Catalyzing Tokenization Infrastructure for Small Enterprises with Arushi Sood Joshi, Founder & CEO of Zult

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Welcome to The Get Down.

Hola and welcome to the Get Down Beyond Bitcoin podcast.

Thank you so much for joining us.

I'm your host, Marisa Estrara Rivera, AKA Richie P.

Our guest today is Arushi Soo.

She is the FinTech entrepreneur and founder and CEO of Zolt Incorporated, where she's building blockchain infrastructure that brings compliance, privacy, and scalability to private credit markets from the ground up.

With over 25 years of experience building transformative financial products, she's led digital asset and DLT strategy at.

Wells Fargo advised central banks on digital currency through her company at Cash and held leadership roles at Mastercard and Visa.

She's launched more than 18 FinTech products and is one of the most recognized voices at the intersection of tokenization, regulation, and real-world asset infrastructure.

Arushi, our butterscotch queen.

Welcome to the Get Down Beyond Bitcoin podcast.

How are you doing today?

Well, I'm doing great, and thank you for inviting me.

I'm excited to be here.

Yes, thank you so much for joining us.

Super excited for this conversation.

Can you please tell us what brought you into crypto?

Well, everybody has a crypto story and I'm no different.

So, I think my association with crypto goes back to 2017.

I was working in actually the Middle East at that time at for Mastercard, and I was fascinated by how they were viewing distributed ledger technology and blockchain.

It was still considered to be relatively new.

I got excited enough to leave and found my first startup, which was called Ad Cash, which leveraged blockchain and focused on digital currencies for governments, so central bank digital currencies.

Interestingly, I never really invested in crypto until a few years. as I wasn't clear whether it was going to be a store of value or a method of payment.

I was really more bullish on the power of distributed ledger technology and blockchain to fundamentally disrupt financial services and upgrade the existing pipes.

Wow, fantastic.

I think that's a lot of people's story, right?

Where we, where you, you know about it and you wait a while and, and you're kind of, you know, to, to make sure it's here to stay.

So could you tell us why did you launch Zolt?

Yeah, so, Zolt is a new fintech and it's also a platform, and it's more than a tokenization platform.

So, of course, we do tokenization of assets, but it is a fundamental rethink of how private markets operate.

So, private markets have been notoriously opaque and typically allowed only those with sufficient assets to participate.

This is true both on the issuer side and the investor side.

So, if you were an asset issuer and wanted to raise capital without going public, your path would be both costly and complicated.

Capital formation for private issuers is not something readily available to small and medium issuers.

Similarly, on the investment side, only large institutional investors or very ultra high net worth individuals that have access to wealth managers generally find out about private offerings.

You know, broadly, people like you.

And I don't really know what's available in the private market, right?

And we're, we're.

Right.

Sort of shut out by design.

The market is deliberately opaque.

Now, imagine a small to medium sized nonbank lender like a CDFI.

What opportunity do they have to access liquidity from the private market?

That is why we really founded Zults, you know, we understood the technology, we understood the opportunity and capital markets, and we're here to connect private assets with private investors by leveraging all of what we know the technology and markets are able to do.

So that's a little bit about why we really founded Zult.

Love the mission behind it.

So you, you mentioned you're leveraging multiple technology solutions, in what ways?

Yeah, so, you know, I want to start, start from the problem, right?

We, uh, I was very, very clear that we don't want to force fit a technology into a problem, right?

Just because AI is hot or blockchain is hot, that doesn't mean you just add it to your products, We, they actually have to solve some purpose, and that is what we started with.

We started with the problems that we're trying to solve for, and I mentioned to you about the problems of private markets, right?

So the three problems that were front and center were like opaqueness.

This is an opaque, Market with information asymmetry if you will, right, it's not very efficient, both in terms of who can participate and how the markets operate, and it has a problem of access, meaning not everyone can access this.

So we started to look at how do we actually solve these problems.

So in terms of opaqueness, it's because information is asymmetrically available.

So it may be available with someone at some time, but not with maybe the investor at the time that the investor needs it.

And, There's no single source of truth or a golden record.

That's where blockchain and distributed ledger technology comes in.

It creates a single immutable source of truth, right?

So we use blockchain and we heavily leverage blockchain for tokenizing our assets, for creating a golden source, and making sure information is available to investors.

Right?

Then we looked at the problem of efficiency and workflow automation.

A lot of the smaller issuers cannot access private markets because it's, it's very cumbersome.

They have multiple systems.

They have legacy systems.

They have a lot of legacy debt and they have a lot of documentation as well.

So, we looked at how we can leverage AI and workflow automation.

To simplify a lot of the processes.

So, when we onboard people onto our platform, we heavily leverage AI to read the documents and to simplify the onboarding process.

We leverage basic web two technologies.

I don't know if you've heard of the term defy mullet, but it's, it's kind of used to describe something with a web two front end and a web, Three back end.

So, you can't do away with, with standard technologies like back end technology, like Node JS and, and all of that.

So, we, we leverage a lot of web too as well.

We, we build a lot of APIs to connect legacy systems with the front end.

You know, our goal is not to replace the existing systems, but to connect with them.

And so we're leveraging traditional technologies to do that, and the way we approach technology is to find the technology that's best suited to solve problems.

And in our case, we've leveraged blockchain, we've leveraged AI workflow automation, and traditional technologies.

Fantastic.

I love how you're thinking about the user.

Right, the user and connecting and making the distinction about not replacing systems, but really connecting systems, giving them access is what we, I think we're all aligned on that mission.

So, let's talk about tokenization.

It's a subjective term.

What are your thoughts on tokenization?

Can you share a simple definition for the folks that are watching or listening?

Sure.

We actually have a video on, uh, Zult's social media platform where a mascot, Zultana, uh, who's actually a little Zultana, astronaut that we call Zultana, defines tokenization in under a minute with graphics.

So I highly encourage your listeners to watch that.

In the interim, I will provide a basic, uh, overview, which hopefully is simple.

But at the simplest level, tokenization is a technical and regulatory process by which you create tokens, right?

So what are tokens and what is tokenization?

So tokenization is the process by which you turn rights to something into a digital token on a blockchain.

Think of an asset like real estate, like gold, loans, or even art.

You can tokenize any asset.

That token that you generate from this process represents your digital proof of ownership and interest in an asset.

That's important because that token is the proof that you are the owner of that digital representation or token.

Subsequently, because you are the owner of that digital representation, you are an owner of the asset and, Rights associated with that asset, which means that if dividends are declared or interest payments are declared to owners of the asset, because you own a token, you will get those dividends and interest payments to the extent of your token, right?

And that also allows you to sell the token.

The blockchain maintains a record of all of those transactions.

So, there is a public ledger of everything that has been done by that token holder.

So, no one can give you a token and take it away, right?

So, it is a very, Digitally sound way of maintaining ownership records and conferring rights of ownership on holders of that asset.

So hopefully that was a simple enough definition in defining and grounding us in what tokenization really is.

Thank you so much for that definition and make sure to everyone out there to check out the, the, the Zoltan.

Was it the Zoltan Zoltana, the Zoltana, oh yes, like the astronaut, the Zoltana video.

Be sure to watch that.

So you recently collaborated with my co-host, Cleve Messador on a webinar entitled Small Crypto.

Focused on tokenization for small enterprises.

What would you say is the opportunity for microfinancial institutions?

Yeah, let me first start by saying that, who doesn't love Cliff, right?

I think we all love Cliff, uh, and Cleve's a great host, and it was a great session that she facilitated with my fellow guest Salman from Plume, and the focus was really on micro lending institutions and small enterprises.

And talking to them about the opportunity, because while most of the large organizations, especially in financial services, understand what tokenization is and understand the opportunity, small to medium sized enterprises are still sort of on the sidelines, right?

Wondering what this opportunity represents, if it's safe, how do they participate, and, You know, we come at it from the perspective that not only is it interesting for small to medium sized institutions, it's imperative.

Right.

Because while larger institutions have options, they have teams focused on technology, they have teams focused on capital markets.

Smaller organizations have none of those benefits.

They don't have access to securitization, for example, the same way a large lender does.

A large lender can take their portfolio and secure.

Advertise it and they can pay the fees associated with that securitization and the portfolios are large enough that they don't have to worry about pooling or any of that.

Whereas if you were a small lender or a small enterprise, you have a problem of liquidity.

You do not know how to access capital.

You cannot securitize your, Book because it's not big enough and, and you don't have the kind of money that is needed for a securitization process.

Working with a partner like Zult not only gives you access to the latest technology stack, but access to capital markets without making those investments that these large players are doing.

If a small player wants to access liquidity, they have to think out of the box, and they have to be willing to participate in platforms like Zult that will give them the technology advantage as well as capital markets advantage.

So, it's not a nice to have in our view.

It is a must have.

And I think the discussion, With Clevin Salman kind of reiterated that, that yes, it may seem scary, but there is a path and that organizations should feel confident to start that journey.

Right.

And with Zol, they're able to take that journey.

So, you received, Zolte has received funding.

Can you tell us a little bit more about those partnerships?

Yeah, so, we are very excited about partnering on both our impact side as well as the technology side.

So, we do have an organization called Zalt Impact, which is a 501c3 entity, which is separate and distinct from Zultz, which is a technology company.

And we are very excited that recently we've had some large players like MasterCard, N, Big top 3 financial institutions that have invested and what we're working on collectively is to solve the problem for small businesses.

So, as we know, small businesses have a notorious time in accessing capital, notoriously hard time in accessing capital.

And it's not because they are not good opportunities to invest in.

It's just that they don't fit a standard credit box.

As a result, a lot of the large lending organizations turn them down.

A lot of banking organizations.

That is why community lenders like credit unions and CDFIs step in and fill the gap.

Unfortunately, they have the challenge of liquidity, where they only have this much money to invest in small businesses, and if they've underwritten, You know, a handful of businesses, depending on the size, they no longer have liquidity to keep funding businesses.

So the, the concept that we are working on is a marketplace where all of these sort of loans, small business loans that have been made by community lenders can be tokenized and offered to investors.

So if you view it from an investor's point of view, the challenge is, you don't know if this is a good investment opportunity or not.

Yes, you trust your local CDFI to have underwritten correctly, and yes, our technology is going to give you access to more information to make educated decisions, but you may still be nervous about investing in an asset class.

You've never invested it, right?

So.

Perhaps you've never bought a piece of a loan portfolio.

You may have bought shares, but not a piece of a loan portfolio.

So the mission of Zult Impact is separate from the mission of Zult, right?

Zult is focused on building the technology, whereas Zult Impact is focused on enabling the ecosystem.

And so, what Mastercard is supporting is a loan loss reserve and a grant that will support or protect those, those loans in case there's a default on them, thereby encouraging investors to participate in this market.

And some of the banking institutions that we're working with are also, Interested in supporting small businesses and in supporting CDFIs.

And so through Ault Impact site, we're creating a robust and vibrant ecosystem where donors and foundations can invest in those reserves or in subsidizing the cost for these CDFIs to participate in the technology.

And on the results side, we're building that technology, we're building those marketplaces because we realize that if we come at it just from a for-profit or just from a nonprofit, neither of them will provide a complete solution, right?

So we've got.

Right.

Our lanes, but the idea is to deliver something that, that is impactful to the entire ecosystem.

No, that I love that.

It's very thoughtful.

So if we think about founders that are in the audience, can you tell us about the benefits and challenges of building a finance platform today?

Yeah, well, that's a very fun question, right?

Like, who doesn't want to be their own boss?

Everyone wants to be their own boss.

Everyone wants to start their own company, but it's not as easy as it seems, right?

It, it is a painstaking process to build a new business.

And I think, The first thing to start off with is, are you solving a real problem, right?

And it's not something that you come to at the beginning of creating a company and say, oh, OK, when I started the journey, it was a problem, so I'm just going to keep my head to the ground and just keep plowing through.

At every point, we do that too, right?

We take a step back and say, OK, we started by solving the problem of liquidity.

Do people really think they have a liquidity problem?

Are we, Solving the right problem.

If we are not, be willing to look back and say, OK, well, what is the problem that people want solved, right?

And are they willing to pay for it, because they may want to have it solved, but they may not be willing to pay for it.

Right.

So, I think as a founder, grounding yourself in the problem is, is something that you do.

You ask if you're solving the right problem.

The second, do not underestimate the challenges of raising capital.

You know, it is unfortunately doubly hard for diverse female founders to raise capital than it is otherwise, right?

So be prepared that this is not going to be an easy journey.

The, the bar is going to be higher for you than fathers, for the same.

Metric, right?

So.

Um-hum.

I think understand, have courage to, uh, and be thick skinned to take nos.

There are going to be so many nos along the way.

Right.

Right.

So, you have to be thick skinned.

You have to believe in yourself.

You have to believe in your, Team, your team has to believe in you.

So, the third thing is really the team.

No person, no matter how smart you think you are, can do it alone, right?

You need people that share your mission, that, that share your passion and that are willing to put in the time.

And I, I've been fortunate enough to, you know, build a team that, that does that.

So, I think, Think of those three things above all else.

We can make a full episode of just what founders should do.

Correct.

But I think if it, if nothing else, I want to leave you with these three thoughts, you know.

Think about the problem you're solving.

Think about capital and being thick skinned.

I guess that's, you can separate that.

And, and then the third is make sure you have the right team.

Right.

Thank you, thank you for those points and especially for, you know, the bonus of we just usually don't get access to that as, as women founders and to, to get ready for the nos that are that are coming your way.

So could you please share one or two professional milestones that you are most proud of?

Yeah, that, that's a tough one, right?

Because, you know, I'm older than I look and I've had a robust carrier full of, you know, lots of ups and and downs like everyone else and There would be so many things I'd like to share with you, but, uh, as I was kind of thinking about what is it that I am really proud of, I think it comes down to the firsts, right?

The first time you leave a paycheck to start something, right?

It takes courage.

It takes tremendous courage.

You think you're not going to be, To do it and you do it, and then you're proud of yourself and you're like, wow, I, I did it.

I walked away from something that was certain to do something that was uncertain.

And I'm better off for doing that.

The first time you, at least in my case, the first time I filed a patent, I was so happy.

Like, you know, I'm, I'm doing something that is actually, Adding value and, and that is innovative, and then the first time you convince the first person to go into something with you, right?

It's all the firsts in your career, it's not really the last, so I I think I look back fondly to all the firsts.

Congrats, congrats on how many patents do you have and just even the first one.

That, of course, that's crazy.

How that must have felt amazing.

Yeah, I think I have about 6 or more that I've uh filed so far more, but yeah.

Amazing.

Amazing.

Congratulations.

Thank you.

So, if we go into policy.

It's, it's a big focus for our podcast.

As a founder, what policy issues keep you up at night?

Yeah, I guess the question is about policy issues do not keep me up at night.

You know, it's crypto and blockchain is an interesting space to be in because you are playing a game where the rules change mid-game, right?

You, you start the game thinking the rules are one and then.

Midway through, there are multiple referees, by the way.

And so you really don't know which referee is, is actually responsible for the rules, and you're like, OK, I'm gonna listen to you and I'm gonna listen to you.

And as a startup, that's very challenging because you're trying so hard to make sure that you are building a compliant product.

Want to make sure you're, you know, adhering to all the requirements.

And so we always just, sort of treat it as this is a technology.

Everything that, that's good for the goose is good for the gander, right?

So, if.

Right.

There are some capital markets rules that apply to traditional markets, we'll just assume regardless of our technology, they apply.

To us.

As a result, quite honestly, sometimes we can do some of those really, I don't want to use the word risky, but, you know, some of the.

The things that people are doing in the DFi market, right?

Because we, we stop and we say, well, what does this mean?

If we do this, you know, does that change what we're doing on the regulated side.

So, I think the thing that keeps me up, At night is knowing what the rules are, and with clarity, understanding how is clarity going to impact us as a tokenization platform, how is clarity going to impact us as an alternate trading system if we apply for that license, what does it mean for alternate trading systems?

We also worry about the broader ecosystem of broker dealers and investors, so we are offering our product to investors and we want to make sure investors are fully protected in their.

Investments in digital assets and quite frankly, unless there are clear guidelines, people are going to be reticent to invest, right?

Right.

People have invested in crypto, which has been highly unregulated, but when it comes to tokenized assets, I think people are still trying to understand, you know, how is this different from a traditional investment, and it shouldn't be, you know, the same way a traditional investment is protected, tokenized investments should be protected.

So I think understanding, first of all, like everyone else, we're waiting to see what happens with clarity.

Right If and when clarity is passed, having, you know, clarity, no pun intended, on what that means for a startup like us, what does that mean for our customers, all of that is important.

But, of course, in the interim, we are holding ourselves to higher standards because we don't know what the rules are.

So we're just being overly cautious and playing by all the rules that ever existed.

Right.

And I love how right now at the time of our recording, we're in World Cup season.

So I love the analogy of the referee because not only is it like what referee do you listen to, but when I move on the field, it could totally change as well and then more referees, I mean, it's just, it's, it's crazy out there for, for anyone in that space.

So do you have any last thoughts before we wrap up with our closing questions?

You know, this has been great, it's, it's been a lot of fun.

I want people to understand that.

We've been hearing that blockchain is here to stay for the past 10 years, right?

For as long as I've been in this, this, every year has supposedly been the year of blockchain.

And then something new will come in like AI and then blockchain will go to the side, right?

And everyone will just be focused.

And what I want people to know is this, this technology is truly and fundamentally. capable of changing financial system plumbing, right?

It, it's.

What we choose to do with it is different.

Whether you choose to think crypto is a safe investment or not is a completely different and separate conversation from whether distributed ledger technology represents a safe technology to build financial infrastructure on, right?

And we are more biased.

Towards that discussion, which is does distributed ledger technology or is distributed ledger technology mature enough, scalable enough to be the technology that financial infrastructure is built on, right?

So I think I just want people to stop confusing or commingling crypto with blockchain and distributed ledger technology.

Right.

No, no, I appreciate that and I totally agree that that's the reason why I even entered the space was because of the change of the infrastructure, security, and also the combination, as you spoke to in our conversation, the impact, the access, um, that, that, you know, I think that's why a lot of us that, you know, are here are in this space.

OK, so let's get into the final questions.

Can you tell us a fun fact most people don't know about you?

If I tell you, it wouldn't be a fact.

No people don't know about me, would it?

It's become a fact that people know about me.

So I think what I can tell you that is innocuous enough is I once wrote a book, a, a fiction book called Split, which was about the life of a first-generation Indian immigrant in America.

It was not my story.

It was sort of like a, what I call a.

Sala novel.

More, more, you know, more fictional than fact, but, um, yeah, and, and I think I have one more book left in me at some point.

So, I, I guess that is something people don't know about me, which is completely random and unassociated with my day job.

Yeah, I was gonna ask if there was another book, but you just said it.

There's another book in you.

And is it under your name or are you under, like, you know, yeah, no, it is under my name.

It shouldn't have been.

I shouldn't have done it under someone else's name.

There's a learning for the next time.

Write a book under someone else's name.

And then maybe you become as famous as, you know, uh, JK Rowling or something like that.

But yes, I do have another book.

It is under my name and it is from many moons ago, and I actively discourage people from reading it.

And just because you said that, everyone's going to look for it now.

OK, so, is there anything you want to compel the audience to consider?

Any CTAs for the folks out there?

Yes, don't, don't be afraid.

Pick up the phone.

Write us an e-mail.

Don't think you need to be an expert in tokenization.

Um-hum.

If you've ever thought about how do I access liquidity as an issuer, right?

Or if you're an investor that's curious about how you can invest, we're here to answer your questions, you know, you can e-mail us at, Info at Zelle.io or hello at Zelle.io, and, you know, we'd be more than happy to schedule a demo, so you can see what we're talking about.

This is not smoke and mirrors.

It's not crypto.

And don't be afraid that you, Don't know.

Most people don't know, even when they claim that they do know, right?

So that's the CTA that just take the first step.

Awesome.

So you gave us the, the way to, to email, to ask questions, and reach out.

What are other ways that people can contact you?

So, we are active on all social media channels.

No thanks to me.

This is thanks to a great team that's focused on marketing and social media.

We do have a social media page for both Zalt Inc. and Zalt Impact.

Please reach out to us on LinkedIn.

Please reach out to us on Facebook.

We're on Telegram.

You really don't have any, Excuse to get in touch with us if you want to, right?

There are, there are so many ways from going to a website, which is Zal.io, to, uh, connecting with us on LinkedIn.

We're small enough that, that we will answer your questions and if you want to meet with any of us personally, we'll be more than happy to.

Awesome.

Well, thank you so much for joining us today.

And special thanks to the butterscotch queens and kings out there for joining this conversation.

Our podcast is now available via FinTech TV.

So check us out and be sure to stream all episodes from season 1 and 2 on your favorite platform.

Until next time.