Speaker 1: But I think the language of this sid of produced
Speaker 1: is actually pretty good. There may be adjustments to that
Speaker 1: by some of our democratic colleagues, but I don't want
Speaker 1: to let that get in the way of the broader
Speaker 1: progress that's needed by getting clarity to throw it across
Speaker 1: the line.
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Speaker 3: I'm Tony Edward and I'm Amanda Wickcroft and.
Speaker 2: Joining us is Congressman Brian Style, who's a Republican out
Speaker 2: of Wisconsin. He's also the chairman of the Financial Services
Speaker 2: Subcommittee on Digital Assets, Financial Technology, and Artificial Intelligence. Congressman Style,
Speaker 2: great to see, Great to have you.
Speaker 1: Back, Hey, Tony and Manna, thanks for having me on.
Speaker 2: Congressmen, all eyes and ears are tuned into the Clarity Act.
Speaker 2: What can you tell us about the current status of
Speaker 2: this bill? The ethics piece, and all the conversations that
Speaker 2: are happening. It's all good things we're seeing, parguss, but
Speaker 2: what can you tell us where the status is.
Speaker 1: I'm in the general view it's darkest before the dawn.
Speaker 1: I mean, some people are indicating it might die. I'm
Speaker 1: still optimistic that we get the deal done. We're down
Speaker 1: to a handful of topics that have been now negotiated
Speaker 1: for well over a year. We have an ethics piece,
Speaker 1: we have to discuss interest rates in some of the
Speaker 1: DeFi language that's inside of Clarity. I was always with
Speaker 1: the view that we best served we took the House
Speaker 1: past Clarity bill and simply moved it to the Senate
Speaker 1: for an up or down vote. Of course, the Senate
Speaker 1: wants to put their print on this, that's okay. But
Speaker 1: the key here is that we reach a resolution and
Speaker 1: ultimately get this across the line. Now that there's legislative
Speaker 1: texts down on paper by Republicans in the Senate, I
Speaker 1: think and I'm hopeful that that gives us an opportunity
Speaker 1: to finalize the negotiations that are needed to get this
Speaker 1: thing all the way through. Signing the law to really
Speaker 1: unlease the capital to sitting on the sidelines in this space.
Speaker 3: Do you think the ethics agreement will be sufficient for
Speaker 3: the Democrats?
Speaker 1: I think at the end of the day it will be.
Speaker 1: I mean, I know that Democrats would like to see
Speaker 1: all sorts of bells and whistles associated with that ethics language,
Speaker 1: and there might be tweaks off of the draft just provided.
Speaker 1: On the Senate side, I think people broadly are open
Speaker 1: to looking at what those reforms are. I don't think
Speaker 1: anybody in the space wants bad actors in it, and
Speaker 1: don't want politicians to be profiting off of inside information
Speaker 1: while they're in office. But I think the language of
Speaker 1: this set of produced is actually pretty good. There may
Speaker 1: be adjustments to that by some of our Democratic colleagues,
Speaker 1: but I don't want to let that get in the
Speaker 1: way the broader progress that's needed by getting clarity through
Speaker 1: it across the line.
Speaker 2: Now, on the other side of the coin, the banks
Speaker 2: seem to be still fighting on the stable coin, yeald
Speaker 2: side of things. Do you anticipate that might be a
Speaker 2: big hurdle as well?
Speaker 1: In some ways yes, but in some ways no. I mean,
Speaker 1: this was a lot of the debate we had when
Speaker 1: Genius was originally passed for stable coin legislation, and this
Speaker 1: goes back to an earlier debate. Should we have moved
Speaker 1: a Genius alongside Clarity at the same time. That was
Speaker 1: my view. That's how it played out fair enough. But
Speaker 1: what we often see is when a bill goes through
Speaker 1: followed by a second item, that second item carries negotiations
Speaker 1: from the first one. And that's exactly what we're saying.
Speaker 1: We're seeing negotiations of Genius on the back of the
Speaker 1: Clarity Act, which is frustrating to a lot of us
Speaker 1: when we negotiate what's not in a bill. My hope
Speaker 1: is that that resolution can be reached. I think logical
Speaker 1: minds can agree on this space. Nobody wants to see
Speaker 1: deposit light from our banks. I think the rules and
Speaker 1: regulations are in there to prevent that. But at the
Speaker 1: same time, we want to make sure that innovation development
Speaker 1: is occurring here in the United States and making sure,
Speaker 1: in particular on the stable point side, that we have
Speaker 1: a regulatory framework to protect consumers. Stable points were existing
Speaker 1: before Genius, they'll continue to exist after Genius. The differences
Speaker 1: inside this regulatory framework, consumers are significantly protected. That's actually good. Obviously,
Speaker 1: for consumers, but it's also good for the industry because
Speaker 1: good actors rewarded by operating under this regulatory framework.
Speaker 3: Are members of the Senate and House monitoring the updates
Speaker 3: of crypto legislation that's getting passed in other countries.
Speaker 1: Well, very much so. I actually just had a meeting
Speaker 1: this week with members from the European Union discussing what
Speaker 1: legislation they're looking at. I've had conversations with our colleagues
Speaker 1: places from Chile and Argentina to Japan and South Korea
Speaker 1: as well, and so the whole world in many ways
Speaker 1: is watching what's taking place in the United States. And
Speaker 1: I remember having a conversation with a deputy finance minister
Speaker 1: of one of the major countries in the globe, and
Speaker 1: we had a large conversation and as we left, he
Speaker 1: said to me, Brian in the United States gets clarity done,
Speaker 1: You're going to take a lot of innovation development that's
Speaker 1: occurring in our country and move it to the United
Speaker 1: States of America. And I left and reflected and thought,
Speaker 1: that's in many ways, what we're trying to do is
Speaker 1: policymakers not to take it from other countries per se,
Speaker 1: but to get that innovation development to occur in the US.
Speaker 1: So many crypto developers, both financial capital as well as
Speaker 1: human capital, are still sitting in the sidelines outside the
Speaker 1: United States because policymakers in Washington can't get out of
Speaker 1: their own way by getting the Clarity Act all the
Speaker 1: way done and signing the law.
Speaker 2: Congressman, once this bill passes the Senate and then needs
Speaker 2: to go to the House, do you anticipate there may
Speaker 2: be similar hurdles that the Senate's currently facing in the House,
Speaker 2: or it might be a smooth process because you guys
Speaker 2: got a version of this past last year.
Speaker 1: My hope is that it's a smooth process. I believe
Speaker 1: it will be. Why because we're in the negotiations with
Speaker 1: the Senate. This is a bipartisan by cameral effort to
Speaker 1: get this legislative text done. Again, it's a handful of Democrats,
Speaker 1: so we need to get on board this bill. In
Speaker 1: the United States Senate, they need to get comfort in
Speaker 1: particular as they relates to the ethics provision. We have
Speaker 1: some language we got to get around DeFi as well
Speaker 1: as the interest rate piece, but the broad framework of
Speaker 1: the bill is actually reasonably agreed to. That's what gives
Speaker 1: me my optimism. And then, because this is by camera,
Speaker 1: in these negotiations, in many ways, lots of us are
Speaker 1: at the table. It's my hope that the package that
Speaker 1: the Senate passes is ready for floor action in the House.
Speaker 1: I don't want to promise that to be the case,
Speaker 1: because we want to read the text and review it,
Speaker 1: but by all means, we're part of this conversation with
Speaker 1: our colleagues of the Senate.
Speaker 2: Quick follow up to that, as part of timeline, I
Speaker 2: heard many people are saying we need to get this
Speaker 2: on by August seventh. I'm assuming past the Senate passed
Speaker 2: the House, and then President Trump can sign in later
Speaker 2: in August if he wants. But is the hard date
Speaker 2: August seventh?
Speaker 1: Last year I said it needed to be done by August,
Speaker 1: and so we've been dragging on this for quite some time.
Speaker 1: So broadly speaking, legislation, as you head into the election
Speaker 1: and there's you know, just over one hundred days between
Speaker 1: now and November three, it just gets harder and harder
Speaker 1: to reach agreements. It shouldn't be, but that's just the reality.
Speaker 1: And so I think a lot of us look to
Speaker 1: that August early August deadline as being a reasonable deadline
Speaker 1: for the Senate to act, because then the Senate will
Speaker 1: go home for a handful of weeks and then all
Speaker 1: of a sudden, we're into September and October before the election,
Speaker 1: And what I don't want to do is punt this
Speaker 1: to the backside of the election in a lane duck.
Speaker 1: So hopefully we see these negotiations move quickly. They can,
Speaker 1: but you know the proof will be in the putting
Speaker 1: as we watch the center over the next handful of days.
Speaker 3: What are your thoughts. I'm so curious on Brian Armstrong's
Speaker 3: common or ultimatum. I should say that if clarity doesn't pass,
Speaker 3: he'll just move coinbase offshore.
Speaker 1: Well hopefully that's not the case, but yeah, I'll let
Speaker 1: Brian Armstrong speak for himself. But I think broadly speaking,
Speaker 1: a lot of businesses are looking at it that way
Speaker 1: right either businesses that are currently offshore which are on
Speaker 1: the precipice of moving to the US, or worst case scenario,
Speaker 1: businesses that are in the US that will move offshore.
Speaker 1: It is so foolish and so frustrating that we can't
Speaker 1: get this done in across the line, because I think
Speaker 1: big picture, what Brian Armstrong's quote is referencing to is
Speaker 1: there's a lot of people who want to invest and
Speaker 1: innovate and develop in the United States, but the regulators,
Speaker 1: as controlled by members of Congress, aren't getting the policies
Speaker 1: finalized so that we can unlock this in the US.
Speaker 1: And so I remain concerned not only about maybe his business,
Speaker 1: but the industry large that will go back back into
Speaker 1: the days of really Gary Gensler, and people will be
Speaker 1: moving offshore, developing offshore rather than here in the United
Speaker 1: States under our values.
Speaker 2: Absolutely, we are in a global competition, and I think
Speaker 2: believe it was just this week Russia past crypto legislation.
Speaker 2: I believe the UK is moving their version through the parliament.
Speaker 2: The EU already has theirs in place, and they continue
Speaker 2: to iterate and find tune and so Congressman, hopefully we
Speaker 2: can get this done. It's so critical for jobs and
Speaker 2: innovation and the future of the United States.
Speaker 1: Absolutely, I mean this global competition is real. The United
Speaker 1: States in many ways one the Web two race. I mean,
Speaker 1: that's in many ways why we are the global leader
Speaker 1: in the tech space. We need to make sure that
Speaker 1: we maintain that level of dominance as we continue moving
Speaker 1: forward in the Clarity Act is going to be absolutely
Speaker 1: essential to make sure that the US is the epicenter
Speaker 1: of innovation development, in particular in the financial services space.
Speaker 3: I'm so curious, also, you've simultaneously been working on Clarity
Speaker 3: as well as the Insider Trading Act. Do you find
Speaker 3: that these two pieces of legislation are complimentary to one
Speaker 3: another with regard to ethics.
Speaker 1: In some ways? I think the Insider Trading Act that
Speaker 1: I just passed, the Stop Insider Trading Act, is really
Speaker 1: a focus and a look at Congress itself. There's a
Speaker 1: broad public concern that members of Congress are getting inside
Speaker 1: information and that might be in a position to leverage that.
Speaker 1: In the financial markets, insider trading is really difficult to enforce.
Speaker 1: It's against the law for anyone, including members of Congress,
Speaker 1: to use inside information and then make a trade. And
Speaker 1: the challenge, of course, is enforcing that. And so my
Speaker 1: solution says, let's just put a blanket ban on members
Speaker 1: of Congress from trading individual shares of stock while they're
Speaker 1: serving in Congress. The bill works that I was glad
Speaker 1: to see it pass with strong bipartisans support yesterday in
Speaker 1: the House. But the Broader Clarity Act is really a
Speaker 1: regulatory framework, but maybe it hits a simil or point
Speaker 1: of let's just have rules of the road that work,
Speaker 1: that we can enforce, that we can show people how
Speaker 1: to do it right. How do we enforce bad actors?
Speaker 1: And it's a general premise of mine that good actors
Speaker 1: in almost any space or any industry, they don't want
Speaker 1: bad actors in that space. And so my hope is
Speaker 1: we can get the Stop Insider Trading Actor across the
Speaker 1: line in the Senate, we can get clarity done as well.
Speaker 2: Does the build cover just stocks or there's a cover
Speaker 2: other assets like I could trade based on information I
Speaker 2: know oil or other commodities, and obviously cryptos has its
Speaker 2: own thing going on, but do you plan to add
Speaker 2: other assets into that umbrella.
Speaker 1: Progress in Washington is often made incrementally, and so I
Speaker 1: think this is a big step forward in the Stop
Speaker 1: Insider Trading Act. I am open to the conversations we've
Speaker 1: been having this with other other types of assets that
Speaker 1: people own. The key here is to get it right.
Speaker 1: As we began kind of exploring some of the commodities,
Speaker 1: talk to some of my colleagues who have family farms,
Speaker 1: and you want to make sure that somebody can, for example,
Speaker 1: hedge their soybean crop. There's nothing wrong with that. It's
Speaker 1: effectively needed. If you're going to be a modern farmer,
Speaker 1: you don't want to just take the price of soybeans
Speaker 1: on the day the truck pulls up to your farm.
Speaker 1: But at the same time, we don't want members of
Speaker 1: Congress sitting and pretending that they're day traders behind their
Speaker 1: desk making swaps or derivatives in for example, the oil space.
Speaker 1: Of course, any insider in any inside trading would be illegal, period,
Speaker 1: full stop. But broadly speaking, I don't think we want
Speaker 1: members of Congress making their living by doing day trading activities.
Speaker 1: And so let's just put in the blanket ban on
Speaker 1: individual companies shares the stock. Then let's look for other
Speaker 1: errors where we can reach that consensus that's needed to
Speaker 1: actually add to the ethics reform we just passed.
Speaker 3: I want to move on to tokenization. Can you tell
Speaker 3: us about the recent hearings on this and the move
Speaker 3: towards tokenization as the future of markets.
Speaker 1: Well, this is a great way to leverage technology to
Speaker 1: create massive efficiencies. And when we have efficiencies, if you
Speaker 1: believe in the free market like I do. The consumers
Speaker 1: are going to benefit by that, both by convenience but
Speaker 1: also by price. When we talk in the financial services
Speaker 1: space rit large, there is a huge opportunity here for
Speaker 1: twenty four to seven real time exchanges that you can
Speaker 1: carry a lot of metadata in these transactions that you
Speaker 1: would not have been able to do in the old days.
Speaker 1: And so some of this I step all the way back.
Speaker 1: We had a hearing last Friday based on I'm really
Speaker 1: on crypto, but broadly in this broader technology space. We
Speaker 1: went to Federal Hall in New York City. Federal Hall,
Speaker 1: if you may remember or may know, was where Congress
Speaker 1: first met in seventeen eighty nine, sitting on Wall Street,
Speaker 1: now adjacent to the New York Stock Exchange. We're talking
Speaker 1: about in that room is the beginning of the debate
Speaker 1: of should the states take on the should the federal
Speaker 1: government take on the debt of states that was issued
Speaker 1: to pay for the Revolutionary war? And you think about
Speaker 1: the financial decisions that were made in the technology that
Speaker 1: was needed back then to make those types of payments
Speaker 1: in the coupons, you go all the way up in
Speaker 1: the greenbacks issues. We head into the civil War. You
Speaker 1: get the thirty three and thirty four Act, and a
Speaker 1: lot of that language is based on what was available
Speaker 1: at the time shareholders held shares. You get all the
Speaker 1: way up into tokenization. There are massive efficiencies that we
Speaker 1: can operate with to create a better plumbing system. The
Speaker 1: United States has been the beneficiary of the best capital
Speaker 1: markets in the globe, and if we lean in and
Speaker 1: get the tokenization piece right, I think you will see
Speaker 1: more efficiencies in the US markets. Stronger US capital markets
Speaker 1: in the US capital markets are a massive benefit to
Speaker 1: innovation and development of new technologies here in the United States.
Speaker 2: Beyond tokenization, are there other use cases that you and
Speaker 2: the folks in the subcommittee are looking at for blockchain?
Speaker 2: Can it be using government and in different ways?
Speaker 1: Yeah? I think there is massive opportunities here. Businesses that
Speaker 1: will build on layer one blockchains that are hearing in
Speaker 1: New York go back to the same reference we had
Speaker 1: the company Helium. In Helium is building out opportunities for
Speaker 1: people to be able to share bandwidth and Wi Fi
Speaker 1: in leveraging blockchain technology to do that. We asked a
Speaker 1: point blank would your business operates if it wasn't for
Speaker 1: distributed Ledger technology, and the answer is no. And so
Speaker 1: I think innovative businesses like that. You think about a
Speaker 1: lot of the paperwork and filings from car registrations or
Speaker 1: land titles that are going to be innovative and businesses
Speaker 1: that will innovate in that space. And then there's a
Speaker 1: lot of stuff we've never thought about. I mean, one
Speaker 1: of my favorite things to think about is if you
Speaker 1: go back and watch back to the future too. They
Speaker 1: travel from the eighties into into the teens. They arrive
Speaker 1: in their you know, their flying cars and everything else,
Speaker 1: but they're taking phone calls in phone booths because the
Speaker 1: concept that you could hold a cell phone in your
Speaker 1: hand and talk to somebody without allowing attached to it
Speaker 1: was a concept that was hard to grasp. A lot
Speaker 1: of those technologies are being developed right now, but until
Speaker 1: they become consumer ready, a lot of folks that aren't
Speaker 1: living and breathing in this space aren't aware of them.
Speaker 1: And so I think a lot of this is going
Speaker 1: to be transformational technology to the benefit of Americans. But
Speaker 1: what we've got to get the regulatory framework right so
Speaker 1: these innovators and developers are here in the US.
Speaker 2: Once the Clarity actis passed, do you believe the next
Speaker 2: priority will be crypto tax legislation, and then you know,
Speaker 2: do you believe after that maybe bitcoin reserve its won't.
Speaker 1: Yeah, I'm opening. I'm very open to walking and schewing government.
Speaker 1: At the same time, I think we can move forward
Speaker 1: on the tax piece, and we can move forward and
Speaker 1: look at bitcoin reserve. Also, I think the tax piece
Speaker 1: is really important. So much of our legislation just was
Speaker 1: not built for the digital age. That's true in the
Speaker 1: regulatory space, which is clarity. It's also true in the
Speaker 1: tax space and providing rules of the road in the
Speaker 1: tax space so people know, for example, what is the basis,
Speaker 1: when is it a taxable event? Is mining and staking?
Speaker 1: When does the tax event occur? What happens if you
Speaker 1: make a donation of digital assets? How do we rule
Speaker 1: and regulate the value of that inside the tax code.
Speaker 1: That's really important to get right. Again, the more clarity
Speaker 1: lower case c clarity in this case that we're providing
Speaker 1: in that space, the better off we are, and more
Speaker 1: and more people business and businesses will be willing to
Speaker 1: engage and innovate in the space. We've got to clean
Speaker 1: a lot of this up. But I think the tax
Speaker 1: good needs to go really in real time here. It's
Speaker 1: time that we have this cleaned up.
Speaker 3: Well. Congressman brand Steele, thank you so much for your time,
Speaker 3: and thank you for all your hard work and efforts.
Speaker 3: I think I speak for Tony as well when I
Speaker 3: say we both you have both of our support.
Speaker 1: Thank you, Thank you both,