Latest / The Paul Barron Crypto Show / Institutional Adoption BOOM on Solana🚀 l 9% APY👀 w/ Hadley Stern

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Institutional Adoption BOOM on Solana🚀 l 9% APY👀 w/ Hadley Stern · The Paul Barron Crypto Show

0:06
Speaker 1: The market is moving and of course institutions are at
0:08
Speaker 1: the front row seat.
0:10
Speaker 2: And today we're going to be breaking that down with.
0:11
Speaker 1: A special guest. I think you're gonna like it. My
0:13
Speaker 1: name is Paul Barren. Welcome back in a tech path.
0:15
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Speaker 2: It's going to be a good one. I think you
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0:53
Speaker 1: Today we're going to be joined by Hadley Stern, who
0:55
Speaker 1: is the Chief Commercial Officer, coming in from Marinad.
0:59
Speaker 2: How are you, Hadley.
1:01
Speaker 3: I'm doing wonderful today. I'm actually coming to you from
1:03
Speaker 3: New York. I'm based in Boston, but I'm here for
1:05
Speaker 3: slon Accelerate, great salon activities happening in New York City
1:09
Speaker 3: this week.
1:10
Speaker 1: Listen Accelerate dropped a ton of news throughout the event.
1:15
Speaker 1: We saw everything from Seeker, We've seen CCIP with Chainlink.
1:20
Speaker 1: There's a lot going on up there, Hadley. And if
1:23
Speaker 1: you look at the current market right now with what's happening,
1:27
Speaker 1: you know, during the Accelerate event, we've had an all
1:29
Speaker 1: time high here and then some from bitcoin and of
1:33
Speaker 1: course a lot of people looking at the ETFs and
1:36
Speaker 1: we definitely want to get into Marinade and your relationship
1:39
Speaker 1: on the ETF side of things. Here's Eric Balshouni is
1:41
Speaker 1: coming in from Bloomberg and he talks about this right
1:44
Speaker 1: here on IBIT going into it's posted second biggest volume.
1:48
Speaker 1: He thinks this still might be maybe the biggest volume day.
1:51
Speaker 2: Yet to come.
1:52
Speaker 1: But the point is is that we're seeing a bit
1:54
Speaker 1: of a feeding frenzy in ETFs. When you look at
1:57
Speaker 1: the market, your background at fidelity, your background obviously now
2:02
Speaker 1: with marinade and also with b and Y melon. You've
2:05
Speaker 1: been around this sector for quite some time. What do
2:09
Speaker 1: you make of the institutional adoption curves that we're seeing currently.
2:15
Speaker 3: Yeah, I think first of all, thanks for having me on.
2:17
Speaker 3: I think there's a couple of ways to break this down.
2:19
Speaker 3: There's the Bitcoin lens, which you know digital store value,
2:24
Speaker 3: and then the Salona lens, which is more of a
2:27
Speaker 3: blockchain technology platform lens. Both of those have different dynamics
2:32
Speaker 3: in the institution and retail market for bitcoin. In the
2:35
Speaker 3: institutional space, I think bitcoin is continuing to emerge as
2:39
Speaker 3: this digital gold, uncorrelated asset where with all the craziness
2:45
Speaker 3: going on in the world with markets and tariffs, etc.
2:48
Speaker 3: It's a safe haven, and I think that's why you're
2:50
Speaker 3: continuing to see the price go up. People are understanding
2:54
Speaker 3: that there's only twenty one million bitcoin ever going to
2:57
Speaker 3: exist divisible by eight, and that this asset class is
3:02
Speaker 3: a safe place to park your wealth, and so that's
3:06
Speaker 3: why I think it's continuing to see adoption. And then
3:09
Speaker 3: of course the ETF market opened up people to be
3:12
Speaker 3: able to buy bitcoin in places where they couldn't formally,
3:15
Speaker 3: like rollover iras and other traditional investment vehicles. So that's
3:19
Speaker 3: on the Bitcoin side of things. On the Salona side
3:21
Speaker 3: of things, the reason why you're seeing tremendous growth there
3:25
Speaker 3: is because Salon is emerging as the chain where people
3:28
Speaker 3: are building real world applications that take advantage of a
3:32
Speaker 3: blockchain in a way that you can't do with bitcoin.
3:35
Speaker 3: So in addition to the announcements, there's another an announcement
3:38
Speaker 3: this morning that krack and is going to issue equities
3:41
Speaker 3: on the Salona blockchain and make it available to investors.
3:44
Speaker 3: That's the builder side of the blockchain ecosystem, which is
3:47
Speaker 3: now becoming largely Solana.
3:50
Speaker 1: Well, and I think the point we've covered Salona for many,
3:53
Speaker 1: many years here and the interesting thing when you look
3:56
Speaker 1: at the original breakpoint releases a few years it was
4:01
Speaker 1: mostly the ecosystem building out. Now we're actually seeing Solana
4:07
Speaker 1: moving into a position of institutional finance, and that I
4:11
Speaker 1: think is the bigger shift going forward when you look
4:14
Speaker 1: at that in comparison to where ETFs are going right now.
4:17
Speaker 1: I'll just show the bitcoin ETF chart here and the
4:21
Speaker 1: amount of growth that we've seen just in the last
4:23
Speaker 1: thirty days in terms of net inflow, and then you
4:26
Speaker 1: look at overall, because I'll get into all ETFs, you
4:30
Speaker 1: can kind of see the fact is we're starting to
4:32
Speaker 1: see a lot more inflow. Solana is going to be
4:37
Speaker 1: part of this crowd. I think very soon around how
4:39
Speaker 1: all of this is going to play out for not
4:42
Speaker 1: only ETFs in general, but I think just the popularity
4:45
Speaker 1: and also maybe the uptake of traditional non a traditional finance,
4:50
Speaker 1: but also traditional retail coming into the space. At Marinade,
4:54
Speaker 1: give me a rundown of what you guys are doing
4:56
Speaker 1: to kind of bridge this gap for the markets as
5:00
Speaker 1: it is today.
5:01
Speaker 3: Sure, so, Marinade is a staking solution provider on Solana.
5:06
Speaker 3: It's actually one of the og protocols on Solana, been
5:10
Speaker 3: in business for three plus years and the original team
5:15
Speaker 3: created the first liquid staking token called emsol on Solana.
5:20
Speaker 3: And our model is a little different. We don't run
5:23
Speaker 3: any validators ourselves. Instead, when people steak with us, we
5:28
Speaker 3: take that salona and distribute it to the most highly
5:30
Speaker 3: performing validators. And what you're showing here is what we
5:33
Speaker 3: announced yesterday in order to serve the ETF market, our
5:36
Speaker 3: broader retail based product takes that salona steak and sends
5:41
Speaker 3: it to hundreds of validators. The ETF market really wants
5:45
Speaker 3: something more select they want to know the validators behind it.
5:49
Speaker 3: So we've created a HAYC a compliance set of that
5:53
Speaker 3: thirty to forty validators who were great validators within the
5:56
Speaker 3: Salana ecosystem and made that available to the ETF market.
6:01
Speaker 3: In addition to announcing this yesterday, we announced the Canary
6:04
Speaker 3: Marinate Salani ETF filing, which is the first Salona staked
6:08
Speaker 3: ETF application that is going to use this product. So
6:11
Speaker 3: we operate solidly within the Salana staking space. But obviously,
6:17
Speaker 3: you know, in order for someone to buy that ETF
6:20
Speaker 3: when it becomes available, they've also got to believe in Solana. Right,
6:24
Speaker 3: do get this eight to ten percent yield on Solana,
6:27
Speaker 3: which is of orders of magnitude better than ethereum, but
6:31
Speaker 3: still there needs to be this underlying belief in Solona,
6:34
Speaker 3: which is why we're very involved and very bullish on
6:36
Speaker 3: the Salana ecosystem as a whole from an institution adoption standpoint.
6:40
Speaker 3: So the short story here for investors is once this
6:44
Speaker 3: is live is an ETF, you'll be able to not
6:46
Speaker 3: only get the potential price action in Solana, but on
6:50
Speaker 3: top of that, you'll get this eight to ten percent
6:52
Speaker 3: yield available.
6:53
Speaker 2: So I'm kind of curious, you know.
6:55
Speaker 1: So obviously during Accelerate we also had the Genius Act
7:00
Speaker 1: make it through its amendment phase. We're going to probably
7:03
Speaker 1: see a vote very quickly. And within that Act there
7:07
Speaker 1: was some directives around some light changes. One of them
7:11
Speaker 1: was staking, and of course we'll most likely see that
7:15
Speaker 1: change in the next phase of crypto regulation around you know,
7:20
Speaker 1: everything from the Market Structure Bill to where.
7:23
Speaker 2: Staking will be allowed.
7:25
Speaker 1: My question to you is when you do you feel
7:27
Speaker 1: like the market is just forecasting that staking is going
7:31
Speaker 1: to be part of this ecosystem going forward, even though
7:35
Speaker 1: with stable coins it still might be a little bit
7:37
Speaker 1: of a.
7:38
Speaker 3: Delay, I think. So, you know, staking has been and
7:41
Speaker 3: where members the Proof of Steak Alliance, which is one
7:43
Speaker 3: of the leading lobbying groups, and I've been down to
7:46
Speaker 3: DC a lot, and as you mentioned, I've been in
7:48
Speaker 3: this space for a while. You know, the part of
7:51
Speaker 3: the complication with staking in the industry, we didn't do
7:54
Speaker 3: ourselves any favors a few years ago when companies announced
7:58
Speaker 3: you know, staking products, but they were really lending and
8:01
Speaker 3: different types of financial services products. They weren't pure staking.
8:05
Speaker 3: What we're endeavoring to communicate very clearly lead to regulators,
8:09
Speaker 3: and they're starting to understand is staking is a protocol
8:13
Speaker 3: activity largely. Yes, it has some financial results, but it's
8:18
Speaker 3: not a financial product. And the regulators are finally starting
8:22
Speaker 3: to understand that. But they need to wait to articulate that.
8:26
Speaker 3: And staking and stable coin is a little bit of
8:29
Speaker 3: a different topic depending on the stake on the stable
8:31
Speaker 3: coin platform than it is in pure native staking on
8:35
Speaker 3: platforms like Solana and Ethereum.
8:39
Speaker 1: Yeah, I think, well you did hit on it, because
8:42
Speaker 1: I think you're right. This is one of the things
8:44
Speaker 1: I think the market is trying to get their heads around.
8:47
Speaker 2: I think investors are also.
8:48
Speaker 1: Seeing this, and in many cases when I talk to
8:51
Speaker 1: money managers even they are looking at some of these
8:53
Speaker 1: rewards and saying, you know, these are undeniably some of
8:56
Speaker 1: the best things out there in terms of financial instruments,
9:00
Speaker 1: and I think that will be an adoption craze going forward.
9:03
Speaker 1: We'll see a lot of institutions moving in this direction.
9:06
Speaker 1: If in fact, we can see those kinds of yields
9:09
Speaker 1: take hold and hold on overall, I'm looking at a
9:13
Speaker 1: tweet you guys had on here in terms of the validators,
9:16
Speaker 1: these are the ones that are committed to keeping Salon
9:19
Speaker 1: decentralized ultra fast. You guys are highlighting most of these now.
9:24
Speaker 1: The one that is missing to me is Gito.
9:27
Speaker 2: So I look at what you guys are.
9:29
Speaker 1: Can you explain a little bit more about that relationship?
9:33
Speaker 3: Sure? So probably the easiest answer is Gito is a competitor.
9:38
Speaker 3: So Gito came along after Marinate and they've done something
9:42
Speaker 3: very successful for Salon and very good for Slona, which
9:46
Speaker 3: is the creation of the med ecosystem. And as part
9:49
Speaker 3: of that there staking solution, which is a liquid staking token.
9:53
Speaker 3: We believe very firmly that native staking is better for institutions,
9:56
Speaker 3: and I can get into that. But that's the reason
9:59
Speaker 3: why GEDO is not on there. Gito also utilized our
10:03
Speaker 3: model of not running any validators. So one of the
10:05
Speaker 3: reasons they're not on there is they're actually not a validator.
10:09
Speaker 3: They utilized our model of this polled validator, so they
10:13
Speaker 3: you know, it's it's partly competition slash cooppetition, and it's
10:18
Speaker 3: partly just mechanical because they're actually not a validator.
10:22
Speaker 1: So okay, so this is good because I think it's
10:25
Speaker 1: good for the market to have some heavy competitiveness around staking,
10:30
Speaker 1: especially when you look at the way that you guys
10:32
Speaker 1: have constructed your model in comparison to what Gito is doing.
10:36
Speaker 2: Now.
10:37
Speaker 1: As far as launching with Marinate, how far out do
10:40
Speaker 1: you feel that this is before you guys are at
10:42
Speaker 1: full steam and ready to go.
10:45
Speaker 3: Yeah, Just to be clear, Marinate Select is a new product,
10:47
Speaker 3: but Marinate is three plus years old with other two
10:50
Speaker 3: billion dollars US total value locked up by platform. So
10:54
Speaker 3: we're very mature where you know, we exchange number one,
10:57
Speaker 3: number two slots with Gito. I think we're in the
10:59
Speaker 3: number to right now. So we're one of the largest
11:02
Speaker 3: players in this space and have been for some time.
11:05
Speaker 3: So the Select product is really the new product targeted
11:08
Speaker 3: towards institutions, and we've already seen adoption. We've made that
11:11
Speaker 3: available on our site where will add it to the
11:15
Speaker 3: custodians that we're integrated with Zodia Copper and Bicco and
11:19
Speaker 3: we expect to see, you know, accelerated adoption. One of
11:23
Speaker 3: the pieces that we're trying to get clear to the market.
11:26
Speaker 3: If you're an ETF fund manufacturer and I've been on
11:28
Speaker 3: the other side of building trad FI products. You're very
11:32
Speaker 3: concerned with contingency and backup, and so what they'll what
11:35
Speaker 3: you'll often have to do if you're an ETF manufacturer
11:38
Speaker 3: is you'll have to select multiple staking providers in case
11:41
Speaker 3: one goes down, just like you select multiple custodians. Well
11:45
Speaker 3: with marinate select you don't need to do that because
11:48
Speaker 3: we do that for you. So we do that to
11:50
Speaker 3: these highly performance validators, and the validators really like it
11:55
Speaker 3: because the validators that you see there on screen, they're
11:58
Speaker 3: not going to be able to go to an ETF
11:59
Speaker 3: provide and try and get their business. They're just that's
12:02
Speaker 3: not the way they're set up. That's not how they think.
12:05
Speaker 3: So we're opening up an additional vehicle to them. As
12:08
Speaker 3: we see bitcoin is now I think six percent of
12:11
Speaker 3: bitcoin is now on ETFs, this is going to be
12:14
Speaker 3: potentially an existential thing for these smaller to mid size validators,
12:18
Speaker 3: which is also very important for the salon and network.
12:21
Speaker 3: It's critical that we keep things decentralized, that we don't
12:24
Speaker 3: go to just one or two big validators, kind of
12:27
Speaker 3: like the coin based custom situation on bit go. It's
12:31
Speaker 3: staking is a financial activity, it's also a protocol structural
12:37
Speaker 3: activity that is critical to the support of the Salonon network.
12:41
Speaker 3: And what we think we're going to see is this flywheel.
12:44
Speaker 3: And the flywheel is going to be institutions building more
12:47
Speaker 3: products on Solana like Crack and announced today, you know,
12:51
Speaker 3: issuing Tokens, Society, General black Rock, and the other part
12:55
Speaker 3: of the flywheel is just more transaction flow going through
12:59
Speaker 3: which leads to taking a validation. So there's kind of
13:02
Speaker 3: this hopefully virtuous flywheel that we want to help create.
13:06
Speaker 1: Well one point nine billion right now locked up for
13:09
Speaker 1: you guys, and if you look at the growth that
13:11
Speaker 1: has been happening just really since back here of October,
13:15
Speaker 1: I think that was what was that twenty yeah, yeah,
13:18
Speaker 1: So I mean this is and this is without select,
13:22
Speaker 1: So with institutional I would see this really exploding over
13:27
Speaker 1: the next few years, maybe over the next twelve months.
13:31
Speaker 1: How much adoption do you feel like, you guys can
13:33
Speaker 1: truly attract in with select a lot.
13:37
Speaker 3: So we're at about two percent of the market right now.
13:39
Speaker 3: We want to be twenty five percent, So we're going
13:43
Speaker 3: to be very aggressive and doing that. One of the
13:45
Speaker 3: beauty of this model is it kind of self scales
13:48
Speaker 3: because from a validator standpoint, we're partnering with the broader ecosystem,
13:54
Speaker 3: so where if you will, I wouldn't say this from
13:56
Speaker 3: a regulatory standpoint. We're kind of a market maker right
14:00
Speaker 3: between sophisticated institutions who want to steak on the broader
14:05
Speaker 3: validator market who run these very running salte of validators
14:08
Speaker 3: is a very specialized service, and so we're bringing those
14:11
Speaker 3: two together. So we feel like we are at the
14:14
Speaker 3: beginning of the journey from institutional adoption standpoint. I joined
14:18
Speaker 3: about a year ago really to help build this out
14:21
Speaker 3: for Marinate.
14:22
Speaker 2: Yeah.
14:23
Speaker 1: So, halle, let me ask you, when you look at
14:26
Speaker 1: the growth of select, institutional is clearly going to be
14:30
Speaker 1: one of the major pathways for global crypto adoption, especially
14:35
Speaker 1: from the Wall Street set, you know set, how much
14:39
Speaker 1: impact will this have on the retail side of staking
14:43
Speaker 1: when you do see institutional uptake, I mean, you're sitting
14:45
Speaker 1: at one point nine almost two billion right now. Will
14:49
Speaker 1: that just accelerate it over on the retail side as
14:52
Speaker 1: well or what will be some of the benefits from that?
14:55
Speaker 2: I think?
14:56
Speaker 3: So, I think as Staking, as blockchains become more and
14:59
Speaker 3: more part of our lives and part of our lives,
15:03
Speaker 3: not in terms of you know, trading things, but really
15:06
Speaker 3: become part of this tech layer that people are familiar with.
15:10
Speaker 3: I would expect to see much like you see on
15:12
Speaker 3: the equity side. You know, Amazon, Apple, Google, they're institutional plays,
15:17
Speaker 3: they're also retail plays. And that's what is going to
15:21
Speaker 3: happen with Solana. Solana will be known as the new
15:25
Speaker 3: tech platform, blockchain underpinning many different elements of our economy,
15:31
Speaker 3: and therefore will attract institutional but also retail adoption and usage.
15:37
Speaker 1: Hadley, Okay, So I think that that, to me is
15:39
Speaker 1: something we've been talking about for many years, is that
15:42
Speaker 1: this adoption cycle mostly being held back because of regulatory
15:46
Speaker 1: that seems to be out of the way. Now looks
15:49
Speaker 1: like we are on the right track, you know, from
15:51
Speaker 1: a regulatory composite here, But when you look at and
15:55
Speaker 1: I've got a couple of clips here, and I want
15:57
Speaker 1: to get your opinion on this because this is coinba's institution.
15:59
Speaker 1: They're talking about big tech and the acquisition of DeFi companies,
16:03
Speaker 1: and I want to kind of get your feedback on
16:06
Speaker 1: what you guys think of these kinds of things happening.
16:09
Speaker 4: Take a look, you've got to have you've got to
16:11
Speaker 4: have companies crypto company, cryptody of companies that are large
16:14
Speaker 4: enough to be they're doing the buy versus build calculation.
16:16
Speaker 2: Right, So if you're Meta, if you're like, you've.
16:18
Speaker 4: Got to you've got to have a pretty significant business
16:21
Speaker 4: for me to think I can't build my way out
16:24
Speaker 4: of it when I've got a billion users already.
16:28
Speaker 1: All right, So when you look at big tech he
16:30
Speaker 1: mentioned Meta there for an example, do you feel that
16:34
Speaker 1: we will see big tech looking at acquisitions to go
16:37
Speaker 1: into DeFi or do you think this is something they
16:39
Speaker 1: actually might try to take on themselves.
16:42
Speaker 3: Interesting question. You're seeing quite a bit of M and
16:44
Speaker 3: A activity, although it seems to be focused on, you know,
16:48
Speaker 3: larger crypto companies gobbling up smaller crypto companies versus traditional
16:54
Speaker 3: companies getting in. I think it's too soon to say which.
16:57
Speaker 3: I disappoints me a little as I say it, But
17:01
Speaker 3: you know, the the idea of saying Apple or Google
17:04
Speaker 3: or Microsoft get, you know, acquiring, I don't think they're
17:08
Speaker 3: going to acquire as much as they may continue. I
17:12
Speaker 3: hope to build on top of these platforms and use them,
17:15
Speaker 3: so I think that's going to continue to happen. I
17:17
Speaker 3: think we're too soon for the acquisition phase. You know.
17:21
Speaker 3: One of the things that I find really interesting in
17:23
Speaker 3: a little complicated about this industry is this tension between
17:27
Speaker 3: the DeFi world and the trad fi world, or the
17:30
Speaker 3: DeFi world and the traditional tech world, in terms of
17:33
Speaker 3: where the innovation is coming from, where the dynamics. Often,
17:37
Speaker 3: you know, there's contradictory goals and purposes between the two.
17:41
Speaker 3: I think on that, you know, stable coin isn't is
17:44
Speaker 3: a pretty interesting example of a then diagram overlap of
17:48
Speaker 3: where those worlds get together. But if you were to
17:52
Speaker 3: take Satoshi out for coffee, what would he think of USDC.
17:55
Speaker 2: I don't think.
17:57
Speaker 3: You're particularly delighted, you know, the oh you got this
18:01
Speaker 3: blockchain and it stores the USD stores at Bank New York.
18:05
Speaker 3: Melon That's not what two thousand and eight was about.
18:07
Speaker 3: So not to pull it out even further, but I
18:11
Speaker 3: think there are broader narratives and complexities at play here.
18:15
Speaker 1: Well, it's kind of interesting because we are you know,
18:17
Speaker 1: if you guys are watching this video right now and
18:21
Speaker 1: not five years from today, because I think we're in
18:24
Speaker 1: a time warp. We're getting ready to see a major
18:27
Speaker 1: shift in the finance ecosystem for sure, and it's happening
18:30
Speaker 1: right before our eyes. If most people are paying attention,
18:32
Speaker 1: I think more and more now because of the narrative
18:35
Speaker 1: that this administration has brought crypto to the front line.
18:39
Speaker 1: Maybe now that is getting adopted by more people, you know,
18:42
Speaker 1: in terms of just awareness of what's happening, including major
18:45
Speaker 1: corporations really paying attention. This last point gets into public companies,
18:50
Speaker 1: and this is where it gets interesting because you saw
18:53
Speaker 1: coin base. Of course, just enter the S and P
18:54
Speaker 1: five hundred. In my opinion, that was the validation of
18:59
Speaker 1: bitcoin or crypto in general. They just put someone in
19:03
Speaker 1: there because in most cases an SNP five hundred, this
19:06
Speaker 1: is a real thing. Now I want to go to
19:08
Speaker 1: this last clip and get your opinion of this.
19:10
Speaker 2: Take a look.
19:11
Speaker 4: Yeah, because in the US, I'd say at least not
19:13
Speaker 4: in the next ten years. Not because it wouldn't be
19:15
Speaker 4: an interesting acquisition. Maybe if like Elon Musk might have
19:18
Speaker 4: the courage. It's kind of like driverless cars, right, the
19:20
Speaker 4: tech is there. What's stopping it is like how do
19:23
Speaker 4: you handle insurance? How do you handle the litigation? How
19:25
Speaker 4: do you like all the social construct and legal and
19:28
Speaker 4: the problem that DeFi is going to have is even
19:31
Speaker 4: with this incredible new administration in the US that's pro
19:34
Speaker 4: crypto friendly, they're not shifting as much on AML KYC,
19:39
Speaker 4: so one can argue they even more strench it on
19:42
Speaker 4: that all right.
19:43
Speaker 1: So that of course was the head of institutional over
19:47
Speaker 1: at Coinbase, and he hit on the same point right
19:49
Speaker 1: there at the beginning of that clip that you said,
19:51
Speaker 1: which is probably going to be a while before we
19:54
Speaker 1: start to see acquisitions from major corporations. But when you
19:57
Speaker 1: look at DeFi protocols now being potentially in there, and
20:01
Speaker 1: you think about am L and KYC and kind of
20:04
Speaker 1: that construct that is quite different than the traditional finance
20:08
Speaker 1: system today, how do you see this playing out in
20:12
Speaker 1: say the next three years if we do see the
20:14
Speaker 1: uptake that we're expecting.
20:17
Speaker 3: First of all, John's a great, great guy and great
20:19
Speaker 3: representative for the industry and have a lot of respect
20:23
Speaker 3: for coinbase. But given the recent news, there's a bit
20:26
Speaker 3: of an irony here and some in terms of Coinbase.
20:30
Speaker 3: You know, customer service professionals being duped into giving away
20:35
Speaker 3: customer data. And this is where I think the defied
20:38
Speaker 3: trad FI thing comes back into place with this AML
20:41
Speaker 3: and y cpiece because Coinbase, you know, was basically forced
20:46
Speaker 3: to do AML and KYC on customers, and so it
20:50
Speaker 3: creates this kind of honeypot effect where they've got millions
20:54
Speaker 3: of wallet addresses, and those wallet addresses typically are pseudonymous
20:59
Speaker 3: in the usual world, but now that there's a SEAFI
21:03
Speaker 3: layer and Coinbase has to collect customer data, suddenly, you know,
21:08
Speaker 3: if Paul's a customer of Coinbase, suddenly they know your address,
21:13
Speaker 3: your social Security number, and how much crypto you ever
21:16
Speaker 3: interacted with on the coin based platform, which is kind
21:18
Speaker 3: of terrifying. So this is where unintended consequences where KYC
21:24
Speaker 3: and AML, very critical to US security and came about
21:29
Speaker 3: for certain reasons, then blend in with this asset that is,
21:33
Speaker 3: you know, potentially untraceable and irreversible, and you've seen some
21:38
Speaker 3: of the kidnappings that have happened overseas. It gets very interesting.
21:44
Speaker 3: What I think is going to happen, and I think
21:47
Speaker 3: you were right in the beginning, is all of this
21:49
Speaker 3: is kind of inevitable on the fringes. You'll see people
21:54
Speaker 3: build out insurance products and lending products on the fringes,
21:58
Speaker 3: but as soon as it touches a US consumer. I
22:02
Speaker 3: think inevitably it's going to involve regulation. But what I'd
22:05
Speaker 3: love to see is the regulators understand this technology through
22:09
Speaker 3: a different framework, just like we've had to do with
22:12
Speaker 3: the Web versus you know, email versus mail. You know,
22:17
Speaker 3: there's different ways you can look at it, and that's
22:19
Speaker 3: probably what we're not doing in a sophisticated way.
22:22
Speaker 1: Well, I think right now, you know, to give lawmakers
22:25
Speaker 1: the benefit of the doubta is right now they're just
22:27
Speaker 1: trying to learn what blockchain is and how all this
22:30
Speaker 1: stuff is actually affecting the financial system.
22:33
Speaker 2: Maybe at the point.
22:35
Speaker 1: Where we start to get a more sophisticated at least
22:38
Speaker 1: other than David Sachs, I would say, you look at
22:40
Speaker 1: the existing administration, not a lot of people who are
22:43
Speaker 1: really sophisticated. Granted they were just at the crypto roundtable,
22:47
Speaker 1: I think was that.
22:49
Speaker 2: Yeah, so you had.
22:50
Speaker 1: Blackrock in there talking with the SEC, but it's still
22:52
Speaker 1: not the administration. Maybe taking it to the next level
22:57
Speaker 1: in terms of regulatory framework that could art to protect
23:01
Speaker 1: especially US citizens, which are I would say arguably the
23:05
Speaker 1: most wealthy of crypto owners out there. You know, so
23:09
Speaker 1: it is going to be an interesting market it's listen.
23:11
Speaker 1: We haven't seen this before. I don't remember this in
23:15
Speaker 1: any financial market since I've been in business and have
23:18
Speaker 1: been around this since two thousand and eight, so it'll
23:21
Speaker 1: be interesting to see how this plays out. I like
23:23
Speaker 1: what you guys are doing in terms of staking, especially
23:26
Speaker 1: on the new Select products, so I'm excited to see
23:29
Speaker 1: how this goes forward for you, Hattie.
23:31
Speaker 2: It's been good having you on today. Thank you so
23:33
Speaker 2: much for coming.
23:33
Speaker 3: In great thanks for your time, Paul any two.
23:36
Speaker 2: That excellent, all right.
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