MIAMI TAPES: Blue Macellari (T-Rowe Price)

0:00Alex Thorn:Welcome back to another edition of the Galaxy Brains Miami Tapes, interviews that we recorded on-site at Miami Beach Convention Center during Consensus 2026 in May. We have another great interview for you. Blue Macellari, the head of crypto at T. Rowe Price, is our guest. T. Rowe Price, one of the biggest asset managers in the world. Blue has been running an actively managed crypto fund at T. Rowe Price, and I think they're launching, they've just announced the first actively managed spot crypto ETF. EF. We'll talk with Blue about institutional adoption and what it means to be a large asset manager, actively trading spot crypto for their holders.

0:37Alex Thorn:Let's hop right into the interview with Blue. Blue Matulari, head of digital assets at T. Rowe Price. Thank you, Blue, for coming on Galaxy Brands. Thank you for having me. I'm very excited to talk to you. We've known each other for a little while now, but have never had you on the show. And a lot is happening both in crypto, but also at T-Row in crypto. And gosh, you guys were kind of pioneers. Now everyone's following what you guys have been doing, right? Now everyone's getting into crypto. It's a cool thing. All the kids like it. Yeah. So yeah. No, we have been, I mean, I joined T-Row. So I've been in crypto for 10 years now.

1:11And I joined T-Row almost four years ago to build out sort of everything from the investment side, tokenization, the operational setup. It was a super easy lift. And I was like, bam, no, it was, you know, coming, you know, your experience of Fidelity. Right. It's a lot of work to bring a large organization along with you. And when you have sort of a totally new operational model combined with a totally new asset class, and you got to just bring like a lot of different stakeholders along.

1:48Alex Thorn:So, I mean, you're one of the few people building a genuine crypto business inside a top tier institutional traditional capital markets business. I mean, you're right. We did. We tried to do this at Fidelity. Fidelity was very early, but it was even there where there was lots of buy in. It was not easy. Right. Yeah. I mean, obviously, there's there's been a, you know, there was a significant regulatory overhang that sort of shaped the path that all large regulated institutions had to take. Yeah. But, you know, and I joined I joined like seven weeks before FTX. Right. So that was my first trip to the, you know, Monday morning meeting was like, no, this is not the end of crypto.

2:30Like, no, it's but, you know, building a bear market. And that's like to our credit as an organization. That's what we did. And we built sort of end to end operating system. And by built, I mean, we went with all best-in-class crypto-native providers. We did not retrofit a single thing at T-Row. I always like to say the only T-Row system we use in digital assets is Microsoft Outlook. And everything else is separate. And we've run an internal research fund for the past three years. We go pretty far down the liquidity scale.

3:10Alex Thorn:Yeah, you guys are playing around a little bit. Yeah, there are times that I've sat in leadership meetings and been like, so this is what a dog-themed meme coin is. But it's been, as an organization, we're incredibly open-minded and research-driven. And so when you can take them on the path, when you can sort of explain the pieces like this is why this makes sense, this is why it is going to transform our industry, then people are open to hearing it and they're willing to sort of support you. Yep. I think that makes a lot of sense. And I have been very encouraged by T-Row's progressiveness on this.

3:48Alex Thorn:Really, again, you guys really were quite early. Do you feel like now T-Row has like a leg up on the, I don't know, the rest of SIFMA's membership that is finally here to work on crypto? I think so, just because it takes a lot of time to like, especially like your operations, your tech group, takes a lot of time to wrap your head around this stuff. So even if you can get there from like an investment perspective or a strategic perspective, those sort of middle and back office and support functions, compliance, right? Financial crimes, it's a lot of work. It's a significant undertaking. And so it feels good to have done that groundwork.

4:27Alex Thorn:How important has the regulatory shift? You talked about the overhang having colored how T. Rowe and others had to build a couple of years ago. How much of an unlock do you feel the last 18 months has been with the market regulators and bills in Congress and stuff? So our PR liaison in investments is always like, whatever you do, don't go on the show and say, it's a sea change. It's like a sea change, right? It has changed. It's changed everything to have, you know, our primary regulators be willing to engage constructively to answer questions, to explore ideas for the answer to be like, well, how can we talk about this or what does that look like?

5:12to be asked how they can support you is mind-blowing. And I think for all the large asset managers, what we really needed was we needed enough certainty to be able to build. It takes a lot to turn that T-Row ship around and go in a direction. We can't just do that and then be like, well, we think maybe six months later, you're like, oh, surprise, you can't. You got a letter from someone. And so that visibility, that certainty, And that willingness to engage has changed everyone's ability to build in this.

5:44Alex Thorn:Yeah, you didn't realize. I certainly didn't realize that regulators could actually like the businesses that they regulate. They don't have to be exclusively hostile. Exactly. Exactly. I think it was such a strange thing, too, because the prior SEC, it didn't just say come in and register and then make it impossible to register, which it did do. It also just didn't, there was a whole bunch of work they should have been doing on broker-dealer rules, on the custody rule, all this groundwork. Even if they later were going to be highly restrictive, they simply didn't do the work. So the FCA in the UK did a lot of work to think about how do we put these things into our existing rulebook or what rules need to be changed.

6:24Alex Thorn:That work even now still has to be done. And we just lost four years where the commission just refused to even do that work. I don't know why. I still don't quite know why. It's strange, you know? It is strange. But one of the things that's really interesting is obviously we're a global organization. And so I'm based in the U.S. But when I, you know, I'm asked to give a global perspective internally and I would talk to like our London-based group or EMEA or Asia, one of the things I would say is, well, here's the slide. on, you know, global regulatory landscape. And FTX happened. And almost every major regulator across the globe took that as an opportunity to say, okay, some things need to change.

7:06We need to make some structure, make some rules. Let's bring this into the tent and figure out how to work with it so that people don't get hurt. And the U.S. said, we're going to close our eyes and hope it goes away. Right. Which is... Right.

7:19Alex Thorn:I agree. You got good things out of Singapore and Hong Kong and the UK. You got MECA in Europe, probably many other jurisdictions I'm not even aware of. You're right. They all did new registration and licensure and compliance, but we just didn't do anything. Anyway, those days are behind us. Thank God. I'm a big fan of what both of the market regulators, the CFTC and SEC, are both working on. Hopefully, we get Clarity Act through Congress. How important is that specifically? Do we need it or can we just sort of live with this positive regulator stuff? So from our conversations, I know that you are like an armchair policy maven.

8:00So I'm going to put the question back to you because I feel like you're going to have a better answer than me. But I feel like I am, compared to the average person, I think clarity is much more important and I'm sort of anxiously awaiting. Compared, like if you put me on the crypto spectrum, I think I'm much more sanguine about how we'll be okay, even if we don't get it. I think the industry as a whole has progressed so much. I think that there are elected officials heard the message in recent years and take the industry seriously.

8:34Alex Thorn:Yeah. So I think that's a really sort of big milestone. Joan. And I think that what we've seen from what we've seen from the CFTC and from the SEC is from the OCC, from everybody is a willingness to make rules and sort of put in some guidelines and give us direction and a framework to the best of their ability in the current circumstances, even in the absence of congressional action on this front. I agree with that. I think that the way I like to say it is that, you know, I think for at least the next two and a half years, we're going to be pretty fine under this administration's regulators. But something like clarity could be something that gets us fine for two and a half decades.

9:19Alex Thorn:Right. It's sort of like I almost think of genius and clarity like the 33 and 34 Act, frankly, like and actually there's it's very rare. It's like the Civil Rights Act and the Voting Rights Act, like the 33 and 34 Act, the Clean Water and the Clean Air Act. They often come big things come in twos, but not that frequently. So it would be a big deal. But I think we I do think some of the industry, like the way they've talked about clarity, have overhyped its importance. It is very important. But I think we're fine without it. I don't think if we don't get it, it's got to be like some disaster. Anyway, that's sort of my view of it.

9:54I think that makes sense. And I think, but if you also look in the grand scheme of things, it's really rare for Congress to pass legislation for a specific financial services industry. Right.

10:07Alex Thorn:I mean, it's complicated legislation, too. And it's been quite bipartisan. I mean, this is honestly, it's probably the most bipartisan issue in Congress today. And then I think obviously it didn't help that we got tangled up in the whole stipend yield. the the yield debate yes the kerfuffle i have to say shout out to tom tillis and angela also brooks who i think some in crypto were quite upset uh with tillis for negotiating with the banks but in the end it looks like they came out with a very good compromise and the banks are still being intransigent and so it's like maybe they'd never want actually i think the banks are the ones now who look like um unreasonable frankly because like they just worked for four months with like a bipartisan senate negotiating panel and they still are mad about it and it's kind of like guys like now you're the ones dragging your feet what kind of looks like they don't want to deal and maybe never did actually is what it's starting to look like to me so and this is like a genuine question for me which if that feels really self-defeating to me because aren't they then like if it isn't covered in past and clarity and addressed aren't they stuck with genius which is what upset them in the first place.

11:20Alex Thorn:I agree with that. I feel like the status quo is not their friend. They're the ones that want the change in law. Exactly. So they should want something. Yeah. I don't know. Maybe they think they can distract their feet. Part of me also thinks, because they are all building too. So it's kind of like, I was arguing that they're, it's like the innovators dilemma. They want to incorporate crypto into their stuff, but they need more time. So they'd rather delay and deny. They just want to slow us all down so that they can like catch up. That makes sense. I mean, maybe. Might make sense. Um, you once said that if you don't start out as a crypto skeptic, there's something wrong with you.

11:52Um, which like, but you love crypto.

11:54Alex Thorn:Are you still a skeptic or how is it important to still build, be skeptical while you're building in crypto? I think it has to be a journey. Like when I meet people and they're like, I, you know, I went on, I went on crypto exchange, blah, blah, blah for the first time. And I bought something and it went super up and I'm like, yay, crypto and this is like I've gone down the rabbit hole and they never stopped to think critically to be thoughtful about it that always makes me nervous I think I think in general I'm like this like I want to interact and engage with people who have like kicked the tires and ask the tough questions it when I first started interacting on chain and when I first walked away from private equity to go launch a crypto fund everybody I like resigned and they all just looked at me and they were like, a what?

12:43Why? Huh? Is this a comp issue?

12:46Alex Thorn:And I was like, no, like, it's like, no, there will be no salary at the new place. We're just going to run our PAs. Like, um, I think in order to be willing to understand something this complex, to be willing to commit to it the way that people in this industry commit to it, because equities, people don't feel like this about what they do. They don't, they're not wearing their equities t-shirts everywhere and dressing their kids up like different equities for Halloween. Oh, right. Right? Wow. So to get to that place, it's a pretty rigorous intellectual process. And I think it should be. I love that point.

13:24Alex Thorn:I think there's clearly something different happening in crypto than there is in other asset classes. We do it because we love it. The passion is immense. I want to ask about tokenization. Obviously, this is, I've lived through so many eras in crypto now. It's back. It's been back for a couple of years now, at least since the new administration came out, because this SEC is supportive of the idea of tokenizing equities. And I remember back when I did VC in this space, like we were in 2018 or so, there was like 30 tokenization platforms. And we used to joke that there were more platforms than issuances.

14:00Alex Thorn:And that was true then. One of the problems I've noticed over the years is like, remember, people wanted to tokenize real estate. It turns out like one of the problems with that is that, you know, connecting the physical to the digital ledger is a problem. I remember IBM was running ads saying they were tracking tomatoes on the blockchain. And we're like, how? How do you put a tomato on a blockchain? But equities are intangible as well. So they're a really good target. And, you know, NYSE and NASDAQ have announced stuff. Obviously, DTC is doing stuff. We've tokenized our or allowed our own stock to be tokenized.

14:35Alex Thorn:How do you, how important is this? You said the next level unlock would be when both the wrapper and the underlying are tokenized. We're getting close. We are, we're getting really close and we're getting closer faster than I thought we were, which I mean, which is great, but it's moved faster than I expected. And so what I mean by like, that's where the next level unlock happens. So we're a$1.8 trillion asset manager. We are one of the largest, I should know this, we're one of the largest managers of active equity funds anywhere in the world. So when you're an asset manager, there are two ways you interact with tokenization.

15:15You can tokenize your funds and you had a lot of autonomy on what that looks like, what you want to tokenize. You can put it on one chain, you can put it on any chains, how you design that. There's a huge amount of flexibility there, sort of white space. And the other place that we interact with tokenization or will interact with tokenization is the trading floor. And there we're really takers of business industry standards as they develop. When you're an active manager, what I don't want is for us to have tokenized and actively managed equity funds, have that moving at the speed of blockchain.

15:55then have all the underlying, not moving at that speed, settling T plus one, and it's not an S &P 500 fund. So there is, right? So this and this can be different. You can be running a perpetually compounding intratemporal asset liability mismatch. And the other thing is, is what we all learned in the 2019, 2019, 2020, 2021 sort of period was how absolutely critical and like seamless interoperability was.

16:27Alex Thorn:Right. So if I get to a place where I've like tokenized a bunch of funds and then six months, two years later, the whole trading floor gets tokenized and it's like. A different tech and different. And I'm like having it like, I'm like, you know, on one end to two o 'clock in the morning trying to bridge us now. I'm joking. But like you're trying to bridge and it's, you don't have fully. Then what you've done is you built two super efficient systems that cannot communicate with each other. I think there's a lot of rebuilding and speed running the history of financial markets happening in crypto.

16:58Alex Thorn:That's one of them. And like that, you know, you've got blockchain A is really good with this and it's pretty much done this way. But then blockchain B, it's, oh, we're a little better or a little different, but it's also done differently. And we're like, do I have to use all of these? And obviously we know the cyber risks in bridging as well. You guys, speaking of tokenized funds though, So T-Row has filed for, I think, what would be the first ever actively managed spot crypto ETF. So spot crypto is in an ETF, but actively managed by a portfolio manager. I don't know the status. There she is right there, the portfolio manager, Blue.

17:37Alex Thorn:I don't know the status of the filing. My understanding is it hasn't launched yet. But what can you tell us about this? It hasn't gone effective yet, but what can you tell us? So we have an active, like we have a pending filing with the SEC for the actively T-Row Price active crypto ETF. We originally filed in October and there was a third update, I think two weeks ago, with the ticker tokens. and it's interesting because it is the first one that is actively managed it was a really challenging process to solve a lot of the questions that come up in the mechanics of an actively managed when you have an asset class that trades 168 hours a week and you have And what is the equity market?

18:35It's like 30, 35.

18:36Alex Thorn:35 maybe. Napping the rest of the time. Yes. There are, it's a whole other set of mechanics that have to be worked out and redesigned. And there was no template for that. Yeah. And so that's been a really, really interesting process. And we're an active management shop. This is like what we do. We're research led. This is our bread and butter. And so now we're just turning that lens to the new asset class. And do you think if we get like tokenized securities or something, does that make asset management generally easier? I know this is about spot cryptos, that fun, but how would tokenize it? If every stock is a token, how does that change the asset management business in your mind?

19:20So one of the things, so I think that one of the questions I'm always curious about is like where people came from before they came into crypto. So like, what did you trade? Did you trade fixed income? Did you trade FX, like equities? Right. If you sit down with your equities desk and are like, so when we tokenize all the stocks, you can quote, I don't know, you'll be able to quote Amazon and NVIDIA. Like you'll have crosses like in FX. There's no, you don't, it will be much more efficient for a long time to go through the dollar lag as it still is in many places.

19:50Alex Thorn:Sure, sure. But when you sort of tokenize all the things, it opens up an incredible range of what is possible in terms of efficiency for trading. Right. And I think when you think about like, and I don't know if this is like five years, 10 years, make up your number. What we like, we can achieve like fully customized, like mass customization for clients. So instead of having like a quasi SMA, like a robo advisor type SMA, like you can have a fully customized portfolio and it becomes affordable to manage that. And I really believe that in, I believe that asset managers ignore tokenization or sort of, you know, dismiss it at their peril.

20:42I think in five years that the equity analysts that cover us are going to kind of like look up and be like, well, let's divide the world between the people who did it and the people who went on chain and the people who didn't. Right.

20:55Alex Thorn:Let's talk a little bit about AI. Your colleague, Matt Howell, talked recently about AI and said that it's moving from theory to practice on the trading desk. How either, you know, I don't want to stretch too hard to, you know, combine crypto and AI in this conversation, but just AI generally as an asset manager, you know, Kraken CEO said he would trust 100 percent of his crypto with an AI portfolio manager within a year. I interviewed Anthony Pompliano. He's launching an all AI stock research business. That's just all AI. How are you guys at T-Row thinking about it? And how is Blue as head of digital assets thinking about the importance or overlap with AI?

21:34So we're making, we have, we've actually been really fortunate and they rolled out AI and they rolled out multiple tools. Like we've had it for a couple of years.

21:44Alex Thorn:Yeah. And so then people have graduated towards like their favorite models and their different flavors and stuff. And now apparently we're having lots of discussions around how to ration tokens. Yeah, I think a lot of people are. But I think it does have the potential to dramatically change asset management and trading. We're within the digital asset group because we're a really lean group and we're super consumers of AI. We use it for a lot. and I'm really fortunate because my co-portfolio manager, David Kroger, also has a degree in AI, which for a middle-aged mom like me, I'm like, hey, David, why isn't it doing what I thought I was going to do?

22:29Alex Thorn:Pretty good to have access to that, no doubt. Rewrite the prompt for me, David. But it is, I think that something where I see a really interesting intersection from like a TreadFi perspective is not only in crypto, but it's sort of being forced by the tokenization discussion. There's a lot of discussion around like, let's all get to 24, seven, three 65 equity markets. Yeah. And I was like, guys, I've been in a market that's 168 hours a week for like 10 years. You don't want it. You don't want it. Like you might want to slow down on that a little bit. It's, uh, you know, you don't want like the phone makes a horrible noise in the middle of the night and you're like, I think we should honestly go the other direction.