Crypto Will See Massive Growth when the CLARITY Act Becomes Law! with Congressman Tom Emmer

Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
We want to make sure that we have something that
is lasting. So unless our federal government can emulate cash,
we'd look at it. In the meantime, they are prohibited
creating a central bank digital currency. This is the greatest
surveillance tool you could turn over to your government.

Speaker 2 (00:17):
I remember when bitcoin was first started, no one thought
of it as a political thing.

Speaker 1 (00:20):
It was just tech.

Speaker 2 (00:21):
It was just like the Internet.

Speaker 1 (00:22):
This cannot ever be a republican democrat thing. We need
everybody participating in this.

Speaker 2 (00:34):
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visit the link in the description. Hey, folks, welcome into
the Thinking Crypto Podcast. I'm your host, Tony Edward, and
joining me is Congressman Tom Emmer, who is the Majority
whip of the United States House of Representatives. Congressman Emmer,

(01:39):
great to see you. Good to be with you again, Tony, Congressman.
We've spoken many times over the years, and this year
has been incredible for the progress of crypto in the
United States. The US is open for business again and
it's an exciting time. But we have another major milestone
coming up, and that's the Clarity at getting through the Senate.
What can you tell us there about the timeline of

(02:00):
getting this bill passed.

Speaker 1 (02:02):
Yeah, first off, I want to point out for your
listeners who probably know, but this is the thought process.
We've had the Genius Act, which is a dollar back
stable coin bill which on its own is a great
piece of well, it's a great law and that it
will allow for the export exporting of US dollars all

(02:25):
around the globe. But you want to have a domestic
system as well. Clarity. Clarity is that regulatory framework that
allows you to do that. And I think our Financial
Services Chairman french Hill, I think you put it in
great terms once when he said having Genius without clarity

(02:50):
is like having a cell phone without cell towers, right,
you got to have both. So this is the other
side of the coin Clarity, Tony. As you probably know,
is it's five years plus of work in the House
under the leadership of our previous ranking member and chair
Patrick McHenry and now under french Hill. We started years

(03:14):
ago building out this regulatory framework. Last Congress, in fact,
we passed something called Fit twenty one. We've just continued
to improve it all along. So you've got just a
ton of talent and work that has been put into Clarity. Now.
The problem over in the Senate is that before they

(03:34):
did Genius, the Senate Banking Committee literally hadn't marked up bill.
I think in six or seven years people are like, oh,
clarity stuck in the Senate, I don't think it is.
The Senate is really did an amazing thing by moving
genius through, getting it across the floor, not only out
of committee, but across the floor, and then ultimately getting

(03:55):
it to us so that we could get it passed.
Clarity now they don't have that history with clarity like
the House does. We are encouraging them to take clarity
as the base text of their bill. You can improve it,
and in fact, they've put out a draft out of

(04:17):
the Banking Committee so far, we're still waiting for the
AG Committee. And our hope really is that in what
they're talking about is the Senate Banking Committee will mark
up their version, hopefully yet in September. The Ag Committee
will produce theirs and will mark it up sometime in October,

(04:37):
and people are hoping for to get this done before
the end of the year with a vote in the
Senate and then getting it back to the House. Three
things that I want to point out that are in
the Senate version. One I think is not a great
idea too, I think are really good ideas, and I
mean they are improvements on the bill. The one that
I think is an emphasis on why you need to

(05:01):
use the clarity base as a base text is the
Senate has created something called ancillary assets. Well, it's too vague.
It's it's trying to work through something that we've worked
through for the last years, last five years. We have

(05:21):
a control based decentralization test that will help determine whether
something whether a project, is considered a security, whether it's
considered a commodity, or whether it's neither right and why
is the purpose? The purpose of that control based decentralization

(05:44):
test is so you know which regulator you're dealing with,
so that you know you know what to expect when
you when you start a project. I think the ancillary assets, again,
the Senate's doing their work, but we did it already,
and I think unless they can improve on that control

(06:06):
and decentralization tests that we put in, I just think
they should start with that and improve upon that. They've
gone farther than we did on protecting software developers. I
think they've improved the bill with this piece where they've
got a provision that says if you're just producing software right.

(06:27):
In previous administrations, the Biden administration, particular with Gary Gensler
and others, was throwing this huge net over everyone, including
software developers. And what this law says is if you're
just building the technological infrastructure that all this stuff works with,
you're not subject to traditional banking laws. You're not involved

(06:51):
in that business of creating a security or a commodity.
You're not working with that. You're just building the technological
infrastructreure that is used to facilitate these transactions these projects.
You will not be subject to traditional banking rules and
regulations and oversight, which makes I think perfect sense, and

(07:14):
it dovetails in with a bill that I've offered now
for several Congress is called the Blockchain Regulatory Certainty Act,
where states have their own banking regulation and rules. If
you are a party the custodies cash money in a
state and you then distribute it or you facilitate the

(07:36):
transaction of moving it to another party, you're considered a
money transmitter and you need to get a money transmitter
license right now in fifty different jurisdictions. With the Blockchain
Regulatory Certainty Act says, if you never custody the funds,
if you are not in control of the funds, all

(07:57):
you are is a conduit. Don't you're not money transmitter?
You don't need to go get a license in fifty states.
This one's long overdue things like that. I think the
Senate is going to do a great job of getting
through it. There does have to be a little urgency though,
because this is what Donald Trump promised, the Golden Age

(08:18):
of cryptocurrency. We are going to be the cryptocurrency capital
of the world, and I would argue, let's expand that
to we are going to be the digital asset innovation
hub for the entire world.

Speaker 2 (08:31):
Absolutely well said, and you know, obviously kudos to you
and the folks in the House who have gotten a
lot done over the years, and it sounds like some
fine tuning needs to be done here for this bill
in the Senate before it makes its way to President Trump.
And to your point, you know, I've spoken to many
stable coin issuers, folks at Paxos and others, and the
clarity bill is needed because use the word dovetail, because

(08:53):
if you want to launch a stable coin, which blockchains
can you launch it on? You need that clarity. So
it's so such a critical component.

Speaker 1 (09:00):
Yeah, it really is. And the stuff that the Senate's doing,
no bill is ever going to be perfect. Tony. You
know we can tell you all Mine is absolutely it
doesn't take any modification. Well that's not true. I mean,
look at what we've done. We've gone through several iterations
since we started five years ago. That's why you had

(09:21):
Fit twenty one, and I think Clarity is a vast
improvement over Fit twenty one. We should expect that our senators, Republicans,
Democrats alike, who are very talented, who believe in this space,
who understand twenty first century finance in particular, we should
hope that they're going to weigh in and try to
improve what the House is created. Our encouragement is simply,

(09:45):
you do not have to rebuild the car. The car
has literally been built. It's got the chassis on it,
it's got the working parts. If you want to improve
something that's on the car already to make it more
I make it whatever it is, then please do. But

(10:05):
you don't want to lose the time of trying to
go back to the beginning of production and recreate something
that already has years of talent and time invested into.

Speaker 2 (10:17):
Absolutely, you mentioned Democrats, and I think it was just
last week twelve Senate Democrats introduced a version of the
market structure Bill. I wanted to get your take on there,
and it doesn't make sense or there are things in
there that shouldn't be.

Speaker 1 (10:31):
So I have purposely not delved into that. I know
what you're talking about, but unless it's coming from the committee,
because what bothers me about this and I should really
sit down and do the due diligence. But this is
not a Republican or Democrat issue. When I see just

(10:53):
one political party represented on putting forward something, I get
very concerned that we are trying to move it into
us and them the community, the industry does not want that.
I mean, we work with Republicans, Democrats and others who
believe in the future of digital assets, who believe in

(11:15):
the promise of blockchain technology and everything that's associated with it.
That's not a political a partisan political thing. That is
an American thing. That's why, Yes, I know what you're
talking about. I didn't take the time. Obviously we're in
c our territory right now too, so you got a
certain amount of bandwidth. But when I see just if

(11:37):
I saw all Republicans just putting something in with no
Democrat input on this, I'd have the same reaction.

Speaker 2 (11:45):
Yeah, that absolutely makes sense, and it kind of they
have to hash it out and then put a draft version,
and then you kind of dive into that version versus
everyone introducing their own.

Speaker 1 (11:55):
Well, I give an example on this bill clarity. I
had certain provisions that I have certain provisions that are
in clarity. Jim Heimes, a Democrat from Connecticut on the
other side, who's a financial guide, I had some issues
with some of the stuff. He wanted some adjustments. Great,

(12:16):
we made them, we agreed, we moved it on. That's
what needs to be happening in the Senate too. And
I do get concerned when it should be a mix
of all of us. Not that twelve Democrats can't put
together a bill that can be agreed to by both sides.
But keep in mind how we got here. This was
not a Republican or Democrat thing when it started. In fact,

(12:39):
both Republicans and Democrats. I remember being on the first
committee hearing that Jeb Henzerling had on digital assets cryptocurrency.
Republicans and Democrats sounded identical. They were both ignorant. They
were like, Oh, this is silk row, this is all
that is. It's bad guys, it's bad news. You now
have gone a decade almost since that seven eight years,

(13:04):
and now you've got both Republicans and Democrats who literally
have done their homework, have learned from their constituents how
important this is. Again, this cannot ever be a Republican
Democrat thing. We need everybody participating in this. Absolutely well said.

Speaker 2 (13:23):
Is there any concern though? And I don't think this
is the majority of Democrats, but some like the Elizabeth
Warrens of the world, who are going to try to say, Okay,
Trump's family is involved in crypto, They're benefiting from this.
I don't like this. Do you think that might be
a roadblock or you know, majority of Democrats are on
board to get this through.

Speaker 1 (13:40):
I think people are smarter than politicians like Elizabeth Warren
and other talking heads give give the average American credit
for I think they recognize that the Trump family was
successful long before the political side of the Trump family
came to be, and they're successful now. I mean, if

(14:02):
you really had a problem with this, I would think
you would have been going after Joe Biden's family for
all the money that they were literally selling American interests
in order to I mean Hunter Biden selling artwork that
really well but we can do all that. I don't
want to get into that, Elizabeth Warren. They do have

(14:26):
more problems because of that mindset. But I got to
tell you, I think the people who played in the
election last time sent a very strong message. Elizabeth Warren
who said she was the crypto whatever it is police,
anti crypto police. She had a couple of her colleagues

(14:47):
that always sided with her. One was in Ohio and
the other one was in Montana. And guess what, they're
not here any longer. And that's not a Republican Democrat thing.
That's Republicans, Democrats and others who believe in the promise
of cryptocurrency, digital assets, blockchain saying knock it off. We
are not going to let these centralized authority, top down

(15:12):
politicians tell us that we're not allowed to innovate in
this country. We're going to do it the right way.
We're going to hire members who actually are aligned with
our values, and we don't care whether they're Republican or Democrat.
They just need to align with our values absolutely. And
you to your point, this is not a political issue.
I remember when bigcoin was first started and this asset

(15:35):
class started growing, no one thought of it as a
political thing. It was just tech.

Speaker 2 (15:38):
It was just like the Internet, and let's see what
we can build and innovate and create. And unfortunately folks
like Elizabeth Warree made it so political and attack the industry.
And I think history is going to look back at
that as just such a foolish endeavor.

Speaker 1 (15:51):
Yeah, she's a bit of a dinosaur. And I mean,
it's easy to pick on Elizabeth, but there are others, right,
I mean, we got the Brad Sherman's in the house.
They don't realize how foolish they sound. Like when Elizabeth
Warren was trying to show us the unfortunate Ukraine, the
tragic Frank the Ukraine Russian conflict when it broke out,
you might remember she was like, oh, the Russian oligarchs

(16:13):
are moving all their money out of Russia using cryptocurrency.
She didn't understand the concept of a private wallet and
or the concept of blockchain that when it comes out
of a private wallet, you can follow it, you can
follow it on the blockchain. You may not know who
it is. But to make a broad statement like that

(16:35):
just showed the ignorance that that senator had when it
comes to this issue, which she really hasn't gone any farther.
And the issue that she doesn't understand I remember very
well because this is when I got involved. It's a
decade ago now, right, which I don't really fit the
stereotype for cryptocurrency enthusiasts and all the rest. But I
got involved because first off, it's about empowering the individual.

(17:00):
You know, the decentralization takes the authority and puts it
back in the hands of the people, which is exactly
what our founders intended. And I watched, right it's I
read all about Stoshi's white paper, and you know who's Sitoshi? Well,
never gonna know. And then it starts to grow, and
you know, the central banking authority, people that identify with

(17:23):
the Elizabeth Warrens the dinosaurs of yesterday, were like, oh,
look at the kids having fun with their play money.
This is great. Well by twenty twelve they were like,
you know, this could be a problem. We need enough
these guys out, and I mean, just look at the Chinese.
At the Chinese can the Communist Party cannot stop completely

(17:46):
this activity in China? What are you gonna do anywhere
else in the world. So they recognized after a year
or two, and I would say, by twenty fourteen, we
can't stop this. So guess what they tried to do.
Then let's embrace it, let's bring it in to the family.
And it's like, no, you don't understand. These two families

(18:06):
aren't related. The only thing that relates them is a
transaction involving value. Right, That's it. After that, one group
is all about I want to make my own decisions
and I don't want my government mismanaging monetary policy putting
me at risk all the time. I'm going to do this,

(18:27):
and the central authority which is just screaming like, oh
my goodness, we may not be in control anymore. Oh no,
you're giving more control back. Now that being said, Tony,
I think you and I have had the discussion before.
This is where Congress and more importantly, Donald J. Trump,
is so important to this space. We have the greatest

(18:49):
financial system. It's not perfect, but it is the greatest
in the world, the deepest markets, Everything that we have
in this country is what makes it great. You have
to protect that, not for generations. But this is a
very disruptive and potentially destructive area because it moves so fast.

(19:16):
With the innovation you have to have some light touch
regulation to protect the existing two tier banking system, legacy
system while it evolves into the twenty first century. And
at the same time, which is why Trump has been
so perfect, at the right time. You got to let
all this innovation come into the United States and just

(19:37):
explode and build and create and innovate. Yeah.

Speaker 2 (19:42):
Absolutely, And one of the things President Trump was working on,
and I believe he had passed an executive order to
establish a strategic bitcoin reserve. Part of the process was
using the bitcoin the confiscated by the government over the years.
But the other aspect of it is to be able
to buy bitcoin. I know there were some folks in
the industry this week meeting with folks in DC. Any

(20:04):
updates on what that might look like. Could it be
tariff revenue that's used to buy bitcoin?

Speaker 1 (20:09):
I think, first off, I'm one of those I don't
think we should be taking taxpayer money in buying bitcoin.
That being said, what President Trump did was it was
a incredible and strong signal you should have a bitcoin
strategic reserve. And you as we're finding out, because the

(20:33):
Biden administration would never tell us they have seized whether
it's tax forfeiture or other things. They have criminal enterprises.
They have seized a quantity of bitcoin already. That's great.
As far as expanding it, I'm supportive and interested in

(20:54):
one of our new members who's very interested in this area,
Nick Beggage. Nick Baggage has a great bill that I
haven't fully embraced, and I got to be careful as
the whim, but he is in alignment with Treasury Secretary Besson,
who says we should be accumulating more bitcoin, but not

(21:17):
at the expense of the tax payer. And I believe
what Nick's bill does is it uses a surplus fund
at the FED. So that's if that's what we're doing,
So there's no you know, tax payers are now through
the federal government buying bitcoin. That's not what we want.
But if it's the surplus funds that are part of

(21:38):
the overall handling of money that the FED does, all right.
I'm interested in hearing it because I do think this
is very important to the strategic reserve.

Speaker 2 (21:49):
Absolutely, because we are in a global race. I'm seeing
countries making moves with stable coins and crypto and blockchain,
obviously China and some other big countries. So it seems
like there's a battle of the supers here around this
technology as well as AI.

Speaker 1 (22:05):
It is a conflict and a race that look, it
picked up a lot when everyone around the world heard
Donald Trump saying We're going to make this country the
crypto capital of the world. It's a new day and
he's going to move everything forward. He wants the US
to be open for business again. Well, as soon as

(22:26):
that happened, you started seeing stuff in Japan and China
and on the other side of the Atlantic, all these
different countries were like, no, we're going to do We're
the best. We are the best, and we will be
the best. Now that we've got Donald J. Trump making
sure that everyone knows that our goal is to be
the best. Is we started getting our act together legislatively,

(22:49):
not just his executive orders, but genius and now clarity
as we do that, Tony, just watch this place. There
are so many in a vaders and entrepreneurs who want
to be in the US, but they just the way
people like Gary Gensler and Elizabeth Warren and all these
people treated him the Biden administration. I heard a great

(23:11):
comment when we had the first Digital Assets summit at
the White House. One of the guests said, you know,
who could have ever believed we'd be sitting here today
in the White House a year ago. If you would
have told me this would happen, I would have thought
we were more likely to be in a jail cell. Yeah,
it's changed dramatically.

Speaker 2 (23:30):
Comes from Emmer. I thought we were rid of Gary Ginser,
but his legacy of bad actions continues to follow us.
There was reports coming out that text messages were deleted
off his phone and much more. It seems like some
sort of cover up here with maybe his collusion with
Elizabeth Warren and much more. What are your thoughts on
this nonsense?

Speaker 1 (23:47):
Well, I think absolutely he doesn't want people to see something.
There's about a year's worth of text messages that he
has said were lost. Right, they're not lost. He learned
well from his former boss, Hillary Clinton. It's said, not lost.
You just don't want people to see him, so you

(24:08):
delete them, you eliminate him. Interesting during this year, this
was the year that involved the build up to the
FTX collapse. You'll remember Sam Bankman fraud Freed was in
his office in March before that thing happened. The following

(24:28):
I think October, somewhere in there meeting with Gary Gensler.
But they even lost those records, remember the ones that
you sign in and you tell people who's actually been
in the office. There are plenty of things. Plus his
attack is what I'll call it, his assault on the industry,
on crypto companies that he was regularly hauling into the

(24:51):
SEC with a legal action all taking place during that time.
And somebody only deletes emails loses emails when they don't
want to have people find out what's in him. Gary
Gensler is without question going to go down as the
worst SEC leader we have ever had in this country.

Speaker 2 (25:16):
Is there any way he could be held accountable, if
it's a fine or if it's just public humiliation.

Speaker 1 (25:21):
I don't know. Well, he humiliates himself enough with stuff
like this. Yes, you could be held accountable for what.
I don't know, but I'm pretty sure that the Oversight
Committee on the House Financial Services side, the subcommittee will

(25:42):
be looking very closely into what happened and what he
did and why he might not want people to see
his communications during that year long period.

Speaker 2 (25:52):
I know you got to run quick item here at
the Anti CBDC Act that you put together. It is
being included in the National Defense author Rization Act, and
that's going to be moved to the Senate. Tell us
about that and the hopes of getting that through. So
it's really interesting. I've been pushing this for at least
five six years, I like to say, because people don't

(26:16):
really remember two years ago. Three years ago, you realize
we had Republicans and Democrats alike advocating for a central
bank digital currency. Four and five years ago, we're.

Speaker 1 (26:27):
Falling behind China. Oh, we got to catch up. Why
do you want to emulate the Communist Party of China.
They're using the digital yuan as a citizen surveillance tool,
and they're building social scores based on the information that
they're able to take back, the data on consumer choices

(26:48):
and all these other things behaviors. That's not an American value.
So I started back then this current version, which you know,
we've got people like Club for Growth and others who
were want heritage, They wanted to be involved in this process.
Why because we want to make sure that we have
something that is lasting. So all it says is that

(27:11):
until unless and until our federal government can emulate cash right,
meaning it's open, permissionless and private with a capital P.
If they can ever do a digital dollar that meets
those three things, a central bank digital currency, all right,

(27:33):
we'd look at it. In the meantime, they are prohibited
from ever creating a central bank digital currency because literally,
this is the greatest surveillance tool you can turn over
to your government. And just remember the FISA courts that
some people may not be familiar with, but these are
special courts that were created in the seventies allegedly to

(27:58):
surveil be able to go to a court and get
an order to evesdrop to do whatever, surveil a foreign
national in this country that was suspected of illegal activity.
As we learned during the first Trump run, the PIZA
courts were actually abused by the government. They were getting

(28:22):
orders to surveil Americans and in that case even the
Trump campaign. So anybody who says, oh, don't worry, central
bank digital currency will never be used like that, you
should be racing for the door, immediately, say thank you, goodbye,
and get out of there because they're not being straight
with you.

Speaker 2 (28:41):
But follow a question on that, there's a lot of
folks now issuing stable coins, especially banks, So some folks
are worried, Hey, is this a pseudo CBDC. So does
this bill protect us from major banks like your JP,
Morgan's or whoever. And it's no problem that they're launching,
is we just want to make sure they're not coming
around the corner or the back door to trample out right.

Speaker 1 (29:00):
Yeah, I mean all you're getting. And by the way,
without the regulatory framework again, you've got to have the
cell towers in order for the cell phone to work
in this country. Right now, those dollar back stable coins
primarily are about exporting dollars, much like you know, somebody
could use venmo to do it now. But here's here's

(29:20):
the difference. The stable coin, whoever's creating it, has to
meet the requirements that are in the Genius Act, which
means that it's going to be a dollar back stable
coin that is actually under the oversight of our federal
government making sure that it has the reserve that it
says it has. And I think that's the most important

(29:41):
thing right now. But no, there are lots of different
conspiracy theories, Tony. Somebody told me once that we all
believe in black helicopters. We just think different people are
flying them. You know, they're not getting around this thing
with a whole. They use a bunch of terms like retail, wholesale,

(30:01):
all this stuff. You know, the federal reserve banks are
all doing this and that. No, this prohibits all of that.
And by the way, we got a guy in the
White House that if it needs to be tweaked, they'll
make sure he knows. I mean, you might remember during
his primary run he was up in New Hampshire and

(30:22):
he said from the podium after he was declared the
winner of the primary that night, when I'm your president,
there will never be a central bank digital currency. So
I'm grateful that we have Donald J. Trump. I'm grateful
that he has embraced this area, and I'm grateful that
he understands the dangers of a central bank digital currency
and why we must prohibit it absolutely.

Speaker 2 (30:45):
Congress Emmer, thank you, as always appreciate your insights. I
look it forward to celebrating with you when the Clarity
Actor is passed into law by President Trump.

Speaker 1 (30:54):
Thank you so much. All right, see it, Tony

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Crypto Will See Massive Growth when the CLARITY Act Becomes Law! with Congressman Tom Emmer

On Purpose with Jay Shetty