WisdomTree Visa Debit Card Highlights ‘Real World Use Cases for Blockchain’: Head of Digital Assets – CoinDesk

WisdomTree Visa Debit Card Highlights ‘Real World Use Cases for Blockchain’: Head of Digital Assets – CoinDesk

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Wisdom Tree Prime has launched one of the newest visa debit cards on the block and head of digital assets. Will peck joins first mover now to tell us why this matters for the digital assets face will welcome back to the show. Hey Jane, good morning, good morning. Let’s talk about this visa debit card. It is something that when I hear about it and you’re probably gonna be mad at me for saying this. It reminds me of the bull market because last bull market, we had a lot of visa debit cards launched by a lot of different uh crypto native firms. Now, Wisdom Tree Prime is launching their debit card. Uh Tell me a little bit about how it works. Yeah. Well, we’ve been working on it a lot longer than uh the bull market has been. But um no, this has been part of our plan for um our digital assets initiative, Wisdom Free Prime from the start connecting, saving spending and investing. And obviously connectivity with, you know, the card networks is a big part of spending in addition to things like ach so effectively, the wisdom free prime debit card just allows you to spend kind of your available balance that you hold in your wisdom, free prime wallet. Um, and, um, you know, right now that’s just gonna be kind of the dollars that we have in their wisdom, free dollar tokens. But over time, we anticipate making things like Bitcoin Ether, digital gold available to connect directly to the debit card. Uh, which we think is, you know, a good consumer use case. I mean, I think what’s different than us versus other crypto companies that have launched cards in the past is this isn’t like a crypto rewards card or anything like that necessarily. And it’s not just crypto, like I said, I mentioned things like gold, you know, which is kind of the original currency. So in some sense, it’s giving people a lot more choice in terms of how they want to save and spend their assets, which is really what we’re trying to do with Wisdom Free Prime General. Let’s take a step back for the audience and just briefly tell me about Wisdom Tree Prime. Um I know Wisdom Tree Prime launched their app last year and you were on the show talking about that, but just give us a brief introduction. Yeah, absolutely. So it’s a personal finance app. Save, spend Invest. Uh I wouldn’t call it a trading app, but we’ve got a series of curated investment exposures across the crypto uh commodities and gold. And then a suite of um what we call digital funds which are effectively, you know, us registered funds that invest in things like stocks, bonds, securities, anything that there could be asset allocation strategies. So, uh but we’ve curated in a way such that it’s not like a trading app where you’d go in and kind of speculate on a lot of things that are kind of moving right now necessarily. But a it’s a way to um save spend, invest across these curated set of assets. And we’ve done it all in a Blockchain native way which allows us to do things like connect your investments more closely to payments. For example, also allows us to more easily interact with assets, you know, that you might hold in other wallets elsewhere. So Blockchain on and off ramps are a big piece of this. So that’s um that’s why we’ve built it. And just as a historically, an asset manager, we saw this as a great way to connect directly to retail and um allow us to serve them in a, in a better way than they might be s being served. Otherwise. Now, for the visa debit card, you mentioned that right now, uh it’s available for the tokenized dollar in the Wisdom tree prime app. What is a Tokenize Dollar? Is that similar to a Stablecoin for it is a, it’s a Stablecoin. It’s a Stablecoin just by another name. And uh we don’t, we just make it available within the week country prime app. It’s not available kind of outside like us DC or tether might be uh but we just found it to be a better way to allow consumers or allow our users to hold dollars within the app. So instead of sitting in like a bank account balance, they might say they’ve got a, a dollar token as the representation in the app, which is, I think uh you know, just an example of how people are using stablecoins today beyond just crypto trading or the like, OK, so I think it makes sense if we talk about using a Stablecoin for, for payments, but then we start getting into Bitcoin Ether gold. Talk to me about the interest you’ve had from users in being able to spend these assets that I think right now when we think about any of those three, we think about investing, holding not necessarily spending on a cup of coffee. Talk to me about the demand there or what kind of demand you expect to see. Well, I think people think about these as alternative currencies investments, right? And if you want it to be a currency, it needs to be available to spend in uh in a better way and look, it’s um all about consumer choice to me. I think if you are somebody that really wants to save in Bitcoin and kind of embrace the volatility of it, like more power to you, but you kind of need the tools to be able to do that in a safe, secure and uh cost efficient way to be able to spend. So that’s the idea behind it is giving users choice. I mean, another example outside of those three digital assets might be, you know, we’ve got a suite of funds that I mentioned like funds today. You know, you’ve got short term treasury funds or money market fund that could be yielding something like 5% in short term government debt, very competitive with a savings account, right? Where many savings accounts today have different products to be clear, but your bank is not paying you 5% in nearly any product that they’re offering. So for a lot of people, that’s a very interesting product to be able to keep more of their assets at work longer in things that, you know, are traditionally very safe investments like government securities. Uh But that are now yielding 5% given where rates are. So that’s a, that’s something that I think is interesting to a lot of people that the same underlying infrastructure and technology allows us to deliver whether it’s gold Bitcoin ether or things like um these funds, it’s tax season. And so I have to ask this question as I was reading through, um, the card will allow you eventually to sell your digital assets and then buy something using your visa debit card. Whether that be a coffee, a slice of pizza or, but I, I don’t know a car. Is there a tax implication here when you’re making transactions? Yeah, absolutely. I mean, capital gains tax is just the reality of life here in the US. And I think there’s some, you know, been talk in the past about Congress doing some sort of the minimis for, uh, crypto assets. Nothing like that has kind of come to pass so far. So, look, it goes both ways though. If you’re, um, you know, selling at a gain, then you’re gonna own taxes on that. If you’re selling at a loss, right, you can use that loss and, you know, use it to offset other gains in different places. So I think over time, you know, this is not where we’re at today, but over time, you can start to see some ability to more sophisticated, manage this, sophisticatedly manage this in a way that could allow you to, um, you know, manage your tax bill as you’d like to. Um, that’s not where we’re at right now. And certainly there would be tax, um, you know, consequences uh for people who want to sell a capital asset like Bitcoin for um their day to day spending. And that’s the case with any app that you want to use like this. Do you think it makes sense to sell your Bitcoin for everyday spending or do you think it makes more, more sense for something that’s maybe less volatile than Bitcoin? It’s all about how you wanna manage your own assets, right? And like thinking about it as part of a broader portfolio but like Bitcoin for sure is volatile, right? There’s like there’s no doubt about it. Bitcoin is volatile. Um And so um yeah, if you’re putting your life savings into Bitcoin and like that’s what you’re spending everything from like II I don’t need to rehash that on this show. So yeah, sure. But like, you know what about gold? Right? Gold is something that’s much more stable. People might like to save in it. Um And people do certainly want to save in it. We see in that for a long time here in the US and just providing that user choice is I think a good benefit for them. But you know, maybe Bitcoin is a niche product in terms of saving for that. But that’s the the choice that consumers want to make and we want to facilitate that. Take a step back for me. Now, what does this mean for the industry? What does this mean for the progression of the digital asset space? I guess. How, how does this push us forward? I think it’s just real world use cases, right? Like this is not the be all end all of everything allowing somebody to spend Bitcoin on their visa debit card, but it is real world use cases for Blockchain in terms of trying to connect it to people’s day to day financial lives, moving this from like a place of speculation to actually a place where like it can just be what you use to kind of manage your money on a day to day basis. So that’s a big part of what we’re doing trying to, you know, people have talked about tokenization for years now in terms of actually adding benefits to consumers and what we’re doing is actually going out there and then demonstrating that. So um that’s why, you know, the debit card is one component of this and one we’re very excited about, but it is about showing that this technology can just have benefits for users beyond, you know, speculation and or investing whatever you wanna call it trading. But actually in their day to day financial services lives, tokenization of assets is something that uh Pra fai has been talking a lot about in recent months, any hurdles there that you foresee in the in the future when it comes to real world assets and tokenizing these traditional financial products. Yeah, I mean, it it has been talked about for some time and I I think there’s been a lot of people who’ve been stuck in kind of doing these various Po CS and things like that as opposed to putting out like real products for consumers. So there’s lots of barriers to entry and you know, things that need to be overcome whenever you’re doing a relat of financial services, new technologies. Like for example, when you know, wisdom tree launched ETF S were a fraction of mutual funds. Right. And today ETF S have overtaken mutual funds vastly in terms of the amount of inflows that they take on an annual basis that takes time though. Like the spy spider sat there for something like 10 years, not getting an inflows. And then today, right, it’s most traded security in the world. So, um, these things take time and it’s about, I think firms, uh, putting out products that they think are gonna be better for customers and then winning adoption that way as opposed to like moving everything and mass all at once. So that’s been our approach. Um And you’re seeing more and more people actually putting out live product in the space trying to also abstract away like, oh this is Blockchain or tokenization. It’s like, oh no, this is something that’s like better for users of financial services, whether you’re the smallest retail investor or the biggest institution. And that’s what we’re trying to do at Wisdom Tree. I think we’ll know we’ve made it when we’re no longer saying tokenization, we’re no longer saying Blockchain there. These products are just things that are integrated into everyone’s lives. Absolutely. I completely agree. You mentioned a customer adoption and meeting customer needs. I know you were on the show last year when Wisdom Tree Prime launched its app, talk to me about the adoption that you’re seeing there. How are consumers reacting to it? Um I assume good since this, this debit card is being launched now. But talk to me about adoption there. Yeah. You know, it’s still early for us. We’re continuing to get our state licenses as we’ve talked about in the past. But it’s been a very strong start for us in terms of most importantly, our learning, seeing how customers are using the app, which types of assets, funds, investments, they are, they’re tracking to and then, uh the debit card, we’ll see how they want to use a debit card. Uh more and more going forward. So, uh it’s been a really good start for us. We’re very excited about it. We’ve got some other announcements for it coming out soon, both on the wisdom tree prime retail side and also how we’re gonna be serving institutional customers as well. So it’s uh we’re not kind of giving out numbers at this uh yet at this point, but it’s been a strong start for us. Any hurdles or challenges in getting the state licenses or has it been relatively smooth? No, I mean, it is hurdles and challenges. It’s been interesting in the us that um, money transmission is a state by state regulated activity, right? Which a lot of the digital asset services kind of fall within that money transmission kind of um regime in different states. And um it doesn’t make it easy when companies like FTX or others blow up and kind of cause a lot of consumer damage, uh, frankly. So, um, I, I think, um, you know, we’re working well with the various regulators that we’re interacting with. I think we’ve had a great approach here. You know, Wisdom Tree is a PRA PFI company that’s well regulated, that’s kind of comfortable with it. Uh, but certainly I think anyone who’s been going through these processes with, uh, you know, various regulators in the US would just say, yeah, it’s like a lot of work and slow going, but it’s certainly worth it and, uh, worth it to build that sort of rapport with the regulators. It’s interesting you bring up FTX. I feel like we haven’t spoken about FTX. It feels like forever, but in this industry forever, it can just be a few days from a regulatory perspective. It sounds like we’re still recovering from, um, the downfall of FTX would in your experience. Would, would you say that? Yeah, I mean, I, I think so. Right. A lot of people, how many people actually know so much about crypto beyond these things? And the biggest news story, front page of the journal and the New York Times is that this kind of guy that’s been on a bunch of billboards blows up like it doesn’t make it necessarily easy to, um, and like, with a terrible fraud too, right. It wasn’t like something, it was like a horrible fraud that, um, it, um, yeah, I think that’s something that people are always gonna need to kind of continue to work over work through. I think you’re seeing a lot of crypto companies in the US being responsible citizens though doing right by their customers, even if there’s hiccups along the way or whatnot. And so, um I, I think there’s still going to be that, that will probably continue for some time. I think crypto is also political in a way that, you know, other technologies and asset classes are not. And uh that probably adds some challenges too. So I, I think um but I think a lot of regulars have been open minded about this policymakers are trying to understand it and reflecting, well, you know, understand the asset class well and kind of the policy implications of it. Well, uh but it um it doesn’t necessarily make it easy when things like FTX happen. And I think that will continue to be the case. It sounds like it’s still, you’re still trucking along though, regardless of FTX. It sounds like regulators, lawmakers are still listening. Hopefully we can get some legislation this year. But as the months go on, I don’t, I don’t know if we will before the next elections, but it, but it sounds like it’s not all doom and gloom. Oh, absolutely not. Absolutely not. I mean, I think there’s um you know, our CEO speaking at the DC Blockchain Summit, you know, put on by the Chamber of Digital Commerce in um in May and I was just looking at the attendees for that and from both parties, very senior people attending. I, I think you are getting a sense that, um you know, not that everything in crypto is like, you know, they uh you know what you want to talk about meme coins and things like that. But like there’s a lot of serious companies, both traditional companies and um you know, new entrants who are trying to put out good products for customers, trying to use this technology to innovate whether you’ve got people like paypal blackrock, one of our biggest competitors or us. And, and, um, I mean, that’s definitely different than it was, I think, you know, 78 years ago when a lot of this started. So I think it’s certainly coming. I think the regulators are open minded and working even if they’re getting caught up on a lot of the stuff and things like that. So, definitely not doom and gloom. Um, I mean, you look at the asset prices and even beyond that, just the activity in the space is very encouraging. Well, it’s always a pleasure having you on first mover. Thanks so much for joining the show. You too, Jim. Thank you.

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