money Crypto: 'Institutions are just getting started,' Cowen CEO says
Cowen Chair and Chief Executive Jeffrey Solomon discusses the state of cryptocurrency and regulation on Yahoo Finance Live.
Video Transcript
BRIAN SOZZI: One thing the team is also apparently working on, Jeff, is that-- is Cowen Digital, your push or incoming push to digital assets or cryptocurrencies. You signed that deal, I believe, over the summer with PolySign. What will you be doing in the crypto front next year?
JEFFREY M. SOLOMON: Yeah, so listen, we don't have a retail business here, so we don't cater to individual investors. And really, the play in cryptocurrency has been largely a retail driven or individual driven market. And there have been a few institutions involved, but not very many. And our view at Cowen is the institutions are just getting started. And we've seen this play before, where institutions follow individuals. There's some very real reasons why institutions haven't been involved. One of them is custody. It's really important to make sure that if they're managing money as a fiduciary for other investors, that their assets are safe and sound.
And this is why we've invested in PolySign. We actually think it's a preeminent digital asset custodian. And what we can do with PolySign is integrate that into our product offering here so that as institutions begin to allocate capital to crypto, which-- and digital assets, which we know they're doing, that we can integrate that product in and deliver them a service to which their custom and other asset classes like equities and fixed income.
And so, we're just following a really good playbook of doing what we do at Cowen, which is catering to the needs of our institutional clients. Digital assets is going to be a big part of their future. And so it's going to be a big part of our future as we head into 2022 and beyond.
BRIAN SOZZI: Are you in the camp, Jeff, lastly, that regulation for crypto would be good?
JEFFREY M. SOLOMON: I am. I am very much in that camp. I think we've done some amazing things in this country, in particular, around regulation that allows people to invest in finance and financial assets without what I would call aberrant risk. It's not like we get it right all the time. But when you think about things like the 33 Act, you think about things that the-- the role that the SEC plays, you know, these are really critical roles to making it safe for investors.
It doesn't mean that there's not risk. It doesn't mean that they can't lose money. But what it means is there's a real rule of law and there's regulation. And people are held accountable. And I just think, you know, as we put rails around crypto, reality will sink in and institutions will show up. And there will more price stability. And you'll be able to make better investment decisions without sort of aberrant things that might otherwise occur that can conspire to keep you from actually making the returns that you deserve. And so, to me, regulation is a real positive.
