Prepare! U.S. Crypto Regulations Will Pass Sooner Than You Think! with Patrick Witt

Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 2 (00:04):
Hey, folks.

Speaker 1 (00:05):
We are recording at Chainleing Smart Coon event and joining
me is Patrick Witt, who is the executive director of
the President's Council of Advisors for Digital Assets.

Speaker 2 (00:14):
Patrick. Great to have you, Thanks for having me.

Speaker 1 (00:16):
Great to be here, Patrick, I was looking forward today's
conversation all day because a lot of eyes are on
the Market Structure Bill and what's happening in DC. Tell
us a bit about what you're doing and any updates
around the.

Speaker 2 (00:28):
Market Structure Bill.

Speaker 3 (00:29):
Well, I'm pretty much camping out on Capitol Hill these days.
It feels like going from office to office and dealing
with both Banking Committee members and ad Committee members. Very encouraged,
especially over the past few weeks, some of the traction
that we're getting with different offices, different members who are
really starting to engage. You know, many of them have
been engaged for months and years, you know, on this

(00:50):
text and these different concepts. But there's a lot of
them that are you know, going to be asked to
vote here pretty soon and are now starting to really
grapple with these issues and ask for the explain and
kind of the you know, job aids if you will,
to help them understand the bill.

Speaker 2 (01:05):
And what it does.

Speaker 3 (01:06):
Nobody wants to get this wrong, you know, and so
as you get closer to a vote, kind of you know,
sharpens the focus. But very encouraged Republicans and Democrats are
engaging with this this text now offering you know, improvements,
edits asking good questions, and I think we're going to
get there. But you know, clock's ticking, and we're trying

(01:27):
to keep the pressure on. Gentle pressure, but make sure
that folks know what a priority this is for the
president and for my boss David Sachs.

Speaker 2 (01:35):
Absolutely.

Speaker 1 (01:35):
If you heard President Trump say he wants to make
America number one in cryptodigital assets, so I'm assuming him
making those statements is lighting some fire or on the
deceits of some of these folks to get things done.

Speaker 3 (01:48):
Well, he said it again just the other night on
sixty Minutes, you know, reiterating that commitment that he made
on the campaign trail, and he means it, you know,
I mean, he understands what an engine this is for
American growth. You know, our economy, the innovation engine, you
know that it unleashes. And so we're doing everything that
we can to to make that vision to make the

(02:08):
US the crypto capital of the world, or as David
likes to say, of the planet, you know, a reality.
So every day I wake up, you know, wondering about
what we can do to move the ball forward, not
only on Capitol Hill with the legislation, though that's definitely
taken up you know, the vast majority of my time,
but also with inner agency actions and guidance and you know,
removing regulations or previous policy statements from from the Biden

(02:33):
you know, Gensler Elizabeth Warren era that we're still trying
to to, you know, remove some of the vestiges from I.

Speaker 1 (02:39):
Have so much trauma from that era, being in the
crypto industry, and it's a breath of fresh air under
this administration to have the openness to innovate and to build,
and I see a lot of entrepreneurs are breathing a
sigh relief and they feel more optimistic about where things
are at.

Speaker 3 (02:55):
We're you know, we're working hard to make sure that
there is appropriate regulatory clarity, you know, with DOJ, with
Deputy Attorney General Blanche's memo that he put out in April,
ensuring that we're reversing course and making sure that we're
not criminalizing innovation, right, and so I think that's providing
the protection and the certainty that innovators, developers need in

(03:16):
order to build their products here, because.

Speaker 2 (03:19):
That's what we want.

Speaker 3 (03:20):
You know, everything that we do we filter through the
lens of is this going to drive innovation offshore? And
if it does, then you know, we need to think
very very hard about whether we want to pursue that path,
because I think the misconception that the you know, again
the Genstler, you know, the Warren crowd had is that
if we just you know, stiff arm crypto, it's ultimately

(03:41):
going to kill the industry. Well it didn't. That proved
to definitely be incorrect. It just drove it off shore.
So do we want to be number two or you know,
a distant third, or perhaps even farther down the ladder,
or do we want to dominate this industry as we
have dominated the financial you know, ecosystem for the past,
you know, one hundred years.

Speaker 2 (03:59):
So this is the future.

Speaker 3 (04:01):
We've got to make sure that we retain the United
States place of primacy in it. And that's what we're
committed to doing every day.

Speaker 1 (04:08):
Many are calling the time we're in the Fourth Industrial
Revolution where you have the convergence of different technologies crypto, blockchain, AI,
new space exploration opportunities. Is that how the administration is
looking at it, that we are in the midst of
the next tech boom and could be incredible for the
United States to create wealth, jobs, and much more.

Speaker 3 (04:28):
Like you mentioned, I think that's exactly right. You mentioned
a few of them. Crypto obviously, you know, my primary focus,
but also AI the other side of the house under
David you know, I would throw in there as you
mentioned the space race, some of the defense tech innovations
that are taking place with autonomy, you know, there's there's
a number of others. Probably bio would be another area

(04:49):
where these you know, different molecules, and AI has a
lot to do with that too, with some of the
development of different medicines. Sure, it's it's an incredibly exciting
time to be alive, and so I think it's appropriate
to call it the fourth Industrial Revolution.

Speaker 2 (05:01):
But it's not just one.

Speaker 3 (05:02):
There's there's many different ones happening in a lot of
different fields, and they're unlocked by these different technologies that
cut across them.

Speaker 1 (05:10):
But it feels that blockchain may have a bigger reach
because it seems like it's going to be the fabric,
kind of like the Internet, another layering that the economy,
the markets will all run in because you see Wall
Street firms and banks now looking at stable coins, tokenization,
and much more.

Speaker 3 (05:25):
Yeah, I would say there's the point that I make,
you know, when when talking with folks, you know, when
we're regulating crypto right now. You know, cryptocurrency is one application.
Obviously it's you know, the one that most people know
when it comes to blockchain, but what we're doing also
has implications for you know, decentralized infrastructure projects, you know,
Helium and these others that are approaching, you know, the

(05:46):
buildouts of different infrastructure using decentralized you know, blockchain models.
I think there's going to be a lot more that
pop up in that space. So very excited about what
that could do. And you think about, you know, autonomous
vehicle fleets for exams. You know, there's different ways that
you could conceptualize business models that crypto and decentralized blockchains

(06:07):
and applications can can enable. So I'm incredibly bullish about
the future. But that's why it's so important that the
Market Structure Bill that we get done here provides those
developer protections, allows people to innovate here at home so
that they could build these products and these companies in America.

Speaker 1 (06:23):
So are you anticipating once this bill makes it the
President Trump he signs it into law, we see massive
innovation here in the United States.

Speaker 3 (06:31):
I think there's going to be a lot of folks
that continue to resure. We've already seen some of them.
And I point to, you know, the Genius Act that
we got passed for stable points. You know what happened
shortly thereafter Tether decided to open up their US operations.
You know, So I think that kind of you know,
flash to bang, clear connection between the two is what
we want to see.

Speaker 2 (06:51):
And we love telling good news stories.

Speaker 3 (06:52):
You know, anyone that comes in to meet with us
in our office, we always make sure to tell them,
you know, if there's a good news story to tell,
we want to amplify it. Because there are very few
times when you actually get to pass a particular you know,
piece of legislation, or repeal a policy, or pass a
new regulation that you then immediately see the benefits that

(07:13):
come from it. But we're seeing that very much in
this industry because you know, it's it's such a one
eighty from the treatment that it got previously that you know, folks,
folks are excited, they're grateful. You know, they come in
and they think, you know, they thank us, but really
they should be thanking President Trump and David for setting
the tone in the direction, and we're just there to execute.

(07:34):
We're on the front lines, you know, trying to lead
it forward, but the direction comes from the top.

Speaker 1 (07:38):
You know what it feels like, Patrick, if my history
is correct here nineteen nineties President Clinton and I believe
Al Gore, they got to write with the Telecom Bill
at which allowed the Internet to flourish, and it feels
like we're at that moment for blockchain and crypto.

Speaker 2 (07:52):
I think that's exactly right.

Speaker 3 (07:53):
Brad garling House brought that up this morning when I
was talking with him, you know, and the point that
we were making is, you know, we need to establish
the appropriate safeguards, you know, the rails here to ensure
that we're not overburdening the industry. But we're providing that
you know, efficient frontier of regulation that will allow these
markets to flourish. And you know, back then they did

(08:15):
exactly that, right, It was a base layer of regulation
and rules of the road that allowed the Internet industry
and everything that was enabled by the Internet to grow there.
But you know, twenty years from now, I don't think
anyone can predict exactly, you know, what the future will
hold for you know, blockchain, for crypto. So we need
to make sure that there's appropriate play in the joints

(08:35):
and there's the ability for the you know, regulatory framework
to adapt to all of the things that are coming
you know, down the pike that we can't even predict
right now. You know, who could have predicted exactly what
the Internet would do and enable in the late nineties now,
So we need to make sure that what we're doing
allows for that appropriate level of adaptation and evolution that

(08:55):
will inevitably happen in this industry.

Speaker 1 (08:57):
Oh absolutely, I'm very fascinated how government will adopt blockchain
technology and maybe solve some of the legacy issues, will
current issues that we deal with it and which we
may may become the legacy issues for example, blockchain with voting,
blockchain for payments via whatever it is, IRS, tax payments
and so forth, and even with communications more more out

(09:21):
trust in communicating with the government and agencies are there
talks with David Sachs and other folks about integrating blockchain
in these things?

Speaker 3 (09:29):
Well, I think you saw it already with commerce, you know,
Secretary Lutnik, you know, putting some of the economic data
on chain, they publish that on chain. I think there's
going to be more of a movement to get other
government data on chain. I mean, the government has tremendous
amounts of data that are out there that putting that
on chain, they can then integrate through oracles into different

(09:49):
applications and use that data.

Speaker 2 (09:51):
Couple that with you know, the AI element of it.

Speaker 3 (09:54):
You know, you've got this massive trove of data and
now you've got the engine that can parse it and
develop real insights off of that.

Speaker 2 (10:01):
You know.

Speaker 3 (10:01):
I'm passionate about other areas that we can you know,
enhance our cybersecurity, you know, and also deliver products and
services to citizens, you know, in a way that's more efficient. Yeah,
you know, you mentioned some of the benefits you know
that could potentially be distributed in a more secure way
that can also root out a lot of waste, fraud,
and abuse that might exist in the system. I'm thinking

(10:21):
healthcare in particular, right, you know, benefits distribution. But yeah,
the possibilities are endless.

Speaker 2 (10:28):
You know.

Speaker 3 (10:28):
The difficulty we have is trying to filter through all
the different opportunities that we could pursue because your bandwidth
is limited and so you're trying to get the biggest
bang for your buck. But that's a trend that's going
to continue beyond just this administration.

Speaker 1 (10:43):
My ideal scenario from my own perspective, of course, is
that having blockchain integrated with my tax payments, voting, my
digital identity and just makes things more efficient and whether
I'm interacting with the federal agencies or whatever it is,
is just faster and more secure, and yeah, hopefully also

(11:05):
curb some of the wasteful spending if you put things
onto blocked. I know Elon tried to do that, but
I think maybe eventually we'll get there.

Speaker 3 (11:14):
I'm hopeful. I think we will definitely make improvements. But yeah,
I think there's we as citizens have every right to
demand that our government, you know, not only delivers certain services,
but delivers them in a customer you know, friendly way,
right right, And there hasn't been as much attention paid
to that. Uh. Joe Gebbia, you know, uh, founder of

(11:36):
Airbnb has kind of been you know, it got some
press a few weeks ago or months ago, I'm not
remembering the exact timeframe, but it's kind of this you know,
chief chief customer, you know experience officer like you know,
citizen experience officer. So, uh, he's got some interesting ideas
and some projects that he's pursuing to enhance, you know,
the the interaction of citizens with their government. So I

(11:59):
think block chain is absolutely a technology that can be
used to get after some of those problems. So, you know,
more to come on that. But you know, we're thinking
about government differently. We're thinking about you know, the relationship
of citizens to their government differently in a way that
I think everybody's going to benefit from. It's not partisan
at the end of the day. You know, folks have
every right to demand that their government is responsive to

(12:22):
them and as efficient as possible.

Speaker 2 (12:25):
Absolutely well said.

Speaker 1 (12:26):
A big topic that folks are very curious about is
the big strategic Bitcoin reserve. What can you tell us
there as far as the process of identifying revenue sources
to buy and set up that.

Speaker 3 (12:37):
Yeah, so you know, kind of two parts to it.
Number one, we've got to get the custody and kind
of the safeguarding of the existing assets right with those
that have been seized, you know, the different sieging agencies
make sure that they can centralize those over at the Treasury,
put in place appropriate cybersecurity protocols sure to ensure that
those assets are you know, safely kept. And then second,

(12:58):
you know, having discussions with different agents ncies about creative
ways that we can in a budget neutral fashion, add
bitcoin and other digital assets potentially to the balance sheet.
So my other hat over at the Department of War
is as the acting director of the Office of Strategic Capital.
You know, that's a large federal credit program with two
hundred billion dollars balance sheet. You know, there's interesting ideas

(13:22):
that are being kicked around about ways that you could
potentially over capitalize some of the loans that the government
is making, you know, not just in the Dow space,
but also you know fhf A, you know, on housing loans,
because you know, we want you know, digital assets on
the government balance sheet, we also want them in the
hands of everyday Americans, and so one of the ways

(13:44):
that we could do that is potentially through you know,
housing and urban development and some of the loans that
the government is making there, so early days of discussions there,
but I know that there's interesting, innovative, you know, forward
thinking folks at these different agencies who when you have
some of these discussions, they don't go, oh, you know,
reject them out right, They say, huh, that's interesting. Let's

(14:05):
have another talk, you know, discussion about that, sure, and
see if we can move out on it. So you know,
we have we have the right mindset of folks in
this administration.

Speaker 1 (14:14):
Is there any chance, terror for if you could potentially
be used to buy some of these.

Speaker 3 (14:17):
Assets potentially, I haven't had that conversation, but yeah, I
would say all options are on the table. And again,
we have some creative folks, uh, you know, deal makers,
business people, whether that's Secretary lut Neck over at the Pentagon,
Deputy Secretary Fineberg, you know, obviously Secretary Besson at Treasury.

Speaker 2 (14:39):
You know, these are these.

Speaker 3 (14:40):
Are folks that are are creative in their thinking and uh,
you know, deep business minded oriented folks. So I think
that there's going to be exciting discussions that happen in
the future.

Speaker 1 (14:52):
Patrick, thank you so much for taking a time. I
would love to have you back on as things progress
and I'm Fringers crossed this market structure bill goes through.

Speaker 3 (15:00):
Yeah, we'll talk again once the bill is done. Thank
you so much for the time.

Speaker 1 (15:03):
Awesome, Thank you so much. This episode is brought to
you by Treasure. Treasure makes beautifully crafted hardware wallets that
allow you to easily and safely store your crypto assets.
Treasure has been in the game for a very long time,
since twenty thirteen. They were the pioneers of hardware wallets
and the seed phrase setup, and their hardware wallets are
open source. In fact, my favorite is the Treasure Save five.

(15:27):
It's a beautifully designed and easy to use hardware wallet, guys,
and it's my go to. And they support a variety
of coins, all your top crypto tokens, your bitcoins, your
x rpe Ethereum, Solana and much more and even new
coins even black Rocks Biddle token. So they support coins
on the institutional side where you have tokenization of different

(15:48):
assets and much more. And they even offer a great
service that helps you to get your Treasure device set up.
You get one on one customer support from their team,
so you can check that out as well. So once again,
I'm I'm a big fan of this hardware wallet, so
if you'd like to learn more, visit the link in
the description.

All Episodes

Episode Transcript

Popular Podcasts

Stuff You Should Know

Medal of Honor: Stories of Courage

Dateline NBC

.css-15opob5{left:0;position:absolute;top:0.8rem;} All Episodes

.css-14f5ked{margin:0;word-break:break-word;display:-webkit-box;-webkit-box-orient:vertical;box-orient:vertical;-webkit-line-clamp:2;overflow:hidden;}Prepare! U.S. Crypto Regulations Will Pass Sooner Than You Think! with Patrick Witt

Episode Transcript

Popular Podcasts

.css-r6mb8g{margin:0;word-break:break-word;display:-webkit-box;-webkit-box-orient:vertical;box-orient:vertical;-webkit-line-clamp:1;overflow:hidden;}Stuff You Should Know

Medal of Honor: Stories of Courage

Dateline NBC

All Episodes

Prepare! U.S. Crypto Regulations Will Pass Sooner Than You Think! with Patrick Witt

Stuff You Should Know