← The Wolf Of All Streets
The Wolf Of All Streets
How The USA Is Becoming The Bitcoin Superpower Of The World | Bo Hines
00:23:27
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- [00:00]
Host
This incredible conversation was recorded live in the Arch Public Lounge at Bitcoin Las Vegas. It's a dollar cost average into bitcoin efficiently. And to check out all the other algorithms go to archpublic.com welcome to Hollywood.
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Beau Hines
So obviously the lowest hanging fruit is stablecoins.
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David Sacks
It's the silliest question of all time and lo and behold, I gotta ask that question. I view my office as really being an administrator between White House policy, interagency activity industry and what's happening on Capitol Hill. And so you know, there a big knowledge gap that exists with many of these legislators in terms of what this technology does, what Bitcoin is.
- [00:39]
Beau Hines
I literally wake up sometimes at like 3 o' clock in the morning in cold sweats thinking fire. Gary Gensler.
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Host
The Trump administration is moving quickly to undo the mistakes of the past. As we all know, the Biden administration had a contentious relationship with the crypto industry. And in just a few months, the Trump administration has begun to dismantle all of the bad policies from before. Nobody is working harder on this than Beau Hines, the executive director of the President's Council of Advisors on Digital Assets of the White House. I sat down with him in the Arch Public Lounge in Las Vegas during the Bitcoin conference to talk about all of the plans that they have for the crypto industry in the future to make sure that we get sensible legislation and regulation that lasts into perpetuity. Bill Hines is an incredibly, incredibly impressive individual who's clearly going to go a very long way in politics if this is just the beginning. I have high hopes for the crypto industry. Listen to this conversation now.
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Audience Member
That's dope. Let's go.
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Beau Hines
So Beau, obviously the United States government has gone effectively 0 to 100 on crypto, right?
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David Sacks
To say the least.
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Beau Hines
We went from the most contentious possible environment to basically taking the governor off entirely. But I imagine then in your role that there's a lot of noise and it's hard to figure out what the low hanging fruit is, what the first priorities are. So maybe start with from your perspective and from the administrations, what are the first priorities? The things you think you can get done the soonest that'll have the most impact?
- [02:20]
David Sacks
Well, you know, we kind of view this in three phases. We've had the demolition phase over the course of the last five months, which has been really getting rid of a lot of the red tape, or as we like to call it in the White House currently blue tape or overregulation and really just policy that was made through prosecution over the course of the last decade, more specifically, over the course of the last four years under the Biden regulatory regime. I feel like we're about 80 to 90% of the way home there. And then we'll move on to the construction phase, which is really, you know, we're relying on our colleagues on Capitol Hill to help us out. How do we enshrine a clear regulatory framework into law? And I feel like that's, well in process. Obviously, the Genius act is moving full head of steam in the Senate with bipartisan support, and then right around the corner will be market structure. But, you know, that gets us to the third phase of this, which is implementation. How do we help these TRADFI folks understand how to integrate these technologies into their current ecosystems in a way that revolutionizes the financial system more generally? And, you know, we'll dive a little bit deeper into Genius, but I think I'd be remiss just not to thank the President for his leadership in this space, giving us the authority to do what we need to do to clear the deck and create an environment for innovation. Also, David Sacks, our brilliant AI in crypto czar, has been phenomenal. He's been the guiding star. And I think we probably should just point back to the first digital assets executive order the President signed on day three, signaling how this is an immense priority for the administration. He created this internal working group which shouldn't be lost on folks, because this is comprised of all the relevant interagency actors inside of government that touch anything regarding the space. So you have Commerce, you have treasury, you have doj, you have the sec, cftc. This has created a workflow and allowed us to streamline the process in order to clear the deck of overregulation, but also put out fires instantly. Having principal level conversations makes things a lot easier to get stuff done and allows us to cut through the minutiae that oftentimes is presented with government work. So it's been great.
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Beau Hines
The demolition phase has been a lot of fun to watch. Obviously, for those of us who were railing against that for the last four years, all of the obviously regulation by enforcement that you alluded to, you said 80, 90% done. What's the remaining gap there? The things you think that still need to be fixed from previous administration.
- [04:30]
David Sacks
So, you know, as an administration, the President said very clearly he doesn't believe in independent agencies, and that would include the Federal Reserve. With that being said, we have Mickey Bowman going in as the Vice chair of supervision. She's very pro digital assets, and we expect them to start issuing pro innovation guidance in very short order. But you know, we still expect the Fed to come along, but I'd say that there's a little bit of a remaining gap there. And look, you know, in the first digital assets executive order, we also had these landmarks that were really important. We had the 30 day landmark, which basically compelled interagency actors to do an internal reviewer audit of anything they touched in the space, produce that to the working group. The 60 day landmark compelled the same actors to produce a list of recommendations, things that they could do independently to move on, creating this more clear environment. And look, you can see what we're doing with this. It's like we're creating this exercise for them to do an internal audit of everything that they've done over the course of the last decade and try to clean this up on their own. We're working towards the 180 day landmark, which will basically be a comprehensive report. I keep saying report, it's more like a book. This will be a book that outlines what is the most robust framework that could possibly exist in the world to permit innovation here in the United States, to ensure that builders can do what they need to do without fear of prosecution. You know, one thing our interagency actors have done is they've, they've been begging us to tell industry, come in and pitch us new ideas. You know, this isn't Gary Gensler's sec.
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Beau Hines
Come in and register. We've heard that before.
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David Sacks
Yeah, correct. As they're writing your wells notice, as you're sitting there pitching your new idea right before you can leave the building, you've been slapped with that enforcement action. Those days are long gone. This is a complete sea change in the United States of America. The President understands how immensely important it is for us to spearhead the effort to revolutionize the financial system and really plug these technologies into our current ecosystem as it sits today.
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Beau Hines
So obviously the lowest hanging fruit is stablecoins and we have multiple bills on the floor. As you said, it looks like it will likely be passed. We have genius in one house and stable in the other house. First of all, maybe we should discuss how you can have two bills coming from two houses and how eventually those will have to merge. But B, we had a little bit of a scare not so long ago when a few Democrats wrote a letter and even two actually Republicans got on board, Holly and Paul, and basically were able to pause the cloture vote. So is there a chance this doesn't pass? I mean, is that still on the table?
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David Sacks
So Basically what they did was an effective filibuster.
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Host
Right.
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David Sacks
A lot of this was political posturing, which is unfortunate because at the end of the day, digital asset issues should be completely nonpartisan. I mean, we're talking about updating an archaic system in which our plumbing of our financial system needs to be completely overhauled. And that's what stablecoin legislation does. It creates a pathway for more expeditious payments, instant settlement times, more cost effective payments, and obviously secures US Dollar global dominance for decades to come. Whether you're Democrat or Republican, I don't know how you fight against that. With that being said, we've gotten past the cloture vote now. We actually picked up numerous Democrats in that process. I think it passed with 69 votes in the Senate. Getting anything done from financial or from Senate banking in a bipartisan way is a monumental feat. I mean, it hasn't been done in years. And so I think that folks should be conscious of the fact that things are progressing very quickly. I am very optimistic that we're going to get Genius passed in the Senate next week and it'll be on the President's desk in short order. That will give us an opportunity to move towards market structure. And to answer your question about how this process works between the two chambers, well, the Senate in this particular case has done a lot of heavy lifting in terms of updating their bill, working with their colleagues to get to a place to produce the best product that was much more reflective of what was in the House. And so they brought the bill to closer alignment. That gives our colleagues in the House the ability to put this on the floor and get it on the President's desk, in my opinion. And look, I think that it does everything that we needed it to do. It provides the regulatory clarity. It ensures that, you know, these issuers are one to one backed with US treasury notes, which is good for the American economy. It also ensures that they are audited from one of the big fives and you know, basically everything that people were begging for so that banks can actually implement these new, you know, these new payment rails into their systems. And this gives way as the foundation for everything that can be built on top of it. You're talking about tokenization of public securities in 24, 7 markets. If you want to access those 24, 7 markets, you're going to have to be using a dollar back stable. I mean, you're talking about pouring trillions and trillions of dollars into the US economy. You're talking about trillions of dollars of US Debt being purchased overseas. I mean, this is extremely exciting stuff. And, you know, for bitcoiners, we try to just emphasize how important this is for that ecosystem, because as this money is coming in and you're able to go in and out of asset classes at will, there's naturally going to be capital that flows into bitcoin. And we love bitcoin. I mean, we've said it repeatedly. We believe bitcoin is digital gold. We want to harness the asset for the American people. We understand that it's unique, which is why we set up the strategic bitcoin reserve the way we did. It's a commodity, not a security, as intrinsic stored value. As David and I say repeatedly, it has the immaculate conception. These are all things that meet a decentralization standard, that currently no one else has developed an ecosystem that does, in my opinion, to the same way. But that being said, we also have the digital assets national stockpile. And this was our recognition of a lot of the technology that's being built across other ecosystems. We still want to encourage that and foster that innovation here in the United States and allow people to continue to build, whether it's in defi or beyond. And so we're extremely excited about where we are. I think that we've delivered on many of the president's promises thus far, but there's still a lot of work to be done.
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Beau Hines
Let's talk about the strategic bitcoin reserve. So obviously we have an executive order, but you alluded to the fact that we need these things codified in law to make sure that if there ever is regime change, that they last.
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David Sacks
Sure.
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Beau Hines
What's the path to that happening? Obviously, Lummis has presented the bill. Nashville, everybody was there when President Trump went off stage, and Senator Lummis was obviously one of our favorites to talk to her so many times. You know, what are the odds of that getting passed? It seems like there's a hierarchy here. Stablecoins, market structure, as you said. I'm hearing people talk less about the actual legislation on the strategic bitcoin reserve. For now.
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David Sacks
I think we bought ourselves a little bit of time there just to the executive order. I mean, we've shown what our views are on bitcoin itself and recognizing as being unique for what it is. And I think that was a very clear landmark that we've laid down. And so with that, I think that just providing the clear regulatory framework more generally for everything happening in the digital assets ecosystem gives us the momentum that we need in order to enshrine the strategic Bitcoin reserve into law. I think our Democratic counterparts certainly recognize that we have to harness this asset class for the American people. And there's certainly going to be countries overseas that are racing to accumulate as much as they can. And I've had this question asked to me repeatedly by journalists. How much do you want? I'm like, it's the silliest question of all time. And lo and behold, I'm going to ask that question.
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Beau Hines
I was going to ask.
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David Sacks
No, I mean, I will say very clearly, we want as much bitcoin as we can possibly get. We have to do this in budget neutral ways that don't cost a taxpayer a dime. But there are countless ways in which we can do it. And if you read the fine print of the executive order, it kicks these innovative ideas over to Commerce and Treasury to come up with. But we'll flesh these out amongst our working group actors. We will move expeditiously on those that can be quickly implemented. But it's not one size fits all. It's not like we have to do this in one singular format. There can be hundreds of different ways we do this, if not thousands. We talked about this in different verticals, whether it be like through mining activity, whether it be through bit bonds. I mean, there's tons of creative things.
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Beau Hines
Like taxes in bitcoin.
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David Sacks
It's endless. And so people ask me to give clear examples. And the reason I don't want to tell you what we're going to do first yet is because I really don't want to poison the well. We want to do something that's going to be the most effective to the United States. And so when we're ready to announce that, which I'm sure we will be in short order, I think that this community will be extremely pleased.
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Beau Hines
You talked about the report, which is effectively a book. So you write this book, you go to every agency, you get all the recommendations, you get everyone in line, but you still need to then go to Congress and the Senate and get bills passed. So what is that process like? What impact can you have, you know, without being a congressman or a senator, to actually make sure that the legislation gets done and that they take the recommendations?
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David Sacks
So I view my office as really being an administrator between White House policy, interagency activity, industry, and what's happening on Capitol Hill. And so, you know, there's a big knowledge gap that exists with many of these legislators in terms of what this technology does, what bitcoin is. I mean, even still what blockchains do. And so just Mending the gap in terms of that knowledge gap that exists is extremely vital for us. And so we've really helped with our counterparts in Capitol Hill just in the process of educating, and it's really that simple. As people start to understand how important this is for the American people, they come on side very quickly, and that includes our Democratic folks. Like, there's no reason that this should be partisan. It just so happens that our President is the first bitcoin president, he's the first crypto president, and therefore, naturally, there's hesitation from the other side. You know, the system's meant for gridlock. But I'm still confident we're going to deliver on the President's wishes to get both stablecoin legislation and market structure legislation on his desk before August recess. And if we do that in parallel to this 180report, hopefully we can use that as a backstop to fill in any remaining questions that might exist with interagency action.
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Beau Hines
I asked David Marcus the same question today. But now that we're getting legislation, you alluded to the fact that we're getting legislation from legislators who aren't necessarily educated on the space. So even if they're making their best effort or trying their best, isn't there a chance that we get some serious unintended consequences from legislation, things that we don't see that could be coming down the road? From the way that these bills are presented, maybe actors that we would like to participate are locked out because of some clause. How do you make sure that the legislation, I guess, is broad enough to guarantee that it's usable in the future?
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David Sacks
Yeah, you know, I think that they've done a phenomenal job of that with the Genius act, just watching the process unfold. And when I say process, it's more the procedural process in the Senate of how this works, how folks interact with one another, how they plug in advice and guidance from the White House and our policy team. I feel as if this bill is truly in a remarkable place. It successfully captures everything that we are looking for in a sense of providing the clarity, providing a framework that makes sense for traditional financial players to be able to plug into their current ecosystems as well. Because the process is so rigorous, I think that it's actually a healthy exercise because it prevents some of the harm that maybe you might be describing. There are countless eyes that look at this legislation, and I'd be remiss. Not that Luke Pettit and really Senator Haggerty. Luke works for Senator Haggerty right now. They have done an incredible Job of pushing this thing home, pulling their Democratic colleagues on board, and really working with Senator Gillibrand on the other side as well. Her team's done phenomenal work. And, you know, that's. That's something that I was extremely pleased by, because if we build this momentum across the aisle heading into market structure, I think the sky's the limit in terms of what we can do, and the sky's the limit in terms of what bitcoin can do and what the other ecosystems can build.
- [15:30]
Beau Hines
Yeah, I think tether alone is the sixth or seventh largest buyer and holder of United States treasuries. Right. So as you said, everybody should be interested. It's in the interest of the country, national security, everything for stablecoins to exist. What do you think the stablecoin market looks like if the best version of this bill is passed a few years down the road? Do we have a few huge winners? Do we go into a world where it's private stablecoins for every single bank and institution and tech platform?
- [16:00]
David Sacks
Well, look, I mean, we believe in creating a fair marketplace. The president believes in fair market competition and more capitalist. At the end of the day, I think that's what this bill provides. It provides that fair market competition. It allows other actors to enter the space in a competitive format. We don't believe in anyone in the industry building regulatory moats around themselves. And that's a problem that you can run into oftentimes when industry is out over its skis. In terms of the legislators actually being able to provide that clarity, I don't think we're at risk of that now. I think there's folks that do phenomenal work in this space, and we want to encourage them to continue to build. I think that there will obviously be Goliaths in this industry like there is in any others, but that'll be a testament to their technology and their teams and the way that they're able to do things internally.
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Beau Hines
So market structure's next.
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David Sacks
It's next.
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Beau Hines
I've heard people say that could be done as soon as August. I'm not going to ask you for a specific timeline.
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David Sacks
Obviously, our goal is to get it done by August. The president's articulated this at the first ever White House crypto summit. He wants both pieces of legislation on his desk before August recess.
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Beau Hines
So market structure seems a bit more complex. I think everybody understands stablecoins inherently, at least to some degree. But market structure, we're starting to define what. What roles custodians will play, what roles exchanges will play. A definitive taxonomy of these assets, what's a security, what's a commodity? It seems like that's much further down the understanding rabbit hole for the people that are going to be doing this legislation.
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David Sacks
I'll say this, it is and it isn't. Because with Genius, there's many other industries that have interests at play, including like the banking lobby and folks like that, and rightfully so, on yield bearing interest provisions and all of that good stuff. And so we had to find the right place to land, which I think we've done on Genius, to foster innovation in this space while also protecting other parts of the US Economy with market structure. This is more industry specific, so there's not as much outside noise that's there. And for us, because we've had so many meetings with industry folks and continue these conversations on a daily basis, we have a pretty good idea of where folks want to land. And so, you know, that that's certainly a leg up for us as we head into this next phase. And the House moves into markup on their market structure bill on June 10th. I'm sure we'll see a draft from the Senate here in the next couple of weeks and we'll do the same thing we did with Genius. We'll work to mend the gap between the two chambers and find the right solution, get it on the president's desk.
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Beau Hines
It's interesting, you have these working groups, obviously with the industry. So we saw, I would say, for the first time in history, the very fragmented crypto industry come together for a singular purp, which was to help President Trump win. Right. And I think backed him heavily. Now it seems like we're going back to lord of the flies, where the lobbies are fragmented and everybody's in their own interest. So how, when you're crafting legislation or advising, do you basically accommodate everybody while making sure that it's actually the interest of the country and the industry and not of the individual players who are lobbying for their own, you know, tokens or projects?
- [18:50]
David Sacks
You know, I'll say this, the warning that was given to me before I stepped into this role was there's going to be a lot of fragmentation. There's going to be a lot of factions that spin off and there's going to be a lot of infighting industry. I want people to realize with Genius, it's the first time ever that all three major trade associations came out and supported the bill, including the Goliaths in the space that stepped up and obviously, you know, played a huge role in the political process in the Last few years. That's what it takes to get things done on Capitol Hill. It takes the industry maturing and saying, look, we're legitimate players in the financial system. We're going to be treated as such. We deserve this regulatory clarity. They did that with genius. I expect to see the same thing from market structure. Sure, there will be wrinkles that we have to iron out. I think that our office is positioned very uniquely to help in that process and get this thing home.
- [19:34]
Beau Hines
There's something I found incredibly interesting about this administration. I think we expected that we would get pro bitcoin and pro innovation people in key roles where it mattered, but it feels like every single role in the administration, even if it's health or educate, whatever, they're all bitcoiners.
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David Sacks
That's right. It's a dream.
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Beau Hines
How did that seriously. But how did that happen? You know, you had Kennedy at health. The guy is obviously, as a meaningful percentage of his net worth, has been a fan of bitcoin for a very long time. Even Tulsi Gabbard, I mean, everybody seems to have a pro bitcoin stance across the administration.
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David Sacks
Yeah, I mean, look, we believe in decentralized finance and we believe in Americans rights to self custody and privacy. And I think that a lot of what undergirded bitcoin's growth is rooted in that. Right. And I think that the folks that are in this administration all believe in those same core principles. So why wouldn't they naturally be inclined to be supportive of this ecosystem? At the end of the day, I think that we have literally the dream team built out for digital assets and bitcoin. I mean, with Secretary Lutnick, Secretary Besant, even Hester and Paul over at the sec, Brian coming into the cftc, you couldn't ask for a better group of folks to be in place for this industry to thrive. And thankfully, President Trump's leadership has allowed us to position ourselves to be the leader globally in this space. If we wouldn't, if he would not have been elected, we would have found ourselves in a really precarious position, not only for the industry itself, but moreover, for our position globally in terms of financial enterprise. So, you know, we're just overjoyed with the fact that we get to do this work every day and I get to work hand in glove with David. His reputation precedes him. He's one of the most brilliant people in the VC world and he's certainly been a guiding light and helped us move throughout this process seamlessly. It's been a pleasure I literally wake.
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Beau Hines
Up sometimes at like 3 o' clock in the morning in cold sweats, thinking, fire Gary Gensler. It's almost like a fever dream that he's not even here. I mean, it's absolutely 180 degrees.
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David Sacks
Yeah. I mean, can you imagine four years ago, the chair, chair of the FCC, walking into a crypto task force that he's hosting and giving a keynote speech about how they want to welcome innovation in the space in the United States. I mean, that would have been completely unprecedented. And it is, and it's happening in real time. I think that, like, we have to catch our breath and just think about the fact that we've been able to accomplish a lot in the first five months. That's not to say there's not more work to be done, and we certainly recognize there is. But we have very clear objectives and we expect to deliver on them.
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Beau Hines
Obviously, crypto is a partisan issue. In the past election. Do you think that now that it's become so clearly politically unpalatable, palatable to be part of the anti crypto army, that we can get to a more reasonable approach where it is truly bipartisan? It feels like we're heading in that direction.
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David Sacks
Oh, I think. I mean, look, having 69 votes in the Senate for anything is a monumental feat. And I think that shows, you know, the direction that we're going to. I hope when market structure rolls around, we can be in the 80s. I think our Democratic colleagues need to understand that this is absolutely crucial for the American people in terms of unlocking innovation here at home and welcoming those folks have gone offshore. I mean, like, my message repeatedly has been, welcome home, welcome back to the United States. You want access to our capital markets, please come and innovate here. And you know, I've said this too. It's like, if we want to be the crypto capital of the world, people need to be ipoing here, they need to be purchasing other businesses here. They need to be supportive of innovation in every way, shape and form. And I think that's the environment that we're building.
- [22:58]
Beau Hines
Well, thank you for everything that you're doing. I think that everybody in this room obviously owes the new administration a debt of gratitude and is exceptionally excited that we are where we are now versus maybe where we were at the same conference last year. Man, thank you so much.
- [23:11]
David Sacks
Thank you.
- [23:12]
Beau Hines
Really appreciate it.
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Audience Member
Let's go. That's dope.