Latest / The Paul Barron Crypto Show / CLARITY Bill Yield Showdown!🔥137 Last Minute Bank Changes!?🚨

Transcript

CLARITY Bill Yield Showdown!🔥137 Last Minute Bank Changes!?🚨 · The Paul Barron Crypto Show

• 0:00
  Speaker 1: Guys, you thought yesterday's video was big, pay attention. We
• 0:03
  Speaker 1: are about to unveil something that is absolutely huge when
• 0:06
  Speaker 1: it comes to the banks and the Clarity Act and
• 0:08
  Speaker 1: what it means for you now. Of course I do
• 0:10
  Speaker 1: want to thank our sponsor, and that is Tangent. This
• 0:13
  Speaker 1: is basically the place where you're going to be able
• 0:15
  Speaker 1: to get yields right now. The way the Clarity Act
• 0:18
  Speaker 1: is setting up, you get ave yields when you are
• 0:21
  Speaker 1: inside the Tangent app holding USDT, USDC all sorts of
• 0:26
  Speaker 1: assets over there. So check it out. Let's go over
• 0:28
  Speaker 1: to the point I want to get at today, and
• 0:30
  Speaker 1: that is a lot has happened in just twenty four hours.
• 0:33
  Speaker 1: The White House is expecting the Senate to advance the
• 0:36
  Speaker 1: Crypto Market Structure Bill tomorrow. Remember this doesn't happen until
• 0:41
  Speaker 1: the fifteenth. The markup is still underway, and we expect
• 0:45
  Speaker 1: that there are going to be massive, massive revisions coming
• 0:49
  Speaker 1: in via amendments. And the last time they did this
• 0:52
  Speaker 1: in the Genius Act. Ill explain a little bit more
• 0:54
  Speaker 1: about how that works. Really tried to delay what was
• 0:57
  Speaker 1: going on. I'm going to go to another tweet. This
• 0:59
  Speaker 1: was Patrick Witt who is Executive Director on the President's
• 1:03
  Speaker 1: Council of Advisors for Digital Assets, and he openly states here,
• 1:07
  Speaker 1: dear banks, now might be a good time for you
• 1:09
  Speaker 1: to take the deal being offered on stable coin rewards
• 1:13
  Speaker 1: and yields. I don't think he's not talking to Congress,
• 1:16
  Speaker 1: but he's talking to the banking industry. So what is
• 1:19
  Speaker 1: going on here? I don't understand why and how the
• 1:22
  Speaker 1: banks are dictating how all of this is being done
• 1:25
  Speaker 1: in Congress. It clearly outlines that they are in control
• 1:29
  Speaker 1: of what's happening in DC right now. If you're wondering
• 1:32
  Speaker 1: why the banks don't want stable coin yields, well, here's
• 1:35
  Speaker 1: a good summary the national deposit rates.
• 1:38
  Speaker 2: From the FDIC.
• 1:39
  Speaker 1: Look at that right there, savings around point thirty nine
• 1:42
  Speaker 1: checking around point zero seven money marcus point five to eight.
• 1:46
  Speaker 1: That's a fat spread of three point eight two. Imagine
• 1:49
  Speaker 1: what that is worth and then multiply that by a
• 1:53
  Speaker 1: variety of banks. Here is a confirmation tweet that just
• 1:57
  Speaker 1: shows you what these banks are earning right now. This
• 1:59
  Speaker 1: is JP Morgan Chase Q four right there, net interest
• 2:03
  Speaker 1: income twenty five billion versus analyst estim as a twenty
• 2:06
  Speaker 1: four point nine seven billion. That's seven percent year on
• 2:10
  Speaker 1: year inline growth. That's how much profit a single bank
• 2:13
  Speaker 1: made by not paying savers more.
• 2:16
  Speaker 2: That's you.
• 2:17
  Speaker 1: Now, we found and went through the JP Morgan's earnings
• 2:21
  Speaker 1: call yesterday. Nobody's reporting on this. Nobody is putting any
• 2:25
  Speaker 1: of this information out and I don't understand.
• 2:28
  Speaker 2: Why take a listen.
• 2:30
  Speaker 3: Well, now, happy to take your questions.
• 2:32
  Speaker 4: Our first question comes from the line of Glen Shaw
• 2:35
  Speaker 4: with Evercore, so honest.
• 2:36
  Speaker 3: On the stable coin. Is so talking about the immediacy
• 2:39
  Speaker 3: of the issue and whether or not they can close
• 2:41
  Speaker 3: the loophole on interest on stable coin, and then how
• 2:45
  Speaker 3: big of a deal for the banking system if they're
• 2:47
  Speaker 3: not successful? Thanks? All right, okay, thanks one. You know,
• 2:53
  Speaker 3: we have an agreement with coinbase and that's going to
• 2:56
  Speaker 3: you know, be possible to buy a crypto in the
• 3:00
  Speaker 3: the CCP ecosystem too. So we're engaged, we're watching. We care.
• 3:05
  Speaker 3: One quick thing. Yeah, that letter was signed by the ABA,
• 3:11
  Speaker 3: the FSF, the ICBA. It was old banks. It wasn't
• 3:14
  Speaker 3: a handful of banks. Okay, I didn't actually know. That's
• 3:18
  Speaker 3: so helpful. The creation of a parallel banking system that
• 3:23
  Speaker 3: pays interest is an obviously like dangerous and undesirable thing,
• 3:27
  Speaker 3: and so that is the core of our advocacy. In
• 3:30
  Speaker 3: the end, all of our thinking around this from a
• 3:32
  Speaker 3: customer perspective is organized around the question of what actual
• 3:37
  Speaker 3: benefit does the consumer get. We always embrace competition, so
• 3:40
  Speaker 3: this is not about saying that we don't want to.
• 3:42
  Speaker 2: Compete, all right, guys.
• 3:44
  Speaker 1: So that was our editors having a little fun with
• 3:45
  Speaker 1: the translation of what was being said in there and
• 3:49
  Speaker 1: way that we read it. And of course this boils
• 3:51
  Speaker 1: down to one thing, and that is that the banks
• 3:53
  Speaker 1: continue to drive home the issue of how they're making money.
• 3:56
  Speaker 1: The real question though, and I thought, is that banks
• 4:00
  Speaker 1: made their money other ways through loans and all sorts
• 4:02
  Speaker 1: of other commercial assets that it wasn't through deposits. And
• 4:06
  Speaker 1: this of course is being revealed now, especially during this
• 4:10
  Speaker 1: fight on the stable coin situation with Clarity Act. On
• 4:13
  Speaker 1: another note, within the call there, what you saw was
• 4:16
  Speaker 1: a presenter that was doing the analysis and the report
• 4:19
  Speaker 1: on the earnings call. But then Diamond jumps in immediately
• 4:23
  Speaker 1: when it came down to the stable coin side and said, hey, no,
• 4:26
  Speaker 1: this is the rest of the banking industry is also
• 4:28
  Speaker 1: supporting this.
• 4:30
  Speaker 2: And then This is where we.
• 4:31
  Speaker 1: Go into the next clip because it explains in reality,
• 4:34
  Speaker 1: it really boils down to only a handful.
• 4:36
  Speaker 2: Take a look.
• 4:37
  Speaker 4: So in the United States, we have like four hundred banks, Okay,
• 4:41
  Speaker 4: twenty of them are seventy percent of the system. But
• 4:44
  Speaker 4: when they lobby, they look at all the tiny ones
• 4:47
  Speaker 4: and act like that's the canonical bank, right, And so
• 4:50
  Speaker 4: when they lobby, they use all the tiny banks that
• 4:52
  Speaker 4: are doing the stuff you want as though that's the system.
• 4:54
  Speaker 3: Is that a yeah.
• 4:56
  Speaker 4: The biggest part of the reaction I got to that
• 4:58
  Speaker 4: was a wake up call on oh wow, the banks
• 5:01
  Speaker 4: are not representing fairly what they actually are doing. Almost
• 5:04
  Speaker 4: everybody read that paper thought banks were like sixty percent
• 5:08
  Speaker 4: plus mortgages at small business loans.
• 5:10
  Speaker 1: Let me jump back to this that tweet I just
• 5:12
  Speaker 1: showed you guys, because this is the reminder right here.
• 5:14
  Speaker 1: This is how much profit a single bank is making
• 5:18
  Speaker 1: on your deposits. And that is the difference here. So
• 5:21
  Speaker 1: it is clearly one of their biggest cornerstones of their profitability.
• 5:25
  Speaker 1: And we're talking about the major banks, which is why
• 5:28
  Speaker 1: they are fighting tooth and nail to take.
• 5:30
  Speaker 2: Out the Clarity Act. For sure.
• 5:32
  Speaker 1: The key here is I think, when you look at clarity,
• 5:35
  Speaker 1: if it gets too crazy, is it possible that we
• 5:38
  Speaker 1: lose clarity in its entirety, because if we did, nothing
• 5:42
  Speaker 1: would change. You would continue to earn interest because there's
• 5:44
  Speaker 1: been no carbon and there's no new clarity. So there
• 5:47
  Speaker 1: is a fine line that the banks have to walk
• 5:49
  Speaker 1: to be able to get this through the end. However,
• 5:52
  Speaker 1: there are some things happening within that. Furthermore, there was
• 5:55
  Speaker 1: so much backlash on what was happening yesterday around at
• 6:00
  Speaker 1: and all of social media in reference to what was
• 6:03
  Speaker 1: happening with the fact versus myth that the Senate Banking
• 6:06
  Speaker 1: Committee had to put out basically a statement on this.
• 6:09
  Speaker 1: And there was a little bit of an interesting point here.
• 6:11
  Speaker 1: I want to go down to number seven. The bill
• 6:14
  Speaker 1: was written by and by industry and serves industry interest.
• 6:19
  Speaker 1: Now was he talking about the banking industry and serving
• 6:23
  Speaker 1: banking industry interest. I'm assuming that's what he means by that,
• 6:26
  Speaker 1: because I can't see this any other way. All right,
• 6:29
  Speaker 1: So you've got to break down the act itself and
• 6:31
  Speaker 1: who benefits. If you look further into the chart, the
• 6:34
  Speaker 1: threat breakdown right there. Corporate state fusion very high on
• 6:38
  Speaker 1: the list, then you look at the who profits. Obviously
• 6:42
  Speaker 1: Coinbase profits here, circle profits, Chanalysis, traditional finance DeFi is
• 6:47
  Speaker 1: not anywhere even in this game. So clearly this is
• 6:51
  Speaker 1: now talking about a corporate fusion of what we're seeing
• 6:54
  Speaker 1: within the industry. This is no longer what we thought
• 6:57
  Speaker 1: it was going to be, and we are there now.
• 6:59
  Speaker 2: Now.
• 7:00
  Speaker 1: There was some things going around yesterday on x and
• 7:03
  Speaker 1: this of course was sand Or Let's talking about Coinbase
• 7:05
  Speaker 1: telling the crypto industry to stand down, right, So everybody
• 7:08
  Speaker 1: saw that tweet most likely if you didn't, this was
• 7:11
  Speaker 1: the exchange and in a response to his request on comment,
• 7:15
  Speaker 1: coinbase spokesperson said, no, we did not tell people to
• 7:17
  Speaker 1: stand down. Coinbase has nothing to add on the stable
• 7:20
  Speaker 1: coin yield language. The Coinbase rep did today tell crypto
• 7:25
  Speaker 1: industry leaders what I posted above, which was stand down.
• 7:29
  Speaker 1: And that is the point that everybody's questioning.
• 7:31
  Speaker 2: Now.
• 7:32
  Speaker 1: Was Coinbase always looking this as maybe an angle in
• 7:36
  Speaker 1: which stable coin yield would start to move away, because
• 7:39
  Speaker 1: remember now there is a partnership with coinbase and JP Morgan,
• 7:43
  Speaker 1: and this is going to of course accelerate Coinbase's revenue
• 7:46
  Speaker 1: because we all know fees is really where it boils
• 7:48
  Speaker 1: down to another thing you have to take a look at.
• 7:50
  Speaker 1: Is this tweet right here Bob Brian Armstrong, a minder
• 7:53
  Speaker 1: that stand with crypto, will be scoring the Senate markup
• 7:55
  Speaker 1: this week. We get to find out what senators stand
• 7:57
  Speaker 1: for bank profits at the expensive American people. And they're
• 8:00
  Speaker 1: going to do this after the vote.
• 8:04
  Speaker 2: So why are we.
• 8:05
  Speaker 1: Not doing this before to influence the vote, not after
• 8:08
  Speaker 1: to just show what happened.
• 8:10
  Speaker 2: This is where I.
• 8:11
  Speaker 1: Think things get a little bit unusual. And of course
• 8:14
  Speaker 1: you go over to the coinbase website and what's this?
• 8:18
  Speaker 1: Something changed? Of course after what you heard earlier, which
• 8:22
  Speaker 1: was stand down. Now they have the Act directive here,
• 8:26
  Speaker 1: which is protect your rewards. So even going to as
• 8:29
  Speaker 1: far as telling you what to say to your senator,
• 8:31
  Speaker 1: which is go out there pass the market structure legislation
• 8:35
  Speaker 1: while protecting our rewards. I don't know what's going on,
• 8:38
  Speaker 1: which is it are we standing down or are we
• 8:40
  Speaker 1: protecting our rewards? That's the point I want to get at. Hopefully, Coinbase,
• 8:44
  Speaker 1: if you're watching, you're welcome to come on the show
• 8:46
  Speaker 1: for comment. We'd love to get a little bit deeper
• 8:48
  Speaker 1: on this, especially as we are going into the market
• 8:51
  Speaker 1: structure tomorrow. Likelihood is this will extend significantly over the
• 8:56
  Speaker 1: next few days. Maybe this even gets delayed further. And
• 9:00
  Speaker 1: if you guys remember yesterday we were talking about Lummas
• 9:02
  Speaker 1: and trying to support this. We thought, well, is there
• 9:04
  Speaker 1: some kind of bank support here? I don't think it's
• 9:06
  Speaker 1: bank support. It's clear you know, Lummas has always been
• 9:09
  Speaker 1: a bitcoin advocate and will continue to be. This is
• 9:12
  Speaker 1: good for bitcoin because it does remove all of the
• 9:15
  Speaker 1: other ability for you to earn income in other ways
• 9:18
  Speaker 1: other than investing in bitcoin. Not saying that's a bad thing,
• 9:20
  Speaker 1: but it is something that now we have senators out
• 9:23
  Speaker 1: there doing the other thing I want to get to,
• 9:25
  Speaker 1: which is Austin Campbell again breaking down why we cannot give.
• 9:29
  Speaker 2: Up this fight just yet.
• 9:30
  Speaker 4: Take a look when the modern banking system was created
• 9:34
  Speaker 4: in nineteen thirty three with the Banking Act that year,
• 9:37
  Speaker 4: there was kind of a three part deal that was
• 9:39
  Speaker 4: given to the banks. Number one, which we still have
• 9:43
  Speaker 4: was the creation of the FDIC. Number two in that Act,
• 9:46
  Speaker 4: which people often forget about, was something called REGQ. Banks
• 9:50
  Speaker 4: could not pay interest on deposits, okay file that away.
• 9:56
  Speaker 4: Three Glass Steegel, which was the separation of commercial and
• 10:00
  Speaker 4: investment back King thanks lobby to get rid of reg
• 10:03
  Speaker 4: Q because they said this is an anti competitive thing
• 10:08
  Speaker 4: to ban paying interest because we can't compete with money
• 10:11
  Speaker 4: market funds and you're damaging the banking system. Two, there
• 10:16
  Speaker 4: was the Graham Leach Blinly Act in the late nineties
• 10:19
  Speaker 4: that repealed class Stegel. So I would say, if we're
• 10:22
  Speaker 4: going to be logical about this, there are two potential conclusions.
• 10:26
  Speaker 4: Let stable coids pay interest and let everybody compete in
• 10:29
  Speaker 4: a free market. But I would say, if you're on
• 10:31
  Speaker 4: the left, you should not be giving away the yield
• 10:35
  Speaker 4: thing without bringing back things like glass Stegel and reg Q, right,
• 10:39
  Speaker 4: because otherwise all you're doing is making sure that Jane
• 10:42
  Speaker 4: Fraser and Jamie Diamond get the biggest bonus possible while
• 10:46
  Speaker 4: in the time of an affordability crisis paying zero to
• 10:49
  Speaker 4: their depositors, right, and that is fundamentally not fair.
• 10:53
  Speaker 1: Totally agree with him there, And I think this is
• 10:56
  Speaker 1: the issue we are facing right now around what clarity
• 10:59
  Speaker 1: is going to be. And because this is such a battlefield,
• 11:04
  Speaker 1: listen to this. One hundred and thirty seven amendments have
• 11:06
  Speaker 1: been submitted here and this is the way it works.
• 11:09
  Speaker 1: And you guys probably remember this from the Clarity Act,
• 11:12
  Speaker 1: or excuse me, from the Genius Act and how it
• 11:14
  Speaker 1: came through. Senator Warren continue to throw amendment after amendment
• 11:18
  Speaker 1: after amendment, trying to slow it down, moving it to
• 11:20
  Speaker 1: the next calendar date so that it would essentially possibly
• 11:23
  Speaker 1: even miss getting voted on. That I think is what
• 11:25
  Speaker 1: we're going to be dealing with tomorrow when this markup
• 11:29
  Speaker 1: goes to the floor, so one hundred and thirty seven amendments.
• 11:32
  Speaker 1: I can't even imagine what that's going to look like
• 11:35
  Speaker 1: in terms of the amount of changes that are going to.
• 11:38
  Speaker 2: Come in tomorrow.
• 11:38
  Speaker 1: This completely throws a wrench into tomorrow getting a decision,
• 11:42
  Speaker 1: and it will, I think, start to move things even
• 11:45
  Speaker 1: further into the nozone layer of what happens now because
• 11:49
  Speaker 1: it's getting so complicated and so confusing. And now you've
• 11:52
  Speaker 1: got more confusing coming in because you've got Trump's issue
• 11:56
  Speaker 1: and he's endorsing this, but he's doing it through Marshall's
• 11:59
  Speaker 1: credit card bill, which may suddenly have a new life
• 12:02
  Speaker 1: on Capitol Hill. What I mean by that is this
• 12:05
  Speaker 1: is a credit card bill that was designed to reduce
• 12:08
  Speaker 1: the fees that merchants paid. Remember when you go to
• 12:10
  Speaker 1: a merchant store or a retail store, there's a fee
• 12:13
  Speaker 1: that every merchant pays to Visa.
• 12:15
  Speaker 2: MasterCard and so on.
• 12:17
  Speaker 1: Well, that's a big deal because in retail it's one
• 12:19
  Speaker 1: of the biggest fees out there that causes small business
• 12:22
  Speaker 1: in some cases to close, that's how much they take.
• 12:25
  Speaker 1: This may get tacked on to the Clarity Act as
• 12:27
  Speaker 1: part of it, which now puts a whole new flare
• 12:31
  Speaker 1: into it, because now Visa is going to jump into this.
• 12:33
  Speaker 1: So you've got a whole issue of Visa now potentially
• 12:37
  Speaker 1: being involved on a lobby effort going further, So, now
• 12:40
  Speaker 1: you've got the biggest hurdle to Trump's credit card proposals
• 12:43
  Speaker 1: his own party, because remember we've got both Democrats and
• 12:46
  Speaker 1: Republicans that support a lot of what Visa has been
• 12:50
  Speaker 1: doing for quite some time. So now you've got a
• 12:52
  Speaker 1: situation where you may have even though most people on
• 12:56
  Speaker 1: the Republican side would vote for Clarity, but if you
• 12:58
  Speaker 1: throw this in, it may lose some Republicans, but you
• 13:02
  Speaker 1: may gain some Democrats. So it's going to be a
• 13:04
  Speaker 1: toss up as to how this plays out going forward.
• 13:07
  Speaker 2: This is nuts.
• 13:08
  Speaker 1: Right now, I've got one more clip from Austin Campbell,
• 13:11
  Speaker 1: which I think did a really good job of breaking
• 13:13
  Speaker 1: everything down, and he talks about this further and his
• 13:16
  Speaker 1: analysis of whether this passes or not.
• 13:19
  Speaker 2: Take a look.
• 13:20
  Speaker 4: I've been of the opinion for a long time. I
• 13:22
  Speaker 4: don't think market structure is going to pass because it's
• 13:25
  Speaker 4: just too complicated. You have a jurisdictional clash that is
• 13:28
  Speaker 4: at least three way between the banking regulators, the SEC,
• 13:32
  Speaker 4: and the CFTC. And then I think you additionally have
• 13:35
  Speaker 4: the problem there of the issuers that have a stake
• 13:40
  Speaker 4: from the security side, the trading platforms that have a
• 13:43
  Speaker 4: stake from the activity side, and are echoes of fights
• 13:47
  Speaker 4: they've been having in traditional markets for a long time
• 13:50
  Speaker 4: that were made unresolved. Dodd Frank was a giant endeavor
• 13:53
  Speaker 4: and covers less in many ways than market structure does.
• 13:57
  Speaker 4: So that's a hard one.
• 13:59
  Speaker 1: Let's take a look at at polymarket real quick, because
• 14:01
  Speaker 1: this is where I get a little nervous. Poly Market
• 14:05
  Speaker 1: is holding right now, as you can see right here
• 14:08
  Speaker 1: that only fifty six percent. Remember this was right here
• 14:11
  Speaker 1: on January thirteenth, seventy percent passing it falls dramatically down
• 14:17
  Speaker 1: to twenty one percent levels off, and now here we
• 14:20
  Speaker 1: are at fifty six percent. I think this is going
• 14:23
  Speaker 1: to go down even further. And the likelihood is that
• 14:26
  Speaker 1: because of the issue we're facing with Visa now entering
• 14:29
  Speaker 1: the fight, and the fact that we are already possibly
• 14:33
  Speaker 1: succeeding one of the biggest advantages of the Clarity Act,
• 14:36
  Speaker 1: which is stable coin yields, which had already been identified
• 14:39
  Speaker 1: and resolved in the Genius Act, this I think is starting.
• 14:44
  Speaker 2: To cause a bit of an uproar roar.
• 14:46
  Speaker 1: For sure, and I think you guys are one of
• 14:47
  Speaker 1: the reasons why you guys get out there, talk to
• 14:51
  Speaker 1: your senators, let them know you want to protect your yields.
• 14:53
  Speaker 2: Stop preferential treatment to the banks. No yield, no bill.
• 15:04
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• 15:07
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• 15:10
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