00:00Senators from both parties blocked a landmark digital asset market structure bill in a procedural vote, sending crypto stocks tumbling.
00:08So this bill would have handed the CFTC the primary authority to regulate the digital assets industry,
00:15but it failed to advance with a vote of 49 to 50, a major blow for crypto industry players.
00:21Here to discuss is Summer Mercier, CEO of the Blockchain Association, a D.C.-based nonprofit dedicated to promoting a pro
00:30-innovation policy environment for the digital asset economy.
00:33And whether this piece of legislation was pro-innovation or not, right now it's not proceeding.
00:40Just on behalf of the industry, summarize your response to how or not how this is passed through Congress.
00:47Yeah, legislation is rarely a linear process.
00:51You're always going to have two steps forward, you know, three steps back.
00:55That's not unusual at all.
00:57And so I don't see it as a major blow.
01:00You know, we this this isn't over.
01:02There was a procedural step taken so that this bill could potentially come back up on the floor.
01:08And, you know, we've got a lot of great things going on at the SEC and the CFTC.
01:12At the end of the day, we're going to get clarity for this industry.
01:15So this is why the market reaction is so interesting, the market reaction being to the downside, right?
01:20The Clarity Act would basically empower the CFTC.
01:24But if you read Bloomberg's reporting, what happens next is that it goes back into the hands of the regulators
01:30anyway, both the CFTC and the SEC to make rules.
01:34Like, why is that being perceived through the markets as a negative thing?
01:38Well, I think any time you are dealing with just using the regular regulatory process versus having something in law,
01:47it's it's a little bit less durable.
01:50That's not to say that they can't come up with a framework.
01:54The SEC and the CFTC have already been working on some ways to do that.
02:00So I think we're going to get the framework that we need.
02:03But it is always difficult to, you know, recognize how does this last across future administrations.
02:11I do think that there are ways to do it.
02:13And I'm confident that they're headed in the right direction.
02:16We're just showing the members of your association, by the way, you know, Kraken, Coinbase, Circle, etc.
02:22Did they want the Clarity Act to pass?
02:25Yeah, industry wanted it to pass.
02:28We still would like to see it pass.
02:31I don't think anyone's giving up yet.
02:33But again, we are we can't wait for this to happen.
02:37You know, digital asset users deserve some protections that we're going to be in this bill that just are not
02:43in place right now.
02:44Yet.
02:45So using the regulatory efforts to do so, I think, is important.
02:49You know, we need to make sure that we don't have another FTX situation.
02:53You know, you never want Congress to legislate in a crisis.
02:56So we're going to work closely with the with the regulators.
02:59But also, we're not giving up on Congress.
03:02Again, you know, these are setbacks.
03:04They're they're not unusual and something that, you know, I've seen many, many times in my many years.
03:11I appreciate that.
03:13I would say it's been a slow march.
03:14Right.
03:15Because I think odds of this bill passing over quite a long period of time have been have been coming
03:21down right now.
03:23There is just absolute focus on artificial intelligence.
03:28OK, how much does that sort of universal attention on one field help or not help your industry, you know,
03:40when they're trying to make regulatory progress like this?
03:43Yeah, AI and crypto actually do.
03:46You know, they're they're very much hand in hand.
03:49I think we're going to see a lot of inner kind of intersection of the two industries.
03:56So the fact that, you know, today you're hearing a lot about AI and less about crypto, that doesn't necessarily
04:01mean that people have moved on.
04:03Again, I think that we are going to be part of the conversation and how that is handled going forward.
04:10And again, you know, we have to keep pushing forward on some sort of crypto regulatory framework because the status
04:17quo doesn't work.
04:18So the interesting political discussion here is that the Clarity Act was intended to outlive the administration of the day.
04:27Right. Have rules with some permanency.
04:29So if the rulemaking goes back to the regulators, CFTC and SEC, that would leave those rules subjected to amendment
04:36by the administration of the day.
04:39You know, how much was this the moment under the Trump administration, like perceived as as open minded, friendly towards
04:46your industry?
04:47Yeah, I think it's important that we have this administration that is this locked in on having the U.S.
04:54via the crypto capital of the world.
04:57And that does give us some flexibility to work with the regulators to get some rules in place that, you
05:03know, there it's not law, but, you know, you can get things put in place that help the markets.
05:10That's really difficult to unwind.
05:13And people don't want to unwind it after, you know, when a new administration comes in, because if you have
05:18consumer protections, why would you want to take those away from the market?
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