Digital Assets: A Global Perspective

Blockchain Leaders Insights Podcast

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In this episode of “Blockchain Leaders Insights,” we take you on an intriguing journey through the interwoven paths of finance and technology, exploring the burgeoning landscape where traditional banking collides with the disruptive forces of blockchain and digital assets.

In this episode, Lory Kehoe, Chair of Blockchain Ireland  meets with a remarkable figure in the financial industry, Caroline Butler, the Global Head of Digital Assets at BNY Mellon. With an impressive $48 trillion in assets under custody, BNY Mellon stands as a colossus in the banking sector, marrying its historic legacy with a bold stride towards the future of digital finance. Caroline’s own story mirrors this blend of heritage and innovation—a journey from the rustic charm of Tipperary, Ireland, to the dizzying heights of Wall Street.

Caroline shares her personal and professional evolution, the transformative power of the travel spirit, and how her roots in the Celtic Tiger era of Ireland served as a springboard into the global financial industry. Her narrative is not just about personal growth but is emblematic of the broader evolution of financial services—a sector that is currently at the cusp of a digital revolution.

This episode delves deep into how BNY Mellon, a venerable institution founded by the visionary Alexander Hamilton, is not just keeping pace with but actively shaping the future of banking in the age of blockchain. We navigate through the bank’s innovative strategies, its approach to custody and safekeeping of digital assets, and the broader implications of digital asset management on global financial systems.

Caroline’s insights provide a rare look into the inner workings of a major bank’s pivot towards digital asset integration and the challenges and opportunities this presents. From the significance of tokenization and its impact on investor accessibility to the role of digital cash in accelerating financial transactions, we cover a spectrum of topics that underline the seismic shift occurring in the financial world.

Join us as we explore how the oldest bank in the United States is not just witnessing but actively participating in the rewriting of financial history through technology. We’ll uncover the synergy between innovation and trust, the importance of regulatory harmony, and the potential for Ireland to emerge as a global blockchain nexus.


Caroline Butler

Caroline Butler

Global Head of Digital Assets, BNY Mellon


Lory Kehoe

Lory Kehoe

Chair of Blockchain Ireland

Key Insights

  • Legacy Meets Innovation at BNY Mellon. With Caroline’s insights, we learn about BNY Mellon’s storied 240-year history of pioneering work, now managing an immense $48 trillion in assets while simultaneously spearheading the integration of blockchain technologies.
  • Digital Assets Leadership. Caroline’s role at BNY Mellon is a prime example of leadership in action, melding the security of traditional finance with the innovation of digital assets through blockchain technology.
  • Institutional Acceptance of Digital Assets. The SEC’s approval of spot Bitcoin ETFs signifies a watershed moment for digital assets, showcasing BNY Mellon’s adaptability as they service a significant share of these ETFs.
  • Europe’s Collaborative Regulatory Approach. Caroline applauds Europe’s collaborative and flexible approach to digital asset regulation, highlighting recent advancements in the UK and setting a precedent for regulatory frameworks worldwide.
  • Strategic Partnerships and Innovation. BNY Mellon’s engagement with startups and niche innovators illustrates a commitment to integrating cutting-edge technologies and enhancing overall financial service offerings.
  • Shaping Digital Asset Regulation. As chair of the CFTC GMAC Digital Assets Subcommittee, Caroline’s role underlines BNY Mellon’s proactive stance in influencing digital asset regulation and contributing to educational efforts.
  • The Transformative Power of Tokenisation. Tokenisation is poised to revolutionize the accessibility and distribution of assets, potentially simplifying complex investments like money market funds for the average investor.
  • The Future Paved by Digital Cash. The emergence of various forms of digital cash, such as CBDCs, stablecoins, and bank deposit tokens, represents the foundational elements that will enable the future of streamlined financial transactions.
  • Ireland’s Blockchain Hub Potential. Ireland is primed to become a leading force in the blockchain industry, with Caroline highlighting the country’s innovative spirit and technological legacy, coupled with the need for investment and unity in action.
  • BNY Mellon’s 2024 Digital Asset Vision. Looking into the future, BNY Mellon’s roadmap for 2024 focuses on leveraging tokenization for enhancing fund distribution and integrating digital cash solutions for a more interconnected financial system.
  • Ecosystem Interoperability. Interoperability is redefined in Caroline’s dialogue, extending beyond technology to encapsulate a collaborative financial ecosystem where all players work harmoniously towards shared objectives.


Today’s insightful conversation with Caroline Butler has shed light on the significant strides being made in the blockchain and digital assets arena by BNY Mellon. The discussion highlighted the importance of tokenisation, the evolving role of digital cash, and the crucial need for interoperability within the ecosystem. Caroline’s journey and perspective underscore Ireland’s potential to become a global leader in blockchain technology. As we move forward, watching the development of these technologies and the regulatory frameworks surrounding them will be fascinating. Ireland’s collaborative approach and innovative spirit are poised to make a substantial impact on the future of finance.

For more detailed insights and future discussions, follow our podcast series for the latest in blockchain thought leadership.

Today's Guest: Caroline Butler, Global Head of Digital Assets, BNY Mellon

Since joining BNY Mellon in 2020, Ms. Butler has driven innovation through new capabilities and collaborations with leading financial technology platform partners. Most recently, as CEO of Custody Services, she spearheaded the development of BNY Mellon’s integrated digital custody and administration platform for traditional and digital assets, which went live in the U.S. for select institutional clients in October.

Connect with Caroline on LinkedIn
Learn more about BNY Mellon
Connect with the Central Bank of Ireland on LinkedIn

[00:00] Podcast title introduction

[00:13] Lory: Hello and welcome to Blockchain Leaders Insights brought to you by Blockchain Ireland. My name is Lory Kehoe, Chair of Blockchain Ireland. Over the past few episodes, we’ve been meeting with people from right across the ecosystem who are helping to shape, build and grow the blockchain, crypto and Web3 ecosystem here in Ireland. Today is no different. We’re meeting a global leader who works for one of the world’s oldest banks, who works for one of the world’s biggest banks and has 48 trillion assets under custody and is an absolute incredible case of Tipperary to Wall Street. Today, we’re joined by Ms. Caroline Butler, who is the Global Head of Digital Assets with BNY Mellon. Caroline, you’re very welcome.

[00:57] Caroline: Thank you. I’m delighted to be here.

[00:59] Lory: So look, jumping straight into this. So from Tipperary to Wall Street, we’d love to hear a little bit about that journey.

[01:08] Caroline: You’d be surprised how many Tipperary to Wall Street people we have in Bank of New York, Mellon. So it’s not that uncommon. I did grow up in Ireland. I did what most people did back in the day, took a one-way ticket, found that travel spirit, went all the way to Australia. I was fortunate enough to be sort of birthed into the Celtic Tiger era. So finding a job was never something that I was too worried about. So I went traveling first, got that travel bug, spent a number of years in Australia, Singapore, Hong Kong, Tokyo, started kind of coming closer back to Ireland via the US and stayed there for what was supposed to be two years. And I’m not giving you the number of years later, but still there. It was a sort of fascinating, I would say tumbleweed of experience where I really got into the funds industry here first, which makes natural sense just given Ireland’s forte in that space, and then started building up my expertise more in credit and then into equities. I think this is where I started to get into the market is global. How do you actually start to really put your footprint on it, even if you come from a smaller market. I think particularly the Irish psyche is how do you keep looking at different possibilities in a wider way. So I started of getting really interested in markets in particular and then in technology and how technology can disrupt markets. At some point I sort of stopped travelling around the world and got a real job and started really focusing on my career. I was in JP Morgan for 18 years and then came over to Bank of New York about three and a half years ago to run custody for Bank of New York. And as most people probably know, Bank of New York is the world’s largest custodian. We manage about $47 trillion of assets for clients. So really starting to move from the millions to the billions to the trillions. So relevance in the capital markets ecosystem was a real attraction for me.

[03:08] Lory: And for people who aren’t familiar with BNY Mellon, so what does BNY Mellon do? I know it’s a big bank and does many things, but yeah, a bit of an overview on that would be great.

[03:18] Caroline: Actually, one of the coolest things is our history. So we were founded by Alexander Hamilton. So anyone who’s watched the movie, I’m sure, has probably related some of it back to Bank of New York. So that innovation spirit really is the foundation of our company. What I love about it is the first physical ledger is actually stored in our headquarters in New York. So if you tie that back to blockchain distributed ledger, you’ve got a very physical reminder of the actual ledger book and how we’re evolving the financial ecosystem through technology. Also, his wife was the first person to put a deposit into the bank. And if you think about back in the 1700s, that was pretty forward thinking. So I think there’s a lot of really interesting culture that’s really moved our company forward. And that vein of innovation, that vein of being there for the community that we operate in, has carried forward for the 240 years that we’ve been around. So we’re celebrating our birthday this year.

[04:17] Lory: Happy birthday.

[04:18] Caroline: Which is very cool. And I think it’s really testament to the fact that that legacy of trust is also implicit. 240 years is no small feat. We’re the oldest bank in the US. We’re actually the first bank to be on the stock exchange as well. So massive amount of really impressive history that’s carrying us forward into hopefully the next 240 years plus. In terms of just some stats on what we do, I mentioned custody. That’s really the backbone of the company. And if you think about custody at its very essence, it really is safekeeping clients’ assets, making sure that that they’re kept safe from theft, for many issues that could happen in the markets. Obviously, we’re operating across global markets, so you’re talking 100 plus markets across the world. Many different events, as we all know, can happen in those markets. So being able to make sure that we are preserving the integrity of those assets at all time on behalf of our clients is really important. We’ve got about 1.3 trillion that goes through our pipes any day for cash products. We’re moving about $2.3 trillion for payments every single day. So, again, if you think about that scale and size, we’re really powering the financial ecosystem from many different angles. When we think about our clients, we don’t look after retail clients. So we manage the institutions that are between the retail investors and ourselves. We touch almost all of the top 500 fortune companies. We look after pension funds. We look after insurance companies, sovereign wealth funds. So quite a wide spectrum of client types, which gives us a real diversity of perspectives on the market, but also helps us innovate for all parts of investor lifecycle, which I think is where when we start to talk a little bit more about digital assets, that becomes the real unique value proposition that we have, having that spectrum across the investor lifecycle. And we’re touching 20% of the world’s investable assets. So I think we have an obligation to make sure that we’re applying new technologies to innovate across that life cycle. So a lot of history and a lot of future potential as well.

[06:27] Lory: Okay. A lot of stats to unpack there for sure. And yeah, just to reiterate to everybody who’s watching and listening, you heard correctly, it’s trillions that you guys are looking after. So looking at your role in BNY Melon, what exactly do you do? And I mean that in the nicest sense.

[06:44] Caroline: Yes, I do a lot, Lory. So very recently, actually, probably not that recently, about a year ago, I took over the role to run and set up our digital asset business. So that is looking at the underpinning technologies supporting digital assets, either the market or the asset itself. So blockchain technology, distributed ledger technology, smart contracts, and seeing how we can apply those technologies across that full investor lifecycle and across the different types of assets that exist underneath that umbrella of digital assets. So whether it is traditional finance assets, whether it’s real world assets, liquid assets, illiquid assets, the variety types of assets. For us, it was very important to do that. Prior, I was running custody, as I mentioned, when I came into the bank. And if you think about, again, the essence of what an investor needs, they need to make sure that they’ve access to a variety of assets that is driving their portfolio and their investment needs. For the next foreseeable future, we will be in a world where investors have a need across digital assets and traditional assets. So for our client base, it’s very important to have that bridge that’s able to go across the two different markets. Secondly, it’s important that if they’re investing into these assets, that they know that the asset is kept safe. So managing through a regulatory framework, which is what we do for the 47 trillion of assets we manage today, is really important. And finally, it’s making sure that we do that in a very efficient way, where the client experience is such that it’s the same as if they were investing in an asset that was across a stock in a bond, as an example. So for us, it really is stitching together the different types of client products that can exist in the market, whether it’s traditional offerings like custody, fund services, transfer agency, all these different things that we do to manage the investor lifecycle and applying it to the new technology. But also making sure that we’re looking at doing things in a different way, because a terrible habit in the industry over the decades has been just to either incrementally use technology to make the same thing just a little bit better. But I think we’ve got a really, really interesting opportunity to reshape and rethink how we actually manage the end-to-end financial ecosystem and making sure that it is as efficient as possible and as global as possible for the end investor.

[09:11] Lory: And how, so a big bank like BNY Mellon and an old bank, and obviously comes or trust comes with that, but how do you innovate and change?

[09:22] Caroline: Yeah, so there’s a couple of things. So obviously our experience gives us a really unique perspective to be able to have learned from many iterations in the past. I think that mindset that’s there of just really braving into territories, even if the end result isn’t always very clear for us. Again, that mindset’s informed by client obligation. So we are first and foremost there to make sure that we are powering our clients. Being more for our clients is actually one of our strategic pillars. Running our bank better is another strategic pillar. Powering our culture is our third. So if you think about those three strategic pillars, it becomes very much an essence of what we do to innovate through, again, leveraging technology, leveraging better ways of doing things. Partnering with our clients is another really core important thing for us to do. So we never operate in isolation to our clients or the broader ecosystem. And that collaboration and that co-creation is absolutely imperative. If you’re just going out with a hammer trying to find a nail, we all know that that’s not a good way to do things. So innovating in partnership with clients has proved over the decades, centuries in fact, to be the right formula for the industry and obviously us powering that industry.

[10:39] Lory: And If I’m not mistaken, there’s a dedicated team in BNY Mellon, which is consistently focused on looking and meeting with start-ups to see who you guys should partner with.

[10:48] Caroline: Absolutely. And look, we’ve got, you know, a wide variety of investments that we’ve made over time, mostly strategic investments, again, to enable the outcomes that we’re building for our clients. But our depth and breadth across the industry really helps us understand who are best in class in the niche that they’re looking after. So very important for us is not to be building every single thing ourselves, right? There’s always areas where there is a niche player that injected into our ecosystem and our ability to run that as a full end-to-end product offering actually brings that product to a whole new level. So that’s always been part of the philosophy. Also helping aid those businesses because a lot of start-ups coming into this environment it’s a difficult place when you’re dealing with a scale of trillions to enable you know you to progress as a company so a lot of what we do by investing in these companies is to bring them up to the level of standard that we would expect as a globally systemic important bank and that’s a very important part of the cornerstone of our trust because as a regulated bank, systemic bank, it’s very important for us that the standard is there across all players in our ecosystem.

[12:02] Lory: Zooming out for a minute, it’s been a pretty interesting few weeks with the approval of the spot Bitcoin ETF. So I wanted to get, I guess, what do you think this means for digital assets more broadly?

[12:13] Caroline: I would say this year definitely started brighter than last year ended. I think that’s a factual statement. For us, it’s a really big move to have the spot Bitcoin ETFs approved in the US by the SEC. It is the ability for institutions now to come into this space. Obviously as a large ETF service provider across the ETF ecosystem for us it’s very important again to apply that core principle we have of this is just another asset and we will apply our services to the ETF. So we’re servicing six out of the 11 ETFs on my last count I think that’s about 80 of the market and that market is obviously growing rapidly as we’ve seen since the launch a couple of weeks ago. So it goes back to that principle of we’re there for our clients. They’re investing in ETFs and they’re investing in ETFs with a spot Bitcoin as a part of that ETF. So for us, offering ETF services was just very, very natural. But what’s different is the credibility that we’ve built up with asset managers and other clients across the global landscape to really focus on the nuances of digital assets and the evolution of where spot Bitcoin will go next and all the variety of services that surround an ETF in particular and just digital assets in general. So I think the efforts that we’ve put back into the ecosystem over the last couple of years and mostly in building the team has aided that credibility to be real consultants for our clients. So not just the specific services that we’re offering, which are really important, But really spring boarding into, again, helping our clients as they’re learning more and more about these types of assets, this type of market, and again, the types of technology that sit underpinning it.

[14:05] Lory: Do you think Europe is leading the way when it comes to digital asset regulation?

[14:10] Caroline: Yes. So, I mean, we’ve been very enthused by what we’re seeing in Europe. Very recently, the UK, in fact, really starting to lean into this space. For us, I think the theme of collaboration in Europe when it comes to regulation, so collaboration across Europe and across all of the different agencies in Europe has been very impressive, and collaboration with the industry itself. And I think that’s led to a very deep place of trust across the ecosystem, that even if it’s not perfectly right in the beginning, that we’re able to actually really build and learn together. I think the differential and the maturity of divorcing the technology from the different types of assets that exist in digital assets is more advanced here. So obviously crypto assets are a discrete subclass of digital assets. There’s a lot of other digital asset types. So moving into that tokenisation, leveraging the technologies that do underpin the crypto space and moving that into the traditional space and actually enabling a tech agnostic regulatory framework, that is very, very important for us because that tokenisation of financial assets is where our priority focus is for our clients. And enabling a regulatory landscape that has that tech agnostic underpinning is very, very important for us. Also, that standardisation of technology. In the US, obviously, you have a lot of different state level regulations. There isn’t the same sort of MICA framework or MICAR framework as I’m learning in Ireland, we must call it. But there isn’t that concept there. And that becomes a challenge to be able to navigate through for our clients when you have different types of regulation and you don’t have that same standard. So we’re very much looking forward to that continued collaboration across the industry, including in the US, and doing our part on the advocacy. So I have the privilege of chairing the CFTC GMAC Digital Assets Subcommittee. And what we’re doing there, partnering with Franklin Templeton as my co-chair, we’re really trying to go back to basic principles in the market. There’s still a lot of lack of education as to what digital assets are. So really starting at the kind of grassroots level of taxonomies, really looking at those use cases. A lot of our regulation is built around what is the definition of an asset. So starting to leverage that same regulatory framework to say, okay, if you’re using an asset for this purpose and you happen to be leveraging this type of technology, what regulatory framework would it actually fall into? So there’s a lot of frameworks we can use from the traditional space. We don’t have to recreate the entire thing, but we can actually use committees like that to look across the globe, making sure that the traditional and the digital players are in there together, helping to put forward guidelines and recommendations for how we do this in the future, not just pinning to the past.

[17:16] Lory: And you mentioned there, just so everybody’s in the same page, CFTC, GMAC. CFTC, what does that stand for?

[17:23] Caroline: So the regulatory agency in the US focus on commodities and futures, but really looking at a broader spectrum of stepping back from their specific coverage area and looking to see how across the whole digital asset landscape, wherever you, whatever you define the underlying assets within digital assets to enable the US market in particular, to start to have some general guidelines that we can apply across the globe. And again, to aid innovation in this space that is built on a fair playing field, but very importantly, built on a foundation of trust and security, because that has to be at the epicentre of how every player shows up in this market.

[18:04] Lory: Do you ever kind of take a moment to think, Jeez, look at where I am. Genuinely.

[18:12] Caroline: Yeah. I actually, I was talking to the team this week because we’ve been in Dublin. So it’s been great to sort of get back to my roots. I feel so incredibly fortunate to be running a start-up in a bank. I mean, what a privilege. Like I get the security of leaning into the 240 years of trust that’s built up. I can ride that coattails to make sure that I’m doing my part to continue you the legacy of the future. I get a little bit of a safety blanket with that, which I’m sure a lot of entrepreneurs in the start-up space are listening going, that’s not fair. And I get to innovate and I get to build a future. So at some point in my career, I started realizing that I love disruption. I’ve run very large businesses and the larger the business, the more prone to complacency you can have in those businesses. So really staying at that forefront of innovation has been a real driver for me. So now to have the privilege to step out of the depth of custody and look across the entire bank and really not just build solutions for clients, which is front and centre, but actually look at how we can operate differently across the bank and differently across the whole financial ecosystem, that’s super exciting. Because I think many of us that have been in here for a couple of decades-ish, we forgive a lot of things that happen in the financial ecosystem. We forgive the fact that you have wet signatures. We forgive the fact that you have to physically print off documents and stick them in a vault as evidence. We think that’s okay. And that’s not okay, right? There are so many things that we could do to improve the industry. I think having the privilege to kind of step back and step out and look at it now, again, happens to be a new technology that we’re leveraging, not just blockchain. You’ve got AI, ML. There’s so many different technologies that that can be applied to make the ecosystem better, I do feel very, very fortunate. Long may it last.

[20:07]  Lory: Great, yeah, more power to you. You mentioned tokenization earlier, so I want to come back to that. In, I guess, yeah, in your words, what is tokenisation?

[20:17] Caroline: Yeah. So we look at tokenisation as, again, leveraging either distributed ledger technology or blockchain technology and smart contracts to digitise the financial services and financial assets that underpin financial services. It is a highly abused term. I have become less enamoured to the term of late because I think it just becomes synonymous a little bit with anything that’s not crypto, which is fine because, again, we need to be delineating pure cryptocurrency assets from assets that are non-bearer assets and just issued in a digital form. So tokenisation enables that ability to issue whether it’s a fund or whether it’s an underpinning asset in a digitally native form and then run that whole value chain in a much more effective way because you can build in code up front to do things like your corporate actions over time. And again, the industry is still coming together on what components of that lifecycle could be digitised if you haven’t issued in digital native form. So I think there’s a lot of different flavours out there. We’re seeing more and more pressure in the industry for fees. So I think across the entire ecosystem, everybody has to do their part to make sure that we are bringing these products to market as efficiently as possible. But we’re also seeing a really interesting change in investor behaviour. So obviously with the new generation of investors, they’re digital natives. Again, they don’t understand how things aren’t showing up in an app and a click of a button. It’s in my account. So that concept of moving assets, accessibility to markets all around the world, accessibility to a variety of assets that you may not have been able to access before. So, again, I want to be able to buy a share in a fraction of a real estate or of a NFT. It’s like all of that is now becoming just an expectation of the new investor type and to be able to do it 24 by 7 anywhere you are. The financial ecosystem does not enable that organically today because we’ve operated very much on a Monday to Friday or depending on where you are in the world. And I think there’s a lot of guardrails that have been built in over time to make sure that assets are moving within those constraints. So I think now we’ve got this fantastic challenge as this new investor type really comes in with an urgency for our accessibility, to really look at how do we move assets in a much more nimble way and move the cash associated to it. So I think that’s going to be a really interesting theme as we go through the year.

[22:56] Lory: Because tokenisation has been around, right? Some people may say it’s been around for decades, but certainly 2015, 2016, 2017, people were kind of writing and speaking about it. But it feels like it’s different now and, wheels were in motion for it to happen.

[23:13] Caroline: Yeah. I think, look, and you can fact check me on this, I think Bitcoin’s been around for what, 15 years at this stage? So we keep saying new, and even I fall into the trap of saying new. It’s new for us to leverage in a greater way. But even the Bank of New York Mellon, we’ve been leveraging distributed ledger technology. I mean, we are the world’s, we are the Fed’s largest clearer for US treasuries. So we are the Clearer for US treasuries. And we run a DLT as a resiliency play to our mainframe databases. So we’ve been doing that for a number of years, right? So even within, you know, our resiliency, which is an absolute cornerstone of making sure that you’ve got trust, you need to have resilient markets and you need to have resilient operations and infrastructure. We’ve been leveraging this technology. I think the difference now is we almost needed to have the crypto industry get to the place it was for people to understand the underpinning technology. Now there is a little bit of that certainty of, actually, look, we know what the technology can enable. It’s also not, by the way, that blockchain is the saviour for everything. So I think people have matured away from like this cool new buzzy thing that you can apply into actually here are the use cases where it makes sense. So there’s that maturing of differentiating where it actually makes sense to apply the technology versus where it doesn’t. And I think now we’re starting to turn the corner of the POC craziness that has happened over the years. And I think that’s the big pivot of this year. So 2024, we need to put the pens down on the POCs. We can do a few discrete ones, but we need to start moving into real use cases that go into the market to actually stop the proliferation of talking about this over and over. Because if we don’t move there, Lory, we won’t be talking about this in five years because we will not have taken advantage of this technology. And I do think it will die on the vine. So I do think we’ve tested enough. We know that it is, you know, again where the technology works. And now we just need to make sure we’re applying it to real use cases, real pain points. And we actually start to move in. This is where I have the biggest conviction. And it’s why I said yes to taking on the role to come out of my comfort zone of running custody, because I do see a lot of investment across our client base moving into tokenisation. The hardest thing, one of the biggest challenges, I know we talk about regulation and standardisation of regulations, and yes, that’s an impediment. But from my lens, one of the biggest impediments is conviction has to come with investment. And in this market to truly make tokenisation, like to get the benefits out of tokenisation, you need to have solutions that cross over the traditional and the digital space. So saying it very simply, you don’t just need to invest into the new technology, which I think in and of itself, yes, it has a burden in terms of the capital you need to put forward, but it’s not that big. It’s the connection and the interoperability into the traditional finance systems. And that’s a real effort and that costs a lot of money. So having the conviction to invest into that long run game, that’s where we’re now seeing a real pivot. So it’s not just, you know, a lot of our client base buying up smaller fintech’s to have a play. It’s actually now really investing in a front to back platform that covers across the digital and the traditional space. And this was our foresight years ago. We knew in the Bank of New York Mellon that we were always going to have a need to not have a siloed offering, which, you know, We do see some players carve off very discrete units just looking at digital assets. But for us, it was very important to be able to integrate it across. And that’s effort. I would put an 80% of the effort of bringing any product to market is the connection into the traditional side. So I’ve got real conviction when I see the investments across the ecosystem leaning into that. We’re getting towards some real use cases in production for tokenisation as a result.

[27:25] Lory: Great. And I’d love to hear that in relation to, I guess, you guys walking the walk. So providing, you know, I guess, blockchain related and crypto and related services on that point, but also using blockchain at an infrastructural level from an infrastructure perspective and a resilience play, I think is powerful, to be honest, and a great example for other companies to follow suit and even countries for that matter. So is that something that Ireland should perhaps be looking at? That’s rhetorical. So, kind of moving and following on naturally from that, based on what you can disclose, maybe a sneak peek into what BNY Mellon’s digital asset roadmap is for 2024?

[28:10] Caroline: Sure. So I would sort of bucket it into a couple of areas. We’re seeing a lot of demand for tokenising funds.

[28:19] Lory: And just on that, right, so people are, what’s the benefit of tokenising a fund? Can I not just buy the fund anyway?

[28:24] Caroline: No, so it is greater distribution benefits for fund managers, right? That’s ultimately what they’re chasing. A little bit of it is on the efficiency side, but I would say we’re seeing more of the benefits and more of the desired benefits on greater distribution. So you can’t, like how easy is it for you to go and buy a money market fund right now?

[28:45] Lory: Complex.

[28:45] Caroline: Complex, exactly. So you can’t, I mean you can, but it’s A, the accessibility. You might be able to do it, Lory, but not the average person. So to be fair, I think this is where that accessibility becomes much easier. Money market funds right now, very interesting given where interest rates are at. So you’re seeing that demand start to really rise. So I think, again, that comes into that accessibility of these types of assets that were really only accessible to, you know, either high net wealth investors or institutions now becoming more directly accessible to end investors. I would say the second area, and obviously with fund tokenisation becomes a really interesting role for us. Clearly, there’s all of the things we do today in Bank of New York to support the fund industry, whether it is, you know, fund accounting, fund administration, custody, a lot of the work that we do as just sort of our bread and butter, if you will. Then there’s taking it into the next sphere, which is the digital services that actually start to be birthed, if you like, when you tokenise a fund. So if you look at transfer agency and the need to actually record keep between the investor and the issuer of the fund, and the ability to move those assets in and out as people are coming in and out of the funds, and that’s, you know, transfer agency said simply, the ability to do that in digital form as a digital transfer agent is a really imperative part. So being able to look at, again, if you think about the technology, what is it at its core? One shared source of truth with a lot of coding in there to enable certainty and transparency and safety of that. So obviously you have a whole complex ecosystem on the technology side to enable that. But when you look at how we do things today, we have this world in the financial ecosystem about reconciliations. I don’t know the fact and someone should run the stats, but I’m sure there is a lot of cost in the ecosystem that is reconciling one source against the other. If we’re able to leverage this technology to have one shared source of truth and have all of the right control mechanisms around that, and then you’re enabling movement of those assets from that source of truth, that’s really where you can see real value. And then, like I mentioned, and the accessibility around the world becomes a part of that as well. The second kind of theme and area that we’re seeing is tokenising at the asset level. I mean, this is a bit of a tale of two cities. A lot of the close to production use cases tend to centre around liquid assets, which is a wee bit of an irony because you would think that the bigger benefits is in the liquid market. And I do think that is the case. But it’s probably a bit of the philosophy of walk before you run. And even in the liquid markets, you have a lot of inefficiency. So there I see it as a little bit more of an efficiency play, where if you take bonds as an example, there’s still so many different manual, what we would call manual touch points or manual processes that happen across that life cycle that make it quite difficult, add a lot of risk into the ecosystem for an investor as the asset moves and maybe not such a slick way through its investor life cycle. So I think there’s a lot of play there. My prediction is that as folks get more comfortable leveraging tokenisation as a tool for the liquid market, that we’ll see the liquid market open up. Obviously, there’s a lot of players out there today who are operating in the liquid market, but we haven’t really seen that take off or seen it at a level of scale of relevance yet. So I think this year we’ll see the liquid market a little bit more, some proper use cases there, and hopefully in earnest then after that we’ll start to see, you know, the alternative market in particular start to really take hold of tokenisation. The other theme for us is cash. You can’t really gain the benefits of tokenising something if you don’t have digital cash as a way to enable movement of that asset. So again, if you think about at the core, everything we’re talking about is enabling that asset to get into the hands of an investor in a quicker and easier manner. Often those assets are paid for in cash. You need to have something to move the asset. If we’re going back into traditional fiat rails you’re by nature operating within the, slower controlled but slower ecosystem that we have today. So if you want to operate at speed and not by the way not everyone’s going to want 24 by 7 365 days a week like there’s different needs of different investors so it’s not a one size fits all but what we will need to enable access for the market to move faster is digital cash. And I think that is a evolving story. There’s obviously a lot of work here in EMEA. And I think this is where EMEA is really, and Europe in general, is really differentiating itself, is really leaning into whether it’s the digital euro, a lot of different experiments on not just leveraging DLT, but seeing what different forms of CBDCs could exist out there. We have a lot of stable coins in the market. Bank of New York is officially the custody reserve, or we custody the reserves for USDC. And you know, you’re seeing a lot of those stable coins now potentially being leveraged as the digital cash rails for tokenised assets. So that could become an interesting story over time. And then you’ve got bank deposit tokens. And I do think for the foreseeable future, there will be a world, just like there is today, of many different forms of digital cash, and they will be used for different purposes and different reasons. So this is why I get very passionate on this debate of, is it stable coins or bank deposit tokens or CBDCs? It’s all of the above for different reasons and different needs. But I do think we need to have all of digital cash. Well, first off, we need all the different forms of digital cash to get to the place where it’s something we can use. And then we need interoperable with tokenised markets as we evolve those. So I think that will become a really interesting theme this year.

[35:19] Lory: Okay, so one is going to accelerate the other. Okay, very interesting. Switching gears and looking at it more, I guess, from an Irish perspective. So given your kind of global view and especially, you know, your US focus, do you think Ireland, you know, can and should become a global blockchain hub?

[35:41] Caroline: 100%. So if you think about a couple of things, Ireland’s legacy in technology innovation is like it’s there. It’s evident, right? Where our offices are sitting on the Liffey, you look up and down and you’re like, look at this. Like this is the spirit of innovation is in Ireland. And yes, I am biased, but it is also a fact and it’s been proven out. So I think why not, right? This is yet again, just another form of technology to be able to apply to make things better. So I think Ireland’s ripe for it. The other really interesting thing is to me, it all comes back to people. Yes, obviously the technology is at the cornerstone of what we’re talking about. But if you don’t have people who are able to use that technology for the right purposes, it just sits there spinning its wheel. If you think about the mindset of Irish people and the Irish ecosystem in general, it is very much that entrepreneurial disruptive mindset. So I think you have a hotspot here of people who are willing to really take a chance, embrace that concept of failure and try again, try again, try again. It’s like the, you can, you know, fall down eight times, but you’re going to get up nine, right? Just making sure that we’re always moving forward. That’s kind of in the psyche of the Irish ecosystem. So I think applying that, and I think the talent base that’s here, one of the most exciting things that I’ve done over the last three years is hire a lot of digital native people and a lot of traditional finance people and just enable that fusion of both. It was not easy in the beginning. There was, it was a very, two foreign languages with no common language in between. There was a complete, and utter lack of empathy for each other and a lack of understanding and appreciation. But three years in, we’re now sitting in a place where you can actually see harmonisation of these different types of thinkers. The Irish ecosystem has all of those different types of thinkers. We have a collaborative spirit in Ireland, which is huge. We really like working together with a lot of different people. And we’re naturally very enthused by different types of thinkers. And there’s a curiosity that goes through that vein of Irish people and Irish ecosystem players. So I think that’s a very important thing to draw down on. We need to make sure that we are collaborating across the industry in a structured way, though, to accelerate it. So I do have a fear that if there isn’t an urgency that’s put into operating as a unit across Ireland, that we will see other countries’ jurisdictions move faster. So I think there is a, you have the funds industry here as the powerhouse. We have a lot of demands that we’re seeing from our clients to leverage tokenised funds, like I mentioned. Ireland’s primed and ready. It’s got all the ingredients, the people, the technology, the players, the mindset, and it’s got the fund’s backbone. I think now is the opportunity to really leverage that and lean into it with proper passion and courage and collaborate across the different agencies that operate here, including Blockchain Ireland.

[38:53] Lory: Fantastic. Thank you very much. And look, naturally, plus one on that. And I think it goes back to the point that you raised earlier, which was, you know, with conviction has to come investment.

[39:02] Caroline: Yes.

[39:04] Lory: So 100%. Quick question. How would you like to see Blockchain Ireland and BNY Mellon working together?

[39:10] Caroline: Yeah. So I think we should continue to do what we’re doing, but really broaden it across the industry. So again, I go back to, in Ireland in particular, it’s not that big, right? So being able to put your arms around a handful of key influential players, put the pens down on competition, and just really think about how do we as a collective move this industry forward and do it in a very safe way. So one of the things that has been very important to how we’ve created products is designing them through a risk mindset from the outset. And again, this is very natural for us as a regulated bank and a very large bank. We do it in a very organic way. But I think our ability to do that with the regulators, with different, whether it’s start-ups, technology centric players, you know, fellow banking community entities. I think we can all bring something different to the table. The sandboxes that are opened up in Ireland are going to be huge. I mean, that’s a real leap forward for all of us to be able to actually get in there and learn and experiment together. And I think just having a lot more structure around that and doing it as a full ecosystem. I go back to the place where, you know, we talk a lot about interoperability in the blockchain world. Interoperability across chains, like traditional, digital, etc., but for me interoperability and digitising in general, it creates all this like amazing benefits that we talked about, but it also can create a lot of interdependency across the ecosystem. So very important for Blockchain Ireland is to make sure that you’re connecting all of those ecosystem players so that as we’re designing the future, because again, that’s what we’re doing. We’re designing out the future. We’re doing it in a way where we’re connected across. Even for the niche small players that are doing just one component, one activity on that lifecycle, all of its interoperable and interconnected. So doing that as one unit is going to be very important for the now and for the future.

[41:16] Lory: Yeah, I like that. Yeah, so interoperability, not just at a blockchain technical level, but actually across the ecosystem. So more broadly. Okay, well put. A question we ask each of our guests, what podcast do you listen to or would you recommend to others?

[41:31] Caroline: So I absolutely love Hard Fork. So it is Casey Newton and Kevin Roose. One is a head of platformer, other is a New York Times journalist. They are fantastically funny. definitely on the geekier side which is you know something that appeals to me. They look at all the emerging technologies they look at buzz stuff that’s out there and they sort of decode it but they also take a little bit of that fanfare away from it and get into the real nuts and bolts of how the technology makes sense or doesn’t. They’ve strong views on crypto in particular and blockchain and they’re just some nice relief particularly for me when I’m on a horrendous commute of two hours each way. N ow I’m just looking for sympathy, but that is true. So they’re definitely a good one, particularly for people that aren’t in the weeds of technology and are not engineers. They sort of keep it simple. So it’s more for business folks, I would say.

[42:27] Lory: Great. Hard fork.

[42:29] Caroline: Hard fork, yeah.

[42:30] Lory: Super. And last question, if people want to follow you, the work you do and BNY Mellon, where should they go?

[42:38] Caroline: So a couple of places. So on the BNY Mellon front, our ALTA report is fantastic. So we issue that once a quarter and that gives a really good perspective across our client base. And again, that client place is very reflective of the world, right? Just given we’ve touched 20% of the world’s investable assets. So the client base really gives you a good view on what’s happening out there in the various different economies across the world. So that’s very important. or obviously on LinkedIn. I’m not the best on LinkedIn. I keep getting told, hey, up your presence on LinkedIn, but I’m very busy doing actual work. So it’s a little bit of a challenge, but I am on LinkedIn, so you can reach me there. And we are very connected into, particularly the digital asset ecosystem. So we’ve got a team that’s split across the world. I’ve got a number of people here in the shores of Ireland who are connected into the ecosystem. So there’s definitely ways to, you know, not only get to me, but get to the whole team as well.

[43:38] Lory: Super. Well, Caroline, thank you very much for joining us.

[43:41] Caroline: Thank you. Appreciate it.

[43:42] Lory: I hope you enjoyed today’s episode as much as I did. There are three key things that I took away from today’s session. Number one is tokenisation. It’s real and it’s happening and definitely something to look out for in 2024. Number two is digital cash, whether it be in the form of central bank digital currencies, stable coins, or deposit tokens or bank deposit tokens. tokens. And number three is interoperability. Yes, that’s something that occurs between various blockchains, but also at a level in the ecosystem where players are interacting and working with one another. Thank you for watching and listening, and we’ll see you next time.

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