WHEN: Today, Monday, January 11
WHERE: CNBC’s “Squawk on the Street”
Following is the unofficial transcript of a CNBC EXCLUSIVE interview with Intercontinental Exchange Chairman & CEO Jeffrey Sprecher and Bakkt CEO Gavin Michael on CNBC’s “Squawk on the Street” (M-F 9AM – 11AM ET) today, Monday, January 11th. Following is a link to video on CNBC.com:
All references must be sourced to CNBC.
JIM CRAMER: Here’s some exciting news back, and that’s Bakkt a digital asset marketplace founded by the Intercontinental Exchange and they own the NYSE, the New York Stock Exchange stock says it’s becoming a publicly traded company, via a merger with the SPAC VPC impact acquisition holdings. Joining us now in a CNBC exclusive is Jeffrey Sprecher Intercontinental Exchange Chairman and CEO, as well as Gavin Michael the CEO of Bakkt itself. Welcome, gentlemen, good to see you.
JEFFREY SPRECHER: Thank you, Jim.
CRAMER: So Jeff. This is the most exciting area of the market right now we know that because crypto currencies, we’re all looking for any way to so called play it whether it be the actual crypto itself or whether it be if there’s a dearth I mean Square PayPal. Will this be the direct way, if you want to invest in the concept of cryptocurrency.
SPRECHER: I think it’s even bigger than that Jim, we, we got into this business because we were interested in the blockchain we were interested in what was going on in the crypto space and so years ago, we started back as a real venture back company within our firm, but as we got into it, we started to see there are all kinds of digital assets, beyond cryptocurrencies that you and I deal with, we have airline miles and rental car miles reward points we have restaurant points and points from coffee companies and all kinds of merchants that are that are rewarding us in different ways. And we started to think what if we could create essentially a wallet. A depository institution where you could put all of those assets in one place. And then, because we’re an exchange underneath it, we could trade back and forth so that you can convert one set of rewards to another set of rewards and use them for spending,
CRAMER: Candidly I didn’t know how big this division was. I didn’t know all the affinity programs, but if I want to own Intercontinental Exchange. Don’t I want all this back business I mean, to me it’s very, very exciting.
SPRECHER: Thank you. I hope you do an intercontinental exchange, by the way. And you and I can talk offline. But, no you know one of the things that my job and the job of the management team here is to create value for shareholders, and we have this great little company inside of us. And I don’t think it was being recognized or rewarded by our own investors and. And so we said to ourselves this great vehicle now that the markets have created that we’ve helped contribute to call the SPAC might be the perfect vehicle to give more exposure to Bakkt so that people could make a direct investment in it. But bear in mind that once we do this transaction will still be the majority partner intercontinental exchange will still have exposure to the value inside of BAKKT
CRAMER: Right that may be an alternative way to play for people who are a little more conservative Gavin Michael let me bring you in Bakkt CEO. It’s interesting Gavin your background is of course it’s Citibank but you were the former head of technology. So what do you bring to the equation if you had that kind of experience to Citi.
GAVIN MICHAEL: Good morning. Thanks to real understanding not just how technology operates and how we scale the venture, like Bakkt to meet the demand that we expect, but also a real understanding of what the changing consumer landscape looks like how customers expectations are rising and how we use digital means to meet and exceed those expectations
CRAMER: market for Bitcoin as we saw this weekend. Is it all orderly Can you bring some order to the market. My experience with Bitcoin is is the weekend is just the Wild West and you shouldn’t even think about doing it. Are you going to be in it 24/7.
MICHAEL: Absolutely. It has to be 24/7 Jim, but what do you think about is we uniquely bring together customer loyalty I mean think about how you’ve considered loyalty today loyalty today looks like a set of cards. We’re putting it on the phone we’re allowing you to accelerate the shift to digital assets and payments we’re empowering you to use your digital assets for everyday spending. Think about buying your morning cup of coffee at Starbucks using unused airline points or using Bitcoin. That’s what our app enables our app enables customers to convert their digital assets in entirely new ways,
CRAMER: When I see NFL players asked to be paid in Bitcoin. I wonder why the heck, we’re not being paid a little bit Bitcoin, Jeff, let me ask you something treasury secretary Steve Mnuchin, he called the New York Stock Exchange President Stacey Cunningham who is well known on our network to object to the, to the New York Stock Exchange’s view of what to do with China’s securities. Is it the role of the government to tell you what to do.
SPRECHER: Well, the New York Stock Exchange is a very highly regulated company and, and we’re navigating, like many companies, how we deal abroad, and we’ve got, you know the President’s actions going on we have Congress has passed some legislation, we have the accounting standards boards are looking at China, we have the FCC that directly oversees us that’s looking at the securities, and in that amalgamation we’re trying to navigate to do the right thing for this country and for the markets and, and they’ve definitely been complicated, just much like the China strategy of the country. what I will say this to Jim you know this because you go into that building. We wrap, an American flag around that building. And we do that purposely and we are uniquely American, and we want to export the best things about this country abroad, but we want to do it in a way that is best for our country. And that’s what you’re seeing us trying to navigate right now.
CRAMER: And you know I believe in that and have for 35 years. But I am confused. I don’t really know what’s best for the country. Do we want those Chinese companies raising capital on our country or do we want to shut them down? What is the right flag way to deal with this situation?
SPRECHER: Yeah, it’s interesting and I’ve thought a lot about it. I’m sure you have too which is, as a society, the United States has always wanted to help the downtrodden no matter what country they’re in. We want to help people get ahead. It’s one of the things that we uniquely export – is our giving and our big hearts. On the other hand, as people rise up, we don’t want them to turn against us. And so there has to be some balance in there. And that’s what I think we’re looking for is how do we help the rest of the world for the benefit of our own people, and then how do we make sure that the rest of the world respects what we’ve just done. And that is not a seamless process, but I will tell you that the New York Stock Exchange was there during the Civil War, during World War One, World War Two, Korean War, Vietnam War, and continues to put that flag in front of the building. So I’m confident that we’ll figure out how to muddle through this.
CARL QUINTANILLA: Jeffrey, I mean you’re pointing to the exact right issue, and your bit about being uniquely American is so well taken. I go into the building too. I mean let’s be more direct. What needs to be the response to the President and his speech prior to the attack on the Capitol, the legislators who tried to challenge the count, the protesters, the rioters themselves – how firm of a stance will you take?
SPRECHER: I’m confident that we’re going to wrap that building in the American flag that I can tell you. I know we will survive this. This company was formed when the United States was formed. The very first listing we had was the Bank of New York, which was Alexander Hamilton’s bank, and the very first loan that they made was to pay the salaries of Congress. So, this institution is the United States if we represent everything that’s good about the United States and notwithstanding the fact that we’re going through an internal debate, I’m confident to the outside world that we’ll represent everything that’s good about our country.
QUINTANILLA: Will you comment at all on the President’s actions?
SPRECHER: No. You know, I think, as you started at the top of the show, the capital markets are doing phenomenally well. The capital markets, which are forward looking, are saying this is all going to work out. There are better times ahead. And you can see it in the collective stock prices of our markets. So I have confidence in those markets that we run. And you know, I’m very positive about what’s going on in the future.
CRAMER: Okay so Jeffrey, obviously, so much going on in Georgia itself. I thought it was really interesting that your wife, Senator Kelly Loeffler of course, was the first CEO of Bakkt. I also know that she was kind of caught up in this controversy – maybe it’s not a controversy or some people think it is – about trading stocks as a senator. And I struggle – I don’t know what the right thing to do is. I mean, do we just say from now on senators can’t do anything with stocks? Like I’m allowed to, I’m not allowed to or is it just look, just as long as there’s sunlight and there’s disinfectant, you can make your own judgment? Again, not sure what the right thing to do is Jeffrey.
SPRECHER: Yeah. Thanks for asking me. You know, what’s been crazy about that narrative is that because I’m the Chairman of the New York Stock Exchange and because Kelly was the head of marketing for the New York Stock Exchange, we’re actually prohibited from trading stocks. And we don’t even have a brokerage account that allows us to direct stock trading activity. So, when we made a disclosure of all of the mutual funds and managed accounts that others are running for us, somehow, you know, the narrative in the politics was that we were insider trading. Which the reality is, she is the one senator that is actually prohibited from trading any stocks.
CRAMER: Well I am glad I asked you that because I think that has not been the narrative. One narrative that I want to go with that I think it’s incredibly positive – I think you do too – younger investors getting in. Now here we can use the moniker Robinhood. But aren’t you just astonished that so many people want in after a long period where young people seem to almost object to capitalism and stocks?
SPRECHER: It’s one of the most amazing trends of 2020. And, you know, a combination of digital literacy by young people coupled with the pandemic that kept people at home, caused people to think about, you know, the investment market as a vehicle for entertainment and for wealth creation when they weren’t working. And that combination has just taken our markets to new heights. I’ve talked to a lot of very senior people on Wall Street and I believe it’s a trend that is not going to go away. In other words, we have created a generation of young people that are in the markets that we think over their lifetime will stay invested in the markets.
CRAMER: Gavin, some thoughts.
MICHAEL: So I think, you know, as you take that retailization of the market into account, we’re helping consumers realize value that they have in assets that perhaps they didn’t know that they held. You know, digital assets like loyalty points have no real value to a customer if they can’t expand them in a variety of ways. And that’s what Bakkt is bringing to this new generation, to these emerging customer segments, and that’s what’s so exciting about the proposition that we’re talking about this morning.
CRAMER: Boy, I’ve got to tell you, for those who want to find a way to be able to invest in crypto and invest in points, invest in everything digital, we may have found it. I want to thank so much to Gavin Michaels, who’s Bakkt CEO. And I also, of course want to thank our old friend Jeffrey Sprecher Intercontinental Exchange Chairman and CEO. Gentlemen, thank you so much for coming on “Squawk on the Street.”
