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The one criticism I give to a lot of the
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regulators at the time who are now leaving, like Michael
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Sue from the OCC who live through the financial crisis,
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is comparing crypto to the financial crisis, which to me
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is like the crime of the century. How can you
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say at technology that's showing new ways of conducting banking,
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of having possibilities. As you know, there are people who
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lose money on meme coins, but there are a lot
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of people who've created wealth, intergenerational wealth for themselves. How
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can you say that's a financial crisis.
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Welcome into the.
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Thinking Crypto Podcast. I'm your host, Tony Edward and my
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guest today is Jason Brett, who is a former US
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regulator at the FDIC and a managing director at Keybridge Advisors. Jason,
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great to have you on.
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Thanks so much, Tony, appreciate you having me. Love your show.
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Jason, you and I met at the Digital Chamber event,
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if I remember correctly, I think that was the first
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time we met. And your background is fascinating, spending time
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at the FDIC, spending time consulting for different crypto companies
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going back years.
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So I think your perspective.
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On everything that's happening in this market is going to
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be very valuable and I'm excited to chat with you
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and maybe we'll get kick off with your background.
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Tell us where you're from and what's your professional background.
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Sure, sure, yeah, I'm from North Jersey originally, and then
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I moved to Washington, d C. After I worked in
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banking for a little bit in Wall Street, Morgan Stanley
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and Washington, d C. Is really where I caught my
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stride because I ended up working for the FDIC while
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getting my MBA in the Division of Finance in two
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thousand and eight when it was very quiet, and then
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literally the timing meant that I got involved in all
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of these different crazy things, including the INDIMAC BAC failure
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in California, where the division I was in had to
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fly out to California to help with taking over that
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bank because it was it was the largest bank failure
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of its time under the FDAC, and then shifting back
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to that, I then was sent over to the Capital
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Markets Division to continue the work I was doing there
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in the fall, and as it turned out, then Lehman
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Brothers fell in September, and so there was a little
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bit of a joke of don't follow Jason around their
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racetrack because that department was directly responsible everything with Lehman
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and then everything else aig. So I got to work
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on some incredible things. I had really within one year,
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something that I think for a lot of people, like
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you know, lucky to touch a few of those subjects
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in twenty years. So I was very fortunate to be
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where I was, although it was very you know, not
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fortunate for the country, but I saw all of these
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things happening in real time. And then from there it
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really opened my eyes before experiencing bitcoin or crypto, to
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seeing in my mind the dangers of our current financial system.
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And now everybody talks about that regularly, like the Federal
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Reserve they're doing this, But at the time, no one
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was really talking about that in two thousand and eight,
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two thousand and nine the way we do today. So
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I felt kind of alone. You know, it was like,
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am I the only one looking at this? Like this
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doesn't seem right? Like what are we really relying on
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to keep this financial system going? I mean, how much
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gum do I have to pull off the bottom of
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my shoe to put on the building to keep the
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you know, financial wheels turning. I mean, he had Ron Paul,
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which was great. So I say all that to say
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is I continue doing regulating for five or six years,
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and then when I discovered bitcoin, actually went to work
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for the Chamber of Digital Commerce in twenty sixteen, where
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was their Director of Operations, helping with things like policy.
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And then I work for a consensus in the Ethereum
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community here in the States, helping them with developing their
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government policy strategy. And then since then I've been moving
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on doing you know, advising the crypto companies. And really,
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i'd say feeling so fortunate, Tony, because I see all
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the younger people now I'm a little older, but like
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people in their twenties and thirties kind of where I
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was in the financial crisis, who are seeing what I
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saw when I was alone and talking about it publicly.
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So it's almost like a treat. Just sitting at a
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conference or hearing people discuss the problems of our current
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financial system and how to fix it has really been
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for me a joy.
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That's amazing.
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And you know, going back to when you're at the FDIC,
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you got thrown into the fire man. I can't imagine
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having to deal with these bank collapses, and like you said,
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no one thought that was possible before that two thousand
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and eight crash, right, everybody thought everything is fined, a
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housing market will never collapse. The banks are our biggest institution.
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Zerre fine, and then it all fell apart. I can't
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imagine what that was like. And I mean, were you
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guys all stressed of the FDIC? Was there a lot
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of pressure and things like that?
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Yeah? Yeah? And actually, well exclusive for you, I'm actually
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finishing up my first book that I've ever written. That'll
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be it's called like From Regulator to Rebel, kind of
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exploring how Bitcoin and found opportunities within the financial crisis.
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I don't know if that's going to be the exact title,
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but the story I have to tell I think is
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so important I want other people to hear it. It's
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not even really about me and what I want to write.
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It's understanding what that stress was like. So, like, just
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to give you one example, right, if you remember what
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Covia Bank and Washington Mutual both failed, I don't. I
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remember that they failed back to back in the two
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thousand and eight financial crisis, really big banks, and we
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had before that happened. We had to do these analyzes
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and I was just the junior person, but the senior
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people were told, hey, spend the weekend analyzing can the
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deposit Insurance Fund for the FDIC that has billions of
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dollars support the fact that Washington Mutual and Wacovia might
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fail at the same time. Well, deposit Insurance Fund still
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remind us people every day, only covers one percent of
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the deposits in the whole banking system. So it's not
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like it doesn't cover all the dollars. Covers one one
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hundredth of everything. And so the analysis was that the
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Deposit Insurance Fund would survive, but only if Wall Covia
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and Washington Mutual were bought by bigger banks, if the
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fund had to support it. And so that to me
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showed there was this incentivization of making the bigger banks
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bigger because there was these shotgun marriages. If you have
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this bank like Washington Mutual that's going to fail, we
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can't just let it fail. You have to just find
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a buyer like Jamie Diamond or someone to come in
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and buy it. But I say that I explain that
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because not only was their stress or disbelief, but I
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still remember to this day the senior folks grumbling and
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just infuriated that they had to spend the weekend away
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from their family saying things like what, COBE is never
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going to fail, Like they'd say, it's like you, Tony, like,
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WELLKBE is not going to fail. I don't even know
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what I'm doing here. This is so stupid, you know.
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And it was just like wow, you know, because when
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I took it back, I was I was like, yeah,
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I guess this is stupid. But then three weeks later, well,
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COVID failed and Washington mutual the exact thing that they
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were told to analyze. So there was a lot of
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frustration and then just complete disbelief. And then when something
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happens that you don't believe can happen, like you know,
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Bitcoin hitting on hundred thousand dollars or something, you're a
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little off guard for a while. You're kind of on
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shaky territory. So then when stuff just keeps hitting you
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and hitting you, and it's like what we see these
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disasters like hurricanes and everything, it just gets worse and worse,
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to the point that literally people thought in September like
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they felt like the building was going to fall down
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pretty soon, you know, they got that close, I think
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to the financial markets seizing up.
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So yeah, and I'm I'm definitely looking forward to reading
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your book because I'm sure it's some interesting stories in there,
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because that was such a crazy time, and you know,
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a lot of people look back to that and say,
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you know, did the real economy die at that point?
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And will America be the same?
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And I'm optimistic that hopefully bitcoin, blockchain and all these
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things can help solve those problems. We don't have a
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repeat of them, and we can come out of the fire,
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so to speak, and already ashes rise on the ashes,
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more stronger, with a better financial system that doesn't have
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all those pitfalls in it.
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Yeah. I get really emotional about this because a lot
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of people really don't realize that. Ben Bernaki, who was
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the chair of the Federal Reserve at the time, definitely
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gets credit for saving us out of that crisis. But
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he was a man who followed the Great Depression, and
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he was a student of the Great Depression and the
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Great Depression. The problem was the credit markets seized up,
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and so that's why things got worse and worse. So
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his goal, or his modus operandi, was to make sure
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that this credit markets didn't seize up during that timetable.
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Now that's a positive thing. Again, I give him credit
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for that. But the unintended consequence of that is I
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think what we're living with today because you saw the
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Federal Reserve come out with so many programs and beloaded
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their balance sheet to make sure that credit markets didn't
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seize that it's like we're left with like a bruise
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in our arm that's still bleeding, you know, and it's
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now transformed into that was the solution that we came
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at this crisis from. We'll never know if there was
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another way to go about solving the crisis, and we're
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still living with what our very potential dire consequences to
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our economy because the size of the FED now has
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gotten so large and still today, I don't think that's
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changed among government officials. Like we had a financial crisis tomorrow,
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I think we still try to handle it the same way.
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I don't think we do something different.
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But Jason is that like there is no other option
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because the world is so financialized, so globalized, and our
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markets are so connected, and the only way in this
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Fiat system. And it goes back to the root of
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the Fiat system. It's not on a goal standard. This
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is what you have to do unless you move to
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some sort of of hard money system. With blockchain, we
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have more transparency where you can weed out the fraud,
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you can weed out the insane leverage that is being
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piled up and people are doing things they shouldn't. Until
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we get to that point, this is the Fiat SYSM
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and they have to build it out because if they don't,
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it collapses, and it could potentially collapse society because everybody's
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retirement is wrapped up in these assets. So if you
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let the collateral the assets go to zero, it's game over.
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That's a great point. I totally agree with you. I
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don't think that there's any other way to handle it either,
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not on top of the fact that we don't really
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have another game plan. I mean, we do have sort
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of the bitcoin maximalists and the focus on what we
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could do with sort of the Austrian method, but we
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also what I would challenge the bitcoin maximalists to do.
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And I'm probably gonna get a lot of hate on
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x nown for saying this, to come up with what
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the credit system looks like in that world, right, because
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there's a fundamental concept that does work in the US,
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which has to do with as dollars come into a bank,
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that's at least how we today come up with mortgages
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and the ability people borrowing and credit. So is it
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the fiscal responsibility of credit? How do we manage that?
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The truth is we've had a financial crisis every seven
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or eight years, you know, we haven't had one in
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a while. But also after the Great Depression there wasn't one.
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There were some aftershocks, like to me, I think Silicon
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Valley Bank, and those were sort of an aftershock of
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two thousand and eight. So han't yet really seen what
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the next financial crisis might look like. So they're not abnormal.
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It's what happens in the FIAT world. And that's at
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least why fundamentally they thought to put things like the
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Federal Reserve and others in place. What's happened, though, I
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think is that you've now seen, and this is a
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challenge for the FEDS, is people who are openly criticizing
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the system on a regular basis, right, and also coming
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up with and it's not just you know, the bitcoin
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maximalist right coinbase is throwing daggers at the FDIC. Right,
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they're suing the fdi C, they're pulling Foyer requests. I
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cannot tell you how unheard of that is that a
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non bank is pressing one of the prudential federal regulators.
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And I see that as a good thing because I
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think there needs to be a shake up in how
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they're doing business, particularly with the reputation risk. That's something
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that camels that has evolved into something that's really bad.
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But anyway, to your point, though, I really agree fundamentally
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that not only is there not you know, not only
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would this be the way we would handle another crisis
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today as we did in two thousand and eight, but
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there really there aren't many other options on the table.
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Yeah, And I think going back to you notice much
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better than I do. It's not that people had mortgages
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or fractional reserve banking. It was the abuse of it, right,
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they started giving bad mortgages to people. But yes, you
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know there was the A category a great mortgages, right,
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and but then there was like the d N the
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C or C and D right the level where no income.
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No docks the abuse of it.
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But and then the regulatory agencies, I don't know why
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didn't catch it or what was happening there, and then
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the grading agencies were a part of it.
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So it was just human behavior playing out.
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And I keep going back to, you know, maybe when
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all this stuff is on the blockchain, but with what
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kind of Elon's trying to do now, I'm not sure
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it's going to stop everything, because things happen in life,
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but it will help curb a lot of that from happening,
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the abuse and that oh I'm gonna slip a C
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note to this regulatory agency, let them grade me higher
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and and you know, get away with it. Maybe that
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those things will stop.
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Yeah, I think it's important to remember back in eight
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there was not a lot. It was very opaque understanding
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the derivatives. So when I look back now, it's very
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easy to see because I had to calculate all the
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derivatives and the exposure with AIG when AIG was about
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to fail, and it was very hard to try to
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dig into what was in all of these products. So
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to the degree that blockchain could help reduce that opacity
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and allow people to see more into what they're buying,
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like up front, that might help determining things. But then
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you need the regulators, the people who are hopefully not
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going to take the C notes to actually be responsible,
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or the ratings agencies to you know, really enforce that
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or highlight that, right, because what if you have a
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quote unquote captured blockchain, like a permission blockchain that is
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regulated and it's from like, you know, let's call it
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Moody's blockchain or whatever, sorry Moody is, you know, like
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and and they're doing things in a way, but it's
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coded in a way where it doesn't quite really show
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you everything. So how do you get to the underlying assets?
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So I think the connection between when you you know,
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tokenize something right like or whatever, you need some kind
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of verification system and you need to have that verified
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maybe on chain is maybe something that we can start
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to do, have independent reviewers you know, of that process.
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And I think, look, there's always always going to be abuse.
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People always find cracks in the system, but that is
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going to take just the fact that we can see
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it better will reduce that possibility of having this huge
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buildup of as you say, all this B and C
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stuff under the A stuff and we think it's fine,
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and then you know, leading at least to another issue
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in the financial crisis in two thousand and eight was
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you know, the credit to fault swaps, right, because then
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people were taking on insurance on the fact that the
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bonds were going to fail, and then there were short
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selling companies like City and if you remember, then SEC
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had to come in and stop the short selling for companies,
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which I still find to this day very interesting because
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the SEC chairman at the time said that was if
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that was, he regrets that decision and he will for
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the rest of his life stually interceded in the financial
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markets and stop people from allowing to short specific stocks
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because they were in the category of banks. Hmm.
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Yeah, there's so many levels to this because it's a
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human aspect. You know, bad actors will do bad things
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human beings. Obviously we're not infallible, and so it's tricky.
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But to your point, if we can progressively raise the
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standard with blockchain technology, would be in a better place.
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So let's talk about operation choke point two point zero.
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I was thinking, so I was.
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Salivating about asking you about this, but given your perspective
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and your background at FDIC, because we're seeing information come
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out that the FED, the FDIC and so forth, we're
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kind of trying to block crypto. I don't know if
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they Elizabeth Warren and her cronies were part of trying to,
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you know, stop or could the collapse of Silicon Valley
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Bank and debanking crypto.
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What are your thoughts on this whole situation.
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Yeah, well, it's funny by the way, that I'm former
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FD I see because I've talked with folks. In fact,
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I was at conference a couple of years ago and
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I was at a table chatting with Nick Carter and
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Nick Carter and you know, Austin Campbell, the real like
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leaders on this stuff. We had a good conversation. I
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explained my background. I was playing some things, and as
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we left the table, Nick said to me, you know,
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I really don't like the FD I see that much.
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And I was kind of like, you doesn't like me
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that much because I wasn't I see, But I was like,
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point taken, and now I could see, Yeah, you really
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didn't like the FD I see that much with what
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you you know, you know shown. But the truth is,
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though Operation Showpoint, the first one was very much covert, right,
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It was not known what was happening. This was really
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out in the open. I mean, you had the Biden
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administration saying that there were dangers of crypto in the
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financial banking processes. So I think a lot of people,
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a lot of regulators took the message from up high
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and said we need to do things to keep this
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stuff out of the system, like we're just not comfortable
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with it and we feel like it could lead to
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a financial crisis. The one criticism I give to a
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lot of the regulators at the time who are now leaving,
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like Michael Sue from the occ who live through the
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financial crisis, is comparing crypto to the financial crisis, which
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to me is like the crime of the century. How
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can you say at technology that's showing new ways of
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conducting banking, of having possibilities. As you know, there are
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people who lose money on meme coins, but there are
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a lot of people who've created wealth, intergenerational wealth for themselves.
376
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How can you say that's a financial crisis? Like I
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understand that it's new and technology does disrupt it. And
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that was my thought about it is it's not like
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a financial crisis, right, But there's these new technologies. How
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are the banks going to adapt to it? So the
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fact that you had people who use their authority to
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simply shut out a certain technology and therefore shut out
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certain people trying to build in this country, is abhorrent.
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I think the people that did that, not necessarily the
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people on the ground, but certainly the supervisors of each
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of these offices if they were had a condoning a practice,
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whether it was written or not, telling to like not
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bank people or d bank people particularly. You know, you
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put in two two million dollars in the bank, excuse
390
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me for your company, whether you're like Anchorage Digital, you're
391
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a bank, and then you pull it the next day,
392
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so and you realize very quickly how much power the
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banks have over you in that regard. So look, I'm human.
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People the fd I, c N Federal Reserver are human too.
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And I like to tell people, you know, don't hate
396
00:20:39.799 --> 00:20:42.319
the players hate the game. The game is really set
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up in a way where, because of the ratings, if
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I go into your bank, let's say you're the CEO
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of a bank, it's camels, right, So I have to
400
00:20:49.839 --> 00:20:53.359
analyze what your capitalism of your bank, what your assets are,
401
00:20:53.839 --> 00:21:00.359
your liquidity, your sensitivity, interest rate, risk, earnings a M.
402
00:21:00.839 --> 00:21:04.000
You know the management part. Now, how do I evaluate
403
00:21:04.039 --> 00:21:08.240
you as a management part? Right? That's very subjective. That's
404
00:21:08.240 --> 00:21:12.079
where the reputational risk creeps in because I could say
405
00:21:12.079 --> 00:21:15.119
Oh yeah, he's got enough earnings, you know, liquidity's good,
406
00:21:16.359 --> 00:21:18.440
got enough capital, So the bank should survive, because that's
407
00:21:18.440 --> 00:21:19.799
all it is is test of how you're going to
408
00:21:19.880 --> 00:21:23.880
move forward. But you know, from a management perspective, this
409
00:21:23.960 --> 00:21:28.160
guy's banking, you're banking crypto companies. He's insane. That's it.
410
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We're gonna we're going to revoke your banking charter. And
411
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I come and tell you that, and you's like, WHOA.
412
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I like my bank. I don't want to lose my bank.
413
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It's my living you know. Uh, And I have the
414
00:21:41.000 --> 00:21:44.279
board of directors. Maybe it's a family run bank. And
415
00:21:44.319 --> 00:21:46.400
then you're basically faced with a choice that I've given
416
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to you, which is get rid of a few customers
417
00:21:49.960 --> 00:21:53.000
or I pull your charter, and that's there of ours.
418
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That's that's the game. I'm saying that where we should
419
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hate the way this game has set this up for
420
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that kind of subjective judgment that comes into how banks
421
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get run in this country, and it's terrible.
422
00:22:03.440 --> 00:22:08.640
Yeah, and Jason, to that point, that's great insight. I
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was talking to someone about this and I thought, and
424
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I don't want to sound conspiratal, but I thought of
425
00:22:18.960 --> 00:22:21.839
the FED and the people, the treasury and so forth,
426
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almost doing this to slow this acid class down because
427
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they don't see they can't see everything with what's happening.
428
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They're not plugged into the blockchains. And if you're controlling
429
00:22:34.920 --> 00:22:37.559
the currency, right, you're the fed of your treasury and
430
00:22:37.599 --> 00:22:41.279
so forth. And money's going to bitcoin, in different crypto assets,
431
00:22:41.279 --> 00:22:45.799
into stable coins. That's pulling powerway and control away from you,
432
00:22:46.440 --> 00:22:47.039
and you could.
433
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Get out of hand.
434
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Don't get me read I see there from their perspective
435
00:22:49.839 --> 00:22:52.319
how that could get out of hand, and then you
436
00:22:52.400 --> 00:22:58.359
have collapses happen like FTX and much more. Elizabeth Warren,
437
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Gary Gains, do your job. That's not that's not a
438
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public conversation. But is that a conversation that could have
439
00:23:06.920 --> 00:23:09.680
happened that, hey, let's slow this thing now until we
440
00:23:09.799 --> 00:23:12.640
can get a grasp of it and put regulations in place.
441
00:23:14.599 --> 00:23:18.759
Yeah, I think that's that's certainly probable that those types
442
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of conversation happen. What I really agree with with Coinbase
443
00:23:23.200 --> 00:23:25.559
and Ripple and the rest of the crypto folks very
444
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much as an ext regulator, and I don't like to
445
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beat up on another regulator too badly. But Harry Genser
446
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was really out of line in a lot of ways,
447
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Like with the two thousand and eight financial crisis, it
448
00:23:37.839 --> 00:23:40.279
was the FED US at the FDIC and the OCC
449
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that figured out that Lehman had to go bankrupt. That
450
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that was, you know, the end, and so they picked
451
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It's in the movie too, It's in the Too Big
452
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to Fail movie. They pick up the phone and they
453
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tell the SEC chair what to do because the SEC
454
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is this really just this backwater agency. They don't really
455
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have anything to do with banking and the financial markets.
456
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They have to do with if you're going to fundraise
457
00:24:00.079 --> 00:24:02.799
for your company, all that kind of thing. But so
458
00:24:02.799 --> 00:24:04.599
there was a lot of scope creep that I saw,
459
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you know, under Gary Gensler, and I think that was
460
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to your point probably that conversation of you know, slow
461
00:24:10.200 --> 00:24:12.279
it down, and he slowed it down for some of
462
00:24:12.279 --> 00:24:15.039
the banking regulators with SAB one twenty one, even though
463
00:24:15.759 --> 00:24:18.640
that was so out of range. I mean, I think
464
00:24:19.079 --> 00:24:21.680
Powell was very diplomatic when he said it surprised us
465
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to see the SEC way in this way because they
466
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were thinking about it a different way. What I think
467
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is important with looking at the way how the bank's
468
00:24:33.039 --> 00:24:38.440
operated now and what their decision matrix is is there's
469
00:24:38.480 --> 00:24:41.079
a great essay and it's about like what is a bank?
470
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And it's from the Federal Reserve, Like how do you
471
00:24:42.759 --> 00:24:46.759
define a bank? Right? And the few principles of what
472
00:24:46.839 --> 00:24:49.720
you define as a bank? And this is so important
473
00:24:49.839 --> 00:24:53.119
is one of the definitions they give it to it
474
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is it's the transmission. It's the transmission for the engine
475
00:24:57.799 --> 00:25:01.319
of the US economy, for monetary pol so in other words,
476
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if rates go up or rates go down, it's like
477
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they have a car and they're tuning it up as
478
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to how fast or slow they want the economy to run.
479
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So banks are like a public utility, right, They're critical
480
00:25:13.000 --> 00:25:15.000
to the way we operate. So they have to be
481
00:25:15.599 --> 00:25:20.039
able to provide that transmission or that you know, runway.
482
00:25:20.480 --> 00:25:24.000
So we can see how consumers are spending. We can
483
00:25:24.039 --> 00:25:27.799
push consumers to spend more. We can get businesses to
484
00:25:27.880 --> 00:25:31.640
borrow more, which sounds very manipulative right when you talk
485
00:25:31.680 --> 00:25:34.880
about it, but that's the control mechanism they have. And
486
00:25:34.960 --> 00:25:38.920
with stable coins in crypto, I think they're looking at
487
00:25:39.039 --> 00:25:40.200
is we don't know that we're going to have this
488
00:25:40.279 --> 00:25:42.720
kind of control because there isn't that bank there isn't
489
00:25:42.720 --> 00:25:47.279
that intermediary? They're these computer programs. I think were they
490
00:25:47.319 --> 00:25:49.359
able to understand how they could do the things they
491
00:25:49.400 --> 00:25:52.400
can do with a bank today, like control with rates,
492
00:25:52.440 --> 00:25:56.319
you know, the transmission of the US economy. FDIC insurance,
493
00:25:56.319 --> 00:25:58.359
which is also a definition for a bank, and it's
494
00:25:58.400 --> 00:26:01.720
something that Katel Long really struggled with Custodia and that
495
00:26:01.839 --> 00:26:04.440
was very unfairly treated on the idea of not being
496
00:26:04.839 --> 00:26:07.559
having the insurance from fdi C to be considered a bank.
497
00:26:08.359 --> 00:26:11.160
Is it comes down to to me, is at least
498
00:26:11.160 --> 00:26:13.640
amongst the regulators and how we have discussions. I think
499
00:26:13.680 --> 00:26:16.599
we need to have more of these discussions and forums
500
00:26:16.640 --> 00:26:20.519
with the regulators now on definitions what do you define
501
00:26:20.519 --> 00:26:22.400
as a bank? Out of the two thousand and eight
502
00:26:22.400 --> 00:26:26.000
financial crisis, the biggest definition that everybody argued about was
503
00:26:26.039 --> 00:26:28.480
what's the securitization? Like what does that mean? What does
504
00:26:28.519 --> 00:26:30.880
it mean when you take a mortgage backed security and
505
00:26:30.920 --> 00:26:33.359
you put it in Like, what's the definition of that term?
506
00:26:33.519 --> 00:26:35.480
Should it be on the bank's balance set? Should it
507
00:26:35.519 --> 00:26:38.039
be off? What's in it? What's not in it? How
508
00:26:38.039 --> 00:26:39.839
do we define how do we rate it? You know?
509
00:26:39.960 --> 00:26:42.279
All these things and I think now we're at the
510
00:26:42.319 --> 00:26:44.799
point with all the dbanking and the things on. Regulators
511
00:26:44.799 --> 00:26:46.839
think we're on a point where it's not The new
512
00:26:46.839 --> 00:26:50.880
word of the twenty twenty five is what is a bank? Yeah?
513
00:26:51.680 --> 00:26:52.400
Great points.
514
00:26:52.480 --> 00:26:54.680
And then as you're saying that, you know when you
515
00:26:54.720 --> 00:26:59.039
talked about control. It's funny how things happen because now
516
00:26:59.240 --> 00:27:02.279
Wall Street's here, they have etf rappers. So now the
517
00:27:02.319 --> 00:27:05.519
government can see how much crypto is going into these
518
00:27:05.720 --> 00:27:09.759
etf rappers. It's being reported in SEC filings. Stable coin
519
00:27:09.880 --> 00:27:12.839
legislation's coming, I'm assuring, I'm assuming all of these stable
520
00:27:12.839 --> 00:27:15.000
coin issues are gonna have to plug in to the
521
00:27:15.039 --> 00:27:17.920
government in some way and report to defend the treasury.
522
00:27:18.200 --> 00:27:20.880
Here's how much we're issuing, here's how much treasury bonds
523
00:27:20.880 --> 00:27:24.119
and all these things we have. And then exchanges are
524
00:27:24.160 --> 00:27:27.519
going to come into compliance with KYCAML. That's already happening,
525
00:27:27.799 --> 00:27:31.640
some of it globally. So it seems like the infrastructure
526
00:27:31.680 --> 00:27:34.599
is being built for the control. So after the four
527
00:27:34.680 --> 00:27:40.319
years of massive lawsuits and battles, all of a sudden
528
00:27:40.559 --> 00:27:44.440
with tradfy here, it seems things are opening up again.
529
00:27:44.480 --> 00:27:46.839
I don't want to get conspiratle but it's just I
530
00:27:46.880 --> 00:27:48.359
sit back and I look at this, and I'm like,
531
00:27:48.519 --> 00:27:49.759
of course, of.
532
00:27:49.759 --> 00:27:54.799
Course, yeah, yeah. Well, I think we're at an interesting
533
00:27:54.799 --> 00:27:58.119
inflection point right with the new administration, because we're having
534
00:27:58.160 --> 00:28:02.279
newer people come in and doing regular and there's a
535
00:28:02.279 --> 00:28:09.200
lot of openness about crypto and stable coins. You know.
536
00:28:09.359 --> 00:28:11.559
I think because people thought we were moving into this
537
00:28:11.640 --> 00:28:17.640
deregulated process, there'd be like that people could kind of
538
00:28:17.680 --> 00:28:19.319
start to do whatever they want. I think we're kind
539
00:28:19.319 --> 00:28:21.880
of witnessing that with the mean coin mania. It's kind
540
00:28:21.880 --> 00:28:24.079
of like that this this space has always been the
541
00:28:24.079 --> 00:28:27.279
wild West. By the way, aren't really their rules anyway?
542
00:28:27.400 --> 00:28:29.279
Are ready to find what we can do with crypto.
543
00:28:29.680 --> 00:28:31.599
So if you don't realize you're already in the wild West,
544
00:28:31.640 --> 00:28:33.559
if you're buying a specific coin, or you don't know
545
00:28:33.559 --> 00:28:36.559
why you don't have protections, like sorry, but wake up,
546
00:28:36.759 --> 00:28:38.839
you know you're at this is the wild West right now.
547
00:28:39.240 --> 00:28:41.200
And it got even wilder because you had a new
548
00:28:41.200 --> 00:28:44.119
sheriff in town who basically said, Hey, it's my rules
549
00:28:44.119 --> 00:28:46.720
and guess what I'm an issue my own meme token.
550
00:28:46.839 --> 00:28:49.200
You should buy what I'm doing. So it changes the
551
00:28:49.240 --> 00:28:53.039
whole game, right, and so you know, you kind of
552
00:28:53.079 --> 00:28:57.920
have this new atmosphere, and I think what you're probably
553
00:28:57.960 --> 00:28:59.519
going to see, in my mind is you're going to
554
00:28:59.559 --> 00:29:02.200
see the meme coin stuff die down as the legislation
555
00:29:02.319 --> 00:29:07.119
starts to come into place that addresses you know, XRP
556
00:29:07.319 --> 00:29:10.160
and all these tokens and how they're fit into commodities
557
00:29:10.200 --> 00:29:13.119
with CFTC or if it is a security, how it
558
00:29:13.160 --> 00:29:15.240
fits in an SEC and how you could move it.
559
00:29:15.519 --> 00:29:17.039
So I think you're going to start to see that
560
00:29:17.119 --> 00:29:20.000
all lay out when sort of the fun and games
561
00:29:20.000 --> 00:29:22.160
are over and we're going to kind of have the
562
00:29:22.200 --> 00:29:25.119
barbed wire that kind of can change the Wild West
563
00:29:25.160 --> 00:29:29.279
forever with these regulations. And I think ultimately that's what
564
00:29:29.720 --> 00:29:32.400
a lot of the institutional folks want to see too.
565
00:29:32.440 --> 00:29:36.440
That's why they like the etf rappers because they like things.
566
00:29:36.599 --> 00:29:40.799
They like to take out the uncertainty that's any regulatory uncertainty.
567
00:29:40.839 --> 00:29:43.640
And so when you look at where we're going now
568
00:29:43.880 --> 00:29:47.319
we get stable coin and market structure legislation, I think
569
00:29:47.359 --> 00:29:49.960
a lot of this stuff will calm down. And I think,
570
00:29:50.160 --> 00:29:54.680
you know, not from the conspiracy standpoint, but the traditional
571
00:29:54.720 --> 00:29:57.000
financial institutions kind of always figure out a way to
572
00:29:57.000 --> 00:30:02.079
win you know thing, I think truth like Biden Trump,
573
00:30:02.079 --> 00:30:05.279
who cares like, look, the banks won Okay, they found
574
00:30:05.279 --> 00:30:07.240
a way to slow down the system for four years
575
00:30:07.480 --> 00:30:09.119
so they could get a handle at it. They could
576
00:30:09.160 --> 00:30:11.480
be prepared build. You know. That's why you see like
577
00:30:11.519 --> 00:30:14.039
I'm a digital assets person from this company, you know,
578
00:30:14.079 --> 00:30:16.240
because they've built all the stuff and they're ready to
579
00:30:16.279 --> 00:30:18.799
go and when and they won't and they won't want
580
00:30:18.799 --> 00:30:21.039
to see that trigger pulled until later this year when
581
00:30:21.079 --> 00:30:23.960
Trump is saying, okay, now we'll have the regulations and
582
00:30:24.000 --> 00:30:25.799
then the banks will come out so they can compete
583
00:30:25.799 --> 00:30:31.400
on equal footing with all the crypto startups, which isn't
584
00:30:31.440 --> 00:30:32.960
exactly fair, But I always say, you know, it's like
585
00:30:32.960 --> 00:30:35.079
with Bill Gates one of his life lessons, His life
586
00:30:35.119 --> 00:30:37.799
isn't fair, you know, but you have we have to
587
00:30:37.839 --> 00:30:39.599
you have to hustle. If in the crypto industry, you
588
00:30:39.640 --> 00:30:42.720
have to understand how you can take advantage of the
589
00:30:42.759 --> 00:30:44.680
wild West. And I don't mean to launch a mean coin,
590
00:30:44.720 --> 00:30:46.920
but I mean build in a way. Find it to
591
00:30:46.960 --> 00:30:50.440
be productive, right, Find something that's of utility that's going
592
00:30:50.519 --> 00:30:53.160
to last out, because that's where the unicorns are going
593
00:30:53.240 --> 00:30:55.240
to succeed and that's where you're gonna see things like
594
00:30:55.240 --> 00:30:57.559
like coin Base already went public, will probably see Circle
595
00:30:57.680 --> 00:30:59.799
go public. One to the stable coin legislation falls in
596
00:30:59.839 --> 00:31:03.359
the place I think you can count guarantee a circle
597
00:31:03.400 --> 00:31:07.039
IPO like weeks after stable coin gets passed. So we're
598
00:31:07.079 --> 00:31:08.720
gonna start to see some of this level out, is
599
00:31:08.759 --> 00:31:11.039
my point. And I think that's all part of the conspiracy.
600
00:31:11.440 --> 00:31:13.720
Yeah no, And I guess you know the reason why
601
00:31:13.920 --> 00:31:16.079
I preface by saying I don't want to sound conspiracy
602
00:31:16.039 --> 00:31:19.480
because people sometimes think these statements, you know, oh yeah,
603
00:31:19.519 --> 00:31:21.359
this puppet masters pulling a string.
604
00:31:21.400 --> 00:31:22.680
But it's not so much puppet masters.
605
00:31:22.680 --> 00:31:25.160
It's if you were an incumbent and you had a
606
00:31:25.680 --> 00:31:29.680
stranglehold on the way moneies move and the whole banking
607
00:31:29.680 --> 00:31:32.119
industry and the financial markets, and all of a sudden,
608
00:31:32.160 --> 00:31:35.799
this disruptive technologies here. If I'm Jamie Dunman, I'm making
609
00:31:35.839 --> 00:31:38.960
phone calls to DC every day and saying, hey, stop
610
00:31:39.000 --> 00:31:43.079
this thing, stop this thing right now, because that's how
611
00:31:43.119 --> 00:31:46.200
the look. There's a revolving door in Washington, DC. We've
612
00:31:46.200 --> 00:31:48.759
seen it. Goldman guys go to DC, vice versa and
613
00:31:48.759 --> 00:31:52.680
all that. So these things are not far fetch or outlandish.
614
00:31:52.920 --> 00:31:55.279
We've seen it, but I think sometimes people don't realize
615
00:31:55.279 --> 00:31:59.519
what's happening behind the scenes, and it's just look if
616
00:31:59.559 --> 00:32:01.559
you have if you were in Jamie Nineman set, you
617
00:32:01.559 --> 00:32:02.640
would do the same thing too.
618
00:32:02.680 --> 00:32:06.640
I think you Bitcoin sucks, right and all these things.
619
00:32:06.680 --> 00:32:09.359
But you know, trying to build their own blockchain quorum
620
00:32:09.400 --> 00:32:10.839
and jpm coin to compete.
621
00:32:12.039 --> 00:32:13.680
Yeah, yeah, definitely.
622
00:32:14.759 --> 00:32:17.920
Now saw one two one gets repealed, right.
623
00:32:18.039 --> 00:32:18.160
Uh.
624
00:32:18.319 --> 00:32:22.119
FDIC said, Hey, we're gonna loosen the restrictions. Jason, what
625
00:32:22.119 --> 00:32:24.119
are you expecting from these banks? Do you think they're gonna
626
00:32:24.160 --> 00:32:26.880
launch their own stable coins? We know they're gonna launch
627
00:32:26.920 --> 00:32:30.680
custody crypto trading. You think they launched an old stable
628
00:32:30.799 --> 00:32:32.119
their own stable coins as well?
629
00:32:33.720 --> 00:32:37.200
Yeah. I think that's long been the premise, right of
630
00:32:38.160 --> 00:32:40.599
JP Morgan being able to launch its own like JP
631
00:32:40.680 --> 00:32:44.880
morgan coin, right, and and what that might look like.
632
00:32:45.799 --> 00:32:48.880
I think you're gonna see PayPal be very competitive, right,
633
00:32:49.079 --> 00:32:51.680
they sort of, And they stress in that hearing recently
634
00:32:51.720 --> 00:32:54.640
unstable coins that it's they believe it's something more of
635
00:32:54.680 --> 00:32:58.200
a payments mechanism than a banking mechanism. I think the
636
00:32:58.240 --> 00:33:00.240
banks are going to want to own the iss and
637
00:33:00.359 --> 00:33:03.720
stable coins mainly as a way of getting customers right,
638
00:33:03.759 --> 00:33:06.200
because it's a great way to onboard new customers into
639
00:33:06.240 --> 00:33:10.119
your into your bank. The other thing that's going to
640
00:33:10.160 --> 00:33:12.240
be interesting is people talk about how we might be
641
00:33:12.279 --> 00:33:15.160
going back to sort of the wildcat banking era in
642
00:33:15.200 --> 00:33:18.279
the late nineteenth century, where I think you're going to
643
00:33:18.319 --> 00:33:21.240
see state stable coins, you might see the Wyoming stable coin,
644
00:33:21.359 --> 00:33:23.960
you know. So I'm like, you know, meeting you somewhere
645
00:33:24.000 --> 00:33:26.359
out in Missouri and I'm like, hey, I got some
646
00:33:26.440 --> 00:33:29.440
New York stable coins from JP Morgan. You're like, oh,
647
00:33:29.519 --> 00:33:32.279
I got some Wyoming stable coins from Cadon Long, Like
648
00:33:33.359 --> 00:33:36.000
who has what? Like how do we are they dollars?
649
00:33:36.240 --> 00:33:37.799
Do we have to go back and test? Like is
650
00:33:37.799 --> 00:33:39.920
Wyoming better than New York? You know? So I think
651
00:33:39.960 --> 00:33:43.279
you're gonna I don't know people will be quite ready
652
00:33:43.319 --> 00:33:46.440
for if there's like different stable coins. But I'd say
653
00:33:46.440 --> 00:33:48.759
though that the at least the federal legislation makes it
654
00:33:48.799 --> 00:33:52.079
all back by a dollar, and you know there'll be
655
00:33:52.119 --> 00:33:56.759
federal ones and state ones. And the reasonab'll have that
656
00:33:56.799 --> 00:33:59.680
system is the same reason we did market structure legislation,
657
00:33:59.759 --> 00:34:03.079
which is right to avoid like the terror Luna collapse
658
00:34:03.240 --> 00:34:06.079
for stable coins or the FTX collapse for market structure.
659
00:34:06.119 --> 00:34:09.079
That's what we're really trying to avoid having these companies
660
00:34:09.119 --> 00:34:11.840
have to go offshore to build, right, and then we
661
00:34:11.880 --> 00:34:14.159
can't trust what it is. And you know, the big
662
00:34:14.199 --> 00:34:16.599
tension point I think we're going to see is Tether, Right,
663
00:34:16.639 --> 00:34:19.840
how does Tether fit into this? But look, they'll be
664
00:34:19.840 --> 00:34:22.920
able to comply, you know, with whatever the regulations are.
665
00:34:23.000 --> 00:34:25.639
They'll have to figure it out. The challenge for them
666
00:34:26.039 --> 00:34:28.280
is going to be in the stable coin legislation is
667
00:34:28.880 --> 00:34:31.239
what are the different ways that you can back a
668
00:34:31.239 --> 00:34:35.360
stable coin treasuries ninety days? So Tether's like a huge
669
00:34:35.360 --> 00:34:38.599
money making company, right, billions of dollars. If they have
670
00:34:38.679 --> 00:34:40.800
to change their asset mix and that's going to affect
671
00:34:40.840 --> 00:34:43.000
their income, that's a gonna be a real pain point
672
00:34:43.000 --> 00:34:44.440
for them. So they're gonna have to kind of do
673
00:34:44.519 --> 00:34:47.159
the cost benefit of do we stay in the US.
674
00:34:47.719 --> 00:34:50.000
We kind of have to because we're a US stable coin,
675
00:34:51.000 --> 00:34:52.559
but then we have to change our balance sheet, We're
676
00:34:52.559 --> 00:34:56.400
going to lose profitability. So I'm sure you know they're
677
00:34:56.480 --> 00:34:59.159
very active probably with what this legislation is going to
678
00:34:59.239 --> 00:35:00.559
look like. At the end.
679
00:35:00.840 --> 00:35:04.159
Yeah, I'm very curious as to how they navigate these waters.
680
00:35:04.159 --> 00:35:06.440
So we saw in the EU with the micro regulations,
681
00:35:06.440 --> 00:35:09.760
they've been struggling there, and the US is probably gonna
682
00:35:09.760 --> 00:35:12.920
do something similar. So yeah, it's gonna be fascinating. You know,
683
00:35:13.039 --> 00:35:15.719
maybe they lose some market share and Circle and some
684
00:35:15.760 --> 00:35:18.639
of the other players, PayPal maybe Ripple that they grow
685
00:35:18.679 --> 00:35:21.400
in market share, and I look, competition's great for the
686
00:35:21.559 --> 00:35:22.880
consumer and the market.
687
00:35:23.000 --> 00:35:24.440
So we'll see.
688
00:35:25.920 --> 00:35:29.480
What are your thoughts on the pro crypto government that
689
00:35:29.519 --> 00:35:33.199
we have in place, pro crypto president, new sec chers,
690
00:35:33.239 --> 00:35:37.480
pro crypto Treasury Secretary's, pro crypto White House, cryptos are
691
00:35:38.360 --> 00:35:42.119
you know, what are your anticipating that this government's gonna
692
00:35:42.119 --> 00:35:44.199
be able to do? Can they get legislation through this year,
693
00:35:44.239 --> 00:35:45.400
big Quinn Reserve this year?
694
00:35:45.519 --> 00:35:46.119
Things like that?
695
00:35:47.760 --> 00:35:51.360
Yeah, So you know, when you hear these terms, right,
696
00:35:52.719 --> 00:35:56.840
it's uh, you know, cool terminology, right like czar, you know.
697
00:35:56.920 --> 00:35:59.400
But I think it's really a signal though, that we
698
00:35:59.480 --> 00:36:02.239
have people who are our friends who are in both
699
00:36:02.239 --> 00:36:04.800
the administration and legislature. What do I mean by friends,
700
00:36:04.800 --> 00:36:07.960
I mean people who understand what these markets are, aren't
701
00:36:07.960 --> 00:36:11.719
afraid of it, and are capable to develop regulations and
702
00:36:11.800 --> 00:36:13.920
policies that will work for the United States, for the
703
00:36:13.960 --> 00:36:17.800
stable point markets to be here at home and the
704
00:36:17.840 --> 00:36:20.599
crypto markets to be here in the US. You know,
705
00:36:20.679 --> 00:36:23.360
when you talk about the cryptos are the big thing
706
00:36:23.400 --> 00:36:26.039
that's happening at the White House, the executive level is
707
00:36:26.440 --> 00:36:29.480
it's a presidential working group. Now, Biden had his own
708
00:36:29.519 --> 00:36:33.920
executive Order that focused on crypto as well, and one
709
00:36:33.920 --> 00:36:36.840
could call that maybe much more conservative, if not sort
710
00:36:36.840 --> 00:36:40.679
of throttling or doing a choke point type mechanism, because
711
00:36:41.000 --> 00:36:45.199
their main considerations the Biden administration for their working group
712
00:36:45.400 --> 00:36:48.639
was that the FED gets to set the monetary policy.
713
00:36:48.719 --> 00:36:51.840
It shouldn't be from some white paper by somebody we
714
00:36:51.880 --> 00:36:54.639
don't know, like Satoshi. You know, we need to protect
715
00:36:54.639 --> 00:36:58.840
the financial markets, protect the consumer from those financial markets
716
00:36:58.920 --> 00:37:02.159
number two and number three, you know, protect from elicted finance.
717
00:37:02.480 --> 00:37:04.199
I think you're gonna want to see the same things,
718
00:37:04.199 --> 00:37:05.639
but you're gonna want to see it in a way
719
00:37:05.679 --> 00:37:08.639
where it allows crypto to scale. And so that's where
720
00:37:08.639 --> 00:37:10.639
the White House is really going to lean in whether
721
00:37:10.719 --> 00:37:13.119
they issue the reserve that I think that very much
722
00:37:13.639 --> 00:37:16.440
could happen. I can tell you I don't ever see
723
00:37:16.480 --> 00:37:19.639
it being just a Bitcoin reserve. I think it will
724
00:37:19.679 --> 00:37:24.400
have to be a mix because then you're allowing the
725
00:37:24.400 --> 00:37:28.960
government to pick a winner, right, and that's not necessarily
726
00:37:28.960 --> 00:37:32.480
what we ever want. This came up in twenty twenty one,
727
00:37:32.559 --> 00:37:37.280
by the way, during the Infrastructure Bill, when initially the
728
00:37:37.280 --> 00:37:39.320
White House was saying we should just endorse proof of
729
00:37:39.360 --> 00:37:44.239
work mechanisms, and even coin Center in other places cried foul.
730
00:37:44.239 --> 00:37:45.519
So so we don't want to pick a winner or
731
00:37:45.519 --> 00:37:49.360
a loser. So you're gonna have to adjust yourselves. Bitcoin
732
00:37:49.440 --> 00:37:52.239
maxis you're going to see a mix in that strategic reserve.
733
00:37:52.280 --> 00:37:54.679
I think you're probably gonna see that, right, because it
734
00:37:54.679 --> 00:37:57.519
makes sense because it's their way of endorsing and signaling
735
00:37:57.639 --> 00:38:00.559
this is a new asset class and it's something that belongs.
736
00:38:00.639 --> 00:38:03.159
Maybe it's not going to replace the financial system, but
737
00:38:03.239 --> 00:38:05.400
we say it on the equity of like gold or oil.
738
00:38:05.480 --> 00:38:08.079
It's something valuable and we should be stockpiling some of it,
739
00:38:08.639 --> 00:38:11.320
and that can be done really through the executive On
740
00:38:11.360 --> 00:38:14.199
the legislative side, obviously, they've created a Byicountal working group
741
00:38:14.480 --> 00:38:18.159
with Chairman Tim Scott and French Hill on the banking side,
742
00:38:18.599 --> 00:38:25.239
and gt from Pennsylvania as well as Bozeman sorry, from
743
00:38:25.239 --> 00:38:27.639
the Senate on the agriculture side. And that's really important
744
00:38:27.840 --> 00:38:30.559
because those are the two committees, the Agriculture that oversees
745
00:38:30.599 --> 00:38:33.960
the CFTC and then you have the financial or banking
746
00:38:33.960 --> 00:38:37.119
committees that oversee the SEC. So all four of them
747
00:38:37.159 --> 00:38:39.960
had that press conference with David Sachs, and so that
748
00:38:40.079 --> 00:38:44.079
means that there's these four corners of the Congress working
749
00:38:44.119 --> 00:38:46.760
together and coordinating with the White House on what that
750
00:38:46.840 --> 00:38:49.239
legislation is going to be. And when you have that
751
00:38:49.360 --> 00:38:53.360
kind of a legislator that's authorized, meaning they're authorized by
752
00:38:53.400 --> 00:38:55.320
the White House in a sense of that what they do,
753
00:38:55.400 --> 00:38:57.559
the White House will support it, they won't veto it.
754
00:38:58.119 --> 00:39:01.679
You have all of the frame work right for success.
755
00:39:02.239 --> 00:39:04.960
And I think that the SEC crypto task for us
756
00:39:04.960 --> 00:39:07.840
that Hester Pearce is doing is going to address things
757
00:39:07.880 --> 00:39:10.159
on the micro level, like kind of in the meantime.
758
00:39:10.199 --> 00:39:12.599
This is what's going to smooth out until we maybe
759
00:39:12.639 --> 00:39:15.800
get the legislation later this year. So I'm very optimistic
760
00:39:15.880 --> 00:39:19.360
that we'll see something, but there are going to have
761
00:39:19.400 --> 00:39:23.920
to be some concessions made to the Democrats because remember
762
00:39:23.920 --> 00:39:26.440
in the Senate isn't just fifty votes in majority, you
763
00:39:26.480 --> 00:39:29.119
need sixty votes to get it to be a vote.
764
00:39:29.480 --> 00:39:32.800
So right now, that's seven Democrats, seven senators who are Democrats.
765
00:39:32.920 --> 00:39:35.519
Now we know Christian Joebrand's a friend, but we have
766
00:39:35.559 --> 00:39:37.360
to find six other Democrats who are going to be
767
00:39:37.360 --> 00:39:39.920
willing to adjust to this and say it for this
768
00:39:40.039 --> 00:39:43.679
legislation actually pass. So it becomes a numbers game, which
769
00:39:43.679 --> 00:39:45.920
she often does with these things, you know in Congress.
770
00:39:45.920 --> 00:39:47.280
We're going to see how that plays out in the
771
00:39:47.280 --> 00:39:48.119
next few months.
772
00:39:48.480 --> 00:39:49.159
Yeah, for sure.
773
00:39:49.159 --> 00:39:53.159
And that was great perspective and insights on the infrastructure bill,
774
00:39:53.679 --> 00:39:57.400
and even that we not necessarily a bigcoin strategic reserve,
775
00:39:57.440 --> 00:40:02.239
but a digital stockpile with different crypto assets. It's hard
776
00:40:02.320 --> 00:40:04.960
question for you with that in mind. You know, let's
777
00:40:04.960 --> 00:40:09.599
say we build this digital stockpile. Do you foresee I
778
00:40:09.639 --> 00:40:13.719
don't know if in our lifetime, but the United States
779
00:40:13.760 --> 00:40:17.000
going back to a hard money standard where we go
780
00:40:17.119 --> 00:40:22.880
back to not necessarily a gold standard, but using digital acids,
781
00:40:22.920 --> 00:40:27.559
gold oil maybe and these things back the dollar instead
782
00:40:27.559 --> 00:40:31.280
of being fiat. It's back to that hard money standard.
783
00:40:31.280 --> 00:40:34.920
If that makes sense, Yeah, I absolutely do. You know,
784
00:40:35.000 --> 00:40:37.159
if you look at the history of our country. We've
785
00:40:37.199 --> 00:40:41.159
had these ebbs and flows and Civil War, Lincoln issued,
786
00:40:41.199 --> 00:40:43.639
you know, the greenback or the US dollar created the
787
00:40:43.679 --> 00:40:47.599
occ and he did that without backing it by gold, right,
788
00:40:47.639 --> 00:40:51.000
so that was that was We weren't backed by gold
789
00:40:51.000 --> 00:40:52.920
for a period of time until later when the Federal
790
00:40:53.000 --> 00:40:55.480
Reserve formed, and then we finally went back on a
791
00:40:55.480 --> 00:40:58.840
gold standard. So there's a myth I think that's in
792
00:40:58.920 --> 00:41:01.119
seventy seventy six, we've been on a gold standard.
793
00:41:01.119 --> 00:41:03.320
We've gone on and off it. And in fact, you
794
00:41:03.360 --> 00:41:05.639
can actually go to the history books to look at
795
00:41:06.599 --> 00:41:09.079
the conversations Lincoln had when he had he felt he
796
00:41:09.119 --> 00:41:11.559
had to issue that to win the Civil War, and
797
00:41:11.639 --> 00:41:14.440
he apologized. He says, I know this isn't gold and silver,
798
00:41:15.039 --> 00:41:17.039
you know, but like it's kind of like, you know,
799
00:41:17.239 --> 00:41:20.119
please have faith in this. And then it even got
800
00:41:20.159 --> 00:41:23.800
to the point where the Secretary of Treasury wanted Lincoln
801
00:41:23.840 --> 00:41:27.039
to put in God we trust on the first dollar bills,
802
00:41:27.079 --> 00:41:28.960
and if you look at it, the first greenbacks don't
803
00:41:29.000 --> 00:41:32.199
say that because Lincoln said, I don't want to say
804
00:41:32.239 --> 00:41:34.159
something like in God we trust because it's really just
805
00:41:34.199 --> 00:41:37.199
a piece of paper, you know, it's just back. So
806
00:41:37.760 --> 00:41:39.480
we've gone in ebbs and flows, so it's actually a
807
00:41:39.599 --> 00:41:42.239
very easy question to answer. We've been off, you know,
808
00:41:42.440 --> 00:41:44.280
of a standard where we just have fiat the point
809
00:41:44.280 --> 00:41:46.400
that we have now, and so I could see a
810
00:41:46.519 --> 00:41:50.639
cycling to where definitely probably something like bitcoin or gold
811
00:41:50.760 --> 00:41:52.559
or other things that we say this is going to
812
00:41:52.599 --> 00:41:57.039
be the new way we standardize our money. And as
813
00:41:57.159 --> 00:41:59.400
everyone says, why we need a whole new sort of
814
00:41:59.440 --> 00:42:02.400
breton Wood two point zero just side what that future
815
00:42:02.480 --> 00:42:05.039
might look like. So I think that that'll be over
816
00:42:05.079 --> 00:42:07.199
our lifetime. That won't be tomorrow, but I think maybe
817
00:42:07.199 --> 00:42:09.039
over the next ten or twenty years we might see
818
00:42:09.039 --> 00:42:10.320
something like that come to fruition.
819
00:42:11.639 --> 00:42:15.519
I can't wait to see that happen, especially as you know,
820
00:42:15.559 --> 00:42:18.239
we go to a more digital world and everybody's going
821
00:42:18.280 --> 00:42:21.880
to be using possibly stable coins, right and digital assets.
822
00:42:22.239 --> 00:42:25.159
It would probably very be very easy to transition over
823
00:42:25.320 --> 00:42:27.719
because it's all going to be in the blockchain and
824
00:42:27.760 --> 00:42:30.480
hopefully we have transparency, you know what dose just trying
825
00:42:30.480 --> 00:42:31.559
to do, and we.
826
00:42:31.519 --> 00:42:33.679
Know they have the actual reserves.
827
00:42:33.760 --> 00:42:38.000
Right, there's a wallet that holes bitcoin theorem XRP whatever,
828
00:42:38.360 --> 00:42:41.360
and then here's some gold. We know it's token eyes
829
00:42:41.440 --> 00:42:45.079
we know it's in Fort Knox, and here's our oil reserves.
830
00:42:45.079 --> 00:42:47.880
We know we have x amount of barrels and whatever, right,
831
00:42:47.960 --> 00:42:50.480
and we can verify via the blockchain.
832
00:42:50.760 --> 00:42:52.320
You know, that would be pretty great.
833
00:42:53.400 --> 00:42:57.280
Absolutely, absolutely. The one interesting challenge I think you're going
834
00:42:57.360 --> 00:42:59.800
to see, because I've heard this from the Democrats in
835
00:43:00.000 --> 00:43:02.920
and this is my sort of thought for your audiences,
836
00:43:03.239 --> 00:43:07.119
the argument over stable coins once the legislation passes, as
837
00:43:07.119 --> 00:43:10.239
to how banks try to adopt stable coins, and I've
838
00:43:10.239 --> 00:43:12.199
heard some of the Democrats say as for as they
839
00:43:12.199 --> 00:43:15.400
want to consider stable coins like bank deposits. And if
840
00:43:15.400 --> 00:43:17.840
you think about that, that's a very slippery slope, right,
841
00:43:18.039 --> 00:43:19.960
because if you just have stable coins, that means we
842
00:43:20.039 --> 00:43:22.440
have cash like in our wallet, and that's kind of
843
00:43:22.480 --> 00:43:24.480
like what PayPal in other words, saying this is just
844
00:43:24.519 --> 00:43:27.800
for payments. That's why PayPal's like just for payments, it's
845
00:43:27.840 --> 00:43:30.159
not banking, no banking. But if you think about it,
846
00:43:30.159 --> 00:43:32.880
if you're the banks and you can offer these stable coins,
847
00:43:33.840 --> 00:43:36.639
at some point, you can offer these stable coins in
848
00:43:36.679 --> 00:43:39.719
a way and then say, well, it's like a deposit
849
00:43:39.760 --> 00:43:43.079
on the bank. In other words, it's backed by a dollar.
850
00:43:43.119 --> 00:43:46.159
But we want to say that it's also a deposit
851
00:43:46.519 --> 00:43:48.519
that you're kind of with us when you have this
852
00:43:48.599 --> 00:43:51.360
stable coin, like if it's our own stable coin, and
853
00:43:51.400 --> 00:43:53.840
if you get that to me. And I just thought
854
00:43:53.840 --> 00:43:55.679
of this actually on your show as you've been talking
855
00:43:55.880 --> 00:43:59.119
in such a fascinating conversation, is because then you actually
856
00:43:59.119 --> 00:44:02.159
get to the point of then the banks and the
857
00:44:02.360 --> 00:44:05.039
and the federal regulators can sort of use the stable
858
00:44:05.079 --> 00:44:07.639
coins the way that we use deposits now to kind
859
00:44:07.679 --> 00:44:11.199
of regulate the economy. So I think one thing you
860
00:44:11.320 --> 00:44:13.719
might see come up that won't be apparent at first though,
861
00:44:13.840 --> 00:44:17.199
is this fight over how stable coins are really considered,
862
00:44:18.039 --> 00:44:22.440
as as the banks and the traditional institutions try to
863
00:44:23.320 --> 00:44:26.800
pull stable coins into the way you know they work today. Right,
864
00:44:27.119 --> 00:44:29.000
So what is a stable coin? Right? Is it going
865
00:44:29.039 --> 00:44:31.280
to be this these dollars we have in our crypto
866
00:44:31.320 --> 00:44:34.840
wallets are now in our bank wallets that isn't really
867
00:44:34.960 --> 00:44:38.519
used to rehopothacate or will at some point the bank's
868
00:44:38.800 --> 00:44:41.400
lobby and try to change the bill to say, yeah,
869
00:44:41.440 --> 00:44:44.559
we want to do rehypothication, we want to you know,
870
00:44:44.760 --> 00:44:47.079
spread out the wealth and you know, lower the one
871
00:44:47.119 --> 00:44:48.880
to one standard. So I think that's going to be
872
00:44:48.880 --> 00:44:51.039
something to keep on the radar. Two mm.
873
00:44:52.159 --> 00:44:54.679
Yeah, so interesting scenario. Is it going to pop off?
874
00:44:54.880 --> 00:44:57.599
I think as regulations come in and we see the
875
00:44:57.599 --> 00:45:00.679
direction to these banks going and the stable co market,
876
00:45:01.880 --> 00:45:05.000
I know, A big thing narrative, and I think it
877
00:45:05.039 --> 00:45:08.119
makes sense is that if the United States can get
878
00:45:08.239 --> 00:45:12.119
stable coin legislation right and US treasuries are backing these
879
00:45:12.119 --> 00:45:16.119
stable coins, it could help preserve the world reserve currency status,
880
00:45:16.920 --> 00:45:20.119
some of that being challenged by bricks nations. And look,
881
00:45:20.159 --> 00:45:24.239
there's alternatives, right, some nations could use bitcoin if they
882
00:45:24.280 --> 00:45:25.599
want opt out of a dollar.
883
00:45:26.559 --> 00:45:28.800
Do you agree with that thesis?
884
00:45:30.679 --> 00:45:33.880
Yeah, I think although if we look at El Salvador,
885
00:45:33.920 --> 00:45:36.679
they kind of opted to go with both the dollar
886
00:45:36.880 --> 00:45:43.719
and bitcoin, So I'd say overall that's probably on track, Tony.
887
00:45:43.800 --> 00:45:47.920
I think that ultimately we're going to see a lot
888
00:45:47.960 --> 00:45:52.880
of countries, whether it's tether or circle, see the value
889
00:45:52.880 --> 00:45:55.199
of the way stable coins work today. It's this amazing
890
00:45:55.719 --> 00:46:00.719
technological development that has these breakthrough capabilities. It's fast, it's quick,
891
00:46:01.239 --> 00:46:03.559
it allows us to go through you know, very very
892
00:46:04.079 --> 00:46:06.960
you know, it makes things easier from a payment's perspective,
893
00:46:07.559 --> 00:46:09.639
could be a way of storing cash for some people
894
00:46:09.679 --> 00:46:12.480
in a digital realm. So it's a real game changer, right,
895
00:46:12.519 --> 00:46:14.639
It's going to do things, and I think it's going
896
00:46:14.679 --> 00:46:16.599
to take the private markets to do that. Right. It's
897
00:46:16.599 --> 00:46:18.679
why we're not going to have like a CBDC or
898
00:46:18.679 --> 00:46:21.599
whatever we want to call it today, because then it's
899
00:46:21.639 --> 00:46:24.159
not something that's necessarily owned by the government. It's something
900
00:46:24.159 --> 00:46:27.199
that's run in a way where it's representing what money is.
901
00:46:27.280 --> 00:46:29.559
So it's really the first stage, I think in what
902
00:46:29.599 --> 00:46:31.639
we're going to see is a change the way the
903
00:46:31.679 --> 00:46:35.199
world looks at money. So I think that you're going
904
00:46:35.239 --> 00:46:39.760
to see the US I don't want to say weaponized,
905
00:46:39.800 --> 00:46:43.920
but certainly utilize stable coins to make sure we stay
906
00:46:43.960 --> 00:46:46.320
on top. And I think that's why you see such
907
00:46:46.360 --> 00:46:49.880
support from Democrats as well as Republicans. Remember Maxine Waters
908
00:46:49.920 --> 00:46:53.239
introduced her on stable coin, much more restrictive, but they
909
00:46:53.239 --> 00:46:55.360
all see the writing on the wall. And this all
910
00:46:55.400 --> 00:46:58.079
goes back to twenty nineteen when you know, liber came
911
00:46:58.119 --> 00:46:59.760
out and they're like, well, we don't want market zucker
912
00:47:00.119 --> 00:47:02.920
to be the the face the gist dollar. We need
913
00:47:02.960 --> 00:47:05.239
something to do it. And now we're kind of here today.
914
00:47:05.440 --> 00:47:07.159
I think this will be the final result of what
915
00:47:07.679 --> 00:47:11.119
a stable coin quote unquote regulated harnessed stable cooin will
916
00:47:11.119 --> 00:47:13.000
look like in a way that it can be our
917
00:47:13.639 --> 00:47:15.920
you know, fast horse and keep us competitive in the
918
00:47:15.920 --> 00:47:18.159
global landscape of the monetary order.
919
00:47:18.800 --> 00:47:21.320
Thank you for bringing up that Libra situations. I remember
920
00:47:21.320 --> 00:47:24.199
Maxine Waters, she was leading the charge and trying to
921
00:47:24.199 --> 00:47:25.280
shut that thing down.
922
00:47:25.400 --> 00:47:25.559
Right.
923
00:47:25.599 --> 00:47:27.400
They were like, no, no, no, no, We're gonna have
924
00:47:27.440 --> 00:47:30.760
a hearing where this is not happening. And in hindsight,
925
00:47:30.800 --> 00:47:33.360
you look at this, you know what's happening. And in
926
00:47:33.360 --> 00:47:37.519
context of what you just said, Uh, Facebook had the ability,
927
00:47:37.920 --> 00:47:41.800
because they're in multiple countries to create a their own
928
00:47:41.880 --> 00:47:45.559
role reserveency if they wanted to, you know what they
929
00:47:45.559 --> 00:47:46.199
were trying to do.
930
00:47:46.280 --> 00:47:48.360
So no wonder that got shut down quickly.
931
00:47:49.159 --> 00:47:52.199
Yeah, Jason, I know we're up on time. So I
932
00:47:52.199 --> 00:47:54.280
got some wrap up questions here for you. At first
933
00:47:54.599 --> 00:47:56.599
is if you could create your own metaverse, what would
934
00:47:56.639 --> 00:47:57.119
the theme be.
935
00:47:59.679 --> 00:48:02.239
The I think would be golf. I'm like, I love golf,
936
00:48:02.320 --> 00:48:04.239
so there have to be lots of golf with crypto
937
00:48:04.320 --> 00:48:07.599
prizes at every hole, and a mean coin is like
938
00:48:07.639 --> 00:48:09.599
a Moobe prize if I don't hit the ball well.
939
00:48:11.039 --> 00:48:12.119
Rapid fire questions.
940
00:48:12.159 --> 00:48:19.760
Favorite food spaghetti, favorite musician or band Led Zeppelin, Favorite
941
00:48:19.760 --> 00:48:25.639
movie The Natural Robert Redford baseball movie. Yeah, favorite book.
942
00:48:27.440 --> 00:48:31.519
Favorite book Liar's Poker by Michael Lewis about the bond
943
00:48:31.559 --> 00:48:33.840
trading in the nineteen eighties. Interesting.
944
00:48:34.440 --> 00:48:34.960
Check that out.
945
00:48:35.000 --> 00:48:37.360
And then I think I know the answer to this.
946
00:48:37.559 --> 00:48:40.039
When you're not working, you're probably playing golf right as
947
00:48:40.079 --> 00:48:40.519
a hobby.
948
00:48:41.440 --> 00:48:44.239
Yeah, golfing, And I do like some model trains and
949
00:48:44.280 --> 00:48:44.760
things like that.
950
00:48:44.880 --> 00:48:47.199
So yeah, nice, Jason.
951
00:48:47.360 --> 00:48:49.679
I wish we had more time, and I'm looking forward
952
00:48:49.719 --> 00:48:51.639
to reading your book. So we'll have to have you
953
00:48:51.679 --> 00:48:54.760
on when that book is ready, because you got some
954
00:48:54.800 --> 00:48:55.639
great perspectives.
955
00:48:55.639 --> 00:48:55.840
Man.
956
00:48:56.039 --> 00:48:57.199
Thank you so much for joining me.
957
00:48:57.800 --> 00:49:10.239
Absolutely, thank you, Tony Attack pak take dost tak t
958
00:49:10.639 --> 00:49:12.159
bakt
1
00:00:00.240 --> 00:00:01.960
The one criticism I give to a lot of the
2
00:00:02.000 --> 00:00:05.000
regulators at the time who are now leaving, like Michael
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Sue from the OCC who live through the financial crisis,
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is comparing crypto to the financial crisis, which to me
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is like the crime of the century. How can you
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say at technology that's showing new ways of conducting banking,
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of having possibilities. As you know, there are people who
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lose money on meme coins, but there are a lot
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of people who've created wealth, intergenerational wealth for themselves. How
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can you say that's a financial crisis.
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Welcome into the.
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Thinking Crypto Podcast. I'm your host, Tony Edward and my
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guest today is Jason Brett, who is a former US
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regulator at the FDIC and a managing director at Keybridge Advisors. Jason,
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great to have you on.
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Thanks so much, Tony, appreciate you having me. Love your show.
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Jason, you and I met at the Digital Chamber event,
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if I remember correctly, I think that was the first
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time we met. And your background is fascinating, spending time
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at the FDIC, spending time consulting for different crypto companies
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going back years.
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So I think your perspective.
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On everything that's happening in this market is going to
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be very valuable and I'm excited to chat with you
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and maybe we'll get kick off with your background.
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Tell us where you're from and what's your professional background.
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Sure, sure, yeah, I'm from North Jersey originally, and then
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I moved to Washington, d C. After I worked in
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banking for a little bit in Wall Street, Morgan Stanley
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and Washington, d C. Is really where I caught my
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stride because I ended up working for the FDIC while
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getting my MBA in the Division of Finance in two
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thousand and eight when it was very quiet, and then
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literally the timing meant that I got involved in all
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of these different crazy things, including the INDIMAC BAC failure
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in California, where the division I was in had to
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fly out to California to help with taking over that
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bank because it was it was the largest bank failure
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of its time under the FDAC, and then shifting back
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to that, I then was sent over to the Capital
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Markets Division to continue the work I was doing there
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in the fall, and as it turned out, then Lehman
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Brothers fell in September, and so there was a little
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bit of a joke of don't follow Jason around their
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racetrack because that department was directly responsible everything with Lehman
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and then everything else aig. So I got to work
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on some incredible things. I had really within one year,
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something that I think for a lot of people, like
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you know, lucky to touch a few of those subjects
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in twenty years. So I was very fortunate to be
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where I was, although it was very you know, not
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fortunate for the country, but I saw all of these
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things happening in real time. And then from there it
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really opened my eyes before experiencing bitcoin or crypto, to
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seeing in my mind the dangers of our current financial system.
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And now everybody talks about that regularly, like the Federal
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Reserve they're doing this, But at the time, no one
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was really talking about that in two thousand and eight,
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two thousand and nine the way we do today. So
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I felt kind of alone. You know, it was like,
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am I the only one looking at this? Like this
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doesn't seem right? Like what are we really relying on
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to keep this financial system going? I mean, how much
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gum do I have to pull off the bottom of
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my shoe to put on the building to keep the
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you know, financial wheels turning. I mean, he had Ron Paul,
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which was great. So I say all that to say
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is I continue doing regulating for five or six years,
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and then when I discovered bitcoin, actually went to work
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for the Chamber of Digital Commerce in twenty sixteen, where
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was their Director of Operations, helping with things like policy.
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And then I work for a consensus in the Ethereum
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community here in the States, helping them with developing their
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government policy strategy. And then since then I've been moving
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on doing you know, advising the crypto companies. And really,
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i'd say feeling so fortunate, Tony, because I see all
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the younger people now I'm a little older, but like
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people in their twenties and thirties kind of where I
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was in the financial crisis, who are seeing what I
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saw when I was alone and talking about it publicly.
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So it's almost like a treat. Just sitting at a
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conference or hearing people discuss the problems of our current
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financial system and how to fix it has really been
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for me a joy.
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That's amazing.
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And you know, going back to when you're at the FDIC,
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you got thrown into the fire man. I can't imagine
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having to deal with these bank collapses, and like you said,
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no one thought that was possible before that two thousand
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and eight crash, right, everybody thought everything is fined, a
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housing market will never collapse. The banks are our biggest institution.
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Zerre fine, and then it all fell apart. I can't
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imagine what that was like. And I mean, were you
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guys all stressed of the FDIC? Was there a lot
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of pressure and things like that?
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Yeah? Yeah? And actually, well exclusive for you, I'm actually
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finishing up my first book that I've ever written. That'll
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be it's called like From Regulator to Rebel, kind of
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exploring how Bitcoin and found opportunities within the financial crisis.
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I don't know if that's going to be the exact title,
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but the story I have to tell I think is
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so important I want other people to hear it. It's
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not even really about me and what I want to write.
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It's understanding what that stress was like. So, like, just
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to give you one example, right, if you remember what
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Covia Bank and Washington Mutual both failed, I don't. I
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remember that they failed back to back in the two
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thousand and eight financial crisis, really big banks, and we
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had before that happened. We had to do these analyzes
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and I was just the junior person, but the senior
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people were told, hey, spend the weekend analyzing can the
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deposit Insurance Fund for the FDIC that has billions of
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dollars support the fact that Washington Mutual and Wacovia might
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fail at the same time. Well, deposit Insurance Fund still
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remind us people every day, only covers one percent of
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the deposits in the whole banking system. So it's not
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like it doesn't cover all the dollars. Covers one one
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hundredth of everything. And so the analysis was that the
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Deposit Insurance Fund would survive, but only if Wall Covia
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and Washington Mutual were bought by bigger banks, if the
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fund had to support it. And so that to me
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showed there was this incentivization of making the bigger banks
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bigger because there was these shotgun marriages. If you have
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this bank like Washington Mutual that's going to fail, we
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can't just let it fail. You have to just find
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a buyer like Jamie Diamond or someone to come in
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and buy it. But I say that I explain that
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because not only was their stress or disbelief, but I
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still remember to this day the senior folks grumbling and
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just infuriated that they had to spend the weekend away
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from their family saying things like what, COBE is never
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going to fail, Like they'd say, it's like you, Tony, like,
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WELLKBE is not going to fail. I don't even know
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what I'm doing here. This is so stupid, you know.
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And it was just like wow, you know, because when
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I took it back, I was I was like, yeah,
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I guess this is stupid. But then three weeks later, well,
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COVID failed and Washington mutual the exact thing that they
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were told to analyze. So there was a lot of
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frustration and then just complete disbelief. And then when something
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happens that you don't believe can happen, like you know,
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Bitcoin hitting on hundred thousand dollars or something, you're a
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little off guard for a while. You're kind of on
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shaky territory. So then when stuff just keeps hitting you
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and hitting you, and it's like what we see these
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disasters like hurricanes and everything, it just gets worse and worse,
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to the point that literally people thought in September like
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they felt like the building was going to fall down
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pretty soon, you know, they got that close, I think
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to the financial markets seizing up.
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So yeah, and I'm I'm definitely looking forward to reading
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your book because I'm sure it's some interesting stories in there,
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because that was such a crazy time, and you know,
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a lot of people look back to that and say,
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you know, did the real economy die at that point?
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And will America be the same?
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And I'm optimistic that hopefully bitcoin, blockchain and all these
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things can help solve those problems. We don't have a
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repeat of them, and we can come out of the fire,
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so to speak, and already ashes rise on the ashes,
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more stronger, with a better financial system that doesn't have
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all those pitfalls in it.
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Yeah. I get really emotional about this because a lot
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of people really don't realize that. Ben Bernaki, who was
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the chair of the Federal Reserve at the time, definitely
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gets credit for saving us out of that crisis. But
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he was a man who followed the Great Depression, and
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he was a student of the Great Depression and the
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Great Depression. The problem was the credit markets seized up,
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and so that's why things got worse and worse. So
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his goal, or his modus operandi, was to make sure
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that this credit markets didn't seize up during that timetable.
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Now that's a positive thing. Again, I give him credit
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for that. But the unintended consequence of that is I
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think what we're living with today because you saw the
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Federal Reserve come out with so many programs and beloaded
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their balance sheet to make sure that credit markets didn't
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seize that it's like we're left with like a bruise
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in our arm that's still bleeding, you know, and it's
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now transformed into that was the solution that we came
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at this crisis from. We'll never know if there was
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another way to go about solving the crisis, and we're
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still living with what our very potential dire consequences to
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our economy because the size of the FED now has
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gotten so large and still today, I don't think that's
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changed among government officials. Like we had a financial crisis tomorrow,
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I think we still try to handle it the same way.
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I don't think we do something different.
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But Jason is that like there is no other option
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because the world is so financialized, so globalized, and our
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markets are so connected, and the only way in this
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Fiat system. And it goes back to the root of
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the Fiat system. It's not on a goal standard. This
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is what you have to do unless you move to
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some sort of of hard money system. With blockchain, we
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have more transparency where you can weed out the fraud,
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you can weed out the insane leverage that is being
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piled up and people are doing things they shouldn't. Until
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we get to that point, this is the Fiat SYSM
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and they have to build it out because if they don't,
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it collapses, and it could potentially collapse society because everybody's
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retirement is wrapped up in these assets. So if you
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let the collateral the assets go to zero, it's game over.
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That's a great point. I totally agree with you. I
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don't think that there's any other way to handle it either,
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not on top of the fact that we don't really
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have another game plan. I mean, we do have sort
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of the bitcoin maximalists and the focus on what we
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could do with sort of the Austrian method, but we
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also what I would challenge the bitcoin maximalists to do.
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And I'm probably gonna get a lot of hate on
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x nown for saying this, to come up with what
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the credit system looks like in that world, right, because
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there's a fundamental concept that does work in the US,
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which has to do with as dollars come into a bank,
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that's at least how we today come up with mortgages
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and the ability people borrowing and credit. So is it
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the fiscal responsibility of credit? How do we manage that?
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The truth is we've had a financial crisis every seven
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or eight years, you know, we haven't had one in
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a while. But also after the Great Depression there wasn't one.
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There were some aftershocks, like to me, I think Silicon
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Valley Bank, and those were sort of an aftershock of
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two thousand and eight. So han't yet really seen what
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the next financial crisis might look like. So they're not abnormal.
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It's what happens in the FIAT world. And that's at
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least why fundamentally they thought to put things like the
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Federal Reserve and others in place. What's happened, though, I
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think is that you've now seen, and this is a
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challenge for the FEDS, is people who are openly criticizing
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the system on a regular basis, right, and also coming
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up with and it's not just you know, the bitcoin
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maximalist right coinbase is throwing daggers at the FDIC. Right,
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they're suing the fdi C, they're pulling Foyer requests. I
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cannot tell you how unheard of that is that a
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non bank is pressing one of the prudential federal regulators.
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And I see that as a good thing because I
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think there needs to be a shake up in how
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they're doing business, particularly with the reputation risk. That's something
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that camels that has evolved into something that's really bad.
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But anyway, to your point, though, I really agree fundamentally
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that not only is there not you know, not only
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would this be the way we would handle another crisis
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today as we did in two thousand and eight, but
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there really there aren't many other options on the table.
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Yeah, And I think going back to you notice much
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better than I do. It's not that people had mortgages
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or fractional reserve banking. It was the abuse of it, right,
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they started giving bad mortgages to people. But yes, you
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know there was the A category a great mortgages, right,
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and but then there was like the d N the
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C or C and D right the level where no income.
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No docks the abuse of it.
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But and then the regulatory agencies, I don't know why
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didn't catch it or what was happening there, and then
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the grading agencies were a part of it.
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So it was just human behavior playing out.
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And I keep going back to, you know, maybe when
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all this stuff is on the blockchain, but with what
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kind of Elon's trying to do now, I'm not sure
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it's going to stop everything, because things happen in life,
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but it will help curb a lot of that from happening,
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the abuse and that oh I'm gonna slip a C
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note to this regulatory agency, let them grade me higher
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and and you know, get away with it. Maybe that
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those things will stop.
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Yeah, I think it's important to remember back in eight
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there was not a lot. It was very opaque understanding
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the derivatives. So when I look back now, it's very
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easy to see because I had to calculate all the
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derivatives and the exposure with AIG when AIG was about
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to fail, and it was very hard to try to
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dig into what was in all of these products. So
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to the degree that blockchain could help reduce that opacity
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and allow people to see more into what they're buying,
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like up front, that might help determining things. But then
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you need the regulators, the people who are hopefully not
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going to take the C notes to actually be responsible,
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or the ratings agencies to you know, really enforce that
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or highlight that, right, because what if you have a
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quote unquote captured blockchain, like a permission blockchain that is
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regulated and it's from like, you know, let's call it
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Moody's blockchain or whatever, sorry Moody is, you know, like
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and and they're doing things in a way, but it's
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coded in a way where it doesn't quite really show
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you everything. So how do you get to the underlying assets?
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So I think the connection between when you you know,
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tokenize something right like or whatever, you need some kind
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of verification system and you need to have that verified
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maybe on chain is maybe something that we can start
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to do, have independent reviewers you know, of that process.
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And I think, look, there's always always going to be abuse.
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People always find cracks in the system, but that is
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going to take just the fact that we can see
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it better will reduce that possibility of having this huge
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buildup of as you say, all this B and C
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stuff under the A stuff and we think it's fine,
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and then you know, leading at least to another issue
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in the financial crisis in two thousand and eight was
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you know, the credit to fault swaps, right, because then
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people were taking on insurance on the fact that the
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bonds were going to fail, and then there were short
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selling companies like City and if you remember, then SEC
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had to come in and stop the short selling for companies,
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which I still find to this day very interesting because
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the SEC chairman at the time said that was if
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that was, he regrets that decision and he will for
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the rest of his life stually interceded in the financial
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markets and stop people from allowing to short specific stocks
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because they were in the category of banks. Hmm.
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Yeah, there's so many levels to this because it's a
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human aspect. You know, bad actors will do bad things
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human beings. Obviously we're not infallible, and so it's tricky.
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But to your point, if we can progressively raise the
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standard with blockchain technology, would be in a better place.
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So let's talk about operation choke point two point zero.
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I was thinking, so I was.
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Salivating about asking you about this, but given your perspective
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and your background at FDIC, because we're seeing information come
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out that the FED, the FDIC and so forth, we're
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kind of trying to block crypto. I don't know if
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they Elizabeth Warren and her cronies were part of trying to,
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you know, stop or could the collapse of Silicon Valley
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Bank and debanking crypto.
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What are your thoughts on this whole situation.
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Yeah, well, it's funny by the way, that I'm former
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FD I see because I've talked with folks. In fact,
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I was at conference a couple of years ago and
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I was at a table chatting with Nick Carter and
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Nick Carter and you know, Austin Campbell, the real like
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leaders on this stuff. We had a good conversation. I
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explained my background. I was playing some things, and as
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we left the table, Nick said to me, you know,
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I really don't like the FD I see that much.
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And I was kind of like, you doesn't like me
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that much because I wasn't I see, But I was like,
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point taken, and now I could see, Yeah, you really
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didn't like the FD I see that much with what
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you you know, you know shown. But the truth is,
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though Operation Showpoint, the first one was very much covert, right,
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It was not known what was happening. This was really
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out in the open. I mean, you had the Biden
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administration saying that there were dangers of crypto in the
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financial banking processes. So I think a lot of people,
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a lot of regulators took the message from up high
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and said we need to do things to keep this
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stuff out of the system, like we're just not comfortable
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with it and we feel like it could lead to
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a financial crisis. The one criticism I give to a
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lot of the regulators at the time who are now leaving,
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like Michael Sue from the occ who live through the
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financial crisis, is comparing crypto to the financial crisis, which
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to me is like the crime of the century. How
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can you say at technology that's showing new ways of
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conducting banking, of having possibilities. As you know, there are
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people who lose money on meme coins, but there are
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a lot of people who've created wealth, intergenerational wealth for themselves.
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How can you say that's a financial crisis? Like I
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understand that it's new and technology does disrupt it. And
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that was my thought about it is it's not like
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a financial crisis, right, But there's these new technologies. How
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are the banks going to adapt to it? So the
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fact that you had people who use their authority to
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simply shut out a certain technology and therefore shut out
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certain people trying to build in this country, is abhorrent.
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I think the people that did that, not necessarily the
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people on the ground, but certainly the supervisors of each
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of these offices if they were had a condoning a practice,
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whether it was written or not, telling to like not
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bank people or d bank people particularly. You know, you
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put in two two million dollars in the bank, excuse
390
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me for your company, whether you're like Anchorage Digital, you're
391
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a bank, and then you pull it the next day,
392
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so and you realize very quickly how much power the
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banks have over you in that regard. So look, I'm human.
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People the fd I, c N Federal Reserver are human too.
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And I like to tell people, you know, don't hate
396
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the players hate the game. The game is really set
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up in a way where, because of the ratings, if
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I go into your bank, let's say you're the CEO
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of a bank, it's camels, right, So I have to
400
00:20:49.839 --> 00:20:53.359
analyze what your capitalism of your bank, what your assets are,
401
00:20:53.839 --> 00:21:00.359
your liquidity, your sensitivity, interest rate, risk, earnings a M.
402
00:21:00.839 --> 00:21:04.000
You know the management part. Now, how do I evaluate
403
00:21:04.039 --> 00:21:08.240
you as a management part? Right? That's very subjective. That's
404
00:21:08.240 --> 00:21:12.079
where the reputational risk creeps in because I could say
405
00:21:12.079 --> 00:21:15.119
Oh yeah, he's got enough earnings, you know, liquidity's good,
406
00:21:16.359 --> 00:21:18.440
got enough capital, So the bank should survive, because that's
407
00:21:18.440 --> 00:21:19.799
all it is is test of how you're going to
408
00:21:19.880 --> 00:21:23.880
move forward. But you know, from a management perspective, this
409
00:21:23.960 --> 00:21:28.160
guy's banking, you're banking crypto companies. He's insane. That's it.
410
00:21:28.640 --> 00:21:31.680
We're gonna we're going to revoke your banking charter. And
411
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I come and tell you that, and you's like, WHOA.
412
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I like my bank. I don't want to lose my bank.
413
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It's my living you know. Uh, And I have the
414
00:21:41.000 --> 00:21:44.279
board of directors. Maybe it's a family run bank. And
415
00:21:44.319 --> 00:21:46.400
then you're basically faced with a choice that I've given
416
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to you, which is get rid of a few customers
417
00:21:49.960 --> 00:21:53.000
or I pull your charter, and that's there of ours.
418
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That's that's the game. I'm saying that where we should
419
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hate the way this game has set this up for
420
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that kind of subjective judgment that comes into how banks
421
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get run in this country, and it's terrible.
422
00:22:03.440 --> 00:22:08.640
Yeah, and Jason, to that point, that's great insight. I
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was talking to someone about this and I thought, and
424
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I don't want to sound conspiratal, but I thought of
425
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the FED and the people, the treasury and so forth,
426
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almost doing this to slow this acid class down because
427
00:22:27.759 --> 00:22:31.480
they don't see they can't see everything with what's happening.
428
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They're not plugged into the blockchains. And if you're controlling
429
00:22:34.920 --> 00:22:37.559
the currency, right, you're the fed of your treasury and
430
00:22:37.599 --> 00:22:41.279
so forth. And money's going to bitcoin, in different crypto assets,
431
00:22:41.279 --> 00:22:45.799
into stable coins. That's pulling powerway and control away from you,
432
00:22:46.440 --> 00:22:47.039
and you could.
433
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Get out of hand.
434
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Don't get me read I see there from their perspective
435
00:22:49.839 --> 00:22:52.319
how that could get out of hand, and then you
436
00:22:52.400 --> 00:22:58.359
have collapses happen like FTX and much more. Elizabeth Warren,
437
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Gary Gains, do your job. That's not that's not a
438
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public conversation. But is that a conversation that could have
439
00:23:06.920 --> 00:23:09.680
happened that, hey, let's slow this thing now until we
440
00:23:09.799 --> 00:23:12.640
can get a grasp of it and put regulations in place.
441
00:23:14.599 --> 00:23:18.759
Yeah, I think that's that's certainly probable that those types
442
00:23:18.799 --> 00:23:23.119
of conversation happen. What I really agree with with Coinbase
443
00:23:23.200 --> 00:23:25.559
and Ripple and the rest of the crypto folks very
444
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much as an ext regulator, and I don't like to
445
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beat up on another regulator too badly. But Harry Genser
446
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was really out of line in a lot of ways,
447
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Like with the two thousand and eight financial crisis, it
448
00:23:37.839 --> 00:23:40.279
was the FED US at the FDIC and the OCC
449
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that figured out that Lehman had to go bankrupt. That
450
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that was, you know, the end, and so they picked
451
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It's in the movie too, It's in the Too Big
452
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to Fail movie. They pick up the phone and they
453
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tell the SEC chair what to do because the SEC
454
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is this really just this backwater agency. They don't really
455
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have anything to do with banking and the financial markets.
456
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They have to do with if you're going to fundraise
457
00:24:00.079 --> 00:24:02.799
for your company, all that kind of thing. But so
458
00:24:02.799 --> 00:24:04.599
there was a lot of scope creep that I saw,
459
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you know, under Gary Gensler, and I think that was
460
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to your point probably that conversation of you know, slow
461
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it down, and he slowed it down for some of
462
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the banking regulators with SAB one twenty one, even though
463
00:24:15.759 --> 00:24:18.640
that was so out of range. I mean, I think
464
00:24:19.079 --> 00:24:21.680
Powell was very diplomatic when he said it surprised us
465
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to see the SEC way in this way because they
466
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were thinking about it a different way. What I think
467
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is important with looking at the way how the bank's
468
00:24:33.039 --> 00:24:38.440
operated now and what their decision matrix is is there's
469
00:24:38.480 --> 00:24:41.079
a great essay and it's about like what is a bank?
470
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And it's from the Federal Reserve, Like how do you
471
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define a bank? Right? And the few principles of what
472
00:24:46.839 --> 00:24:49.720
you define as a bank? And this is so important
473
00:24:49.839 --> 00:24:53.119
is one of the definitions they give it to it
474
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is it's the transmission. It's the transmission for the engine
475
00:24:57.799 --> 00:25:01.319
of the US economy, for monetary pol so in other words,
476
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if rates go up or rates go down, it's like
477
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they have a car and they're tuning it up as
478
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to how fast or slow they want the economy to run.
479
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So banks are like a public utility, right, They're critical
480
00:25:13.000 --> 00:25:15.000
to the way we operate. So they have to be
481
00:25:15.599 --> 00:25:20.039
able to provide that transmission or that you know, runway.
482
00:25:20.480 --> 00:25:24.000
So we can see how consumers are spending. We can
483
00:25:24.039 --> 00:25:27.799
push consumers to spend more. We can get businesses to
484
00:25:27.880 --> 00:25:31.640
borrow more, which sounds very manipulative right when you talk
485
00:25:31.680 --> 00:25:34.880
about it, but that's the control mechanism they have. And
486
00:25:34.960 --> 00:25:38.920
with stable coins in crypto, I think they're looking at
487
00:25:39.039 --> 00:25:40.200
is we don't know that we're going to have this
488
00:25:40.279 --> 00:25:42.720
kind of control because there isn't that bank there isn't
489
00:25:42.720 --> 00:25:47.279
that intermediary? They're these computer programs. I think were they
490
00:25:47.319 --> 00:25:49.359
able to understand how they could do the things they
491
00:25:49.400 --> 00:25:52.400
can do with a bank today, like control with rates,
492
00:25:52.440 --> 00:25:56.319
you know, the transmission of the US economy. FDIC insurance,
493
00:25:56.319 --> 00:25:58.359
which is also a definition for a bank, and it's
494
00:25:58.400 --> 00:26:01.720
something that Katel Long really struggled with Custodia and that
495
00:26:01.839 --> 00:26:04.440
was very unfairly treated on the idea of not being
496
00:26:04.839 --> 00:26:07.559
having the insurance from fdi C to be considered a bank.
497
00:26:08.359 --> 00:26:11.160
Is it comes down to to me, is at least
498
00:26:11.160 --> 00:26:13.640
amongst the regulators and how we have discussions. I think
499
00:26:13.680 --> 00:26:16.599
we need to have more of these discussions and forums
500
00:26:16.640 --> 00:26:20.519
with the regulators now on definitions what do you define
501
00:26:20.519 --> 00:26:22.400
as a bank? Out of the two thousand and eight
502
00:26:22.400 --> 00:26:26.000
financial crisis, the biggest definition that everybody argued about was
503
00:26:26.039 --> 00:26:28.480
what's the securitization? Like what does that mean? What does
504
00:26:28.519 --> 00:26:30.880
it mean when you take a mortgage backed security and
505
00:26:30.920 --> 00:26:33.359
you put it in Like, what's the definition of that term?
506
00:26:33.519 --> 00:26:35.480
Should it be on the bank's balance set? Should it
507
00:26:35.519 --> 00:26:38.039
be off? What's in it? What's not in it? How
508
00:26:38.039 --> 00:26:39.839
do we define how do we rate it? You know?
509
00:26:39.960 --> 00:26:42.279
All these things and I think now we're at the
510
00:26:42.319 --> 00:26:44.799
point with all the dbanking and the things on. Regulators
511
00:26:44.799 --> 00:26:46.839
think we're on a point where it's not The new
512
00:26:46.839 --> 00:26:50.880
word of the twenty twenty five is what is a bank? Yeah?
513
00:26:51.680 --> 00:26:52.400
Great points.
514
00:26:52.480 --> 00:26:54.680
And then as you're saying that, you know when you
515
00:26:54.720 --> 00:26:59.039
talked about control. It's funny how things happen because now
516
00:26:59.240 --> 00:27:02.279
Wall Street's here, they have etf rappers. So now the
517
00:27:02.319 --> 00:27:05.519
government can see how much crypto is going into these
518
00:27:05.720 --> 00:27:09.759
etf rappers. It's being reported in SEC filings. Stable coin
519
00:27:09.880 --> 00:27:12.839
legislation's coming, I'm assuring, I'm assuming all of these stable
520
00:27:12.839 --> 00:27:15.000
coin issues are gonna have to plug in to the
521
00:27:15.039 --> 00:27:17.920
government in some way and report to defend the treasury.
522
00:27:18.200 --> 00:27:20.880
Here's how much we're issuing, here's how much treasury bonds
523
00:27:20.880 --> 00:27:24.119
and all these things we have. And then exchanges are
524
00:27:24.160 --> 00:27:27.519
going to come into compliance with KYCAML. That's already happening,
525
00:27:27.799 --> 00:27:31.640
some of it globally. So it seems like the infrastructure
526
00:27:31.680 --> 00:27:34.599
is being built for the control. So after the four
527
00:27:34.680 --> 00:27:40.319
years of massive lawsuits and battles, all of a sudden
528
00:27:40.559 --> 00:27:44.440
with tradfy here, it seems things are opening up again.
529
00:27:44.480 --> 00:27:46.839
I don't want to get conspiratle but it's just I
530
00:27:46.880 --> 00:27:48.359
sit back and I look at this, and I'm like,
531
00:27:48.519 --> 00:27:49.759
of course, of.
532
00:27:49.759 --> 00:27:54.799
Course, yeah, yeah. Well, I think we're at an interesting
533
00:27:54.799 --> 00:27:58.119
inflection point right with the new administration, because we're having
534
00:27:58.160 --> 00:28:02.279
newer people come in and doing regular and there's a
535
00:28:02.279 --> 00:28:09.200
lot of openness about crypto and stable coins. You know.
536
00:28:09.359 --> 00:28:11.559
I think because people thought we were moving into this
537
00:28:11.640 --> 00:28:17.640
deregulated process, there'd be like that people could kind of
538
00:28:17.680 --> 00:28:19.319
start to do whatever they want. I think we're kind
539
00:28:19.319 --> 00:28:21.880
of witnessing that with the mean coin mania. It's kind
540
00:28:21.880 --> 00:28:24.079
of like that this this space has always been the
541
00:28:24.079 --> 00:28:27.279
wild West. By the way, aren't really their rules anyway?
542
00:28:27.400 --> 00:28:29.279
Are ready to find what we can do with crypto.
543
00:28:29.680 --> 00:28:31.599
So if you don't realize you're already in the wild West,
544
00:28:31.640 --> 00:28:33.559
if you're buying a specific coin, or you don't know
545
00:28:33.559 --> 00:28:36.559
why you don't have protections, like sorry, but wake up,
546
00:28:36.759 --> 00:28:38.839
you know you're at this is the wild West right now.
547
00:28:39.240 --> 00:28:41.200
And it got even wilder because you had a new
548
00:28:41.200 --> 00:28:44.119
sheriff in town who basically said, Hey, it's my rules
549
00:28:44.119 --> 00:28:46.720
and guess what I'm an issue my own meme token.
550
00:28:46.839 --> 00:28:49.200
You should buy what I'm doing. So it changes the
551
00:28:49.240 --> 00:28:53.039
whole game, right, and so you know, you kind of
552
00:28:53.079 --> 00:28:57.920
have this new atmosphere, and I think what you're probably
553
00:28:57.960 --> 00:28:59.519
going to see, in my mind is you're going to
554
00:28:59.559 --> 00:29:02.200
see the meme coin stuff die down as the legislation
555
00:29:02.319 --> 00:29:07.119
starts to come into place that addresses you know, XRP
556
00:29:07.319 --> 00:29:10.160
and all these tokens and how they're fit into commodities
557
00:29:10.200 --> 00:29:13.119
with CFTC or if it is a security, how it
558
00:29:13.160 --> 00:29:15.240
fits in an SEC and how you could move it.
559
00:29:15.519 --> 00:29:17.039
So I think you're going to start to see that
560
00:29:17.119 --> 00:29:20.000
all lay out when sort of the fun and games
561
00:29:20.000 --> 00:29:22.160
are over and we're going to kind of have the
562
00:29:22.200 --> 00:29:25.119
barbed wire that kind of can change the Wild West
563
00:29:25.160 --> 00:29:29.279
forever with these regulations. And I think ultimately that's what
564
00:29:29.720 --> 00:29:32.400
a lot of the institutional folks want to see too.
565
00:29:32.440 --> 00:29:36.440
That's why they like the etf rappers because they like things.
566
00:29:36.599 --> 00:29:40.799
They like to take out the uncertainty that's any regulatory uncertainty.
567
00:29:40.839 --> 00:29:43.640
And so when you look at where we're going now
568
00:29:43.880 --> 00:29:47.319
we get stable coin and market structure legislation, I think
569
00:29:47.359 --> 00:29:49.960
a lot of this stuff will calm down. And I think,
570
00:29:50.160 --> 00:29:54.680
you know, not from the conspiracy standpoint, but the traditional
571
00:29:54.720 --> 00:29:57.000
financial institutions kind of always figure out a way to
572
00:29:57.000 --> 00:30:02.079
win you know thing, I think truth like Biden Trump,
573
00:30:02.079 --> 00:30:05.279
who cares like, look, the banks won Okay, they found
574
00:30:05.279 --> 00:30:07.240
a way to slow down the system for four years
575
00:30:07.480 --> 00:30:09.119
so they could get a handle at it. They could
576
00:30:09.160 --> 00:30:11.480
be prepared build. You know. That's why you see like
577
00:30:11.519 --> 00:30:14.039
I'm a digital assets person from this company, you know,
578
00:30:14.079 --> 00:30:16.240
because they've built all the stuff and they're ready to
579
00:30:16.279 --> 00:30:18.799
go and when and they won't and they won't want
580
00:30:18.799 --> 00:30:21.039
to see that trigger pulled until later this year when
581
00:30:21.079 --> 00:30:23.960
Trump is saying, okay, now we'll have the regulations and
582
00:30:24.000 --> 00:30:25.799
then the banks will come out so they can compete
583
00:30:25.799 --> 00:30:31.400
on equal footing with all the crypto startups, which isn't
584
00:30:31.440 --> 00:30:32.960
exactly fair, But I always say, you know, it's like
585
00:30:32.960 --> 00:30:35.079
with Bill Gates one of his life lessons, His life
586
00:30:35.119 --> 00:30:37.799
isn't fair, you know, but you have we have to
587
00:30:37.839 --> 00:30:39.599
you have to hustle. If in the crypto industry, you
588
00:30:39.640 --> 00:30:42.720
have to understand how you can take advantage of the
589
00:30:42.759 --> 00:30:44.680
wild West. And I don't mean to launch a mean coin,
590
00:30:44.720 --> 00:30:46.920
but I mean build in a way. Find it to
591
00:30:46.960 --> 00:30:50.440
be productive, right, Find something that's of utility that's going
592
00:30:50.519 --> 00:30:53.160
to last out, because that's where the unicorns are going
593
00:30:53.240 --> 00:30:55.240
to succeed and that's where you're gonna see things like
594
00:30:55.240 --> 00:30:57.559
like coin Base already went public, will probably see Circle
595
00:30:57.680 --> 00:30:59.799
go public. One to the stable coin legislation falls in
596
00:30:59.839 --> 00:31:03.359
the place I think you can count guarantee a circle
597
00:31:03.400 --> 00:31:07.039
IPO like weeks after stable coin gets passed. So we're
598
00:31:07.079 --> 00:31:08.720
gonna start to see some of this level out, is
599
00:31:08.759 --> 00:31:11.039
my point. And I think that's all part of the conspiracy.
600
00:31:11.440 --> 00:31:13.720
Yeah no, And I guess you know the reason why
601
00:31:13.920 --> 00:31:16.079
I preface by saying I don't want to sound conspiracy
602
00:31:16.039 --> 00:31:19.480
because people sometimes think these statements, you know, oh yeah,
603
00:31:19.519 --> 00:31:21.359
this puppet masters pulling a string.
604
00:31:21.400 --> 00:31:22.680
But it's not so much puppet masters.
605
00:31:22.680 --> 00:31:25.160
It's if you were an incumbent and you had a
606
00:31:25.680 --> 00:31:29.680
stranglehold on the way moneies move and the whole banking
607
00:31:29.680 --> 00:31:32.119
industry and the financial markets, and all of a sudden,
608
00:31:32.160 --> 00:31:35.799
this disruptive technologies here. If I'm Jamie Dunman, I'm making
609
00:31:35.839 --> 00:31:38.960
phone calls to DC every day and saying, hey, stop
610
00:31:39.000 --> 00:31:43.079
this thing, stop this thing right now, because that's how
611
00:31:43.119 --> 00:31:46.200
the look. There's a revolving door in Washington, DC. We've
612
00:31:46.200 --> 00:31:48.759
seen it. Goldman guys go to DC, vice versa and
613
00:31:48.759 --> 00:31:52.680
all that. So these things are not far fetch or outlandish.
614
00:31:52.920 --> 00:31:55.279
We've seen it, but I think sometimes people don't realize
615
00:31:55.279 --> 00:31:59.519
what's happening behind the scenes, and it's just look if
616
00:31:59.559 --> 00:32:01.559
you have if you were in Jamie Nineman set, you
617
00:32:01.559 --> 00:32:02.640
would do the same thing too.
618
00:32:02.680 --> 00:32:06.640
I think you Bitcoin sucks, right and all these things.
619
00:32:06.680 --> 00:32:09.359
But you know, trying to build their own blockchain quorum
620
00:32:09.400 --> 00:32:10.839
and jpm coin to compete.
621
00:32:12.039 --> 00:32:13.680
Yeah, yeah, definitely.
622
00:32:14.759 --> 00:32:17.920
Now saw one two one gets repealed, right.
623
00:32:18.039 --> 00:32:18.160
Uh.
624
00:32:18.319 --> 00:32:22.119
FDIC said, Hey, we're gonna loosen the restrictions. Jason, what
625
00:32:22.119 --> 00:32:24.119
are you expecting from these banks? Do you think they're gonna
626
00:32:24.160 --> 00:32:26.880
launch their own stable coins? We know they're gonna launch
627
00:32:26.920 --> 00:32:30.680
custody crypto trading. You think they launched an old stable
628
00:32:30.799 --> 00:32:32.119
their own stable coins as well?
629
00:32:33.720 --> 00:32:37.200
Yeah. I think that's long been the premise, right of
630
00:32:38.160 --> 00:32:40.599
JP Morgan being able to launch its own like JP
631
00:32:40.680 --> 00:32:44.880
morgan coin, right, and and what that might look like.
632
00:32:45.799 --> 00:32:48.880
I think you're gonna see PayPal be very competitive, right,
633
00:32:49.079 --> 00:32:51.680
they sort of, And they stress in that hearing recently
634
00:32:51.720 --> 00:32:54.640
unstable coins that it's they believe it's something more of
635
00:32:54.680 --> 00:32:58.200
a payments mechanism than a banking mechanism. I think the
636
00:32:58.240 --> 00:33:00.240
banks are going to want to own the iss and
637
00:33:00.359 --> 00:33:03.720
stable coins mainly as a way of getting customers right,
638
00:33:03.759 --> 00:33:06.200
because it's a great way to onboard new customers into
639
00:33:06.240 --> 00:33:10.119
your into your bank. The other thing that's going to
640
00:33:10.160 --> 00:33:12.240
be interesting is people talk about how we might be
641
00:33:12.279 --> 00:33:15.160
going back to sort of the wildcat banking era in
642
00:33:15.200 --> 00:33:18.279
the late nineteenth century, where I think you're going to
643
00:33:18.319 --> 00:33:21.240
see state stable coins, you might see the Wyoming stable coin,
644
00:33:21.359 --> 00:33:23.960
you know. So I'm like, you know, meeting you somewhere
645
00:33:24.000 --> 00:33:26.359
out in Missouri and I'm like, hey, I got some
646
00:33:26.440 --> 00:33:29.440
New York stable coins from JP Morgan. You're like, oh,
647
00:33:29.519 --> 00:33:32.279
I got some Wyoming stable coins from Cadon Long, Like
648
00:33:33.359 --> 00:33:36.000
who has what? Like how do we are they dollars?
649
00:33:36.240 --> 00:33:37.799
Do we have to go back and test? Like is
650
00:33:37.799 --> 00:33:39.920
Wyoming better than New York? You know? So I think
651
00:33:39.960 --> 00:33:43.279
you're gonna I don't know people will be quite ready
652
00:33:43.319 --> 00:33:46.440
for if there's like different stable coins. But I'd say
653
00:33:46.440 --> 00:33:48.759
though that the at least the federal legislation makes it
654
00:33:48.799 --> 00:33:52.079
all back by a dollar, and you know there'll be
655
00:33:52.119 --> 00:33:56.759
federal ones and state ones. And the reasonab'll have that
656
00:33:56.799 --> 00:33:59.680
system is the same reason we did market structure legislation,
657
00:33:59.759 --> 00:34:03.079
which is right to avoid like the terror Luna collapse
658
00:34:03.240 --> 00:34:06.079
for stable coins or the FTX collapse for market structure.
659
00:34:06.119 --> 00:34:09.079
That's what we're really trying to avoid having these companies
660
00:34:09.119 --> 00:34:11.840
have to go offshore to build, right, and then we
661
00:34:11.880 --> 00:34:14.159
can't trust what it is. And you know, the big
662
00:34:14.199 --> 00:34:16.599
tension point I think we're going to see is Tether, Right,
663
00:34:16.639 --> 00:34:19.840
how does Tether fit into this? But look, they'll be
664
00:34:19.840 --> 00:34:22.920
able to comply, you know, with whatever the regulations are.
665
00:34:23.000 --> 00:34:25.639
They'll have to figure it out. The challenge for them
666
00:34:26.039 --> 00:34:28.280
is going to be in the stable coin legislation is
667
00:34:28.880 --> 00:34:31.239
what are the different ways that you can back a
668
00:34:31.239 --> 00:34:35.360
stable coin treasuries ninety days? So Tether's like a huge
669
00:34:35.360 --> 00:34:38.599
money making company, right, billions of dollars. If they have
670
00:34:38.679 --> 00:34:40.800
to change their asset mix and that's going to affect
671
00:34:40.840 --> 00:34:43.000
their income, that's a gonna be a real pain point
672
00:34:43.000 --> 00:34:44.440
for them. So they're gonna have to kind of do
673
00:34:44.519 --> 00:34:47.159
the cost benefit of do we stay in the US.
674
00:34:47.719 --> 00:34:50.000
We kind of have to because we're a US stable coin,
675
00:34:51.000 --> 00:34:52.559
but then we have to change our balance sheet, We're
676
00:34:52.559 --> 00:34:56.400
going to lose profitability. So I'm sure you know they're
677
00:34:56.480 --> 00:34:59.159
very active probably with what this legislation is going to
678
00:34:59.239 --> 00:35:00.559
look like. At the end.
679
00:35:00.840 --> 00:35:04.159
Yeah, I'm very curious as to how they navigate these waters.
680
00:35:04.159 --> 00:35:06.440
So we saw in the EU with the micro regulations,
681
00:35:06.440 --> 00:35:09.760
they've been struggling there, and the US is probably gonna
682
00:35:09.760 --> 00:35:12.920
do something similar. So yeah, it's gonna be fascinating. You know,
683
00:35:13.039 --> 00:35:15.719
maybe they lose some market share and Circle and some
684
00:35:15.760 --> 00:35:18.639
of the other players, PayPal maybe Ripple that they grow
685
00:35:18.679 --> 00:35:21.400
in market share, and I look, competition's great for the
686
00:35:21.559 --> 00:35:22.880
consumer and the market.
687
00:35:23.000 --> 00:35:24.440
So we'll see.
688
00:35:25.920 --> 00:35:29.480
What are your thoughts on the pro crypto government that
689
00:35:29.519 --> 00:35:33.199
we have in place, pro crypto president, new sec chers,
690
00:35:33.239 --> 00:35:37.480
pro crypto Treasury Secretary's, pro crypto White House, cryptos are
691
00:35:38.360 --> 00:35:42.119
you know, what are your anticipating that this government's gonna
692
00:35:42.119 --> 00:35:44.199
be able to do? Can they get legislation through this year,
693
00:35:44.239 --> 00:35:45.400
big Quinn Reserve this year?
694
00:35:45.519 --> 00:35:46.119
Things like that?
695
00:35:47.760 --> 00:35:51.360
Yeah, So you know, when you hear these terms, right,
696
00:35:52.719 --> 00:35:56.840
it's uh, you know, cool terminology, right like czar, you know.
697
00:35:56.920 --> 00:35:59.400
But I think it's really a signal though, that we
698
00:35:59.480 --> 00:36:02.239
have people who are our friends who are in both
699
00:36:02.239 --> 00:36:04.800
the administration and legislature. What do I mean by friends,
700
00:36:04.800 --> 00:36:07.960
I mean people who understand what these markets are, aren't
701
00:36:07.960 --> 00:36:11.719
afraid of it, and are capable to develop regulations and
702
00:36:11.800 --> 00:36:13.920
policies that will work for the United States, for the
703
00:36:13.960 --> 00:36:17.800
stable point markets to be here at home and the
704
00:36:17.840 --> 00:36:20.599
crypto markets to be here in the US. You know,
705
00:36:20.679 --> 00:36:23.360
when you talk about the cryptos are the big thing
706
00:36:23.400 --> 00:36:26.039
that's happening at the White House, the executive level is
707
00:36:26.440 --> 00:36:29.480
it's a presidential working group. Now, Biden had his own
708
00:36:29.519 --> 00:36:33.920
executive Order that focused on crypto as well, and one
709
00:36:33.920 --> 00:36:36.840
could call that maybe much more conservative, if not sort
710
00:36:36.840 --> 00:36:40.679
of throttling or doing a choke point type mechanism, because
711
00:36:41.000 --> 00:36:45.199
their main considerations the Biden administration for their working group
712
00:36:45.400 --> 00:36:48.639
was that the FED gets to set the monetary policy.
713
00:36:48.719 --> 00:36:51.840
It shouldn't be from some white paper by somebody we
714
00:36:51.880 --> 00:36:54.639
don't know, like Satoshi. You know, we need to protect
715
00:36:54.639 --> 00:36:58.840
the financial markets, protect the consumer from those financial markets
716
00:36:58.920 --> 00:37:02.159
number two and number three, you know, protect from elicted finance.
717
00:37:02.480 --> 00:37:04.199
I think you're gonna want to see the same things,
718
00:37:04.199 --> 00:37:05.639
but you're gonna want to see it in a way
719
00:37:05.679 --> 00:37:08.639
where it allows crypto to scale. And so that's where
720
00:37:08.639 --> 00:37:10.639
the White House is really going to lean in whether
721
00:37:10.719 --> 00:37:13.119
they issue the reserve that I think that very much
722
00:37:13.639 --> 00:37:16.440
could happen. I can tell you I don't ever see
723
00:37:16.480 --> 00:37:19.639
it being just a Bitcoin reserve. I think it will
724
00:37:19.679 --> 00:37:24.400
have to be a mix because then you're allowing the
725
00:37:24.400 --> 00:37:28.960
government to pick a winner, right, and that's not necessarily
726
00:37:28.960 --> 00:37:32.480
what we ever want. This came up in twenty twenty one,
727
00:37:32.559 --> 00:37:37.280
by the way, during the Infrastructure Bill, when initially the
728
00:37:37.280 --> 00:37:39.320
White House was saying we should just endorse proof of
729
00:37:39.360 --> 00:37:44.239
work mechanisms, and even coin Center in other places cried foul.
730
00:37:44.239 --> 00:37:45.519
So so we don't want to pick a winner or
731
00:37:45.519 --> 00:37:49.360
a loser. So you're gonna have to adjust yourselves. Bitcoin
732
00:37:49.440 --> 00:37:52.239
maxis you're going to see a mix in that strategic reserve.
733
00:37:52.280 --> 00:37:54.679
I think you're probably gonna see that, right, because it
734
00:37:54.679 --> 00:37:57.519
makes sense because it's their way of endorsing and signaling
735
00:37:57.639 --> 00:38:00.559
this is a new asset class and it's something that belongs.
736
00:38:00.639 --> 00:38:03.159
Maybe it's not going to replace the financial system, but
737
00:38:03.239 --> 00:38:05.400
we say it on the equity of like gold or oil.
738
00:38:05.480 --> 00:38:08.079
It's something valuable and we should be stockpiling some of it,
739
00:38:08.639 --> 00:38:11.320
and that can be done really through the executive On
740
00:38:11.360 --> 00:38:14.199
the legislative side, obviously, they've created a Byicountal working group
741
00:38:14.480 --> 00:38:18.159
with Chairman Tim Scott and French Hill on the banking side,
742
00:38:18.599 --> 00:38:25.239
and gt from Pennsylvania as well as Bozeman sorry, from
743
00:38:25.239 --> 00:38:27.639
the Senate on the agriculture side. And that's really important
744
00:38:27.840 --> 00:38:30.559
because those are the two committees, the Agriculture that oversees
745
00:38:30.599 --> 00:38:33.960
the CFTC and then you have the financial or banking
746
00:38:33.960 --> 00:38:37.119
committees that oversee the SEC. So all four of them
747
00:38:37.159 --> 00:38:39.960
had that press conference with David Sachs, and so that
748
00:38:40.079 --> 00:38:44.079
means that there's these four corners of the Congress working
749
00:38:44.119 --> 00:38:46.760
together and coordinating with the White House on what that
750
00:38:46.840 --> 00:38:49.239
legislation is going to be. And when you have that
751
00:38:49.360 --> 00:38:53.360
kind of a legislator that's authorized, meaning they're authorized by
752
00:38:53.400 --> 00:38:55.320
the White House in a sense of that what they do,
753
00:38:55.400 --> 00:38:57.559
the White House will support it, they won't veto it.
754
00:38:58.119 --> 00:39:01.679
You have all of the frame work right for success.
755
00:39:02.239 --> 00:39:04.960
And I think that the SEC crypto task for us
756
00:39:04.960 --> 00:39:07.840
that Hester Pearce is doing is going to address things
757
00:39:07.880 --> 00:39:10.159
on the micro level, like kind of in the meantime.
758
00:39:10.199 --> 00:39:12.599
This is what's going to smooth out until we maybe
759
00:39:12.639 --> 00:39:15.800
get the legislation later this year. So I'm very optimistic
760
00:39:15.880 --> 00:39:19.360
that we'll see something, but there are going to have
761
00:39:19.400 --> 00:39:23.920
to be some concessions made to the Democrats because remember
762
00:39:23.920 --> 00:39:26.440
in the Senate isn't just fifty votes in majority, you
763
00:39:26.480 --> 00:39:29.119
need sixty votes to get it to be a vote.
764
00:39:29.480 --> 00:39:32.800
So right now, that's seven Democrats, seven senators who are Democrats.
765
00:39:32.920 --> 00:39:35.519
Now we know Christian Joebrand's a friend, but we have
766
00:39:35.559 --> 00:39:37.360
to find six other Democrats who are going to be
767
00:39:37.360 --> 00:39:39.920
willing to adjust to this and say it for this
768
00:39:40.039 --> 00:39:43.679
legislation actually pass. So it becomes a numbers game, which
769
00:39:43.679 --> 00:39:45.920
she often does with these things, you know in Congress.
770
00:39:45.920 --> 00:39:47.280
We're going to see how that plays out in the
771
00:39:47.280 --> 00:39:48.119
next few months.
772
00:39:48.480 --> 00:39:49.159
Yeah, for sure.
773
00:39:49.159 --> 00:39:53.159
And that was great perspective and insights on the infrastructure bill,
774
00:39:53.679 --> 00:39:57.400
and even that we not necessarily a bigcoin strategic reserve,
775
00:39:57.440 --> 00:40:02.239
but a digital stockpile with different crypto assets. It's hard
776
00:40:02.320 --> 00:40:04.960
question for you with that in mind. You know, let's
777
00:40:04.960 --> 00:40:09.599
say we build this digital stockpile. Do you foresee I
778
00:40:09.639 --> 00:40:13.719
don't know if in our lifetime, but the United States
779
00:40:13.760 --> 00:40:17.000
going back to a hard money standard where we go
780
00:40:17.119 --> 00:40:22.880
back to not necessarily a gold standard, but using digital acids,
781
00:40:22.920 --> 00:40:27.559
gold oil maybe and these things back the dollar instead
782
00:40:27.559 --> 00:40:31.280
of being fiat. It's back to that hard money standard.
783
00:40:31.280 --> 00:40:34.920
If that makes sense, Yeah, I absolutely do. You know,
784
00:40:35.000 --> 00:40:37.159
if you look at the history of our country. We've
785
00:40:37.199 --> 00:40:41.159
had these ebbs and flows and Civil War, Lincoln issued,
786
00:40:41.199 --> 00:40:43.639
you know, the greenback or the US dollar created the
787
00:40:43.679 --> 00:40:47.599
occ and he did that without backing it by gold, right,
788
00:40:47.639 --> 00:40:51.000
so that was that was We weren't backed by gold
789
00:40:51.000 --> 00:40:52.920
for a period of time until later when the Federal
790
00:40:53.000 --> 00:40:55.480
Reserve formed, and then we finally went back on a
791
00:40:55.480 --> 00:40:58.840
gold standard. So there's a myth I think that's in
792
00:40:58.920 --> 00:41:01.119
seventy seventy six, we've been on a gold standard.
793
00:41:01.119 --> 00:41:03.320
We've gone on and off it. And in fact, you
794
00:41:03.360 --> 00:41:05.639
can actually go to the history books to look at
795
00:41:06.599 --> 00:41:09.079
the conversations Lincoln had when he had he felt he
796
00:41:09.119 --> 00:41:11.559
had to issue that to win the Civil War, and
797
00:41:11.639 --> 00:41:14.440
he apologized. He says, I know this isn't gold and silver,
798
00:41:15.039 --> 00:41:17.039
you know, but like it's kind of like, you know,
799
00:41:17.239 --> 00:41:20.119
please have faith in this. And then it even got
800
00:41:20.159 --> 00:41:23.800
to the point where the Secretary of Treasury wanted Lincoln
801
00:41:23.840 --> 00:41:27.039
to put in God we trust on the first dollar bills,
802
00:41:27.079 --> 00:41:28.960
and if you look at it, the first greenbacks don't
803
00:41:29.000 --> 00:41:32.199
say that because Lincoln said, I don't want to say
804
00:41:32.239 --> 00:41:34.159
something like in God we trust because it's really just
805
00:41:34.199 --> 00:41:37.199
a piece of paper, you know, it's just back. So
806
00:41:37.760 --> 00:41:39.480
we've gone in ebbs and flows, so it's actually a
807
00:41:39.599 --> 00:41:42.239
very easy question to answer. We've been off, you know,
808
00:41:42.440 --> 00:41:44.280
of a standard where we just have fiat the point
809
00:41:44.280 --> 00:41:46.400
that we have now, and so I could see a
810
00:41:46.519 --> 00:41:50.639
cycling to where definitely probably something like bitcoin or gold
811
00:41:50.760 --> 00:41:52.559
or other things that we say this is going to
812
00:41:52.599 --> 00:41:57.039
be the new way we standardize our money. And as
813
00:41:57.159 --> 00:41:59.400
everyone says, why we need a whole new sort of
814
00:41:59.440 --> 00:42:02.400
breton Wood two point zero just side what that future
815
00:42:02.480 --> 00:42:05.039
might look like. So I think that that'll be over
816
00:42:05.079 --> 00:42:07.199
our lifetime. That won't be tomorrow, but I think maybe
817
00:42:07.199 --> 00:42:09.039
over the next ten or twenty years we might see
818
00:42:09.039 --> 00:42:10.320
something like that come to fruition.
819
00:42:11.639 --> 00:42:15.519
I can't wait to see that happen, especially as you know,
820
00:42:15.559 --> 00:42:18.239
we go to a more digital world and everybody's going
821
00:42:18.280 --> 00:42:21.880
to be using possibly stable coins, right and digital assets.
822
00:42:22.239 --> 00:42:25.159
It would probably very be very easy to transition over
823
00:42:25.320 --> 00:42:27.719
because it's all going to be in the blockchain and
824
00:42:27.760 --> 00:42:30.480
hopefully we have transparency, you know what dose just trying
825
00:42:30.480 --> 00:42:31.559
to do, and we.
826
00:42:31.519 --> 00:42:33.679
Know they have the actual reserves.
827
00:42:33.760 --> 00:42:38.000
Right, there's a wallet that holes bitcoin theorem XRP whatever,
828
00:42:38.360 --> 00:42:41.360
and then here's some gold. We know it's token eyes
829
00:42:41.440 --> 00:42:45.079
we know it's in Fort Knox, and here's our oil reserves.
830
00:42:45.079 --> 00:42:47.880
We know we have x amount of barrels and whatever, right,
831
00:42:47.960 --> 00:42:50.480
and we can verify via the blockchain.
832
00:42:50.760 --> 00:42:52.320
You know, that would be pretty great.
833
00:42:53.400 --> 00:42:57.280
Absolutely, absolutely. The one interesting challenge I think you're going
834
00:42:57.360 --> 00:42:59.800
to see, because I've heard this from the Democrats in
835
00:43:00.000 --> 00:43:02.920
and this is my sort of thought for your audiences,
836
00:43:03.239 --> 00:43:07.119
the argument over stable coins once the legislation passes, as
837
00:43:07.119 --> 00:43:10.239
to how banks try to adopt stable coins, and I've
838
00:43:10.239 --> 00:43:12.199
heard some of the Democrats say as for as they
839
00:43:12.199 --> 00:43:15.400
want to consider stable coins like bank deposits. And if
840
00:43:15.400 --> 00:43:17.840
you think about that, that's a very slippery slope, right,
841
00:43:18.039 --> 00:43:19.960
because if you just have stable coins, that means we
842
00:43:20.039 --> 00:43:22.440
have cash like in our wallet, and that's kind of
843
00:43:22.480 --> 00:43:24.480
like what PayPal in other words, saying this is just
844
00:43:24.519 --> 00:43:27.800
for payments. That's why PayPal's like just for payments, it's
845
00:43:27.840 --> 00:43:30.159
not banking, no banking. But if you think about it,
846
00:43:30.159 --> 00:43:32.880
if you're the banks and you can offer these stable coins,
847
00:43:33.840 --> 00:43:36.639
at some point, you can offer these stable coins in
848
00:43:36.679 --> 00:43:39.719
a way and then say, well, it's like a deposit
849
00:43:39.760 --> 00:43:43.079
on the bank. In other words, it's backed by a dollar.
850
00:43:43.119 --> 00:43:46.159
But we want to say that it's also a deposit
851
00:43:46.519 --> 00:43:48.519
that you're kind of with us when you have this
852
00:43:48.599 --> 00:43:51.360
stable coin, like if it's our own stable coin, and
853
00:43:51.400 --> 00:43:53.840
if you get that to me. And I just thought
854
00:43:53.840 --> 00:43:55.679
of this actually on your show as you've been talking
855
00:43:55.880 --> 00:43:59.119
in such a fascinating conversation, is because then you actually
856
00:43:59.119 --> 00:44:02.159
get to the point of then the banks and the
857
00:44:02.360 --> 00:44:05.039
and the federal regulators can sort of use the stable
858
00:44:05.079 --> 00:44:07.639
coins the way that we use deposits now to kind
859
00:44:07.679 --> 00:44:11.199
of regulate the economy. So I think one thing you
860
00:44:11.320 --> 00:44:13.719
might see come up that won't be apparent at first though,
861
00:44:13.840 --> 00:44:17.199
is this fight over how stable coins are really considered,
862
00:44:18.039 --> 00:44:22.440
as as the banks and the traditional institutions try to
863
00:44:23.320 --> 00:44:26.800
pull stable coins into the way you know they work today. Right,
864
00:44:27.119 --> 00:44:29.000
So what is a stable coin? Right? Is it going
865
00:44:29.039 --> 00:44:31.280
to be this these dollars we have in our crypto
866
00:44:31.320 --> 00:44:34.840
wallets are now in our bank wallets that isn't really
867
00:44:34.960 --> 00:44:38.519
used to rehopothacate or will at some point the bank's
868
00:44:38.800 --> 00:44:41.400
lobby and try to change the bill to say, yeah,
869
00:44:41.440 --> 00:44:44.559
we want to do rehypothication, we want to you know,
870
00:44:44.760 --> 00:44:47.079
spread out the wealth and you know, lower the one
871
00:44:47.119 --> 00:44:48.880
to one standard. So I think that's going to be
872
00:44:48.880 --> 00:44:51.039
something to keep on the radar. Two mm.
873
00:44:52.159 --> 00:44:54.679
Yeah, so interesting scenario. Is it going to pop off?
874
00:44:54.880 --> 00:44:57.599
I think as regulations come in and we see the
875
00:44:57.599 --> 00:45:00.679
direction to these banks going and the stable co market,
876
00:45:01.880 --> 00:45:05.000
I know, A big thing narrative, and I think it
877
00:45:05.039 --> 00:45:08.119
makes sense is that if the United States can get
878
00:45:08.239 --> 00:45:12.119
stable coin legislation right and US treasuries are backing these
879
00:45:12.119 --> 00:45:16.119
stable coins, it could help preserve the world reserve currency status,
880
00:45:16.920 --> 00:45:20.119
some of that being challenged by bricks nations. And look,
881
00:45:20.159 --> 00:45:24.239
there's alternatives, right, some nations could use bitcoin if they
882
00:45:24.280 --> 00:45:25.599
want opt out of a dollar.
883
00:45:26.559 --> 00:45:28.800
Do you agree with that thesis?
884
00:45:30.679 --> 00:45:33.880
Yeah, I think although if we look at El Salvador,
885
00:45:33.920 --> 00:45:36.679
they kind of opted to go with both the dollar
886
00:45:36.880 --> 00:45:43.719
and bitcoin, So I'd say overall that's probably on track, Tony.
887
00:45:43.800 --> 00:45:47.920
I think that ultimately we're going to see a lot
888
00:45:47.960 --> 00:45:52.880
of countries, whether it's tether or circle, see the value
889
00:45:52.880 --> 00:45:55.199
of the way stable coins work today. It's this amazing
890
00:45:55.719 --> 00:46:00.719
technological development that has these breakthrough capabilities. It's fast, it's quick,
891
00:46:01.239 --> 00:46:03.559
it allows us to go through you know, very very
892
00:46:04.079 --> 00:46:06.960
you know, it makes things easier from a payment's perspective,
893
00:46:07.559 --> 00:46:09.639
could be a way of storing cash for some people
894
00:46:09.679 --> 00:46:12.480
in a digital realm. So it's a real game changer, right,
895
00:46:12.519 --> 00:46:14.639
It's going to do things, and I think it's going
896
00:46:14.679 --> 00:46:16.599
to take the private markets to do that. Right. It's
897
00:46:16.599 --> 00:46:18.679
why we're not going to have like a CBDC or
898
00:46:18.679 --> 00:46:21.599
whatever we want to call it today, because then it's
899
00:46:21.639 --> 00:46:24.159
not something that's necessarily owned by the government. It's something
900
00:46:24.159 --> 00:46:27.199
that's run in a way where it's representing what money is.
901
00:46:27.280 --> 00:46:29.559
So it's really the first stage, I think in what
902
00:46:29.599 --> 00:46:31.639
we're going to see is a change the way the
903
00:46:31.679 --> 00:46:35.199
world looks at money. So I think that you're going
904
00:46:35.239 --> 00:46:39.760
to see the US I don't want to say weaponized,
905
00:46:39.800 --> 00:46:43.920
but certainly utilize stable coins to make sure we stay
906
00:46:43.960 --> 00:46:46.320
on top. And I think that's why you see such
907
00:46:46.360 --> 00:46:49.880
support from Democrats as well as Republicans. Remember Maxine Waters
908
00:46:49.920 --> 00:46:53.239
introduced her on stable coin, much more restrictive, but they
909
00:46:53.239 --> 00:46:55.360
all see the writing on the wall. And this all
910
00:46:55.400 --> 00:46:58.079
goes back to twenty nineteen when you know, liber came
911
00:46:58.119 --> 00:46:59.760
out and they're like, well, we don't want market zucker
912
00:47:00.119 --> 00:47:02.920
to be the the face the gist dollar. We need
913
00:47:02.960 --> 00:47:05.239
something to do it. And now we're kind of here today.
914
00:47:05.440 --> 00:47:07.159
I think this will be the final result of what
915
00:47:07.679 --> 00:47:11.119
a stable coin quote unquote regulated harnessed stable cooin will
916
00:47:11.119 --> 00:47:13.000
look like in a way that it can be our
917
00:47:13.639 --> 00:47:15.920
you know, fast horse and keep us competitive in the
918
00:47:15.920 --> 00:47:18.159
global landscape of the monetary order.
919
00:47:18.800 --> 00:47:21.320
Thank you for bringing up that Libra situations. I remember
920
00:47:21.320 --> 00:47:24.199
Maxine Waters, she was leading the charge and trying to
921
00:47:24.199 --> 00:47:25.280
shut that thing down.
922
00:47:25.400 --> 00:47:25.559
Right.
923
00:47:25.599 --> 00:47:27.400
They were like, no, no, no, no, We're gonna have
924
00:47:27.440 --> 00:47:30.760
a hearing where this is not happening. And in hindsight,
925
00:47:30.800 --> 00:47:33.360
you look at this, you know what's happening. And in
926
00:47:33.360 --> 00:47:37.519
context of what you just said, Uh, Facebook had the ability,
927
00:47:37.920 --> 00:47:41.800
because they're in multiple countries to create a their own
928
00:47:41.880 --> 00:47:45.559
role reserveency if they wanted to, you know what they
929
00:47:45.559 --> 00:47:46.199
were trying to do.
930
00:47:46.280 --> 00:47:48.360
So no wonder that got shut down quickly.
931
00:47:49.159 --> 00:47:52.199
Yeah, Jason, I know we're up on time. So I
932
00:47:52.199 --> 00:47:54.280
got some wrap up questions here for you. At first
933
00:47:54.599 --> 00:47:56.599
is if you could create your own metaverse, what would
934
00:47:56.639 --> 00:47:57.119
the theme be.
935
00:47:59.679 --> 00:48:02.239
The I think would be golf. I'm like, I love golf,
936
00:48:02.320 --> 00:48:04.239
so there have to be lots of golf with crypto
937
00:48:04.320 --> 00:48:07.599
prizes at every hole, and a mean coin is like
938
00:48:07.639 --> 00:48:09.599
a Moobe prize if I don't hit the ball well.
939
00:48:11.039 --> 00:48:12.119
Rapid fire questions.
940
00:48:12.159 --> 00:48:19.760
Favorite food spaghetti, favorite musician or band Led Zeppelin, Favorite
941
00:48:19.760 --> 00:48:25.639
movie The Natural Robert Redford baseball movie. Yeah, favorite book.
942
00:48:27.440 --> 00:48:31.519
Favorite book Liar's Poker by Michael Lewis about the bond
943
00:48:31.559 --> 00:48:33.840
trading in the nineteen eighties. Interesting.
944
00:48:34.440 --> 00:48:34.960
Check that out.
945
00:48:35.000 --> 00:48:37.360
And then I think I know the answer to this.
946
00:48:37.559 --> 00:48:40.039
When you're not working, you're probably playing golf right as
947
00:48:40.079 --> 00:48:40.519
a hobby.
948
00:48:41.440 --> 00:48:44.239
Yeah, golfing, And I do like some model trains and
949
00:48:44.280 --> 00:48:44.760
things like that.
950
00:48:44.880 --> 00:48:47.199
So yeah, nice, Jason.
951
00:48:47.360 --> 00:48:49.679
I wish we had more time, and I'm looking forward
952
00:48:49.719 --> 00:48:51.639
to reading your book. So we'll have to have you
953
00:48:51.679 --> 00:48:54.760
on when that book is ready, because you got some
954
00:48:54.800 --> 00:48:55.639
great perspectives.
955
00:48:55.639 --> 00:48:55.840
Man.
956
00:48:56.039 --> 00:48:57.199
Thank you so much for joining me.
957
00:48:57.800 --> 00:49:10.239
Absolutely, thank you, Tony Attack pak take dost tak t
958
00:49:10.639 --> 00:49:12.159
bakt
