# Tokenization, Regulatory Clarity, and the Future of On-Chain Finance

**Podcast:** The Milk Road Show
**Published:** 2026-07-28

## Transcript

And so it really is a parallel financial system where we've been kind of testing and building the infrastructure for the past 10 plus years.
And it's only really in the past two years where the speed and scale is getting there for the mass migration of the financial system.
And we think things like the Clarity Act will be an accelerant to that process.
Bitcoin is fighting to hold on to the 65K price level as odds of the Clarity Act passing seem to be coming back to life.
But will this actually finally happen or are we all about to get rug pulled again?
Hello and welcome to the Milk Road Show.
The podcast is here to remind you that nobody remembers where Milk Road and GSR got there.
names, but they both have great crypto podcasts.
I'm your host, John Gill, and today is Monday, July 27th, and today we are joined by Josh Reisman.
Josh is the Chief Legal and Strategy Officer at GSR.
Previously, he was the Assistant General Counsel at Circle.
And GSR is one of the largest and longest running crypto market makers and liquidity providers in the entire industry.
It has traded over $1 trillion in digital assets.
It operates globally with regulatory licenses and has expanded into advisory with plans to become a crypto native investment bank.
But what does that mean?
Joshua is going to tell us all about that.
He's going to share a lot of alpha with us in this episode.
So if that sounds good to you.
Make sure you like and subscribe.
Share this episode with somebody who's going to enjoy it.
A reminder, our podcast today is free, and that would not be possible without our wonderful partners at Securitize, the regulated rails for tokenization.
You keep an ear out for some more information about them later in the show.
But for now, welcome to the Milk Road Show.
Josh, how are you, sir?
Great to be here.
Nice to see you, John.
Well, I'm glad to have you.
Josh, there's a lot to cover today, but I wanted to start the conversation with some information and context about GSR.
We can come back to the legal side later, but as far as the strategy aspect of your role goes, how would you describe the overall market strategy at GSR?
What differentiates you from other players in the market?
That's a great question.
First of all, thank you very much again for having us here today.
exciting time to talk so much happening in the markets and in dc so uh never a dull moment in crypto but you know so from gsr's perspective right we've been around uh you know for for nearly 13 years we've been in the market for some time and our business has evolved kind of with the crypto market we think kind of grown with the ecosystem and if you think about what's long differentiated us and i think it maybe even took us a a while to realize it was we've really built a client franchise over time.
And so when you think about the term even market making and market makers in crypto, it can have several different meanings.
And your focus or your firm could be on exploiting arbitrages and trading amongst the kind of major crypto assets that trade in a lot of volumes.
Or I think what's historically been the focus of GSR is working with crypto projects and entrepreneurs from the ground up to help bring effectively liquidity to nascent networks.
And that liquidity comes more than just in the kind of bid offer spread type liquidity.
We really do view ourselves as kind of infrastructure partners where you can deploy on top of GSR's infrastructure across centralized exchanges, decentralized exchanges to get assets where they need to go.
Right.
And so, you know, our guiding light and I've people probably who've heard me speak before for me say this, but our guiding light is is a lot like why is market making so important for kind of nascent crypto projects.
It's because, you know, the, you know, the very different than in traditional finance, where you do not need access to your Apple stock in order for your iPhone to work, you generally need access for your tokens for your network to work.
And you see that with Ethereum and you know, all the, all the networks and kind of applications that have been built since then.
So you need to get the tokens to the users.
And so often we viewed it as a partnership between us and projects and exchanges that need that capability.
And, you know, liquidity is very fragmented across the world of crypto.
And we've built the infrastructure on which we look to kind of bridge that fragmentation.
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Okay, so that gives us a little bit of the liquidity provider aspect of this.
But I want to ask about this.
Back in March of 2026, GSR announced that there was an acquisition of Autonomous and Architect, which are two firms.
And GSR in this public announcement said that they were creating a crypto native, quote unquote, investment bank.
What does that mean?
And talk us through a little bit of the strategy here in these acquisitions and what GSR is going for here.
Absolutely.
you know kind of in connection with our strategy of being a client service franchise um i think historically we've been kind of adding services as our clients uh kind of needed and requested and one of the things that we we kind of always did but probably never as organized as it could have been was provide various levels of advisory service to both labs and foundations and crypto startup projects that were getting started on the whole lifecycle of their journey.
So from the very beginning, where they're seeking kind of capital and venture support all the way through the end or the progression where they're a major asset and they're looking for kind of new levels of capital market support.
And so what we've been working on over the past four or five years really is developing the set of capabilities, both from regulatory, corporate trading capabilities to say, how can we best support the full lifecycle of crypto projects?
And this is where the kind of investment banking similarities alike.
I think we're very specific to the crypto market, but it's pretty similar in that we want to work with projects from the very beginning of their journey.
and help them through all the way through kind of maturity.
And so the acquisition of Autonomous and Architect brought us really, we think, kind of the leading teams in the space to provide advisory and then kind of foundation token services.
So if you're a new crypto project and you're establishing yourself, we can advise on tokenomics, help you with your go-to-market, get exchange listings, and then also kind of manage the underpins of the foundation as you work to grow.
obviously where GSR is now and then provide the secondary liquidity and OTC capabilities.
And so we've been kind of adding these capabilities.
If you look at it, we kind of even have this chart internally where it looks like kind of these like building blocks that build on each other over time.
And so you start with a market maker, right?
Then you add OTC, then you add venture investment, and then it's...
you know, asset management, now it's advisory and foundation services, all these kind of build, you can't kind of start day one being able to provide those services, but by being in the market as long as we have and working with as many projects as we have, kind of having a sense of what projects need and how can we best deliver it.
And it's a constant kind of work in progress to make that full service offering coherent and efficient for the market.
But now we think we've really brought together kind of unique pieces in the market that differentiates GSR from kind of other players.
Another thing I wanted to ask about this is you all recently got a license from FINRA to act as a broker-dealer.
For those who maybe aren't familiar, what is a broker-dealer and what does that look like in crypto?
And how does that factor in?
Why is that an important part of all these building blocks you're putting together, like you said?
Yeah, so there's actually a really long and interesting story here that goes to the core.
You may not have been expecting that with that question.
That kind of goes to the changing in market structure in crypto.
If you go back four or five years, especially in the United States, but really even globally around the world, I think there was still this uncertainty around how regulators were going to treat crypto assets.
which have a set of unique properties that make them neither really pure commodities or pure securities in their kind of structure.
And regulators and markets kind of grappled with how they were going to classify those instruments.
And so just to be on the safe side, many years ago, GSR approached regulators in the United States to say, hey, look, we're going to trade in these instruments.
We want to be compliant whether or not you think they are.
commodity securities.
We obviously think they're commodities in the vast majority of cases or at least non-security instruments.
But just in case you think regulators or courts come to the conclusion that certainly these assets are securities, while we engage with them, we want to be ready to engage with those assets.
And so we approached the SEC at the time to obtain or file for a broker-dealer, which is the registration you need to either to broker or deal in securities in the united states and i think the reception at the time towards crypto firms as is well documented now was very very close and and the view was that um you know we don't know what what what these assets are uh but we don't think you should be regulated uh or that you have what it takes to be regulated for the securities markets and we're going to leave that with traditional securities players and and the market and and regulatory space has changed so dramatically since then it's kind of hard to imagine.
But, you know, now we're in this new world where I think it's much clearer to the market what are non-security crypto assets.
And this is something we'll talk about, I'm sure, as we talk about clarity.
But then we are tokenizing real actual securities in the world now.
Right.
And these are our securities in the enumerated sense we talk about in the securities regulations.
So stocks, bonds, indentures, investment contracts, things that would be investment contract, generally securities, as you'd understand them.
historically and we need to be in the place to be able to deal with those both in the united states and and around the world so we uh purchased a broker earlier and filed for a change of control that we've completed so gsr securities is now alive the initial business of that entity is is less about um tokenized securities although although it prepares us for that journey but it also enables us to kind of engage in the fundraising aspects that we talked about at the beginning so for our projects and partners that are looking to raise capital, we can engage as a broker dealer where that's also a regulated service as well.
So it's been a big addition to our stack.
We've also filed for securities license in the Cayman Islands that will allow us to deal kind of globally across, you know, securities and commodities and derivatives as well.
So, you know, crypto is very global.
The regulations are very different depending on which jurisdiction you're looking at.
But the United States is a crucial, has been and always will be.
crucial jurisdictions for the United States.
And so we hope to be kind of, you know, best in class from regulatory preparedness and a broker dealer is kind of the first step on that journey.
We also have entities that are regulated as money transmitters and, you know, money service businesses.
And this is all part of our kind of regulated approach to the industry.
Okay, Josh, I really appreciate you walking us through some of these things because I've known about GSR for a while, but you guys do so many different things.
I think just having some context for people is helpful there.
I want to pick up on a thread that you mentioned, which is this idea of token taxonomy.
And I'm curious your take on how the Clarity Act, if this bill actually does get passed into law, how this will impact token taxonomy in the United States.
And just how does this bill classify different digital assets?
Why do these definitions matter?
What do we need to know about that?
So kind of going back to what we were talking about before, right, the issue specifically in the United States has generally been, you know, how do we classify tokens in the United States as either commodities or securities?
The argument that in some cases they may be considered securities relies on, you know, long.
term judicial precedent, namely the Howey case, and whether the kind of efforts of others, right, have led to, you know, the expectations by investors that there'll be a, you know, a rise in their investment.
And, you know, it's a reasonable construction, but I think what is attempted by Clarity is to kind of answer the question once and for all, and ultimately that the tokens themselves.
are what they call ancillary assets or network tokens.
Depending on the definition, we can go into that in some detail.
But the tokens themselves are not securities, but that if you sell a token in an investment contract where you make certain promises, that that transaction, that fundraising transaction should be regulated.
as a securities transaction.
And this is something I think most lawyers in the space have long kind of argued that for sure, if you engage in a fundraising transaction, that should be governed by the securities laws, but the tokens themselves representing kind of these networks are generally not securities, although they may have certain characteristics that we need to evaluate under the securities law.
So what the Clarity Act what says is we kind of fall into, let's call it three baskets of tokens.
One is securities tokens.
So tokens that look like enumerated securities that we've known for a long time, stocks, bonds.
If you make a security that's really just like a share of stock in your private company, that should be regulated like a security.
That's something we all agree on.
But now we've created two new concepts called network tokens and ancillary assets.
And so you can think about network tokens like Bitcoin and like ETH, where there's really no centralized company that's responsible for the value creation of that ecosystem.
And it really has reached, you know, we can call it decentralization, or we could just say a level of kind of maturity whereby the team behind it is not ultimately responsible for its, you know, successes or failures.
And they've created a third set of tokens called Ansari assets.
And this is the case where, you know, I think it's yet to be certified.
as a network token, but the type of tokens where there probably is a team.
So most startup crypto projects probably look more like ancillary assets than network tokens, although it's not possible to launch a fully decentralized network token into the wild with code and just see how it does.
But for projects that raise money and want to build a project, they very well may start up as an ancillary asset.
And what the legislation will say is, okay, nothing wrong with that.
That token itself is not a security.
Obviously, if you sell it in a security transaction, that should be regulated under the securities law.
Nothing controversial there.
But what we will require is before you sell those tokens to the public, that you make certain disclosures.
to give information to investors.
And again, I think that's something that should be relatively non-conversial.
Now, what's in those disclosures, how complex they are, how costly it is to comply with this type of legislation are all reasonable requests.
But I think the idea that if you're going to sell instruments to the public as an investment or quasi-investment, that it comes with a certain level of disclosures from a customer protection standpoint.
and that you don't create the setup for too much insider dealing, right?
So it puts restrictions on insiders selling those tokens.
And this is kind of all standard customer protection that we think is really important.
So Clarity provides those kind of two concurrent goals.
One is to give guidance about what these assets are, who regulates them at any given time, whether it's the CFTC or the SEC.
But I think most important in what goes kind of...
underreported is it's more than clarity.
This is a full customer protection regime to protect investors engaging in this market to bring additional transparency guidelines and regulations around who can interact and with whom.
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Okay, so there's a lot in there to unpack.
But let's narrow this down to what this looks like in practice.
If you're a company, a project trying to launch one of these ancillary assets in the United States, what is it about Clarity Act that is so important?
How does this change how you go about doing that?
How do you think about how this actually gets applied when people are trying to launch tokens and do business in digital assets in the US?
This goes back into the prior administration.
The fundamental reason it is so crucial and so important is because entrepreneurs building crypto business in the United States need to know that what they're building is in compliance with the law so that they can deploy those investments, grow teams and hire people.
I think what happened in the prior administration is there was probably purposeful confusion about how to comply with the regulations such that you could be the most well-meaning entrepreneur in the world, desire to be regulated even, but not have a path to regulatory certainty, meaning here are the rules that apply.
And if I apply, if I comply with those rules, I will not be prosecuted by the United States government.
And so what clarity gives to the market is that certainty for entrepreneurs to say, here's the rules of the road.
So long as you comply with them, you are not at risk.
of kind of regulatory action by the various agencies in the United States government.
That's part one.
Part two, and I think this is the big hope of the industry and we think is really important, for real institutional investors, the large players in the financial ecosystem, for them to engage in this market, they also need that same certainty, which is if I'm going to invest, if I'm going to build, if I'm going to use those tools, I also need to be certain that I'm not tripping up a rule that would put me into regulatory jeopardy.
And this guidance provides that clarity that would allow institutions to now use these tools, build these tools, and engage with these tokens, both from an investment perspective, but also from a utility perspective.
And so I think what's really instrumental, if you looked at what happened with the Genius Act, which was the stablecoin legislation passed into law that was bipartisan and now governs the issuance and distributions of stablecoin.
in the United States, we've just seen a proliferation of payments businesses, right?
Built on top of stable coins and neobanks and an immense amount in investment in this space.
Because why?
Because now the rules are clear on what's necessary to engage in stable coins, which is obviously better infrastructure for transacting in certain use cases.
You know, a lot of people talk about stable coins, but there is no doubt.
It is a faster and cheaper way of transacting in U.S.
dollars amongst like-minded counterparties over the Internet.
And that is proven by the rapid kind of adoption.
But I think even what we're seeing now.
And so the hope for clarity, and I think the best argument for it now, is the success of genius for stablecoins.
You would hope give some of that to the broader crypto market is that a lot of these assets and tokens have kind of been in limited.
let's call them sandboxes, where it's been a lot of, you know, first adopters and crypto folks.
And Clarity gives the blessing for larger institutions to engage in this market where they might be more risk adverse.
And so it's a super positive development of the market, but it won't be the determination of whether crypto wins or fails, but it may very well have a lot to say whether a lot of that growth happens in the United States.
Or does it happen outside the United States?
So Josh, I appreciate you laying all this out for us.
I wanted to ask you about this.
You all sent a letter of public comments to the chairman of the SEC specifically on this issue of token taxonomy and why it's so important.
I want to get your thoughts on Project Crypto.
The SEC and the CFTC have been collaborating on trying to give the industry some regulatory clarity.
Do you think that's going to be enough to give the market what it needs here or do we really need to get the Clarity Act passed in order to get something legislatively done to sort of cement all this stuff into concrete?
What's your view on that?
Do you think that's possible?
No, I think it's a great question.
And that's perfect timing for this question as clarity is up for consideration.
But we also have a lot of action at the agency level.
And what we've seen in this administration is a really proactive, you know, SEC and CFTC to address how do we, in the context of the existing legislation, not create a permissive environment for crypto, but effectively allow you know, the industry to grow and flourish, but still protect customers and address kind of the issues around introducing this new asset into very old legislation.
And they've made tremendous progress.
So we're big fans and supporters of Project Crypto.
And I think what's very clear engagement at the commissioner level in both agencies.
And so...
The problem with relying on agency only action is you don't get that kind of in law protection that I think industry participants are looking for, because even if you get guidance from the SEC or the CFTC, that guidance can change in the next administration.
It doesn't necessarily solve the issues around private litigation.
It doesn't necessarily solve the issues around state law enforcement.
federally preempted legislation that provides 50 state clarity for engaging with these assets.
Absent that, I think Project Crypto is going to provide some amazing interpretations that will, again, allow us to be a little bit more clear on how do we engage, at least for so long as this administration, but then potentially into the...
next administration and where they make joint rulemakings specifically, those are things that are harder to roll back even in a different encounter administration, although not obviously impossible.
That being said, even in the guidance that's coming out, again, like I said, this is not permissive guidance.
This is interpreting the law as it applies to try to provide some of that clarity.
And so the guidance that came out from the SEC, for example, that GSR responded to, talks about this issue about when do we think about tokens and are they ever securities?
And in that release, to kind of summarize it and not go into too much detail, they're making a very kind of educated analysis of how are you applying it and saying, hey, if you make promises about your token and you're a centralized team and someone invests reliance on those promises.
that token could in fact be considered a security.
And that security-ness effectively attaches to that asset until such time as those promises are kind of fulfilled or abandoned.
And we think this is kind of a nuanced, thoughtful approach to Howie, but it does create real problems for especially the secondary market participants when thinking about these assets.
And so in our comment letter, what we say is, hey, look, That that's, again, like we said, a very smart, educated take.
But as a secondary market participant that deals with hundreds, if not thousands of different crypto assets, how do I know if those promises have been made in the first place or if those promises have been fulfilled?
And it's very difficult for a third party to know.
And so what's crucially important is we know whether that asset is considered by the agencies as security at any given time.
so that if it is, we deal with that out of our regulated securities entities rather than our entities that deal in non-security assets and comply with the securities laws related to those assets, which were, again, going back to the very beginning, everybody wants to comply.
They just want to know how to comply and win.
And so what we've asked for, and I think they're very willing to engage on these type of topics, is that's a thoughtful approach.
But then how do we apply that to the secondary markets?
I think that's the next piece of that specific SEC guidance.
But just to give you a sense that guidance from Project Crypto is not a panacea, but what's still amazing and shouldn't be lost by anybody is an engaged...
agencies that want to work with the industry to figure out these hard questions.
That's more than half the battle.
And that's where we're at now.
So we expect, you know, further engagement and, you know, a lot of these issues, even apps and clarity will be will be worked out to some degree.
Okay, that's encouraging to hear.
The Clarity Act seems like it's actually finally coming to a make or break moment here.
Do you think the Clarity Act is going to pass?
And why?
It's anyone's anyone's guess at this point?
Because it's I mean, this has been well reported, so I'm not going to say necessarily anything breaking new, but I think it comes down to about three or four senators that if they want, and these are Democratic senators, if they wanted to pass this legislation, it would.
They have raised throughout the process, been super engaged and raised some very legitimate concerns.
A lot of the concerns from the Democratic side have made their way into the bill.
This is...
Definitely, while not a fully equally maybe bipartisan bill.
This is a bipartisan bill that is not just kind of a one-sided piece of legislation, as it should be.
Crypto is really a nonpartisan and should be considered a nonpartisan industry.
And we definitely like to think of it as such.
But they have political concerns.
And with Trump and his family's engagement in the crypto industry, it's a political liability.
for some Democrats to engage in this legislation and to push it over the line.
But the reason we kind of retain this optimism is throughout the process, there has been deep commitment and engagement at the staff level to engage in this process.
And they've spent countless man hours on both sides of the aisle.
working on this legislation.
And the truth is, and this is known in DC is, if we don't pass clarity, it's not as if this issue goes away, it just comes back again.
And so, you know, how there's an element of exhaustion on an issue like this, that is often the key to success in DC, that once you beat everything to death for so long, I think ultimately, you reach a level of compromise that both sides can live with and you pass the bill.
And that's where we hope we are here in the month of August, right, going into September.
And we hope the kind of the main issues that is holding back those three or four senators can be addressed.
And if it's not, we come back and fight again.
But our view is as we continue to delay.
is really delaying investment into the United States of America.
So there aren't that many positives that we see for not passing legislation like the Clarity Act, other than we'll have to come back and address it in a different shape or form.
I like the framing of politics in Washington as fighting a battle like a war of attrition.
I think, yeah, it can feel that way sometimes.
Josh, I want to pivot this to kind of broaden the aperture here on the benefits of clarity, because this is not just going to help, you know.
crypto native companies, but there's a broader impact here.
I want to talk about tokenization.
This is something else that GSR has been focused on.
And something you tweeted last week, I think, is a great way into this conversation.
You said on X that low float and high valuation.
delays retail access and it isn't just a crypto problem anymore.
It's becoming a problem in equities markets too.
And you said that tokenization gives us a chance to rethink equities markets with broader ownership and earlier access for the public.
I'd love to hear you elaborate on this for our audience and explain how things like the Clarity Act, tokenization can help benefit not just digital assets, but all assets.
And just explain a little bit of that for our audience.
Yeah, so this is a pretty nuanced topic.
So let's unpack it a bit.
But what...
what was fundamentally kind of becoming an issue and it's still to some extent an issue in the crypto markets is you'd have you'd have early investors in an asset that have privileged investors this is normally you know venture and and um you know other early investors and the team um you would then kind of release a very small amount of that asset um to the public on exchanges so that's the low float right so a large percentage of that those assets stay in private hands and a small is made available to the public, which creates potentially a supply demand valuation.
And it would generate what would maybe would be a higher valuation for those assets flow.
And then, you know, people with the private assets could sell into that higher valuation.
It's not something germane to crypto.
This happens in all markets.
what we're seeing specifically in the US equity markets is something that rhymes a lot like what we've seen in crypto, right?
That if you look at the, I think my tweet related to a chart that my colleague Frank Chaparro posted as well, that I think originally comes from Apollo.
So let's give them the credit on this kind of interesting chart, was that if you've invested in IPOs over the past X period of time, most of those are now trading below their issue price.
And a big reason for that, not the only reason, there's all sorts of market dynamic reasons.
And we don't have all the answers here, but companies are staying private for longer.
Right.
So that's that's that's keeping those assets in private hands, not making them available to the public.
They're then releasing a small fraction of those assets for sale.
So those securities come out in a relatively small percentage vis-a-vis the overall valuation.
of the company and that's giving retail the first access to buy at an extremely high valuation because again you end up and you release into a supply demand valuation then as insiders kind of get unlocked and start releasing their securities into the market you've seen kind of an overall price decay probably to the benefit of long-term holders but maybe to the detriment of of retail or those that are buying once these assets become public.
And so how do we fix this?
It's a big problem.
And I think this is why there's some concern generally about accredited investors rule, retail access to invest in these companies that are really driving the growth of America.
Right.
We're seeing just tremendous growth.
And what the hope is by everyone is that that growth is not being captured only by a select few.
but being captured by the broader investing public to have access to these amazing engines of of innovation and capitalism coming out of america and so with tokenization the hope is that we have more mechanisms to distribute ownership to more buyers at at different levels and so you know just for example if i tokenize my company today You know, I still have to comply with securities law, but it's easier for me to distribute to more investors than it would be had I gone through the traditional route of subscriptions and private shares.
And so as you look to tokenize, that is one of the biggest hopes is it's proven itself as an amazing fundraising mechanism.
I can distribute those assets and attract buyers from a much more geographic and income.
as first pool while still complying with the applicable securities regulations.
We may have things like accredited investor tests, which we also hope is potentially addressed in this overall fix.
But that's the big hope is using tokenizations to find new buyers at earlier points of a company's existence such that you can benefit.
There's a higher risk reward.
in those type of investments, but you have the chance to benefit from the growth of these companies rather than coming in only once they've kind of reached full maturity.
So we'd like to see kind of earlier access across the board and that's crypto and now very specifically equities.
Yeah, and I thought that that framing was really helpful because there are a lot of other problems in the market that digital assets can help with beyond just having this bill just be for crypto.
So I think that's helpful there.
I've heard you say, Josh, that you think we're moving quickly towards a world where all assets are tokenized and everything is on-chain.
On-chain finance kind of becomes finance.
What does that look like?
What do investors need to know about that world as we transition in that direction?
Who are the big winners and losers of that?
And just what are your thoughts on that?
Yeah, and we're not the only ones saying that now.
I saw Vlad from Robinhood was saying the same thing because I think once you see it, you can't unsee it in that, you know, if you were, so, you know, for example, GSR's trading platform is the ability to trade all tokenized assets and we can basically trade assets all over the world simultaneously at amazing speed.
In a way, it would take you the investment to do that in traditional assets would be, you know, many, many multiples.
of that.
So it's a better and more seamless technology for transferring value over the internet.
It's as simple as that.
So as is the same for stable coins being better than sending a bank wire, it's just much easier to transact a stable coin Visa via tokenized security than to buy a share of stock that takes X days to settle.
into your account before you realize the value.
And that's okay.
We've just built new rails.
That doesn't necessarily mean it's going to accrue to one asset.
This is why it's such like a, it's just hilarious when this issue becomes partisan because it's just a different type of database to some extent that works better and is faster and is more internet native.
And so once you see it, you realize, well, we're really just going to tokenize everything.
Because it's a better way, again, to transact on kind of these large amounts, especially and globally, right?
Cross borders, cross financial systems, I think is where you especially see the benefit rather than interest.
Right now, you sign on to your Schwab account, you buy a stock, they front you the value.
It kind of all works.
And so you don't see it, I think, as an everyday.
kind of United States citizens engaging with your stock, you know, as for multinationals and for international transactions, it's just a no brainer that most assets will be tokenized and will be transacting in a wall.
So, you know, I think from a value capture perspective, it's very unclear where the value is going to accrue in that process.
But as we engage, as more wealth comes into the on-chain economy, it's hard not to be long crypto, right?
And to think about crypto as we're going to be building on these rails the foundation for the movement of all value transfer.
And once you have that, the opportunity to build additional on-chain businesses is extremely high.
And so it's kind of taking that forward look as more.
Wealth comes on chain with stable coins.
We're going to be buying and investing in more things on chain.
And then as more of that wealth is generally on chain, more businesses will transact generally on chain and individuals will transact on chain.
And then it's just a whole new ecosystem.
And so it really is a parallel financial system where we've been kind of testing and building the infrastructure for the past 10 plus years.
And it's only really in the past two years where the speed and scale is getting there for, you know, kind of the mass migration of the financial system.
And now we're starting to see that bit by bit.
And we think things like the Clarity Act will be an accelerant to that process.
I really appreciate you framing that.
That's really bullish.
It makes you want to stand up and salute.
I want to get your thoughts on how GSR is preparing for this tokenized world that we're, like you said, we're moving in this direction very quickly with or without the Clarity Act.
Does that change the strategy?
Are you preparing for both scenarios?
And how do you think about the two different outcomes there?
Yeah, it's a core part of how we think about the future and that, you know, we want to be able to provide the same type of services for anything tokenized everywhere.
So the first step in that kind of strategic point and where I spend a lot of my time thinking about is first things first, let's get the regulatory strategy right.
So if we want to engage in assets beyond non-security crypto assets, we need to be regulated in the jurisdictions around the world.
um right so we we're applying for licenses in the uk and then came in and in the united states that we're engaged as we as we discussed and we have an mpi in singapore so first you set the foundation and that's really led by this overall business strategy that we should be able to trade anything tokenized anywhere especially you know gsr with their derivatives capabilities really to engage in everything everywhere and we will continue to uh you know build out the infrastructure necessary to do that and work with our partners to provide that.
So when we back up, we look at where is the value created in quote unquote tokenization.
And we have our own internal view.
You kind of tokenize something, you can use it to raise money, there's secondary liquidity, right?
So where can GSR provide the most value?
We've recently completed an investment, for example, into Libera, which is a standard charter based tokenization company, mostly outside the United States tokenizing.
you know, funds and other security instruments.
And so we want the ability to, you know, help, help, you know, both entrepreneurs, but also funds tokenize assets, and then provide secondary liquidity to those assets and be able to trade them all around the world.
And that's the capabilities we're building for the next phase.
And we think, you know, tokenization is happening with or without.
clarity is not a guardrail because even within the existing rules and especially offshore, again, just so long as you comply with the existing rules, we think it's going to happen.
And what's been announced, for example, in the United States is the SEC separately working on an innovation exemption that would allow you to take tokenized securities and make them potentially more of utility in DeFi.
And so I think that's one of the big unlocks we're going to see is having these assets be more utility, right?
Where you can post them as collateral, you can use them as loans, you can generally transact differently so long as you're in compliance with the obligations.
So again, a forward looking SEC is going to go a long way in helping to unlock a lot of the value around tokenization that I think the whole industry sees now.
Josh, I really appreciate you coming on the Millcroach Show.
I could keep you a lot longer, but we're getting up to time here.
So one final question, where can we send people to find more of you and your work online?
So you can see me at x at joshr underscore gsr or come to gsr's website, gsr.io.
But follow along as we kind of go through this really fun transition in crypto, and we hope to play a big part in it.
Josh, thanks so much for being on the Millcroach Show.
I'm looking forward to catching up with you later down the road as we continue to follow along all this together.
Awesome, John.
Thanks for having me.
Thanks for joining us, everyone.
I hope you all learned something today.
So until next time, stay safe, stay educated, stay bullish, and we will see you all on the next episode of the Milk Road Show.
Thanks for being here, everyone.
Bye.
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