Latest / The Paul Barron Crypto Show / Crypto CLARITY vs Privacy🚨Rep. Warren Davidson INTERVIEW

Transcript

Crypto CLARITY vs Privacy🚨Rep. Warren Davidson INTERVIEW · The Paul Barron Crypto Show

• 0:00
  Speaker 1: Midterms just around the corner. You've got Clarity edging in.
• 0:03
  Speaker 1: A lot is happening in DC and today we want
• 0:05
  Speaker 1: to bring in an insider and that of course is
• 0:08
  Speaker 1: going to be a good interview. I think you guys
• 0:09
  Speaker 1: don't want to miss. Let's just start off by thinking
• 0:12
  Speaker 1: our sponsor and that is Tangent. If you guys are
• 0:14
  Speaker 1: not in self custody, this is where you guys can
• 0:16
  Speaker 1: get rolling. Pretty simple to set up by just going
• 0:19
  Speaker 1: over to tangum dot com and setting up your own
• 0:22
  Speaker 1: self custody wallet if you've ever done it, this is
• 0:24
  Speaker 1: where you start. Use our link down below. It's going
• 0:27
  Speaker 1: to give you a little bit of a discount. They
• 0:28
  Speaker 1: do have a special offer on where you can get
• 0:30
  Speaker 1: a couple of wallets at a discount, so check it
• 0:33
  Speaker 1: all out. There's a great stack there, very easy to
• 0:36
  Speaker 1: set up, don't be afraid of it. Super easy to
• 0:38
  Speaker 1: use and get started. As you guys know, we have
• 0:41
  Speaker 1: been tracking the Clarity Act since it passed the House
• 0:45
  Speaker 1: three hundred and ninety eight days ago. That's right, guys,
• 0:49
  Speaker 1: three hundred and ninety eight days ago we had the
• 0:51
  Speaker 1: House pushing this out to the Senate. You've seen a
• 0:54
  Speaker 1: lot of our content has been pushing in this direction,
• 0:57
  Speaker 1: and most of it has been with some of the
• 0:58
  Speaker 1: leaders out of and of course you have Warren Davidson
• 1:02
  Speaker 1: coming in, Congressman Warren Davidson, who will have on the
• 1:04
  Speaker 1: show here in a second, pretty much doing a slam
• 1:07
  Speaker 1: dunk on his own race. So he would be back
• 1:10
  Speaker 1: in there at the house representing what's happening in the
• 1:14
  Speaker 1: in the space. And if you look at stand with Crypto,
• 1:17
  Speaker 1: this is the good Warren, not the wicked Warren coming on.
• 1:21
  Speaker 1: So we want to welcome in Congressman Warren Davidson. How
• 1:25
  Speaker 1: are you, Warren, Nice to see you.
• 1:26
  Speaker 2: I'm doing well. It's always an honor to join you.
• 1:28
  Speaker 2: Thank you.
• 1:29
  Speaker 3: Yeah. So we're going to get into a lot today.
• 1:32
  Speaker 1: First of all, congratulations, look like you're guaranteed to win
• 1:35
  Speaker 1: your your race, so kudos to you. And what you're
• 1:39
  Speaker 1: dealing with there.
• 1:41
  Speaker 4: Well, you don't want to take the victory lapse too soon.
• 1:43
  Speaker 4: That's why we run the race. But it's a good
• 1:45
  Speaker 4: district and it's an honor to get a representative hopefully
• 1:48
  Speaker 4: get to keep doing it.
• 1:50
  Speaker 1: You know, when you look at the clarity situation right now,
• 1:53
  Speaker 1: and you also consider the Crypto summit that occurred yesterday
• 1:58
  Speaker 1: at the White House where a lot of industry leaders
• 2:00
  Speaker 1: were there with President Trump, and the Clarity Act possibility
• 2:05
  Speaker 1: or probability actually took a little bit of a run
• 2:08
  Speaker 1: and we saw it moving up again. Do you think
• 2:11
  Speaker 1: that was substantiated? Do you think this had any effect
• 2:14
  Speaker 1: on the potential decision of both Democrats and Republicans on
• 2:19
  Speaker 1: the topic of the Clarity Act coming up here next month.
• 2:22
  Speaker 4: Well, it's an encouraging sign that Senator Thune scheduled this
• 2:25
  Speaker 4: for a vote on September fifteenth, So I think in
• 2:28
  Speaker 4: the afternoon of September fifteenth, the Senate supposed to have
• 2:30
  Speaker 4: a recorded vote the Senate. We've been hard pressed to
• 2:35
  Speaker 4: get the Senate to commit to have recorded votes on
• 2:37
  Speaker 4: a whole range of topics.
• 2:38
  Speaker 2: So this is a good sign.
• 2:40
  Speaker 4: And you know, a lot of times, you know, it's
• 2:43
  Speaker 4: hard to get things through in September. This looks like
• 2:45
  Speaker 4: something that going into the home stretch for the election,
• 2:48
  Speaker 4: both parties want to be good on, or at least
• 2:50
  Speaker 4: seen as good on. Historically, this has been something that
• 2:53
  Speaker 4: unites Republicans and divides Democrats, And you mentioned Stan with Crypto.
• 3:00
  Speaker 4: Elizabeth Warren sort of tried the anti crypto army and
• 3:03
  Speaker 4: has built a lot of pushback. I think some of
• 3:05
  Speaker 4: her Democratic colleagues resent her for that because the crypto
• 3:09
  Speaker 4: army showed up on the other side exactly well.
• 3:12
  Speaker 1: I mean, Warren of course has been the one that
• 3:15
  Speaker 1: has been against Crypto for quite some time, attacking pretty
• 3:19
  Speaker 1: significantly on almost every front, privacy, you know, bad actors,
• 3:24
  Speaker 1: you name it, she'll use. I think she's been able
• 3:26
  Speaker 1: to be successful in using almost every means necessary trying
• 3:30
  Speaker 1: to attack it.
• 3:31
  Speaker 3: When you look at Okay, so let's the way it sounds.
• 3:34
  Speaker 1: Based on your statement there is you feel like this
• 3:36
  Speaker 1: has a good chance of making it through the Senate
• 3:39
  Speaker 1: if in fact it does. What do you stand when
• 3:42
  Speaker 1: it comes back to the House. Is that a process
• 3:45
  Speaker 1: that's a rubber stamp or does it get a material
• 3:47
  Speaker 1: vote against the changes?
• 3:50
  Speaker 4: Yeah, I mean it'll have to be you know, the
• 3:52
  Speaker 4: House's past a version, the Senate's version keeps honestly keeps
• 3:56
  Speaker 4: getting worse. So who knows what'll what it'll take to
• 3:59
  Speaker 4: get it across the finish line. But I think it
• 4:01
  Speaker 4: will have the votes to pass, you know, almost no
• 4:05
  Speaker 4: matter what they do to it. In the Senate because
• 4:09
  Speaker 4: people know, well that's where the votes are in the Senate.
• 4:11
  Speaker 4: You know, the need has been long standing. I mean
• 4:14
  Speaker 4: go back to twenty eighteen. The guts of this bill,
• 4:17
  Speaker 4: the base premise for it, were in my Token Taxonomy
• 4:20
  Speaker 4: Act of twenty eighteen. So Darren Soto, a Democrat from Orlando,
• 4:24
  Speaker 4: Florida area, and I introduced this and it was totally
• 4:27
  Speaker 4: bipartisan at the time, but we couldn't get traction really
• 4:31
  Speaker 4: on either side of the aisle. It's taken years to
• 4:33
  Speaker 4: build the momentum, and all that did was give you
• 4:35
  Speaker 4: a bright line test for what is and what is
• 4:37
  Speaker 4: not a security. Since then, it's taken a lot more
• 4:40
  Speaker 4: to build it out and define you know, huge regulatory
• 4:44
  Speaker 4: expansion for the Commodity Futures Trading Commission and some other
• 4:48
  Speaker 4: kind of onerous things that are being packed into the
• 4:51
  Speaker 4: Clarity Act. So it's doing far more than really was
• 4:54
  Speaker 4: necessary to provide a bright line test for what's the security,
• 4:58
  Speaker 4: what's a commodity, and what's a real world ASSI. But
• 5:01
  Speaker 4: that's kind of what it takes to get the votes.
• 5:02
  Speaker 1: I guess what did you make of the sec rule
• 5:07
  Speaker 1: that came out yesterday where you had kind of basically
• 5:09
  Speaker 1: two buckets. You had the seventy five million dollar raise
• 5:12
  Speaker 1: bucket the five million dollar raise bucket. There are limits
• 5:16
  Speaker 1: on the uh more Advanced fund that's out there or
• 5:22
  Speaker 1: could be out there, versus what could end up being
• 5:26
  Speaker 1: a lot of maybe shoddy projects that make their way
• 5:29
  Speaker 1: through the five million track, which is no reporting. They
• 5:32
  Speaker 1: can kind of raise from anyone and you can go
• 5:35
  Speaker 1: in and get exposure on that. What was your opinion
• 5:37
  Speaker 1: on any of what the SEC put out yesterday?
• 5:40
  Speaker 4: Well, I haven't read the full version, but if you
• 5:42
  Speaker 4: look at like reg CF, for example, small dollar donors
• 5:45
  Speaker 4: can do lots of things already, so this is trying
• 5:48
  Speaker 4: to fit within their existing framework. And you know, for
• 5:51
  Speaker 4: a lot of us, we've wanted Reggae and reg D
• 5:53
  Speaker 4: to be able to go to much higher projects. So
• 5:56
  Speaker 4: this kind of is like, you know, very clear certain
• 5:59
  Speaker 4: things are to be in the SEC's regulatory sandbox. The
• 6:02
  Speaker 4: big thing is it still doesn't give you confidence that, well,
• 6:06
  Speaker 4: let's say Gary Gensler gets rehired to be at the
• 6:08
  Speaker 4: Security as and an Exchange Commission. You really need a
• 6:11
  Speaker 4: law that makes it clear that this is a security
• 6:15
  Speaker 4: whether Gary Ginstler likes it or not, And I think
• 6:18
  Speaker 4: that's why we have to get the Clarity Act alone.
• 6:19
  Speaker 4: We can't just do executive action or even SEC rulemaking.
• 6:23
  Speaker 4: So I'm encouraged. I think directionally, you know, letting adults
• 6:27
  Speaker 4: be able to do more with their own money is great.
• 6:31
  Speaker 4: I don't I'm not a fan of the accredited investor
• 6:33
  Speaker 4: rule in general, but the idea that you know, they've
• 6:36
  Speaker 4: kind of created a path that you can do more
• 6:39
  Speaker 4: in the space, I think is great. Capital formation continues
• 6:42
  Speaker 4: to lag. Really the demand for it. The market really
• 6:46
  Speaker 4: wants this, and the Securities and Exchange Commission is kind
• 6:49
  Speaker 4: of struggling to keep up with the demand.
• 6:54
  Speaker 1: Congressman, if you look at the current chance right now,
• 6:58
  Speaker 1: when it comes to the Senate, it's starting to get
• 7:00
  Speaker 1: a little bit tighter. And of course the House right
• 7:03
  Speaker 1: now you're dealing with a very hostile takeover. It appears
• 7:07
  Speaker 1: when you look at the House. If this plays out
• 7:10
  Speaker 1: and the Democrats control the House in the Senate, how
• 7:14
  Speaker 1: you know how resilient is are these executive orders and
• 7:18
  Speaker 1: even to a certain extent, some of the rulemaking that.
• 7:20
  Speaker 3: The SEC and the CFTC is going to be doing.
• 7:23
  Speaker 3: How resilient.
• 7:24
  Speaker 1: Are those standing up to something like that where the
• 7:27
  Speaker 1: Democrats take control here, Well, there'll.
• 7:30
  Speaker 2: Be a lot of scrutiny.
• 7:31
  Speaker 4: I mean, if Democrats control the agenda, the big thing
• 7:34
  Speaker 4: is it's going to kill lawmaking, so you're not going
• 7:36
  Speaker 4: to be able to change the law Democrats who control
• 7:41
  Speaker 4: the committee, I mean effectively Elizabeth Warren controls the agenda
• 7:44
  Speaker 4: in financial services, so because of Senate confirmation process, she
• 7:48
  Speaker 4: becomes the gatekeeper for everyone in the financial services space.
• 7:52
  Speaker 4: That's how you wind up with people like Gary Gensler,
• 7:54
  Speaker 4: That's how you wind up with somebody who had potential
• 7:56
  Speaker 4: like Chopra at CFPB. Can I go into the dark
• 7:59
  Speaker 4: side and becoming part of the Elizabeth Warren orbit and
• 8:04
  Speaker 4: you look at it recks a lot of things, But
• 8:07
  Speaker 4: that'll be more relevant if there is an executive branch
• 8:10
  Speaker 4: controlled by Democrats. When you look at the immediate consequence,
• 8:14
  Speaker 4: you're not going to be able to do laws. And
• 8:16
  Speaker 4: essentially every hearing is going to be oversight on Donald Trump.
• 8:20
  Speaker 4: I mean, it'll be hard to talk about anything other
• 8:23
  Speaker 4: than Donald Trump. If Democrats get the agenda, that's essentially
• 8:27
  Speaker 4: their campaign.
• 8:28
  Speaker 1: Yeah, for sure, which I think is going to be
• 8:31
  Speaker 1: if you look at just sentiment, because yesterday's summit didn't
• 8:36
  Speaker 1: really result in anything, and I'm not sure if it
• 8:38
  Speaker 1: really has an impact on how Clarity is going to
• 8:40
  Speaker 1: be decided, but it did have a huge impact on
• 8:44
  Speaker 1: the market, and I think most of that was sentiment driven.
• 8:47
  Speaker 3: So to your point, if.
• 8:49
  Speaker 1: We end up with the Democrats kind of guiding what's
• 8:52
  Speaker 1: happening right now of no laws, this could really be
• 8:55
  Speaker 1: a sentiment killer maybe on where the markets are heading,
• 8:58
  Speaker 1: especially around things like innovation. If Clarity does in fact
• 9:02
  Speaker 1: not go through, it does go through, things could be
• 9:05
  Speaker 1: a little bit different going forward. So I'm positive, I'm
• 9:09
  Speaker 1: kind of upbeat on the fact that you think Clarity
• 9:11
  Speaker 1: is going.
• 9:11
  Speaker 3: To head through.
• 9:12
  Speaker 1: Let's talk a little bit about Keep your Coins Act,
• 9:14
  Speaker 1: because that is something that you've been working on for
• 9:17
  Speaker 1: quite some time. It cleared committee, it never got completely
• 9:22
  Speaker 1: done in terms of floor time, leadership, never schedule it.
• 9:25
  Speaker 4: Who's stopping this, well, the Intel people. They really want
• 9:31
  Speaker 4: to be able to control everything. I mean, if you
• 9:33
  Speaker 4: look at and frankly a lot of the big banks,
• 9:36
  Speaker 4: they want everything to be account based. The idea that
• 9:40
  Speaker 4: individuals would control their own money is anathema to them.
• 9:43
  Speaker 4: And when you look at the Genius Act, that was
• 9:46
  Speaker 4: one of the real flaws with it if you created
• 9:48
  Speaker 4: a payment stable coin, and in particular, this was more
• 9:51
  Speaker 4: important for payments than it is for you know, I
• 9:55
  Speaker 4: tooke an ice security is self custody isn't really the
• 9:59
  Speaker 4: app pable thing there. You have to go through a
• 10:01
  Speaker 4: broker dealer to do securities trades for the most part anyway,
• 10:05
  Speaker 4: whereas really relevant is on payments, and so you know,
• 10:10
  Speaker 4: you can write it through on Clarity and make it
• 10:13
  Speaker 4: apply to payment stable coins, which is the goal, and
• 10:16
  Speaker 4: that is in the current based text of the Clarity
• 10:20
  Speaker 4: Act in the Senate. So it's not a standalone bill,
• 10:22
  Speaker 4: but the provision is in the current version of the
• 10:25
  Speaker 4: Senate's Clarity Act.
• 10:27
  Speaker 1: So okay, so you say big banks, possibly the intelligence
• 10:31
  Speaker 1: people is there, but is there someone within Congress that's
• 10:35
  Speaker 1: really kind of standing in the way, who can we say, hey,
• 10:37
  Speaker 1: maybe you should look at this.
• 10:39
  Speaker 4: Yeah, I mean I think if you get Mark Warner
• 10:41
  Speaker 4: on board. And my understanding is that he has been
• 10:44
  Speaker 4: I talked with. You know, Ted budd has been one
• 10:47
  Speaker 4: of the real champions for this in the Senate. He
• 10:49
  Speaker 4: was a co sponsor when he was a member of
• 10:51
  Speaker 4: the House of Representatives, part of the Financial Services Committee.
• 10:54
  Speaker 4: He got elected in North Carolina, it's the United States Senate,
• 10:58
  Speaker 4: and he's continued to be a good advocate for it,
• 11:00
  Speaker 4: and he's also on the Intel Committee, so he's been
• 11:03
  Speaker 4: able to say, well, look, this is how this would work.
• 11:06
  Speaker 4: And I think a lot of people are also seeing
• 11:08
  Speaker 4: over time, as you see chain analysis and others do
• 11:11
  Speaker 4: forensic accounting on blockchain, they've come up with the idea
• 11:16
  Speaker 4: that there is some level of privacy behind digital assets,
• 11:21
  Speaker 4: but it's not pure secrecy. They're able to follow the money.
• 11:24
  Speaker 4: It's just a little different than what they're doing with banks,
• 11:27
  Speaker 4: and a lot of cases they're able to do it
• 11:28
  Speaker 4: far better than they were able to do even with
• 11:31
  Speaker 4: an account based banking system.
• 11:33
  Speaker 1: Well, I think to your point is the blockchain doesn't
• 11:37
  Speaker 1: necessarily hide anything. It's really just a matter of layers
• 11:40
  Speaker 1: of how institutions are going to manage security in the future,
• 11:43
  Speaker 1: which is an issue I think that we're going to
• 11:45
  Speaker 1: continue to see addressed.
• 11:47
  Speaker 3: Let me ask you, in reference to Section seven zero two.
• 11:49
  Speaker 1: This is Jim Jordan who abandoned your warrant Amendment and
• 11:53
  Speaker 1: he backed renewing surveillance on Americans.
• 11:56
  Speaker 3: He was on the other side of that, and now
• 11:59
  Speaker 3: he's on this side of it.
• 12:00
  Speaker 1: What changed between twenty four and now twenty twenty four and.
• 12:04
  Speaker 4: Now the chairman's gavel. I mean, that's the same thing
• 12:07
  Speaker 4: that happened with Jamie Raskin. When Jamie Raskin was a
• 12:10
  Speaker 4: member of the Judiciary Committee, he said, get a warrant.
• 12:13
  Speaker 4: When he was the ranking member i e. The minority Party,
• 12:17
  Speaker 4: he said, get a warrant. When he became chairman, you know,
• 12:20
  Speaker 4: his speaker, his President, Joe Biden, said Okay, we're going
• 12:24
  Speaker 4: to do clean reauthorization, no changes, and Jamie, you're Askin
• 12:28
  Speaker 4: carried the water for that and honestly, looking at Jim
• 12:31
  Speaker 4: Jordan say okay, we're going to do this clean with
• 12:33
  Speaker 4: no warrant requirement. I don't know if he was really
• 12:37
  Speaker 4: blinking sos as he was making the case for it,
• 12:41
  Speaker 4: but he knows he doesn't have the votes. And I
• 12:43
  Speaker 4: think that's really where we're at is we need reform.
• 12:45
  Speaker 4: We're finally at a point where Republicans and Democrats are
• 12:48
  Speaker 4: insisting on reform. We barely got a build out of
• 12:51
  Speaker 4: the House that came just shy of a real warrant requirement,
• 12:55
  Speaker 4: but it was too much for the Senate to take.
• 12:57
  Speaker 2: They basically let it lapse.
• 12:58
  Speaker 4: So as we go into seven oh two, the administration
• 13:01
  Speaker 4: really would like to get the framework adopted.
• 13:04
  Speaker 2: There's clear support, the clear.
• 13:05
  Speaker 4: Will of the body is to get a warrant, and
• 13:08
  Speaker 4: even if it's more narrowly tailored, there are exigence circumstances
• 13:13
  Speaker 4: that are accepted, and that's always been the case. So
• 13:16
  Speaker 4: we've worked to craft this in a way that keeps
• 13:19
  Speaker 4: US safe but also keeps us constitutional. And right now
• 13:22
  Speaker 4: I think there's a lot of unconstitutional surveillance. Seven oh
• 13:25
  Speaker 4: two fis is the tip of the iceberg, and so
• 13:28
  Speaker 4: we've been so fixated on that in part because there's
• 13:30
  Speaker 4: a sunset provision. Other portions of the Patriot Act aren't sunset.
• 13:36
  Speaker 4: They're just base law, and we're not getting after real
• 13:39
  Speaker 4: reform to Title one. For example, the Title one is
• 13:42
  Speaker 4: really what was abused against President Trump. And you know
• 13:45
  Speaker 4: a lot of people are talking today about like flock cameras.
• 13:48
  Speaker 4: Those are everywhere, like about one hundred and thirty thousand
• 13:51
  Speaker 4: of them around the country. We haven't dealt with an
• 13:54
  Speaker 4: underlying privacy law broadly, artificial intelligence is accelerating all of
• 13:59
  Speaker 4: those concerns. And then lastly tie it back together with
• 14:02
  Speaker 4: what we're talking about crypto central bank digital currency and
• 14:04
  Speaker 4: digital ID. That's the future, Elizabeth Warren once, which is
• 14:08
  Speaker 4: a complete surveillance, coercion and control device. And I've had
• 14:13
  Speaker 4: Democrats who've been great working with me on FIZA, and
• 14:17
  Speaker 4: they rightly see the threat of privacy. How they don't
• 14:20
  Speaker 4: see central bank digital currency as a massive viohilation of privacy.
• 14:25
  Speaker 2: I don't know.
• 14:26
  Speaker 4: But on the other side, Republicans who have been reluctant
• 14:30
  Speaker 4: to support my fight against warrantless surveillance are pretty united
• 14:36
  Speaker 4: in opposition to central bank digital currency. So hopefully we
• 14:39
  Speaker 4: can just get everyone to do the right thing here
• 14:41
  Speaker 4: and defend freedom.
• 14:44
  Speaker 1: Interesting that you mentioned both flock and CBDCs there. If
• 14:48
  Speaker 1: Americans were voting on that tomorrow, which one do you
• 14:51
  Speaker 1: think they would would vote to ban a CBDC or flock?
• 14:56
  Speaker 4: Right now, I think it's all doomed, and I think
• 14:59
  Speaker 4: data centers that back up all of it maybe the
• 15:02
  Speaker 4: real crux of the problem. And I think data centers
• 15:05
  Speaker 4: may have a lower approval rating than Congress right now.
• 15:08
  Speaker 4: Certainly in Ohio not popular.
• 15:10
  Speaker 1: Right, Okay, So let's go jump over because as you
• 15:14
  Speaker 1: get into privacy, D banking is one of the big ones.
• 15:17
  Speaker 1: We've seen D banking start to make its way into
• 15:19
  Speaker 1: the immigration side of things around enforcement. When you look
• 15:23
  Speaker 1: at that happening right now and the idea of self custody,
• 15:27
  Speaker 1: and I know you understand self custody, and there's a
• 15:30
  Speaker 1: lot of Americans out there that are getting into self
• 15:32
  Speaker 1: custody for the first time. Is this a slippery slope
• 15:36
  Speaker 1: into some sort of ban on self custody while it's
• 15:40
  Speaker 1: down the road?
• 15:40
  Speaker 3: Do you think?
• 15:42
  Speaker 2: Yeah, I think it really is.
• 15:43
  Speaker 4: And you know, when you look at D banking, you
• 15:47
  Speaker 4: know it's one thing to say, you know, well, you're
• 15:50
  Speaker 4: not really the right.
• 15:51
  Speaker 2: Fit for us.
• 15:51
  Speaker 4: If you're a business and let's say, let's say, for example,
• 15:54
  Speaker 4: you've got a trucking business and you've got a small
• 15:56
  Speaker 4: community bank, and people will say, hey, we want you
• 15:59
  Speaker 4: to do our trucking business and finance all of our
• 16:03
  Speaker 4: fleet of trucks and everything else. If you're a small bank,
• 16:06
  Speaker 4: you might look at a decent sized trucking company and say,
• 16:08
  Speaker 4: I don't really understand the risk. I don't have a
• 16:11
  Speaker 4: single trucking customer, we just don't really want to get
• 16:15
  Speaker 4: into that line of business as an example. It's one
• 16:19
  Speaker 4: thing to say that in a business sense, but when
• 16:22
  Speaker 4: you're just looking at a deposit customer that pays their money,
• 16:25
  Speaker 4: they're not a criminal, they're not you know, you have
• 16:27
  Speaker 4: these people being d banked. That's a challenge. Nevertheless, when
• 16:32
  Speaker 4: you find companies where they're de banking because of political
• 16:38
  Speaker 4: risk and other things, that's where a lot of the
• 16:40
  Speaker 4: frustration has come in. It's not even a business. It's
• 16:43
  Speaker 4: a sure depository account, no lending, nothing else, and they're
• 16:49
  Speaker 4: being told, hey, you've got to find another bank. And
• 16:51
  Speaker 4: these are big sophisticated banks JP Morgan Chases basically de
• 16:54
  Speaker 4: banking customers. They're in every line of business that you
• 16:57
  Speaker 4: can imagine, not necessarily with every customer, but not because
• 17:01
  Speaker 4: they're bad credit. They're just basically saying, we don't want
• 17:03
  Speaker 4: to manage this person. And some of it comes down
• 17:06
  Speaker 4: to politicized reporting obligations, which goes back to weaponization and government.
• 17:11
  Speaker 4: If you've got bank regulators that are putting pressure on
• 17:14
  Speaker 4: banks to collect information about certain customers or certain categories
• 17:19
  Speaker 4: of customers, that's a problem, and that's really where the
• 17:22
  Speaker 4: Biden administrations were on Crypto came where even banks who
• 17:26
  Speaker 4: were open to being in the space found the burden
• 17:28
  Speaker 4: of complying with all that regulation, you know, too much
• 17:32
  Speaker 4: to handle. So they're like, look, we can't even take
• 17:34
  Speaker 4: on crypto customers because we can't manage the compliance cost
• 17:38
  Speaker 4: under Biden's regulators.
• 17:41
  Speaker 3: Yeah, right.
• 17:42
  Speaker 1: Do you think the Bank Secrecy Act has been diminished
• 17:45
  Speaker 1: or improved under Trump?
• 17:48
  Speaker 4: Well, they're doing a rulemaking right now that I think
• 17:51
  Speaker 4: will come out soon that is revising it.
• 17:54
  Speaker 2: Now.
• 17:54
  Speaker 4: The draft notice of proposed rulemaking doesn't do everything I
• 17:58
  Speaker 4: would like.
• 17:58
  Speaker 2: I think one of the big.
• 17:59
  Speaker 4: Things that if you look at suspicious activity reports in
• 18:05
  Speaker 4: cash transaction reports, they haven't been updated for inflation, and
• 18:09
  Speaker 4: a lot of times they're just overly broad. I mean
• 18:13
  Speaker 4: some bank regulators have even benchmark banks saying, hey, for
• 18:16
  Speaker 4: a bank your size, we usually collect this many suspicious
• 18:20
  Speaker 4: activity reports and you're not doing enough. Well, you shouldn't
• 18:24
  Speaker 4: measure that by activity, you should say, well, what is
• 18:27
  Speaker 4: the risk out of this bank? And so you're not
• 18:29
  Speaker 4: really doing it right now, About five percent of all
• 18:32
  Speaker 4: the stars suspicious activity reports in a year are used ever,
• 18:37
  Speaker 4: so you're building a giant haystack. The haystack keeps growing
• 18:41
  Speaker 4: and you're not finding the needles. So they do have
• 18:45
  Speaker 4: an approach that focuses more on signal and less on
• 18:48
  Speaker 4: all the noise. But one of the things I'd love
• 18:50
  Speaker 4: to see done is update for inflation. I mean, the
• 18:54
  Speaker 4: ten thousand dollars cash requirement would go to eighty two
• 18:57
  Speaker 4: thousand if we adjusted for inflation.
• 19:00
  Speaker 1: Yeah, that's a good point because I think obviously that's
• 19:03
  Speaker 1: a very old law that exists and has been existed
• 19:05
  Speaker 1: in banking for quite some time. So to your point,
• 19:08
  Speaker 1: I think you're right. When Okay, so last couple of questions.
• 19:11
  Speaker 1: You look at clarity, the probability or possibility that this
• 19:16
  Speaker 1: goes through in September. What has to happen, first of all,
• 19:20
  Speaker 1: on the Democrat side for us to get a bipartisan
• 19:23
  Speaker 1: is it still hint lynch pinning on what's going on
• 19:27
  Speaker 1: with the Ethics provision or is there anything else we
• 19:29
  Speaker 1: should watch for?
• 19:31
  Speaker 4: Yeah, I think overwhelmingly it's the Ethics Provision and you know,
• 19:34
  Speaker 4: world liberty financial for you know, anyone fall in this
• 19:37
  Speaker 4: space knows that the Trump family really and you know,
• 19:41
  Speaker 4: others involved in World Liberty Financial launched a perfectly legal
• 19:46
  Speaker 4: crypto business.
• 19:47
  Speaker 2: In the space.
• 19:49
  Speaker 4: And you know Donald Trump is associated, whether because the
• 19:52
  Speaker 4: Trump family is involved now, He's not actively managing any
• 19:55
  Speaker 4: of this. His sons aren't officeholders that are out in
• 19:58
  Speaker 4: private sector doing business, but the perception issues are real
• 20:03
  Speaker 4: and the Trump Mean Coin, Donald Trump's coin and Milania's
• 20:06
  Speaker 4: coin didn't go over well with a lot of people
• 20:08
  Speaker 4: who see the mean coin as part of why we
• 20:10
  Speaker 4: want clarity in the first place, because people have sometimes
• 20:14
  Speaker 4: labeled those kinds of things as pump and dump or
• 20:17
  Speaker 4: rug pool kind of operations where the early adopters see
• 20:21
  Speaker 4: the value rise and then there's a transfer of the
• 20:25
  Speaker 4: money to the founders and a lot of people get
• 20:27
  Speaker 4: left holding the bag. So there's definitely some open wounds
• 20:31
  Speaker 4: from that issue, and I think that's why dealing with
• 20:34
  Speaker 4: the ethics provisions are incredibly important.
• 20:37
  Speaker 1: Carsman, have you had a chance to talk with fellow
• 20:40
  Speaker 1: Republicans in the Senate at all? Maybe you don't communicate
• 20:44
  Speaker 1: with them often, but in reference to stable coin band specifically,
• 20:48
  Speaker 1: because this is a concern, are there any that maybe
• 20:51
  Speaker 1: are in that position where they would look at this
• 20:54
  Speaker 1: on trying to get clarity through.
• 20:58
  Speaker 2: Well. Republicans in the Senate. I've talked to regularly.
• 21:01
  Speaker 4: I've talked to a handful of Democrats, and you know,
• 21:03
  Speaker 4: I've worked for a long time to try to get
• 21:05
  Speaker 4: this legislation across the finish line.
• 21:08
  Speaker 2: So I feel hopeful that we can get there.
• 21:10
  Speaker 4: With respect to stable coins, you know, that's part of
• 21:13
  Speaker 4: the challenge that people want to keep it account based.
• 21:15
  Speaker 4: The banks have been heavy on this, trying to make
• 21:18
  Speaker 4: sure that you know, essentially customers don't leave the traditional
• 21:22
  Speaker 4: banking world and just go into stable coins as their
• 21:26
  Speaker 4: means of holding their their wealth and tokenizing all the
• 21:32
  Speaker 4: payment systems. So I've been encouraging banks to consider offering
• 21:37
  Speaker 4: this to their customers. Most most people don't want to
• 21:40
  Speaker 4: leave their existing relationships. They just want to be able
• 21:43
  Speaker 4: to work with their existing bank to do more of
• 21:46
  Speaker 4: the services. Banks have been very slow to adopt that.
• 21:49
  Speaker 4: I think the regulators haven't been there. But if you
• 21:51
  Speaker 4: look at what's going on, Secretary Vessent has been working
• 21:56
  Speaker 4: to you know, look at the demand for treasuries right now.
• 21:59
  Speaker 4: One of the things that about stable coins, it creates
• 22:01
  Speaker 4: massive new demand for treasuries because every dollar that's held
• 22:05
  Speaker 4: in a stable coin is fully backed by US treasuries.
• 22:09
  Speaker 4: So that's the genius act past you know, last summer,
• 22:13
  Speaker 4: and yeah, right now in traditional banking you've got fractional
• 22:17
  Speaker 4: reserve banking. And that's why I think some of the
• 22:19
  Speaker 4: banks are concerned, is there may be a push by
• 22:23
  Speaker 4: even Treasury to shift more of the market to stable coins.
• 22:28
  Speaker 4: But that's why to me, then the banks should just
• 22:30
  Speaker 4: accommodate stable coin balances.
• 22:33
  Speaker 1: Well, I think the key is going to be yields,
• 22:36
  Speaker 1: you know, in terms of being able to get that leverage,
• 22:38
  Speaker 1: and I think whether the banks will pay that is
• 22:41
  Speaker 1: the real question, because.
• 22:41
  Speaker 3: Then maybe you could get some flight.
• 22:43
  Speaker 1: I think of the crypto you know, crowd definitely, but
• 22:47
  Speaker 1: I think most of them have already kind of gone.
• 22:49
  Speaker 1: But if you add yields to stable coins and we
• 22:52
  Speaker 1: get this through under clarity, this is only going to
• 22:55
  Speaker 1: put jet fuel into US treasuries globally. You know, really
• 23:00
  Speaker 1: if you think about this as printing money around the world, yeah.
• 23:04
  Speaker 4: I mean if you look at the dollar, if all
• 23:07
  Speaker 4: the you know, M two supply were fully backed by treasuries,
• 23:11
  Speaker 4: I mean that that would let us essentially soak up
• 23:14
  Speaker 4: all the demand for US debt. So you're looking thirty
• 23:18
  Speaker 4: trillion dollars monetization that in theory can be possible. You know,
• 23:23
  Speaker 4: will that happen immediately, of course not. But I think
• 23:26
  Speaker 4: even when you look at cross border payments, you know,
• 23:29
  Speaker 4: people know this is kind of a killer app and
• 23:31
  Speaker 4: a lot.
• 23:31
  Speaker 2: Of the payments.
• 23:32
  Speaker 4: Folks are you know, trying to hold onto the status quo.
• 23:36
  Speaker 4: Swift and everybody else that's been bridging this for a
• 23:39
  Speaker 4: long time is trying to develop alternative products. They don't
• 23:44
  Speaker 4: want to be disrupted. But the technology to do is
• 23:47
  Speaker 4: the disruption has been in place for over a decade now.
• 23:50
  Speaker 4: It's been stable, and you know, the market demand has
• 23:53
  Speaker 4: been has been there. We just have to get the
• 23:55
  Speaker 4: regulatory clarity in place to do it.
• 23:59
  Speaker 1: You've been out campaigning, obviously for your own race. You've
• 24:02
  Speaker 1: seen voters of all walks of life privacy right now.
• 24:07
  Speaker 1: Is that a big concern with the younger voters out
• 24:11
  Speaker 1: there today or have they kind of thrown their hands
• 24:14
  Speaker 1: up and said, you know, we're just not going to
• 24:16
  Speaker 1: get any from the US government.
• 24:18
  Speaker 3: Where does that?
• 24:18
  Speaker 2: You know, it's a mix, Yeah, it's a mix.
• 24:21
  Speaker 4: I mean people who you know will share all their
• 24:24
  Speaker 4: information in the world online and they go, well, you know,
• 24:27
  Speaker 4: I don't really have anything to hide. My life's kind
• 24:29
  Speaker 4: of an open book anyway. Well, let's not what the
• 24:31
  Speaker 4: Fourth Amendment says. The Fourth Amendment says that you have
• 24:34
  Speaker 4: a reasonable expectation of privacy in the government. If they
• 24:37
  Speaker 4: want to get your data, names, you know, what's to
• 24:40
  Speaker 4: be searched.
• 24:41
  Speaker 2: And get a warrant.
• 24:43
  Speaker 4: So you know, it's a it's a challenge in an
• 24:47
  Speaker 4: online world to do that in an era where we
• 24:50
  Speaker 4: really haven't updated our online privacy laws in the United States.
• 24:53
  Speaker 4: I mean a lot of ways companies are really only
• 24:55
  Speaker 4: governed by whatever they put in the terms and conditions
• 24:58
  Speaker 4: or European regular But when it comes to physical surveillance,
• 25:03
  Speaker 4: you know these flock cameras. Young people are incredibly frustrated
• 25:07
  Speaker 4: by that. So I think some of them are becoming
• 25:10
  Speaker 4: activated on privacy and they're paying a lot of attention
• 25:13
  Speaker 4: to it. They feel at least the camera itself makes
• 25:16
  Speaker 4: them feel this is creepy. And what I'm trying to
• 25:19
  Speaker 4: convey to them is, you know, the online version of
• 25:21
  Speaker 4: this is way more sophisticated.
• 25:23
  Speaker 2: Just the tech is keeping up with the physical world.
• 25:26
  Speaker 4: Now, but everything you touch with an electron in it
• 25:29
  Speaker 4: has been turned into a surveillance tool at this point.
• 25:32
  Speaker 4: I mean, your car collects more data on you probably
• 25:35
  Speaker 4: than your phone does, if you've got a modern car.
• 25:37
  Speaker 1: Yeah, well, I think to your point is that it
• 25:40
  Speaker 1: might be activating a whole new voter set out there
• 25:44
  Speaker 1: around privacy, which has been one of those I think
• 25:47
  Speaker 1: that one particular category in demographic has been very open
• 25:50
  Speaker 1: about giving that up, mainly because of the EULA you
• 25:54
  Speaker 1: know era, which is when we've seen the smartphone, the
• 25:57
  Speaker 1: rise of the smartphone and user licenses that have just
• 26:01
  Speaker 1: been kind of just accept accept, accept. So but to
• 26:04
  Speaker 1: your point, I think the physical surveillance may be the
• 26:08
  Speaker 1: stake that everybody has been waiting for to get privacy
• 26:11
  Speaker 1: back in the mainstream here. So we're gonna be watching
• 26:14
  Speaker 1: very closely. Congressman, thanks so much for coming in today.
• 26:17
  Speaker 3: We appreciate it. We're gonna be following you.
• 26:19
  Speaker 1: Your career there, and of course what's happening next month
• 26:23
  Speaker 1: in Clarity is the most important at least for our industry.
• 26:26
  Speaker 3: So thanks for coming in.
• 26:27
  Speaker 4: Thanks so much, Paul, God bless you and all listeners
• 26:29
  Speaker 4: and viewers.
• 26:37
  Speaker 1: If you like, this video, like and subscribe, drop a
• 26:39
  Speaker 1: comment down below, and also join our free private member group.
• 26:43
  Speaker 3: The link is in the description