Latest / The Paul Barron Crypto Show / Banks Suing Government For Stablecoin Yields!?🚨Austin Campbell INTERVIEW

Transcript

Banks Suing Government For Stablecoin Yields!?🚨Austin Campbell INTERVIEW · The Paul Barron Crypto Show

• 0:00
  Speaker 1: Banks are coming for your yield. In fact, it's going
• 0:03
  Speaker 1: to be law fair. Now today we'll break it down
• 0:05
  Speaker 1: with you. I think that's going to be a good
• 0:07
  Speaker 1: one you guys. Of course, I do want to thank
• 0:08
  Speaker 1: our sponsor, and that is I Trust Capital. This is
• 0:10
  Speaker 1: where you guys can go out there and diversify some
• 0:13
  Speaker 1: of your assets into a CRYPTOIRA. Very easy to join,
• 0:16
  Speaker 1: very easy to set up as well. All you have
• 0:18
  Speaker 1: to do is just visit I Trustcapital dot com. A
• 0:21
  Speaker 1: couple of things you can do over there. Other than
• 0:23
  Speaker 1: just digital assets, you can also do gold and silver
• 0:26
  Speaker 1: self manage your own IRA. So check it out. Use
• 0:29
  Speaker 1: our link down below. It's going to give you one
• 0:31
  Speaker 1: hundred dollars funding reward just to get started and get
• 0:33
  Speaker 1: going on your own crypto IRA. All right, so let's
• 0:36
  Speaker 1: go into a couple of points. We've got a guest
• 0:38
  Speaker 1: coming on, Austin Campbell will be joining us here in
• 0:40
  Speaker 1: a minute. I do want to take a look at
• 0:41
  Speaker 1: a few things. One of course, is what's happening on
• 0:44
  Speaker 1: poly market with clarity probability, which is starting to dip,
• 0:48
  Speaker 1: I guess slightly, coming off that seventy four percent high,
• 0:52
  Speaker 1: slipping down into the seventy percent run right now. Some
• 0:56
  Speaker 1: of this could be induced with what's going on with
• 0:58
  Speaker 1: Iran and keeping Congress busy. Some of this also could
• 1:02
  Speaker 1: be fatigue in the market. But if you look at
• 1:05
  Speaker 1: some people out there kind of pointing at this, this
• 1:08
  Speaker 1: is the banking industry of one of their lobbyists talking
• 1:10
  Speaker 1: about this, that the compromise on clarity is just not
• 1:13
  Speaker 1: going to happen. Simply impossible for the banks to roll
• 1:16
  Speaker 1: over in this fight, meaning they are not going to
• 1:19
  Speaker 1: go away quietly. And you have the US Democrats right here.
• 1:23
  Speaker 1: They are ready to pass the crypto market structure legislation.
• 1:27
  Speaker 1: If that is actually in the cards, this could get
• 1:30
  Speaker 1: very interesting, mainly because that means maybe people are going
• 1:34
  Speaker 1: against the banks on this, including our lawmakers. Well, we'll
• 1:38
  Speaker 1: find out. The other thing that's happening is Trump is
• 1:41
  Speaker 1: putting some pressure on them, and what he said here
• 1:44
  Speaker 1: is pretty simple. I'm not doing anything until we get
• 1:47
  Speaker 1: this new the Save America Act pass, meaning that slows
• 1:50
  Speaker 1: down clarity. Here was Nick coming in talking that we
• 1:54
  Speaker 1: could see as soon as July, possibly by DC insider,
• 1:58
  Speaker 1: but it could reach the sometime in August as well.
• 2:01
  Speaker 1: So we've got July August maybe in the window here
• 2:04
  Speaker 1: breaking it down. The real question is is probability. So
• 2:07
  Speaker 1: I wanted to bring in Austin Campbell coming in. You
• 2:10
  Speaker 1: guys know him from ZK Consulting. How are you?
• 2:12
  Speaker 2: I'm doing very well. How about yourself?
• 2:14
  Speaker 1: Nice to see you there, Austin. I want to go
• 2:16
  Speaker 1: into a few points. One of course, is what's happening
• 2:21
  Speaker 1: with Clarity, And we're going to do a whole rundown
• 2:23
  Speaker 1: at the end of the show. Is kind of our
• 2:24
  Speaker 1: lightning run. I know you guys love it, but I'm
• 2:27
  Speaker 1: going to show you this tweet here by Ron Hammond,
• 2:29
  Speaker 1: who is a former lobbyist now Winter Mute graduate, and
• 2:34
  Speaker 1: he's in here talking about that we may end up
• 2:36
  Speaker 1: getting just a watered dow version of this bill going in.
• 2:40
  Speaker 1: What's your opinion right now on the current state of Clarity.
• 2:43
  Speaker 2: It is, I guess unintended, deeply unclear where this thing
• 2:48
  Speaker 2: is going to go right now.
• 2:50
  Speaker 1: Yeah, you have.
• 2:51
  Speaker 2: Competing factions within crypto itself as to what people want
• 2:55
  Speaker 2: out of the Clarity Act. You also have a clash,
• 2:58
  Speaker 2: as you've been alluding to, between the banks and the
• 3:00
  Speaker 2: crypto people, and that is before you get to the
• 3:03
  Speaker 2: political problem between Republicans Democrats over what's going on with
• 3:07
  Speaker 2: the Trump families activities. So there are a lot of
• 3:10
  Speaker 2: rocks to still crash into.
• 3:12
  Speaker 1: Where would you put it? I mean, are you in
• 3:14
  Speaker 1: agreement with the polymarket right now? It's about a seventy
• 3:17
  Speaker 1: percent probability here, I'm passing.
• 3:20
  Speaker 2: I would take the under on. I would take the
• 3:22
  Speaker 2: under on seventy one. Always beat against major legislation in
• 3:26
  Speaker 2: an election year. Let's not forget that midterms are coming up.
• 3:30
  Speaker 2: That is a statement beyond crypto. But two, the bank
• 3:33
  Speaker 2: lobby is one of the more powerful lobbies. And right now,
• 3:37
  Speaker 2: even though I think it's on incorrect premises, they've come
• 3:40
  Speaker 2: out against the Clarity Act very strongly, and so those
• 3:44
  Speaker 2: way heavily against it, and I don't think people have
• 3:46
  Speaker 2: taken that into account.
• 3:48
  Speaker 1: Well, they're talking about this right here, which is kind
• 3:51
  Speaker 1: of interesting. They're kind of waging war across everything. This
• 3:55
  Speaker 1: is the banking lobby waging lawsuits against the occs. These are,
• 3:59
  Speaker 1: of course the occ alignment around bringing a lot of
• 4:02
  Speaker 1: these new fintech companies into where they have a master account.
• 4:07
  Speaker 1: Will that have any bearing on their maybe consideration of
• 4:12
  Speaker 1: where Clarity negotiations should go from here.
• 4:15
  Speaker 2: It should, but so far really has not. If you
• 4:18
  Speaker 2: look at the bank position on this, it is essentially
• 4:21
  Speaker 2: we are deposit taking institutions who lend to the average
• 4:25
  Speaker 2: American and anything in everything that could impact that in
• 4:30
  Speaker 2: a negative way, where negative definitionally is good for the banks,
• 4:34
  Speaker 2: they are opposed to. So they're opposed to additional competition,
• 4:38
  Speaker 2: they're opposed to the Skiddy Master accounts, they're opposed to
• 4:41
  Speaker 2: the Clarity Act. But under the hood all of it, Paul,
• 4:44
  Speaker 2: to a point I think you've been making to some extent,
• 4:47
  Speaker 2: is the banks arguing their own interests here.
• 4:50
  Speaker 1: Yeah, for sure. Do you think that we're at a
• 4:53
  Speaker 1: state yet where the bipartisan Congressional group is now starting
• 5:00
  Speaker 1: to kind of look at this as it's kind of
• 5:03
  Speaker 1: falling on deaf ears. Are we at that state yet
• 5:06
  Speaker 1: now that the President has come out and kind of said, hey, banks,
• 5:09
  Speaker 1: you need to come to the table.
• 5:10
  Speaker 2: Certainly from the big banks, I would say that if
• 5:13
  Speaker 2: you look at the bank lobby itself, it's important to
• 5:16
  Speaker 2: sort of divide it into two groups. On one side,
• 5:18
  Speaker 2: you have the very large banks, the JP Morgans of
• 5:21
  Speaker 2: the world. I think the reality is they're pleading is
• 5:24
  Speaker 2: somewhat being ignored because they've done very well. They're highly profitable,
• 5:29
  Speaker 2: and everybody kind of looks at that and says, you
• 5:31
  Speaker 2: should compete on fair terms. Now, the other group is
• 5:34
  Speaker 2: the community banks, local lenders. Their concerns are going to
• 5:38
  Speaker 2: be more persuasive with Congress, in the House and in
• 5:41
  Speaker 2: the Senate. And I think that group, unfortunately has kind
• 5:46
  Speaker 2: of bought some of the big bank talking points and
• 5:48
  Speaker 2: might be arguing against their own best interests in impeding
• 5:51
  Speaker 2: this bill.
• 5:52
  Speaker 1: I am totally in agreement with that. I think that
• 5:55
  Speaker 1: the regional banks could actually become the winners because they
• 5:58
  Speaker 1: can go to market pretty quickly with some pretty innovative
• 6:00
  Speaker 1: products that might put them on i won't say equal footing,
• 6:04
  Speaker 1: but on at least similar footing. And if you look
• 6:07
  Speaker 1: at the demographic of their customer base, if you went
• 6:11
  Speaker 1: to a sixty year old in Tulsa, Oklahoma and said hey,
• 6:15
  Speaker 1: I'm going to give you one and a half percent
• 6:16
  Speaker 1: on your savings and your money market, these people would
• 6:20
  Speaker 1: be over the moon on that. So it would I
• 6:23
  Speaker 1: think it would lock in a lot of these regional
• 6:25
  Speaker 1: bank customers, maybe long term. So I kind of agree
• 6:28
  Speaker 1: with you when you look at the situation right now
• 6:32
  Speaker 1: that's happening around the bill itself, because there's a lot
• 6:35
  Speaker 1: of massaging of what it's going to look like. Eleanor
• 6:39
  Speaker 1: Tarrett kind of hit on it right here saying that.
• 6:43
  Speaker 1: Right now, we're talking about House members that are making
• 6:45
  Speaker 1: it very clear that they're not going to tolerate this
• 6:48
  Speaker 1: twenty thirty sunset provision on cbdc's band. What do you think?
• 6:52
  Speaker 1: Do you think we're going to get a CBDC narrative
• 6:54
  Speaker 1: that will come out in the Clarity Act?
• 6:56
  Speaker 2: I think the CBDC thing is probably a distraction and
• 6:59
  Speaker 2: will end up getting stripped out entirely if you're going
• 7:02
  Speaker 2: to pass a bill. And the reason I say that
• 7:04
  Speaker 2: is right now, if you were to go speak to
• 7:06
  Speaker 2: the Federal Reserve, they will tell you we can't do
• 7:09
  Speaker 2: a CBDC without congressional authorization. Right so their current stance
• 7:13
  Speaker 2: is that CBDCs are illegal. From there, why would you
• 7:17
  Speaker 2: do anything. The objection of the House members to this,
• 7:20
  Speaker 2: which I think is fair, actually is if we say
• 7:24
  Speaker 2: it's illegal, but that ban expires in twenty thirty, did
• 7:28
  Speaker 2: we not just implicitly make it legal as soon as
• 7:31
  Speaker 2: that expires, I would say I actually think it's an
• 7:34
  Speaker 2: advantage for the United States not to have a CBDC.
• 7:37
  Speaker 2: If you've looked at rollouts across the world, mostly people
• 7:41
  Speaker 2: don't want these things, right. You've seen nations try to
• 7:44
  Speaker 2: deploy them, like China in a very technocratic way, or
• 7:48
  Speaker 2: you know, somewhere small, like you know, the Bahamas in
• 7:51
  Speaker 2: a somewhat disorganized way. But the general statement is that
• 7:55
  Speaker 2: people don't want money that the government can control or
• 7:59
  Speaker 2: take from them at a whim. Right. If you think
• 8:02
  Speaker 2: about the value of something like physical cash, it's because
• 8:05
  Speaker 2: if it's in my wallet, I own it. And that's
• 8:07
  Speaker 2: kind of the end of that statement. And if you're
• 8:10
  Speaker 2: going to go to electronic cash, you want private institutions
• 8:13
  Speaker 2: that are fighting for your business, like bes. The government
• 8:16
  Speaker 2: having programmable electronic money is being rejected by consumers globally.
• 8:22
  Speaker 2: I actually think the United States is avoiding wasting time
• 8:25
  Speaker 2: on a losing strategy by instead focusing on stable coins
• 8:28
  Speaker 2: and private market solutions.
• 8:30
  Speaker 1: I was looking at a tweet you put out, and
• 8:33
  Speaker 1: this was in reference to Kraken in them getting their
• 8:35
  Speaker 1: master account, the fed master account. First of all, were
• 8:38
  Speaker 1: you surprised and what does this mean? What does this
• 8:41
  Speaker 1: allow them to do?
• 8:43
  Speaker 2: So zooming out on the problem with many of these things,
• 8:46
  Speaker 2: it helps not to start with crypto. What's going on
• 8:49
  Speaker 2: here is more similar to the original version of PayPal.
• 8:53
  Speaker 2: And there's a thread that goes through American economic history
• 8:57
  Speaker 2: here that leads to an accident that is cared a
• 9:00
  Speaker 2: monopoly for the banks, which is to say, Paul, if
• 9:02
  Speaker 2: you and I transport ourselves from the present day back
• 9:06
  Speaker 2: to nineteen seventy, the overwhelming majority of our economic activity
• 9:11
  Speaker 2: does not touch a bank. We are paying for things
• 9:13
  Speaker 2: mostly with cash. Nowadays, even to buy coffee, you're probably
• 9:18
  Speaker 2: using your bank account right with digital payments, and so
• 9:21
  Speaker 2: banks have inadvertently been given a monopoly over the payment
• 9:25
  Speaker 2: system in America in a way that quite frankly, they
• 9:27
  Speaker 2: were never designed to have. So. Christopher Waller, who is
• 9:31
  Speaker 2: one of the senior folks at the FED, proposed this
• 9:34
  Speaker 2: idea of the skinny master account, and I actually spoke
• 9:37
  Speaker 2: with him about this at a FED event at one
• 9:39
  Speaker 2: point and asked him what he was thinking, and one
• 9:41
  Speaker 2: of the things he referenced was this idea that splitting
• 9:44
  Speaker 2: the payment system and deposit taking and lending apart is
• 9:48
  Speaker 2: not a terrible idea. It leads to a more resilient
• 9:52
  Speaker 2: payment system and creates more fairness for people who purely
• 9:55
  Speaker 2: want to buy a coffee and care less about getting paid.
• 9:58
  Speaker 2: Yield Kraken's Master account is exactly that. When you look
• 10:03
  Speaker 2: at the Skiddy master account, here's what you can do
• 10:05
  Speaker 2: with it. You can send payments. I'm done talking. That's
• 10:09
  Speaker 2: everything that lets you do. They don't pay you interest,
• 10:11
  Speaker 2: they don't let you borrow at the discount window. You're
• 10:13
  Speaker 2: not really a fed participant in the sense of a bank.
• 10:16
  Speaker 2: You could just use ach and wires.
• 10:19
  Speaker 1: But Waller was he was he pro stable coin because
• 10:24
  Speaker 1: I kind of thought he was against stable coin.
• 10:26
  Speaker 2: So I think one of the things to be careful
• 10:29
  Speaker 2: about is people's previous views of pro or anti stable
• 10:33
  Speaker 2: coin maybe changing post genius. Because am I pro a
• 10:37
  Speaker 2: stable coin that's offshore and won't tell us what's in
• 10:40
  Speaker 2: the reserves like the original version of tether? Is a
• 10:43
  Speaker 2: very different question than would I be opposed to a
• 10:47
  Speaker 2: box filled with t bills that is regulated in the
• 10:50
  Speaker 2: United States and used for payments. I will remind everybody
• 10:53
  Speaker 2: that already exists. Fidelity has a cash management account powered
• 10:58
  Speaker 2: by their government money market fund that is in the
• 11:00
  Speaker 2: US financial system right now, and people have been fine
• 11:04
  Speaker 2: with that. So I think the question has changed a lot,
• 11:06
  Speaker 2: and that's throwing people off.
• 11:09
  Speaker 1: Well it was originally. I think what I'm getting at
• 11:11
  Speaker 1: is the stablecoin yields was what he was kind of against,
• 11:15
  Speaker 1: So wouldn't he side on the side of the banks
• 11:18
  Speaker 1: in that situation.
• 11:20
  Speaker 2: So the FED I think, has a specific concern around
• 11:22
  Speaker 2: stable coin yields, which I will grant is probably fair
• 11:26
  Speaker 2: given their past behavior, which is they don't want a
• 11:28
  Speaker 2: narrow bank. And what a narrow bank is is basically,
• 11:32
  Speaker 2: you give money to somebody and they put it at
• 11:34
  Speaker 2: the FED, okay, and that's one hundred percent of the transaction.
• 11:38
  Speaker 2: There was actually a proposal for a thing called the
• 11:40
  Speaker 2: narrow bank in two thousand and nine that the FED rejected.
• 11:43
  Speaker 2: They don't want stable coins to be a back door
• 11:45
  Speaker 2: where people give money to the stable coin, the stable
• 11:48
  Speaker 2: coin puts it at the FED earns interest and just
• 11:50
  Speaker 2: pays it back to people. I think Waller's views on
• 11:55
  Speaker 2: things like rewards or activity based yield are probably significantly
• 11:59
  Speaker 2: more favorable.
• 12:00
  Speaker 1: I'm looking at this treasury hold law. They're recommending that
• 12:04
  Speaker 1: Congress would create a safe harbor hold law freezing suspicious
• 12:07
  Speaker 1: digital assets, urging lawmakers to define which DeFi actors should
• 12:13
  Speaker 1: be and also face AML and CFT obligations. This is
• 12:18
  Speaker 1: much bigger in terms of targeting DeFi. How do you
• 12:21
  Speaker 1: translate this because this could be big.
• 12:24
  Speaker 2: So on the first part, I think this is Treasury
• 12:27
  Speaker 2: trying to grapple with two competing goals. Goal number one
• 12:31
  Speaker 2: is can I have an always on, constantly usable financial
• 12:35
  Speaker 2: system where not everybody has to KYC at all times
• 12:38
  Speaker 2: to use everything? And the other part is acknowledging there's
• 12:42
  Speaker 2: been a tremendous amount of financial crime in the current
• 12:44
  Speaker 2: crypto ecosystem that has not been effectively interdicted. Look at
• 12:48
  Speaker 2: things like the bibitack, look at money wandering through some
• 12:51
  Speaker 2: of the stable coins, and that is improving. I want
• 12:54
  Speaker 2: to be clear of the traditional system has a lot
• 12:56
  Speaker 2: of problems. But what Treasury does not want is a
• 12:59
  Speaker 2: paradigm where people can see bad things happening, have knowledge
• 13:03
  Speaker 2: that they are probably illegitimate, and then just kind of
• 13:06
  Speaker 2: let them go by anyways. So they're kind of trying
• 13:10
  Speaker 2: to strike a balancing act here, and this is why
• 13:12
  Speaker 2: you will notice it only says freeze. They are not
• 13:15
  Speaker 2: talking about taking people's money away right unilaterally by third
• 13:20
  Speaker 2: party actors. But they are talking about the idea of
• 13:22
  Speaker 2: maybe don't let a billion dollars leave if you think
• 13:25
  Speaker 2: there's been a hack without some sort of controls around that,
• 13:28
  Speaker 2: especially about stable coins. The second part is to defy
• 13:32
  Speaker 2: actors is when you drill underneath the sort of veneer
• 13:37
  Speaker 2: of decentralized finance. There are a lot of projects that
• 13:40
  Speaker 2: have tried to do things the right way and relinquished
• 13:43
  Speaker 2: control and operate autonomously. Uniswamp is a good example of
• 13:47
  Speaker 2: somebody who's been relatively responsible, But there are many that
• 13:51
  Speaker 2: if we're being totally honest with each other, dinos right,
• 13:53
  Speaker 2: that is to say, decentralized and name only. And in
• 13:57
  Speaker 2: those cases, I think Treasury is looking at the facts
• 13:59
  Speaker 2: and so circumstances and saying, listen, if you have elective
• 14:02
  Speaker 2: control over wallets, if you could stop user transactions and funds,
• 14:06
  Speaker 2: if you have those powers, you cannot pretend to be
• 14:10
  Speaker 2: decentralized while retaining all of that ability.
• 14:13
  Speaker 1: Well, okay, so you're talking about true D five versus
• 14:16
  Speaker 1: what you're referencing there but even though you're talking about dinos,
• 14:21
  Speaker 1: you know, decentralizing name only, you're talking about freezing assets,
• 14:25
  Speaker 1: which seems to me like that seems like a CBDC
• 14:29
  Speaker 1: to me. If you can start to control assets, I mean,
• 14:32
  Speaker 1: that's a slippery slope, Austin. The next thing is now
• 14:36
  Speaker 1: you can seize assets or you can say when you
• 14:38
  Speaker 1: can only spin those assets and if it matches up
• 14:41
  Speaker 1: to a social credits. This is dystopian, but that seems
• 14:45
  Speaker 1: like a first step.
• 14:46
  Speaker 2: I would remind everybody's qus dollar stable coins already work
• 14:50
  Speaker 2: that way right like forever that you want to say
• 14:53
  Speaker 2: about the most of them have freeze and c's capabilities.
• 14:56
  Speaker 2: And the reason is if you're a stable coin issuer
• 14:58
  Speaker 2: and I say this having worked it axos and managed
• 15:00
  Speaker 2: a stable coin, and the Department of Justice shows up
• 15:04
  Speaker 2: and says, there's two billion dollars of your stable coin
• 15:06
  Speaker 2: on by the North Korea. So you go, yes, but
• 15:08
  Speaker 2: we're decentralized. We can't do anything. They're just going to
• 15:12
  Speaker 2: go down the street to the custodian where you have
• 15:14
  Speaker 2: the money and take it from you there. If you're
• 15:17
  Speaker 2: using real world assets, you have to comport with real
• 15:21
  Speaker 2: world laws and frameworks, and that's sort of an irreducible
• 15:24
  Speaker 2: problem in this space. I would tell people who are
• 15:27
  Speaker 2: worried about the truly dystopic sort of endgame, there's solutions
• 15:32
  Speaker 2: for that, and it's things like bitcoin or some of
• 15:34
  Speaker 2: the privacy coins. It is not using real world assets,
• 15:38
  Speaker 2: and I think Treasury here is just acknowledging that reality.
• 15:42
  Speaker 2: I also, as an American, think it's much better to
• 15:44
  Speaker 2: vest that power and third party commercial entities who have
• 15:49
  Speaker 2: a desire to build businesses and a profit motive and
• 15:51
  Speaker 2: like want customers. Because if a stable coin issue or
• 15:55
  Speaker 2: constantly bricks and freezes your tokens, you're going to stop
• 15:57
  Speaker 2: using them.
• 15:58
  Speaker 1: Ah you, Well, that's going to be the the main thing.
• 16:00
  Speaker 1: And I think the first time that we see a
• 16:02
  Speaker 1: major bank do that, you could see a flight into
• 16:05
  Speaker 1: DeFi pretty quickly of the savvy people that know what's up.
• 16:09
  Speaker 1: Because there's going to be a lot of people that
• 16:11
  Speaker 1: when JP Morgan Chase Bank of America say hey, we're
• 16:15
  Speaker 1: going to take all your bitcoin in your CBD or
• 16:17
  Speaker 1: your excuse me, stable coins here and we're going to
• 16:20
  Speaker 1: give you some yield on them, there's going to be
• 16:22
  Speaker 1: some people that go there they're going to do that
• 16:25
  Speaker 1: because they want that security, they want that. But I
• 16:28
  Speaker 1: think the first time we get one of those freezes
• 16:31
  Speaker 1: on it, that will change people's minds pretty quickly.
• 16:36
  Speaker 2: Yeah, I was going to say, I will remind everybody
• 16:38
  Speaker 2: Tether who's already frozen hundreds of millions of dollars of
• 16:41
  Speaker 2: funds and people seem to continue using.
• 16:43
  Speaker 1: Them using it.
• 16:44
  Speaker 2: I would Yeah, I would suggest if you look at
• 16:48
  Speaker 2: financial activity written large, the question really comes down to
• 16:52
  Speaker 2: are you freezing people where beyond a reasonable doubt everybody
• 16:56
  Speaker 2: agrees they're bad actors or not, Because, for instance, when
• 16:59
  Speaker 2: Tether froze a couple one hundred million of funds affiliated
• 17:01
  Speaker 2: with the pig butchering scammers in Cambodia, everybody was like,
• 17:05
  Speaker 2: you know what, that's fine. But if Tether were Paul
• 17:08
  Speaker 2: to say to freeze your funds because you said something
• 17:11
  Speaker 2: on the show that they didn't like, then I think
• 17:14
  Speaker 2: they're going to have a commercial problem. And yeah, that
• 17:16
  Speaker 2: really is a question of where the line goes.
• 17:19
  Speaker 1: Does this kind of system being put in place start
• 17:22
  Speaker 1: to slowly erode the true DeFi networks that are out
• 17:28
  Speaker 1: there because all the money is essentially pouring into these
• 17:30
  Speaker 1: controlled mechanisms, whether it's tether, USDC or other you know,
• 17:35
  Speaker 1: bank stable coins that eventually are paying high yield. I
• 17:38
  Speaker 1: mean even X is going out here promising six percent.
• 17:42
  Speaker 1: I mean that's what I'm talking about. So that gets
• 17:46
  Speaker 1: a little dicey.
• 17:46
  Speaker 2: I would think, yeah, and you you so one, you
• 17:51
  Speaker 2: were correct that. I think the call it cipher punk
• 17:54
  Speaker 2: idealism of totally like permissionless money, right, that will always
• 17:58
  Speaker 2: have a place, But that place is probably smaller than
• 18:01
  Speaker 2: people think, and smaller than somewhat like the trade off though,
• 18:04
  Speaker 2: is what Treasury is proposing here is actually significantly better
• 18:09
  Speaker 2: than the current financial system, where it's even more restricted.
• 18:12
  Speaker 2: So there are some degrees of trade off and transmission.
• 18:16
  Speaker 2: And I would encourage anybody who's concerned about what you
• 18:19
  Speaker 2: are raising here, stay in touch with people in the house,
• 18:22
  Speaker 2: Stay in touch with your senators, look them up and
• 18:24
  Speaker 2: write to them, because keeping this balanced and in favor
• 18:27
  Speaker 2: of the people is the most important thing we can do.
• 18:30
  Speaker 1: What is your position on self custody, because this is
• 18:32
  Speaker 1: the other question mark that I think a lot of
• 18:35
  Speaker 1: people are concerned with, is that self custody may go away. Obviously,
• 18:38
  Speaker 1: if you look at cash being able to hold your
• 18:40
  Speaker 1: own goal. Those kind of things that already exists today,
• 18:43
  Speaker 1: So why should it not transfer over to digital as well.
• 18:47
  Speaker 2: Yeah, I'm a strong proponent of self custody, not just
• 18:50
  Speaker 2: for the traditional reasons around cash, but also as somebody
• 18:55
  Speaker 2: who worked at large financial entities. It's a way to
• 18:57
  Speaker 2: keep them honest. Right When people can take not only
• 19:00
  Speaker 2: their money out, but also their securities out if they
• 19:03
  Speaker 2: don't trust you, that actually is a very good forcing
• 19:06
  Speaker 2: effect on the ecosystem to force people to behave well.
• 19:09
  Speaker 2: So I am strongly in favor of it.
• 19:11
  Speaker 1: I like it. We put out a tweet this weekend.
• 19:14
  Speaker 1: Of course, Florida advanced a bill now it's going to
• 19:17
  Speaker 1: go to the Governor's desk that essentially is going to
• 19:20
  Speaker 1: give Florida the ability first first state to pass a
• 19:25
  Speaker 1: dedicated stable coin framework. And this is called State Bill
• 19:28
  Speaker 1: three fourteen. This is done so it's going to give
• 19:31
  Speaker 1: legal clarity for issuers, so not a security, consumer protections,
• 19:35
  Speaker 1: one to one reserves, which is unheard of pilot program.
• 19:38
  Speaker 1: You're going to be able to pay some of your
• 19:40
  Speaker 1: government fees and stable coin. That's a big deal. And
• 19:42
  Speaker 1: then it's also going to be aligning with the Genius Act.
• 19:44
  Speaker 1: So my prediction is that we're going to probably see
• 19:47
  Speaker 1: some businesses because we're already losing so much money to
• 19:51
  Speaker 1: these merchant fees here in the state of Florida. You know,
• 19:54
  Speaker 1: it's the biggest tourism place in the world, and we're
• 19:58
  Speaker 1: paying these ridiculous merchant fees that essentially could flow back
• 20:01
  Speaker 1: into the state of Florida. Would this be a big
• 20:04
  Speaker 1: deal for master Card and Visa in a bad way?
• 20:08
  Speaker 2: Both yes and no. It's important to look at who
• 20:10
  Speaker 2: gets what part of interchange. So MasterCard and Visa take
• 20:14
  Speaker 2: a flat fee out of interchange amounts and are passing
• 20:17
  Speaker 2: the rest to the banks involved in the network. I
• 20:20
  Speaker 2: would tell you I think it's worse for the banks
• 20:22
  Speaker 2: thanks and the high end rewards programs than it is
• 20:25
  Speaker 2: specifically for MasterCard and Visa. On the other hand, if
• 20:29
  Speaker 2: the system works well and it actually generates more volumes
• 20:33
  Speaker 2: as a result of that, that part can be good.
• 20:36
  Speaker 2: It's sort of the Jevins paradox thing of something becoming
• 20:39
  Speaker 2: cheaper increasing demand, and so it could have a very
• 20:42
  Speaker 2: positive effect on total payments going through the State of Florida.
• 20:46
  Speaker 2: It's done properly, I would also say an adjacent benefit
• 20:49
  Speaker 2: is if you look at Wyoming and the Frontier token,
• 20:52
  Speaker 2: that state is launching a stable coin partially for government
• 20:56
  Speaker 2: payments and transparency reasons. I have a feeling that loge
• 21:00
  Speaker 2: it will resonate in Florida as well, and if you
• 21:03
  Speaker 2: develop a greater trust framework with your citizens, you will
• 21:06
  Speaker 2: attract more business and thus more payments.
• 21:09
  Speaker 1: No doubt. I mean Florida's on the front edge here.
• 21:11
  Speaker 1: I think whether it's DeSantis or our next governor, if
• 21:14
  Speaker 1: they can stay on track here with what's going on
• 21:16
  Speaker 1: in crypto, will be huge. Let me get into the
• 21:18
  Speaker 1: lightning round with you, Austin. We always do this to
• 21:20
  Speaker 1: kind of get a quick rundown. This is my first question.
• 21:22
  Speaker 1: Trump's tweet against the banks made a huge difference. We're
• 21:27
  Speaker 1: in terms of clarity getting at least back up to
• 21:31
  Speaker 1: the front of the of the line, both in Congress
• 21:34
  Speaker 1: and in terms of attention.
• 21:35
  Speaker 2: What do you think, yes, yeah, Trump is the executive
• 21:38
  Speaker 2: controlling the banking regulators. Banks should pay attention to his tweets.
• 21:43
  Speaker 1: Yeah, for sure. Clarity is ironically signed on Independence Day.
• 21:48
  Speaker 1: You think.
• 21:51
  Speaker 2: No, No, Congress doesn't do anything that quickly or all right.
• 21:55
  Speaker 1: No, I am going to go yes on this because
• 21:57
  Speaker 1: sometimes I'm just too optimistic. Banks are ready to call
• 22:01
  Speaker 1: your bluff on not passing clarity. It's bad for banks.
• 22:04
  Speaker 2: So what do you think I mean, the banks are
• 22:08
  Speaker 2: ready to call that bluff. I just think Congress will
• 22:11
  Speaker 2: run them over.
• 22:11
  Speaker 1: Ooh, okay, I'm going to go in the middle. Yeah.
• 22:14
  Speaker 1: Who told the occ to put out the yield policy
• 22:17
  Speaker 1: right before March first deadline? Was that a coincidence? Or
• 22:21
  Speaker 1: I am just reading the tea leaves here?
• 22:24
  Speaker 2: Nothing in there is a total coincidence. I know they
• 22:27
  Speaker 2: had been working on it long before that, but the
• 22:29
  Speaker 2: exact release state might have some significance.
• 22:31
  Speaker 1: Okay, so we're just going to say it. We'll just
• 22:34
  Speaker 1: say the banks did that. If yield policy is left
• 22:38
  Speaker 1: to the Treasury, Scott Bessett would side with.
• 22:40
  Speaker 2: Who Definitely coinbase. The Treasury is looking at global treasury distribution.
• 22:45
  Speaker 2: Anything that makes that more appealing they are interested in.
• 22:48
  Speaker 2: And by the way, keep in mind, something like eighty
• 22:51
  Speaker 2: five percent plus of current buyers of stable coins are
• 22:54
  Speaker 2: non US persons. Right. Another reason the banks don't have
• 22:58
  Speaker 2: the best argument here.
• 22:59
  Speaker 1: I just remember what best said about Brian Armstrong he
• 23:04
  Speaker 1: was not very happy. Now, it was at a different
• 23:06
  Speaker 1: time too, in that negotiation. I don't know if he's
• 23:09
  Speaker 1: changed his position based on what he's said at least
• 23:13
  Speaker 1: then I can only go off of that. I would
• 23:14
  Speaker 1: say I think he would side with the banks on this,
• 23:17
  Speaker 1: just going off of what you're saying, Scott. So don't
• 23:20
  Speaker 1: kill the messenger here. Bank fees will skyrocket if banks
• 23:23
  Speaker 1: have to competitively share yields with customers. No you don't
• 23:27
  Speaker 1: think so. No, I'm going to go against you there.
• 23:30
  Speaker 1: I think they're going to raise fees. Give you interest,
• 23:33
  Speaker 1: and they're going to raise the shit out of your fees.
• 23:35
  Speaker 2: I think if you look at banks right now, only
• 23:38
  Speaker 2: about twenty percent of their lending is mainstream lending. Right
• 23:42
  Speaker 2: go look at the balance sheet of the top twenty banks,
• 23:44
  Speaker 2: about twenty percent is mortgage's small business loans. The stuff
• 23:48
  Speaker 2: that's going to go up in price is purely consumptive things,
• 23:52
  Speaker 2: so like, yes, this may actually impact credit cards, but
• 23:55
  Speaker 2: not so much deposit accounts. The places where things will
• 23:58
  Speaker 2: get more expensive is all the instant tutional banking stuff,
• 24:01
  Speaker 2: sales and trading securities issues.
• 24:03
  Speaker 1: I'm gonna still stay on my know because I know
• 24:06
  Speaker 1: that bankers are greedy.
• 24:07
  Speaker 2: That is an incontrovertible fact.
• 24:10
  Speaker 1: Banks will eventually charge at charge added fees for stable
• 24:14
  Speaker 1: coin minimums, priority sending, gas whitelisting wallets. Do you think
• 24:18
  Speaker 1: we'll see a lot of that nonsense?
• 24:19
  Speaker 2: So the answer is yes, they will try it in
• 24:22
  Speaker 2: the short term, but the people doing that will eventually lose.
• 24:26
  Speaker 2: That is a market economics question, but it will take time.
• 24:28
  Speaker 1: Yeah, I'm in agree with you. I think they'll try it.
• 24:30
  Speaker 1: I think they will fail, and I think the market
• 24:33
  Speaker 1: will push back and they'll eventually come to the come
• 24:36
  Speaker 1: to the table about all this stuff. DeFi and privacy
• 24:39
  Speaker 1: will be thrown under the bus in order to pass clarity.
• 24:42
  Speaker 1: You think they'll do it.
• 24:43
  Speaker 2: It's going to be a split decision, right, Like privacy
• 24:46
  Speaker 2: is a true balancing test. I get the perspective of
• 24:49
  Speaker 2: the people who do not trust the government. I also
• 24:52
  Speaker 2: get the perspective of the Department of Defense people I
• 24:55
  Speaker 2: work with who are worried about like weapons programs in
• 24:57
  Speaker 2: nation state, money wandering. It's going to be a decision.
• 25:00
  Speaker 1: I feel a little bit in the sense that and
• 25:02
  Speaker 1: I hope that the American people have made it. You know,
• 25:06
  Speaker 1: it's very clear that privacy is a concern and it's
• 25:10
  Speaker 1: only rising now, especially with everything that's going on in
• 25:13
  Speaker 1: social So hopefully our congressman and lawmakers are thinking about that. No,
• 25:17
  Speaker 1: pack progressive Democrats are winnable. This is kind of a question.
• 25:22
  Speaker 1: Crypto industry just hasn't tried hard enough. What do you think?
• 25:25
  Speaker 2: No, And I say that as somebody like on the
• 25:27
  Speaker 2: Democratic side in New York, the far left is interested
• 25:31
  Speaker 2: in state control of enterprises. Crypto is their enemy.
• 25:34
  Speaker 1: Okay, all right, I'm going to agree with you there.
• 25:37
  Speaker 2: A lot of moderate Democrats are persuadable, though the progressives
• 25:40
  Speaker 2: are the problem.
• 25:41
  Speaker 1: All right, what will Elizabeth Warren spend her Senate floor
• 25:44
  Speaker 1: time ranting about before the Clarity vote? Do you think
• 25:48
  Speaker 1: it's going to be the criminals and the terrorist or
• 25:50
  Speaker 1: is it or the world liberty five?
• 25:53
  Speaker 2: Create two copies of me, because it's going to be both. Right, Like,
• 25:57
  Speaker 2: she's just going to go down the buzzwords. By the way,
• 26:00
  Speaker 2: she's also going to say it's going to destroy the
• 26:01
  Speaker 2: banking system because of financial rights. It's like all of it.
• 26:05
  Speaker 1: He sit in the middle. I think she's going to
• 26:07
  Speaker 1: go all in on terrorist again. It's going to be
• 26:09
  Speaker 1: just the bad guys. Crypto industry should go on the
• 26:12
  Speaker 1: offense and lobby for a no more bank bailout or
• 26:16
  Speaker 1: stock buy back amendments.
• 26:18
  Speaker 2: I think this is totally viable, Paul, you and I
• 26:21
  Speaker 2: were talking before the show a little bit about financial history,
• 26:24
  Speaker 2: and I would remind everybody in the nineteen thirty three
• 26:26
  Speaker 2: Act that created the FDIC for banks, there was also
• 26:30
  Speaker 2: a little thing in there called glass Steegel as part
• 26:33
  Speaker 2: of that arrangement which split commercial banking from investment banking.
• 26:37
  Speaker 2: If banks want to argue for more regulation, I suggest
• 26:40
  Speaker 2: the roadmap is there and we should give.
• 26:42
  Speaker 1: It to them. Go right ahead, just use the roadmap.
• 26:45
  Speaker 1: I like it all right, A couple more questions here
• 26:47
  Speaker 1: in the future. All it takes is and this goes
• 26:49
  Speaker 1: back to the point I made earlier, single use case
• 26:51
  Speaker 1: of a major bank losing your uninsured crypto or halting
• 26:54
  Speaker 1: with draws to push everybody to mass self custody.
• 26:58
  Speaker 2: You think that would be too lazy.
• 27:00
  Speaker 1: Too lazy man.
• 27:02
  Speaker 2: Let's live in the real world.
• 27:04
  Speaker 1: I know. I know, though, and I'm not going to
• 27:06
  Speaker 1: say to our audience that you guys are lazy, because
• 27:08
  Speaker 1: I know you guys would jump ship in a second
• 27:11
  Speaker 1: if something like this happened at your bank. But there's
• 27:13
  Speaker 1: a lot of people out there that just won't, you know,
• 27:15
  Speaker 1: they just won't do it. Unfortunately, clarity will mark the
• 27:18
  Speaker 1: beginning of the end for USDC and Circle.
• 27:21
  Speaker 2: I'm going to say no, because I think genius did
• 27:24
  Speaker 2: that already. If we're being honest, that happened last year.
• 27:27
  Speaker 1: That ship has sailed. Would you ever trust X as
• 27:30
  Speaker 1: your bank?
• 27:31
  Speaker 2: No. From an operations perspective, don't accumulate all your data
• 27:36
  Speaker 2: in one place, because if you get hacked, you have
• 27:38
  Speaker 2: a problem.
• 27:38
  Speaker 1: Well okay, what about you know? Because I want to
• 27:43
  Speaker 1: say yes, but I look at diversifying, you know, So
• 27:46
  Speaker 1: I'm like, you should have you should have five banks
• 27:48
  Speaker 1: in reality.
• 27:49
  Speaker 2: At least two. This is one of the few times
• 27:51
  Speaker 2: I will give most people financial advice. Having worked at
• 27:54
  Speaker 2: a large bank. Your bank account can get bricked for
• 27:58
  Speaker 2: reasons that have absolutely nothing to do with you. The
• 28:01
  Speaker 2: banks that could collapse always have at least two.
• 28:05
  Speaker 1: So I'm going to say that I will add bank
• 28:07
  Speaker 1: Acts as one of my banks. If they have services.
• 28:11
  Speaker 1: It will not be my only one, but it would
• 28:12
  Speaker 1: definitely be one of them that I would use I'm
• 28:15
  Speaker 1: just saying it in that way. It wouldn't be the
• 28:17
  Speaker 1: only one I would use. Robinhood will be the prime
• 28:19
  Speaker 1: beneficiary of Clarity regardless of the details. Do you think
• 28:23
  Speaker 1: that will be the case?
• 28:24
  Speaker 2: No, because they're going to face a lot more competition
• 28:27
  Speaker 2: from traditional people. Robinhood's advantage has been being at the
• 28:30
  Speaker 2: forefront of this. If Clarity brings others into the game,
• 28:34
  Speaker 2: it's a bad thing for them.
• 28:35
  Speaker 1: Yeah. I agree. I think it's a no on that.
• 28:37
  Speaker 1: I think they'll make some great products and they'll continue
• 28:40
  Speaker 1: to roll out a lot of new stuff, but they're
• 28:42
  Speaker 1: going to have other people in the game going against
• 28:45
  Speaker 1: them on that, so I do agree with you on that.
• 28:47
  Speaker 1: All right, listen, this has been good.
• 28:49
  Speaker 2: I love it.
• 28:50
  Speaker 1: Austin, thank you so much for coming in today. We'd
• 28:52
  Speaker 1: love to kind of dice it up, especially with what's
• 28:55
  Speaker 1: going on in DC and around this Clarity Act. So
• 28:58
  Speaker 1: thanks for stopping it.
• 28:59
  Speaker 2: Thank you for having me.
• 29:07
  Speaker 1: If you like this video, hit like and subscribe, drop
• 29:09
  Speaker 1: a comment down below, and also join our free private
• 29:12
  Speaker 1: member group. The link is in the description.
• 29:15
  Speaker 2: Mm hmm.