← The Wolf Of All Streets
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- [00:01]
Scott
Morning everybody. Welcome to Crypto Town Hall, 10:15am Eastern Standard Time every weekday here on X. Got an amazing panel and a lot of topics to talk about today. Actually one of our panel members, Dave Weisberg, will be hosting the show most of next week. Dave, good job. Thank you and covering for me, although I will be here some of the time for sure. But Dave going to be handling a lot of the co hosting duties next week. Really excited for that. Now obviously we have this title here, what's driving Ethereum and Altcoins Underperformance? I think we'll get to that. I think the first topic though worth discussing today is actually the passage of the genius stablecoin act through the Senate House Senate Financial Committee, which is really notable news that we're seeing legitimate stablecoin legislation moving forward. And I think what's even more notable is that the vote was 18 to 6 in committee. For those who don't know, this is the committee that Elizabeth Warren formerly chaired and that she still sits on the rank as the ranking minority member on this committee. She did not go quietly into the night. She was kicking and screaming the whole way as five Democrats who it would have been unthinkable to vote against her probably when she was the chair went the other way. It was Senator Angela also Brooks, Senator Mark Warren, Andy Kim, Lisa Blunt Rochester, Ruben Gallego. So some real, real tailwinds here behind stablecoin legislation. Looks like a major priority and looks like it's likely we're going to get this, get this done. Bill Hughes, obviously you're in and around Washington and have spent some time up there. What do you make of this versus the odds of this having happened anytime in the past. In the past. Excuse me.
- [01:58]
Bill Hughes
Well, good morning. I think this certainly stands on the shoulders of past efforts, but Republicans controlling both houses of Congress and there being tremendous support for this in the White House. I think it was just the perfect conditions to actually get something done. You're right. The bipartisan nature committee vote is notable. Elizabeth Warren, who became the ranking member after Sherrod Brown was lost, lost in November. She, she is singing the same tune but fewer and fewer people are dancing. I think a notable Democrat to support this bill is Senator Mark Warner. He is a national security hawk. His, his office added some provisions to this bill that focus on anti money laundering efforts. Those are not very popular in the House. And so it's going to be interesting to see when this Senate banking version, assuming it gets to the Senate floor, which is for discussion, which is next up and then Eventually a vote in the Senate. How it's reconciled with the House version of a stablecoin bill, which is called the Stable act. How they reconcile the two, we will see. But I think given the bipartisan support for the CRA vote in the House and the Senate over these last couple weeks, given the bipartisan vote in favor of the stablecoin bill out of Senate banking, crypto is getting a lot of positive momentum on Capitol Hill. I think that means we're going to see before the midpoint of this year, hopefully both Houses coming to agreement as to stablecoin legislation and passing it and it going to the President's desk. I also think it means that if there's a reasonable chance, we keep that momentum going into the second half of the year and deal with a market structure bill and perhaps even a bitcoin strategic reserve Bitcoin bill, where actual treasury funds would be allocated for the sole purpose of buying it. So it's, there's good momentum in a positive direction.
- [04:33]
Dave Weisberg
This.
- [04:34]
Scott
Yeah.
- [04:35]
Bill Hughes
So it's, it's good signs from D.C. yeah.
- [04:39]
Scott
It was notable. Something I discussed with nlw on my YouTube this morning when I asked him a question about the same thing is that his view, and the view of many is that this isn't as much a right left divide as it is an old, young divide. Mark Warner obviously is an older member, but the other four who voted are all extremely young senators. And we had Richie Torres on this very show on crypto Town hall. It's got to be over a year ago now. And when I asked him why is there this sentiment that, you know, Democrats are anti crypto and Republicans are pro crypto? And he said that's not the case at all. It's old versus young. He said all the young Democrats get it, they're going to get it. And these are the people who will be voting for this thing. So I just, I think some interesting nuance that the four senators who are Democrats have voted for this are all the younger members.
- [05:24]
Bill Hughes
And before we turn the mic over to someone else, I'll just make another point. It really shows how our engagement efforts as an ecosystem, whether through Fair Shake or other, other bodies acting on behalf of lots of industry members, are really making an impact. And these, these senators were all impacted by those lobbying efforts, by that advocacy. And so they don't, they don't come in with entrenched positions. And they, they find our arguments as to why this ecosystem needs to have a chance, they're finding it persuasive. So our, our Work in that regard is actually paying off. And that's a positive sign too.
- [06:08]
Scott
Yeah. And I think it's fair to say, and Gary, you're up next. But I think it's fair to say also that stablecoins are the low hanging fruit here. It's not that controversial. It obviously a tokenized dollar. And you even have to that end besent the Secretary of the treasury saying that this is a strategic maneuver, that this is a part of hyper dollarization. They get it and they understand that this is going to spread the dollar far and wide. So it's less of a crypto thing and more of a very obvious way to sort of gain control short of going full central bank digital currency, which interestingly the European Union and Lagarde now pushing forward harder with a central bank digital currency directly in response to stablecoins likely being legislated in the United States and how powerful those are for the dollar. Go ahead, Gary.
- [07:00]
Gary
So I just want to get a little bit of clarity from the panel about when someone says stablecoin and the legislation that's coming around is it basically dollar backed in a bank account with the, you know, the centralized stable coins.
- [07:16]
Scott
Centralized stable coins.
- [07:17]
Gary
So it has all of the, to me, that has all of the downside of being dollar inflation purchasing power loss because it's dollar bank account backed even if it's a trusted quote unquote trusted custodian for the bank account that's attached. And I know that's part of the idea is basically to sequester dollars into a bank account and increased demand for something that's already 80% of the world economy, basically it's more specifically Treasuries, just.
- [07:50]
Scott
To be clear, Gary. So there is a percentage that's in bank accounts, but by far the large majority is sitting in Treasuries. So just to give an example, when Silicon Valley Valley bank failed last year, or however long it was almost two years ago now, I think when that happened, Circle had $3 billion in Silicon Valley bank, which was about 10%, I think of their holdings was in that actual bank in dollars. Yeah, yeah.
- [08:19]
Gary
I mean, and again, I'm not trying to throw controversy, but it just seems interesting that the crypto world is embracing these ideas because that's counter. It seems like it's counter. It just becomes the CBDC narrative explained again versus something along the lines of DAI or you know, we've had failed algorithmic stablecoins in the past, but as example as the big boogeyman. But DAI has existed for a while Liquidy forks as far as Ethereum based, a dollar worth of Ethereum, always without an oracle. So I'm surprised that the crypto community in general is saying yes to stablecoin because it's politically appetizing to support, you know, this idea. But like why is this not a PayPal ledger or any other kind of, you know, turn off the bank account kind of situation when these things already get blacklisted? You know, I've sent money in the past, many years before the war to Ukraine, but Ukraine couldn't, I couldn't do it through bank accounts, I couldn't do it through a lot of different methods other than crypto. This is well before the war. So like I don't understand how the crypto community is saying yes, yes, yes to the politicians saying let's have stablecoin that's dollar backed and still is basically a different custodian that also has all the downside risk of government intervention.
- [09:42]
Scott
Sasha, you add your hand up.
- [09:44]
Sasha
Yeah, yeah. In terms of the stablecoin, right. Just to make things clear, it goes more in the direction of what's called narrow banking where there is exactly the amount of reserves that's behind the stablecoin. I think it's a very positive thing for the industry. Right. It's going to be setting clear that any stable CO, I think above 10 billion is going to be regulated by the fed and the OCC. Below 10 billion I think it's going to be more at the state level. But what's really important is that there's going to be regulatory oversight to really know what's in those reserves. And we've seen with tether it's really not clear and there's non reliable auditing processes behind what's going on. And even tether, right. If the government decides to block some transactions or freeze some accounts, they can do so already. Right? So to me that's a big step forward in having more clarity on what the reserves are, making sure that they're sound and that there is real auditability of those reserves and making sure that.
- [10:44]
Gary
But again these issues are still. It's not just the government boogeyman, someone saying hey, I'm going to send an order just like you would tell Facebook to block any other account on any kind of post. It's not just government intervention, it's anyone that has server admin keys. These are simply servers that can be basically turned off someone's account. So I don't understand how the crypto community in general, Bitcoiners, Ethereum, anybody that likes crypto in general. I don't understand how this is just like wave the wand. This is great because it bumps somebody's bags. I don't understand it.
- [11:18]
Sasha
I think a lot of other people want to react. I'll just say yes. But I think if we want to provide financial services to US persons, I mean, right. It shouldn't be an issue that the government can come in and any way they can come to your apartment and seize your. Your wallets.
- [11:39]
Scott
Right?
- [11:42]
Gary
Yeah. Liquidy. Liquidy should be the example. And again, I know.
- [11:51]
Scott
I lost Gary. Did you guys. I never know if we're in the glitch.
- [11:54]
Dave Weisberg
Scott, can I answer because.
- [11:56]
Scott
Yeah, go ahead, Dave. And then Ryan and then Carlo.
- [12:01]
Dave Weisberg
There. The problem, Gary, is conflating two topics. And when you conflate topics, you twist yourself into knots. The topics are the dollar and fiat currencies and money movement and the crypto ecosystem. So let's talk the first one, Bitcoin is your answer to fiat debasement, full stop. That's all I'm going to say. You know, if you don't want to be in the dollar and you want to be in something that's not the debase, be in bitcoin. On the other hand, if you want to understand what's going on in the crypto ecosystem, just think about how Tether FUD has held back this industry. What happens? How many people who have stayed out of crypto because they believed Bitfinex and all these other idiots who make these statements about tether from five years ago being true today, if all of a sudden now the on ramp to crypto buying and selling is legal in the world's largest economy, Just ask yourself that question. This is not a trivial point. The money flows once you're in stablecoins, it moves around the crypto ecosystem incredibly fast, incredibly easy. In fact, that's why Abu Dhabi just invested in binance in stablecoins, for Christ's sakes. I mean, it is dramatically easier. Anyone who sent bank wires understands the breaking of the system. Ever since Silicon Valley bank and all of the shutdowns of Silvergate and Signature, you've had dramatic liquidity differences in the USD pairs versus the stablecoin pairs against crypto, where the USD pairs have been much more volatile, much less liquid. The ability for stablecoins to become usable and blessed by regulatory authorities is a very big deal for the crypto ecosystem. But don't conflate that with believing you want to hold dollars long term. The dollars are being held to be able to enter the crypto ecosystem. If you want to hedge against that, buy Bitcoin. Those two things are those two ideas can be held in the same person's head at the same time.
- [14:08]
Ryan
Ryan yeah, I'm a big proponent of looking at past performance and past actions and I do believe that most entities, governments and organizations just don't change. And right now I look at Cash App and Venmo and all these other peer to peer payment systems and if I try to send someone thousand dollars it says I can't. If I try to send someone $500, you know I can for a day but then I'll hit like you know, $1,000 for the week limit. The reality is that we don't have freedom and movement of our money in the US And I don't see that changing when they have a central backed digital currency. In fact, I think it's just going to be better controls for the central authority, it's going to be better regulation for the central authority. If they wanted us to have freedom of movement of money, we would have had it in all these different apps. But the way the regulations are and the way people are just in constant cover our ass mode for getting sued for moving money against KYC AML, I just don't. I think Dave's incredibly right. Like Web3 stablecoins move incredibly fast, incredibly easy once they're in the Web3 ecosystem. I don't see the government appreciating that and they probably put a lot of rails and a lot of protections on that.
- [15:33]
Dave Weisberg
I need to explain something because people, a lot of people don't know this. When you send an ach you think it moves immediately, it takes days, multiple days and it batches and there's risk in the system. So the banks take risks. So the reason Cash app, the reason Zelle, the reason Venmo have these dollar restrictions are risk management on the purpose of the banks and the regulators make them do that. From a risk point of view, it has nothing to do with restricting freedom of move, everything to do with banking risk. With stablecoins unlike ach, it moves immediately and the bank's risk won't be there. In fact what will happen is the banks will use stablecoin technologies underneath these app layers to allow for faster, easier money movement. The only question will be, and if you were listening to Scott's show earlier, will be whether amendments like what Mark Warner is putting in will limit the ability until you're KYC'd, et cetera, et cetera in the US but it's really people need to remember the current banking system is built on paper. And while they've dressed it up with nice fancy apps, the paper is still there and creates risks for the institutions.
- [16:43]
Ryan
Dave but these habits don't change overnight. Like for example, if I try to send a wire, the banks block it and then I get a call an hour later saying oh we saw suspicious activity on your account. Even though I've been sending wires out of my account every week for the last year. And they constantly try to block it and they constantly try to stop the movement of money. That's right. Suggesting that it's going to somehow be fast and free because we have a central system.
- [17:09]
Dave Weisberg
But follow the money and understand there's two reasons wires suck. First of all, based on paper, they're taking risk. It's peer to peer stuff. It's not even close to like for example, crypto. When you try to used to move bitcoin, you'd have to use the bitcoin network. It takes 40 minutes. You want to know why there isn't anywhere near the arbitrage spread between Kraken and Coinbase and bitstamp anymore? Because they're all in the fireblocks network and they all have visibility as to the movement. So they were able to do that. The wire system is much more arcane than that system. And the second thing is with the wire system the intention is on the banks. The banks are responsible both for sender and receiver for aml. If AML is pre cleared for money in the system in stablecoins that won't happen. So it's just, it's plumbing but you have to understand the plumbing to understand it. Now do I think the banks are going to fight this? Yeah. You know why? Because the banks make billions of dollars off a little thing called float. And when stablecoins are fully active in the system, they're not able to claim that float anymore. They can float by the way is the interest they get because when you send an ACH to Joe the bank gets the interest for about the three days it takes for it to clear internally. Joe never get doesn't get it until it fully clears and you lose it the instant you send it. So that three days of interest goes to the banks, that's called float and it's billions of dollars in profits. That's what stablecoins are going to disintermediate. So you're right, the banks are going to fight it. But as long as it's legal, apps will pop up and that's important. Everyone has to understand the plumbing.
- [18:45]
Scott
Yeah, the banks are going to fight it, but companies like Stripe are using it. Right? I don't know if you guys have seen the news, but Stripe obviously very publicly says that this is how they move money after hours and on weekends is their I GU partnership with USDC or the integration. And Stripe is a huge. One of the largest payment providers obviously in the world. So this is happening, but banks are not gonna. Not gonna like it. To your point. Good morning, Carlo.
- [19:11]
Carlo
Good morning, Scott. So it is an interesting debate. I can see the points that Gary is raising. I think for purposes of dai, for purposes of tether, this does present a potential existential threat and it is a win for USDC because they are obviously more compliant. And where I think this is going to fall is first of all, I think it is a foregone conclusion that in some way, Shape or form we will always have KYC and AML standards when it comes to anything touching banks. And if we are going to entertain the notion of a stablecoin system which requires licensure and compliance and falls under the banking system, then we're going to definitely see AML and KYC as baked into that. What I'm curious to see is what shape or form DEFI comes out on the other side of this because you're essentially going to have, you're going to have two worlds. You're going to have a regulated compliant defi where you may have things like AAVE and Uniswap that adopt these tokens that are approved and regulated under the GENIUS act and are the preferred method for transaction. And then you'll have purely decentralized alternatives to this which will continue to operate off the traditional MakerDAO model. The MakerDAO model, more decentralized of course, comes with less regulatory scrutiny and regulatory relief and protection for consumers, arguably because it lacks a lot of those requirements for the. For the true one to one, which is the problem we see with Tether. A lot of people have argued that tether is not completely transparent and that causes potential counterparty risk. And I think they definitely want to avoid that. So I think this is a good step in the right direction. I think it's different than the approach that the EU wants to take. We saw the terrifying news last week that the EU is proposing a central digital currency that they think is going to be great because it will create a pure surveillance state and be able to track and turn off transactions and immediately tax transactions. And we have to pick our poison here. I think if we continue to entertain the possibility of being purely decentralized. I agree 100% with Dave. Bitcoin is the way. Nothing is going to take down bitcoin, but when you're talking about off ramps into stable coins, you're going to have friction. It's inevitable. That's at least my take.
- [21:56]
Scott
Yeah, good take. I think, Gary, you probably had your hand up next.
- [22:02]
Gary
I'll just make a quick comment. And again, looking into again, no network favoritism. I don't have network favoritism. I've got plenty of bitcoin, plenty of Ethereum and other things. But there are liquidy forks. They issued their own stablecoin because it's always redeemable for what the underlying L1 is. And is there something along those lines for bitcoin? The only reason I've seen bitcoin, it goes through its cycle four years, whatever. People want to explain as far as global liquidity and all these different reasons about price movement, but I would love to sit inside of something that's always redeemable for a dollar's worth of Bitcoin. And if it requires kyc, that's, that's, that's not crypto to me. You know, I want to be compliant. I want to be able to show accountants where the money source of funds come from if I'm going to buy real estate or anything along those lines. But like sitting in something that is considered a stable position, whether it's related to a dollar on an oracle or not, it seems like it's already there for other EVMs. I'm surprised that bitcoin doesn't have this already and maybe I'm just not aware.
- [23:10]
Scott
I do know that tether is coming to lightning, but that's slightly different.
- [23:15]
Gary
Hey Scott, could I plug then the fees again are. Again, these are all Treasury. As far as tether. Tether is earning because they buy treasuries and we pay the float because we sit in something that loses purchasing power for three or four years until the cycle comes back. So tether isn't the answer any more than anything else. I have a favoritism toward bitcoin, but it is. I don't want to see ordinals and all the different collectible elements riding on the network as much as cosmic cats and things like that. I would love to be in something that is always redeemable for some amount of bitcoin regardless of where the price moves globally.
- [23:53]
Dave Weisberg
Should I make a plug for your network when you're not here? All I was going to say Is next Thursday actually subbing in for Scott as well, talking with Eden Yago quite literally about exactly the initiatives that you're asking about, Gary. So that's next Thursday at 9. That's literally what we're talking about.
- [24:13]
Scott
Perfect. Sasha, you had your hand up then on Mateo.
- [24:17]
Sasha
Yeah. To me there are two things here. One, to me, stable right here, when we say stable, we're just saying a representation as close as possible to US$1 and that stays around US$1. The second question, whether you get yield on that. A lot of stablecoin issuers would give yield. They want to give yield. And I think that's going to come at some point. It's just from a regulatory perspective, it's hard to do so because it opens up a whole can of worms. And if you look, the only way they figured out to do this for now is Coinbase. You have to put your stable coins on Coinbase and that's how you get yield on usdc. But I think regulatory clarity is going to bring the ability to give that yield back on those stablecoin. And the thing that is important with those stablecoins is they are treated on public blockchains. We're not talking of private blockchains that are gated. These are still public blockchains.
- [25:15]
Scott
Amateo.
- [25:17]
Santiago
Yep.
- [25:20]
Mateo
Really enjoyed Carlo's points on this. I think if you're a regulator, you look at this market and you have to look at it and go, what are the systemic, what's the biggest systemic risk that affects this market? As I look to come in and regulate it and apply legislation that's going to apply to it. And you look at the last largest risk event, which was Luna, which was an algorithmic based stablecoin. So if you're going to de risk this, you're going to have to come in and go, well, we need to put in policies that actually look at these assets and create one to one fully backed attestation with audits and with clarity. And I think that this is what this attempts to do. What it also does is it blocks other liquidity risk events from new algorithmic stable coins being registered in the market. Kind of puts a cap on their ability to grow if they want to operate in the US while proposing a path forward for what I consider to be stable coins. I know that stable coins don't maybe make sense for certain things that are still affected by inflation, but they are inevitable as much as Bitcoin's dominance in the market and global liquidity is inevitable. So is stablecoins. And you have to figure out a way to embrace this. I've thought for a long time that in the US we'll probably see some kind of AML KYC defy versus the sort of open pirated defi, and I think that that fork in the road will continue to happen. I don't think that the lack of AML KYC DeFi, the pirated defi is going to essentially like be something that is not allowed. But I think everyone should be concerned when government is involved for encroachment of power.
- [27:15]
Scott
Santiago, you jumped up on stage, assuming you had some comments here.
- [27:21]
Santiago
Appreciate it.
- [27:22]
Scott
Thank you.
- [27:23]
Santiago
Scott, just a quick comment on.
- [27:28]
Carlo
You'Re.
- [27:28]
Scott
A little glitchy, but I don't know if you could fix your mic, your connection, but you go ahead.
- [27:34]
Santiago
Just a couple of quick comments regarding the differentiation in payments versus kind of like a settlement layer, and I think that's being confused in this discussion. The way I view stablecoins is that they're a useful payment mechanism, but that you never really get to a final settlement in the same way that you might with traditional crypto or a bearer instrument like Bitcoin. So I think part of the discussion is when others are facilitating payments, they need certain functionalities that people in crypto are not really accustomed to or like, for example, clawback features, right? If you use a credit card and for some reason the transaction fails or there's a problem with your product or maybe fraud, the business and the credit card companies need to be able to claw back some of those payments until there's resolution onto whatever the underlying issue was. And I think if stablecoins start taking the role of a lot of payment infrastructure, you need to have that kind of functionality. Otherwise businesses and individuals can't really use it in the way that they've been made accustomed to. So callback functions are antithetical to, I think, some of the crypto values that people have. But again, it's a payment layer, not a settlement layer. And then I would also say that with regards to kyc, we're in this kind of domain where there's overlap between banking services and payment services, right? That you've got these payment layers on top of the banking system. And we're almost essentially adopting the regulatory infrastructure of the banking system on top of the payment layer. And so I think that's going to be problematic because if you don't create the kind of regulatory infrastructure for stablecoin payments at a level similar to the burden that banks have, then you're going to introduce Systemic risk. There eventually will be competition between stablecoin providers that they go further out on the risk curve to have more yield for their stable coin versus their competitors. The kinds of things that they back it with for redemptions are going to change as competition incentivizes them to change. So you'll eventually create systemic risk. So the stable act, I think, is a critical component to mitigate that right before it happens, so that we don't have the kind of the problems we had in the great financial crisis. Thank you, Gary.
- [30:03]
Scott
I think you had your hand up.
- [30:05]
Gary
Yeah, I just have issue with. And again, it's not anything specific to what he just said, but it's not called a stablecoin. If there is clawback, it is not. It is credit. And you can cut off that credit. You can claw back, if you want to call it that. But if there's no settlement layer, it is not sound money. And it's funny that since the 1950s when we had the Diners Club and we started credit, as far as consumer level credit, we have these ideas of being able to pull back because merchants have to have it. No, they don't. We've had gold in the past. We've always had bullets that basically protect what people consider their transaction property that they now own. You don't have credit on cattle and things like that that gets clawed back without violence in human history. So, no, it's not a stable coin if it has a clawback factor to it. And it's not crypto if it has. It requires a bank account with a government permission. You can ask the Canadian truckers, you can ask anybody else that basically call this crypto. It's not. It's not crypto if it has a clawback feature.
- [31:12]
Dave Weisberg
So I agree with Gary, but I think that everyone always assumes that everything has to be monolithic. It doesn't. So, like credit, you know, credit cards are not going to go away. They're. They provide two services to people who use them. Service number one, obviously is credit. Some of us don't use the credit, you know, pay it off every month. Service number two is security that security that you have, you sign up for whatever the hell it is that has a monthly recurring thing. You cancel it. They don't let you cancel it. They keep billing you for it. You get to call your credit card company and dispute it. That's worth something. And people pay for it. And you pay for it because you know when you're using your credit card, they're taking a big piece out of it. There's zero reason why business models can't grow up around using stables where they say, listen, we will eat that issue. We will, it will be our risk and you can use stables underneath it if you want to. There's zero reason. It's just like people who argued on when they argued against perpetual swaps in the United States. They said, oh well, you know, but the farmers don't want 24 hour liquidations. Well, they don't have to have it. You know, a broker could interpose in the middle. You can build business models on top of it. I agree with Gary though. A true stable coin. The only issue where it's going to be reversible is going to be when the government says this bad drug dealer needs to have their accounts frozen. And that is going to have to be allowed. I mean there's just no way around it. You're not going to get around. The government cares about two things, I repeat this all the time, Scott. They care about two things. They care about getting their taxes and stopping the bad guys. And as long as stablecoins can do that, it's going to be free to do a lot of other stuff that's a hell of a lot better than we have today.
- [32:54]
Scott
By the way, though that's already the case. Right? I mean tether and circle already participate with government agencies for clawbacks of fraud and crime. So that's not going to be. Maybe that agenda is furthered a bit by government passing legislation, but that's already the environment that we exist in. I think a philosophical debate that Gary is bringing up, which is a valuable one, about centralization versus decentralization and the purpose of bitcoin versus everything else. So I think that the way to frame it perhaps is cheering for stablecoin legislation or for the adoption of stablecoins is more about an acceptance of the underlying technology than it is of the ethos of bitcoin. And that's how I view it at least.
- [33:39]
Gary
Yeah. And again, people can buy an ETF that holds custody of Bitcoin or silver.
- [33:46]
Scott
Correct. Or whatever.
- [33:47]
Gary
And these are all, you know, these all can be. Your account is no longer welcome here with our institution kind of situation. So everybody, you know, there's insurance products that are out there, Fireblocks has its insurance policies with, with, with different institutions as well. So like you have layers as far as like what are you willing to pay as a merchant or as a, you know, transaction cost versus what is the purpose of crypto. And crypto to me is sound. That's why I got involved with it many years ago is because it was not just a ticker to make money on. There's lots of ways to make money, but there's a principle behind the construction of these things.
- [34:25]
Scott
But, Santiago, you'll jump in in a second. I just wanted to say, but I think that it's clear that more adoption of the underlying technology, people learning to use wallets, people understanding how to transact in stablecoins, could be a path to a further understanding and adoption of Bitcoin as well. I don't think they're mutually exclusive. Maybe that's a stretch and it's only to a small percentage. But either way, at the very core, we want to basically eliminate the third party toll collectors who are in the middle of our transactions. That's a huge part about, of the ethos of crypto, whether it's bitcoin or not. And this does do that. So there's still massive benefits to it, I would say. Santiago, go ahead.
- [35:10]
Santiago
Yeah, I think we should be cautious in the crypto community about purity tests regarding applications built on top of these public permissionless networks. And by that I mean is, you know, the where to draw the line is on bare instruments and native assets to the layers that we choose to use. It really shouldn't be on the applications built on top. And I consider stablecoins as an application built on top of a layer one. So the application just really the only standard there is, how competitive is it? If it has attributes that make it, you know, makes it so people don't want to use it, it has to consider that with respect to the native assets. Right. If there are clawback functions, if there are reversibility, if there's kyc, whatever factor it is that you don't like about a particular application or instrument, that's the whole point of having bitcoin and other layer one native assets is that you can exit out of those things that you don't like and enter into the things that you do. And so what we're really talking about here is making sure we have a competitive landscape for people to decide what kind of values they want to champion and what kind of instruments they want to use. But I think it's counterproductive to hold all assets and all applications to the same kind of purity test. Thank you, Lou.
- [36:38]
Scott
Lou.
- [36:38]
Lou
Yeah, I was just so.
- [36:40]
Gary
So first.
- [36:40]
Lou
I think the nice thing about crypto is everybody gets to have their own purity test. You know, for me, what I'm particularly excited about is algorithmic stablecoins. They're getting Better and better. And from my viewpoint, A, you can have custody without clawbacks and two, there when they work, there's obviously by definition less systemic risk than there is in dollar backed US stablecoins, which we all saw when SVP failed. The only reason that those people got their money back was because the government saved their ass.
- [37:20]
Mateo
Yeah, I know there's a lot of concern around clawbacks. I think the attractiveness of stablecoins is the settlement and I think that sometimes we underplay the amount of expense that goes into banks when it comes to enforcing fraud. Clawbacks, transaction reviews, wire processing, the time delays, there is revenue in that. But I think that the stable coins, it's very obvious that the speed, the efficiency and the ability to accrue additional AUM is actually a huge attraction point because you're actually going to see more liquidity flowing through the system. You're going to see greater aum, you're going to see faster transaction speeds, you're going to see greater customer certainty with this stuff. We're also going to get better front end experiences with less complications abstracting away the need to manage wallet addresses. And I think that that's very clearly where this stuff is headed and it's very attractive to people. It's much more efficient. Everyone knows that. It's absolute hell sending wires and I think that that alone is going to save banks a ton of money, not just be a threat to their profit margins.
- [38:35]
Scott
Yeah, so we obviously have the government side of it, but I think we all know that stablecoins have reached such a high level of adoption because of movement within web3 and obviously speculation in the crypto market. Robbie, asking you this question, obviously, do you think that Web3 can even exist or do you think that it would have reached the point it's at with adoption and building without stablecoins being at the foundation of moving money around?
- [39:14]
Dave Weisberg
Can anyone hear Robbie or is it me?
- [39:17]
Mateo
I can't hear him. I can hear you. Dave, can you hear me?
- [39:20]
Gary
I only hear Dave and I heard the host, but no, not Robbie.
- [39:24]
Dave Weisberg
Okay, Scott, it wasn't you this time. I know you dropped down to drop back up.
- [39:31]
Scott
Yeah, I don't know if anybody caught anything. I said I was asking Robbie about specifically how money moves through Web three with stable coins, but obviously I had a glitch there. Yeah.
- [39:44]
Dave Weisberg
Robbie, if you can hear us, you maybe you should drop and come back.
- [39:48]
Scott
So I glitched. Andy glitched. Perfect.
- [39:53]
Dave Weisberg
Yeah, right. You're obviously there. Obvious. I sold 100%. Okay, there we go. Scott. You can bring him back now.
- [39:59]
Scott
Yeah, we'll try it.
- [40:00]
Dave Weisberg
I'm looking forward to next week.
- [40:04]
Scott
It's always a good time. So, listen, I missed about a minute or two there. I don't know what happened. So you guys can continue the conversation there or actually, you know, or otherwise maybe we' beaten Stablecoins to death here and can move on since we're. We're glitching if. Let's see if I can get Robbie back up.
- [40:20]
Dave Weisberg
Yeah. Does anyone want to have a take on why Ethereum is. Is, which is the original title?
- [40:26]
Scott
You know what? You know, languishing.
- [40:29]
Dave Weisberg
What's going on with the Bitcoin Ethereum ratio? I mean, I. I've commented on this a lot, but I'd rather hear other people for a change.
- [40:36]
Sasha
Well, I thought Ethereum was the ultimate Stablecoin.
- [40:38]
Scott
Right.
- [40:40]
Dave Weisberg
It certainly sees me over the last couple days.
- [40:43]
Scott
Same price as 21, baby.
- [40:45]
Ryan
Let's go.
- [40:49]
Scott
Robbie.
- [40:50]
Gary
I saw somebody post that and they said, I think it might have been you, Scott. I can't remember who it was. It said something about Ethereum being at the same price as 2021. Actually, if you look at the Ethereum BTC ratio, it's nine years. Nine years ago is when it was at the same Ethereum BTC ratio. I don't know what that has to do with that.
- [41:09]
Scott
Also 2020. So it has passed through the level multiple times, but yes, that's accurate.
- [41:14]
Gary
It's wild.
- [41:16]
Scott
Really crazy. Robbie, is your mic working? I think Robbie might be living in the glitch. Welcome to Spaces, everyone. Yeah, it's not working, unfortunately. It happens to the best of us on a very regular basis. I'm actually glitching two guys, so unfortunately I'm going to call it a day on this one and we'll revisit it on Monday at 10:15am Eastern Standard Time. X. It's always a challenge. I appreciate you guys very much. Give everybody on stage a follow and Dave will be back on Monday as our host. Thanks, Dave. See you guys then. Bye.