What’s the role of indices in the next generation of capital markets? S&P DJI’s Cathy Clay joins Kaiko’s Ambre Soubiran to discuss bringing benchmarks on-chain.
[TRANSCRIPT]
Cathy Clay:
Hi everyone, and welcome back to The Rebalance. I’m so excited to continue exploring the trends reshaping indexing and capital markets and how they’re driving our work at S&P DJI. Now, today we’re diving into something that’s becoming impossible to ignore. How on-chain markets are changing the game for index providers.
And today I’m joined by Ambre Souriban, CEO and Chairman of Kaiko, who we collaborated with to bring the first major financial benchmark on-chain as a native digital asset. We recently tokenized the iBoxx U.S. Treasuries Index together. And I want to explore what that means not just as a milestone, but as a signal of where indexing is headed. Ambre, thanks for joining me today. So nice to have you. And before we dig in, though, maybe you could tell the audience a little bit about Kaiko.
Ambre Souriban:
Of course. Thank you for having me. Kaiko is a data analytics index and data infrastructure company.
Cathy Clay:
That’s a lot.
Ambre Souriban:
Yeah. Specialize in the world of digital assets. So native assets on the blockchain, initially mostly crypto and now increasingly non-crypto and all sorts of tokenized assets.
Cathy Clay:
So I mentioned the iBoxx U.S. Treasuries Index that we tokenized together. Thank you so much for your partnership on that. But maybe talk a little bit about truly what that means to have a tokenized index natively on the blockchain. What does that unlock?
Ambre Souriban:
Yes. So the idea with our data infrastructure product is really to offer a distribution play for data owners and IP owners into the blockchain world. So what that means is that your clients that are index-linked product issuers can consume that token natively on the blockchain and wrap it into a financial asset that they’re going to issue on the blockchain.
Cathy Clay:
That’s really incredible because when I think about what that gives us as the index provider, it gives us complete traceability and auditability of all of the terms economics that you talked about, embedded in that tokenized index, that’s pretty powerful.
Ambre Souriban:
Yeah, absolutely. And that is why there’s a key difference between providing and publishing the price of the index on-chain, which is very valuable in some use cases, and creating an actual transferable token that is then portable from a wallet to another, meaning that you can transfer that IP to a client and track where your IP goes into the value chain of building a investable financial product.
Cathy Clay:
Now, you obviously talked to a lot of participants in this on-chain ecosystem. If I asked you where do you think indexing is heading, what would you say?
Ambre Souriban:
I think it’s really interesting in the area where you will have financial transaction referencing those indices in products that can be invested directly on-chain. We are working right now with an OTC swaps platform that will offer banks the ability to natively on-chain trade those indices. So, this is typically something whereby the index is created, tokenized, transferred and then embedded into a financial product natively on-chain. And this is really the whole kind of value proposition of blockchain is to disintermediate the value chain of creating, investing and trading a financial asset.
Cathy Clay:
Is this a fad, a phase, or is this something that is inevitably happening?
Ambre Souriban:
I think there is no putting the genie back in the bottle. Honestly, I think we’re now in a world where assets are natively tokenized on-chain and we are going to get to the second phase. Tokenization is there now. It’s done at scale. We’re seeing U.S. Treasuries natively issued on-chain. We’re seeing money market funds and kind of collateral being tokenized. The question now is how do we embed it into financial products?
And that cannot be done unless you can pair the tokenized asset with its market price. You can enable 24/7 finance, continuous finance, if you can provide 24/7 marks and prices for collateral. And this is really where I believe there’s a fascinating play for data owners such as S&P Dow Jones Indices, both on the data side and on the index side in participating in this on-chain finance.
Seeing an increasing number of purely traditional financial applications that are now being brought onto crypto native rails and what we’re seeing essentially is a real merge of traditional assets and blockchain infrastructure. How do you see that evolving from your perspective?
Cathy Clay:
Well, it’s super exciting because I think you’re absolutely right. We’re seeing really this confluence of TradFi moving towards DeFi. We’re seeing DeFi moving towards TradFi. So really the only question in my head is what does that end convergence look like? But there’s no doubt there is going to be convergence. And the way I think about the opportunity for S&P DJI is what has made traditional finance so strong, so trusted is having our indices and benchmarks available for the investing public to reference, to look at relative performance, to assess risk, to understand portfolios.
What really excites me is the ability to bring these indices into this new world of on-chain finance and establish the same trusted benchmarks, the North Star for investors, for traders, for asset managers to really lean into. And it should build trust in this new space. So again, the convergence, we still need to get the trust of benchmarks over. And with your help, getting the tokenized iBoxx, that’s the first step and really what we need to do on a grand scale. Ambre, it was so amazing having you here today. I always learn so much in our conversations together. So thank you for coming.
Our collaboration with Kaiko isn’t just about one tokenized benchmark, it’s about proving that institutional trust and digital innovation can advance together. Setting the foundation for how benchmarks will work in tomorrow’s markets. What excites me most is that we’re not waiting for on-chain finance to fully mature before engaging or helping shape the standards that institutional capital will rely on as these markets evolve. I hope this conversation gave you a sense of how we’re building the future of trusted benchmarks in programmable markets. See you next time.
