Quadrillions: The New Wall Street | Nick Shalek & Mathew McDermott

I'm a believer that it's not permissionless or permissioned. These things are symbiotic and there's lots of, you know, what we'd call like consortiums or permission chains that have become really critical infrastructure that have existed for a long time. So you'd have to be a zealot or an ideologue not to look at ICE or market or the way cards develop or look today at UPI or Pix and say it's all going to be decentralized or permissionless. Like as an investor, I think it's very interesting to invest in. Things like Tempo or Canton, and we're excited about it. I also think the, like, most relevant question maybe to be asking, you know, what's the downside of talking about risk and regulation and being pragmatic and thinking from the valuable incumbents perspective? Or, you know, what are the misconceptions?

Quadrillions is a miniseries produced by Blockworks and is sponsored by Canton Network. Nothing on this show is a recommendation to buy or sell securities or tokens. It's for informational purposes only, and the views expressed by anyone on the show are solely their opinions, not financial advice or necessarily the views of Blockworks. Our hosts, guests, and the Blockworks team may hold positions in companies, funds, or projects discussed, including those related to Canton Network. All right, everyone, welcome back to Quadrillions. Very excited about this. Been an amazing series, amazing season, and this is the last episode. So bummed. But we have, I think, the best lineup that we've had the entire season. So we've got Nick from Ribbit Capital, we've got Matthew from Goldman, and Yuval back with us from Canton. So Nick, Matthew, welcome to the show.

Thank you.

Thank you.

Yeah. Nick, I thought we could maybe start with you. I want to use this conversation to talk about how— I mean, it seems like basically all capital markets are quickly moving on-chain, whether that's a company like a Goldman down to maybe some of the fintechs like Revolut or Robinhood and brokerages and payment providers. Give me your— you guys wrote this amazing piece on just tokens at the end of last year. Tell me how you guys are viewing tokens and tokenization and yeah, capital markets moving on-chain. I'd love to get your like macro thesis for this to kick this off.

That's a big question, but, uh, there's, there's a lot of, uh, a lot of really, really interesting stuff happening. I mean, I guess we, we started on, on tokenization, you know, talking about tokenization a long time ago, right? Tokenization were— was the words that, uh, You know, kind of first came in everybody's conscious, you know, broadly when Apple Pay launched. And you fast forward, whatever it's been, 10 years, 11 years since then. And we just started to see this thing outside of crypto, which was you'd listen to the, you know, earnings call for Google, or you listen to earnings call for Visa, or you listen to earnings call for Coinbase, and all the CEOs were talking about how many tokens they were producing or how many tokens they had and how much they were processing. And we're like, it's same word, different concepts, but what's the thread that tied them together? And I think that's been, you know, that question has been kind of like a guiding one for us as we, we think about what matters the next 10 years. I guess the, the high level, you know, just to, to, to break down our thinking simply, we'd say what tokenization is really about is making the world legible for machines. And machine interpretable so that we can build intelligent software that's able to, you know, interact with the world's assets. And what we define as an asset is going to be a lot broader than what we thought about in the past. And the combinations of assets, you know, will be very, very different. We'll end up with a financial system that looks something like what we have today, but is far more personalized, far more intelligent, and also in a lot of ways, like totally unrecognizable. You know, I think that the analogy I would say is like when you go to Amazon and you experience that as a store and the millions and millions of products that are there, in some ways it's like a department store, but in most ways it's totally unfamiliar. You go to Netflix, in some ways it's like Blockbuster, it's doing the same job, but you know, the combinations, the way you find content and, um, I, to get to that world, we think you have to make the world, you know, legible to machines, you know, around, uh, around different, different, different assets and, and data. So yeah, a lot more I could say about that, but that's the core thing.

Maybe I'd go one level deeper that, I mean, you, for people who don't know Ribbit, you guys are probably the most prolific fintech investor of all time, potentially, right? Nubank and Coinbase and Robinhood and Stripe and Brex and Revolut and I think at one point Mickey might have owned like 1 or 2% of the total Bitcoin supply. I heard that somewhere. Um, so, you know, maybe we can get into like, I see all of your guys' portcos moving on-chain faster than many other folks like, like Nubank, um, right, who just hired Michael to run their crypto, who's now head of crypto there. Coinbase obviously is a crypto company. Robinhood quickly moving on-chain. Stripe launched Tempo, right? Revolut doing the same. Why is, why do you see, like, what's the trend that's underlying this? What's the underlying reason?

Um, I think it's two things. One is just these companies have, these companies are, are all 10 to 15 years old. They were started in a digital era when, uh, when there was this opportunity to get distributed on mobile or on the internet. And, um, so they have innovation in their DNA, like they're natural disruptors. They were started by disruptors. And there's just something about the culture of the organizations that wants to push and wants to adopt new technology. And they have relatively modern software stacks and they have their, you know, they're big companies now. So they have their own challenges with operating as big companies, but compared to institutions that have been around for a couple hundred years, I think they're just, they're, they're still very, they're quite risk-seeking. And, um, so just on the kind of risk-reward you know, uh, scale there. They're in a different spot. I think the second thing is their businesses are still relatively, you know, small. Like they're, they're, uh, $100 billion companies, not $500 billion companies. And they serve, you know, for the most part, a couple markets, not all the markets. And I think they're, they're interested in the expansion potential that comes with being able to, um, operate on a global state machine and serve lots of customers in non-traditional ways outside their geographies. So I just say that that's the main thing, right? If you're a bank, there are a lot of reasons not to get into crypto. If you're Revolut or you're Stripe or you're Robinhood and you see where things are going and you've got your core business, you know, obviously to protect, but your DNA is about figuring out how to bring more value to your customers. That's what made it, you know, that's what got you where you are. 10 years, you know, starting 10 years ago. So you just, you kind of continue to hold that. Yeah.

Matthew, maybe we can— I think Nick's talking a lot about the, you know, new companies. You guys are, uh, yeah, obviously, yeah, historic, been around for a very long time. What, um, and we, you know, we've known each other for many years and you've spoken at DAS and been on the podcast and stuff like that. I feel like it's fair to say there's been a few, um, uh, you know, false starts for like institutional adoption and now you guys are pushing. Now it feels like this is finally the time that it's actually happening. Can you maybe tell us like Yeah, just what feels different this time and why things stalled out before, but maybe, you know, they won't stall out this time.

Yeah, it's a good question. I mean, I guess if you kind of take a little step back to when I even started in this space, I mean, there was, you know, still a lot of talk around kind of blockchain technology. And if you use the old adage, it was kind of, you know, a solution in search of a kind of problem. And initiatives kind of need to be kind of commercially driven. And I think that was one of the things that really kind of was highlighted to me when I first kind of started to spend time in the ecosystem, that there's a lot of proof of concepts that really give you a great glimpse into the power of the technology, but it was just that, a glimpse, and none of them were really kind of scalable. And we know kind of some of the reasons for that. There was an absence of regulatory clarity, something that, you know, is close and dear to kind of all of the financial institutions. And so that kind of leads, you know, to kind of, I guess, uncertainty. Both kind of internally and external to organizations. And therefore, that broad-based adoption, you know, was pretty kind of, I guess, slow to really start. Now, you know, kind of what's changed, I think we all kind of know that there's been a big and significant kind of momentum shift, you know, over the last kind of 12, 18 months in terms of certainly the US, where the posture is just very different. And I think, you know, what breeds confidence is that seeming regulatory clarity. We've had the Genius Act, we've got all of the agencies, you know, most of the agencies working very positively, you know, kind of towards digital assets. And that just breeds that, like I said, that confidence, the clarity. And that's when you see now most of the sell side, the buy side investing kind of real dollars, you know, in terms of building out their digital asset businesses. And also their strategies. And, you know, technology's moved a long way as well. You know, obviously Yuval's here, but when we think about kind of the development and the focus on institutions, that's been very prevalent in the market. And I think that's also been, you know, hugely helpful as people do start to move forward, you know, with their kind of strategies. And although there's kind of still probably more clarity we need on the reg side, I think the broad cross-section of the market really focused now on this space. I think now you can really start to see where adoption will truly accelerate.

No, I just want to say, you know, this question of like why, why the fintechs and, and how the incumbents, you know, react. I think the incumbents largely move when they have to. They're, you know, they're natural second movers, and we can, we can talk a bit more about that. I love Matt's thoughts on it. Um, you know, on the fintechs, I, I think the experience of building a regulated financial company over the last 15 years was that the channels were open and you could build better customer experiences, but you had to do a, you had to like shovel a lot of shit to figure out the infrastructure. And that's been very like, when you're building a fast growing company, um, you know, that's really felt by technologists. If you're Patrick at Stripe or Vlad at Robinhood or Nick at Revolut or David at Nubank, you know, you're referencing the banks, but you're also referencing what's happening. In tech. You're looking at, you know, billion users, uh, plus a ChatGPT. You're not, you know, you're not necessarily thinking by the old rules. So you get really frustrated by the inability to build, build new things. And I think it's— we're talking, I think, a day or two after the 5-year anniversary of, uh, of GameStop. And, you know, the, the feeling that Robinhood and the people around the company had when, because of T+2 settlement, you know, the company almost went bankrupt and You know, they went through this experience that was very damaging to the, to the brand and their relationship with customers. Yeah, there's just a frustration, a desire to help bring in a new system. Um, so that's back to your, your first question, Jason. Some of, I think, what's happening too.

Yuval, how do you think about this? The contrast between the, I don't know, I mean, you guys work with both the, the fintechs and also these, you know, like quote unquote legacy institutions.

Yeah, I mean, I, I think, I think inherently, uh, Nick is right, but The question is, what is the reason for that? And, you know, big incumbents have, you know, a big revenue base. And, you know, it's much more of a bigger ship, right? Making changes could also be much more disruptive. You know, it's no different than the US dollar issuing CBDC versus, you know, a private company issuing a stablecoin. You know, the consequences are much bigger. So I think that's, that's a natural thing. But at the end of the day, I do think that incumbents and Stripe today, I would say, is also to some extent an incumbent, have an opportunity that if they do adopt the technology and kind of set the rails for, for a new system. I think a lot of times people think that just because I use crypto, I can disrupt everyone. And I try to explain to people that creating a network and network is not a physical network, of actual client connections or people that are using your services is a huge competitive advantage. And therefore, I do see that there are a good number of incumbents that are actually taking, you know, some serious steps of using the technology and, as Nick said, creating this new system where they can actually leverage their, you know, client connections or customer connections to actually bring a whole different user experience to them. So I think it's just part of life for incumbents. It's a much more challenging thing to disrupt.

I think it's what we should expect too, in general, with new technology. And it's not just true of crypto. I mean, it's, you know, why did Stripe and Braintree emerge, you know, as the leaders, or PayPal, in digital payments versus the banks who had other advantages? You know, it's, it starts with serving a customer base that's not that interesting to the incumbents. The incumbents are focused on, as Yuval points out, they have really big businesses, customers that are asking for things, and usually they're not asking for the new thing. And so kind of begins with, well, actually there's a lot of the world that doesn't have access to good financial services and we can make, you know, financial services a lot better broadly, but you kind of want to frame it as this or that. And the reality is. Zelda's a trillion dollars of payment volume now, and Venmo's got 109 million users. What's actually happened is people transact digitally between each other more, um, and the players, either the new players or the incumbents that get with it quickly, are winners, you know, while people who are slow to change, you know, kind of fall off.

Yeah, I mean, I would counter a little bit of that with the old institutions. I mean, we're not, you know, sat here like Luddites. I mean, we recognize the potential of the technology, but I don't think you can underestimate the regulatory kind of point that I made earlier and that legal clarity. I think one of the other things that has definitely kind of evolved over the last few years has been that institutional grade for institutions. And, you know, with that backdrop where KYC, AML, interoperability, I guess the point that Yuval's making is absolutely key. And that's, you know, kind of in the context of a network, but also separately when you think about like legacy systems, you know, kind of some of the systems we have are as old as me, right? And so, you know, that interoperability with those systems as well is things that we need to consider just given the legacy of the institution and the market more broadly. And I think with these institutions, they're large and also it's the kind of education, you know, that's, you know, both in the context of working with clients as well as kind of, you know, internal stakeholders as well.

Matt, how'd you think about the products to offer and like how to basically, okay, so Your title is Global Head of Digital Assets at Goldman, right? So there's all these different ways that you could attack crypto, right? You could do trading, you could offer crypto products to customers, you could do it more on the technology side. You guys have done— I think I remember you talking at DAS maybe 2 years ago about collateral movement and collateral mobility, cash-settled crypto trading. I'm not sure what's happened with GS— I forget the name— GS DAP. Yeah, DAP. GS DAP. Maybe you can give us like the lay of the land of what crypto inside of Goldman Sachs looks like today.

Yeah, I think, you know, it's, it's kind of broadly similar to what we talked about, but just probably kind of evolved, you know, quite a bit since then. I mean, the core tenets of the business, you know, with regards to kind of the capital market side of crypto, we are able to trade pretty much all the products that we have the regulatory approval to do. Still, you know, we don't touch the underlier for regulatory reasons, which is down to permissibility, but, you know, we are very active and driven by kind of the client base, and you can kind of layer in content and, um, data into that part of the business. We have invested in companies, and I would say, you know, those companies are a microcosm of what we see across the market, um, both in terms of M&A and kind of equity, kind of capital market activity. BitGo have been a good example of that just recently. Um, we do, and focus on tokenization, you know, kind of from, again, from a client perspective. And the digital asset platform that we've developed is something that we continue to build on and, and are pretty excited actually by, I guess, kind of, um, the fluidity of the regulatory backdrop in the US. So there is actually a lot of focus both there and, you know, across the globe. So, so definitely we'll see more, you know, kind of in that context. Your point around collateral mobility, a big, big, big focus. And I think that more broadly of the market, and again, you know, when you come back to kind of what are the commercial use cases that really do work, you know, the kind of interoperability, the intraday kind of activity, as well as when you start to look at more broadly the focus around collateral moves to collateralize derivatives, securities finance, and repo. And we see that with Broadridge, for example, Obviously, you know, they're extensive users of that. So, so as we continue to see that scale and become, you know, a more global endeavor, that becomes very powerful. And then probably the last thing, you know, kind of is digital money. And that's just something we continue to take a broad-based approach on. Obviously, you know, there's a lot of focus last year on stablecoins. We're part of a large consortium that's exploring, you know, whether there's something to do amongst the G-SIB banks and probably thinking along similar lines to others. With respect to digital deposits and central bank digital currencies.

Do you guys think, question for both, I guess, Nick and Matthew, was it the regulatory side of things holding the industry back or was it the technology was not actually good enough? And I'm teeing up your ball a little bit here and talking about Canton, but yeah, just curious how you guys think, like how you weight that. And it's obviously not binary, but.

I think it's probably a combination of everything, right? I mean, the regulations naturally, you know, kind of certainly from, you know, kind of a bank perspective, different for the buy side as we've seen with BlackRock and others. But in terms of, you know, the bank's capabilities has definitely been driven by what's permissible. So that's probably, you know, been something that's perhaps slowed down, you know, kind of a cross-section, you know, of the market really kind of embracing. That's, as I said, changing in a very positive way. Hence, you know, Morgan Stanley announced its new head of digital assets. We just see all banks coming out with statements, you know, as well as FMIs in the buy side. But the technology has evolved, and I'll, you know, leave Yuval to talk about that a bit more. But, you know, obviously when I think about kind of institutional grade, you know, when you think about networks, privacy is a big consideration, I think, for the institutional players in the market. And, you know, what we see on Canton is something that, you know, kind of, I think, has been very warmly received by that cohort.

I guess I, I would say probably there's lots of things that have needed to upgrade and improve. There are many ways in which the technology hasn't been ready from, uh, you know, just the, uh, core technical points being settled. But I think it's mostly like, to me, it's mostly incentives. You look at the adoption of UPI or Pix You know, in the real-time payments sphere, the government mandated it and took the risk away for the banks and really pushed and promoted it. In the US, FedNow has hardly been adopted at all. So while, uh, there are all these, you know, issues that have, have made it, I think it's, it's largely that, um, it doesn't pay to innovate when it's risky for, for, for the incumbents. And it's been, um, it's been too risky and there hasn't been a competitive imperative until we've gotten to the point that we're at, you know, now we're at the point where we've got some regulation, stablecoins are pretty big and real, and it's time to act. So, you know, maybe I'm being overly simplistic, but I think that that explains kind of most of the story.

And I think that's really interesting though. Stablecoins, yes, we've got the law, which I think is fantastic, right? And, but you still need the regulations to complement that, uh, which is, you know, what's being presently crafted by the agencies.

Yeah. Yuval, what's your high-level take? I mean, actually, you can go deep on this too. Like, what's your take on why what you guys are building is the thing that the industry needs in 2026? Of all, like, a million chains, a million infrastructure providers, like, yeah, what's the take there?

So first of all, just to your previous question, my view is that, and whether it's a good thing for the incumbents or not, I think that one of the things that scared regulators is that the industry started saying This is permissionless. You don't need any intermediaries and no rules. To be honest, when we built Canton, we didn't build it for the Clarity Act or for the Genius Act. I think that building a business where you're relying on the law changing is not a good business model, personally. Maybe Nick as an investor will say that that's not true, but my personal view was if we need the regulation to change to make what we're doing successful, then we're in a bad position. That being said, I think that the posture of the administration, even pre-Genius Act, already allowed a lot of incumbents and regulated entities to actually do things on Canton more publicly because they knew that the regulator is not just going to go after them because they're using blockchain. Right. And I think prior to this administration, I think that that was a lot of the concern. It wasn't necessarily just clarity. It was like, if you use the word blockchain, that was bad. And, you know, if you're an incumbent, you know, it's just not worth it. It's not worth it for your business to get in trouble with the regulator, even if you didn't do anything wrong, just to be clear. It's just not worth the headache and, you know, the problems that it can cause your business. So I think that that's really what I think that, you know, have stalled a lot of the innovation. I think that You know, when we started the company a long time ago, our view was that if you want to achieve on-chain finance at scale, you have to solve for privacy. That was just kind of day one thesis. And, you know, it's— I think it's playing nice now. Uh, 10 years ago, we were told that we were dinosaurs and we don't understand crypto. And now it's like, you know, everybody's talking about privacy. So that's one thing that I think went really well. The other two things, which again, I think, uh, were a bit of a miss at crypto, is aligning the incentives. At the end of the day, you know, sometimes I use this example: when the internet was just being created, you know, there was no internet. So the, you know, the, the companies that were making, you know, switches and, and routers and all of those things were the hottest thing in the world because you needed a lot of it to make the internet a thing. But once the internet became a thing, those became commoditized companies. And it's really like the Stripes, the Robinhood, the Googles, those companies that became the most important things on the internet because they were actually bringing people to use the infrastructure. I think in crypto, the incentives till today on most L1s have effectively drive all the economics to the infrastructure providers. Therefore, I think you've seen a lot of forking of EVM chains, because if I'm now rich and famous and I have a dedicated client base, well, why should I just own the sequencer fees? Why should I send sequencer fees to someone else? Because at the end of the day, if the user isn't feeling any change in behavior or from what they get from the product, well, great, I can get more revenue. And that to me is a very commercial decision to make. As we've seen in a lot of these L2s that will claim they are part of the ecosystem, but in my opinion, they're not. They're just a private chain that is maximizing value for those that launched it, which is good. I actually don't see it as negative. So one of the things that when we designed the economics of Canton, we said that it needs to look something similar to credit card networks, meaning the infrastructure is important, but it's at the bottom of the value stack. So the people that run the infrastructure make money. They should be a positive profit margin business. But at the end of the day, you run servers. You don't have clients. You don't come up with new business models. You don't come up with products. You don't go to events. You don't do marketing. And therefore, those that actually drive value to the network actually get most of the economics of the network. And, you know, although I really like what Ribbit wrote about the token economy because I think it's the concept, the idea of tokens, one of the things that I'm actually really proud of, there have been to date zero tokens launched on Canton. So no one thought that they need to create yet another token to create a monetization strategy on Canton. They actually built products that drive, you You know, volume to the network and they, they participate in the economics of the network.

But do you want that to continue, Yuval? Do you want, like, do you want eventually, you know, millions of tokens on Canton or no?

That sounds fine to me today, but what about in, you know, the next few years? It feels like a really big missed opportunity.

Well, I think that if you needed to launch, so my view is that if you actually drive economic value. I think that you should be able to make enough money on Canton that you don't need to come up with another. Now, I'm not saying that there, that there couldn't be positive outcomes, but I'm just saying that my point is that the builders currently in the ecosystem are generating economic return that allows them to focus on the product. Managing a token with a community, with tokenomics, with listing, with all of those things As you know, Nick, is not a trivial thing. I mean, before we started recording, you were like asking me about listing and like, it's not a trivial thing. And it actually does draw a lot of focus from the entrepreneur. So my point is I actually am proud that the people that build on Canton can monetize their business and focus on how do I ship better features, get more clients, drive more activity. And I don't need to think about yet another problem set. It's not that I'm saying that you cannot do it, and I totally agree with you that there's potentially a lot of an opport— a lot of opportunity there. But again, I'm actually proud that, that people can monetize by participating in the network without having to have that, that kind of additional, additional, uh, distraction. And then, and then the last thing I would say that I think, again, um, you know, I haven't done a PhD on this, but at least from my experience, is governance. And, you know, at the end of the day, I think that one of the things that we've been thinking a lot about in the Canton ecosystem is how do you govern a network? And for multiple reasons. One is if you want large-scale institutions to actually participate at scale, And again, this is why I think you're seeing these what people call corp chains. They're saying like, I need to know that I'm building it on a piece of infrastructure that I can actually rely running a mission-critical business on. And that there's going, you know, so governance, you know, we don't control the foundation. We're actually one vote. DTCC and Euroclear are the chairs of the foundation. Goldman is on the foundation. There's another 3 or 4 banks, there's multiple exchanges, and there's a lot of DeFi players. So you're actually getting a really nice mix of voices there. And one of the most important things about the foundation is we see an L1 no different than any other technical product company. Like, like, and if you want to innovate, it means that changes need to happen. right? Like you need to be able to add features, take feedback from your community, think about how do you create better developer experience, governance experience, like those type of things. So we made sure that the people that join understand that it's a full-time job to participate in the governance. Just today, someone posted on X that like they were on the tokenomics subcommittee. There's 100 people that dial in. Every week for, you know, now 2 years almost, every single week. And that's great because, you know, the feedback loop is much faster, as you would expect from a product company that wants to innovate and stay, you know, stay, you know, ahead of the curve. And that, to me, is potentially just as critical, if not more critical, from some of the technical capabilities of the underlying technology.

Matthew, what do you see I'm sure you guys get pitched all the time from crypto companies and crypto founders and, you know, the Ribbit Portcos are coming into Goldman's office trying to say why, you know, Goldman should build on top of them or something. What do you see crypto companies get right and get wrong when they're coming in for an institutional pitch?

I think we've kind of touched on some of it already, to be honest. I think, you know, for us and, you know, not kind of wanting to labor the point, but I think, you know, the stuff that really kind of focus, you know, our attention is, is kind of the governance, the privacy, uh, interoperability. And I think, you know, Yuval's talking about the tokenomics with regards to the CANTO network. I think being rewarded for developing applications that we see actually have true foundational value kind of in the financial system, these are things that really kind of resonate. Um, and so look, obviously, naturally keep an open mind, but we've found with the Canton Network that really kind of does, you know, kind of offer a lot of what we're focused on, which is why we've been very, you know, keen to continue to develop all of our kind of dApp applications there.

Yeah.

Are you guys, you guys are building on Canton?

Yep.

What are you building?

Well, the digital asset platform is an application on that. And then there's things that will be developed in and around that. And that, you know, as we start to think about Because I mean, really fundamentally where you want to get to is a place where if I'm a kind of repo trader or I'm issuing equities, that you, we're not talking about the technology, we are just kind of really reaping the benefits of the underlying technology. And I think that's the kind of key kind of place we want to get to. But you need to kind of replicate today's financial system on those rails, which, you know, easy to say, not that easy ultimately to deliver, certainly in the short term. So, For us, that, you know, is kind of the real foundational, you know, focus. So everything that we look at, and you can really, you know, going back to the first comment I made, you know, kind of way back when there really wasn't the obvious commercial, you know, value propositions in many of the things that we looked at. Now it's very clear where the value proposition is, and those are the areas that we're very focused on. And in part, you know, that's because of broader adoption. The evolution, the technology. But again, it needs to kind of go back to those core tenets that we talked about. One of the other kind of things I'll pluck on, you talked about kind of what are some of the misconceptions, and I think we touched on them, but I always find, and even less so probably now, but even, you know, last year, people took, continued to really labor the nefarious activity that you see on chains. And to me, when you look at kind of all these blockchain intelligence companies and the visibility that you get, I mean, it's incredible the insight. And so, I really think, you know, that's a massive misconception that is slowly being addressed. And I think, yes, privacy is absolutely key, but you do have great visibility to the activity. Yeah.

What's the buy-in like internally at Goldman right now?

Yeah, I think very positive. I think, you know, kind of like most financial institutions, it's a kind of an incredibly, you know, important topic for pretty much all of our client base globally. I mean, I was just, I've actually been in Hong Kong this week. You know, we did a panel yesterday at our macro conference, which is probably our flagship conference in the macro space. And we talked about AI and digital assets, you know, quite extensively. And the clients were, you know, very focused and interested in that space. So I'd say, yeah, probably very, very focused. And also we are seeing, you know, kind of things like the innovation exemption that the SEC's talking about and kind of the implications on that for the digital native companies? What does that mean more broadly for traditional financial players? So there's a lot to consider that's exciting as we think forward.

I think this conversation is interesting, but just to push some hot takes here, to push it to make it more provocative, 'cause first I'll say like I'm a believer that it's not permissionless or permissioned. These things are symbiotic and there's, lots of, you know, what we call like consortiums or permissioned chains that have become really critical infrastructure that have existed for a long time. So you'd have to be a zealot or an ideologue not to look at ICE or Market or the way cards developed. I mean, this is— or look today at UPI or PIX and say it's all going to be decentralized or permissionless. So I, I, like, as an investor, I think it's very interesting to invest in things like Tempo or Canton, and we're excited about it. I also think the, like, most relevant question maybe to be asking while we're talking, if we all agree on that, is what can that approach miss? You know, what's the downside of talking about risk and regulation and being pragmatic and thinking from the, the, the, the valuable incumbents perspective? And, or, you know, what are the misconceptions? And maybe I'll say things we agree on or not, but part of the reason I pushed on sort of Yuval about, you know, new assets, not tokens specifically, but new assets is because to me, you know, there are a few, few big things. First, you know, I think whether it's, it's regulators or incumbents, sort of this question of like, can you contain what's happening on chain? And do you look at it through the right framing? You know, you take Coinbase, you can now trade, I don't know, 300, 350 assets directly, 20 million tokens indirectly. Stocks, prediction markets, perps. There's, um, a really different way that the consumer may access financial services that's not consistent with the way they have in the past. And I think you want your chain to— you, you want your ecosystem to, to benefit from that growth if it does. I think, you know, related to that is like the assets that matter today may not be the only assets that matter in the future. Prediction markets are a good example of this. Um, You know, the more I put these under the more broader category of like, there's so much opportunity and efficiency and that's what incumbents tend to talk about, speed and efficiency, but it's, it's usually new markets that are the biggest deal, new, you know, under, underserved customers. Um, and, and then I, and at this point came up earlier, but like the, you know, you got, I think you have to be really careful in a permissioned ecosystem to make sure that we don't think of the audience as humans and institutions, but we think of it as machines. And we imagine the right level, the right kind of permissioning, the right kind of security models that still allow for the type of experimentation we were talking in the very beginning before the, you know, before we started about everything that's going on with Cloud Code and these tools. I mean, the world, the future is going to be weirder than we think. So that was a long way of saying like, I would wish us, to say, okay, we love Canton and, you know, we gotta, we gotta move at the pace of regulation, but how do we make, how do you make sure not to miss?

Some of what you said is actually kind of interesting, and I think people are naturally kind of going to have to embrace that anyway. I mean, a 24/7 market is pretty kind of groundbreaking, you know, when you start to think about how the financial system has kind of operated, you know, for decades and as and when, you know, folks start trading the underlier, and we've been involved with secured lending of crypto, for example, you know, you've gotta have a 24/7 risk management, and that suddenly kind of just changes the whole nature of how the market operates. And so I actually think, you know, kind of one of the points you made around efficiencies and things, I think that's hugely important because you can extract huge value by freeing up capital and liquidity by leveraging this technology. And I don't think you can underestimate that. But that's only possible because of the interoperability, the ability to get real-time pricing, you know, and settlement finality. And so that kind of aids all of this and really plays into some of the positives that you talk about. And I think it is self-empowering for, you know, I think wealth management clients are going to be some of the biggest beneficiaries of this technology, quite frankly. But I think it does, you know, and it has to be, you know, done in the right way, but I think it will be very transformational. In a very innovative and positive way.

Yeah, if I may, Nick, and we didn't prepare for this, I actually think that what you said was the perfect pitch for Canton. The reason that we chose the name Canton is because we believe that the world is very heterogeneous. And I actually think that in crypto, we kind of were kind of like funneled to make these two extreme decisions. It's either public permissionless or it's private permissioned. And the reality of the world is that it's not like that, right? I think that if the internet had to go in these two extreme directions, the internet also wouldn't become what it is today. So I actually very much, I would say I'm 100% aligned with you. The reason the name Canton is that if you think about the cantons in Switzerland, they're not homogeneous, right? They don't even spell Canton the same way, but they all kind of interoperate under one country. So this idea that you could actually create a fully permissioned application, like let's say a life insurance company, which does exist on Cantrell. And now I want to— for— because I decided that from a risk perspective, this wonderful thing of stablecoins, which is fully permissionless, have been created. And now the thing have matured. Now there's Genius Act. Now I want to be able to actually pay premium with stablecoins. I don't actually have to choose, oh, I cannot exist on the same rails. So now you can actually compose a transaction between a permissioned application and a fully permissionless asset. So I actually totally agree with your thesis that what we have tried to build, and this is why it's taken so long, is a rail that doesn't kind of like force a worldview on the application or the assets, but actually says to the assets, You decide what are your properties, but you can all compose to each other on one, one single protocol.

Guys, as we think about wrapping this up, I'm just looking at the time. If this is your first time listening, I would— I hope that you guys would go back and listen to the first 5 episodes of Quadrillions. They were great.

You've all—

it's been an awesome season with you. And yeah, thanks to Canton for doing this with us. And Nick and Matthew, thanks for doing this episode.

You've all—

any pleasure? Yeah, just closing thoughts. I know a lot of people have been listening to every episode and just have sat with us for maybe 6 or 7 hours now. Any closing thoughts as we wrap up the Quadrillion series?

No, to be honest, I'm super excited about this industry, not just Canton. I think that when you actually take a step back and you just mark to market what is happening from actual activity and you just take back, like, you don't even need to go 5 years. I was going to say, look back 5 years, just think 2 years back and just think about the sentiment. I mean, if, if, if someone could say to people where, where we're at right now from a, from a real activity perspective, I think everybody would have said that Bitcoin is probably at half a million dollars. And the reality, there's other reasons why the market is where it's at, but I think that at the end of the day, if we are all believers that this technology should be worth more, the ecosystem should be worth more, because there's utility that is using the ecosystem, then you should be extremely bullish about it. That's just kind of my perspective. So when people ask me about the sentiment in the market, I always go and say to them, look at how much utility gets added every day. And that's how I look at this market. I think that prices sometimes are a misleading indicator to where the industry is at.

Yeah, it's a good way to end. Yeah, 100%.

I love, love being here. Thank you guys. And, uh, I, yeah, I just want to echo what, uh, you've all saying, uh, which is, you know, when we, when we, at the start of Ribbit, most of the world didn't have access to financial services. And you, you fast forward to today, everybody's got mobile phones. You have a couple billion new people who have, you know, access to, to digital money and the infrastructure underneath is not good enough for where we need to go next. And it's not going to happen without the world's biggest financial institutions and most important, you know, financial services companies involved. And so it's just like a hugely exciting and generative time. And it's always been to me inevitable that like, you know, the best finance companies in the world are going to be part of it. So to see it coming together with Canton and, you know, obviously the work Goldman and others have been doing for a long time is is exciting.

Yeah, 100%. Well said, Nick, Matthew. Thank you. And you've all— big thank you to, you know, yeah, supporting the show and making this happen.

Of course. Thank you.

Thank you.