Bank Charters Give Crypto Cos. Power: Brian Brooks

Bloomberg

Watch Bank Charters Give Crypto Cos. Power: Brian Brooks - Bloomberg on Dailymotion

Transcript

00:00I just want to start with getting an idea of how things are going at Meridian. You've been in the

00:04position since March of 2024. Where are you in kind of getting things under control?

00:11Well, it's a great question, and thanks so much for having me, Tim. I really,

00:14really appreciate it. Meridian is going great. You know, it's one of these things where you

00:20had a giant company that was really the dominant platform in its space, and it ran into, you know,

00:27a couple of regulatory hurdles. People, your crypto viewers will recognize this from lots of

00:31crypto companies. Meridian's a traditional finance company, but the story is the same. You grow at a

00:36hyper growth rate. You have a handful of people who didn't get the compliance memo, and somebody's got

00:41to come in and impose some set of controls. So the markets are coming back. You see it with Bitcoin,

00:47but you also see it with commercial real estate. And as the animal spirits return, we're in the

00:51market. We're feeling terrific. All of our restraints have been lifted. We're back doing

00:55business like it was 2022 again. Brian, Tim gave you an introduction,

00:59and he cited all your titles. You wear a lot of different hats. How do you wear so many different

01:05hats balancing these different jobs from traditional assets like real estate to the crypto space?

01:13Well, you know, it requires having a philosophy, and I'm going to just quickly tell you what that is.

01:18So to me, this idea that there's a distinction between traditional finance and digital assets

01:23is based on sort of 5- and 10-year-old thinking at this point. The truth of the matter is,

01:28everybody who's in financial markets is looking for the same thing. Everybody's looking for yield and

01:33price. And, you know, whether you're finding that in the commercial real estate markets or in consumer

01:38finance or in equities or in crypto, everybody's looking for the same thing, which is rates of return.

01:45And at a certain point, all of those distinctions between those asset categories collapse.

01:49I would just pick up on what you were just talking to David Shamus about a couple of minutes ago. This

01:53is what makes Hyperliquid so special. Liquidity is just seeking yield. The company I run is one of

01:59the places where it seeks yield, and there are lots of other places, and we should stop making

02:02these artificial distinctions. The other thing that we've noticed, of course, in the industry

02:06is crypto companies applying for bank licenses. Anchorage Digital, Circle, Ripple, each have made

02:12their own moves. What do you make of that? Why do they need them? Is there a common thread,

02:16or is each going for their own reason? Yeah, well, you know, I would make a couple

02:21comments on that. There's why they need them, and then what should the incumbent banks worry about

02:26about that happening? The reason they need them is because there are certain powers that come with

02:31having a bank license. You can take deposits. You can perform fiduciary activities. You can operate

02:37across state lines if you're a national bank. There are all kinds of things you can do. And you can't do

02:43those in any other corporate form. There's no other license that allows you to do that. So it's a great

02:47tool to have. By the way, you listed some of the companies that are in the bank application space,

02:53but not some of the biggest. Coinbase has filed an application for a bank charter. BitGo, which I'm on

02:58the board of, has also filed a bank application. There are like 25 crypto-related companies applying

03:03for bank charters right now, and with good reason. They want the same powers that JP Morgan has.

03:08If I were looking at the space, I'd be more worried if I wore JP Morgan than if I were one of

03:14these crypto companies, because historically, the biggest banks have said, we own the payment

03:19system, and we own the deposit system, so we're unassailable, and we don't have to touch some of

03:24these newfangled digital assets. But the worry is, when the most scaled digital asset companies get

03:30bank charters, you flip the script, and all of a sudden, they'll be able to offer a range of banking

03:35services plus digital assets that the incumbents aren't able to do. So my belief is, coming back

03:40to my point about collapsing these distinctions, these bank applications are the front end of these

03:45distinctions starting to collapse. It's all the liquidity, it's all seeking yield, and it's going

03:50to happen inside of those kind of charters.

Category

Transcript

Be the first to comment

Recommended