00:00You have a pretty big remit. I just went through kind of everything that you'll be covering.
00:03How do these two roles, the new role that you've added onto your existing role, how do they naturally fit
00:08together?
00:08Yeah, I think there's a lot of synergies. Thanks for asking.
00:11So as we've seen electronification of markets, we've seen new technologies be deployed, cloud computing, AI, APIs.
00:19And likewise, distributed ledger technology presents a new opportunity for us to do things more efficiently.
00:25On the other hand, the strategic investments portfolio and partnering with fintechs I think is going to be a critical
00:30part of the evolution of digital assets.
00:33We know we can't solve for this alone. We need to come to industry standards, converge on models.
00:39And I think that there is an important role for fintechs to play in doing that with us.
00:42I'm curious about the push for this new role. Where did it come from?
00:45Did it come from existing B of A clients asking for the types of products and services that you and
00:51your team plan to develop?
00:52Or is this something that you're building, intending to bring in new money to the firm?
00:57I think about it as continuing to future-proof our businesses, right?
01:03Like we are always looking to modernize financial markets expeditiously and safely.
01:08And this role reflects an increasing interest that we're seeing in financial services and digital assets.
01:13So the one thing that we know, as you said, is we're going to be client-led and platform-focused
01:18in our build and our approach for all of this.
01:20Because, you know, innovation needs to work in all market conditions.
01:23And, you know, we've spent decades building up the trust of our clients through resiliency, through scale, through liquidity provision
01:30in all conditions.
01:31So anything that we're going to touch is going to uphold those same standards.
01:35The fact that you're keeping your old role and taking on this expanded role is not an accident.
01:40Clearly, the firm sees digital assets as an extension of the trading infrastructure that currently exists, not a separate business.
01:46But then you look at, say, J.P. Morgan, it has Connexus as a standalone unit.
01:50Citi also built the digital depository receipts through its security services division.
01:55So I guess the question is, what's the advantage of embedding digital assets inside e-trading rather than having a
02:01standout on its own, standing it up independently as its own unit?
02:05Yeah.
02:05So this is a broader remit across the enterprise.
02:07And as we see use cases emerging across the enterprise and different lines of business, it's important for us to
02:14take a coordinated approach across the firm to do so.
02:17I think, you know, we are, again, going to be use case-driven, client-driven.
02:20Some of the areas that we're seeing, you know, initial promise and interest are in areas like collateral mobility.
02:26There's obviously a sequitur there for the thick e-trading markets.
02:30But, you know, it's not a surprise that we're seeing interest in collateral mobility.
02:34With rates elevated, you know, moving collateral around the globe more efficiently has been, you know, top of mind.
02:40And this is one more way that we can use the technology to do so.
02:44On that technology, one thing we talk about a lot are stable coins.
02:47And I'm just curious about the way you're viewing stable coins versus sort of building joint tokenized deposits.
02:53Bank of America, JP Moore, and Citi, they're said to be building a joint tokenized deposit network that's expected to
02:58go live in the first half of next year.
03:00Is that something you're working on?
03:02Yeah.
03:02So I think the firm is engaged in all of these discussions.
03:05Okay.
03:05So let's say that happens.
03:06If the three largest U.S. banks issue tokenized deposits that move to a shared ledger, that's essentially a private
03:11sector alternative to the Fed's payment rails and to stable coins like USDC.
03:16Does that mean that banks don't necessarily need Tether or need Circle at all?
03:21I think that the digital payment leg for assets is what we need to solve for in the U.S.
03:27And I don't think that there's one solution yet.
03:29We're open-minded, whether it's tokenized deposits, stable coins, or other forms of settlement.
03:34We've also, you know, been an investment initiative around, you know, wholesale deposits at central banks.
03:40I think that payment leg and how it's going to work is still evolving.
03:43So at Bank of America, we're involved in, you know, the clearinghouse initiative around tokenized deposits.
03:48We're also involved with Project Faro, which is around, as you mentioned, regulated stable coins and even more broadly around
03:54Zelle payments.
03:55I think that this ecosystem, the payment leg for the digital asset, is one that the industry is still solving
04:02for.
04:02I don't think that we have one clear-cut answer yet.
04:05And we're remaining open-minded and working on all fronts.
04:07I mean, the technology is certainly evolving, but I wonder, as you look out, what's the single biggest obstacle to
04:14digital assets becoming permanent?
04:16Yeah, that's a great question.
04:18I think that it's not about proving the technology anymore.
04:21I think it's about proving, you know, the benefits and how we're going to scale this.
04:27You know, we need to move away from just thinking about how could we integrate the technology to how we
04:32are really going to explore business benefits.
04:34The complexity of that question is high.
04:37These challenges are new, whether it's thinking about things like, you know, gas fees or 24-7 staffing or, you
04:45know, digital custody.
04:46These are all new questions.
04:48And actually proving the economics for this for different institutions, everyone's going to come up with, you know, their own
04:54math around this.
04:55So I think in terms of getting to where we can scale, and again, going back to the resiliency has
05:00to operate in all environments, you know, that's where I think if some people think that this isn't moving as
05:06fast as it can with larger institutions, I can't overemphasize the complexity of doing this at scale and proving the
05:12commercial benefit.
05:13You've been at B of A since 2018.
05:14You're new to this role specifically or the addition of this role.
05:18We are going to keep in touch.
05:19We hope to have you back here sitting right here in six months.
05:22When we do have you back here in six months, what will you tell us that will prove that what
05:26you're trying to build succeeded?
05:29Well, I'm going to have to think about the percent for the next six months.
05:31Look, I think for us, like I said.
05:33But there have to be some benchmarks or some internal goals.
05:35Yes, I think we're going to start with the foundation and building that platform and making sure that it is
05:41interoperable for any emerging use cases.
05:44We know that this is coming fast and furious to all pockets of the financial sectors, and we need to
05:49make sure that we've built a platform that can adapt quickly.
05:53And I think those will be the benchmarks that we measure ourselves against.
05:57What I see, as a Bank of America customer, what will I see?
06:03Different, anything different.
06:05I don't have a couple of days into this role, so I don't have a crystal ball on what you're
06:08going to see in six months.
06:09What I can tell you is that we are firing on all cylinders around deploying, building a stable platform, and
06:15really starting from the center out.
06:17We talked about some of these themes around digital collateral, digital cash, and building out from there.
06:22Because I think once you have some of these building blocks in place, all the different things that you might
06:27put on top of that platform will become easier and easier.
06:30So that's our focus.
06:31And that's what he's going to end up seeing at some point.
06:32Yes.
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