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Collection for podcasts • 511 items • Updated • 2
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A | Bankless nation. This is probably the biggest week for crypto in DC, the capital of the United States, probably ever. Last week was a massive victory for pro crypto legislation. You probably heard David and I talking about this on the roll up. Basically, it was good news. An obscure accounting rule put in place by Gary... |
B | The stakes are pretty high for politicians these days because I think the whole DC sphere is finally waking up to the fact that crypto voters are actually a powerful bloc in a very close election. So we have the potentially the power to swing elections, and we're potentially even splitting the democratic party right no... |
A | Bankless nation. We are very excited to introduce our next guest, Congressman Patrick McHenry. He is the chair of the House Financial Services Committee. He's a key supporter of fit for the 21st Century act. This is a bill, it's major crypto legislation that's going to Congress for vote this week. Representative McHenr... |
C | Awesome to be with you. Fun to listen, but even better to be on with you. |
A | Oh, it's amazing. I'm excited that you're a listener. I don't know how many listeners we have in DC, but there's more than a handful. I guess the topic of DC is first and foremost in the crypto listener's mind this week because it feels like it's going to be a big week for crypto in DC. And I just want to remind people... |
C | Yes. The thing that has shifted here is that an industry that they said was dead is not dead. And once they said it was dead, it was undead, and they said it was dead again. So it's a whole wave of all this stuff. And the last time DC assumed everything was dead was after FTX blew up. And you have a lot of my colleague... |
A | That's a good word. We like that word. |
B | That's acceptable. |
C | Yeah, shenanigans. That's better than using profanity, but it keeps going. And you have new innovations that are built on this new technology, and then people experience that because the populace asks elected officials about it. I think what we see mainly is a generational dividend, less of a partisan divide in the Hou... |
B | I really want to get into this generational divide versus partisan divide, because that was really revealed to us, the broader crypto community with this SAB 121 repeal. It was expected to be repealed, but I don't know if it was expected to be the vote to be that split. 6830 is a pretty strong divide with a number of k... |
C | Well, a couple of things. So first, for folks that aren't familiar with the Congressional Review act, which is like most people, the Congressional Review act is a law that enables Congress to come in, pass a bill through the House, the Senate, and get it signed by the president repealing a major regulatory action. So t... |
A | And why? Why was it so huge? How do you explain this? Just, like. Like, was it just so arbitrary and dumb as you say that? Just like all legislators, like many legislators, kind of, like, caught wind of this and said, it doesn't make sense, or just, how do you explain this outcome? |
C | No, it's because there's been a massive amount of work done to educate members of Congress, and there's been an interest among members of Congress on being educated. And so this is a different vote than what we would've gotten on crypto ten years ago. Different vote. Much wider, much more understood by policymakers tha... |
B | Well, so Biden has said that he intends to veto this bill, and he said that before we got this 68 30 vote out of the Senate, I think he has seven days to actually sign that veto. Do you think that any of his calculus has changed as a result of this vote, or do you think that he's actually going to be in somewhat of a b... |
C | Well, let's see what he says about the fit 21 bill, because the staff accounting bulletin just is how institutions hold crypto. Do they hold it like you'd hold a stock or a bond in custody for someone, or do you have to hold it on your balance sheet and hold capital against it as if it's a, as if it's a liability? So t... |
A | Yeah, it's just fascinating. I got to congratulate you on the impeccable timing of kicking this into, into May, because it's like, it's just a way better timeline to do this because you're coming with the Fit 21 act vote that happens this week, I believe, in the House and at a time where last week we got a tremendous a... |
C | So currently in federal law, we have no definition what is a digital asset. So we have people that put out a white paper and pretend to be Satoshi and are fraudsters, and we have no definition of what that is. It is buyer beware. You have people that are pretending to be innovators like FTX, and they're running their w... |
A | So can we test that? Let's say fit 21 was in place? It does seem like there is maybe certainly some ambiguity at the SEC with respect to crypto asset network Ethereum, as to whether it's a security or not, right? There's some ambiguity there. The CFTC, it seems like, has been clear that it is a commodity. We really don... |
C | It does. Ethereum would clearly pass the, the decentralization test that we have in this act. And we've put, you know, there are a number of assets we put through this test to see where it would fall out. But Ethereum clearly meets that Mark and would be a digital commodity, just like bitcoin is a digital commodity. Th... |
B | Of things, there's a catch 22 about teams who are trying to bootstrap a project, bootstrap a token bootstrap a network. And the vision of this team is to have a fully decentralized network in the fullness of time. But in the beginnings of this lifecycle of project startup development, it's very centralized and very lik... |
C | Yes, that was the very scenario that we went through. So imagine you take no outside capital. Well, a whole section of the provisions of this bill won't affect you because you're not raising money with the securities offering. And so bootstrapping and that version of it, there is a clear process by which you go through... |
A | Nice. |
C | That was lame, but that's where you want to go for decentralization. That's kind of the dream which you shoot for. But in the very beginning, you have an idea, you have code, and you have a handful of insiders, and then how do you get from that handful of insiders into, you know, the wide, large scale holdings? We deal... |
A | Okay? |
C | Now, why it's so complex and why it takes so long, because you want to make sure you get it right, and you get it right for not the next five years, but for the next 30 years. |
A | So there's clearly some wins for the crypto community, for crypto natives, for crypto holders here. Talk about your fellow legislators. So sell it to them now. Right? So why should Congress support this? Somebody like, let's say, democratic minority lead Hakeem Jeffries, like, where does he stand on this? Why should so... |
C | Number one, consumer protection. You saw with the FTX failure and a bunch of frauds in this space that you have bad actors that are going unpoliced. So you have a massive amount of consumer harm, number one. Number two, you don't have clarity for innovators. So you have folks that want to create a project here, a techn... |
A | Yeah, I think they are in play. I've talked to a lot of independents and, like, generally left leaning folks that are in crypto who are just like, I can't believe what some of the establishment democrats, their policy on this. And if they don't change, it's going to actually change my vote. I want to ask you a personal... |
C | So, because I saw how my, well, the origin of this is a pretty basic one, which is I saw how my dad grew his small business in our backyard. You're like, what does that have to do with crypto? You know, my dad didn't go to business school, and he told me, he's like, I didn't go to business school. So I had to go figure... |
A | So fit is going in front of the House. I believe on Wednesday there'll be some debate, and I guess I would say to bankless listeners, this is the clearest mark I've ever seen on. It's like an acid test for whether you're representative or like the politicians, whether Congress is pro crypto or anti crypto, similar to t... |
C | It is. Look, Maxine Waters, who's the ranking member of the House Financial Services Committee, she and I have been negotiating for 23 months on legislation to provide for a federal regulation of a stable coin. Right now, New York and Wyoming are the only two states really in action. Now, Nebraska has a regime. Few oth... |
A | One other thing before we move to close. This is still maybe, maybe tactical. It feels very much like the crypto industry and like startups and like, even consumer products are under assault. So the SEC now has lawsuits against five major us crypto companies that are completely legitimate. This is not, we're not talkin... |
C | Well, it's directionally, it's the opposite direction that the securities and Exchange Commission is going. We're providing clarity, they're providing ambiguity. They're going after companies that went public in the last three, four, five years under the securities Exchange Commission's requirements. And now the SEC is... |
B | Speaking of the election, this 2024 election, I think is going to be the most relevant to crypto that there's ever been. Both presidential candidates have indicated their alignment towards the crypto industry or not. Biden, with his statement to veto, SAb 121, Donald Trump, as a reaction to that statement to veto, has ... |
C | Well, let's see what they say about this bill. Let's see what they say about fit 21, number one. Number two, you have to have policy behind words. President Biden issued an executive order that was broadly, I would say, a little inclined towards crypto. That's how I took it when he did it. And now that I've produced le... |
A | This has been great. So thank you, Representative McHenry, for hanging with us today and educating us on fit. I guess the last question as we close here is you mentioned a few times that voters should get their voices heard. How do they do that? What do we do? Is it tweets? Is it phone call? Are we doing anything on Tw... |
C | Those are great questions. Look, phone calls matter. Yes, tweeting matters. I see the action online. But we've got a lot of folks saying that these are. Yes, they're digital warriors. They're going to be out there tweeting to their 52 followers on Twitter or an ex. Right. Or whatever they're going to do, or they're goi... |
A | Well, perfect. Let's end it there. And I'll leave bankless, the bankless community who are, you know, crypto advocates with an action item. If you want to hear what your politician, if you want to look up what your politician thinks about crypto, your local representative, you can go to stanwithcrypto.org and go search... |
C | Thanks. Thanks for having me. |
A | Take care. |
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