24/7 Real US Equities and Global Market Access: Armani Ferrante on CNBC

Backpack founder and CEO Armani Ferrante joins CNBC’s Morgan Brennan to discuss 24/7 trading of real US equities, bona fide security entitlements, and the globalization of US capital markets.

‍Watch the original interview on CNBC

About the conversation

Backpack Brokerage enables international investors to trade real US equities 24/7, including when traditional US markets are closed. In this conversation, Armani Ferrante explains why the most important question is not simply when investors can trade, but what they are actually trading.

The interview examines the distinction between a bona fide US equity security entitlement and synthetic, wrapped, derivative, or cash-settled stock exposure. Armani also discusses how tokenization is transforming global access to financial markets.

Stablecoins expanded access to US dollars beyond local banking rails, particularly for international users. Backpack is extending that model of global access to US equities through round-the-clock brokerage trading and Backpack-issued tokenized stocks on Solana.

The conversation explores three connected ideas: how genuine US equity security entitlements can trade around the clock, why the underlying asset and its legal rights matter, and how the international adoption of stablecoins may provide a model for the globalization of US equities.

Watch the conversation above or read the full transcript below.

Speakers

Armani Ferrante, Founder and CEO, Backpack

Morgan Brennan, Anchor, CNBC Morning Call

Transcript

Morgan Brennan: Joining me now is Armani Ferrante, founder and CEO of Backpack, which is launching the first 24/7 trading of U.S. equities for international investors. Armani, it's great to have you on the show. And it's interesting. I feel like we opened up the hour talking about giving international companies greater access to U.S. markets. But now you and I are going to talk about giving international investors greater access to U.S. markets as well. So what does that mean for Backpack?

Armani Ferrante: Yeah, thank you so much, Morgan. I'm super excited to be here. Good morning. Maybe I should say good evening, given I'm calling in from Tokyo. Just real quick, you know, Backpack is a modern brokerage, but we're not just a brokerage. The product looks and feels a bit like a neobank, but it's not correct to call it a bank. You know, we're a crypto exchange, but it's not just a crypto exchange. Backpack is a globally regulated financial institution for the future of money. And right now, we are in the early innings of this incredible transformation of global finance all around the world. And this is being built on the back of tokenization. It's being built on the back of blockchain technology. And this is really what the crypto industry, which, you know, admittedly, it might feel a bit mysterious sometimes. This is what the crypto industry is all about. And so we're super excited to be going live with 24/7 trading of real U.S. equities through the brokerage for the first time going live today. I couldn't be more excited about it.

Morgan Brennan: Yeah. And to your point, I mean, we've heard a lot about tokenized securities and sort of the role that blockchain is playing in enabling this financial infrastructure, financial services infrastructure of the future. But how is what you're offering when we talk about specifically the stocks themselves? How is this different than what else is out there?

Armani Ferrante: Yeah, it's a great question. Really, it boils down to what is the asset you're trading, right? Are you trading a genuine stock, a genuine security entitlement, or are you trading something else? You know, maybe taking a step back for a moment, 24/7 trading has been around for a while in crypto. This was really the core innovation that tokenization initially brought to the world. And if you take a look at what the tokenized stock issuers are doing today, what they're really doing is they're taking a traditional brokerage, they put stocks into it, then they wrap it into a completely separate security, a completely separate instrument that has, well, it has different properties than what you would expect from a traditional brokerage. You know, these properties might be different legal rights. They might be cash settled. And so they might be more akin to something like a CFD rather than an actual security entitlement. And so when you're going back and forth between these different representations of different assets, even though it might be the same symbol, at least at the surface, really what we're talking about most of the time is we're talking about these derivatives or, you know, synthetic assets that are these approximations for giving price exposure to an actual stock. And so what we're doing is really for the first time opening up 24/7 trading for a genuine bona fide security entitlement. You know, markets will close on Friday in the U.S. And over the weekend, Saturday and Sunday, people through the Backpack brokerage will continue to trade and they'll get the exact same asset that you would expect from, you know, your neighborhood brokerage account.

Morgan Brennan: Okay. And you're starting with three names that have been pretty heavily traded this year, Micron, SanDisk, and I realize it's only been trading for less than a month here, but SpaceX as well. What does 24/7 international access for, what does that mean for the global capital that's flowing into the U.S. stock market, especially at a time where really over the last, I'd call it a year and a half, we've actually seen some of those international investor flows flow out of things like the U.S. bond market.

Armani Ferrante: So Jensen Huang from NVIDIA, he loves to say that the world needs to build on the American tech stack. But we don't talk enough about the world building on the U.S. capital market. And that's really the thing that's happening with crypto right now. And there's no better example of this than what's been happening with stablecoins as they exploded over the past couple years. Where, you know, what's a stablecoin, right? It's, you know, you have cash sitting in a bank account, you tokenize it, you put it on blockchain. Maybe from a domestic point of view, a stablecoin is a story about efficiency, a story about upgrading the existing financial system. But when you look internationally, it's a very different story, right? It's a story about access. It's a story about the entire world wanting access to U.S. dollars, even if they don't have access to local USD banking rails. And the consequence of this has been pretty clear over the past couple years, where you have Circle, you have Tether grow to be, you know, some of the largest holders of U.S. treasuries all around the world. And so in the exact same way that U.S. dollars have really been exported to the entire world and proliferated through kind of the form factor of a stablecoin, you know, we fully expect tokenization of U.S. equities to have the exact same effect, but for publicly traded companies in the U.S. all around the world.

Morgan Brennan: Super interesting. A trend we'll continue to track here. Armani Ferrante of Backpack, great to have you on. Thank you.

Armani Ferrante: Yeah, thank you so much, Morgan.