Hello everybody and welcome to the latest edition of C&F Talks. It's my pleasure to have with me today John Patrick Mullin who's the CEO and Co-founder of MANTRA and John Patrick's going to be speaking at the Tokenisation Summit on the 21st of November in London. John, welcome.

Thank you so much, really excited to be here and definitely looking forward to London. Maybe not so much the weather in November though, that's okay.

It's great to have you with us.

Let's start with perhaps a bit of a background check on the potential for this market. I mean, there's a lot of discussion about tokenisation generally and tokenisation of real-world assets. What's the limit in this? What's the scope of real-world assets that can be tokenised?

It's a great question. I mean, I think depending on your time frame, almost limitless. I mean, this is really a multi-trillion-dollar opportunity. I think major consulting firms, McKinsey, BCG have put a report projecting upwards of $16 trillion of assets on chain by 2030, as low as $2 trillion.

Yeah, fantastic.

But what are the real advantages of tokenising these assets and why is it superior to how things are now?

Yeah, so there's a number of reasons and it will depend a little bit on the asset class, but generally speaking, I think this idea of access is an important one. So, I use the example of myself. I'm a middle class, white American from the Midwest and I live in Hong Kong. I've been in crypto for a long time. A lot of my net worth is in digital assets. I live on chain, so to speak.

For me to be able to participate in the equity markets in the US, which obviously is a given if you're an American, for most people at least, I would have to go from my crypto wallet to my exchange account to my bank account to a brokerage, which is multiple steps and that's a painful process. Fees, tax, time, and that's for me in my privileged position. But if you think about someone in Southeast Asia or Latin America or Africa who has no access to these type of things, who has maybe a currency that's devaluating every other day, they'd much rather hold a tokenised treasury or even just a tokenised US dollar than their local currency.

So, this idea of being able to use blockchain technology to give that trustable access to different types of products on chain is really important. Fractionalisation or just reducing the ownership stakes required to access these markets is also very important. You might not be able to buy a tokenised money- sorry, a money market fund from BlackRock because the minimum ticket is 5 million.

Even for wealthy individuals, that's a lot, but you could take maybe 100k or 50k or 5k, which really does lower the barriers to entry for participants. I think the third one that a lot of people talk about is this idea of potential global liquidity. It's definitely not there yet because this is still a nascent market. We're still bringing things onchain. We're still figuring out regulatory landscapes, regimes, etc., and creating secondary market venues for these things to trade. But imagine having an international global stock exchange, is the, you know, idea.

The potential sounds absolutely enormous for so many different types of assets. I think the fractionalisation point is key.

You mentioned money market funds, private equity commitments, very much an area where retail investors can't get so much involved, but through tokenisation, I guess they could. Whilst all of this sounds fantastic and it sounds like a brave new world, what are the main challenges to getting it going properly?

A number of them. I think there's still technical limitations, although that's improving day in, day out. There's regulatory challenges. I think that's probably one of the biggest. Every country has a little bit of a different spin on things.

Every country has their own regulator. There doesn't seem to be really a global alignment on how these things should operate. One country might say this is a security, one country says this is a commodity, one country says this is a token. That's a very big challenge.

When you're talking about real world assets, you are thinking of these things almost asset class by asset class, country by country, jurisdiction by jurisdiction. That's a global remit and that makes it a unique regulatory challenge from that regard.

You also just have, in certain places, regulators don't like anything tokenised or anything crypto, and they just assume that token means crypto and not necessarily maybe even tokenised security, so it could follow securities rules. There's that part. I think third, another challenge is honestly education and getting people to understand exactly what they're engaging with.

Part of that is also improving the end user experience to be able to transact these things, because for many people, it's still very complex. Dealing with things onchain or in tokenised form does require a little bit more of a lift than just going on your Robinhood account or Revolut and just clicking some buttons on your phone. We're working towards that web2 experience, but it's going to take some time.

I think you're right. It's education and getting people to understand precisely what it is. The fact that you're not talking about crypto, you're talking about the use of blockchain and getting people to understand that there is a distinction to be made there.

Turning to your own business, tell us a little bit about Mantra. How do you position Mantra within this emerging market straight technology?

Absolutely. MANTRA is building both the protocol for asset tokenisation as well as a secondary market trading venue.

The protocol itself is a layer one blockchain solution. It means we have a sovereign validator set that transacts and validates blocks and transactions on its chain. We really want to be the protocol or the layer for provenance of real-world assets onchain.

They can go engage in other blockchains, other ecosystems, other applications, other places, but we want them to ideally start and have provenance with us. If we become that layer of settlement or layer of recognition of where these things come from, it becomes a really big opportunity for us. Then again, it can be proliferated into other ecosystems, other venues, other places around the world.

That's really our goal at the moment to be that layer of recognition for all the settlement of these real-world assets.

And so, would you describe, you're part of the infrastructure that will facilitate the tokenisation. I guess your customers are institution investors, developers of apps?

We kind of have a B2B2C model, I would say. It's a little bit all of the above, which makes it a little bit interesting. It's funny, some of my investors say that one of the reasons that, I think I'm good at my job is because I can talk to the crypto degens, with the NFTs and the monkey faces and all this kind of stuff in one instance.

Then I can go, I don't really wear a suit that often, but I can go and talk to the institutional investors of the world and be able to really communicate with both sides of this equation, which is honestly incredibly important because in today's market, today's market of these things from a permissionless blockchain perspective are crypto native users. They're not really wanting to know too much about the suits and wanting to know too much about TradFi as we call it. At the same time, where the capital is, where the money is, where the regulators are, it's a very different paradigm. You need to be able to speak the language too.

I guess it's a matter of uniting those two different cultures, isn't it? In order to make it all work really well. We've run out of time, which is a pity because this is a really interesting subject.

For our viewers, very much hope you'll be able to join us in person at the Tokenisation Summit in London on the 21st of November. If you can't join us in person, you can watch it virtually. More information at the City & Financial Global website.

John Patrick, thank you so much for sharing those views with us today.

Thank you. I appreciate it.