Latest / The Paul Barron Crypto Show / CLARITY Next Steps🔥Kristen Smith INTERVIEW🚨Solana Policy Institute

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CLARITY Next Steps🔥Kristen Smith INTERVIEW🚨Solana Policy Institute · The Paul Barron Crypto Show

0:00
Speaker 1: All right, let's dive into Clarity today because there's a
0:02
Speaker 1: lot happening now that it has moved out of the
0:05
Speaker 1: Banking Committee, and we're going to break all that down
0:08
Speaker 1: for you. We have a special guest coming over from
0:10
Speaker 1: the Salona Policy Institute. Let's just get started. I do
0:13
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0:51
Speaker 1: to bring in Kristin Smith, who is the president at
0:53
Speaker 1: the Salona Policy Institute today. How are you, Kristin?
0:57
Speaker 2: Good morning, Paul, great to be here and excited about
1:01
Speaker 2: the developments this week.
1:03
Speaker 1: Listen, it was a big week. Yesterday pretty much a
1:06
Speaker 1: rapid fire of amendments, and then of course those amendments
1:10
Speaker 1: pretty much were I don't know if they were shot down,
1:13
Speaker 1: but they were somewhat ignored coming out of the Senate,
1:16
Speaker 1: and maybe there were some deals that were made to
1:19
Speaker 1: kind of get into that, just to kind of get
1:22
Speaker 1: people going. I'll give you guys a few things. This
1:25
Speaker 1: was a few interesting developments and reactions from yesterday. This
1:29
Speaker 1: was Amanda Fisher. She was talking about the issue around
1:33
Speaker 1: I just don't get it. The industry spent years saying
1:35
Speaker 1: crypto didn't fall within the SEC's jurisdiction. Now we're seeing
1:39
Speaker 1: this kind of spin. You look at that, you also
1:43
Speaker 1: look at the ABA, which of course moved directly into
1:47
Speaker 1: doubling down on statements around what to do in term
1:51
Speaker 1: of advancing the Clarity Act, and of course at all
1:53
Speaker 1: centers around that right there, which is stable cooin yield. Guys,
1:56
Speaker 1: So you guys know this generating rewards is the sticking
2:00
Speaker 1: point for the ABA. So it's going to be a
2:03
Speaker 1: big one. What do you consider as bipartisan right now? Kristin.
2:08
Speaker 2: Yeah, well, you know, I mean, I think, as a
2:10
Speaker 2: technical measure, anytime you have a legislation where there are
2:14
Speaker 2: either co sponsors.
2:16
Speaker 3: Or votes where you have at least.
2:18
Speaker 2: One senator from both sides of the aisle, that is
2:22
Speaker 2: technically considered bipartisan. But the real threshold here with the
2:27
Speaker 2: Clarity Act is we need sixty votes to get it
2:30
Speaker 2: out of the Senate, and there are fifty three Republicans,
2:34
Speaker 2: forty five Democrats, and two independents, and so you know,
2:38
Speaker 2: depending on if all the Republicans vote or not, you
2:41
Speaker 2: know you're going to need at least another seven. And
2:43
Speaker 2: so I think, you know, as you know, we look
2:47
Speaker 2: at this legislation, we want it to be bipartisan because
2:49
Speaker 2: it AA has to be bipartisan. But also the bills
2:53
Speaker 2: that are bipartisan tend to have more staying power. They
2:56
Speaker 2: aren't revisited anytime soon, Like they're really like the best
3:00
Speaker 2: negotiated deals because you have inputs from all sides of.
3:05
Speaker 3: Kind of the political spectrum.
3:06
Speaker 2: And so, you know, our hope is that you know,
3:10
Speaker 2: I think listen, going into the markup yesterday, there was
3:15
Speaker 2: a lot of nervousness around whether or not we would
3:17
Speaker 2: have Democrats joined the Republicans. It was clear we had
3:21
Speaker 2: all the Republican votes, but it was a question of
3:23
Speaker 2: whether or not we would get the additional Democratic senators
3:26
Speaker 2: to join. That did happen, and that means that this
3:30
Speaker 2: bill has a much much greater chance of getting floor
3:33
Speaker 2: time on the Senate floor. If it had been just
3:35
Speaker 2: a straight partisan line, it might not have had the
3:38
Speaker 2: momentum needed to finish the process. So I'm incredibly pleased
3:42
Speaker 2: that Senators Diego and Senators also Broke joined with the
3:47
Speaker 2: Republicans to get this bill out of committee into the
3:49
Speaker 2: next phase, because if that had not happened this week,
3:52
Speaker 2: it would have been very, very difficult. It starts to
3:55
Speaker 2: get very difficult to have enough time to complete the
3:57
Speaker 2: process before the end of the year. So very excited
4:01
Speaker 2: that we reached this critical milestone.
4:03
Speaker 1: Well, we're going to talk about timing here, because this
4:05
Speaker 1: is going to get very, I think, very dire if
4:07
Speaker 1: we don't get things moving quickly. You mentioned Gego and
4:11
Speaker 1: also Brooks, others that we're concerned about. Obviously, Mastow is
4:15
Speaker 1: in the hunt in terms of being able to turn
4:18
Speaker 1: into a yes vote, but with Diego and also Brooks,
4:22
Speaker 1: they did have a statement yesterday that kind of gave
4:26
Speaker 1: them an out. Yes, they were voting to get this
4:29
Speaker 1: through the committee, but it did kind of position it.
4:32
Speaker 1: Do you think they'll end up rug pulling us? I
4:35
Speaker 1: feel like, yeah, playing here.
4:38
Speaker 3: No, I certainly, I certainly hope they don't rug pull us.
4:41
Speaker 2: Obviously, each vote is an independent vote, and senators it's
4:44
Speaker 2: so prerogative to vote how they want. But I think
4:48
Speaker 2: that there there's been a lot of time and effort,
4:52
Speaker 2: both in the House, with the Senate, with the White House,
4:55
Speaker 2: that has gone into this bill, and I think that,
5:00
Speaker 2: you know, people start to they have skin in the game.
5:02
Speaker 2: They've spent hours and hours and hours negotiating this, and
5:05
Speaker 2: so it is my hope that you know, they they
5:08
Speaker 2: don't rug pull. Listen, Like we do this all the
5:12
Speaker 2: time right at Salona Policy Institute, when I was at
5:14
Speaker 2: the Blockchain Association. You want to preserve your optionality to
5:17
Speaker 2: continue to negotiate, and so oftentimes support at one stage,
5:23
Speaker 2: you know, doesn't necessarily mean support all the way through
5:25
Speaker 2: the process. So so no, I, but listen, I think
5:29
Speaker 2: that these senators, you know, I wasn't in the room,
5:31
Speaker 2: but my colleagues were in the room.
5:33
Speaker 3: We sort of divided and conquered yesterday.
5:35
Speaker 2: And the thing that I don't think was a parent
5:39
Speaker 2: from viewing it versus being in the room, is that
5:42
Speaker 2: negotiations were happening on this bill up to the very
5:45
Speaker 2: last minute. I think both the Republicans and the Democrats
5:49
Speaker 2: knew that if we wanted to keep this bill moving forward, like,
5:53
Speaker 2: there had to be some bipartisan support coming out of committee,
5:57
Speaker 2: and so, you know, there was a tremendous amount of
5:59
Speaker 2: activity in the room. I think, you know, the fact
6:01
Speaker 2: that there was this recognition that it needed to be
6:03
Speaker 2: bipartisan to increase its chances was good. I think that,
6:07
Speaker 2: you know, the Republicans gave some concessions in order to
6:10
Speaker 2: get Diego and also Brooks's votes at this time, and
6:14
Speaker 2: I think that, but I think it just shows that
6:17
Speaker 2: they're committed to finding a pathway forward and you know,
6:20
Speaker 2: getting this to the Senate floor as quickly as possible.
6:24
Speaker 1: All Right, you just mentioned something there that the Republicans
6:26
Speaker 1: may have given some concessions. What would you think that
6:30
Speaker 1: concessions have been given so far in terms of just
6:34
Speaker 1: your opinion?
6:35
Speaker 2: Yeah, No, I think that there was one issue that
6:38
Speaker 2: I think we need to continue to work on as
6:40
Speaker 2: an industry.
6:42
Speaker 3: But this had to deal with sections three oh one
6:46
Speaker 3: and six o four.
6:46
Speaker 2: And for those of you who don't live in legislative
6:48
Speaker 2: build text all the time, this is the relationship between
6:53
Speaker 2: UH sort of the rule making for sort of non
6:56
Speaker 2: decentralized systems and the Blockchain Regulatory Certainty Act, which are
7:02
Speaker 2: the developer protections. And so there were a couple changes
7:07
Speaker 2: made to those sections. But there were also some changes
7:12
Speaker 2: related to bank amissibility, to tokenization, to insider trading, to
7:18
Speaker 2: customer protections. These were sort of the bipartisan series of
7:21
Speaker 2: amendments that were passed, and I think, you know, it
7:25
Speaker 2: was very exciting to hear Senator Diego when he first
7:28
Speaker 2: said that he planned to support for it. I think
7:30
Speaker 2: there was a real, you know, sort of sense of
7:33
Speaker 2: relief and excitement amongst those of us watching because it
7:37
Speaker 2: did show that there was a pathway forward on a
7:40
Speaker 2: bipartisan basis, and so very very exciting, very dramatic markup
7:44
Speaker 2: and a lot of activity being negotiated directly in the room.
7:50
Speaker 1: You look at what Sander was talking about. He's the
7:53
Speaker 1: one of the reporters over at the CRYPT and he
7:56
Speaker 1: mentioned also Brooks kind of holding on to this whole
7:59
Speaker 1: issue around ethics, which we've talked about quite a bit,
8:03
Speaker 1: but this is one of the things that we are
8:05
Speaker 1: concerned about that this could become another sticking point in
8:10
Speaker 1: terms of negotiations that are happening right now. We'll get
8:14
Speaker 1: in timing in second. Obviously ethics are going to be
8:17
Speaker 1: a big part of this. Where do you think the
8:20
Speaker 1: line will get drawn? Do you guys have any opinion
8:23
Speaker 1: on what you think is going to come out of it?
8:25
Speaker 2: You know, I think it's a It's an interesting issue
8:29
Speaker 2: because this is legislation about regulating different participants in the
8:34
Speaker 2: crypto space.
8:36
Speaker 3: You know, the ethics is not really regulation of crypto.
8:39
Speaker 2: It's regulation and obligations that apply to government employees all
8:45
Speaker 2: the way up, you know, from the president down to
8:48
Speaker 2: the to the interns, right, and so.
8:52
Speaker 3: This is really a politically driven issue.
8:55
Speaker 2: This is about Democrats wanting to hold you know, President
9:01
Speaker 2: Trump accountable for anything.
9:03
Speaker 3: Him or his family might be doing with you know,
9:06
Speaker 3: the crypto space.
9:07
Speaker 2: And so I do think for the crypto industry it's
9:11
Speaker 2: a little bit challenging because we're not really a party
9:13
Speaker 2: at this table, right, you know, we we I think
9:18
Speaker 2: the thing that that the crypto industry cares about, at
9:21
Speaker 2: least that we care about it slam a policy institute,
9:23
Speaker 2: is we want, like the example I keep using, if
9:26
Speaker 2: we want a senator to go to the floor of
9:28
Speaker 2: the Senate and give a speech celebrating the Satoshi's the
9:31
Speaker 2: anniversary of Satoshi's white paper, you know, we don't want
9:35
Speaker 2: we want them to be able to say the word
9:37
Speaker 2: bitcoin without them running into an ethics issue, right. We
9:40
Speaker 2: want we want senators to be able to talk about it,
9:43
Speaker 2: and especially as we see tokenization of assets, you know,
9:46
Speaker 2: everything is going to be on crypto rails at some point,
9:49
Speaker 2: and so we need to make sure that that the
9:51
Speaker 2: Ethics Provision is written in a way where senators can
9:55
Speaker 2: have conversations that aren't being perceived as being like an
10:00
Speaker 2: endorsement of a specific token.
10:02
Speaker 3: And so I think that you know, these conversations are ongoing.
10:07
Speaker 2: I know that there was a lot of work that
10:08
Speaker 2: was done between the Senate Democrats and the White House
10:12
Speaker 2: last week. But this is kind of a funny issue
10:15
Speaker 2: because it doesn't really have anything to do with the
10:17
Speaker 2: core part of the bill. They're definitely you know, focused
10:21
Speaker 2: on crypto industry assets and activity as opposed to just
10:26
Speaker 2: sort of broader general you know, Trump has a lot
10:29
Speaker 2: of real estate, for example, There's a lot of industries
10:31
Speaker 2: out there, and so it's a really delicate one and
10:33
Speaker 2: it's one that I think is not one that the
10:39
Speaker 2: industry is at the table on. But I do think
10:42
Speaker 2: as the bill moves forward and we negotiate and solve
10:45
Speaker 2: some of these other outstanding issues that are there, if
10:48
Speaker 2: the last thing that's left is ethics, I think there's
10:51
Speaker 2: going to be a tremendous amount of pressure both on
10:53
Speaker 2: the White House and the Democrats to find a deal
10:57
Speaker 2: and to attach that and get that done, because, as
11:00
Speaker 2: I said, there's just been you know, thousands and thousands
11:02
Speaker 2: of hours of work that has gone into this legislation,
11:06
Speaker 2: and I think people are going to want to see
11:07
Speaker 2: it across the finish line.
11:08
Speaker 1: I'm kind of I'm kind of curious now that David
11:11
Speaker 1: Sachs has stepped away from that position. You've got Patrick
11:16
Speaker 1: with kind of I guess leading the charge there.
11:20
Speaker 3: Who would be at least.
11:22
Speaker 1: In the negotiation side from the administration that would maybe
11:26
Speaker 1: even get into a debate around ethics.
11:29
Speaker 2: Well, Patrick Wit is definitely the sort of main negotiator
11:33
Speaker 2: on behalf of the White House, and I think he's
11:35
Speaker 2: been doing a phenomenal job. And for somebody who you know,
11:40
Speaker 2: a year ago wasn't doing much with crypto policy, it's
11:42
Speaker 2: been really amazing to see how effective he has been.
11:47
Speaker 2: I think that, you know, Listen, Patrick's going to go
11:50
Speaker 2: have to sell this upwards at the White House right
11:53
Speaker 2: when he did when he does have something on paper,
11:55
Speaker 2: and so you know, we wish him go luck in
12:00
Speaker 2: in that. But yeah, I do think, you know, David
12:03
Speaker 2: Zachs obviously continues to care. He chairs the peak CAST,
12:07
Speaker 2: which is the Advisory Committee for Science and Technology. He
12:11
Speaker 2: obviously continues to have a direct line to President Trump
12:14
Speaker 2: and cares deeply about this, but he's not doing the
12:17
Speaker 2: negotiations on a day to.
12:18
Speaker 1: Day basis, all right, So we have a lot happening
12:22
Speaker 1: additionally with some of other key senators out there, as
12:26
Speaker 1: far as Chuck Sumer. Schumer, you know, we've had him.
12:29
Speaker 1: He voted against the Genius Act. I'm looking at his
12:31
Speaker 1: page right here over on stand with crypto, but he
12:35
Speaker 1: was also on the SAD one twenty one Joint House resolution,
12:40
Speaker 1: so that had you know, some inklings of where we
12:43
Speaker 1: are now with clarity. So my question is how important
12:48
Speaker 1: is Schumer right now?
12:50
Speaker 2: Now? I think I think Schumer is very important. Schumer
12:53
Speaker 2: is a little bit interesting in that. I mean, he
12:55
Speaker 2: is a political person, right like, he operates you know,
12:59
Speaker 2: every thing, looks at everything through a political lens. He is,
13:03
Speaker 2: you know, the majority leader for the Democrats, and so
13:06
Speaker 2: you know, most of the Democrats are not going to
13:08
Speaker 2: vote for this bill. There's only going to be a handful,
13:11
Speaker 2: you know, maybe a dozen or so, maybe twenty if
13:14
Speaker 2: or for really good you know Democrats.
13:17
Speaker 3: That will you know, eventually vote for this bill. And so.
13:22
Speaker 2: You know, he has a duty to kind of his
13:24
Speaker 2: full party and his uh you know, ranking member and
13:28
Speaker 2: the Senate Banking Committee, Elizabeth Warren. But he also, you know,
13:32
Speaker 2: very much understands that crypto is an emerging industry. He
13:35
Speaker 2: represents New York. He you know, there's a lot of
13:38
Speaker 2: activity going on with the crypto industry and traditional finance,
13:42
Speaker 2: and so you know, he he's looking at this through
13:46
Speaker 2: a lot of different angles. I think that he's been
13:48
Speaker 2: very personally involved, and you know, he was making phone calls, uh,
13:52
Speaker 2: you know, to the crypto industry this week. But I
13:55
Speaker 2: think his involvement is critical. Whether or not we get
13:58
Speaker 2: his vote may or may not matter if there are
14:01
Speaker 2: enough votes. But I think having him, you know, kind
14:05
Speaker 2: of push to get something across the finish line, even
14:08
Speaker 2: if he ultimately doesn't vote for it, is very helpful.
14:10
Speaker 2: Like with the Genius Act, he voted against that, but
14:13
Speaker 2: he was you know, helpful and trying to get you know,
14:17
Speaker 2: some of the votes. So he's a little bit of
14:19
Speaker 2: a complicated one. And but he's he's very active at
14:22
Speaker 2: this time, and you know, at least says that he's
14:25
Speaker 2: very committed to moving this forward.
14:29
Speaker 1: Okay, so obviously there there are a lot of key
14:32
Speaker 1: votes here right now. Fifty. Do you anticipate any of
14:35
Speaker 1: the Republicans defecting?
14:39
Speaker 3: That's an interesting question. I hope not.
14:42
Speaker 2: Sometimes you might get someone and I'm not saying that
14:45
Speaker 2: he's going to do this, but just as an example,
14:47
Speaker 2: like a Senator Ram Paul who's very libertarian, you know,
14:51
Speaker 2: he might look at this and say this is too
14:53
Speaker 2: onerous of regulation for you know, technology like so you.
14:58
Speaker 3: Might get somebody like that. I'm not saying that's what
15:00
Speaker 3: he said he's going to.
15:01
Speaker 2: Do, but it's very likely that we will probably lose
15:05
Speaker 2: one or two Republicans, you know, unless it's a really
15:09
Speaker 2: really tight vote. But you know, we'll have to see
15:12
Speaker 2: and we'll know more as the bill, you know, kind
15:15
Speaker 2: of moves out of the committee, you know, combines with
15:18
Speaker 2: the agriculture bill and gets ready for the floor, we'll
15:21
Speaker 2: start to see, you know, if there's any cracks on
15:23
Speaker 2: the Republican side. So yeah, I would expect we lose
15:26
Speaker 2: one or two. But you know that's why we need
15:29
Speaker 2: you know, a good number you know, or more Democrats
15:32
Speaker 2: to get on this bill.
15:34
Speaker 3: For sure.
15:35
Speaker 1: I'm looking here at the calendar, Christen, this, yeah, this
15:39
Speaker 1: is getting tight. So here we are in May. We
15:44
Speaker 1: of course are seeing what will be you know, a
15:47
Speaker 1: holiday coming up in another week, so you've got that
15:51
Speaker 1: laying out right there in late May. Likelihood is people
15:54
Speaker 1: are probably going to be departing, you know, maybe on
15:57
Speaker 1: the twentieth or twenty first, uh, along with June not
16:01
Speaker 1: having as much exposure. Maybe or maybe the June is
16:06
Speaker 1: going to be the working month, I don't know, and
16:08
Speaker 1: then you only have you know, three weeks in July
16:10
Speaker 1: and then it's pretty much done outside of one week
16:13
Speaker 1: in August before we probably go to midterms. So in
16:17
Speaker 1: your anticipation, what's the timeline here.
16:20
Speaker 2: Yeah, well, I think there's a big push going on
16:22
Speaker 2: right now to try to get the Senate to take
16:25
Speaker 2: it up in June. You know, yes, there is some
16:28
Speaker 2: room that could slip to July, but the floor time
16:32
Speaker 2: really does need to happen this summer because Congress, you know,
16:35
Speaker 2: every year they take the August recess where they go
16:38
Speaker 2: home and they work out of their districts. When you
16:41
Speaker 2: come back in September, there are the Jewish holidays which
16:44
Speaker 2: limit the number of days that they can vote, and
16:47
Speaker 2: then there are also the it's the end of the
16:51
Speaker 2: fiscal year, right, so the government fiscal year. This is
16:54
Speaker 2: where they're working to pass legislation to keep the government open,
16:57
Speaker 2: to keep the government funded, And so the September floor
17:00
Speaker 2: time is largely accounted for. And then when we move
17:04
Speaker 2: to October, they tend to take that time to go
17:08
Speaker 2: home and get ready for the November election. And depending
17:12
Speaker 2: on what happens with the election, you know, sometimes that
17:14
Speaker 2: lame duck period in November and December is very productive.
17:17
Speaker 3: Sometimes it's not.
17:19
Speaker 2: It's really hard to know what the political situation is
17:21
Speaker 2: going to be like. So, yes, they need to move
17:24
Speaker 2: as quickly as possible. And the Genius Act, if you
17:27
Speaker 2: recall Paul, was that took about four weeks of.
17:29
Speaker 3: Floor time, and that is a very long time.
17:32
Speaker 2: So yeah, there's going to be a big push to
17:35
Speaker 2: get this moving as quickly as possible. And so you know,
17:39
Speaker 2: I think we're looking to hopefully get that process going
17:42
Speaker 2: by mid June at the latest.
17:44
Speaker 1: What is your what's your likelihood right now if you
17:47
Speaker 1: were the Christen polymarket.
17:50
Speaker 2: Yeah, no, I have a Kristen poly market every day
17:52
Speaker 2: and it's all over the place depending on the latest information.
17:55
Speaker 2: But I will say this, I'm probably at about sixty
17:59
Speaker 2: percent this gets done right now. Okay, that is the
18:03
Speaker 2: highest I have been throughout this whole process. I think
18:07
Speaker 2: that legislation is really really hard to do. There are
18:12
Speaker 2: so many different pieces that need to line up just right.
18:16
Speaker 3: The good news is all of those pieces are there.
18:18
Speaker 2: They're they're on the board, they're you know, we have,
18:22
Speaker 2: you know, in theory everything we need and now we
18:25
Speaker 2: need to get them all all lined up and in
18:27
Speaker 2: a row. And so I'm at about sixty percent right now.
18:33
Speaker 2: Just two weeks ago I was at forty percent. I
18:36
Speaker 2: think I had a real turning point when I was
18:39
Speaker 2: interacting with folks down in Miami.
18:41
Speaker 3: We had a really good bipartisan group.
18:43
Speaker 2: Of Senators and congressmen that came down to the consensus conference,
18:47
Speaker 2: and we're really actively engaged and being very productive. And
18:53
Speaker 2: so I would say like that the fact that we
18:56
Speaker 2: got through this markup has has put that above sixty
19:00
Speaker 2: for me. But there's listen, there's a lot that can
19:02
Speaker 2: go wrong. We don't want a lot to go wrong.
19:04
Speaker 2: We want this to go right. We want to get
19:06
Speaker 2: this done. And I think that's why everyone's working really
19:08
Speaker 2: really hard, because you know, if this gets bumped into
19:11
Speaker 2: next year, depending on the makeup of the House and
19:13
Speaker 2: the Senate, it might not be as much of.
19:17
Speaker 3: A priority for getting this done.
19:19
Speaker 2: So we really need to try to take advantage of this,
19:22
Speaker 2: of the fact that we have so much work done
19:24
Speaker 2: and we have such a willing group of bipartisan senators
19:27
Speaker 2: that don't want to get it across the finish line.
19:30
Speaker 1: I was looking at a tweet by Adam Mainhardt. He's
19:33
Speaker 1: coming in. Yeah, we just had him on the show.
19:36
Speaker 3: He's fantastic.
19:37
Speaker 1: Yeah, he's been in DC for a while. And he
19:40
Speaker 1: had a statement in here that caused me a pause.
19:43
Speaker 1: And it was this statement right here that I highlighted.
19:45
Speaker 1: I don't know if you can see it. Let me
19:47
Speaker 1: zoom in on it for you a little bit. It
19:50
Speaker 1: is really in reference to CLARITYAC, but it boiled down
19:53
Speaker 1: to one thing. Serious work lies ahead on BRCA and ethics,
19:57
Speaker 1: and this is in reference to the negotiation. So when
20:00
Speaker 1: you think about that and you worry, I look at
20:04
Speaker 1: it and I go, wait a minute, maybe there's some
20:05
Speaker 1: negotiations being done by centralized exchanges as well. Coinbase is
20:09
Speaker 1: going to be one of the biggest ones out here,
20:11
Speaker 1: has been fighting for this in terms of killing DeFi
20:15
Speaker 1: protections as a sacrificial lamb. Do you think because it's
20:19
Speaker 1: not in their interest, do you think that is possibly underway?
20:23
Speaker 3: No, I don't think that's underway.
20:25
Speaker 2: I do think the centralized exchanges, and I obviously don't
20:29
Speaker 2: speak for them, but in my conversations with them, you know,
20:33
Speaker 2: they want to be at a gateway for people to
20:36
Speaker 2: get to the DeFi world, and they want to connect
20:39
Speaker 2: with DeFi and they have you know, Coinbase has Base, right,
20:43
Speaker 2: Kraken has has you know, their own I think is
20:47
Speaker 2: called ink. I haven't used it, but they have their
20:50
Speaker 2: own like they they want to you know, be gateways
20:55
Speaker 2: to the DeFi world. And I think that the leadership
20:58
Speaker 2: at those companies these are the oh geez right, Like
21:01
Speaker 2: they are not trying to recreate the old financial system
21:05
Speaker 2: with like a fintech wrapper, Like they truly believe that
21:09
Speaker 2: that DeFi is really the entire point of crypto.
21:13
Speaker 3: And so I'm not worried about this.
21:15
Speaker 2: This is very different than a couple of years ago
21:17
Speaker 2: when Sam Bateman Freed was going around with FTX and
21:20
Speaker 2: he was you know, he actually did have I think,
21:25
Speaker 2: you know, very harmful intentions towards DeFi.
21:30
Speaker 3: That is not the case today.
21:32
Speaker 2: And I think that the real source of this and
21:36
Speaker 2: any concerns around DeFi is a misunderstanding by law enforcement
21:41
Speaker 2: and by senators who have strong ties to law enforcement.
21:45
Speaker 2: You know, there have been a lot of conversations trying
21:48
Speaker 2: to get some of the law enforcement groups up to
21:51
Speaker 2: speed on how much that if you look at the
21:54
Speaker 2: entirety of the bill like this gives so many new
21:57
Speaker 2: tools for law enforcement and an entire regulatory framework that
22:02
Speaker 2: will help you know, law enforcement catch the criminals. And
22:06
Speaker 2: I think if in isolation, without the full context, you
22:10
Speaker 2: look at one little section here, in one section there
22:12
Speaker 2: you and you know, most people don't read the full bill,
22:15
Speaker 2: right like this is a three hundred plus pages. And
22:19
Speaker 2: so I think we're going to continue to do some
22:20
Speaker 2: work with the law enforcement and try to get them to,
22:24
Speaker 2: you know, sort of back down from this sort of
22:26
Speaker 2: very sort of narrow often like miss you know, sort
22:31
Speaker 2: of not factual statements that they're making, because there I
22:34
Speaker 2: think of real misunderstanding there that that that is the
22:37
Speaker 2: biggest threat to something like the Blockchain Regulatory searchgy Act,
22:41
Speaker 2: not the centralized six stages.
22:43
Speaker 1: Okay, not that And and really this kind of goes
22:46
Speaker 1: in line with what Senator Warren has been pushing for.
22:48
Speaker 1: But there's also a handful of others that are out
22:52
Speaker 1: there that have kind of aligned with it. We're starting
22:54
Speaker 1: to identify some interesting people that have not necessarily been
22:58
Speaker 1: in the negotiations before, at least on the Senate side,
23:01
Speaker 1: that could end up on it. So I think we're
23:03
Speaker 1: going to see a few new names. Anybody that you're
23:05
Speaker 1: watching outside of the obvious ones that we know of
23:09
Speaker 1: with Gagos, also Brooks, Mastow, anyone else that you think
23:13
Speaker 1: we need to kind of be on the lookout for.
23:15
Speaker 3: Yeah.
23:15
Speaker 2: I think Senator Mark Warner from Virginia is another important one.
23:20
Speaker 2: You know, he also leads up the Intelligence Committee on
23:25
Speaker 2: the Democratic side, and I think a lot of uh,
23:28
Speaker 2: you know, he's a lot of colleagues, you know, off
23:32
Speaker 2: committee on the Senate floor, I think look to him
23:36
Speaker 2: for how to handle something like this, given his tech
23:38
Speaker 2: background and his intelligence background, and so I think he's
23:42
Speaker 2: going to be kind of a critical one on the
23:45
Speaker 2: Democratic side that if he gets to a good place,
23:48
Speaker 2: you know, he'll bring several votes along with him.
23:51
Speaker 1: What about Van Holland, do you think he would.
23:53
Speaker 3: Be Van Holands? A potential Van Hollins in the mix.
23:58
Speaker 3: I think he's an option.
24:00
Speaker 2: I mean, I think, I mean, I think if we
24:02
Speaker 2: can get you know, if we can get a deal,
24:05
Speaker 2: I think it's not going to be a close vote.
24:07
Speaker 2: I think it's going to be actually a very strong
24:08
Speaker 2: vote in the Senate. I think it's just going to
24:11
Speaker 2: be a question of, you know, can we find something
24:15
Speaker 2: that works for the Democrats that also you know, doesn't
24:19
Speaker 2: overly harm the industry because you know, if we do
24:22
Speaker 2: start to take away and eroad these developer protections and
24:26
Speaker 2: we do make it very burdensome for new startups to
24:29
Speaker 2: operate here in the US. You know, all of a sudden,
24:32
Speaker 2: the bill is you know, not going to be a
24:36
Speaker 2: net positive for the industry. It'll be in that negative.
24:38
Speaker 2: And so it's really important that we keep a couple
24:40
Speaker 2: of these key provisions in there so that developers feel
24:45
Speaker 2: like they can come back to the US and launch
24:47
Speaker 2: their companies, launch their protocols here, because we think this
24:52
Speaker 2: is uh, that's the whole point. We're trying to do
24:55
Speaker 2: this law so that we have clarity so that the
24:57
Speaker 2: US can be the leader as we.
25:00
Speaker 3: Entered this new era of financial technology.
25:03
Speaker 1: Listen, Senator Warren most likely is going to be the
25:06
Speaker 1: brick wall coming into that, you know, Senate vote who
25:12
Speaker 1: would be because every time I've seen her go head
25:16
Speaker 1: to head with anyone, whether it's Republican or Democrat, doesn't matter.
25:20
Speaker 1: She does a pretty good job at positioning her facts,
25:24
Speaker 1: even though sometimes I don't think the facts are fully disclosed.
25:27
Speaker 1: And we just called that out yesterday in one of
25:30
Speaker 1: our shows. Who could challenge Senator Warren to try to
25:34
Speaker 1: get her on the right side of history here?
25:37
Speaker 3: She won't. She like, she's just not gonna happen.
25:40
Speaker 2: Yeah, we've been you know, before being at Slana Policy Institute,
25:43
Speaker 2: I was a CEO of the Blockchain Association for seven years.
25:47
Speaker 3: She is not on our side and will never be
25:50
Speaker 3: on our side.
25:51
Speaker 2: And there have been effort after effort, you know, former
25:57
Speaker 2: students trying to appeal to her, know, people within the
26:02
Speaker 2: crypto industry who are very like minded politically trying to
26:05
Speaker 2: get out. You know, there have been more efforts to
26:08
Speaker 2: try to get Elizabeth Warren on our side because if
26:10
Speaker 2: you think of her, you know, many years ago, you
26:13
Speaker 2: sort of thought of her as being the one that
26:15
Speaker 2: wanted to challenge the big banks, that wanted to you know,
26:19
Speaker 2: democratize finance like she had.
26:22
Speaker 3: She has a lot of values that you think would
26:24
Speaker 3: align with crypto.
26:26
Speaker 2: But it turns out at the end of the day,
26:28
Speaker 2: she just wants the government to have control over everything
26:31
Speaker 2: and all of the information, and she is not here
26:35
Speaker 2: to be constructive and so it is a lost cause.
26:38
Speaker 3: I think to get her on board there you go.
26:40
Speaker 1: So fight to the end. Last question to you, this
26:45
Speaker 1: obviously comes out of we're assuming that this is going
26:47
Speaker 1: to get passed through the Senate, it goes to the House.
26:50
Speaker 1: Would this be pretty much a slam dunk over there,
26:53
Speaker 1: similar to fit twenty one vote, which yeah.
26:56
Speaker 2: I think, I think, so, I think, And when the
26:59
Speaker 2: how past their version of clarity, it was a very
27:02
Speaker 2: bipartisan this year as well. And listen, it is so
27:06
Speaker 2: difficult to get something through the Senate floor that whatever
27:10
Speaker 2: the Senate can get the sixty plus votes to send
27:13
Speaker 2: over to the House, I think the House will probably
27:16
Speaker 2: just pass that obviously, as you will know, to get
27:18
Speaker 2: to the President's desk you have to have identical language
27:20
Speaker 2: approved in the House in the Senate, and so I
27:23
Speaker 2: think it'll very quickly move through the House and then
27:26
Speaker 2: you know, hopefully we can be headed back to the
27:28
Speaker 2: White House for another bill sending ceremony this summer.
27:30
Speaker 1: Wouldn't that be something?
27:31
Speaker 3: It would be amazing, It would be really historian.
27:34
Speaker 1: We haven't seen much like this in thirty years since
27:37
Speaker 1: really the birth of the internet. So Kristin Smith, President
27:41
Speaker 1: at the Salona Policy Institute, thank you so much for
27:43
Speaker 1: coming in today.
27:44
Speaker 2: We appreciate it all right, Thanks for having me, Paul.
27:53
Speaker 1: If you like this video, like and subscribe, drop a
27:56
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28:00
Speaker 3: The link is in the description