Banks want to UNDO Stablecoin Legislation! Crypto Must Fight! with Summer Mersinger

Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
I saw a little bit of this in the fintech
and everybody was talking about how fintech was going to
disrupt traditional finance, but it really kind of merged into it.
There are so many things that digital assets and the
blockchain solved in the financial services sphere. I think it's
been kind of neat to see something that fixes a
lot of problems that have existed within the sector for

(00:22):
quite some time.

Speaker 2 (00:23):
Is there any chance that the banking folks can lobby
to get this bill updated or we have to fight?

Speaker 1 (00:28):
So it's not like we're picking this fight, but we're
going to have to respond to it.

Speaker 2 (00:38):
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So if you'd like to learn more about v chain,
go to vchain dot org. Link will be in the description. Hey, folks,
welcome into the Thinking Crypto Podcast. I'm your host, Tony
Edward and joining me today is Summer Mersinger, who is
the CEO of the Blockchain Association and a former CFTC commissioner.

(01:47):
Some are great to have you on.

Speaker 1 (01:49):
Oh, I'm excited to be on today.

Speaker 2 (01:51):
Yeah, Summer, I followed you over the years. Appreciate your
thought leadership and your insights on regulating markets, especially crypto,
and I'm excited to dive into the latest and greatest
that's happening with the Blockchain Association as well as the
crypto industry as we're now trying to get the Clarity
Act pushed through. But uh, let's start off with your background.
Tell us a bit about where you're from and how'd

(02:12):
you end up with the CFTC.

Speaker 1 (02:14):
Yeah, it's kind of an interesting, uh you know, kind
of journey that I did take to get to the CFTC.
I mean, I grew up on a farm in South Dakota.
Uh and you know, worked for my home state congressman
who's now the majority leader of the Senate, John Thune.
Worked for him for a lot of years and did

(02:35):
financial services policy for him when the when the financial
crisis hit. So it was kind of a I had
to learn very fast how everything worked in the in
the banking sector. You know, who the regulatives are, what
they do. Uh. So that was really good. You know,
It's kind of a moment that shaped my my career.

(02:58):
And at some point I ended up at the CFTC
working for former Chairman Turbert who's now at Circle. And
you know, I it was great. I kind of said this,
I found my people. They have like an agriculture background,
but they, like you know, everyone's in financial services. So
it's very unique. And at some point they asked if

(03:20):
I would consider being a commissioner given you know, again
given my background, given the policy that I've worked on,
and that they I think I have a lot of
friends in the Agriculture Committee space too, So it worked
out really well. It was it was an honor to
be a commissioner. I really enjoyed the work. I really

(03:41):
enjoyed the people there too. You know, even when we disagreed, uh,
we all you know, everybody still can be a great
you know, we can all be friends at the end
of the day. So it was it was a great
op It was a great experience.

Speaker 2 (03:54):
That's awesome. And you know, you've seen what maybe somebody
may consider now fi where we're seeing the evolution into
web three and on chain finance. You know what's that
like to see, Uh, you're you were in one era
and now you're seeing the evolution of this technology into
a new era.

Speaker 1 (04:12):
Yeah, I mean it's we've I saw a little bit
of this too when the fintech you know, kind of
came unseen and and everybody was talking about how fintech
was going to disrupt traditional finance, but it really kind
of merged into it. And so it is there are
so many things that that digital assets and the blockchain

(04:33):
solve in the financial services sphere that you know, you
look at it and you're like this makes so much sense,
you know, faster payments, less friction, you know, more kind
of more security. So I think it's it's been kind
of neat to see something that fixes a lot of

(04:54):
problems that have existed within the sector for quite some time.

Speaker 2 (04:59):
Yeah, that makes sense. The technology is finally here, blockchain
tech where you have that instant settlement, verifiability, more transparency,
and more decentralization where the little guy so to speak
and participate.

Speaker 1 (05:13):
Yep. Absolutely so on.

Speaker 2 (05:16):
That note, we need clarity in the United States right
to let this innovation flourished, to create jobs and maybe
push the next economic boom along with AI and other technologies.
So I would love to get your thoughts on the
Clarity Act and where we're at right now and the
timeline for getting this past.

Speaker 1 (05:36):
Yeah. Absolutely. I was just on a panel with former
Chairman of the CFC Russ Benham, and we said we
should have a drinking game for every time some desais
word clarity.

Speaker 2 (05:47):
Uh.

Speaker 1 (05:48):
It was repeated over and over again in our in
our talk. But uh yeah, kind of here's where we
are right now. The House, the House Representatives had a
very good by partisan vote on the Clarity Act.

Speaker 2 (06:03):
Uh.

Speaker 1 (06:04):
It was I think probably surprised a lot of us.
We you know, I think we were all kind of
taking bets as to, you know, how how much how
many Democrats would vote for it, and I don't think
anybody had you know, got that number right, which is
really good. That shows that there is bipartisan you know,
support for this legislation, bipartisan recognition that there needs to

(06:27):
be rules of the road. We need legislation to keep,
you know, so that we don't have future regulators trying
to interpret the law and use it as a weapon.
So seeing that was great, and I think it really
spurred the Senate to move. They were they were kind
of slow walking in a little bit, and seeing how

(06:50):
well the House did, they realized they have to they
have to work on it too. So Senate's kind of
doing their own thing. That's not unusual. A lot of
times the sides will have completely separate bills, and you know,
they have to figure out how it's going to come
together in the end. But this is extra complicated because

(07:11):
it's also across two committees of jurisdiction, so the Senate
Banking Committee and the Senate Agriculture Committee. And sometimes that's
a really difficult divide to cross, and when you're merging
text from two different committees, that gets tricky as well.
So they're in the process of trying to get you know,

(07:31):
the text for each each jurisdiction. Right, Senate Banking is
pretty far along. They've got kind of a second discussion
draft out there. They're making a lot of you know,
minor changes. At this point, I think we can expect
something out of Senate Agriculture soon. I actually expect it
to look a lot like clarity, which is good. I

(07:51):
think that will help move this along. But at some
point they've they're going to have to merge what Senate
Banking has, well it's going to do They're going to
they're going to have what's called the mark up at
the end of the month, and that's like actually sitting down,
going through the bill and voting on it as a committee.
So they're going to do that at the end of
the month, and at some point they'll have to merge

(08:11):
with the Senate Agriculture language, and then they have to
merge it with the House. Get the House, you know,
they have to work together. They they have what they
call a conference committee. We don't see this as often anymore.
But you know, this was a procedural where you'd put
the House and send it together with their two separate bills,
and they'd come out with a conference report. Anymore, what

(08:34):
we see is kind of a pre negotiated bill. So
they'll get the bill to appoint. You know, clarity on
the Senate side will be at a point where the
House or representatives will be okay with you know, the
changes they made. They will have talked about it in
the advance and agree. So once they get the two

(08:55):
bills merged in the Senate, you know, moving that forward,
working with the House to make sure sure they're comfortable,
and you know, then then it's when we'll see like
the full Congress voting on this. So it's a lot
of little moving pieces right now. It's very tedious and
there's a lot of things that kind of it could
could throw things off too, so we have to be

(09:17):
very mindful and kind of stay on top of it.

Speaker 2 (09:20):
Oh absolutely, And then you know, those changes let's say
that these committees make in the Senate. You know, even
if it's a minor does the House still have to
vote on it or they can say, hey, we're okay
with that. Let it go or it has to be
a major change for it to go back to the
House for them to vote on it again.

Speaker 1 (09:36):
Yeah, any word change, any any change at all, they
have to revote on it. So it's it's very you know,
you could get down to just a couple of words
that are different, and you've got to you know, go
back to the House and try to get the support
that you and and it's tricky because you know, yes,
Clarity had a lot of support coming out of the House,

(09:56):
but that was Clarity. This is going to look different,
and so so we don't know if it will have
the same level of support and the House when it
goes back from what the Senate has you know, added
to it or morphed, you know, into their version of it.
Sometimes you can get the Senate to vote on a
House bill if it's you know, pretty much you know,

(10:20):
no brainer. But you know, even on on the stable
coin bills, they weren't that far apart, you know, the
two different bills, but the House ended up voting on
the Senate version of that bill. So that's kind of
how it usually ends up.

Speaker 2 (10:38):
Yeah, I'm optimistic because I saw they were able to
get this done with a Genius Act at a Stable
Cooin bill. I know, this is a much more complex bill.
It has the meat and potatoes and there's so many implications.
So hopefully they can get this done before the end
of the year and folks go on a holiday break.
I did see some Democrats, I believe it was reported
twelve Senate Democrats introduced their own version of the bill.

(11:00):
I know that that can make things complicated, but are
they doing anything very different from what was put together
from the House.

Speaker 1 (11:07):
So they introduced principles, which is actually really helpful because
sometimes when you just put language out there, it's hard
to negotiate on language. It's better to negotiate on the
overall what are we trying to accomplish, and then do
the language. So they put out a list of principles
that they need to see in market structure legislation. I

(11:29):
think a lot of them. You know, you look at
the list and it's not unreasonable. And there's a number
of concerns around the CFTC, having permanent leadership, having more
resources for the agency, things that you hear Republicans talk
about as well. So it shows that they are ready
to you know, negotiate, ready to work on this, and

(11:51):
I actually think it's a good thing that they didn't
put out specific language, but kept at high level at
kind of the goals that they want to achieve because
a lot that gives a lot of flexibility to get
to a place where everybody can agree.

Speaker 2 (12:05):
That's really great to hear, and we need both sides
of the isle to get these bills through, and obviously
like they did that with Genius. But because I know
there are some Democrats who are not happy, for example,
President Trump's family participating in crypto businesses, I'll uh, Elizabeth Warren,
but but do you foresee that being an issue or
that's just a little bit of political theater, so it'll

(12:28):
come up again.

Speaker 1 (12:29):
I think the answer to that has been effective, which
is everyone will be regulated under this new structure. So
whoever's in the markets, wherever's creating tokens, everyone is going
to have to equally abide by this new law. No
one's going to get any special exemptions. And so, you know,
I think a lot of times when they went on

(12:52):
the House side, especially when they were talking about adding
in new conflicts of interest language or you know, preventing
the president is family from you know, having tokens or
being in the market. You know, one thing that doesn't
fit in the jurisdiction of the House Financial Services Committee.
That's a whole different committee that would decide something like that.

(13:13):
You know, it's probably the Government Reform or somebody who
would look at you know, ethics rules for the for
the president and administration. So that didn't really go anywhere
because I think a lot of people realize what they
were proposing was impossible given the committee of jurisdiction. And
then again, I think it's that narrative of everyone's going

(13:34):
to be under this legislation. No one's getting a free pass,
and having something is much better than there being nothing
at this point.

Speaker 2 (13:42):
Yeah, well said, we absolutely need that, you know, to
spur innovation, but also protect consumers. I think that's so
important because I love this technology, but bad actors exist
in every asset class or you know, market, and they
tried to come in and take advantage of people who
may not know much about the technology.

Speaker 1 (13:59):
Yeah. Yeah, absolutely.

Speaker 2 (14:03):
With the Clarity Act, you know, there's going to be
some readjustment to the balance between the SEC and CFTC.
I think you mentioned some of it already. How do
you think this plays out, is it fifty fifty, sixty forty.
More so on the CFTC side, I see a lot
of collaboration happening right now, Acting Chair Commissioner Bam along
with Paul Atkins and the folks at the SEC, working

(14:25):
and doing some great things. But how do you think
that balance plays out?

Speaker 1 (14:28):
So I always go back to the fact that you know,
a vast majority of tokens have been declared commodities. The
tokens that would be considered securities, it's very small percentage.
So the idea that you know, the SEC would have
more jurisdiction over an asset that they've never had jurisdiction over.

(14:52):
I think that's where you kind of have to look
at the natural regulator. Here is the CFTC, the markets
that they're in, This is what they understand, This is
kind of they're already doing a lot of this work
because we have bitcoins, futures, we have you know, there's
a lot of futures products on crypto already. So you know,

(15:14):
I think the majority of the kind of oversight it's
going to end up at the CFTC. So there will
be you know, where there's fundraising and you know something
that looks a lot like a security. You know, the
SEC will have that jurisdiction. No one's going to take
the security jurisdiction away from them, But what it's going
to do is define the fact that you know, these

(15:37):
are commodities and they need to be you know, regulated
under the Commodity Exchange Act as you know, commodities rather
than as a security. So I think the bulk of
the new jurisdiction will go to the CFTC.

Speaker 2 (15:54):
That makes sense, and I mean rich Jeff. Recently, the
SEC even said like meme coins are not security, so
obviously that will the ball goes up to you the
cfdc's court. Yeah, since we're talking about mean coins, I'm
curious your thoughts on this, and you know your experience
at the CFTC. You know, this is a very volatile
new way to invest. And I believe in the free market,

(16:15):
so I'm not against people creating tokens. But going back
to my comments about bad actors, right, you get people
trying to rug folks again who may not know better.
So how does the SEC, excuse me, The CFTC do
you think coordinates with other law enforcement officials to let
go after people like that?

Speaker 1 (16:31):
Yeah, it's something they do all the time right now.
You know, all of their markets that they regulate are global.
It's something where they have, you know, there are actors
within their space, you know, spread out, and so they
have to work with foreign jurisdictions, they work with certainly
law enforcement in the US, and so it's something that

(16:53):
they are already doing and they will continue to do.
And again it's kind of why this makes sense. It's
the CFTC. These are global markets. They're not going to
be just in the US. There's going to be volume
moving across, you know, across countries, and so having that
experience that the CFTC has with working with global law enforcement,

(17:16):
global regulators, you know, making sure they're watching for the
bad actors and trying to weed them out. That's that's
what they're good at. And I think it will it'll
work well given their focus on global markets.

Speaker 2 (17:30):
Sure. And then since we're on a topic of CFTC,
Brian Cantons, you know, he was nominated to be the
next chair, but there's been delays in his confirmation. What
can you tell us there? What are you hearing in
DC about that?

Speaker 1 (17:43):
Yeah, it's it's unfortunate because his nomination is kind of
in limbo right now. It's still pending before the Senate. So,
you know, the President sends up a nomination, and once
you send up a nomination, is it's pending in front
of the Senate. His nomination is still pending in front
of the Senate. It has not been withdrawn. So you know,

(18:05):
there's that which feels, you know, feels like it's in
a good place. But I you know, there's just so
much talk around the town about whether or not he's
gonna get it, he get through to the end. It's
really hard to say, a lot of a lot of
rumors out there.

Speaker 2 (18:24):
You know.

Speaker 1 (18:24):
Kind of the only thing that I know right now
is that he's still pending in front of the Senate.
His his nomination has not been withdrawn from the by
the White House, and he's still their nominee.

Speaker 2 (18:35):
I hope they get this done soon. I've interviewed Brian
a couple of times over the years, and he's very smart,
understands the markets and crypto and much more. So hopefully
they can get this done soon. It seems kind of
weird what's going on, but yeah, it is what it is.

Speaker 1 (18:50):
Yeah, No, it's it's unusual because normally, when you have
a nominee, you know, they'll put the name out there.
This the President will put an intent to nominate somebody
out there, and so if there are kind of problems
with that nominee, that's when it gets kind of flushed out.
And a lot of times you know they will they

(19:11):
will announce who's going to be the nominee, you know,
even before they put that intent out there, and so
problems get flushed out before there's a physical domination set
up to sent up to the Senate. So this is
a little unique in that the concerns were not raised
until right before Brian was going to get a vote
in the Senate Agriculture Committee. So I haven't seen this before,

(19:33):
and I've been in DC for twenty some years, so
it's an unusual situation.

Speaker 2 (19:38):
Oh for sure, let's jump ahead to the Genius Act,
because you put out a great op ed in Coined
ass yesterday. It was a great read for those who
may not know. This Genius Actor is, of course, the
stable coin Legislation Bill which was passing to law, and
it seems the banking sector is pushing back on this.

(19:58):
King tell us about what is happening.

Speaker 1 (19:59):
Here, Well, what is happening is I think the bankers
maybe were flat footed. They were maybe not as involved,
you know, not as there were things that they agreed
to that maybe now they're regretting. I always tell everyone

(20:19):
they were in the room when these bills were negotiated.
It's not like they were missing from the discussions. They
were there. I think it's a little bit of like,
you know, regret and maybe what they agreed to. I
think it's kind of misinterpretation, you know. I think what
they're calling yields is rightfully a reward that the exchange

(20:42):
is offering, not the issuer. The other thing I say
to everyone, they say, at the end of the day,
the banks can compete if they're worried about losing deposits,
which there's no evidence of that at all. But if
you're worried about losing deposits because there's a you know,
a higher reward offered by an exchange on the stable
coin lift, you know, higher your APR for your savings accounts,

(21:04):
right Like, that's how you fix that problem. You compete.
You know, you're on a level playing field. So it's
you know, it's little frustrating that they're trying to reopen
that bill when it has just been signed into law.
They haven't even started the rulemaking. They're just putting out
kind of requests for information on the rule making side

(21:25):
of it, and we're trying they're trying to open it
back up and change it. And that's unfortunate and I
think it's a lot of like kind of you know,
now there's some regrets and again they were in the room,
this was negotiated with, you know, across the the you know,
kind of financial services broader spectrum, and so it's it's

(21:49):
really frustrating to have them come back and say, oh,
I guess we don't like this and we want to
change it.

Speaker 2 (21:55):
So it seems like the crypto industry has another fight
on its hands. We're used to it now after the
past four years. So but there is there any chance
that the banking folks can lobby to get this bill
updated or we have to fight?

Speaker 1 (22:11):
Yeah, I mean we've got to push back because I
think some of it is misinformation, and certainly we have
to push back on any any kind of myths that
are out there, misinformation that's being that's that's being sent
out from from the banking community, and you know it

(22:31):
is going to be a bit of a fight. I
think it's I think the banking community side has the
harder lift here because again, this was negotiated language. We
just got the story. We haven't even started rolemaking, so
I think they have a heavy lift. I think they're
going to put a lot of resources behind it, which
means we're going to have to respond. So it's not

(22:52):
like we're picking this fight, but we're going to have
to respond to it. We can't sit back and just
let them, you know, say what they want about you
know the facts of the bill.

Speaker 2 (23:03):
I love what you said just a moment ago about
you got to compete, like and I've talked a lot
about the podcast. I have some money on uphold platform,
where I'm earnings yield on I think like five percent
on a certain stable coin. On Coinbase, I earn about
four percent or higher USDC. I do have money in
my checking in savings, but I'm getting more on the

(23:25):
stable coin than the banks. So if the banks offer
something similar or higher, I'll go back to the bank.

Speaker 1 (23:33):
Yeah, exactly. And you know, again, there's no evidence that
as stable coin adoption has grown that the posits have
been shrinking. There's been no evidence of that, but even
if it did happen, there's an easy solution offer a
higher APR, you know, compete with the exchanges here.

Speaker 2 (23:54):
I don't know if you've probably seen the news, but
like Bank of America said, they're going to launch your
own stable coin city Bank in addition to tokenizing, in
addition to launching crypto trading. So do you think this
could be a little bit of a delay tactic until
we catch up and maybe I don't know, a year
from now or six months from now, they launched their
own stable coin and you have ap R higher APR.

Speaker 1 (24:14):
Yeah, no, it's possible. It's also you know, that kind
of building a regulatory moat, you know, protecting what they do.
And I think you know there's a bit of that too,
like how can we sure we can have stable coins
and they can be you know, federally regulated, but let's
keep them in a space where they will never compete

(24:36):
with our products. And so I think it's part of
that kind of regulatory moat that you know, gets created
from traditional and it's not just traditional finance, it's everywhere,
you know, across the economy where there's there's certainly the
kind of incumbents really do try to keep their market

(24:57):
share and maybe you policy to to further that or
to keep it when there should be new innovation, new actors,
new you know, efficiencies brought to market. So I think
some of it's just a protection mechanism to try to
just make sure that, you know, only they are offering

(25:20):
certain products. And again these are different products, so it's
not the same. But yeah, I think it's kind of
a protectionist, you know, reaction.

Speaker 2 (25:31):
It reminds me of h in the nineties, if I
my history is correct here to telecom companies trying to
block certain things on the Internet, but under Bill Clinton's presidency,
they got it right and the rest is history.

Speaker 1 (25:43):
Yeah. I mean cable TV is another good example of
this too, where you know, there was there were so
many fights about you know, what channels will play on cable,
what's on networks? This is this is a common fight
in Washington, you know.

Speaker 2 (25:58):
As far as the stable count and Bill and the
impact it will have on the US dollar, I want
to talk a bit about that. Certainly there's a geopolitical
layer to this, and everybody is trying to create their
own stable coin. China has their CBDC and so forth.
Is this kind of the savior of the dollar if
you want to call it, or another Bretton Woods moment
because these stable coin issuers have to hold US treasuries

(26:21):
and that's very good for what we do here in
the United States as far as the economy and things
like that.

Speaker 1 (26:25):
Yeah, it's certainly really helpful, especially on you know kind
of treasury markets. You know, that's that's a space where
if they're bolding treasuries, that's that's you know, those markets
need more liquidity, they need more people, you know, in
their buying. You know, whether or not it's kind of
a fundamental shift, you know, I don't know for sure.

(26:47):
That's a it's a good question of, you know, what
does this mean for the dollar long term? But what
I do know is if we hadn't passed, if we
didn't pass Genius, if we lost this opportunity, that would
have been detrimental to the dollar. So, you know, it's
hard to say how much this has helped the dollar
and helped the you know overall, you know, kind of

(27:09):
adoption and use of the you know, of the US
currency is kind of the base for a lot of this.
But if we did not have genius, we would have
lost that advantage.

Speaker 2 (27:22):
Yeah, for sure. And then you also have the there look,
the dollars the world reserve currency, and there's a lot
of people around the world who want the dollar, whether
it be in countries in Africa or Latin America and
now in a digital format, in a wallet set up.
If you can get them a digital dollar, that would
be very beneficial. Then yes, great stable coin yield. I

(27:43):
think that could be a game changing.

Speaker 1 (27:45):
Yeah, absolutely. And for the you know, not unbanked population,
for those who just you know, whether they don't have
access or they don't feel like they can you know,
work with traditional banks, this is a way to you know,
control their money. This gives them, you know, personal responsibility
over over their money and they can you know, it's

(28:07):
a very empower it's empowering I think too, you know,
people who may have not normally been within the financial
services system or for other countries where there's you know,
worries about corruption and stuff. It's it's empowering to have
these assets and this ability to control you know, your
your own money, your own assets.

Speaker 2 (28:29):
Yeah, well said Another key component of crypto legislation is
a bitcoin strategic reserve that we know President Trump signed
an executive order to establish that. But using the crypto
we've the US government is confiscated over years. But the
flip side of that, or the other side of token
is the buying of bitcoin. There's talks of tariff revenue

(28:52):
being used. What are you hearing about that in DC?

Speaker 1 (28:55):
Yeah, I think that's there's kind of split views on that.
You know, some of it's split because they believe there
should be other tokens that are held in a strategic
reserve and other tokens that are other digital assets that
are purchased and held in a strategic reserve. And then
you have people who just think, you know, the government
shouldn't be in the business of buying in the market.

(29:20):
You know, personally, I always worry when the government is
a buyer in any market, or a sell a buyer
or even more it's a seller in a market, it
can really disrupt prices. It really can you know, fundamentally
change where the price is. So, you know, I think
that's a real concern, but you know, it's it's a

(29:42):
live issue right now. There's a lot of discussion, there's
a lot of you know, good points on on either
side of how you do this, whether it's you just
maintain the crypto that's been seized, or you go out
and you add more and you buy more. They're they're
good arguments on both sides, and I think at the
end of the day, what this tells this is there's
widespread adoption. Right, people recognize the value of digital assets,

(30:06):
and that's good for the entire industry.

Speaker 2 (30:09):
I appreciate that others point of view that you gave
that you know, it's not necessarily a good thing if
the governments are buying assets, because I could see people
in tradfi and companies say well, come buy my stock,
why not my stock right or my I don't know
whatever other asset. So I appreciate that, and that's that's

(30:29):
a good counter argument I think to what's happening.

Speaker 1 (30:32):
Yeah, I mean, I'm from the commodity space and I
kind of joke ask the oil traders how they feel
about the Strategic Oil reserve, because when the government moves
oil in and out of that reserve, it affects the price.
And that's not you know, reflective of what the you know,
dynamics are within the market. It's the government actually being

(30:54):
a buyer or seller, and so I always say, you know,
ask an oil trailer how they feel about the government
and the oil market. You know, that's kind of a
good a good read for how this you know, whether
or not it would it would work?

Speaker 2 (31:07):
Yeah, well said. Now, we'd love to get your thoughts
on the tokenization and prediction markets. Obviously with your background
at the CFTC and the CFTC has been giving a
lot of clarity to prediction market players such as polymarkets
and Calshi and so forth. What are your thoughts on
these two types of markets on the rise and the

(31:27):
impact they may have.

Speaker 1 (31:29):
Yeah, it's I think prediction markets have a lot of possibility.
I think that they will provide information that is difficult
to get, you know, true information out there. It will
kind of help, you know, some of the misinformation that
we have, you know, certainly around kind of political pulling

(31:51):
and those sorts of things. But at the end of
the day, it's it's about kind of getting out, you know,
the real information because people are willing to put their
money against it, and you know, so there's a lot
of utility from whether it's you know, you are a
politician and you don't have good pulling data. But you
can look at cal she's you know, pull cal she's market,

(32:12):
or you are a professor and you're trying to get
information on where you know certain sentiment is. It's going
to provide very good, good information there. But also like
if you're just trying to you know, let's say you're
a bar in a city where you know your team
is going to maybe be in the super Bowl, and

(32:34):
your sales, it's going to be a big difference if
they are or if they're not, and so you can
actually hedge, you know, put a hedge on that with
prediction markets. So there's a lot of good that can
come out of these prediction markets. I love Congress, but
I think they wrote this part of the statute poorly
and that's why it has been so controversial. Uh And

(32:55):
but I'm glad to see that the CFTC is kind
of opening up and allowing more contracts to be offered
and recognizing that it's not going to break you know,
I think there's a lot of like it's going to
break the whole system. It's not going to break the
whole system. We can monitor these markets, we can make
sure that they are you know, there's not the kind

(33:15):
of fraud or manipulation or whatever people were worried about,
and they're realizing that now, so it's it's good to
see it expanding.

Speaker 2 (33:23):
Yeah, and look, we we got the blockchain technology. You
can see everything, just plug it. Yeah, and it's real time.

Speaker 1 (33:29):
Yeah, exactly.

Speaker 2 (33:30):
And then on the other side of that is the
tokenization markets. And I know this is a race it
seems would tradify in Wall Street to tokenize stocks and
much more. I know that there's been talks of if
you're tokenizing a security asset like a stock or an ETF,
it's still a security, So it seems like that may
still be under the premise of the s the sec.

Speaker 1 (33:51):
Yeah, absolutely, and I think that's you know, I was
kind of recognized all along as we were working through
this legislation, is that you can't just tokenize something and
call it like, well, now it's commodity. You know that
that can't be the way this is that you know,
we do business, because then everybody's going to tokenize everything
and try to get around regulations. So this shouldn't be

(34:14):
somehow a way to avoid regulation that you don't like.
And so yeah, if you tokenize a security. It's still
a security and it's still under the SEC's purview. But
what's interesting seeing all the tokenization and everybody moving in
that direction. It just shows that they recognize the efficiencies
and the benefits of blockchain technology and you know, use

(34:40):
having a tokenized asset on the blockchain and what that
means for the movement of money, the you know, just
verifying who's the owner, where's it coming from, having that
kind of audit trail. It just shows that they see
the advantages and the opportunities of the block chain and

(35:00):
realizing that, yes, we can tokenize all these other financial
instruments and make those markets more efficient.

Speaker 2 (35:09):
Yeah, one of the things I was thinking about as
you were saying that is we're going to this twenty
four to seven, three hundred and sixty five day markets,
which is a complete change from the thing the world
we've known. Obviously, you've experienced, you know, a lot with
the banking sector and the traditional markets. You know, some
are is the regulator Are the regulators going to have
an even tougher job because you have truly global markets

(35:33):
running twenty four to seven, They're going to have to
be a night crew at the SEC and CFDC.

Speaker 1 (35:38):
I think a lot of it is this is that
coordinating with regulators around the globe looking at this is
it's it's a global market. It's not just going to
be based in the US. So we're going to have
to work with our other countries, We're gonna have to
work with our partners, and you know, at the end
of the day, there's going to be a lot of
you know, kind of whether it's AI or other technology

(36:00):
that's also going to help monitor these markets. So there
are going to be new tools, and there already are
new tools that can help. So I don't think there's
going to be an overnight shift that the CFTC. I think,
you know, I think the markets you know, will operate,
can operate well, and they are are able to you know.
You hear the argument sometimes from the more traditional players, well,

(36:23):
if you do this, then is the wheat market going
to suddenly be twenty four to seven? No, because there'd
be non liquidity. Nobody would be buying and selling wheat
US white overnight in the market. So I think that
that kind of solves itself that yes, not every contract
out there can, not every market can be twenty four

(36:44):
to seven, But digital assets certainly.

Speaker 2 (36:48):
Can Yeah, yeah, that definitely makes sense. And then you
mentioned AI. I'm sure that's going to be a part
of it. But it goes back to the blockchain. There's
an audit trail. You will know even if you wake
up at seven am and you go look at whatever reports,
it's all there.

Speaker 1 (37:01):
Yep, yeah, exactly.

Speaker 2 (37:04):
That makes sense. It's it's a brave new world but
also scary at the same time. At all these different things.
Some are what's on the Blockchain Association's roadmap. You know,
I'm sure you guys are going to be busy trying
to educate people about the clarity acting.

Speaker 1 (37:19):
Yeah, you know, we'd love to see market structure get
cross the finish line. And a lot of that is education.
We've we're up on the hill weekly doing briefings, doing
we do these lunch and learns where we bring in
staff and we just explained to them, you know, kind
of a one oh one of crypto and blockchain technology.

(37:43):
So that's definitely going to continue. There are there are
some you know, probably lawmakers who don't have a hard
like I love this or I hate it. They're just
like I don't care about it, and so finding how
you how do you reach those members of Congress and
those senators who really just are like I don't care.

(38:04):
I don't care, because you need them to care. And
so we're going to be focused on that, you know,
finding use cases that maybe appeal to an agriculture state,
you know, member or Congress or senator, you know, using
it would decentralized infrastructure. You know, I think there's a
lot of great use cases there that I think are
easy to understand and will help kind of that narrative

(38:28):
of why you should care and why it's important. So
we'll be focused on that, and you know, hopefully we
get that across the finish line. There's rule making that's
going to happen. We're already you know, certainly Genius has
a certain level of rulemaking that has to go through.
That's something we're following closely, and we're going to be
working closely with our members on getting feedback to the agencies.

(38:49):
If market structure is done, there will be a lot
of rolemaking very fast, and so we will have to
focus on that. But we can we can walk in
chew gum. At the same time, there's a number of
tax issues that we want to fix as well. The
way staking its tax the you know, demnimous. You know,
not everything, not every action is a taxable event with

(39:11):
digital assets, and we need to fix that. It's critically
important to you know, it's kind of the we call
it the third leg of a stool. You need to
fix that as well. So we'll be focused on getting
that done, getting that through Congress, and you know, just
making sure that wherever we end up that their regulations

(39:33):
are crypto friendly, they recognize the innovation, they're not driving
innovation offshore, and we're doing what we can to you know,
kind of fulfill the President's wish and making the US
the crypto capital of the world.

Speaker 2 (39:47):
Yeah. Absolutely, Well you mentioned the tax items. That is
such a core part and something we have to figure
out because I think a lot of people want to
do more of a crypto but they're worried about or
you know, concerns about taxes and what are the implications
and much more. So great to hear. Yeah, that's a
priority item.

Speaker 1 (40:04):
Yep, absolutely, some are great stuff.

Speaker 2 (40:07):
I got some wrap up questions here for you. First,
if you could create your own metaverse, will the theme be.

Speaker 1 (40:13):
Can it be a metaverse without laundry or like where
like magically everybody's clothes are clean and I never have
to fold my children's clothes, because that's where I would start.
I have, I have four children, I do a lot
of laundry. No, but I think it would be you know,
it would be a metaverse where there were efficiencies and

(40:35):
people could use the blockchain to everything from you know,
your your stable coins move, moving the money to you know,
keeping a track of your the deed of your house
or the title to your car. A metaverse universe where
everything that right now kind of is tedious and slows down,

(40:57):
the economy is able to be on chain and we
see the efficiencies that the technology brings, and you know,
I think we can get there. I don't think we're
I don't think we're that far off.

Speaker 2 (41:08):
Absolutely rapid fire questions. Favorite food cake, favorite musician or Ben.

Speaker 1 (41:15):
It's going to age me, but I love meat loaf,
not the food.

Speaker 2 (41:20):
The singer, Yeah, for sure, Favorite movie.

Speaker 1 (41:23):
Happy Gilmore.

Speaker 2 (41:25):
Favorite book.

Speaker 1 (41:26):
Oh, that's a tough one. You know, I read the
full like Lewis and Clark manuscript or they're the kind
of the Lewis and Clark, you know, that whole big
book that was put out a number of years ago,
and I think that to be just because it costs
a lot of like my where I grew up and
gave a lot of history of that that area. So

(41:47):
I really enjoyed reading about their their kind of journey
through the to the West.

Speaker 2 (41:52):
Oh very cool. And when you're not working at the
Blockchain Association, what are you doing for fun?

Speaker 1 (41:57):
And well, for fun and going to kids. I do
enjoy going to my kids is like, you know, basketball games,
football games, that sort of thing. What I'm usually doing
is like running around taking people to different places, doing
their laundry, that sort of thing. But I do enjoy
the kids activities. It's it's great to see them, you know,

(42:20):
in these competitive, you know kind of competitive opportunities where
they're learning skills, they're learning about teamwork, and they're learning,
you know, how to be one of many, not yet
not like a you know, self centered individual. So I
think that's really important for kids that they be in
these team sports.

Speaker 2 (42:39):
Absolutely well, I can certainly relate. I have a seven
year old, and yeah, soccer games and yeah and all
that stuff. So yeah, for sure, some are absolute pleasure.
And I'm going to have to have you back on
as you know, you guys continue to lead to charge
in DC and uh, you know, specifically that tax item.
You know, I think we're gonna have to have a

(43:00):
big conversation about that. But thank you so much for
joining me.

Speaker 1 (43:03):
Oh thanks for having me on. This was fun.

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