- 7 weeks ago
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00:00We believe that consumers win when there's choice available to them at the same time we've heard.
00:05From a number of Senate Republicans that they do have concerns about.
00:10What this could mean for community banks in particular and the stability of the banking system.
00:15Overall, we're not deaf to those concerns.
00:18We definitely believe that.
00:20This is the direction of the future that stable coins and crypto overall is ultimately.
00:25Going to lead the way.
00:30This is Sam Yuen for Coindesk.
00:33I am here with Patrick Witt.
00:35Executive Director, President's Council of Advisors for Digital Assets.
00:40I am really interested, Patrick, in getting your interpretation of.
00:45Of all the events last week that happened in Davos, I thought it would be great for us to hop on.
00:50It seemed like there was a ton of energy there.
00:53I read your Twitter feed.
00:55We were definitely actively involved.
00:56I just wanted to get a sense from you of how you thought.
01:00Crypto showed up on the global stage at Davos last week.
01:05It was a turning point.
01:07I think it was recognition that we've entered a new era.
01:10The president obviously spoke about the work that the administration has done.
01:15To bring crypto into the regulatory framework to normalize it.
01:20As an asset class, make it part of our financial infrastructure of the future and also say.
01:25He signaled his commitment to continue that work with the passage of the market structure bill and many of the other.
01:30Regulatory actions that we can do cross-agency.
01:33My boss, David Sack...
01:35Over there, I think, gave a number of great remarks recognizing the balance that we're trying to...
01:40strike between traditional incumbents and the new crypto entrants.
01:45And in some ways, they're going to be symbiosis there.
01:48They're going to work together.
01:49And in other ways, they're...
01:50They're going to compete.
01:50But consumers win when there's choice.
01:53And we're on the side of it.
01:55This administration is on the side of innovation, whether it's crypto or any number of other...
02:00...exciting technologies that are rolling out.
02:02So I think you saw that healthy tension.
02:05But ultimately, pointing in the direction of progress over there in Davos.
02:10I felt there was a fair amount of thematic centering around stablecoin.
02:1524-hour markets tokenization.
02:17And I'm just interested if you have a...
02:20perspective of, you know, when you think of world and business leaders, is there an area
02:23that they're more interested...
02:25...or less interested of those three?
02:28I think stablecoins is a bit of...
02:30the gateway drug.
02:31It's perhaps the easiest for them to wrap their heads around.
02:34Maybe that's why...
02:35we're seeing some of the pushback is because they're starting to recognize what this is.
02:40And how, in some ways, it could be threatening or challenging to their business model.
02:44I think, ultimately, the...
02:45there's a cycle here.
02:46There's going to be stages of it where the initial lack of...
02:50understanding transitions into understanding and perhaps a bit of fear.
02:53And then, ultimately, I think where folks...
02:55come out as they recognize this is an exciting new product that they can also offer.
03:00to their customers and, you know, they transition from trying to fight something...
03:05in order to...
03:06and shifting over to facilitating something and trying to make it part of their...
03:10their own product offering.
03:11So, that's...
03:12that's what we're trying to help facilitate is...
03:14is that process.
03:15right now, so that folks ultimately can understand what these products and technologies are...
03:20and figure out ways to accommodate them and incorporate them into their own business.
03:25models.
03:26As you think of stablecoins and the kind of globalization of that...
03:30that opportunity, you know, the president renewed his...
03:33his pledge to make America the cryptocurrency...
03:35the capital of the world.
03:36You know, we look at...
03:38at blockchains and...
03:39and...
03:40...and...
03:40crypto as a decentralized technology across the world as well, but he really wants to
03:45make...
03:45U.S.
03:46the innovation center.
03:47How do you think other countries respond to...
03:50U.S.
03:51taking that leadership stance?
03:52I think it's something they're...
03:54they're used to...
03:55the U.S.
03:56has...
03:57has been a...
03:58major innovator and...
03:59and driving...
04:00on the cutting edge of...
04:01pretty much every technological development...
04:03um...
04:04over the past...
04:05you know...
04:0550...
04:06100 years...
04:07we intend to keep that edge...
04:08and...
04:09it starts here in Washington.
04:10making sure that regulators get out of the way...
04:13provide appropriate protections from...
04:15uh...
04:16runaway regulators...
04:17like a Gary Gensler at the SEC...
04:18for example...
04:19so...
04:20uh...
04:20we have our work to do...
04:21uh...
04:22to get government out of the way...
04:23or in some cases...
04:24help facilitate...
04:25uh...
04:26capital formation...
04:27and investment...
04:28into technologies...
04:29that...
04:30that...
04:30need that clear signal...
04:31that...
04:32government's not gonna come in...
04:33and regulate them out of existence...
04:35but is instead gonna partner with them...
04:36and...
04:37and recognize that...
04:38everybody wins...
04:39not only America...
04:40but the rest of the world...
04:41when these technologies...
04:42are...
04:43are developed...
04:44and nurtured...
04:45and we wanna be the place...
04:46that innovators choose...
04:47to...
04:48to build their companies...
04:49um...
04:50because it's all...
04:50ultimately...
04:51gonna...
04:52accrue to the benefit...
04:53of...
04:54of Americans...
04:55and again...
04:56the global community overall...
04:55last year...
04:56I traveled a lot...
04:57around the globe...
04:58when we were...
04:59talking to...
05:00a bunch of folks...
05:01in Asia...
05:02in Europe...
05:03in South America...
05:04all of them were actually...
05:05looking to the US...
05:06to say...
05:05how do we...
05:06think about this...
05:07from a regulatory perspective...
05:08do you think there's also...
05:09a greater responsibility...
05:10to say...
05:10let's get it right...
05:11here...
05:12so that we can...
05:13influence how...
05:14regulation is done...
05:15around the globe...
05:15we certainly take that...
05:18very seriously...
05:19folks here in the US...
05:20understand our...
05:21leadership position...
05:22in the financial system...
05:23and so...
05:24what changes we...
05:25make will have...
05:26ripple effects...
05:27around the globe...
05:28what I do tell...
05:29some of my counterparts...
05:30in other countries...
05:31and other jurisdictions...
05:32though...
05:33is...
05:34we have a...
05:35bicameral legislature...
05:35we have a...
05:36very robust...
05:37and...
05:38debate-friendly...
05:39uh...
05:40democratic process...
05:41what comes out...
05:42of congress...
05:43might not be...
05:44perfect...
05:45might not be...
05:45exactly...
05:46how we would...
05:47draw it up...
05:48but...
05:49it's gonna be...
05:50directionally accurate...
05:51we'll continue...
05:52working on it...
05:50so...
05:51I think...
05:52in engaging with...
05:53other jurisdictions...
05:54we're gonna try and...
05:55get...
05:55get the best...
05:56legislation...
05:57and regulations passed...
05:58but...
05:59understand that...
06:00we might not get it...
06:01exactly right...
06:02and there's still room...
06:03for other jurisdictions...
06:04to continue to...
06:05to push...
06:05the envelope...
06:06and...
06:07and...
06:08demonstrate...
06:09that perhaps...
06:10there's...
06:11there's a more...
06:12ideal...
06:13model...
06:14and...
06:15you...
06:16you...
06:17you...
06:18you...
06:19you...
06:20you...
06:21you...
06:22you...
06:23you...
06:24you...
06:33forward-leaning, so there's a bit of that TradFi crypto tension.
06:38As well, even on the right.
06:40Yeah, I think we're used to that, and frankly,
06:43I think that's part of the process.
06:45Speaking of tension, there was a, you know, last week,
06:48there's a bit of back and forth regarding the Clarity Act.
06:51We saw some of the sort of large.
06:53Industry players like a Coinbase kind of, you know,
06:55retract a little bit from there,
06:56talk about how the banks were kind of doing.
06:58What Banks Do.
06:59I'm interested in just how do you see us moving forward to get Clarity Act?
07:03Clarity across the finish line.
07:05Well, it's going to take a lot of conversations.
07:08It's going to require some folks to make difficult decisions that might hurt.
07:13one part of their business,
07:14but ultimately will allow the rest of their business to thrive,
07:17and that's on.
07:18Both sides of it, it's not just exchanges, it's traditional bank.
07:23players, it's broker-dealers, it's folks writing DeFi code.
07:28Ultimately, we are moving in the right direction and we are trying to keep.
07:33everybody on the boat, recognizing that it's not going to be perfect.
07:36No one's going to walk away.
07:38100% satisfied, but that's the nature of compromise and negotiation.
07:43and step back, zoom out, recognize that there's a lot of goodness in this bill.
07:48that will provide the regulatory certainty, will equip regulators with the authorities that.
07:53they need in order to do appropriate rulemakings in a post-chevron world that's critical.
07:58important, and I think overall folks recognize that this is a.
08:03step in the right direction and that we shouldn't throw the baby out with the bathwater if.
08:08there are one or two things in here that to any one individual player.
08:13might be, might be detrimental.
08:15I think folks are recognizing that for the crypto industry over.
08:18all this is a good piece of legislation that we need to get passed.
08:21And.
08:22And.
08:23you tweeted a few days ago.
08:24it wasn't.
08:25if it's when.
08:26Do you have a sense of.
08:27do you have a sense of.
08:28do you have a sense of.
08:28how soon that's going to happen.
08:31So it got moved a couple.
08:33days, but on the Senate Ag side, so we have two committees involved, Senate Agriculture.
08:38And Senate banking because of our the unique dual.
08:43Regulatory framework that we have here in the US between the SEC and the CFTC.
08:48So the Senate Agriculture Committee handles the CFTC portions of the bill.
08:53They are going to mark up their bill on Thursday morning now at 1030.
08:58We're encouraged by some of the progress there.
09:00We're hoping that it will be bipartisan at the end of the.
09:03day, but even if not, we're confident it will get voted out of committee.
09:06So we'll have half the legislature.
09:08And then with Senate banking's postponement of their committee.
09:13We have some work to do to convene and play a bit of a mediator role.
09:18between the folks on either side of the stable coin rewards and yield debate.
09:23And try and find a solution there that is ultimately as win-win as we can possibly.
09:28make it so that'll take a couple weeks to get right, but I'm confident we'll be able.
09:33to get there and then it's a matter of Senate banking finding time on their calendar to get a markup back up there.
09:38get that piece out of committee and then ultimately the bill will be reconciled and brought.
09:43to the floor so still a little bit of time to go work to be done on the compromise.
09:48side of things and then also the reconciliation between the two bills once they're out of committee.
09:53support gets brought to the floor so more to come does the white house have a position.
09:58on interest bearing stable coins?
10:01Look, we believe that consumers win.
10:03when there's choice available to them at the same time, we've heard from a number of Senate Republicans.
10:08that they do have concerns about what this could mean for community.
10:13banks in particular and the stability of the banking system overall.
10:17We're not.
10:18deaf to those concerns.
10:19we definitely believe that this is the.
10:23direction of the future that that stable coins and crypto overall is ultimately going to.
10:28lead the way and there will be a convergence between the two with with traditional players.
10:33and crypto players there's not going to be this divide in the future but for now.
10:38we want to make sure that it's a smooth transition that folks that represent.
10:42community.
10:43community banks and others in the traditional banking system.
10:48understand.
10:49understand.
10:50what this means, what it doesn't mean, which is.
10:53what it doesn't mean, which is.
10:53arguably more important and find a way that we can have a smooth glide path.
10:58into that.
10:59that future technology.
11:00So.
11:01we don't necessarily.
11:02we don't necessarily.
11:03we don't necessarily.
11:04we don't necessarily.
11:05come out one way or the other.
11:06we definitely.
11:07believe that.
11:08this is the way.
11:08of the future and we're encouraging folks to come together and find a way to make it as
11:13possible and if we can sort of look into the
11:18future through the idea of let's say market structure passes
11:20the industry is really excited
11:23about the idea of a crypto tax package
11:25as well
11:25so if market structure passes
11:28do you believe there's bandwidth for another major digital assets bill in the congress this year
11:33never say never
11:35there have been a number
11:38of provisions kicked around senate finance held a hearing not too long ago
11:43the house is working on a piece of legislation there so
11:46it'll come down
11:48down to how quickly folks pivot elected representatives pivot and start thinking
11:53about the midterms and politics but there's there's definitely a window there's still time
11:58and um we're going to once we get market structure passed we'll we'll turn to that and
12:03new course and uh see if there's a window to potentially get this passed
12:06okay great
12:08finally patrick i just wanted to ask you with all the actions recently in venezuela there is a lot of speculation
12:13on the crypto twitter side that there is a fair bit of digital assets seized
12:18in that and i'm just wondering if you have you know any comment on
12:23whether or not digital assets were seized and the actions that might be done with those if so
12:28uh obviously uh developing situation down there uh still working through it a lot
12:33of national security uh equities there so um folks are talking they're they're looking
12:38at the the situation overall how the maduro regime was financed uh and
12:43where some of those assets whether it's on the oil side actual physical commodities or
12:48digital assets may be so uh can't comment on on anything there uh
12:53as of now but uh there's there's a number of folks in the national security apparatus and
12:58engaged and looking into that great patrick thank you so much for your time really appreciate it
13:03that great patrick you got it thank you
13:04you got it thank you
13:05you got it thank you
13:07thank you
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