Speaker 1: The one criticism I give to a lot of the
Speaker 1: regulators at the time who are now leaving, like Michael
Speaker 1: Sue from the OCC who live through the financial crisis,
Speaker 1: is comparing crypto to the financial crisis, which to me
Speaker 1: is like the crime of the century. How can you
Speaker 1: say at technology that's showing new ways of conducting banking,
Speaker 1: of having possibilities. As you know, there are people who
Speaker 1: lose money on meme coins, but there are a lot
Speaker 1: of people who've created wealth, intergenerational wealth for themselves. How
Speaker 1: can you say that's a financial crisis.
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Speaker 3: Welcome into the.
Speaker 2: Thinking Crypto Podcast. I'm your host, Tony Edward and my
Speaker 2: guest today is Jason Brett, who is a former US
Speaker 2: regulator at the FDIC and a managing director at Keybridge Advisors. Jason,
Speaker 2: great to have you on.
Speaker 1: Thanks so much, Tony, appreciate you having me. Love your show.
Speaker 2: Jason, you and I met at the Digital Chamber event,
Speaker 2: if I remember correctly, I think that was the first
Speaker 2: time we met. And your background is fascinating, spending time
Speaker 2: at the FDIC, spending time consulting for different crypto companies
Speaker 2: going back years.
Speaker 3: So I think your perspective.
Speaker 2: On everything that's happening in this market is going to
Speaker 2: be very valuable and I'm excited to chat with you
Speaker 2: and maybe we'll get kick off with your background.
Speaker 3: Tell us where you're from and what's your professional background.
Speaker 1: Sure, sure, yeah, I'm from North Jersey originally, and then
Speaker 1: I moved to Washington, d C. After I worked in
Speaker 1: banking for a little bit in Wall Street, Morgan Stanley
Speaker 1: and Washington, d C. Is really where I caught my
Speaker 1: stride because I ended up working for the FDIC while
Speaker 1: getting my MBA in the Division of Finance in two
Speaker 1: thousand and eight when it was very quiet, and then
Speaker 1: literally the timing meant that I got involved in all
Speaker 1: of these different crazy things, including the INDIMAC BAC failure
Speaker 1: in California, where the division I was in had to
Speaker 1: fly out to California to help with taking over that
Speaker 1: bank because it was it was the largest bank failure
Speaker 1: of its time under the FDAC, and then shifting back
Speaker 1: to that, I then was sent over to the Capital
Speaker 1: Markets Division to continue the work I was doing there
Speaker 1: in the fall, and as it turned out, then Lehman
Speaker 1: Brothers fell in September, and so there was a little
Speaker 1: bit of a joke of don't follow Jason around their
Speaker 1: racetrack because that department was directly responsible everything with Lehman
Speaker 1: and then everything else aig. So I got to work
Speaker 1: on some incredible things. I had really within one year,
Speaker 1: something that I think for a lot of people, like
Speaker 1: you know, lucky to touch a few of those subjects
Speaker 1: in twenty years. So I was very fortunate to be
Speaker 1: where I was, although it was very you know, not
Speaker 1: fortunate for the country, but I saw all of these
Speaker 1: things happening in real time. And then from there it
Speaker 1: really opened my eyes before experiencing bitcoin or crypto, to
Speaker 1: seeing in my mind the dangers of our current financial system.
Speaker 1: And now everybody talks about that regularly, like the Federal
Speaker 1: Reserve they're doing this, But at the time, no one
Speaker 1: was really talking about that in two thousand and eight,
Speaker 1: two thousand and nine the way we do today. So
Speaker 1: I felt kind of alone. You know, it was like,
Speaker 1: am I the only one looking at this? Like this
Speaker 1: doesn't seem right? Like what are we really relying on
Speaker 1: to keep this financial system going? I mean, how much
Speaker 1: gum do I have to pull off the bottom of
Speaker 1: my shoe to put on the building to keep the
Speaker 1: you know, financial wheels turning. I mean, he had Ron Paul,
Speaker 1: which was great. So I say all that to say
Speaker 1: is I continue doing regulating for five or six years,
Speaker 1: and then when I discovered bitcoin, actually went to work
Speaker 1: for the Chamber of Digital Commerce in twenty sixteen, where
Speaker 1: was their Director of Operations, helping with things like policy.
Speaker 1: And then I work for a consensus in the Ethereum
Speaker 1: community here in the States, helping them with developing their
Speaker 1: government policy strategy. And then since then I've been moving
Speaker 1: on doing you know, advising the crypto companies. And really,
Speaker 1: i'd say feeling so fortunate, Tony, because I see all
Speaker 1: the younger people now I'm a little older, but like
Speaker 1: people in their twenties and thirties kind of where I
Speaker 1: was in the financial crisis, who are seeing what I
Speaker 1: saw when I was alone and talking about it publicly.
Speaker 1: So it's almost like a treat. Just sitting at a
Speaker 1: conference or hearing people discuss the problems of our current
Speaker 1: financial system and how to fix it has really been
Speaker 1: for me a joy.
Speaker 3: That's amazing.
Speaker 2: And you know, going back to when you're at the FDIC,
Speaker 2: you got thrown into the fire man. I can't imagine
Speaker 2: having to deal with these bank collapses, and like you said,
Speaker 2: no one thought that was possible before that two thousand
Speaker 2: and eight crash, right, everybody thought everything is fined, a
Speaker 2: housing market will never collapse. The banks are our biggest institution.
Speaker 2: Zerre fine, and then it all fell apart. I can't
Speaker 2: imagine what that was like. And I mean, were you
Speaker 2: guys all stressed of the FDIC? Was there a lot
Speaker 2: of pressure and things like that?
Speaker 1: Yeah? Yeah? And actually, well exclusive for you, I'm actually
Speaker 1: finishing up my first book that I've ever written. That'll
Speaker 1: be it's called like From Regulator to Rebel, kind of
Speaker 1: exploring how Bitcoin and found opportunities within the financial crisis.
Speaker 1: I don't know if that's going to be the exact title,
Speaker 1: but the story I have to tell I think is
Speaker 1: so important I want other people to hear it. It's
Speaker 1: not even really about me and what I want to write.
Speaker 1: It's understanding what that stress was like. So, like, just
Speaker 1: to give you one example, right, if you remember what
Speaker 1: Covia Bank and Washington Mutual both failed, I don't. I
Speaker 1: remember that they failed back to back in the two
Speaker 1: thousand and eight financial crisis, really big banks, and we
Speaker 1: had before that happened. We had to do these analyzes
Speaker 1: and I was just the junior person, but the senior
Speaker 1: people were told, hey, spend the weekend analyzing can the
Speaker 1: deposit Insurance Fund for the FDIC that has billions of
Speaker 1: dollars support the fact that Washington Mutual and Wacovia might
Speaker 1: fail at the same time. Well, deposit Insurance Fund still
Speaker 1: remind us people every day, only covers one percent of
Speaker 1: the deposits in the whole banking system. So it's not
Speaker 1: like it doesn't cover all the dollars. Covers one one
Speaker 1: hundredth of everything. And so the analysis was that the
Speaker 1: Deposit Insurance Fund would survive, but only if Wall Covia
Speaker 1: and Washington Mutual were bought by bigger banks, if the
Speaker 1: fund had to support it. And so that to me
Speaker 1: showed there was this incentivization of making the bigger banks
Speaker 1: bigger because there was these shotgun marriages. If you have
Speaker 1: this bank like Washington Mutual that's going to fail, we
Speaker 1: can't just let it fail. You have to just find
Speaker 1: a buyer like Jamie Diamond or someone to come in
Speaker 1: and buy it. But I say that I explain that
Speaker 1: because not only was their stress or disbelief, but I
Speaker 1: still remember to this day the senior folks grumbling and
Speaker 1: just infuriated that they had to spend the weekend away
Speaker 1: from their family saying things like what, COBE is never
Speaker 1: going to fail, Like they'd say, it's like you, Tony, like,
Speaker 1: WELLKBE is not going to fail. I don't even know
Speaker 1: what I'm doing here. This is so stupid, you know.
Speaker 1: And it was just like wow, you know, because when
Speaker 1: I took it back, I was I was like, yeah,
Speaker 1: I guess this is stupid. But then three weeks later, well,
Speaker 1: COVID failed and Washington mutual the exact thing that they
Speaker 1: were told to analyze. So there was a lot of
Speaker 1: frustration and then just complete disbelief. And then when something
Speaker 1: happens that you don't believe can happen, like you know,
Speaker 1: Bitcoin hitting on hundred thousand dollars or something, you're a
Speaker 1: little off guard for a while. You're kind of on
Speaker 1: shaky territory. So then when stuff just keeps hitting you
Speaker 1: and hitting you, and it's like what we see these
Speaker 1: disasters like hurricanes and everything, it just gets worse and worse,
Speaker 1: to the point that literally people thought in September like
Speaker 1: they felt like the building was going to fall down
Speaker 1: pretty soon, you know, they got that close, I think
Speaker 1: to the financial markets seizing up.
Speaker 2: So yeah, and I'm I'm definitely looking forward to reading
Speaker 2: your book because I'm sure it's some interesting stories in there,
Speaker 2: because that was such a crazy time, and you know,
Speaker 2: a lot of people look back to that and say,
Speaker 2: you know, did the real economy die at that point?
Speaker 3: And will America be the same?
Speaker 2: And I'm optimistic that hopefully bitcoin, blockchain and all these
Speaker 2: things can help solve those problems. We don't have a
Speaker 2: repeat of them, and we can come out of the fire,
Speaker 2: so to speak, and already ashes rise on the ashes,
Speaker 2: more stronger, with a better financial system that doesn't have
Speaker 2: all those pitfalls in it.
Speaker 1: Yeah. I get really emotional about this because a lot
Speaker 1: of people really don't realize that. Ben Bernaki, who was
Speaker 1: the chair of the Federal Reserve at the time, definitely
Speaker 1: gets credit for saving us out of that crisis. But
Speaker 1: he was a man who followed the Great Depression, and
Speaker 1: he was a student of the Great Depression and the
Speaker 1: Great Depression. The problem was the credit markets seized up,
Speaker 1: and so that's why things got worse and worse. So
Speaker 1: his goal, or his modus operandi, was to make sure
Speaker 1: that this credit markets didn't seize up during that timetable.
Speaker 1: Now that's a positive thing. Again, I give him credit
Speaker 1: for that. But the unintended consequence of that is I
Speaker 1: think what we're living with today because you saw the
Speaker 1: Federal Reserve come out with so many programs and beloaded
Speaker 1: their balance sheet to make sure that credit markets didn't
Speaker 1: seize that it's like we're left with like a bruise
Speaker 1: in our arm that's still bleeding, you know, and it's
Speaker 1: now transformed into that was the solution that we came
Speaker 1: at this crisis from. We'll never know if there was
Speaker 1: another way to go about solving the crisis, and we're
Speaker 1: still living with what our very potential dire consequences to
Speaker 1: our economy because the size of the FED now has
Speaker 1: gotten so large and still today, I don't think that's
Speaker 1: changed among government officials. Like we had a financial crisis tomorrow,
Speaker 1: I think we still try to handle it the same way.
Speaker 1: I don't think we do something different.
Speaker 2: But Jason is that like there is no other option
Speaker 2: because the world is so financialized, so globalized, and our
Speaker 2: markets are so connected, and the only way in this
Speaker 2: Fiat system. And it goes back to the root of
Speaker 2: the Fiat system. It's not on a goal standard. This
Speaker 2: is what you have to do unless you move to
Speaker 2: some sort of of hard money system. With blockchain, we
Speaker 2: have more transparency where you can weed out the fraud,
Speaker 2: you can weed out the insane leverage that is being
Speaker 2: piled up and people are doing things they shouldn't. Until
Speaker 2: we get to that point, this is the Fiat SYSM
Speaker 2: and they have to build it out because if they don't,
Speaker 2: it collapses, and it could potentially collapse society because everybody's
Speaker 2: retirement is wrapped up in these assets. So if you
Speaker 2: let the collateral the assets go to zero, it's game over.
Speaker 1: That's a great point. I totally agree with you. I
Speaker 1: don't think that there's any other way to handle it either,
Speaker 1: not on top of the fact that we don't really
Speaker 1: have another game plan. I mean, we do have sort
Speaker 1: of the bitcoin maximalists and the focus on what we
Speaker 1: could do with sort of the Austrian method, but we
Speaker 1: also what I would challenge the bitcoin maximalists to do.
Speaker 1: And I'm probably gonna get a lot of hate on
Speaker 1: x nown for saying this, to come up with what
Speaker 1: the credit system looks like in that world, right, because
Speaker 1: there's a fundamental concept that does work in the US,
Speaker 1: which has to do with as dollars come into a bank,
Speaker 1: that's at least how we today come up with mortgages
Speaker 1: and the ability people borrowing and credit. So is it
Speaker 1: the fiscal responsibility of credit? How do we manage that?
Speaker 1: The truth is we've had a financial crisis every seven
Speaker 1: or eight years, you know, we haven't had one in
Speaker 1: a while. But also after the Great Depression there wasn't one.
Speaker 1: There were some aftershocks, like to me, I think Silicon
Speaker 1: Valley Bank, and those were sort of an aftershock of
Speaker 1: two thousand and eight. So han't yet really seen what
Speaker 1: the next financial crisis might look like. So they're not abnormal.
Speaker 1: It's what happens in the FIAT world. And that's at
Speaker 1: least why fundamentally they thought to put things like the
Speaker 1: Federal Reserve and others in place. What's happened, though, I
Speaker 1: think is that you've now seen, and this is a
Speaker 1: challenge for the FEDS, is people who are openly criticizing
Speaker 1: the system on a regular basis, right, and also coming
Speaker 1: up with and it's not just you know, the bitcoin
Speaker 1: maximalist right coinbase is throwing daggers at the FDIC. Right,
Speaker 1: they're suing the fdi C, they're pulling Foyer requests. I
Speaker 1: cannot tell you how unheard of that is that a
Speaker 1: non bank is pressing one of the prudential federal regulators.
Speaker 1: And I see that as a good thing because I
Speaker 1: think there needs to be a shake up in how
Speaker 1: they're doing business, particularly with the reputation risk. That's something
Speaker 1: that camels that has evolved into something that's really bad.
Speaker 1: But anyway, to your point, though, I really agree fundamentally
Speaker 1: that not only is there not you know, not only
Speaker 1: would this be the way we would handle another crisis
Speaker 1: today as we did in two thousand and eight, but
Speaker 1: there really there aren't many other options on the table.
Speaker 2: Yeah, And I think going back to you notice much
Speaker 2: better than I do. It's not that people had mortgages
Speaker 2: or fractional reserve banking. It was the abuse of it, right,
Speaker 2: they started giving bad mortgages to people. But yes, you
Speaker 2: know there was the A category a great mortgages, right,
Speaker 2: and but then there was like the d N the
Speaker 2: C or C and D right the level where no income.
Speaker 3: No docks the abuse of it.
Speaker 2: But and then the regulatory agencies, I don't know why
Speaker 2: didn't catch it or what was happening there, and then
Speaker 2: the grading agencies were a part of it.
Speaker 3: So it was just human behavior playing out.
Speaker 2: And I keep going back to, you know, maybe when
Speaker 2: all this stuff is on the blockchain, but with what
Speaker 2: kind of Elon's trying to do now, I'm not sure
Speaker 2: it's going to stop everything, because things happen in life,
Speaker 2: but it will help curb a lot of that from happening,
Speaker 2: the abuse and that oh I'm gonna slip a C
Speaker 2: note to this regulatory agency, let them grade me higher
Speaker 2: and and you know, get away with it. Maybe that
Speaker 2: those things will stop.
Speaker 1: Yeah, I think it's important to remember back in eight
Speaker 1: there was not a lot. It was very opaque understanding
Speaker 1: the derivatives. So when I look back now, it's very
Speaker 1: easy to see because I had to calculate all the
Speaker 1: derivatives and the exposure with AIG when AIG was about
Speaker 1: to fail, and it was very hard to try to
Speaker 1: dig into what was in all of these products. So
Speaker 1: to the degree that blockchain could help reduce that opacity
Speaker 1: and allow people to see more into what they're buying,
Speaker 1: like up front, that might help determining things. But then
Speaker 1: you need the regulators, the people who are hopefully not
Speaker 1: going to take the C notes to actually be responsible,
Speaker 1: or the ratings agencies to you know, really enforce that
Speaker 1: or highlight that, right, because what if you have a
Speaker 1: quote unquote captured blockchain, like a permission blockchain that is
Speaker 1: regulated and it's from like, you know, let's call it
Speaker 1: Moody's blockchain or whatever, sorry Moody is, you know, like
Speaker 1: and and they're doing things in a way, but it's
Speaker 1: coded in a way where it doesn't quite really show
Speaker 1: you everything. So how do you get to the underlying assets?
Speaker 1: So I think the connection between when you you know,
Speaker 1: tokenize something right like or whatever, you need some kind
Speaker 1: of verification system and you need to have that verified
Speaker 1: maybe on chain is maybe something that we can start
Speaker 1: to do, have independent reviewers you know, of that process.
Speaker 1: And I think, look, there's always always going to be abuse.
Speaker 1: People always find cracks in the system, but that is
Speaker 1: going to take just the fact that we can see
Speaker 1: it better will reduce that possibility of having this huge
Speaker 1: buildup of as you say, all this B and C
Speaker 1: stuff under the A stuff and we think it's fine,
Speaker 1: and then you know, leading at least to another issue
Speaker 1: in the financial crisis in two thousand and eight was
Speaker 1: you know, the credit to fault swaps, right, because then
Speaker 1: people were taking on insurance on the fact that the
Speaker 1: bonds were going to fail, and then there were short
Speaker 1: selling companies like City and if you remember, then SEC
Speaker 1: had to come in and stop the short selling for companies,
Speaker 1: which I still find to this day very interesting because
Speaker 1: the SEC chairman at the time said that was if
Speaker 1: that was, he regrets that decision and he will for
Speaker 1: the rest of his life stually interceded in the financial
Speaker 1: markets and stop people from allowing to short specific stocks
Speaker 1: because they were in the category of banks. Hmm.
Speaker 2: Yeah, there's so many levels to this because it's a
Speaker 2: human aspect. You know, bad actors will do bad things
Speaker 2: human beings. Obviously we're not infallible, and so it's tricky.
Speaker 2: But to your point, if we can progressively raise the
Speaker 2: standard with blockchain technology, would be in a better place.
Speaker 3: So let's talk about operation choke point two point zero.
Speaker 3: I was thinking, so I was.
Speaker 2: Salivating about asking you about this, but given your perspective
Speaker 2: and your background at FDIC, because we're seeing information come
Speaker 2: out that the FED, the FDIC and so forth, we're
Speaker 2: kind of trying to block crypto. I don't know if
Speaker 2: they Elizabeth Warren and her cronies were part of trying to,
Speaker 2: you know, stop or could the collapse of Silicon Valley
Speaker 2: Bank and debanking crypto.
Speaker 3: What are your thoughts on this whole situation.
Speaker 1: Yeah, well, it's funny by the way, that I'm former
Speaker 1: FD I see because I've talked with folks. In fact,
Speaker 1: I was at conference a couple of years ago and
Speaker 1: I was at a table chatting with Nick Carter and
Speaker 1: Nick Carter and you know, Austin Campbell, the real like
Speaker 1: leaders on this stuff. We had a good conversation. I
Speaker 1: explained my background. I was playing some things, and as
Speaker 1: we left the table, Nick said to me, you know,
Speaker 1: I really don't like the FD I see that much.
Speaker 1: And I was kind of like, you doesn't like me
Speaker 1: that much because I wasn't I see, But I was like,
Speaker 1: point taken, and now I could see, Yeah, you really
Speaker 1: didn't like the FD I see that much with what
Speaker 1: you you know, you know shown. But the truth is,
Speaker 1: though Operation Showpoint, the first one was very much covert, right,
Speaker 1: It was not known what was happening. This was really
Speaker 1: out in the open. I mean, you had the Biden
Speaker 1: administration saying that there were dangers of crypto in the
Speaker 1: financial banking processes. So I think a lot of people,
Speaker 1: a lot of regulators took the message from up high
Speaker 1: and said we need to do things to keep this
Speaker 1: stuff out of the system, like we're just not comfortable
Speaker 1: with it and we feel like it could lead to
Speaker 1: a financial crisis. The one criticism I give to a
Speaker 1: lot of the regulators at the time who are now leaving,
Speaker 1: like Michael Sue from the occ who live through the
Speaker 1: financial crisis, is comparing crypto to the financial crisis, which
Speaker 1: to me is like the crime of the century. How
Speaker 1: can you say at technology that's showing new ways of
Speaker 1: conducting banking, of having possibilities. As you know, there are
Speaker 1: people who lose money on meme coins, but there are
Speaker 1: a lot of people who've created wealth, intergenerational wealth for themselves.
Speaker 1: How can you say that's a financial crisis? Like I
Speaker 1: understand that it's new and technology does disrupt it. And
Speaker 1: that was my thought about it is it's not like
Speaker 1: a financial crisis, right, But there's these new technologies. How
Speaker 1: are the banks going to adapt to it? So the
Speaker 1: fact that you had people who use their authority to
Speaker 1: simply shut out a certain technology and therefore shut out
Speaker 1: certain people trying to build in this country, is abhorrent.
Speaker 1: I think the people that did that, not necessarily the
Speaker 1: people on the ground, but certainly the supervisors of each
Speaker 1: of these offices if they were had a condoning a practice,
Speaker 1: whether it was written or not, telling to like not
Speaker 1: bank people or d bank people particularly. You know, you
Speaker 1: put in two two million dollars in the bank, excuse
Speaker 1: me for your company, whether you're like Anchorage Digital, you're
Speaker 1: a bank, and then you pull it the next day,
Speaker 1: so and you realize very quickly how much power the
Speaker 1: banks have over you in that regard. So look, I'm human.
Speaker 1: People the fd I, c N Federal Reserver are human too.
Speaker 1: And I like to tell people, you know, don't hate
Speaker 1: the players hate the game. The game is really set
Speaker 1: up in a way where, because of the ratings, if
Speaker 1: I go into your bank, let's say you're the CEO
Speaker 1: of a bank, it's camels, right, So I have to
Speaker 1: analyze what your capitalism of your bank, what your assets are,
Speaker 1: your liquidity, your sensitivity, interest rate, risk, earnings a M.
Speaker 1: You know the management part. Now, how do I evaluate
Speaker 1: you as a management part? Right? That's very subjective. That's
Speaker 1: where the reputational risk creeps in because I could say
Speaker 1: Oh yeah, he's got enough earnings, you know, liquidity's good,
Speaker 1: got enough capital, So the bank should survive, because that's
Speaker 1: all it is is test of how you're going to
Speaker 1: move forward. But you know, from a management perspective, this
Speaker 1: guy's banking, you're banking crypto companies. He's insane. That's it.
Speaker 1: We're gonna we're going to revoke your banking charter. And
Speaker 1: I come and tell you that, and you's like, WHOA.
Speaker 1: I like my bank. I don't want to lose my bank.
Speaker 1: It's my living you know. Uh, And I have the
Speaker 1: board of directors. Maybe it's a family run bank. And
Speaker 1: then you're basically faced with a choice that I've given
Speaker 1: to you, which is get rid of a few customers
Speaker 1: or I pull your charter, and that's there of ours.
Speaker 1: That's that's the game. I'm saying that where we should
Speaker 1: hate the way this game has set this up for
Speaker 1: that kind of subjective judgment that comes into how banks
Speaker 1: get run in this country, and it's terrible.
Speaker 2: Yeah, and Jason, to that point, that's great insight. I
Speaker 2: was talking to someone about this and I thought, and
Speaker 2: I don't want to sound conspiratal, but I thought of
Speaker 2: the FED and the people, the treasury and so forth,
Speaker 2: almost doing this to slow this acid class down because
Speaker 2: they don't see they can't see everything with what's happening.
Speaker 2: They're not plugged into the blockchains. And if you're controlling
Speaker 2: the currency, right, you're the fed of your treasury and
Speaker 2: so forth. And money's going to bitcoin, in different crypto assets,
Speaker 2: into stable coins. That's pulling powerway and control away from you,
Speaker 2: and you could.
Speaker 3: Get out of hand.
Speaker 2: Don't get me read I see there from their perspective
Speaker 2: how that could get out of hand, and then you
Speaker 2: have collapses happen like FTX and much more. Elizabeth Warren,
Speaker 2: Gary Gains, do your job. That's not that's not a
Speaker 2: public conversation. But is that a conversation that could have
Speaker 2: happened that, hey, let's slow this thing now until we
Speaker 2: can get a grasp of it and put regulations in place.
Speaker 1: Yeah, I think that's that's certainly probable that those types
Speaker 1: of conversation happen. What I really agree with with Coinbase
Speaker 1: and Ripple and the rest of the crypto folks very
Speaker 1: much as an ext regulator, and I don't like to
Speaker 1: beat up on another regulator too badly. But Harry Genser
Speaker 1: was really out of line in a lot of ways,
Speaker 1: Like with the two thousand and eight financial crisis, it
Speaker 1: was the FED US at the FDIC and the OCC
Speaker 1: that figured out that Lehman had to go bankrupt. That
Speaker 1: that was, you know, the end, and so they picked
Speaker 1: It's in the movie too, It's in the Too Big
Speaker 1: to Fail movie. They pick up the phone and they
Speaker 1: tell the SEC chair what to do because the SEC
Speaker 1: is this really just this backwater agency. They don't really
Speaker 1: have anything to do with banking and the financial markets.
Speaker 1: They have to do with if you're going to fundraise
Speaker 1: for your company, all that kind of thing. But so
Speaker 1: there was a lot of scope creep that I saw,
Speaker 1: you know, under Gary Gensler, and I think that was
Speaker 1: to your point probably that conversation of you know, slow
Speaker 1: it down, and he slowed it down for some of
Speaker 1: the banking regulators with SAB one twenty one, even though
Speaker 1: that was so out of range. I mean, I think
Speaker 1: Powell was very diplomatic when he said it surprised us
Speaker 1: to see the SEC way in this way because they
Speaker 1: were thinking about it a different way. What I think
Speaker 1: is important with looking at the way how the bank's
Speaker 1: operated now and what their decision matrix is is there's
Speaker 1: a great essay and it's about like what is a bank?
Speaker 1: And it's from the Federal Reserve, Like how do you
Speaker 1: define a bank? Right? And the few principles of what
Speaker 1: you define as a bank? And this is so important
Speaker 1: is one of the definitions they give it to it
Speaker 1: is it's the transmission. It's the transmission for the engine
Speaker 1: of the US economy, for monetary pol so in other words,
Speaker 1: if rates go up or rates go down, it's like
Speaker 1: they have a car and they're tuning it up as
Speaker 1: to how fast or slow they want the economy to run.
Speaker 1: So banks are like a public utility, right, They're critical
Speaker 1: to the way we operate. So they have to be
Speaker 1: able to provide that transmission or that you know, runway.
Speaker 1: So we can see how consumers are spending. We can
Speaker 1: push consumers to spend more. We can get businesses to
Speaker 1: borrow more, which sounds very manipulative right when you talk
Speaker 1: about it, but that's the control mechanism they have. And
Speaker 1: with stable coins in crypto, I think they're looking at
Speaker 1: is we don't know that we're going to have this
Speaker 1: kind of control because there isn't that bank there isn't
Speaker 1: that intermediary? They're these computer programs. I think were they
Speaker 1: able to understand how they could do the things they
Speaker 1: can do with a bank today, like control with rates,
Speaker 1: you know, the transmission of the US economy. FDIC insurance,
Speaker 1: which is also a definition for a bank, and it's
Speaker 1: something that Katel Long really struggled with Custodia and that
Speaker 1: was very unfairly treated on the idea of not being
Speaker 1: having the insurance from fdi C to be considered a bank.
Speaker 1: Is it comes down to to me, is at least
Speaker 1: amongst the regulators and how we have discussions. I think
Speaker 1: we need to have more of these discussions and forums
Speaker 1: with the regulators now on definitions what do you define
Speaker 1: as a bank? Out of the two thousand and eight
Speaker 1: financial crisis, the biggest definition that everybody argued about was
Speaker 1: what's the securitization? Like what does that mean? What does
Speaker 1: it mean when you take a mortgage backed security and
Speaker 1: you put it in Like, what's the definition of that term?
Speaker 1: Should it be on the bank's balance set? Should it
Speaker 1: be off? What's in it? What's not in it? How
Speaker 1: do we define how do we rate it? You know?
Speaker 1: All these things and I think now we're at the
Speaker 1: point with all the dbanking and the things on. Regulators
Speaker 1: think we're on a point where it's not The new
Speaker 1: word of the twenty twenty five is what is a bank? Yeah?
Speaker 3: Great points.
Speaker 2: And then as you're saying that, you know when you
Speaker 2: talked about control. It's funny how things happen because now
Speaker 2: Wall Street's here, they have etf rappers. So now the
Speaker 2: government can see how much crypto is going into these
Speaker 2: etf rappers. It's being reported in SEC filings. Stable coin
Speaker 2: legislation's coming, I'm assuring, I'm assuming all of these stable
Speaker 2: coin issues are gonna have to plug in to the
Speaker 2: government in some way and report to defend the treasury.
Speaker 2: Here's how much we're issuing, here's how much treasury bonds
Speaker 2: and all these things we have. And then exchanges are
Speaker 2: going to come into compliance with KYCAML. That's already happening,
Speaker 2: some of it globally. So it seems like the infrastructure
Speaker 2: is being built for the control. So after the four
Speaker 2: years of massive lawsuits and battles, all of a sudden
Speaker 2: with tradfy here, it seems things are opening up again.
Speaker 2: I don't want to get conspiratle but it's just I
Speaker 2: sit back and I look at this, and I'm like,
Speaker 2: of course, of.
Speaker 1: Course, yeah, yeah. Well, I think we're at an interesting
Speaker 1: inflection point right with the new administration, because we're having
Speaker 1: newer people come in and doing regular and there's a
Speaker 1: lot of openness about crypto and stable coins. You know.
Speaker 1: I think because people thought we were moving into this
Speaker 1: deregulated process, there'd be like that people could kind of
Speaker 1: start to do whatever they want. I think we're kind
Speaker 1: of witnessing that with the mean coin mania. It's kind
Speaker 1: of like that this this space has always been the
Speaker 1: wild West. By the way, aren't really their rules anyway?
Speaker 1: Are ready to find what we can do with crypto.
Speaker 1: So if you don't realize you're already in the wild West,
Speaker 1: if you're buying a specific coin, or you don't know
Speaker 1: why you don't have protections, like sorry, but wake up,
Speaker 1: you know you're at this is the wild West right now.
Speaker 1: And it got even wilder because you had a new
Speaker 1: sheriff in town who basically said, Hey, it's my rules
Speaker 1: and guess what I'm an issue my own meme token.
Speaker 1: You should buy what I'm doing. So it changes the
Speaker 1: whole game, right, and so you know, you kind of
Speaker 1: have this new atmosphere, and I think what you're probably
Speaker 1: going to see, in my mind is you're going to
Speaker 1: see the meme coin stuff die down as the legislation
Speaker 1: starts to come into place that addresses you know, XRP
Speaker 1: and all these tokens and how they're fit into commodities
Speaker 1: with CFTC or if it is a security, how it
Speaker 1: fits in an SEC and how you could move it.
Speaker 1: So I think you're going to start to see that
Speaker 1: all lay out when sort of the fun and games
Speaker 1: are over and we're going to kind of have the
Speaker 1: barbed wire that kind of can change the Wild West
Speaker 1: forever with these regulations. And I think ultimately that's what
Speaker 1: a lot of the institutional folks want to see too.
Speaker 1: That's why they like the etf rappers because they like things.
Speaker 1: They like to take out the uncertainty that's any regulatory uncertainty.
Speaker 1: And so when you look at where we're going now
Speaker 1: we get stable coin and market structure legislation, I think
Speaker 1: a lot of this stuff will calm down. And I think,
Speaker 1: you know, not from the conspiracy standpoint, but the traditional
Speaker 1: financial institutions kind of always figure out a way to
Speaker 1: win you know thing, I think truth like Biden Trump,
Speaker 1: who cares like, look, the banks won Okay, they found
Speaker 1: a way to slow down the system for four years
Speaker 1: so they could get a handle at it. They could
Speaker 1: be prepared build. You know. That's why you see like
Speaker 1: I'm a digital assets person from this company, you know,
Speaker 1: because they've built all the stuff and they're ready to
Speaker 1: go and when and they won't and they won't want
Speaker 1: to see that trigger pulled until later this year when
Speaker 1: Trump is saying, okay, now we'll have the regulations and
Speaker 1: then the banks will come out so they can compete
Speaker 1: on equal footing with all the crypto startups, which isn't
Speaker 1: exactly fair, But I always say, you know, it's like
Speaker 1: with Bill Gates one of his life lessons, His life
Speaker 1: isn't fair, you know, but you have we have to
Speaker 1: you have to hustle. If in the crypto industry, you
Speaker 1: have to understand how you can take advantage of the
Speaker 1: wild West. And I don't mean to launch a mean coin,
Speaker 1: but I mean build in a way. Find it to
Speaker 1: be productive, right, Find something that's of utility that's going
Speaker 1: to last out, because that's where the unicorns are going
Speaker 1: to succeed and that's where you're gonna see things like
Speaker 1: like coin Base already went public, will probably see Circle
Speaker 1: go public. One to the stable coin legislation falls in
Speaker 1: the place I think you can count guarantee a circle
Speaker 1: IPO like weeks after stable coin gets passed. So we're
Speaker 1: gonna start to see some of this level out, is
Speaker 1: my point. And I think that's all part of the conspiracy.
Speaker 2: Yeah no, And I guess you know the reason why
Speaker 2: I preface by saying I don't want to sound conspiracy
Speaker 2: because people sometimes think these statements, you know, oh yeah,
Speaker 2: this puppet masters pulling a string.
Speaker 3: But it's not so much puppet masters.
Speaker 2: It's if you were an incumbent and you had a
Speaker 2: stranglehold on the way moneies move and the whole banking
Speaker 2: industry and the financial markets, and all of a sudden,
Speaker 2: this disruptive technologies here. If I'm Jamie Dunman, I'm making
Speaker 2: phone calls to DC every day and saying, hey, stop
Speaker 2: this thing, stop this thing right now, because that's how
Speaker 2: the look. There's a revolving door in Washington, DC. We've
Speaker 2: seen it. Goldman guys go to DC, vice versa and
Speaker 2: all that. So these things are not far fetch or outlandish.
Speaker 2: We've seen it, but I think sometimes people don't realize
Speaker 2: what's happening behind the scenes, and it's just look if
Speaker 2: you have if you were in Jamie Nineman set, you
Speaker 2: would do the same thing too.
Speaker 3: I think you Bitcoin sucks, right and all these things.
Speaker 2: But you know, trying to build their own blockchain quorum
Speaker 2: and jpm coin to compete.
Speaker 1: Yeah, yeah, definitely.
Speaker 3: Now saw one two one gets repealed, right.
Speaker 1: Uh.
Speaker 2: FDIC said, Hey, we're gonna loosen the restrictions. Jason, what
Speaker 2: are you expecting from these banks? Do you think they're gonna
Speaker 2: launch their own stable coins? We know they're gonna launch
Speaker 2: custody crypto trading. You think they launched an old stable
Speaker 2: their own stable coins as well?
Speaker 1: Yeah. I think that's long been the premise, right of
Speaker 1: JP Morgan being able to launch its own like JP
Speaker 1: morgan coin, right, and and what that might look like.
Speaker 1: I think you're gonna see PayPal be very competitive, right,
Speaker 1: they sort of, And they stress in that hearing recently
Speaker 1: unstable coins that it's they believe it's something more of
Speaker 1: a payments mechanism than a banking mechanism. I think the
Speaker 1: banks are going to want to own the iss and
Speaker 1: stable coins mainly as a way of getting customers right,
Speaker 1: because it's a great way to onboard new customers into
Speaker 1: your into your bank. The other thing that's going to
Speaker 1: be interesting is people talk about how we might be
Speaker 1: going back to sort of the wildcat banking era in
Speaker 1: the late nineteenth century, where I think you're going to
Speaker 1: see state stable coins, you might see the Wyoming stable coin,
Speaker 1: you know. So I'm like, you know, meeting you somewhere
Speaker 1: out in Missouri and I'm like, hey, I got some
Speaker 1: New York stable coins from JP Morgan. You're like, oh,
Speaker 1: I got some Wyoming stable coins from Cadon Long, Like
Speaker 1: who has what? Like how do we are they dollars?
Speaker 1: Do we have to go back and test? Like is
Speaker 1: Wyoming better than New York? You know? So I think
Speaker 1: you're gonna I don't know people will be quite ready
Speaker 1: for if there's like different stable coins. But I'd say
Speaker 1: though that the at least the federal legislation makes it
Speaker 1: all back by a dollar, and you know there'll be
Speaker 1: federal ones and state ones. And the reasonab'll have that
Speaker 1: system is the same reason we did market structure legislation,
Speaker 1: which is right to avoid like the terror Luna collapse
Speaker 1: for stable coins or the FTX collapse for market structure.
Speaker 1: That's what we're really trying to avoid having these companies
Speaker 1: have to go offshore to build, right, and then we
Speaker 1: can't trust what it is. And you know, the big
Speaker 1: tension point I think we're going to see is Tether, Right,
Speaker 1: how does Tether fit into this? But look, they'll be
Speaker 1: able to comply, you know, with whatever the regulations are.
Speaker 1: They'll have to figure it out. The challenge for them
Speaker 1: is going to be in the stable coin legislation is
Speaker 1: what are the different ways that you can back a
Speaker 1: stable coin treasuries ninety days? So Tether's like a huge
Speaker 1: money making company, right, billions of dollars. If they have
Speaker 1: to change their asset mix and that's going to affect
Speaker 1: their income, that's a gonna be a real pain point
Speaker 1: for them. So they're gonna have to kind of do
Speaker 1: the cost benefit of do we stay in the US.
Speaker 1: We kind of have to because we're a US stable coin,
Speaker 1: but then we have to change our balance sheet, We're
Speaker 1: going to lose profitability. So I'm sure you know they're
Speaker 1: very active probably with what this legislation is going to
Speaker 1: look like. At the end.
Speaker 2: Yeah, I'm very curious as to how they navigate these waters.
Speaker 2: So we saw in the EU with the micro regulations,
Speaker 2: they've been struggling there, and the US is probably gonna
Speaker 2: do something similar. So yeah, it's gonna be fascinating. You know,
Speaker 2: maybe they lose some market share and Circle and some
Speaker 2: of the other players, PayPal maybe Ripple that they grow
Speaker 2: in market share, and I look, competition's great for the
Speaker 2: consumer and the market.
Speaker 3: So we'll see.
Speaker 2: What are your thoughts on the pro crypto government that
Speaker 2: we have in place, pro crypto president, new sec chers,
Speaker 2: pro crypto Treasury Secretary's, pro crypto White House, cryptos are
Speaker 2: you know, what are your anticipating that this government's gonna
Speaker 2: be able to do? Can they get legislation through this year,
Speaker 2: big Quinn Reserve this year?
Speaker 3: Things like that?
Speaker 1: Yeah, So you know, when you hear these terms, right,
Speaker 1: it's uh, you know, cool terminology, right like czar, you know.
Speaker 1: But I think it's really a signal though, that we
Speaker 1: have people who are our friends who are in both
Speaker 1: the administration and legislature. What do I mean by friends,
Speaker 1: I mean people who understand what these markets are, aren't
Speaker 1: afraid of it, and are capable to develop regulations and
Speaker 1: policies that will work for the United States, for the
Speaker 1: stable point markets to be here at home and the
Speaker 1: crypto markets to be here in the US. You know,
Speaker 1: when you talk about the cryptos are the big thing
Speaker 1: that's happening at the White House, the executive level is
Speaker 1: it's a presidential working group. Now, Biden had his own
Speaker 1: executive Order that focused on crypto as well, and one
Speaker 1: could call that maybe much more conservative, if not sort
Speaker 1: of throttling or doing a choke point type mechanism, because
Speaker 1: their main considerations the Biden administration for their working group
Speaker 1: was that the FED gets to set the monetary policy.
Speaker 1: It shouldn't be from some white paper by somebody we
Speaker 1: don't know, like Satoshi. You know, we need to protect
Speaker 1: the financial markets, protect the consumer from those financial markets
Speaker 1: number two and number three, you know, protect from elicted finance.
Speaker 1: I think you're gonna want to see the same things,
Speaker 1: but you're gonna want to see it in a way
Speaker 1: where it allows crypto to scale. And so that's where
Speaker 1: the White House is really going to lean in whether
Speaker 1: they issue the reserve that I think that very much
Speaker 1: could happen. I can tell you I don't ever see
Speaker 1: it being just a Bitcoin reserve. I think it will
Speaker 1: have to be a mix because then you're allowing the
Speaker 1: government to pick a winner, right, and that's not necessarily
Speaker 1: what we ever want. This came up in twenty twenty one,
Speaker 1: by the way, during the Infrastructure Bill, when initially the
Speaker 1: White House was saying we should just endorse proof of
Speaker 1: work mechanisms, and even coin Center in other places cried foul.
Speaker 1: So so we don't want to pick a winner or
Speaker 1: a loser. So you're gonna have to adjust yourselves. Bitcoin
Speaker 1: maxis you're going to see a mix in that strategic reserve.
Speaker 1: I think you're probably gonna see that, right, because it
Speaker 1: makes sense because it's their way of endorsing and signaling
Speaker 1: this is a new asset class and it's something that belongs.
Speaker 1: Maybe it's not going to replace the financial system, but
Speaker 1: we say it on the equity of like gold or oil.
Speaker 1: It's something valuable and we should be stockpiling some of it,
Speaker 1: and that can be done really through the executive On
Speaker 1: the legislative side, obviously, they've created a Byicountal working group
Speaker 1: with Chairman Tim Scott and French Hill on the banking side,
Speaker 1: and gt from Pennsylvania as well as Bozeman sorry, from
Speaker 1: the Senate on the agriculture side. And that's really important
Speaker 1: because those are the two committees, the Agriculture that oversees
Speaker 1: the CFTC and then you have the financial or banking
Speaker 1: committees that oversee the SEC. So all four of them
Speaker 1: had that press conference with David Sachs, and so that
Speaker 1: means that there's these four corners of the Congress working
Speaker 1: together and coordinating with the White House on what that
Speaker 1: legislation is going to be. And when you have that
Speaker 1: kind of a legislator that's authorized, meaning they're authorized by
Speaker 1: the White House in a sense of that what they do,
Speaker 1: the White House will support it, they won't veto it.
Speaker 1: You have all of the frame work right for success.
Speaker 1: And I think that the SEC crypto task for us
Speaker 1: that Hester Pearce is doing is going to address things
Speaker 1: on the micro level, like kind of in the meantime.
Speaker 1: This is what's going to smooth out until we maybe
Speaker 1: get the legislation later this year. So I'm very optimistic
Speaker 1: that we'll see something, but there are going to have
Speaker 1: to be some concessions made to the Democrats because remember
Speaker 1: in the Senate isn't just fifty votes in majority, you
Speaker 1: need sixty votes to get it to be a vote.
Speaker 1: So right now, that's seven Democrats, seven senators who are Democrats.
Speaker 1: Now we know Christian Joebrand's a friend, but we have
Speaker 1: to find six other Democrats who are going to be
Speaker 1: willing to adjust to this and say it for this
Speaker 1: legislation actually pass. So it becomes a numbers game, which
Speaker 1: she often does with these things, you know in Congress.
Speaker 1: We're going to see how that plays out in the
Speaker 1: next few months.
Speaker 3: Yeah, for sure.
Speaker 2: And that was great perspective and insights on the infrastructure bill,
Speaker 2: and even that we not necessarily a bigcoin strategic reserve,
Speaker 2: but a digital stockpile with different crypto assets. It's hard
Speaker 2: question for you with that in mind. You know, let's
Speaker 2: say we build this digital stockpile. Do you foresee I
Speaker 2: don't know if in our lifetime, but the United States
Speaker 2: going back to a hard money standard where we go
Speaker 2: back to not necessarily a gold standard, but using digital acids,
Speaker 2: gold oil maybe and these things back the dollar instead
Speaker 2: of being fiat. It's back to that hard money standard.
Speaker 2: If that makes sense, Yeah, I absolutely do. You know,
Speaker 2: if you look at the history of our country. We've
Speaker 2: had these ebbs and flows and Civil War, Lincoln issued,
Speaker 2: you know, the greenback or the US dollar created the
Speaker 2: occ and he did that without backing it by gold, right,
Speaker 2: so that was that was We weren't backed by gold
Speaker 2: for a period of time until later when the Federal
Speaker 2: Reserve formed, and then we finally went back on a
Speaker 2: gold standard. So there's a myth I think that's in
Speaker 2: seventy seventy six, we've been on a gold standard.
Speaker 1: We've gone on and off it. And in fact, you
Speaker 1: can actually go to the history books to look at
Speaker 1: the conversations Lincoln had when he had he felt he
Speaker 1: had to issue that to win the Civil War, and
Speaker 1: he apologized. He says, I know this isn't gold and silver,
Speaker 1: you know, but like it's kind of like, you know,
Speaker 1: please have faith in this. And then it even got
Speaker 1: to the point where the Secretary of Treasury wanted Lincoln
Speaker 1: to put in God we trust on the first dollar bills,
Speaker 1: and if you look at it, the first greenbacks don't
Speaker 1: say that because Lincoln said, I don't want to say
Speaker 1: something like in God we trust because it's really just
Speaker 1: a piece of paper, you know, it's just back. So
Speaker 1: we've gone in ebbs and flows, so it's actually a
Speaker 1: very easy question to answer. We've been off, you know,
Speaker 1: of a standard where we just have fiat the point
Speaker 1: that we have now, and so I could see a
Speaker 1: cycling to where definitely probably something like bitcoin or gold
Speaker 1: or other things that we say this is going to
Speaker 1: be the new way we standardize our money. And as
Speaker 1: everyone says, why we need a whole new sort of
Speaker 1: breton Wood two point zero just side what that future
Speaker 1: might look like. So I think that that'll be over
Speaker 1: our lifetime. That won't be tomorrow, but I think maybe
Speaker 1: over the next ten or twenty years we might see
Speaker 1: something like that come to fruition.
Speaker 2: I can't wait to see that happen, especially as you know,
Speaker 2: we go to a more digital world and everybody's going
Speaker 2: to be using possibly stable coins, right and digital assets.
Speaker 2: It would probably very be very easy to transition over
Speaker 2: because it's all going to be in the blockchain and
Speaker 2: hopefully we have transparency, you know what dose just trying
Speaker 2: to do, and we.
Speaker 3: Know they have the actual reserves.
Speaker 2: Right, there's a wallet that holes bitcoin theorem XRP whatever,
Speaker 2: and then here's some gold. We know it's token eyes
Speaker 2: we know it's in Fort Knox, and here's our oil reserves.
Speaker 2: We know we have x amount of barrels and whatever, right,
Speaker 2: and we can verify via the blockchain.
Speaker 3: You know, that would be pretty great.
Speaker 1: Absolutely, absolutely. The one interesting challenge I think you're going
Speaker 1: to see, because I've heard this from the Democrats in
Speaker 1: and this is my sort of thought for your audiences,
Speaker 1: the argument over stable coins once the legislation passes, as
Speaker 1: to how banks try to adopt stable coins, and I've
Speaker 1: heard some of the Democrats say as for as they
Speaker 1: want to consider stable coins like bank deposits. And if
Speaker 1: you think about that, that's a very slippery slope, right,
Speaker 1: because if you just have stable coins, that means we
Speaker 1: have cash like in our wallet, and that's kind of
Speaker 1: like what PayPal in other words, saying this is just
Speaker 1: for payments. That's why PayPal's like just for payments, it's
Speaker 1: not banking, no banking. But if you think about it,
Speaker 1: if you're the banks and you can offer these stable coins,
Speaker 1: at some point, you can offer these stable coins in
Speaker 1: a way and then say, well, it's like a deposit
Speaker 1: on the bank. In other words, it's backed by a dollar.
Speaker 1: But we want to say that it's also a deposit
Speaker 1: that you're kind of with us when you have this
Speaker 1: stable coin, like if it's our own stable coin, and
Speaker 1: if you get that to me. And I just thought
Speaker 1: of this actually on your show as you've been talking
Speaker 1: in such a fascinating conversation, is because then you actually
Speaker 1: get to the point of then the banks and the
Speaker 1: and the federal regulators can sort of use the stable
Speaker 1: coins the way that we use deposits now to kind
Speaker 1: of regulate the economy. So I think one thing you
Speaker 1: might see come up that won't be apparent at first though,
Speaker 1: is this fight over how stable coins are really considered,
Speaker 1: as as the banks and the traditional institutions try to
Speaker 1: pull stable coins into the way you know they work today. Right,
Speaker 1: So what is a stable coin? Right? Is it going
Speaker 1: to be this these dollars we have in our crypto
Speaker 1: wallets are now in our bank wallets that isn't really
Speaker 1: used to rehopothacate or will at some point the bank's
Speaker 1: lobby and try to change the bill to say, yeah,
Speaker 1: we want to do rehypothication, we want to you know,
Speaker 1: spread out the wealth and you know, lower the one
Speaker 1: to one standard. So I think that's going to be
Speaker 1: something to keep on the radar. Two mm.
Speaker 3: Yeah, so interesting scenario. Is it going to pop off?
Speaker 2: I think as regulations come in and we see the
Speaker 2: direction to these banks going and the stable co market,
Speaker 2: I know, A big thing narrative, and I think it
Speaker 2: makes sense is that if the United States can get
Speaker 2: stable coin legislation right and US treasuries are backing these
Speaker 2: stable coins, it could help preserve the world reserve currency status,
Speaker 2: some of that being challenged by bricks nations. And look,
Speaker 2: there's alternatives, right, some nations could use bitcoin if they
Speaker 2: want opt out of a dollar.
Speaker 3: Do you agree with that thesis?
Speaker 1: Yeah, I think although if we look at El Salvador,
Speaker 1: they kind of opted to go with both the dollar
Speaker 1: and bitcoin, So I'd say overall that's probably on track, Tony.
Speaker 1: I think that ultimately we're going to see a lot
Speaker 1: of countries, whether it's tether or circle, see the value
Speaker 1: of the way stable coins work today. It's this amazing
Speaker 1: technological development that has these breakthrough capabilities. It's fast, it's quick,
Speaker 1: it allows us to go through you know, very very
Speaker 1: you know, it makes things easier from a payment's perspective,
Speaker 1: could be a way of storing cash for some people
Speaker 1: in a digital realm. So it's a real game changer, right,
Speaker 1: It's going to do things, and I think it's going
Speaker 1: to take the private markets to do that. Right. It's
Speaker 1: why we're not going to have like a CBDC or
Speaker 1: whatever we want to call it today, because then it's
Speaker 1: not something that's necessarily owned by the government. It's something
Speaker 1: that's run in a way where it's representing what money is.
Speaker 1: So it's really the first stage, I think in what
Speaker 1: we're going to see is a change the way the
Speaker 1: world looks at money. So I think that you're going
Speaker 1: to see the US I don't want to say weaponized,
Speaker 1: but certainly utilize stable coins to make sure we stay
Speaker 1: on top. And I think that's why you see such
Speaker 1: support from Democrats as well as Republicans. Remember Maxine Waters
Speaker 1: introduced her on stable coin, much more restrictive, but they
Speaker 1: all see the writing on the wall. And this all
Speaker 1: goes back to twenty nineteen when you know, liber came
Speaker 1: out and they're like, well, we don't want market zucker
Speaker 1: to be the the face the gist dollar. We need
Speaker 1: something to do it. And now we're kind of here today.
Speaker 1: I think this will be the final result of what
Speaker 1: a stable coin quote unquote regulated harnessed stable cooin will
Speaker 1: look like in a way that it can be our
Speaker 1: you know, fast horse and keep us competitive in the
Speaker 1: global landscape of the monetary order.
Speaker 2: Thank you for bringing up that Libra situations. I remember
Speaker 2: Maxine Waters, she was leading the charge and trying to
Speaker 2: shut that thing down.
Speaker 3: Right.
Speaker 2: They were like, no, no, no, no, We're gonna have
Speaker 2: a hearing where this is not happening. And in hindsight,
Speaker 2: you look at this, you know what's happening. And in
Speaker 2: context of what you just said, Uh, Facebook had the ability,
Speaker 2: because they're in multiple countries to create a their own
Speaker 2: role reserveency if they wanted to, you know what they
Speaker 2: were trying to do.
Speaker 3: So no wonder that got shut down quickly.
Speaker 2: Yeah, Jason, I know we're up on time. So I
Speaker 2: got some wrap up questions here for you. At first
Speaker 2: is if you could create your own metaverse, what would
Speaker 2: the theme be.
Speaker 1: The I think would be golf. I'm like, I love golf,
Speaker 1: so there have to be lots of golf with crypto
Speaker 1: prizes at every hole, and a mean coin is like
Speaker 1: a Moobe prize if I don't hit the ball well.
Speaker 3: Rapid fire questions.
Speaker 2: Favorite food spaghetti, favorite musician or band Led Zeppelin, Favorite
Speaker 2: movie The Natural Robert Redford baseball movie. Yeah, favorite book.
Speaker 1: Favorite book Liar's Poker by Michael Lewis about the bond
Speaker 1: trading in the nineteen eighties. Interesting.
Speaker 3: Check that out.
Speaker 2: And then I think I know the answer to this.
Speaker 2: When you're not working, you're probably playing golf right as
Speaker 2: a hobby.
Speaker 1: Yeah, golfing, And I do like some model trains and
Speaker 1: things like that.
Speaker 3: So yeah, nice, Jason.
Speaker 2: I wish we had more time, and I'm looking forward
Speaker 2: to reading your book. So we'll have to have you
Speaker 2: on when that book is ready, because you got some
Speaker 2: great perspectives.
Speaker 1: Man.
Speaker 3: Thank you so much for joining me.
Speaker 1: Absolutely, thank you, Tony Attack pak take dost tak t
Speaker 1: bakt