Speaker 1: Hey everyone.
Speaker 2: I'm Tony Edward and I'm Amanda Warcraft.
Speaker 1: And we're recording at the Salona Policy Summit today and
Speaker 1: joining us is Miller white House Levine, who is the
Speaker 1: CEO of the Salona Policy Institute.
Speaker 2: Miller, great to have you. Thank you for having me.
Speaker 1: Miller told spit about yourself and what led to the
Speaker 1: founding of the Salona Policy Institute.
Speaker 2: A bit of a long story.
Speaker 3: I'll try to keep it brief, but I originally got
Speaker 3: interested into crypto for I would say ideological reasons. So
Speaker 3: I was living in China twenty thirteen, twenty fourteen. I
Speaker 3: was very young, and it was a you know, I think,
Speaker 3: a formative moment in my life. And at the time,
Speaker 3: living in China, it felt very different than living in
Speaker 3: southern California, Los Angeles from a political perspective, like you
Speaker 3: can really feel the presence of the government there and
Speaker 3: I think a way that at least was not the
Speaker 3: same in the United States at the time twenty thirteen,
Speaker 3: twenty fourteen. So at the same time, these crazy expats
Speaker 3: in Beijing like you should think about this crypto called bitcoin,
Speaker 3: and I was like, oh, what's that? And it really
Speaker 3: grabbed me I think the idea that a technology can
Speaker 3: empower individuals via v institutions, be them businesses or governments,
Speaker 3: is a really powerful one and I think an outlier
Speaker 3: in the history of technological development over the last fifty years, honestly,
Speaker 3: So I think it's decentralization based on public blockchains is
Speaker 3: a very potent concept, and I think force in the
Speaker 3: world for individual empowerment. So that's why I originally got interested.
Speaker 3: I'm too stupid to be an engineer, so I have
Speaker 3: to do something less big brain, which is what brought
Speaker 3: me to policy work. So after college started working at
Speaker 3: the Blockchain Association for Kristen Smith, my current colleague then
Speaker 3: was that an organization called the DeFi Education Fund, which
Speaker 3: was really focused on DeFi specific and DeFi developer issues.
Speaker 3: And then last year, you know, we saw in my view,
Speaker 3: a vacuum and a need for ecosystem advocacy, not because
Speaker 3: of any anyone's like out to get Solona or any
Speaker 3: other ecosystem, but because policy decisions have to be based
Speaker 3: on technological understanding, and if that doesn't exist, you can,
Speaker 3: you know, things can go hey wire quickly. So we
Speaker 3: set up SBI to get after that problem and try
Speaker 3: to get you know, the good news about Salon out
Speaker 3: to policymakers around the world and about a year and now,
Speaker 3: can you give.
Speaker 4: Us the status of where things stand with those Salona
Speaker 4: spot ETFs. I know you were on Crypto and America
Speaker 4: not too long ago and you had mentioned the paperwork
Speaker 4: was filed that you definitely wanted to involve staking as
Speaker 4: part of that. But we're I know, there's kind of
Speaker 4: nuance and how because the SEC is pushing back on
Speaker 4: yielding as part of that launching these these ETFs, So
Speaker 4: where where do where do you stand with that? With
Speaker 4: the regulatory framework.
Speaker 2: Being what it is.
Speaker 3: So these spotytvs are already live, which is great news,
Speaker 3: and those launched in October. So I think that was
Speaker 3: the big, the big threshold the moment. And now there
Speaker 3: are specific issues around staking and how to treat that
Speaker 3: really for tax purposes is the big one within ETP products.
Speaker 3: So I think, you know, it gets complicated quickly, but
Speaker 3: they're like weird tax rules that need to be resolved
Speaker 3: such that ETPs can pass staking rewards back to their
Speaker 3: holders without it creating an insane tax burden. So I
Speaker 3: think that you know, it's it's kind of makes sense,
Speaker 3: Like it's not really a controversial policy change. It just
Speaker 3: has to get done by IRS to make it work.
Speaker 3: So I think that'll ab and it just you know,
Speaker 3: isn't super controversial. It's just very complicated on the tax side.
Speaker 3: And some of these things you have to think through
Speaker 3: the implications outside of crypto, like, okay, if we ask
Speaker 3: aaking rewards within ETPs, what's that gonna you know, unleash
Speaker 3: in traditional markets. I don't think they're those issues. So
Speaker 3: it's it seems like we're right on the CUSP. But yes,
Speaker 3: they did launch in October I believe, and it might
Speaker 3: have been September, but have have been training since and
Speaker 3: I think they're about eleven or twelve.
Speaker 1: Now, how's the Salona Policy Institute engaging with the SEC
Speaker 1: and the CFTC to get rule making and things along
Speaker 1: those lines.
Speaker 3: Yes, so rule making is important, Like the agencies can
Speaker 3: do a ton. There's a lot of focus on Congress
Speaker 3: and you know, Lord Willing, the Clarity Act will pass
Speaker 3: and we will not have to do you know, a
Speaker 3: ninth and tenth year of market structure debates because I'm
Speaker 3: sick of sick of them at this point. But there's
Speaker 3: a whole host of stuff that the SEC and CFTC
Speaker 3: are already working on that are squarely within their own authority.
Speaker 3: The two big ones that we've been focused or I
Speaker 3: suppose the efforts at CFTC and SEC we've been focused
Speaker 3: on I collectively refer to as the innovation exemptions. So
Speaker 3: on the SEC side, there was a big development this
Speaker 3: morning that's somewhat related, so it's good timing. But the
Speaker 3: vision is we have these amazing public blockchains that allow
Speaker 3: anyone in the world to participate in these markets, and
Speaker 3: any asset in the world should be able to be
Speaker 3: traded and purchased and used on these blockchains. That's inclusive
Speaker 3: of securities, tokenized securities, be it Apple stock or you know,
Speaker 3: Miller wants to issue debt in Miller Inc.
Speaker 2: You know, what have you, You should be able to
Speaker 2: do it.
Speaker 3: So the idea is the SEC needs to make that
Speaker 3: possible by tweaking their regulatory framework. So how can you,
Speaker 3: for example, have a stock tokenized stock in your cell
Speaker 3: posted ballet. How can you then go and use a
Speaker 3: DeFi protocol to trade it on a peer to peer
Speaker 3: basis with a counterparty? How does that fit within the
Speaker 3: existing regulatory regime. It looks a lot different than how
Speaker 3: trading happens on the New York Stock Exchange today, and
Speaker 3: so that's what the SEC is working through and on
Speaker 3: front ends, they answered a lot of those questions this
Speaker 3: morning under what conditions that is possible, so you know,
Speaker 3: they're really getting after it. So that's on the one
Speaker 3: side at the SEC, and we're hoping to do the
Speaker 3: same at the CFTC for on chain derivatives markets. Today,
Speaker 3: to trade derivatives on chain, you have to be an
Speaker 3: x US person, not not in the United States, and
Speaker 3: that shouldn't be the case. The CFTC wants to create
Speaker 3: a pathway to compliance such that if you want to
Speaker 3: go ahead and you know, trade derivatives or purchase derivatives
Speaker 3: on chain, you can do so alongside your traditional intermediaries
Speaker 3: or you know, centralized intermediaries. I think the SEC and
Speaker 3: CFTC are committed to giving consumers choice and they can
Speaker 3: engage with these products and use them in whichever way
Speaker 3: they're most comfortable. So those are the two big initiatives,
Speaker 3: you know. I think the SEC is on the brink
Speaker 3: of releasing this hopefully before before May. But we'll see CFTC.
Speaker 3: You know, they're really just getting getting started since cher
Speaker 3: Sealy was confirmed in December, So I think, you know,
Speaker 3: have a bit more time to a bit more would
Speaker 3: to chop, so to speak, but I think we'll move expeditiously.
Speaker 3: So it's you know, I have to pinch myself every
Speaker 3: time I talk about this because imagine like eighteen months
Speaker 3: talking about the SEC allowing US equities trading in in DeFi,
Speaker 3: and you know someone would laugh at you, if not
Speaker 3: just you know, shoot you on the spot.
Speaker 4: From where you sit. Where does Salona benefit from this
Speaker 4: new regulatory framework compared to other blockchains?
Speaker 3: Well, you know why I started using Solana and got
Speaker 3: interested in it, It's because it's fast and cheap. Like,
Speaker 3: as an individual, I'm not sending or engaging in transactions
Speaker 3: that are tens of thousands of dollars, and so a
Speaker 3: two dollars gas fee or a three dollars gas fee
Speaker 3: really mattered to me as an individual DeFi user, and Solona,
Speaker 3: you know, seeks to solve that problem by creating a
Speaker 3: super fast, super high bandwidth blockchain that anyone can use
Speaker 3: for fractions of So that's why I should are using Solana.
Speaker 3: And I think, you know, my thesis is not that
Speaker 3: any of these regulations ultimately benefit Solana in a way
Speaker 3: that is not in the interests of like another ecosystem.
Speaker 3: But I think Solana wins on its competitive advantages via
Speaker 3: VI these other chains for the same reasons that you know,
Speaker 3: I chose to be using it. So I think that
Speaker 3: as all of these new businesses and investors are able
Speaker 3: to operate on chain, they will come to a similar conclusion,
Speaker 3: which will of course be good for Solana.
Speaker 2: Miller Claritiac.
Speaker 1: Do you think that passes this year or are we
Speaker 1: heading into twenty twenty seven.
Speaker 2: I think it's going to pass this year.
Speaker 3: I have never been more hopeful, and I you know,
Speaker 3: I know, I've this is my first time on the podcast,
Speaker 3: but that has not been my view over the last
Speaker 3: eighteen months. I was a bit more skeptical than most,
Speaker 3: but I've had a change of heart and it really
Speaker 3: does feel like the momentums there, all the pieces are
Speaker 3: in place. As Patrick Wick just mentioned on stage, it's
Speaker 3: you know, a list of fifteen critical issues has been
Speaker 3: welled down to two or three critical issues. I didn't
Speaker 3: think we were going to get through you know, ten
Speaker 3: of those fifteen. So I haven't proven wrong, and I
Speaker 3: think the momentums there, it's the right time, so I hope,
Speaker 3: I hope it gets done.
Speaker 2: That would be awesome too.
Speaker 4: Yeah, Millard, thank you so much for your time. It
Speaker 4: was great having you.
Speaker 2: Thanks for having measure. Thank you.
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