00:00Can you help explain to me how companies, how people make money on stable coins is if everyone seems to be getting into it?
00:06Tim mentioned that a lot of non-financial firms, I mean, Apple, Amazon, Walmart, Uber, they're all contemplating launching their own stable coin.
00:14Right. And getting back, Tim, to your question about how do you separate the good from the bad, I want to be clear when we're talking about stable coins,
00:20when I'm talking about stable coins, what I'm talking about is a fiat backed stable coin.
00:24Of course, there are other varieties of stable coins. We saw this in the last cycle.
00:28We saw experimentation with algorithmic stable coins. That's very frontier.
00:33But when I'm speaking about stable coins, I'm talking about fiat backed.
00:37So there is an actual dollar, for example, in the case of USDC backing a dollar in a bank account, backing every USDC in the case of that particular brand of digital currency or stable coin.
00:50In terms of how people make money or entities make money, I think this is a really important question.
00:54There's a debate going on right now in D.C. that I think folks need to start paying more attention to.
01:01And that is the yield. And the question really is who is going to keep the yield?
01:05You ask who who who makes money off stable coins?
01:08Well, right now, in the case of some of the large stable coin issuers, there's a yield back on those deposits.
01:13So when there's a dollar, for example, deposited in a bank account, there's interest paid on that dollar.
01:19And so who's capturing that yield?
01:21And I think one of the really interesting things about the Genius Act is that it bans so-called yield bearing stable coins from giving that yield directly back to consumers.
01:30Now, that's not true everywhere.
01:32There are some other regulatory regimes in the world that allow yield to be given to consumers.
01:38And I think if consumers have a choice, why would a consumer want an institution to keep that yield?
01:44Or would there be sharing of that yield?
01:46So right now, one of the debates going on is will rewards be allowed?
01:50And I think these are really important questions.
01:52OK, so that's something that...
01:54Yeah, you see a lot of banks, by the way, wanting to argue that they should be allowed to keep the yield and that consumers should not be allowed to keep the yield.
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