Episode 92: Simplifying Finance: Tokenization’s Role in Modernizing Markets with Archax & Blue Tractor
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Today's podcast features a discussion on tokenization with Terence Norman from Blue Tractor and Graham Rodford from Archax, hosted by Johnny Fry.
Archax is a UK-based regulated digital securities exchange. Graham's journey started in asset management and led him to crypto in 2013. By 2020, Archax became the UK's first regulated digital securities exchange custodian, allowing them to operate in both crypto and securities. They have been developing their platform for six years and are now at a stage where they believe the world recognizes the value of moving assets on-chain. Graham mentions their efforts to set up a European hub in the Netherlands post-Brexit, highlighting the region’s strong regulatory environment and the establishment of their European operations there.
Blue Tractor offers a unique ETF structure that protects the manager’s investment and trading strategies, distinguishing it from fully transparent ETFs. A fun fact from the episode is that the name "Blue Tractor" has an interesting origin, inspired by Terry’s experience on a small farm in Essex, England, where the initial ideas for their structure were conceived while he was on his blue tractor.
The focus of this episode is on the practical aspects of tokenization and its relevance. Graham describes tokenization as the process of recording ownership on a blockchain or distributed ledger technology (DLT). He explains that tokenization streamlines the tracking of ownership for various assets like shares, cars, or houses, which can traditionally be recorded on paper, spreadsheets, or databases.
Terry highlights the benefits of tokenizing actively managed mutual funds. He explains that ETFs already have a form of tokenization as each share represents a portion of the underlying portfolio. However, tokenization can bring additional benefits like intraday liquidity and lower trading costs.
Participants:
Jonny Fry: https://www.linkedin.com/in/jonnyfry/
Graham Rodford: https://www.linkedin.com/in/graham-rodford/
Terence Norman: https://www.linkedin.com/in/terence-norman-4bab73197/
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