White House Stablecoin Yield Debate, Stables $33T vol, Circle's 2026 USDC Roadmap & Clarity ACT News

Transcript

[music] H the >> [music] [music] >> How about [music] the block? >> [music] [music] >> How the [ __ ]

[music] [music] JP Morgan, Black Rockck, DTCC, Fidelity, the entire thing was just institutions. It's just it's next level. This industry is going to the next level. And guys, I I don't know what else to say. I'm bullish. [music] You said it. You finally said it. So, he's bullish. I'm bullish. We're bullish. [music] Break down [music]

the back. [music] [music] >> [music] [music] >> H the mother [music] back.

>> [music] >> back. Hop up above the [music] back. [music] How the [ __ ] [music] [music] roll up is headed to the top. If we're not already at the top, we're going to the top. We're [music] on fourth floor today. We're going to be on floor one and then we're headed straight to the moon, boys. [applause] >> And we're live, guys. You may think it's

a bare market, and that's because it is. Um, no, don't get too too discouraged. I think uh I think there were some people that were uh really really good at sifting through the noise and understanding where where the signal was coming from. Um and so obviously what happened last week the uh the new Fed chair was announced Kevin Worsh and uh and you know the stock market held up just fine because he is a big proponent of uh of Fed independence. So, we saw, you know, US equities stick around that 7K mark for the uh for the S&P, but man, metals smoked, cryptomote.

Um, just the entire debasement trade got uh got wiped. And now we're in a phase of kind of picking up the pieces. Uh there was a lot of ruckus happening around 1010 as well. And so, uh, I think the market structure kind of broke on 1010 and, uh, and now it's just further, uh, further emphasized by a rather hawkish, uh, Fed chair pick. In my opinion, I think some of these, uh, some of these things, the hawkishness is a bit overblown. We know that Trump is not going to just is not going to pick some guy that's going to be super tough on inflation and raise rates because inflation's at 2.9%.

No. Uh Wars is a guy that has said um he's he has said that tariffs uh will not create persistent inflation. Maybe they create a one-time price increase, but uh that is transitory. And so uh he believes and I think we all believe that we're past that uh mostly inflationary pressure from tariffs. Uh secondary, we know that Trump is going to pick someone who's willing and ready to uh kind of work in tandem with his mission of running the economy hot. We know he's going to run the economy hot. He wants to print GDP numbers upwards of 25%.

That's absolutely ridiculous. But we've already seen prints of five plus percent. So what does that mean? It means GDP up, uh, inflation moderately up, uh, and as long as the labor market can can hold on strong, you know, everyone's not displaced by AI too soon, um, you know, they're they're going to cut rates. They're going to slam rates all the way to the floor, and that's going to cause, you know, some some easing pressures on the economy. So that's what we're we're watching when it comes to macro uh and the new Fed share which was you know one of the primary uh uh triggers of what happened in the markets over the last few days. Uh obviously AI molt book uh took the world by storm as well. But we're gonna be

talking more about what is going on uh both in the stable coin world, the neo finance world because uh and and I think Santiago Santos put it best when he said that 2026 is going to be a year where we see tons of adoption and and particularly we anticipate adoption in some key verticals um stable coins, RWAs, lending, tokenization, but man the prices are just not going to keep up with the fundamentals. Um, and that may be because of this, you know, macro fear, which should be subsided once we, you know, get the new guy into his, uh, into his Fed chair. But it it might just be a result of uh you know not keeping

up with the fundamentals and the new guard of crypto being these tokenization platforms um leading the way which means that a lot of the old guard crypto infrastructure slop is going to get fallen by the wayside. So [snorts] position accordingly. Um, in the meantime, we've got some headlines to go over. And so, we can go ahead and and cut to our first headline, which is from our good friend Eleanor. Uh, she has been the voice out of the White House and on Capitol Hill. Uh, she is here saying that, uh, the White House meeting with crypto and banks on stable coin yield will start at 1 p.m. Eastern this afternoon. It [snorts] is ongoing.

uh they are going to be adding some color around Monday's white house meeting. Uh this is intentionally not a seuite meeting. So Coinbase chief Brian Armstrong and major bank CEOs will not attend. This is a bit more fundamental, bit more mechanical to discuss uh some of the uh some of the ins and outs around paying yield on stable coins. Um, you know, we saw last week, um, how, you know, Tether was kind of added into this conversation. It was almost like hearsay. Paulo ended up coming out and saying that, "Look, this is we don't have a dog in this fight. They don't currently pay out interest on stable coin yields and they don't need to.

Look, they have uh essentially won the market of stable coin issuance. Uh, they've got significant market share. Uh, they're the leader in stable coins. uh you know, Circle and Jeremy Aair second to Tether and so they don't need to pay out this you know interest uh to attract a lot of deposits. [cough and clears throat] They're seeing significant market share already and and uh you know if they were uh to stand up some sort of bank uh consumer bank or neo bank you know that that could trigger some outposts uh from you know the the legacy financial institutions but they're not in a race. They're not planning on doing so anyway. And [snorts] so Tether is saying, you know, they don't really have a dog in this

fight. Obviously, you know, Brian Armstrong is saying they want to pay interest on stable coins, uh, whether that be, you know, Circle or Coinbase, so it ultimately does pay. But lo and behold, this is a very complex issue. Uh, and the White House is is getting involved uh, in order to try to push this through. So, we've got some two uh, two really knowledgeable guests that are coming a little bit later. We've got Ha Nan from Codex who is well positioned to speak on stable coin yield uh both at the regulatory level and get into stable coin forex and what this means for geographical stable coins worldwide. We'll be coming up with him in just a few minutes.

Uh before we do, we've got a few more headlines that we're going to hit through. Why don't we get to our next one? This one is from our guy Vitalik. [sighs] And so the Ethereum Foundation is entering its austerity phase. Let's read uh from Vitalic what this means. In these five years, the Ethereum Foundation is entering a period of mild austerity in order to be able to sim simultaneously meet two goals. Before we read off these two goals, remember austerity is effectively um cutting spending is really is really the essence of austerity. And so let's read on.

Uh the first goal here is to deliver on an aggressive roadmap that ensures Ethereum status a performant and scalable world's computer that does not compromise on robustness, sustainability and decentralization. Now you know usually growth is fueled by more capex and so to uh enter this period of austerity, reduce spending but try to deliver on an aggressive roadmap might seem contradictory. Let's continue reading. Uh the second goal here is to ensure the Ethereum Foundation's own ability to sustain into the long-term and protect Ethereum's core mission and goals including both the core blockchain layer as well as users ability to access and use the chain with self- sovereignty, security, and privacy.

Okay. Uh it doesn't seem like uh anything that we should scoff at. Um obviously we want the Ethereum Foundation to succeed uh and to sustain into the long term. Uh this also came around at about the same time we saw rumblings of a new DAO obviously the Dow uh was uh back in 2016. It was this very ambitious project that the Ethereum Foundation built out and the goal was essentially it was the DAO of Dows. It was a governing organization within Ethereum to direct incentives to participate in governance to allocate incentives and tokens to the broader Ethereum ecosystem almost like the

protocol guild does now. uh but it was going to have a much stronger hand in a lot of the core protocols that uh Ethereum you know had at its disposal and this was in 2016 so it was before all of the DeFi craze and a compound and DeFi summer of 2020. Um but what happened to the Dow back in 2016 was uh it got exploited. Uh, so someone must have found a a an vulnerability before the thing went live and it was operated and audited and it was open sourced. Someone found a vulnerability um and it went live anyway. Uh, and it got drained. All the money into it got drained. Uh, and you know this was a very systemic and cataclysmic thing that

happened in the early Ethereum lore because what you know this this was what led to the creation of Ethereum Classic. And so Ethereum Classic to this day carries a a valuation I believe in the billions. Um and the reason is because uh the Ethereum community had a vote uh anyone who ran a full node and at the time in order to have a wallet you needed to run a full node and you could signal with your node uh whether you were in support of blacklisting uh the tokens that were drained from the Dow or or not. uh you could vote to keep Ethereum immutable and keep uh keep the coins in the Ethereum ecosystem. Um but obviously, you know, this hacker was

going to have a significant portion of the network value in the ETH token. And so the community voted to blacklist the tokens uh and have a hard fork of the chain in which one version of the chain continued to live on uh and the other version of the chain was uh was no more. Uh and so what uh and that's the chain that we now know as uh as Ethereum Classic was the chain that kept uh the tokens in the protocol and then the Ethereum that we know and love today, the you know second largest cryptocurrency in ETH uh that Ethereum protocol uh blacklisted the tokens and uh you know continued on its path. Um, and so the original Ethereum back, you know, in the ICO and and you know, way

back in 2015 and 2016, the one that originally launched the Dow, uh, that canonical chain is now what's known as Ethereum Classic. So, it's a little bit of Ethereum lore for you. Um, and so they're redoing the DAO. Uh, to this end, uh, they're they're also doing this austerity. uh to this end uh my own share of the austerity is that I am personally taking on responsibilities that might in other time have been special projects on of the EF and so austerity in Vitalic sense it sounds like he's just redirecting focus um and and you know pouring even more attention they're not special projects anymore uh they're actually key elements of the road map specifically we are seeking the existence of an open- source secure and verifiable full stack of software and hardware that can

protect both our personal lives and our public environments he links uh uh Vitalik article there. This includes applications such as finance, communication and governance, blockchains, operating systems, secure hardware, biotech, including both personal and public health and more. If you have seen the Vensa announcement, seeking to make open silicon commercially viable reality at least for security critical applications, the Ukriter uh ukritter.com including recent versions with built-in ZK, FHE and differential privacy features, the air quality work, my donations to encrypted messaging apps, my own enthusiasm and use can continue scrolling here for privacy preserving walkway test friendly local first software including

operating system. then you know the general spirit of what I am planning to support. So they're actually going to be putting uh more funds and resources into this uh into these efforts which I think is uh is uh is going to be interesting especially as we see uh some of these efforts progress and so that's what's happening here. We can continue uh so they've uh for this reason withdrawn 16,000 ETH uh which will be deployed toward these goals over the next few years. I'm also exploring secure decentralized staking options that will allow even more capital from staking rewards to be put towards these goals in the long term. Um, Ethereum itself is an indispensable part of the full stack openness and verifiably

vision. Okay. Well, we're going to move on here. We can go ahead and cut to our next headline, but this is essentially what's happening uh to Ethereum. And so we're going to see what happens because you know there's quite a few special projects that are existing outside of the purview of the current you know infrastructure dynamic how Ethereum is operating. Um but obviously these are very complimentary uh pieces that you know will in in turn you know fuel Ethereum further. It almost reminds me of Tom Lee's uh moonshots. I think Vitalic is endeavoring on his own version of moonshots uh with some of these special projects he describes.

Let's go ahead and continue. Uh, we've got an update from our friends over at Securitize. They hit $4 billion in tokenized assets. Um, shout out to our guys Tom and Carlos. I think we're going to get them uh onto a debate here pretty soon talking about uh native issuance. Um, but here you can see that they uh hit $4 billion in institutional business. Uh, this came out today and this is a case study about how securitiz scaled to $4 billion in institutional RWAs. Um, and so, uh, you know, the tokenization case study here, uh, they've spent years in a in a holding pattern. In 2025, everyone agreed it could change finance. Uh, now we're

finally seeing this come to fruition. Instead of asking whether tokenization is possible, the research looks at what happens when a platform actually builds reliable institutional grade infrastructure for it. Uh, the case follows uh, Securitize and how they were able to build, you know, through those early days which were really, really flat. They didn't see a lot of adoption. They were just building headstrong. They knew the vision that they wanted to create. And then hockey stick growth. Pretty incredible to see out of our friends over at Securitize. Uh we're going to have them on the show again very very soon. Uh and they are preaching what we believe is the endgame of tokenization in their native issuance model. Obviously, there are some more nearterm, you know, pseudo models that

are very abstracted way. They don't give actual shareholder custody. Uh we're going to be diving into more of those topics later in the show. Uh what do we have up next from our friends over at Circle? These guys released their 2026 growth plan for USDC, which I'd imagine depends quite a bit on whether or not they're able to pay yield on stable coins. Uh you know, these guys are embracing the um the uh Genius Act and uh we're going to see more from our friends at Circle very soon. They're also launching ARC.

Uh so let's speedrun through this. Strengthening compliance and financial infrastructure is a central theme of circle 2026 roadmap aims to align USDC uh more closely with evolving stablecoin frameworks in uh new jurisdictions. Obviously genius clarity these are the things that we're seeing. Uh they have a priority on regulatory integration and transparency. I'd imagine as we see more tokenization efforts at the financial beings uh in the highest power uh we have New York Stock Exchange pushing tokenization we have 247 markets we have CFTC and SEC collaborating all of this is pushing tokenization further we're getting more assets um in both the

speculative equities and securities front also in the fixed income front stable coins play crucial role in both of these industries and uh and they're They're working on regulatory integration and transparency uh for each of these. Uh they're going to reinforce reserve management and compliance to attract institutional capital. No surprise there. Obviously, we you know if there is a run of which we've seen before, remember Silicon Valley Bank back I think this would have been somewhere like 2023 to 2024 maybe actually even earlier. Um, you know, we we saw Silicon Valley Bank was one of the banks where a lot of the reserves of Circle was stored in cash and

treasuries. Silicon Valley Bank went under. We were thinking maybe they would get bailed out. Turns out they didn't. And so when that bank went down, there was some concern as to whether or not USDC was going to to, you know, go down with it if it didn't have the proper reserves and it wasn't backed fully onetoone. It did dep briefly, but after, you know, some more uh more of the information came out about Silicon Valley Bank, it turns out, no, Circle's fine, USDC is fine, returned the peg, and it was it was the easiest, quickest 10% uh gain that anyone would have gotten. Uh they ended up going from 90 cents back to a dollar within a couple of days uh at the latest. So, um USDC is going to become

even more integrated into the regulatory environment. They're going to become more transparent. Uh and reserve management compliance will inra attract more institutional capital. This is something that we know is necessary in order to expand stable coins. Uh we'll also see crosschain infrastructure, improve USDC's interop and settlement efficiency across networks. We believe ARC is going to be almost this like central hub of which they're going to route several uh several variations of USD across all of the multi-chain. Uh ARC is going to become a very important piece to this. Uh they're going to expand bank and payment partnerships, embedding stable coins deeper into existing financial rails. Um payments only just a fraction of the payments

industry uh has started to convert into stable coins, but Mastercard, Visa are are really taking hold. uh and then you know generally this this roadmap signals USDC uh as positioning for a core layer in this reg emerging regulated onchain payments installment stack and and we anticipate that will continue. So that wraps up our news portion of the show. Uh we are going to take a very brief break and uh we're going to be back with our friend Hanan from Codeex on our stable coin segment for the week sponsored by Fracks. And uh there's lots to talk about. Uh obviously all the yields on stable coins. We've got the regulatory environment. We've got

Circle's new road map. Um there's there's there's tons to dig into. So don't go anywhere. We'll be right back after a quick break. [music] Yeet is built for big moments. The most fun you'll ever have with your crypto. Go to yeet.com to yeet into your next game. Not your keys, not your [music] coins.

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>> [music] [music] >> Welcome back to another episode of Stabled Up, our premier weekly show covering the ins and outs of digital dollars, stable coins, and the future of decentralized finance. The >> show is made possible by FRA and FRA is powering the financial engine of the internet, powering FRXUSD and genius compliant stable coins. This is the stablecoin super cycle made possible by FRA. Now enjoy stabled up our weekly stable coin show.

All right, Han, we are here. We've got uh we've got our friend over at Codeex. How nan is here for our stable coin segment. Uh sponsored by Fracks. Our friends over at FRA are doing great work. Uh Genius Compliance stable coins and uh recently just had a another $50 million uh partner get get announced. uh and join Fracknet. So, uh it is our pleasure to welcome how non because we've got a lot to talk about in the stable coin world. Um obviously the Clarity Act, you know, is is getting held up uh because banks and uh and stable coin issuers can't figure out where to put the yield. Um and and uh stable coin FX is getting a lot more traction as of as of late. But uh Han,

man, it's a it's a pleasure because it's been a little while since Argentina. So I uh I hope you're doing well. >> I'm good. Robbie, I hear you're doing better, though. You're down uh you're down south >> up north here. >> I was just telling you, man, it's 25 degrees here, so I I am in Florida, but it's Man, I'm I'm I'm trying my best to stay warm. I know you are, too. >> Yeah. Yeah, it's uh it's freezing up here. >> What What have you been up to since Argentina? >> We've been uh we've been headound building the business. Um and so, lots of exciting things going on at Codex. We hit a billion plus in uh run rate volumes. Uh we're profitable on a net revenue basis. Things are things are looking good and uh we're we're very happy.

>> I love it. Um and and so you know for anyone who is uh it was a it was a doozy down there in uh in Argentina. It was a marathon. Um and so we had you know several guests for for anyone who didn't get a chance to see that segment. You know give us a a bit of an explainer on Codeex. Obviously, you guys are in the world of stable coins, particularly stable coin forex, which you know is a very uh there's a lot to unpack in that regard as well, but yeah, give us a sense of how you've been able to generate up to a billion dollars of volume this far. >> Yeah, so Codex is the first uh stable coin FX chain, and we're built to make currency conversions to and from fiat cheap, instant, and always on. And the reason why that's so important is

because despite stable coins growing by almost a hundred billion last year, most of FX today in stable coin land is done in a traditional way. And so it's slow and expensive and it's holding back the growth of stable coins. And so what we want to do is we want to bring that activity onchain in a cryptonative way. And we think this will uh unblock uh one of the key blockers that's holding back stable coin growth. And so far it seems like we're right. Yeah. And and you know one of the examples that you had shared with us back then was you know take the take the example of um third party currency to third party currency almost like a like you know right now I believe if I'm remembering correctly a lot of the forex

and and US a lot of the the interchange between countries currencies abroad has to flow through the dollar. there's no liquid markets between um you know some of these third world nations and a lot of their currencies but forex is one of the most liquid industries out there. So could you just unpack a little bit you know if forex is so liquid why why aren't we seeing more you know third world currency to third world currency flows? Yeah, I I think to separate out the issues here, um I think first let's discuss like what traditional FX looks like. Traditional FX is a very hierarchical system, right? Originally there were these problems with

settlement risk and so they came up with institutions like CLS that solve that settlement risk and you know CLS only wants to deal with so many people at a time and so only that set of banks has actually direct access to that market and then everybody else has to go through these banks. So you get these tiers of access and each tier of access adds fees and of course you know if you're you know on offramp in some country that's not very prominent uh you're probably not at the very top of that hierarchy uh you are you know suffering from sort of multiple layers of these types of fees and so that's what's happening today uh when somebody is exchanging local fiat into stable coins and so it shouldn't it should be no surprise that it's expensive um that's the first aspect of it and so

now recall like why why does this hierarchy even exist. It exists because there's a settlement risk problem. Basically, if guy sends A sends B money, B might not have sent A money yet. And you don't you have no way of knowing for sure that's happened unless you have an intermediary. But remember, in crypto, we don't have that problem. And in fact, if you were to design the effect system from scratch today, you wouldn't need something like a CLS because you'd be on crypto rails. Now, um that is sort of the first principles advantage, right? You you don't need this hierarchy. you don't need to solve the settlement risk problem and so you can flatten it and so this can create much better economics for everybody involved um and cheaper FX for everybody. Um that's kind of the the big picture of what's going on. Uh now

on the specific dollar point it's it's true most traditional FX goes through the dollar. It could emerge to be the similar case in stable coins as well but that doesn't delete the advantages as well as the uh efficiencies here. Uh these are maybe a little separate. >> Okay. Okay, got it. Um, and so, you know, a as we're thinking through this, like like you're saying, flattening the the hierarchal structure that we have out there, you know, we we don't need an intermediary um you know, enter codecs to essentially, you know, solve what would previously be done by intermediaries.

You guys are enabling through some peer-to-peer connections. And so can you can you give me a sense of like who are your current partners and who is doing the pro the the most of the volume on codeex right is it I think it's probably not retail right it's probably at you know some sort of institutional level whether that's mostly crypton native or it's mostly you know legacy finance who who are the primary players that are currently doing most of the volume on on codeex today >> yeah it's primarily today uh I would think of it as like fintexs and PSPs think of them as like bund handlers of underlying flows. And we're starting to see companies directly want to do this as well because who doesn't want, you know, cheaper and faster conversions.

Um, and and that's maybe the demand side of the business, right? Which is, you know, pretty easy to think about from the customer's perspective. They have fiat, they want stable coins, they want it really cheap or maybe the other way around or, you know, between two stable coins, whatever, right? Anything to anything is the new slogan that we're coming up with. Um, so they want anything to anything and they don't really care what's going on in background. They don't care about CLS hierarchy, blah blah blah. This is all Babel, right? Who gives a [ __ ] Okay, that that's the demand side. And then on the supply side, what we're going to be spinning up soon are these onchain pools that anybody can participate in.

>> And so what can you do? You can stake value in there and you can make money. Now, crucially, this is not a DeFi Ponzi, right? It's not like you stake a DEX token to receive liquidity mining of the token of the DEX that then gets rehypothecated, you know, 12 different ways and some weird thing, very complicated. It's very simple. The money you're making is from the customer who wants to pay a fee to get his conversion done. That's it. >> Okay. And and so um we're very excited about this because uh this is the great in my view the holy grail in stable coins which is build the FX facility that is the globally dominant stable coin FX facility and liquidity begets liquidity and uh I think this is the

crucial primitive that's missing in stable coins today and what will determine the winner in this next uh 5 10 years >> and so give us I I we may hop back and forth between the the traditional legacy you know stable coin or or FX stack and and back just to make sure we really wrap our heads around it here, right? Where does most of the volume today happen in the FX market? Is it it's like it there's some portion of venues, right? And we're we're looking to to take that essentially vampire attack it put it on codeex.

>> That's right. Uh maybe I would put it less aggressively [laughter] but uh I I think like um you know there are massive volumes being done for like dollar euro right >> right >> to me that's not particularly interesting we'll do that business if we need to but you know it's pretty efficient >> where I think it's most interesting is where one leg is maybe in the developing world let's say or Southeast Asia I think there the inefficiencies are extremely high and uh you know there we can we can uh very much offer a much better experience And so I think these things will start small. FX markets are very large as you say like you know billion sounds great but it's a drop in the bucket in the glo overall FX market. Um to me that means that it's a much larger pie for us to

grow into. Uh this is truly a massive addressable TAM. I think if we're sober about it I think we can talk about it as like the addressable TAM today for stable coins is likely in these kind of corridors where one side has an emerging market need. And this is partly why I think if you see stablecoin teams uh you know spend most of their time in New York and spend most of their time in Europe, you should be a little skeptical like what's really going on there? What are they actually doing? Like what why does uh why does CLA need a stable coin? Not to pick on anybody in particular, right? But um you know why does a why does a deop fintech necessarily need a stable coin? Um these are these are questions I think folks should be

asking. >> Okay. And so from your perspective, why does CLA like we we've been, you know, we've been proponents of like pretty much anyone with distribution can launch a stable coin and there they probably won't be the issuer themselves. Maybe they'll have, you know, an issuing partner or some infrastructure partner that enables their stable coin. But, you know, Uber, Airbnb, like all of these guys have the distribution where whether it's for a loyalty program or if it's just to, you know, earn the interest income themselves rather than having money floating out there and, you know, giving it to the bank getting you know, pennies on the dollar, they could be taking the interest in their own hands.

Is that the primary value proposition for like the CLA stable coins of the world or is there is there more to this picture? >> Uh I I think the primary value proposition of deals like that is hype. Um and I think the primary value proposition of that is well look like tether is such a fantastic business right? It's you know it's enormously profitable very few people. What if we what if we could create another tether? >> Mhm. Now, of course, like the problem may be that you cannot create another tether. I think >> some people are going to realize that.

Yep. [laughter] >> But people are going to try. That's for sure. Right. And and so like um there are two it cuts down on two pieces, right? The first piece is well if the fintech holds the balances themselves then a stable coin is no no better than a money market money market mutual fund or like rolling commercial paper or like you know reverse repo themselves >> which like if you're of size obviously you have some guy doing that >> so then the question is you need other people to hold it >> right like why are other people holding it >> do you want to hold CLA stablecoin Robbie >> I don't use CLA very often if I did and I got some sort of rewards or benefits or special VIP access somewhere. I guess

maybe I would consider it, but >> yeah, >> I would need some pretty good assurances to to know that a a dollar here is a dollar there. You know what I mean? >> That's right. That's right. And um I think but we're the type of thing where it's like, well, that could make sense for somebody else, you know? Like I don't know. Like let me ask you this, Robbie. Like how would you like to uh do transactions for cheaper and faster? >> That's a no-brainer. >> Yeah. So that I like to bet on that kind of thing, right? Let's not do like cartwheels and somersaults in our brains, right? Let's do the stuff that, you know, really moves the needle.

>> Yeah. And so anything to anything is primarily going to be stable coin, stablecoin, fiat, stable coin. Like do you anticipate getting too involved in I take probably not the fiat to fiat world be it different fiat forex currencies but like the fiat to stable coin world is where I think is probably where there's a lot of creative design space. We have AMMs, right? A lot of the AMMs are pretty liquid. They can do tokens. They can do stable coin to stable coin. But fiat to stablecoin is where you need the the the right mix of technology and banking providers and and payment service providers and all these things, right? So give us a sense of like where

the the fiat to stable coin on-ramp off-ramp flows. What what is the stack there? How does how do those flows look? It >> it's a it's a it's a mess, right? It's incredibly difficult to wrangle all this stuff. Um, it's all the stuff that typically a cryptonative team A has no interest in doing and B has no ability to do it. And so we're we're a very strange team, right? We're kind of like uh, you know, part eagle and and uh, part lion, you know, like we're we're a Griffin company, like what one side of it is like uh, very native, extremely cryptonative, all the native tactics, and the other side is a lot of uh, tradition.

And so like in my view uh you know there's there's a lot of pessimism right now right about like tokens blah blah blah like what is the path forward? The path forward is griffin companies that really can understand both sides and can apply these like um interesting playbooks that nobody else can even replicate because they don't just they don't have both sides of the knowledge in their head. >> Yeah. >> Um and so that that's what's happening and I I think like um you'll see more and more that that intersection is where all the interesting things will happen. I mean this is this is what we've been calling neo finance and so you know this idea of sort of you know straddling that line in the middle uh these teams there was crypto native infrastructure slop that never found product market fit on

one side that's getting forced to you know rethink I think man you had uh you coined the term research fetish which I think right was spoton and we we've been using that thank you um and then on the other side you've got this legacy financial you So this system that's worked for a long time but is is ripe for innovation, ripe for disruption. They're also being forced to innovate. Um and ultimately it's not just that these two things are innovating in parallel. They're actually innovating to the same place. And this is kind of that Griffin convergence area that you mentioned. And this is where, you know, we think that there's a ton of uh opportunities to explore more sustainable businesses, actual

businesses if you're coming from the crypto world. And we're we're calling that that neo finance um because it started with stable coins. But the reality is that there's an entire world built around these stable coins. There's financial mechanisms, money markets, yield sources, all of these things that are built around stable coins. And I think, you know, I'd actually like love to explore it from both lens. Why don't we start with the crypto side? What do you think the crypto side of the world gets wrong about like the more traditional payments side of the of of the equation?

>> Well, I think um first of all like uh traditionally the problem has been like nobody wants to even think about it because there's been such a graveyard of payment crypto payment companies, right? Stretching all the way back to like Satoshi you could say like Satoshi was e- money e- money but then if the denomination moves is a you know $10 asset like uh that's probably not a very good payment rail. >> Yeah. [snorts] Um, I think of late it's like just a bunch of guys who don't know what they're doing. Um, it's very hard to acquire the expertise, right? And I think it's very hard to shed old habits. I think many people are thinking of stable coins as like another narrative to shout about, >> which is very strange to me. I I see some like shifting to AI where like, you know, people want to kind of ride the AI

coattails. >> They want to do like AI to AI economy using stable coins. >> Yeah. Like, you know, there's a guy like launching memecoins for, you know, the the COD bots and whatnot. Like, >> dude, like, why are you riding the cotails off somebody else's product market fit? We have our own now. >> Mhm. >> You actually don't have to do that anymore man. >> Yeah. >> Just focus on what's working. Look at the numbers. 200 billion to 300 billion. 100 billion doesn't happen. That's not, you know, somebody's not rigging that, right? Like that that's that's real. >> And if you look at the spread between like, let's say Salana, Salana this week is down 17%. and stable is up 40%.

Stable is another, you know, stable coin chain pure type, right? >> Like why is the spread 60%. Well, because markets are realizing where the real stuff is. >> Yeah. >> Um and so really guys, like there's no need to you don't have to do you don't have to do all dance anymore. It's here. We're good. >> Let's just do the thing. >> Yep. I think that's why we're seeing a lot more incoming uh builders, founders into the stable coin world. >> That's right. That's right. Um, yeah, it's uh it's it's pretty obvious. It's it's like the timeline is reaching this kind of max pessimism phase just at the same time like the product market has never been realer, >> right? Exactly.

>> And so it depends how much emotional volatility you can handle, I guess. >> Yeah. >> Crypto's always been uh if you can't handle the ball, you know, get out. [clears throat] >> It's always been a roller coaster, man. >> Um Okay. Okay. And then and then you know I want to get a concrete you know some commentary on a on a concrete example in the crypto world. Um take polygon right and there's a number of examples but I think you know that polygon is an example of look they've been in the in the space for a long time. They've built a lot of different stuff um from ZK EVMs you know all all the way through the docket. Um, and now it seems as if they've really reentered around this open money stack, right?

This, you know, payments broadly, um, using stable coins and onchain rails, acquiring a couple companies. Is this the right approach? Do you think, you know, they've kind of gone too far and they're losing a little bit of, you know, what, you know, where they came from, a little bit of their roots generally? Just curious how how you're seeing uh this Polygon open money stack. >> Yeah, I I I don't know too much about the specifics there. I I can comment generally on how these chain deals tend to work, right? I I think like chain deals uh again these are old habits. Old habits die hard. Like chain deals typically are like yo guy like use my chain which is the same as every other chain. Uh you know where it matters,

right? Sure they're like technical differences but like on a product basis it's really very similar. Use my chain and I'll give you some tokens. like that. That's the classic playbook. And um I think that just doesn't work anymore, right? Like I think what you need to do instead is you need to build differentiation that's like real. For instance, if you ask a builder like, you know, would you like to build on a substrate where you have the cheapest possible FX at all times? Of course, that's a very easy sell. But you know, how would you like to build on, you know, uh this 50th deployment of OP stack?

>> I don't know why. Why? Well, we have tokens out on, >> right? Yeah. And like, okay, your tokens are colored green, the guy's tokens are colored yellow, and you know, there's a very thin marking layer around, but it's like, what what the hell are we doing here, guys? Like, >> oh, man. >> Yeah. >> Yeah. Um, uh, that's when you start seeing the vesting cliff reached meme and the guy jumping off. That's that's what ends up happening there. Okay. So, that's kind of the how the crypto side is approaching this this convergence. Now, if we look to the other side, you know, I could see how if I'm if I'm strongmanning or trying to strongman here, you know, someone from this side is going to say, "Hey, I I think it sounds great. You know, you've got this on-ramp off-ramp thing. You know, the

the cheaper, faster, better is a no-brainer. I if you can get to that liquidity point where you're able to offer cheaper and better execution, but you know, you know, Han, like this is a new game for you, right? You guys have been building maybe a couple years. Like there's forex incumbents that have been building for decades. How do you achieve a liquidity landscape, liquidity milestone that ultimately gets you better execution than some of the incumbents? >> Because some of the cryptonative tactics we know can be applied here and give us an unfair advantage.

>> Please uh you know more just what are those like be more specific? Unpack that for us. Yeah, I think um I think there's a really underexploited opportunity here of um you know the right structuring when it comes to NIM shares of like local non-dollar stables sharing NIM as well as an intelligent incentive system that you know isn't just like trying to drive up TVL for no reason or trying to drive some vanity metric but is actually creating this new financial primitive onchain FX and like to pull something like that off requires nativity.

That's actual useful nativity. Um, you know, I there are many smart payments people, right? But this is a total totally different ball game. Um, this is a very different type of ball game. And so [snorts] I think again like there's this type of intersection that I think is really interesting uh for the right people to explore these type of Griffin companies. >> Okay. And and so um specifically we're looking at targeting like some some currencies in developing nations that currently don't have the liquidity topography that a lot of the you know the US dollar to euro like you said you're you're not kind of staying out of that market for now but you think it it is achievable to become some of the most

like one of the most liquid venues for certain currency pairs. >> We think so. We think so. and uh well before we are the most liquid I think we can be extremely competitive in cost much cheaper in cost as well. Um, a lot of this is, I think, price discrimination that's being used against people who don't have power. And one of the great uh virtues of being a a tech startup at the frontier is that, you know, I don't wake up every morning and think like how much gross profit can I generate, right? I I don't really care, right? We need to get a network effects and I want to grow. That's what matters.

Um, and so I think the combination of those forces make it quite likely that for many pairs, many interesting uh frontier pairs, the onchain FX markets will become the default markets. [snorts] >> Okay. And so if you're if you're looking at um onchain FX um my my understanding is that a lot of the FX volume currently you know it comes from speculation like it's people that are you know taking out some leverage and you know they're they're you know increasing their their notional size by by you know orders of magnitude.

>> Yeah. Is that is that also the case onchain or is it more for payments and you know those sorts of things or is it is it also for currency speculation? >> We have considered building products that are like specifically tuned for currency speculation you know that embed more leverage in them. I think uh what we are seeing the market pull out of us right now is like real business uh like players right like somebody really wants to do a crossber payment and they need stable coins or you know they're trying to get out of some hyperinflating regime and they prefer to denominate their profits in stable coins that's what we're seeing right now and that's what we're building for uh you know like >> aesthetically I kind of like that better >> than you know helping some dude like go

20x long you know >> uh yen USD or thing. Um, that one seems more the one we're doing seems more useful for society. >> Yeah. And so, walk us through like the user experience, right? But, but for a business that is looking to escape a hyperinflationary currency and and utilizing codecs, you know, to get access elsewhere. >> Yeah. So, there's three ways to interact with us today. You give us a ring or, you know, a telegram. Uh, you speak to us directly like that through voice. you can use our uh UI which is a guey uh or you can use our APIs and so depending on the type of business they'll prefer one of these three you know types of modalities and across all these platforms you know our commitment to you

as our customer is that we will source you the cheapest possible FX liquidity >> and okay anything to anything uh to hammer that one home >> and so someone can just give you a call you know if they're um if they're trying to do a crossber payment they can give you guys a call you'll do like OTC or block pricing and and uh deliver the uh the end currency that the destination currency that they're looking to achieve. >> That's right. The the domination you want in the form you want. You want stables, boom, you got stables. You want [snorts] fiat in this bank account, boom, you got fiat in this bank account.

Um that's what we specialize on. >> And so what what would you say is the is the path to scale? You guys are at a billion dollars in volume now. How do we get that to to 10 billion and eventually 100? I think the onchain component of this is crucial. Uh I think it it will give us this structural cost advantage that I think is very hard to beat and I think um you can run this flywheel where you know the cheaper you're able to provide this FX the more customers you have the more liquidity the cheaper the FX and so on and so forth and we have tokens to juice that flywheel. Now what we need to distinguish here is like a useless Ponzi token incentive thing where like you're juicing a [clears throat] something but there's nothing there, right? like you're you're

trying to beat the horse to death and the horse is dead and there's not no matter how much token incentives you do, the horse is still dead >> versus like you are starting an actually useful thing that is going to be like a key primitive in this new system that is novel as well that nobody has ever pulled off yet. >> Yeah. Yeah. Uh we obviously saw plenty of uh like examples of doing it the wrong way, right, with token emissions pool. Now, you know, part of this neo finance thesis is that like there's actual businesses underneath the hood.

You need real revenue. You can't just exist in cryptonative infrastructure slop land anymore, right? It it's, uh, it's a, you know, reality check for for a lot of these businesses. Um, >> you know, last time you were on, uh, we also talked about geographical, uh, like regional stable coins. Um, >> and I'm just curious how you're thinking about this, you know, you know, fast forward a couple months because >> I if you know, we go to developing countries today, you know, the most popular stable coins are USDT for the most part, right? uh is a US dollar denominated stable coin >> and and so it almost seems like actually I I I don't think anyone would debate

this that right now US dollar denominated stable coins have more market fit in the developing nations than like even their own currency stable coins right so >> so h do you expect that to change because it seems like in order for obviously fiat to stable coin even if it is just US dollar stable coin that can still be a tremendous business but I'd anticipate that you know in order for um you know the the onchain FX market to really take off, we would need some regional stable coins to to develop more more in growth. Is that how you're thinking about this as well?

>> We think we have a contrarian view that uh non-doll stable coins have immediate product market fit and that product market fit will be as a way to do onchain effects. meaning it's uh its primary use will be so that you can trade in that denomination onchain for that FX. Not so much that it itself will be the payment instrument. It itself could be offramp back into the fiat if need be. >> That's kind of our view. Um and if we're correct then uh you know this is about to get pretty exciting. And so the way to think about this is more so as like tokeni like if you look at the US equities market New York Stock Exchange is talking about getting into you know

tokenized equities. It doesn't really give the actually it gives the shareholder less rights right there's like not bankr bank bankruptcy protection oftent times they're just buying like an SPV wrapper of the actual share. Um, and so, you know, the New York Stock Exchange is still getting into tokenization for these reasons because it can kind of proliferate their th those assets further. More people can get access. Um, and so you're saying that people may not actually need or want the the regional stable coin, you know, specific to your to your, you know, desired and, you know, ideal business case before of, hey, we

actually want to help people. like we want to deliver these currencies that people actually want, not just a speculative vehicle, right? Are you saying that, you know, regional stable coins are more so a speculative vehicle and those can still provide a lot of value for doing onchain FX? They're just not to the key business proposition of helping people get the the form factor and currency that they are looking for. >> Yeah, I um we're we're getting into pretty like kind of technical territory. Um, let me think about how best to express this. So, the local stable coins themselves are an interesting banking rail. Think of it that way where um people who hold that local stable coin can burn it and get back

into fiat. And so, that's a very interesting avenue. And so, what do I think the non-doll stable coin product market fit will be immediately? It'll be twofold. one, it will be people who may want to end up back in fiat, local fiat, right? And there's a way for them to do that [snorts] now. So then why would they go through this like uh non-dollar stable coin is because then they they got the cheaper FX. That's why >> Oh, you're saying it's cheaper to go from their regional stable coin to their regional fiat than go from USDT to their regional fiat.

>> That's right. That's right. And and there there other like complicated reasons why why that might be the case. And then the second interesting use case here is well look if you're sitting in some local fiat. Well, why wouldn't you prefer a version of that that actually yields a ton more and is safe, right? It's just on the other side of this FX trade. Um, that's what I I see kind of the immediate product market fit being now. Five years from now, who knows, right? But, you know, I need to live in the present and uh that's why again we're we're so convicted on the direction we're taking. >> Awesome. Yeah, it it makes sense. And this is something that like you said I it's a contrarian view. Like I think others are not seeing regional stable coins. They're going they're you know circle's got their do their euro

product. Tether is almost going away from this completely. It seems like they're going more tokenized gold than regional stable coins. They just announced another USAT right this US dollar or US >> Tether like you know partnership with World Liberty Finance guys and and that whole thing. Um, >> that's right. >> Any any comments there? I just I haven't heard too much about that, but you know, there's other there's other things. >> It's a good gig for Bo Hines, right? Uh, it's great gig.

>> Uh, shout out to Bo. >> Yeah, >> good seat. >> Yeah. Um, and then, uh, the other thing I wanted to chat with you about here was, you know, the DC rumblings, right? And uh and there was plenty of this at Davos as well, like you know, people are worried that uh paying yield on stable coins is going to end up with uh capital flight out of US banks and into stable coins. Banks seem afraid. But then on the other side of it, you got Tether saying like, look, we don't even we don't even want to pay yield on our stable coins. We've got plenty of market share not paying yield. don't come at our bottom line and and you know make us you know pay yield on the stable coin.

So you know I I was on a on on a call the other day and it with and it almost seemed like it wasn't just the banks and the crypto players fighting it out anymore. It was like this divergence between the crypto players and now it's a three-headed beast. >> That's right. >> Okay. Just tell us, you know, where where's your perspective on this? Um, incumbents are incumbents no matter whether they're crypto or tradent will reach for regulatory capture as the tool to keep out outsiders. >> So if you're hollow today and let's say you know Nick Van comes along with Agora like what's a great way to kneecap Nick Van [snorts] well like make it impossible for him to compete with you on margin. You already have scale,

right? Tether doesn't need to pay anybody to use Tether. But if you're if you're if you're going to try to get people to use um you know um let's say CLA stablecoin, you probably are going to have to pay up in some way for that. And what better way to kneecap the competition than to say that's illegal. It's not possible. Now like the depositbased arguments from uh the traditional banks I think are a little thin. I think the truth is probably the exact opposite actually. Um much of credit creation in in the American economy is not actually through the banks these days. It's through you know uh separate institutions like uh credit funds and other places >> and um part of the reason uh that uh rates are as high as they are is because that the

banks are this way and if anything actually uh the movement of capital into stable coins might actually compress rates and make everything cheaper for everybody. And so I think the lobbyists are uh making a series of uh uh very aggressive arguments that probably don't hold up if you look at them. >> Okay. Now I if you know say tomorrow right you you end up getting this clarity act approved and they can pay yield and we do see a capital flight just you know even that that may be unlikely but if it were to happen even if it's not 9 trillion or whatever you know the estimates are from the banks but you know even even you know a more reasonable number I is that a

deflationary pressure would you say that you know because in the in the traditional credit creation world, right? You have money that's rehypothecated a few times. A dollar in deposits is more like $10 circulating. You know, by by transferring that into a stable coin world where everything is onetoone fully backed, are we not are we taking, you know, the other $9 out of the supply and kind of squashing everything uh back to the capital base? Is that is that a tr is that a truth to this argument even if it's not nine trillion at scale? Le let's take any like I think it's like it all sounds very scary in the abstract right but then once you make it concrete I think

it will be clear why it's not true >> um let's say you're buying a house you're going to have a mortgage right you know like how are mortgages created now the banks at some point may have originated and packaged them but today sure as hell they're not holding on to the principal risk meaning somebody else is holding on to the other side of that stuff it's not a bank and so this has nothing to do with you buying mortgages you get you and the uh costliness of being able to purchase a house. And so like you know credit creation and all these things the words sound very big and sound very scary but um in actual fact it doesn't affect you at all.

[snorts] And second piece of this is that like the banks to GIS in particular right the the very large banks are the beneficiaries of an enormous societal subsidy. >> You know we as society have decided like look these banks are too big to fail like if if something happens like we're going to bail them out basically right? um they were too big in '08 and so we made them even bigger and [snorts] then now they definitely can't go down right okay so you know that is a subsidy provided by society like you know that's not something that uh they necessarily earned or that they uh have sort of some kind of inherent right to and they make massive profits off that deposit base that those profits could be compressed you could continue to extend loans but maybe don't make all 4% maybe make 3%

off the spread or 2% off the spread banks have that option And so like these arguments just really don't hold water I think once you examine them. >> Yeah. Okay. [clears throat] And so um you know just putting a putting a ribbon on on this like you know where do you think we go from here with you know the stable coin regulation um I if you know Coinbase is you know fighting it tooth and nail. They want yield to be paid. Tether says they don't want it to be paid and banks are kind of like yeah we don't want it to be paid either. you know, we're we're happy with the way things are. You know, do you think we get the clarity act or that might be a tough question, but generally like how how do you think we should

navigate this yield on stable coins business? >> Yeah, I I think um so what is the question with clarity is that um an associated entity not the issuer uh is also not allowed to give marketing payments. Now like the bank lobby's view on this is that you know this the marketing payment thing is a loophole right it's really it's just you're giving out interest but you're calling it marketing but if you take that at face value then like what other financial products are you not allowed to to make it consistent right like what other financial products are you not allowed to have marketing spend for know virtually most financial products have some kind of marketing spend let's say the credit card point systems right that

is marketing spend >> and so like for you to be logically consistent across these things, I I think uh you'd have to be uh pretty radical about your views on these things. Now, like I don't know if that's how the decision will be made. Uh you know, perhaps other dynamics are at play there, but I think the facts are very much in stable coins's uh favor. >> Yeah. >> Last point on that. Sure. >> What about the savers? >> So, like people keep making these like borrower arguments. Okay. But what about the savers? Are the savers just supposed to get screwed?

savers are getting screwed with 0% interest rates, right? They're not getting anything even though risk-f free rates are much higher. Are they just supposed to be screwed? Like this is why the the banks flattened the argument as if it's just this it's not a set of trade-offs. It's just this kind of bad boogeyman thing. But if you look a bit closer, there's a it's a lot more complicated. >> Yeah. Yeah. Uh it it certainly seems that way and it's it's you know too hairy to really get a sense of. We we've got actually uh someone from uh the Salana Policy Institute coming up next and she's you know been on Capitol Hill a little bit so we'll we'll get a bit more. Um but before you go I wanted to get your read on uh on the next Fed share. Bullish bearish for crypto in

general. Bullish bearish for for stable coins. >> The Bitcoin people tell me bullish. [laughter] >> I don't know. I honestly don't know. >> It's Yeah, we'll see whether or not you know I got to think that he's going to he's going to lower rates, right? And then whether that, you know, how that affects uh stable coins, we'll see. But it seems as if in the past, you know, that's made DeFi rates more attractive. We'll see. >> Yeah, we'll see. Interesting times we live in. >> Yeah. Hanan, thank you so much for joining, man. Always a pleasure. Would love to have you on again soon because uh stable coins aren't going anywhere.

That's >> right. >> That's for sure. >> Thanks, Robbie. We'll see you next time. Thanks man. >> Bye. All right, we'll do a quick break uh before our next guest Kristen from the Solana Policy Institute got even more even more politics regulation going on. We'll be right back after is built for big moments. The most fun you'll ever have with your crypto. Go to yeet.com to yeet into your next game.

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Money shouldn't wait for Mondays. Following his real upgrade, Polygon is now one of the fastest chains for stable coin transfers [music] and payments. Visit Polygon Technology to learn more. [music] All right, we are back. We are here with Kristen Smith. Uh Kristen, welcome to the show. It's your first time on. Yeah, thanks for having me. >> Absolutely. Why don't uh you give us a little bit of an intro and a background? You are uh in DC on Capitol Hill uh with the best and the brightest working up market structure. So uh tell us a bit of uh how you ended up there on DC working on uh crypto regulation.

>> Yeah, well I've been in DC for over 25 years now. It seems like so so long yet so it's gone by so quickly. And uh first uh 10 years or so I worked as a staffer on Capitol Hill working on internet policy issues. This was uh obviously long before the Bitcoin white paper and and uh cryptocurrencies. Uh I then became a lobbyist for many years and about eight years ago I got into the crypto space by being the very first employee of the blockchain association which I helped to build up uh over seven years uh into the powerhouse that it is today. and I left in the spring to join Salana Policy Institute as president.

So, it's been uh really fun to bring my experience to the Salana ecosystem and be a part of uh a blockchain that is uh doing so much, building so much, and it's been a lot of fun. >> Absolutely. Well, congrats on the on the move. Uh we we've had Summer on the show. Um and we've had a couple of the the people in the DC circuit on the show as well. Um, and like I mentioned, you know, we're excited to go to the DC blockchain summit in March, uh, and speak with even more. Um, and so give us a before we dig into market structure, give us a sense of just generally how things tend to work on Capitol Hill when legislation is in the mix and regul regulations are becoming formed, right?

You've got trade groups, you've got lobby groups, you've got, you know, the blockchain association, now Salana Policy Institute. just briefly how do these these groups all fit together? >> Yeah. No, that's that's a good question. I think you know when I started working on these issues you could probably count on you know two hands the number of people in Washington who were thinking about crypto policy. It was uh largely coin center uh the digital chamber and maybe one or two other individuals but there weren't companies or certainly weren't ecosystems that had specific representation in DC. And so there's been sort of a natural growth of the uh crypto influence industry, I guess you could say. Um uh trade associations are a very good place to start because you

know you essentially a trade association has member companies that all sort of financially support the association and so it's a sort of a lower cost way for companies to get involved. Um but over time the issues get more complex. uh companies uh you know have more budgets and uh you sort of get to the point where you in addition to having trade associations which represent an industry, you can also have somebody working on specific issues and as um I'm sure you well know because it it sounds like you've been spoking with a lot of people in DC. Uh there there are a lot of issues going on right now and that means you need lobbyists, you need marketing and communications professionals, you need lawyers, um you need a a whole group of people to really

think through these issues and and help get it done correctly. So I would say it's a little bit chaotic. Um but the crypto industry is very communicative and very good at sharing information uh you know asynchronously. And I think that we probably do it better than any other industry as a whole just because we come from, you know, a sort of a high-tech fastmoving industry. That means we can also work on the policy issues in a very collaborative way. >> Yeah, it certainly is fast-paced. Um, we like to get things done quickly and uh from afar it seems like maybe DC operates at their own pace, which is >> Yeah. Yeah. They do not they do not work at the speed of crypto, that's for sure.

So uh though I have to say you know in the past year since uh you know the Trump administration came in and and the new Congress um I mean the amount of progress that has been made within Congress with the passage of the Genius Act within the White House with the executive orders and across the regulatory agencies. I mean it has been a complete 180 because it there were there were some dark dark days not not too long ago and uh so much has happened. We still have a long ways to go, but yeah, um it's it's been completely turned around from >> from the direction it was headed.

>> Just one last question on this. Is it is it that this current administration seems like it's moving so quickly and so fast because we're coming off of the Gendler, you know, Middle Ages dark era, or is this is this was Gendler just, you know, that era was just so subpar and this is just normal and par for the course? No, I don't I don't think this is normal in par for the course. I mean, yes, Gendler was incredibly hostile. I've never seen a singular regulator so like focused on destroying an industry in the United States as we saw with Gary Gensler. Um, and so this is, you know, what would have been normal is to maybe stop the litigation and sort of step out

of the way and not get in the way. This is completely different. We have the full support of the White House with David Saxs there. Um, previously Bo Hines, now Patrick Wit. Um, you know, we've had some really great champions from within and we've had a president who, you know, wants to talk about it and, uh, is is willing to get on the phone and and help get the deal done uh, to get things across the finish line. So no, I would say this is this is very unusual and I think we're pretty lucky here in the US because I think if we hadn't if we didn't have this level of engagement from the government, I think, you know, it might have been too late for things to come back in the US, but because we have that kind of support, I think it's really uh it's been a huge a

huge bo for crypto here in the US. >> Absolutely. It's repatriated a lot of crypto companies, right? It's not just, you know, the it's it's brought a lot of the the foundations, a lot of the businesses that, you know, fled the US during the Gendzor era are now back. They're doing business in the US again. And and it's a result of, like you're saying, it's both uh the compounding of, you know, how bad things were, but how good things are now. So it it also it it points to why we should embrace this and really get as as far along as possible as we can because we don't know what administrations you know in the future could look like. And so with that being said, um why don't we start with, you know, things that are happening just

today, right? We're we're moving quickly. Um and so today, I believe the White House hosted um a roundt, some sort of working group between banks and uh crypto companies. And so, you know, given you're in DC, you're you're on the ground floor of a lot of these conversations, could you give us a sense of, you know, like what is happening? What is the purpose of this group session? And and what do we expect to come out of this? Yeah. So the meeting at the White House today, this this was not a meeting for CEOs. This was a meeting for people who are working on policy issues both at banking trades and a couple companies as well as uh the the crypto trade associations and a couple of select crypto companies who are deeply involved on the yield issue. Um

you know in the Genius Act uh it was prohibited from stable coin issuers directly passing along yield to the holders but thirdparty platforms like say Coinbase for example uh has the ability to give rewards to customers for holding um stable coins. So this is a huge incentive for a user maybe switch uh and and you know put some value into stable coins. And so we I think everyone in the crypto industry wants this to be uh preserved. Um but the banks have decided that they want to try to cut off that avenue and have um you know some friends in in the Senate who are are willing to fight to do that. So the meeting today was a of policy folks. It

was at the White House. I was not in the room myself but I talked with a couple of folks who were uh just before hopping on uh to this show. and it sounds like it was a constructive conversation. Um I think the fact that you have the White House involvement in trying to broke our deal here is incredibly significant. Um it does sound like this is the first of many conversations and that they will probably continue to have this dialogue. But you know when when the White House steps in and says you know hey you two industries you need to figure this out.

I think it shows that they want to have a path forward and or find a path forward because they realize unless this gets solved and we can get uh you know both industries uh around the same page uh then then it's going to be problematic for the bill moving forward. So um you know I'm very encouraged by it. I think there's definitely more work to do, but you know, you don't get White House involvement on issues like this as on an everyday basis. And so, the fact that they're doing this shows that that they're willing to put in the work to to get everybody to a Yes. >> Yeah. Uh it it has primarily been an opposition between the banks and the crypto companies at large. But I I think just a few hours ago and there was rumblings about this last week, uh the

Tether CEO Paulo, you know, he he has gone and said, "Look, we we don't support paying yield to stable coin holders because look, Tether's got significant market share and they currently don't pass on any net interest margin. Um, and they've been able to reach scale. And so, you know, allowing stable coins to uh go on and pass net interest margin to their holders would actually undercut their business and they might be forced to give away some of their profit margin. And so, it it it feels and seems as if that it's no longer this two-headed opposition. It's kind of become this three-headed beast.

Is that the perception? And then and then obviously Coinbase and Brian Armstrong are somewhere in there as well on the opposite side of you know uh of this not supporting the bill but you know really forcing the issue on paying yield to stable coin holders. How like give us a sense of the offense and the defense here? You know who are the teams playing together? Who is who is you know who are they playing against? >> Yeah. Well, I would say and I I did not see specifically what Tether said on this. I saw some reporting on both sides that they were supportive. they were not supportive. So, I'm not sure what exactly is right. I would say one thing.

Um, I think stable coin adoption overseas looks very different than stable coin adoption in the US. I think overseas you have people that are looking to preserve their savings to uh be able to hold um you know their assets in something that is not going to deflate if they have a you know or or inflate I'm sorry for if they have an inflationary currency. Like they're looking to sort of preserve their wealth. I think in the US it's very different, right? Like we have a very sophisticated uh system of payments here in the US and uh you really need that extra incentive to get customers to change and to to use utilize stable coins. And so I think it is slightly slightly different but I would say that

you know I think we want to have as many options as possible right like there's going to be different models and there's going to be different platforms that want to offer different types of incentives and like we shouldn't deny um you know a platform that wants to offer these rewards to consumers the ability to do do so because it's good for consumers right and so I think that um uh you know I I would say crypto is mostly unified at least in the folks I've been talking to and you know wanting to preserve the Genius Act as is and um not having the banks come in and take away an option for for somebody to offer uh some kind of rewards um for for the holders of stable coins.

>> Yeah. I and I'll throw my own personal two cents in here, which is, you know, right now you go to a a savings account at a bank, you're ordering maybe it's a quarter of a percent. Um whereas you >> Oh, it's like a joke. I'm like, "Oh, good. I got another 32 cents this month." Like what? Like that doesn't matter to me right now. >> Oh, you find more money liing around on the street, you know? You just pick it up if it's your lucky day once a year, right? And so, yeah, that that I I completely agree is a total joke. Um, and so, you know, seeing high yield savings accounts at Coinbase and and some of these other NEO banks, um, I I think it's going to open a lot of people's eyes. At least I I hope that's what happens.

>> Yeah. Well, and I think too, you know, I've seen some of the arguments that the banks are like, "Oh, well, if you want to like take deposits, like, you know, just just go be a bank." And it's like, well, you know, the they're not, you know, Coinbase isn't rehypothecating someone's dollar, right? like the banks are like the banking regulation is dealing with that issue where you only have you know 10 cents for a person's dollar because the rest of it has been lent out and I think that you know these are very different things and very different models and you know we want Coinbase to be able to do that if that's the way that Coinbase wants to you know incentivize people to use their platform we shouldn't deny them that opportunity >> absolutely and I and I just one more thing on this is is something Brian

Armstrong said at Davos which I think is important it it flips the banking model on its head. You know, right now we bring a a deposit, you know, whatever the number is, we bring it to a bank and they're sure surely going to go loan that out uh and rehypothecate it. The Coinbase model is, you know, you bring your deposits, >> you only participate in their yield program if you opt into it, right? Yeah. Um whereas which is, you know, contradictory. It's very different from, you know, the current landscape of you give us money, we're going to lend it out no matter what you say. don't have an option not to lend it out. Um, and the alternative is, you know, we're only going to lend it out uh if you choose to and we're going to pay a higher interest rate. I just I, you know, we can kind of

see the writing on the wall. >> Yeah. No, I think crypto's in the right here and I think that um I'm I'm hopeful that they'll be able to come up with a solution uh that that works for all parties involved. >> Yeah. And and so with that being said, um the the Senate Agricultural Committee is advancing it seems like part part of this bill. Um the stable coin yield component is holding things back. Just give us a sense of what's moving forward and and what is not moving forward with regards to the Clarity Act these days. >> Yeah. So the Clarity Act has made its way through the House. The House was able to move pretty quickly last spring.

Um and and you know the House and Senate works very differently, but they were able with a very strong bipartisan vote to pass that bill over to the Senate. Uh but the ball is in the Senate's court now. And the Senate is is very different than the House. The House is uh you know, very much sort of a topdown like you tend to vote with leadership or maybe leadership is like, "All right, vote your conscience on this one and you can do what you want to do." The Senate is very different. And in the Senate, any one senator can stand up at any time and filibuster a bill, which means every single senator is incredibly powerful because they can stand in the way of the progress of legislation. Um to get a bill through the Senate floor, you need to have 60 votes. Um you know, sometimes

legislation is added on these mustpass vehicles that you've heard about. That's not really an option right now for crypto because to let's say attach a crypto bill to the National Defense Authorization Act or Appropriations Bills or something like that that is outside of the committee of jurisdiction, you have to have the sign off from both the Republicans and the Democrats and uh who are the leads of the relevant committees. And Elizabeth Warren is the ranking Democratic senator on Senate Banking and she is not going to approve of any crypto bill uh being moved. So instead, what we have to do is go through the regular order of getting 60 votes on the Senate floor. 60 is an important number because that's the

number of votes that you need in order to stop debate, to stop someone from standing up and filibustering. And so it's it's a very high threshold. And what what further complicates all of this is that this legislation, as you noted, h is touches the jurisdiction of two different committees. And the Senate Banking Committee um has jurisdiction over the SEC and the banking regulators. Um where the Senate Agriculture Committee has jurisdiction over the Commodity Futures Trading Commission or the CFTC. And so both committees need to to pass their portions of the bill. And the good news is that last week the Senate Agriculture Committee uh did vote

out their portion. Um, this was on a party line unfortunately, but a lot of the Democrats who voted against the bill did say they want to keep working on this and that they want to get to yes. So, I think that that is very encouraging. But the yield issue that you referenced, um, issues around tokenization of securities, uh, issues around DeFi, most of that sits, uh, within the Senate Banking Committee. So, I think the work that the White House is doing and trying to convene stakeholders and get to a deal on that piece of it is very important because it's most likely going to be that we need to have that deal in place before the Senate Banking Committee bill is able to move through its half. But once we get it through the Senate Banking Committee, then the two

bills will be uh you know, sort of pieced together and they will be ready for consideration by the full Senate. So, it's a lot of steps. um some days it feels like maybe we're going backwards, but then there will be a breakthrough and things will move forward. This is like a very normal part um of the legislative process. And so um I've I've never seen a more committed group of senators um on the Hill and and at the White House and wanting to get this done. And so, you know, I think they're taking it issue by issue and and step by step. And I think um it it may seem a little jarring and slow from the outside, but I think that there are a lot of people working on this and

there's um you know a lot of folks who really want to see this get done. >> Yeah. And and I think there's a sense of urgency to get this done now because there's an anticipation of around the midterms happening later this year and if those things go a certain way then it could become even more difficult to to get this through the Senate. Is that >> Yeah, I think that's right. I think um yes, typically as you get closer to an election, which we have, you know, the midterm election coming up in November, typically it becomes difficult to get anything done because politics takes over.

>> If there's one exception to that, I would say it could be this crypto bill. I think that, you know, there's been a lot of work that people within the leaders within the industry have put in towards building relationships on both sides of the aisle. And if you look at how bipartisan the votes on the Genius Act were in the House uh and in the Senate as well as the Clarity Act in the House, um I think this this is about as close to a you know bipartisan issue as you can get. And so I think the window for getting legislation done when it is truly something bipartisan like this is extended a little bit. Um, you know, there are some issues that that that could be politically problematic. Um,

you know, I mean, there's been a lot of um discussion by Democrats on both the Senate Banking Committee and the Senate Agriculture Committee. Um, there's been a lot of expression of concern around sort of the Trump family's involvement with the industry and having some sort of ethics requirements that are put in place that would be specific to crypto outside of the normal requirements. Um, and so this is an issue that I think, you know, could heat up as we get closer to the midterm election, but I do think we have champions, strong champions on both sides of the aisle and there is a desire um by both parties to get something done. So, I'm hopeful that the window will have a little bit more time than a typical issue uh just because

there is such strong bipartisan interest and support in crypto. >> Yeah, there there's certainly an interest in getting this done from from the crypto industry. Um, and this is at the same time that there's there's several things that are all built up into this market structure build. Stable coin yields has gotten, you know, majority of the air time, but you also mentioned tokenized securities. I just want to pass it to you to to give a last word on anything that you think maybe the media isn't covering as much as it should be or the or the industry, you know, is something that's flying under under the radar that you think we should all keep in mind with regards to tokenization or anything about how the White House or the SEC CFTC or just sen senators in general are thinking about this? Is there any misconceptions or

anything flying under the radar that you you believe deserves some more attention? Well, I do think the one thing I do like to point out and we I heard this I was at the CFTC for an a joint a joint event last week that was um a uh Chair Atkins from the CFTC and Congressman I'm sorry uh Chair Celig from the CFTC and they stood up there together and they said we want to work there. We want to work together and we're taking meetings, we're taking ideas and we're going to act within the authority that we have. And so I think there's this misconception that uh we have to wait for Congress for the agencies to act. Um I think waiting for Congress um you know we need Congress right we want these things to

be permanent but I do think there is a lot of clarity that the agencies can work on in the meantime and so I think the fact that the SEC's project crypto is now a joint effort of the SEC and the CFTC is really important and we should be watching to see uh what the agencies can do in the meantime while Congress is working on the legislation. >> Yeah. the despite the market conditions, we're we're seeing adoption happen across the board. And so the fact that project crypto is enabling, you know, companies to come in, speak to the the chairs of these organizations, um I think is going to help accelerate that adoption even further. Um Kristen, thank you so much for joining. This was this

was great. Um uh great insight into what's going on in DC and uh really looking forward to the DC blockchain summit later in March. Um and as well as just you know more and more progress happening on this bill. >> Yeah. No, thanks for having me and um happy to keep chatting as as these issues move forward. >> Absolutely. We'll see you again soon. Thanks for >> All right. Thanks. >> All right. Well, that is um that's our show today, guys. So, uh you know, we had Hanan from uh Codeex come on talk about stable coins. Obviously, stable coin legislation is deeply in the news.

Um, and then we had Kristen come on and, you know, tell us about how things are going in the DC world as it pertains to the regulation these days. Um, and so it it it may feel like, you know, one step forward, two steps back. Uh, I think the right way to think about this is, you know, things are moving forward on one side of the equation. On the other side, they're still stalled. You heard Kristen talk about how um you know the the CFTC, the the Senate Agricultural Committee has advanced their portion, but a lot of the the pieces of the Clarity Act fall within the the jurisdiction of the SEC, the Senate Banking Committee. This is the stable coin yield issue, the tokenized securities issue. Um, and those are

still in flux because it requires uh either Elizabeth Warren to sign off, not going to happen, or more senators uh to accept uh that that this thing is going to go through. So guys, we're going to hunker down because we're in it for the tech these days. Careful out there in the markets. It's tough, but uh but stay patient. Uh because ultimately we believe this is uh this is still the place to be. Uh there's still some winners out there. uh you guys are going to want to pay attention to hyperlquid and um I would recommend that you know you just the best way to do it is just build build guys it's the best time to build look at the regulatory environment look at you know the friendliness of the

administration uh there are opportunities out there you don't want to make it all back trading you want to build something people actually use get some value out of uh you can get some value out of it as well we're going to see you again same time tomorrow um right here on Rollup TV. Peace. >> [music]