WEBVTT
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00:00:06.959I'm Justin Friedman, Head of Policy at Stablecon.
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00:00:14.240This is a special edition of the Stable Pulse, recorded live on stage at Stablecon USA in Washington, D.C.
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00:00:23.359on September 10, 2026, where I had the privilege of interviewing Patrick Witt, who coordinates policy on digital assets at the White House.
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00:00:30.239Patrick shared his read on how the Barely One-Year-old Genius Act is already enabling the stablecoin marketplace.
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00:00:41.600I also asked for his perspective on non-US dollar stablecoin issuance, as well as the transformative potential for agentic commerce and the need to modernize digital identity to keep up.
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00:00:51.359Finally, I couldn't let him go without asking for Patrick's whip count on the crypto market structure legislation known as the Clarity Act, which is yet to become law.
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00:00:54.240With that, let's turn to the interview.
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00:01:35.840And has a pretty exciting moment coming up in a few days, which we'll get to.
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00:01:38.959So, Patrick, welcome.
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00:01:39.760Thank you.
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00:01:40.879Thank you for having me.
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00:01:49.840You're the president's key advisor on digital assets, and this president has made crypto a major priority for his administration.
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00:01:54.000So what is your most significant accomplishment so far?
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00:02:03.280I think you have to look at the entire corpus of uh activity and accomplishments over the past year and a half of the administration.
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00:02:06.959Obviously, the passage of the Genius Act right at the top of the list.
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00:02:26.400There were a number of executive orders relating to digital assets that the president signed and that are being implemented now, and then some of the rulemakings that have already taken place, uh kind of pulling back Operation Joke Point 2.0 actions and then putting forward, you know, there's the deconstruction phase, taking down what was what was bad and harmful.
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00:02:28.560Uh and now we're into the construction phase.
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00:02:34.000And obviously legislation is a key part of that, but then also rulemakings at the different agencies.
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00:02:45.439You saw Reg Crypto come out of the SEC just recently, and there's a lot more in the rulemaking hopper that will uh start to roll out depending on the outcome of Clarity on Tuesday.
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00:02:51.520So, in your mind, what has the Genius Act already accomplished?
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00:02:59.599I think it's, you know, a lot of this um activity in stable coins had already been a product and proliferated.
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00:03:05.919There was already obviously a large uh uh you know market cap of stable coins that are out there, a large float.
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00:03:10.319Um we've seen an increase in that since the passage of genius.
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00:03:12.479And I think there's kind of a next leg up.
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00:03:18.479There was the initial phase, which was a lot of retail adoption, a lot of adoption around the world and the global south.
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00:03:27.039And now with the passage of genius, it's for the for the more developed economies that have a already existing, pretty robust banking system.
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00:03:50.800I think that's where genius really provides that next leg up, where it's not just someone in a country that has an unstable currency, a national currency, and they want access to US dollars as somewhat of a savings instrument or a hedge uh against inflation, which is somewhat odd for us as Americans to think about as the uh the dollar as a hedge against inflation, but for many parts of the world it is.
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00:03:59.599And um now it's okay, what do stable coins mean for institutions and an existing uh payment system that is pretty robust and built out?
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00:04:05.039And I think that's what you're gonna see with the passage of genius and then the implementation of the rules.
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00:04:06.879Uh, that's really when it becomes real.
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00:04:11.759There is no such thing as a genius compliant stablecoin yet, but very soon there will be.
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00:04:14.719And I think that's when you're gonna see it really take off.
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00:04:28.160So, as you know, this conference we're at today is named StableCon because we're here to highlight the growing importance and use of stablecoins and the related infrastructure domestically and around the world.
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00:04:45.120In the US, we've defined this very specific instrument as a genius compliant payment stablecoin, which is backed one-to-one by reserves and US government securities, and it's designed to be as reliable and interoperable as the US dollar.
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00:04:57.439So when you think about American competitiveness in the world, do you see this instrument as emerging as the new global currency potentially replacing others?
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00:05:07.839I don't want to necessarily opine on what it means for currencies around the world, but as we've seen, even before uh the passage of Genius, there are many economies around the world.
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00:05:22.720I think Venezuela is a great example of this, where without even so much as a coordinated policy effort or a conscious decision, you know, I think 50% of transactions in that country uh were taking place in US dollars and largely uh US dollar backed stable coins.
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00:05:31.040So there's clearly demand for this, especially in countries that have capital controls and and uh uh a poorly managed currency.
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00:05:38.000So um I would expect that to probably continue, but it's it's not necessarily a policy of the United States to push that.
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00:05:48.079It's just um there's a product out there that was obviously created and and flourished uh without really government uh uh input on that.
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00:05:54.480Genius now establishes the rules for these products that were already in existence for one to be genius compliant.
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00:06:05.920And I think we'll let the free market decide on its own whether or not this is ultimately a currency that that people want to own, but uh tremendous potential for it, and um you know we'll see what happens.
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00:06:14.480So Tether is building a Genius compliant stablecoin, whatever genius compliant may be, as the rules come out in the next few weeks and months.
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00:06:25.839USAT today has a float of 180 million, which is like a thousandth the size of USDT, which is uh the most widely used stablecoin in the world.
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00:06:33.199So do you foresee offshore stable coins that have already achieved such dominance?
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00:06:39.839Ultimately proving their use usefulness within the regulatory cordon of the Genius Act?
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00:06:41.040I think we'll see.
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00:06:44.879As I mentioned, the rules are in proposal stage right now.
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00:06:48.720Genius will become effective, I believe, January, uh mid-January.
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00:06:58.720So once that is in place and once you truly have genius compliance stable coins out there, um, then we'll we'll see what the market ultimately demands and and what people want.
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00:07:01.279As we mentioned, there's there's kind of two different parts to it.
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00:07:06.800There's the the retail side of it, and then there's more of an institutional B2B uh side of that.
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00:07:19.680I think you'll probably see institutions and more of the B2B uh usefulness gravitate towards more of the genius compliant model, um, and and we'll see whether retail users ultimately decide to use one or the other.
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00:07:30.480But I think there's tremendous value that comes from operating within the bounds of the Genius Act and the rules that are uh in proposal stage and will soon be final on that.
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00:07:33.759And uh, you know, we'll we'll see ultimately what the market decides.
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00:07:42.160But I think you'll see somewhat of a bifurcation and then potentially uh you know a convergence uh over time uh to what uh what the market wants.
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00:08:00.800So in a increasingly interconnected global economy, how do you think about non-USD stable coins, both local issuance in foreign currencies around the world, or even American companies who are issuing in non-USD currencies elsewhere?
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00:08:06.560I think there's a place for all of them in the same way that there's a place for different uh currencies uh currently.
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00:08:14.000The the US dollar doesn't necessarily crowd out uh other currencies in the digital dollar world and the stablecoin world.
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00:08:18.240Um, there's a place for non-USD uh backed stable coins as well.
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00:08:37.039I think part of that is somewhat dependent upon the frameworks that the different jurisdictions put in place themselves, uh, as we've seen over in Europe with their stablecoin framework, it's more restrictive, it's more prescriptive to the market, and it makes it somewhat less useful from the standpoint of you know what's attractive in the market.
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00:09:16.159So I think uh with Genius kind of setting the standard for uh what good looks like or what kind of the most utilized and and most liquid uh you know uh government compliant uh stablecoin is, I think you're probably gonna see other jurisdictions either adopt the same framework, uh try and achieve um uh reciprocity with the United States, which there's a mechanism for that, in Genius, or I think the existing frameworks in place might be adapted somewhat to more closely mirror uh what is in Genius because you know we took an approach that was ultimately, you know, American in nature.
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00:09:20.159We're not necessarily going to dictate to the market exactly how to do this.
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00:09:24.639We're gonna set uh you know minimum standards here, uh a baseline framework.
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00:09:34.080And then otherwise, we're gonna let private companies um, you know, issue and and create these products, and uh it's it's up to the market to ultimately adopt them.
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00:09:44.720So I think it's it's the right approach between appropriate regulation, but also allowing the the uh private sector to to move out and uh be able to pursue their businesses.
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00:09:45.600Great.
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00:09:57.679So you've been the most essential troubleshooter at the White House on some of the hot button issues throughout the development of the Genius Act and the Clarity Act.
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00:10:10.240The Genius Act prohibits the payment of yield by issuers of stable coins, but it provides some tolerance for payment of yield or rewards by others in the ecosystem.
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00:10:24.799This issue has been relitigated as the Clarity Act has moved through Congress, but you helped negotiate a bipartisan compromise that was well received that seems to have settled this issue, at least for the moment.
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00:10:36.639So why do you feel that the ability of ecosystem participants to pay yield or rewards for stable coin usage is so important?
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00:10:42.720I think obviously, you know, my job is to implement the president's agenda.
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00:10:46.399The president recognizes the need for the Clarity Act to get passed.
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00:10:52.879And so this issue that we thought was already settled in Genius, like you said, gets relitigated in Clarity.
00:10:52.879 -->
00:10:57.440And uh we brought both sides to the table over the course of I think three months.
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00:11:01.279I hosted issue uh meetings at the White House to resolve this issue.
00:11:01.279 -->
00:11:05.519And then there was a handoff to Senators Tillis and also Brooks uh on this.
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00:11:19.279They ran their own process and arrived at a product that ultimately tried to balance the competing interest here, um, you know, prohibiting idle yield and permitting uh rewards uh related to a bona fide activity.
00:11:19.279 -->
00:11:22.960And I think uh why is it so necessary to preserve this?
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00:11:32.879Well, number one, just philosophically as a free market individual, you shouldn't necessarily restrict uh companies' ability to reward their customers, whether it's stable coins or any other product, right?
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00:11:35.440That's that should be a permissible activity.
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00:11:44.960Um, but at the same time, in order to get the legislation advanced, you know, we we had another uh important constituency that uh you know felt threatened by it.
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00:11:46.879So we we threaded that needle.
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00:11:57.919And um, you know, it's it's really more about allowing companies to reward their customers as any company wants to be able to do, and uh not doing so in a way that's that's anti-competitive.
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00:12:06.559So as best we could and as best you can with uh the the use of the English language, uh, you know, we tried to thread that needle and we think we got it right.
00:12:06.559 -->
00:12:12.240And obviously Senators Tillis and also Brooks uh arrived at at the language that they ultimately put out there.
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00:12:15.679So um I think it's a durable compromise.
00:12:15.679 -->
00:12:24.879And uh members that are not necessarily on the banking committee that didn't go through that multi-month process, for some of them, they're kind of encountering this for the first time.
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00:12:26.320They're like, Well, did you consider this?
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00:12:27.759Did you talk to these individuals?
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00:12:29.279And the answer is yes.
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00:12:33.519I can I can definitively say that we we considered all sides of this.
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00:12:35.600This was not put together in an afternoon.
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00:12:42.159It was a very uh healthy and detailed process that we went through to get to the place that we ended up.
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00:12:55.600Your job must involve spending a lot of time educating stakeholders about the fundamentals of blockchains and cryptocurrency and what is money, well, you know, what is money in the economy?
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00:12:57.039Like what is its role?
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00:12:59.600Um, a lot of philosophical things.
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00:13:08.320What can we learn from your experience bringing along skeptical stakeholders in this very highly charged political environment?
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00:13:27.200Um, it's hard to do, um, but you have to establish that baseline level of trust, um, bridging the partisan divide, or even on one side of the aisle, there are obviously members that are more savvy, more crypto friendly, and others that are a little bit more skeptical, and just it's not their, it's not their key issue.
00:13:27.200 -->
00:13:30.080And so you have to bring them along, you have to meet them where they are.
00:13:30.080 -->
00:13:38.559And when it comes to bridging the uh the partisan divide, there has to be that baseline level of trust that's built, which is hard to do and it takes time.
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00:13:44.480Um, and you you have to understand that uh, you know, people have different perspectives on this.
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00:13:50.159Uh senators have different constituents that are important to them whose voices they want to make sure are heard.
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00:14:02.399And uh you have to just be patient and continue to work through it and always believe that there is a solution on the other side of it, uh, which I think we've demonstrated with a lot of very difficult issues that we've worked through.
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00:14:26.159So today is September 10th, and next week the Senate is facing a motion to proceed to a debate on the Clarity Act, the so-called market structure legislation that would create a national regulatory framework for digital commodities and answer a lot of unanswered questions that this industry has confronted in recent years.
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00:14:31.039The vote requires a supermajority of 60 to advance.
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00:14:37.679So before we even begin the debate, let me ask you what is your whip count at this moment?
00:14:38.559 -->
00:14:39.759Uh I think it's good.
00:14:39.759 -->
00:14:40.559I think it's good.
00:14:40.559 -->
00:14:51.279I'm not gonna uh necessarily put a number on it, but um I think it's the leader has put out a number of excuse me, he solicited from members uh the whip count a couple of times.
00:14:51.279 -->
00:14:52.639I think it's very strong.
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00:15:06.720And uh the important thing is, you know, you get so down into the weeds and you're debating a couple words on page 536 of the bill, and that becomes uh the the mountain uh that that's hard to um surmount.
00:15:06.720 -->
00:15:14.559But I think when you ask people when they get closer to a vote, you ask them to zoom back out and and step back and remember why are we doing this?
00:15:14.559 -->
00:15:16.399Why is this important in the first place?
00:15:16.399 -->
00:15:20.240It's not necessarily those two words on on page, whatever it is.
00:15:20.240 -->
00:15:31.120It's about establishing a framework for a very important and growing part of the economy that currently operates with without certainty and has operated as such for far too long.
00:15:31.120 -->
00:15:33.519So this is about American competitiveness.
00:15:33.519 -->
00:15:53.360Uh, this is about making sure that our markets and our innovation uh in the US stays apace and we don't seed our leadership position in financial markets and capital markets with the US dollar, you know, in this era of uh you know stable coins to a different jurisdiction.
00:15:53.360 -->
00:15:58.559We've seen liquidity um and innovation go offshore because of that uncertainty.
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00:16:09.360It's gone to places in Asia, it's gone to places in the Middle East, and if we're going to maintain our leadership position, then we need to lead uh by establishing a regulatory framework.
00:16:09.360 -->
00:16:11.919And uh that's what we're trying to do with this bill.
00:16:13.200 -->
00:16:16.080Shifting to another topic, thinking ahead.
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00:16:36.639Artificial intelligence is rapidly changing the kinds of threats faced by financial institutions, participants in the digital asset ecosystem, and they're thinking about how to defend against the threats while also enable users to enjoy and get value out of these technologies.
00:16:36.639 -->
00:16:41.759So one important dimension of this is identity.
00:16:41.759 -->
00:16:49.600And when you think about permissionless networks, what is the key problem to be solved?
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00:17:00.720I think it's incredibly exciting uh what is possible between the marriage of AI and programmable money, um whether that's stable coins or or different uh products.
00:17:00.720 -->
00:17:07.519Um now you can do incredible things with that, but it also raises unique challenges like you're talking about.
00:17:07.519 -->
00:17:27.680How do you how do you deal with um you know KYC or you know, BSA obligations in a world in which money's moving faster than ever before, it's global, um, and you're operating in systems that no longer have that intermediary, which BSA obligations kind of attach to, they make sense in a world in which there is that person standing in between.
00:17:27.680 -->
00:17:39.359So uh we are forward thinking in the sense that we recognize the tremendous opportunity that permissionless networks and decentralized systems and trustless systems uh present.
00:17:39.359 -->
00:17:49.279But there's obviously uh, you know, a part of this that uh people don't want to do anything that uh facilitates illicit finance or cartel financing or terrorist financing.
00:17:49.279 -->
00:17:52.160So we're we're trying to be sensitive to those topics.
00:17:52.160 -->
00:18:04.000That's one thing that we've worked through uh with the Clarity Act with law enforcement, is hearing their concerns and uh talking with uh law enforcement officers on the front lines or prosecutors who are making cases against bad actors.
00:18:04.000 -->
00:18:13.440Um we're trying to balance that, but uh do so in a way that allows this innovation to flourish and and for the benefits of it to be uh to be you know uh realized.
00:18:13.839 -->
00:18:25.200Is there a role for public policy in enabling the upgrade to the digital identity stack that is going to make the agentic economy something real?
00:18:25.759 -->
00:18:26.240I think so.
00:18:26.240 -->
00:18:41.839There's there's a number of companies out there that we've engaged with who are trying to solve that that issue of not just know your customer, but now know your agent and know whether that agent is operating with uh appropriate approvals from uh the user behind it.
00:18:41.839 -->
00:18:46.319So there's a lot of interesting questions when you add this agentic layer in here.
00:18:46.319 -->
00:18:51.039Um, you know, the agents are going to be operating with considerable latitude, and they already do.
00:18:51.039 -->
00:18:58.160We've already seen, uh I can't remember the exact stat, but it's already dwarfing the number of humans that are transacting or operating online.
00:18:58.240 -->
00:19:01.039These agents that threshold for the first time this year.
00:19:01.359 -->
00:19:02.160It's it's amazing.
00:19:02.160 -->
00:19:06.480And that it's like, wow, I, you know, people just started to talk about it like this is going to happen.
00:19:06.480 -->
00:19:08.559And it's like, wait a second, that's already in the rearview mirror.
00:19:08.559 -->
00:19:11.359It already happened, um, and it's only going to accelerate.
00:19:11.359 -->
00:19:14.400So um it's it's incredibly exciting.
00:19:14.400 -->
00:19:16.640There's tremendous opportunity with it.
00:19:16.640 -->
00:19:30.079But um, you know, with that, you want to make sure that uh you're you're not uh you're not breaking uh an existing system, but you're allowing this new technology and this new innovation and the benefits that come from that to achieve its full potential.
00:19:30.079 -->
00:19:48.160So um it's also something that is not just financial in nature, although that's an important part of it, but agents are gonna be conducting all sorts of transactions and activity, and you want to make sure that there's some way to prove digital identity to the amount that's necessary, but also not above that.
00:19:48.160 -->
00:19:55.759So, you know, kind of that uh the the holy grail of being able to disclose what's necessary, but also solve privacy on the other side of it.
00:19:55.759 -->
00:20:01.519We don't want to live in a world in which um, you know, everything is is suddenly fully exposed and there's no privacy in that world.
00:20:01.519 -->
00:20:03.200So it's a delicate balance.
00:20:03.200 -->
00:20:09.039Uh if I knew a perfect answer, maybe I would uh go launch a company to go move out on that.
00:20:09.039 -->
00:20:11.839But I know there's people a lot smarter than me working on it.
00:20:11.839 -->
00:20:18.400And um it's it's gonna be an iterative process, I would think, and there's gonna be an emerging standard that I think comes out of it.
00:20:18.799 -->
00:20:25.839In our last 30 seconds, imagine we're back here on this stage this time next year at Stablecon 2027.
00:20:25.839 -->
00:20:28.640What will you and I be talking about?
00:20:29.279 -->
00:20:34.880Oh man, well, hopefully we're talking about uh the implementation of the rules coming out of the Clarity Act.
00:20:34.880 -->
00:20:38.559So we'll we'll see how Tuesday goes and and final passage of that.
00:20:38.559 -->
00:20:50.160But that would be number one, even in the absence of clarity, the agencies are going to be moving out to establish the market structure for digital assets to the greatest extent that they can within their existing authorities.
00:20:50.160 -->
00:21:03.920So as I mentioned, Reg Crypto is already out from the SEC, CFTC has a uh very robust package of uh uh different policy actions, whether it's rulemakings or agency guidance that they plan to uh to issue.
00:21:03.920 -->
00:21:06.960And so we'll be talking about the implementation of those things.
00:21:06.960 -->
00:21:20.720There's gonna be healthy uh uh input solicited from the market, and in the case of rulemakings with uh with notice and comment, formal notice and comment, there's gonna be a lot of uh people providing uh good input there.
00:21:20.720 -->
00:21:22.079So they're gonna have to navigate it.
00:21:22.079 -->
00:21:23.039It's it's not easy.
00:21:23.039 -->
00:21:27.359There's not clear answers to this, but I can just say the president has set the vision.
00:21:27.359 -->
00:21:37.039He wants to lead in in digital assets and you know, kind of ancillary type of technologies like prediction markets, for example, and um down the list.
00:21:37.039 -->
00:21:44.720Any kind of frontier technology, this president wants America to be at the forefront and to be leading, and uh, we're gonna be doing that.
00:21:44.720 -->
00:21:49.359The agencies are ready to uh to move out with legislation or without it.
00:21:49.680 -->
00:22:01.359So, stablecoin enthusiasts will call 2025 the year of legislation and 2026 the year of anticipation, and 2027 will be the year of implementation.
00:22:01.359 -->
00:22:02.160There you go.
00:22:02.160 -->
00:22:02.720I like it.
00:22:02.720 -->
00:22:03.599Thanks, Patrick.
00:22:03.599 -->
00:22:04.160Thank you.
00:22:04.160 -->
00:22:08.400Days after our interview, the Clarity Act was brought before the U.S.
00:22:08.400 -->
00:22:12.559Senate, where it fell to a procedural vote on September 15th.
00:22:12.559 -->
00:22:18.160Just 49 of the 99 senators voting agreed to begin a final debate on the bill.
00:22:18.160 -->
00:22:35.440Those voting no cited a number of reasons, but there was an essential block of Republicans and Democrats who had otherwise signaled their support for Clarity, yet pointed to the bill's lack of meaningful limits on the ability of public officials to profit from the digital asset industry.
00:22:35.440 -->
00:22:43.279While it's still possible the Senate may try to return to the bill after November's elections, it seems unlikely that much will have changed by then.
00:22:43.279 -->
00:22:55.359As Patrick hinted, the regulators in Washington wasted no time moving ahead on their agenda to formalize crypto market structure using existing authority under current law.
00:22:55.359 -->
00:23:00.079Thanks for joining us for this special episode of the Stable Pulse.
00:23:00.079 -->
00:23:01.519See you next time.
