People in crypto talk about tokenization like it's going to happen in the distant future. But Haider Rafique from OKX says it's coming a lot faster than people think. In this discussion, we get into why the old financial system may be on borrowed time.
Look, there's enough case studies on when companies don't innovate. They don't welcome change. They get obsolete. You just look at the streaming business or Blockbuster is a great example of it.
Why OKX partnering with ICE, the owner of the New York Stock Exchange, could be one of the clearest signs yet that Wall Street and crypto are about to collide. And why the next phase of markets may be about bringing stocks, futures, and everything else on chain, making them tradable 24/7 around the world. We also talk about how AI agents could soon be managing portfolios, moving money, and building financial apps with almost no human input.
We're probably going to launch a new AI or agentic product almost if not every week, you know, every two or three weeks. Most of the company's going to end up running with the agentic tools with people monitoring these tools.
And through all of that, one huge question hangs over the entire conversation. If everything becomes tokenized, programmable, and always on, where does Bitcoin fit? This one is a deep look at the future of finance, AI, tokenized equities, crypto regulation, and the next evolution of global markets.
What do you make of this market? It's been mayhem.
I don't know either. Usually have like strong conviction and idea of where things are going and even myself I could see anything happening at this point.
It's true. It reminds me a little bit of the COVID days when there was a bit more fear in the market but that didn't last too long during COVID. I feel like this may last a little longer.
Yeah, I mean I think markets in general are exceptionally confusing. There was a couple weeks ago when the S&P was at an all-time high and the fear and greed index on stocks was like a four. It's like the most fearful the market had ever been, but with it at an all-time high and I think that pretty much sums it all up. But I mean everything's trading like a risk asset now.
Oil, gold, silver, they're all just meme stocks.
It might as well. Okay. So speaking of meme stocks then obviously you guys presumably have a roadmap that's going to be tokenizing and trading everything right. So OKX obviously has been at the forefront of all those kind of products and you're making a move in the United States. So what kind of behavior are you seeing I guess on the exchange that would give us more information on what people are looking to trade and how the market's behaving?
You know, it's fascinating the parallels of when every crypto exchange is sort of on the same trajectory, so to speak. Everyone's trying to build the everything app. And it started with the super app concept a few years ago. I think you and I were talking about it. I think we were in Singapore. And you fast forward to today and I think when you look at the top five exchanges, everyone seems to have the same strategy which is around two main things as we see a backdrop of market softening in crypto. One is the idea of tokenization and the other is AI tools and how agentic AI can add more value to the services we provide customers. I think on OKX we're of course pursuing both. You probably saw the announcement. We didn't say much about tokenized assets before this announcement because the reality is we were working on this and it was too premature to say anything because it really determines the strategy of the company. How do we build this out? Do we build it out in the synthetic form that a lot of other companies are doing it or do we focus on issuer-based tokenized assets? And naturally, I think you know a lot about our company, we tend to build native technology and our preference has always been if we're going to add tokenized assets, at least the majority of it should be issuer-based. We may have cases or use cases where we choose to have sort of the synthetic version of an asset but the preference is always issuer-based token.
I don't want to take for granted that everybody understands what that means. Can you just like give the brief TL;DR and what the difference would be there?
I think the layman explanation for issuer-based is when there, if you look at the SEC definition and don't quote me, I think this is my understanding which is to be an issuer-based token or tokenized asset it either needs to be issued by one of the exchanges so let's say for example NY or NASDAQ or it needs to be directly from the company that issues the stock, but that requires them to have their own distributed ledger and then issue that tokenized security, which you're likely not going to see that behavior for some time until exchanges adapt this technology and there's consumer interest and then I think there could be an argument that some brands would probably want to take on that innovation and distribute that value back that they, you know, don't have to pay to the exchanges back to their holders in forms of dividends or what have you. But that's issuer-based which is either it's issued by the exchange which is the listing venue or it's issued by the company that issues the equity in the first place.
Yeah, that makes perfect sense. So where are you on the path to offering everything?
Well, look, I think there are plans of us launching tokenized equities, tokenized perps, tokenized futures in the United States, in Europe, in the markets where we are regulated or self-regulated markets. So, it's going to be a combination of some markets getting sort of the non-issuer-based asset, but our majority of our engineering efforts are going to be focused on unlocking the US market and the European market where our preference is of course we can distribute native tokens in these markets and have a direct consumer relationship so to speak.
Right? So when you talk about the exchange issuing these tokenized equities, you guys just did a massive partnership obviously that was news last week which was an investment from Intercontinental Exchange. They get a board seat to my understanding and you're effectively plugged in now to the company that owns the New York Stock Exchange, right? So is that part of the strategic vision of doing a deal like that?
Absolutely. It took us, you know, any deal takes time and we've been at this for a good bit. I think it dates back to last year, at least as early as, you know, when we started talking to them in the summer. So I'm glad we got it done, number one, because can you imagine doing a deal like this in the conditions of the market that we're living today? So I'm very happy that it's completed and now the hard work is the two technical teams are getting together and we're figuring out how to build this product the right way and how to seek the regulatory approvals required and then not just offer this technology on the OKX app but also make this technology available for other participants to access. So we're not going to, you know, guard rail it. I think the idea will be we let it be open and let others use that technology.
So collectively you're building a way to issue these tokenized equities and then for them to be tradable on multiple platforms.
100%. And not just tradable but imagine tomorrow there's an IPO. Well in today's world for you to access that equity you'd go on your Fidelity account or your Charles Schwab account or so on and so forth. But you're not going to see that equity immediately make it to crypto platforms unless they're issuer-based platforms. In this case, when we complete our product, what's going to happen is you see an IPO, the company gets listed, you open up your OKX app, and the idea is that you have that stock available for you to trade just like you would on Fidelity or other brokers. There is a key difference though. On our platform it will be tradable 24/5 or 24/7 minus one hour for maintenance or what have you. And it will be accessible globally in the markets where local laws allow us to distribute this product. So that's the core difference is you're getting instant access and you're getting always-on access.
I don't really understand how the existing system survives. I know that's hyperbolic and I'm a crypto guy, but every part of this is a better way to do business.
It is. And it's interesting you bring that up because I always debate in my own mind the different generations of investors and you look at our age group. Perhaps we got into 30 or 30 in our age group, you know, we discovered the world of investments through perhaps like you and I got a 401k account with our first or second employer and then you create an account with a brokerage, you know, platform and now you have access to the equities market and maybe you're learning about certain companies and you start, you know, adding up positions and in our generation that was the way in. And then the crypto wave came in and we adopted crypto. When you look at people who are younger than us, their first investment experience actually happened on a crypto platform, whether it was a wallet or whether it was an exchange app. And so for them, they're actually used to and grew up in this concept of 24/7. I can trade this thing anytime I want, anywhere I want. So for them, when they experience, when they welcome equities they're going to want the same access that they're used to on crypto.
I keep asking my hedge fund friends about what happens when they're forced 24/7 365 or 24/5 and they can't even fathom the idea of their companies having to do that. I'm talking about friends at Citadel and Millennium and the biggest shops in the world. How do these guys who are used to being in the Hamptons all summer and taking weekends off and they're done with work before five o'clock, how does a company adjust to having to be present 24/7, 365?
I think I speculate that there's going to be a lot of consolidation in the market, whether it's led by partnerships or whether it's acquisition-led, but you're going to see a lot of trade companies partner up with crypto companies because that's the best path forward for them. Look, there's enough case studies on when companies don't innovate, they don't welcome change, they get obsolete. You just look at the streaming business or, you know, Blockbuster is a great example of it. So, I don't think we're going to see the Blockbuster-like moments here. Whether it's brokerage platforms or banks, I think these institutes are quite smart and they're going to make their plays and crypto companies need them as much as they need the crypto companies, I would argue. And your point of what happens to the brokerage platforms I think they're absolutely going to be in the game and they're going to have these services. The reality is they have trust that arguably crypto companies don't. Crypto companies have the tech but not the trust and not at least at the same level as the brokerage platform. So I think there's a bit of give and take here and the consolidation is good for the consumer.
Doesn't that make the approach that you've taken with ICE the superior approach? Because we know if you accept that they're not going anywhere, Schwab or, you know, Morgan Stanley, any of them, but that they're going to want to avoid being Blockbuster to Netflix coming in, that means they're going to have to adopt the superior technology and put everything on those rails, and they'd rather probably do that in a partnership to keep up rather than try to do it themselves.
Look, I have a huge amount of respect for ICE and NYSE folks. They are quite advanced. Before us they invested in Polymarket. They've made other bets. So I think they embrace this technology. They understand it. I think they will be ahead of others. So, I really do think that a lot of folks in TradFi are thinking about this and they understand that the younger people want this technology. So, depending on who shows up first or who gets the product out first, I think in five years, you're going to see a lot of cross-pollination and you're going to see a merging of crypto companies with trade companies.
Yeah, that's exactly the path. But you're the first ones I'm seeing really do that because there's even a corollary I think in stablecoins, right? So you see you have obviously native stablecoin issuers and then you have every bank now post-Genius saying we need a stablecoin plan. Some are trying to create their own but most of them now seem to realize that that's reinventing the wheel and they should just partner with somebody right and either like white label their own private stablecoin. So like it just that seems like the same kind of multiple paths that everyone's going to have to choose.
It's very true. I think crypto needs a little bit of a cleanup. I've had that point of view for a while. It's the reason why we created this piece of content called the Mile West. So if you look at the markets today, the public markets, you have like less than a dozen companies, crypto companies that went public. This is no dig to anyone that went public but the reality is I don't see a lot of shareholder value being returned. Maybe one company out of all of them has had a decent run in the last earnings but you look at majority of the basket and they're sitting in the red from the time they actually went public and I don't think that's a good thing for the category. When any company goes public in our category it's our responsibility back to their shareholders whether it's in institutions or retail that we return shareholder value. So when you have a market of crypto companies that haven't returned that value, what do you think happens? Doesn't it create even a bigger opportunity for these crypto companies to either get acquired or partner with TradFi? Because a consumer doesn't want two or three applications. They think of markets as a singular whether it's gold, silver, commodities, cryptos, equities. And so this convergence of trade and crypto is inevitable. Some companies may resist it. Some companies might continue to fight for their independence. But I think what's better for the category is sort of the convergence. And perhaps that's just my point of view.
Yeah, I was making the argument last year when people were so frustrated that tokens weren't moving like crypto, altcoins, that we basically had alt season that just happened in the stock market instead of in crypto. And you can see it's like the, you know, the joke Burj Khalifa pattern on the chart where it's straight up one side and straight down the other side of the Christmas tree, whichever one. But that basically happened to every one of those that issued and then every treasury company. So basically anywhere that people went to get exposure to crypto in the market or by and large they ended up doing the same thing that they did participating in an ICO or a pre-sale which is buying the top and then watching it bleed.
There's the good and bad here. The bad is we call it the alt markets but another way to look at it from my vantage point is penny stocks. You know you look at a lot of those speculation in the equities markets and it's typically in the penny stock space is the pharmaceutical companies getting FDA approval, their stock shooting up and then sort of going down. So you saw a lot of that happen in the crypto markets. We issued a lot of tokens. There was a time when I think in crypto markets you were seeing 3,000 plus tokens published every single day or listed every, not listed but concepted or created every day. The good on the other side is the platforms whether it's the exchanges, the networks meaning the chains or the governance or tokenomics everything got stress tested through this process of pushing so much volume of newly created tokens out there in market. So there is the bad side which is I think these are penny stocks and most of them don't have long-term value and they go to zero which is not good for the consumer not good for the market not good for the category but the good is that we did develop a lot of great tech on the back of it and that tech is now going to be commoditized. It's going to be used by trade to then tokenize everything else in the world. And we now know how to do that because we know how to stress test the systems and what works, what doesn't work.
Yeah. I always kind of ask myself when we see that at its full potential. Obviously, all of this commoditized, all these blockchains being used, whether private or public, and everything's tokenized, whether that's captured in some way by institutions in Wall Street and uninvestable by individuals or whether there's going to be a way for individuals still to participate.
You know when it comes to tokenization I think 5 years from now we can assume that most assets are inevitably going to get tokenized. I definitely see that future and I think the backbone of that tech is going to be one we developed over the last like five six years.
Yeah, I agree. It just makes me wonder if the things we've already seen it. So I think stocks obviously having crypto adjacent stocks moved a lot of the liquidity out of crypto. Prediction markets have moved a ton because if we're being honest that most people are just gambling. They can go gamble on the weather tomorrow. They don't need a memecoin.
Right. And they can do it pretty much 24/7 365 anywhere. And now people are going to be able to trade everything else just like they trade crypto. So you got to wonder where the bid comes for or maybe now we just have a real return to utility and some of those the few that actually deserve it.
Yeah. Actually rise and we start creating our own indexes of, you know, great basket of crypto assets that have long-term value.
Yeah, I think that's exactly where it heads.
Yeah. Now the equity side is interesting because you look at the global equities market or actually you look at the US equities market which is the dominating one. I think don't quote me but in 2025 the market was valued between 60 to 70 trillion. About 18 trillion of that is foreign investors. But the reality is to access US equities outside of the United States is extremely difficult. You can be in UK, you have access to it. However, the challenge is UK is a different time zone. So, you really got to play with time zones to make sure you know if you're trying to place a trade after markets for anyone who's not a sophisticated investor is unable to do it. And then when you go to different time zones like Brazil or APAC, what have you, it becomes even more cumbersome.
The value of tokenized equities to the United States is I believe it opens up the US stock market to the rest of the world. And if you've got 16 to 18 trillion of volume being done by foreign investors, I think you see that jump over a period of time because the reality is when American innovation becomes accessible in public markets and you price them in public markets, there's a whole world out there that is looking to access those assets and they currently don't have access to it. So I would argue tokenized assets bring a complete new inflow of money and investments into the US stock market and I think that's great for American economy. It's a great unlock for us and I really think our government should continue to support it because it's going to be great for everyday Americans.
I want to talk about that in a minute. I guess the progress of clarity and how you see that legislation sort of pushing forward. But on the regulatory side, obviously we have Atkins at the SEC pushing project crypto. And he made a comment a couple months ago that he effectively thought everything would be tokenized by the end of 2026. And that sounded insane. Just so people don't think we're insane for having this vision. And then the DTCC, which clears four quadrillion in volume a year. I mean, I think four or seven. It's something insane. Basically the entire stock market got a no action letter from the SEC and then made the announcement that with Canton network and then future other networks they're going to be looking to tokenize everything and basically go to T plus zero or less settlement. So we're not crazy talking about that. This is inevitable.
I don't think it's a crazy idea that by the end of 2026 we don't see most assets trending in that direction. Now of course the regulatory side still needs to mature and we need to get there. We need to get approvals to be able to do this at scale but once it begins then it's just a matter of adding additional assets. I think it starts with equities and futures and what have you and then you see the snowball effect so to speak. So, I have to imagine it's great for the American economy and I think it's great for American investors because they're now going to have this demand that we historically couldn't unlock and now we can unlock it.
So, I would have to imagine that the deal that you just got done would have been much more difficult in the previous regime than now. Is that fair to say?
Okay. No comment. But you were able to get it done now and you're getting it done in a time when we still don't have complete legislative clarity, no pun intended, right? So we're everybody's eyes on the Clarity Act. We know that the regulator is going to be favorable for the next two and a half or three years, but we still need something on the books, I think, to make sure that we don't see the pendulum swing back the other way in the future, right? So how do you handicap that when you're building in the United States?
Well, first off, I think for any policy maker listening to this, I think they've really gotten close to a lot of the companies in our category over the last, you know, one-year period and I hope that every policy maker sees that what these companies are not trying to do is break the law. What they're trying to do is focus on the tech and the access to people. So, I really do think regardless of which side of the aisle you're on, this is in the interest of our, this is a national interest for us and we should support it. And I hope that Democrats are going to continue to support it. The Republican side is going to continue to support it. And yeah, but I mean it's ridiculous that it's even a political issue.
And I think it's really important that we continue to keep all the innovation in the United States. We have to maintain that environment. Why do people feel compelled, founders, investors, feel compelled that they want to come and start one of the greatest products in the world here in the United States because we have the right environment. We have the right capital markets to be able to do this. And I think it's in our national interest to make sure that that continues to be the case because capital is now democratized. 10 years ago, 15 years ago, you needed to be in Silicon Valley to raise money to start a startup. That is not the case anymore. You can raise money in Singapore. You can raise money in Hong Kong. You can raise money in Dubai and Abu Dhabi. You can raise money in parts of Europe. So I think we have real competition and with AI coming in knowledge is getting commoditized skills are getting commoditized. So it really begs the question how do we protect our national interest and how do we make sure that the incredible founders continue to find our country as the place where they want to establish themselves and create these great innovations.
I want to move it on to AI next, but just curious, not non-specific, but do you think that companies right now have to have like two plans like a clarity gets passed plan or a clarity does not get passed plan or do you think everybody's just full steam ahead and hoping for the best?
Look, clarity does, no pun intended, clarity does have a lot of sort of resolution on market structure at many levels. Now, I really hope that clarity is going to pass and we should talk about that. But if clarity did not pass does not mean that crypto companies are suddenly going to have to shut their business in the United States. State laws support crypto companies. And I think we can continue with state level MTLS and offer these services. But naturally, if we want to sit with the big boys and big girls on Wall Street, the market structure bill is what's going to allow that convergence to happen.
Okay. So you let's talk about it, right? Clarity specifically why it's so important that gets done.
I think you know this that I always say a deal is better than no deal. It's the most important thing because when you have something in front of you, I always believe you should take it because the world is quite uncertain. I don't think Brian Armstrong or Coinbase anticipated then that fighting for crypto people at the time on staking rewards against banks would have jeopardized the bill. I don't think they intended for that to happen, but no one can predict a global conflict. And I think now that's a great example of why you should take what you have in front of you and then work on amendments, then work on modifying the bill and optimizing it over a period of time. So none of us in the industry disagree with the stance Brian took, but I don't know if we needed to die on that hill, and I hope we haven't. I hope there's a compromise. I hope we see this bill passed before midterms because it is really important for everyday Americans.
Well, I was going to say Patrick Witt at the White House had a great tweet at one point. It was right after Brian Armstrong made the, you know, no bill is better than a bad bill comment. And he basically said the same thing you're saying and added, in addition, if we have regime change, we get a Clarity Act written by the anti-crypto army rather than crypto supporters. So, it's not even binary. It's not like this clarity or no clarity. It could be some terrible legislation in the future from an unfriendly regime.
Yeah. And there are things that are out of our day-to-day control. And like I said, hindsight is 20/20. Let's move on. Let's work all of us work really hard to push this bill through. I commend Brian and Coinbase. They've put in a great effort. And you know, who knows, maybe their resistance to accept the bill as it sat back then may end up in a great place in terms of rewards for consumers and all crypto companies in the United States being able to offer the right services to people. Now I also think when I think about banks, I think they're, I don't understand why they're resisting giving rewards to people because they should be in this game. I want to see a JP Morgan coin. I want to see a Bank of America coin. I want to see a Wells Fargo coin. And I want it to have really competitive yield products. Today, if I have money in my, you know, I have my primary bank, if I put it in a money market account, I barely get any value back. If I put it in a CD, I might get single digits, lower single digits, but then there's a lockup period and I can't do anything with that asset once it's in that lockup period, right? Because I'll have to off-ramp from it and then I'll have to...
reinvest it into or move it into a position or in the markets. That's not a great experience. That's very archaic. So can you imagine when Bank of America customers or any of the banks that we have here, federal banks or local banks, when they're able to offer that yield product using this great technology, using blockchain settlement and its efficiency, and taking that value and giving it back to the people. Can you imagine the sort of retention they will experience in their institutions? They already have the trust to some degree. I think some of them lost the trust along the journey, but I think that should be intriguing for them and they should be developing this technology, not fighting it.
Well, they're never going to give people the same yield that a stablecoin is going to because it cuts into their bottom line and they're obviously, like we all understand, fractional reserve banking and they make their money on giving you less than they can lend it out for. But maybe there's a happy medium where actually because of volume and the amount of business they would bring in by even offering one and a half or 2% or something much better than they do, that they could thread that needle and actually win this battle.
Well, Scott, I think you're right, but think about it this way. In our generation, banks might succeed with that idea and they might resist it, but how are they going to do this with younger people?
Yeah, you have self-custody wallets which I call, you know, banking software on your computer, right? Be your own bank. You and I know that for many, many years now. So fine, they can resist this change for 5 years, for 10 years. What happens after the boomers die? That's what happens.
And the young people, they're going to go be policy makers. They're going to be working at these future banks. They're going to be working at the future fintech companies and they're going to end up evolving the entire industry and the consumer experience. So, I think the smart thing to do for banks is stop being dinosaurs, adopt it and be competitive and show up at the baseball field and, you know, swing the bat.
Yeah. Instead, they're trying to get the entire game shut down.
