. You know, because of the what I mentioned earlier, the idea that you can have an AI manage your wealth and even potentially provide competitive strategies for investment and you are going to now see a whole new world of agentic trading that will enter the market. And the that this is the another big reason with with the foundation and why we want to encourage everybody to take advantage of this technology of this new onchain finance real world assets security tokens because um eventually with the wealth gap the way that it's going the way that markets are controlled with economies of scale and with access and such if the world goes onchain and we allow the wealthy to essentially trade uh you using AI uh as individuals we are going to year by year get priced out of opportunities or make it more difficult to achieve levels of wealth. I actually believe, you know, pretty crazy to say for some people, but by that 2050 mark, it's not really like an overnight pause, but we will essentially see economic stagnation. the economic class growth will no longer be possible because if you have all markets on chain and you have AI managing the whole thing on behalf of wealthy users, you're never going to see too many trades where people are letting their AI take risk knowing that there are potentially smarter AI with bigger war chests, right, to be able to go out and do and create business. And so back to reasons why universal basic income and other things that people preach about AI, it's not just about automation of jobs, it's also the automation of the market. Uh and that is a massive deal in the next decade or two where I want to encourage as many individuals to take advantage of this new form of finance where they can also in my opinion find the most economic mobility. Right? And I'm not just talking about middle or lower middle class or even the lower class in America. I'm talking about all people around the world. Billions of people in India, in China, in Africa and in Latin America, and even Europe that do not have access to the world's top tier financial services today. They can't get loans. They can't even get banked, right? And they certainly can't get access to safe opportunities that would help them gain capital, right?

[00:54:57]Even investing in US treasuries, right?

[00:55:00]The money behind the money that people get paid for, right? That yield, that treasury yield, you know, only goes to, you know, certain sets of folks and is mostly used as infrastructure for a lot of corporation treasuries and a lot of governments. But most individuals, how many people own a US Treasury bond, right? Everybody owns cash or everybody owns stocks, but most people unless they have a money market account, they don't realize that they've got exposure to it, right? They're not going in and buying treasury bonds. Definitely not through the US government, which takes months.

[00:55:32]It's like not an easy thing to go and buy US treasury bonds, right? So, if now suddenly those are being issued on chain and everybody can get access to it and every agent AI agent can fight for that access, right? Imagine where the world is going to be headed. And so the more people that are positioning themselves on chain to have their wealth on chain to take advant advantage of these AI agents, hopefully none of them fall for or fall into issues with AI agents getting caught on the wrong end of a trade with a significant portion of your wealth. Right? I would not recommend allowing the AI to ever allow to to make such trades. But you can imagine that that is where the world is headed. All right? It's not about finding the best deal. the AI agent is already accessing the same rails as everybody else to go out and scour thousands of deals. You would never have that amount of time to go through and figure out and the AI can get to know who you are, your income level, your your risk profile as they call it, your tolerance for investments and what you prefer to invest in all those things. Then it can just go out and go about what it's doing. Right? So where does it look like in five years?

[00:56:39]It will look like today people are building AI agents. Today people are already tokenizing assets on chain. So in the next three to five years you better believe AI agents will already be trading in markets. Uh and there are now public securities getting put on chain.

[00:56:56]So that means public markets too. Um that's where where the future of finance is headed. uh and why again I believe that it's very important to kind of be positioned to take advantage of that as best you can as an individual.

[00:57:11]>> Love it, man.

[00:57:12]>> You made it to the end of the highlights from our conversation that we had on our live show, Memes and Marcus, which to me means that you're probably going to absolutely love the highlights from this next conversation that we had on Memes and Markets, which you can find right here.