0:08 Well, good afternoon.
0:10 Uh, it's a pleasure to be here at the
0:13 the second annual Ando Summit. Uh, and
0:16 pleasure to be on stage with uh two of
0:17 the finest from the Trump
0:20 administration, I must say. Um, we have
0:22 Patrick Wit who's the executive director
0:25 of the president's uh council on digital
0:28 assets. um working in the White House,
0:30 coordinating across government. Um and
0:33 then we have Tyler Williams who's uh uh
0:34 coordinating across Treasury on the
0:37 implementation of all the cryptoreated
0:40 items uh including the Genius Act. Thank
0:41 you all for being here today. Thanks for
0:45 taking time. Um a lot's going on and so
0:48 the the prep for for a questioning of
0:51 you Patrick is very difficult because uh
0:53 you're so in motion, right? Uh you
0:56 started from uh when did you start at at
0:57 the White House from
0:59 >> uh I started detailing over from the
1:01 Pentagon in April of last year
1:03 >> and uh and then took over as executive director
1:05 director um
1:05 um
1:06 >> late summer. Yeah.
1:09 >> So it's been a incredible journey
1:11 >> to watch you uh do this. But I I think
1:13 it'd be great for a scene setter on
1:15 what's happened over the last year
1:17 because a lot's changed just by from
1:21 election day of 2024 to today. Uh so
1:23 bring us up to speed on on what's what's
1:25 happened uh as a result of the President
1:26 Trump's election.
1:28 >> Well, it's been a flurry of activity as
1:31 you mentioned uh not just on on crypto
1:32 policy but across the board. This
1:35 administration came in um with a a raft
1:37 of executive orders and different
1:40 actions that we started to move out on.
1:42 Um I personally had a front row seat to
1:43 that because I served on the transition.
1:45 So was one of the day one employees down
1:47 there. um and got to see the different
1:49 teams that uh many of whom had served in
1:51 Trump 45 come back again this time
1:53 around and kind of pick up right where
1:55 they left off and that uh core nucleus
1:57 at the White House too with chief of
2:00 staff Susie Wild, Steven Miller, others
2:02 um had been working together and some of
2:04 them in the first Trump administration
2:05 but then certainly that was the the
2:08 campaign team. So it it really just we
2:09 hit the ground running. And on the
2:12 crypto side in particular, um that was
2:14 uh moves immediately to get the right
2:16 people in place at the agencies to
2:18 nominate the the correct folks to bring
2:20 in people like Tyler over at Treasury
2:22 and build this incredible team because
2:24 it's not just the White House. It
2:25 requires everyone at these different
2:27 agencies that that touch on crypto
2:29 policy even in places that might not be
2:31 obvious um to to people on the outside
2:34 that have a hand in this. Um so
2:37 president assembled an amazing team. Um
2:39 we got uh multiple executive orders
2:41 signed. The the first one the ending
2:43 operation chokepoint 2.0 know uh the
2:46 Biden uh administration's
2:48 uh misguided, let's say, policy of
2:50 regulation by enforcement that had
2:54 really uh just prosecuted and and uh uh
2:57 put crypto in the crosshairs and took a
2:58 technology and an industry that really
3:01 America should have embraced and and put
3:02 it on the outs and drove a lot of that
3:04 innovation offshore. So, we put an end
3:06 to that. That's still an ongoing effort
3:09 to to root that out entirely. Uh we got
3:10 the executive order on the strategic
3:13 Bitcoin reserve uh signed into law uh
3:15 stopped the government from liquidating
3:17 assets uh by some accounts. I think we
3:19 we missed out on tens of billions or
3:21 maybe even upwards of hundred billion
3:23 dollars of um assets that could have
3:25 been held on the balance sheet because
3:26 they were sold in fire sales just
3:29 without much thought whatsoever. Um and
3:30 then obviously the the big legislative
3:32 push to get the Genius Act passed. So,
3:34 uh, Tyler and team over at Treasury are
3:36 now hard at work implementing the
3:39 follow- on rules from that. Um, I know
3:40 they're they're working around the
3:41 clock. There's a lot in there, a lot of
3:44 directed rulemakings. Uh, but that one I
3:46 I think you've already seen the response
3:48 to that with people onshoring, new, uh,
3:50 Fidelity just issued a stable coin the
3:52 other day. more and more people entering
3:55 this space. Um, foreign heads of state,
3:58 foreign ministers of of economies, uh,
4:00 central bankers, all very interested in
4:02 what the US is doing with stable coin
4:04 policy. And then the next one that
4:06 dominates my time these days is the the
4:08 market structure legislation. So, the
4:10 Clarity Act, uh, which, uh, you have
4:12 worked on multiple pieces of legislation
4:14 over the years. Uh, we finally got one
4:17 over to the Senate, um, last week, which
4:18 I'm sure we'll talk about. We passed it
4:20 out of the Senate a committee to the
4:22 floor of Cong to the floor of the Senate
4:24 and now we're trying to play catch-up on
4:25 the banking side. Some issues still
4:28 outstanding to resolve there. But uh uh
4:31 that's a a quick summary, not that quick
4:32 just because there is so much that has
4:34 happened, but uh it's it's been a
4:35 privilege to serve in this role and
4:38 there's still more to do. Well, to to
4:40 look at the the Biden administration,
4:42 their approach to crypto, just the
4:44 change in the election, just that change
4:46 took us from a very negative view of
4:48 digital assets where in order to be an
4:49 innovator, you had to be offshore.
4:51 That's the only way you could actually
4:52 flourish with digital assets, you
4:55 couldn't be in the United States. uh to
4:56 the election and just by the election of
5:00 President Trump being pro- crypto um
5:02 that changed the whole market
5:03 >> and actually made innovators look back
5:05 to the United States and then all the
5:08 work that you and uh and your colleagues
5:10 have put in uh in coordinating with
5:13 Congress and the agencies has actually
5:15 really driven uh the creators to come
5:18 back to come back and and uh innovate
5:21 here domestically. Uh it's it's a quite
5:23 welcome thing uh and a lot more to come
5:25 and we'll get to that. Um because what
5:27 what you've been up to just in the last
5:30 couple of days is is uh market moving
5:34 and substantial. Um but Tyler uh Patrick
5:36 mentioned the passage of the Genius Act
5:39 stable coin stable coin law. Um we had
5:41 negotiated during my time in Congress.
5:45 We had negotiated for five years. Um my
5:46 first meeting with on the House
5:47 Financial Services Committee as a
5:50 ranking member as a lead Republican was
5:53 to uh bring in uh outside experts to
5:56 talk about crypto market uh regulation,
5:58 stable coin regulation five years ago.
6:03 Um, and so to watch that glacial pace of
6:07 Congress and then the election and how
6:10 quickly you're able to drive uh Congress
6:12 to act on on stable coin, a stable coin
6:14 law in the passage of the Genius Act.
6:17 Uh, and that happened when April of of
6:19 last year, May.
6:20 >> Yeah, it got signed into law into July
6:21 in July.
6:24 >> July. Um, that's fast for Congress,
6:26 >> very quick. Um, now you have all the
6:30 work of uh of implementing uh a law uh a
6:33 new piece of legislation um and the work
6:36 that you're doing within Treasury and to
6:37 coordinate with these agencies on the
6:39 regulatory implementation. Walk us
6:41 through that work.
6:42 >> Yeah, maybe I'll I'll do that. I'll do
6:44 the second stage. I want to just add one
6:46 thing I think is really helpful to how
6:49 the administration set it up uh in terms
6:50 of the executive director role,
6:52 Patrick's role at the White House. It
6:54 serves as a nucleus for all of the
6:56 people across the government to work
6:58 with each other. So we went through this
7:00 process from the early day of the
7:02 administration with the ex first
7:04 executive order that asked the uh whole
7:06 of the government to produce a
7:08 comprehensive report on crypto policy
7:10 regulation like put all of your thoughts
7:11 on paper of what's broken, what we need
7:14 to fix. And we did that and it keeps
7:16 that group together like we meet on a
7:19 regular basis. we talk to each other and
7:21 you know this adage like you know
7:23 personnel is policy in Washington and
7:25 like we all work together we all like
7:27 each other I think the time [laughter]
7:29 so like uh just wanted to add that so we
7:32 we published this and I I think David
7:34 Sax calls it the crypto bible like it's
7:36 literally on the website
7:37 >> so how big was that report describe that
7:39 for folks watching and where they could
7:39 get it
7:42 >> we did thousands of meetings across like
7:44 the Treasury Department white house SEC
7:46 CFTC DOJ all the other particip
7:49 participants in the um core working
7:53 group and from that we spent months
7:55 writing this report and I think there's
7:58 over 111 recommendations in there across
8:00 agencies and departments what Congress
8:02 should do what the regulators should do
8:03 how they should think about market
8:05 structure legislation how they should
8:07 think about market structure certainty
8:09 in the absence of legislation so we we
8:12 sort of covered the watershed um and I
8:15 think it's 168 pages 400 plus footnotes
8:17 if I'm counting And where can they get
8:18 where can the public get this?
8:20 >> It's on it's on the White House website crypto.gov.
8:21 crypto.gov.
8:23 >> So go there, read it. If you want to
8:25 meet with us about it, come talk to us.
8:27 >> So you compiled what all the agencies
8:28 could do across government that coordination.
8:29 coordination.
8:30 >> That's right.
8:32 >> So what is happening right now uh with
8:34 the Genius Act? on on the genius
8:36 implementation. Um, and I want to be a
8:38 little careful not to talk about like
8:40 specific timelines and things like that,
8:43 but the the bill and the act requires
8:46 that uh Treasury coordinate with the
8:48 bank regulators, the bank regulators,
8:52 whether it's the Fed, FDIC, OC, NCUA for
8:54 the credit unions, uh, they all are have
8:56 supervisory and regulatory authority
8:57 over stable coin issuance. It
8:59 contemplates sort of a dual framework
9:02 like we have uh in um the state and
9:04 federal banking system where you can be
9:06 a statelicicensed entity but you can
9:09 also go to the OC and get a license from
9:11 the OC to charter your uh stable coin
9:14 issuer. Um so there's the whole
9:16 government from a bank regulatory
9:18 perspective is involved and what I was
9:20 saying about this early report like it
9:22 it helps because we all talk to each
9:23 other all the time. We all work with
9:26 each other. Um and and so we really set
9:28 out on this uh this approach at least
9:30 from Treasury that we wanted to make
9:32 sure we uh did an advanced notice of
9:34 proposed rulemaking. So we put that out
9:36 and we got 400 plus comments back and
9:38 we're going through that. The the next
9:41 step that we'll really get to is we'll
9:43 do uh proposed rules which takes time.
9:46 Uh we have deadlines under the act that
9:48 are one year in July. We have 18-month
9:50 deadlines. We have three three-year
9:52 deadlines. So all >> we'll
9:52 >> we'll
9:53 >> leave it to Congress to kind of all
9:55 these quirky these quirky timelines.
9:56 >> And I would say just for like the people
9:58 who think about Treasury, Treasury is a
10:01 huge building. We have domestic finance,
10:03 international affairs, and then then
10:05 then the terrorism risk and financial
10:07 intelligence vertical. And then we have
10:10 the IRS and other bureaus. So we work
10:12 across the building, the crypto team at
10:14 Treasury. So we cover the whole building
10:16 and every piece of Treasury.
10:19 >> Okay. So with the Genius Act, we're in
10:22 that pretty tight timeline. With the
10:23 Genius Act, the passage of the Genius
10:25 Act, I think we've taken some some of
10:27 that for granted, right? The market has
10:29 taken the fact that we have clear law
10:31 when it comes to regulating stable coins
10:34 in the United States for all 50 states.
10:37 The model that uh that was before the
10:40 Genius Act that all the issuances went
10:41 through, all the volume went through was
10:44 the New York regulatory model. So, in
10:46 many ways, the passage of the Genius Act
10:49 was not really a revelation for stable
10:51 coins. You could issue it through New
10:54 York. There's a clear regulatory u
10:56 perimeter there. But with just the
10:58 passage of the Genius Act, and we're not
11:01 even a year, don't even have a year
11:04 anniversary yet. We've seen this rush of
11:08 innovation and volume um into stable
11:10 coins. And you see heavily regulated
11:11 institutions, large financial
11:13 institutions get into this. You
11:15 mentioned Fidelity's announcement of
11:17 Fidelity offering a stable coin. You see
11:19 these major players making these moves.
11:22 You see this with a panel uh of
11:23 participants today of some of the
11:25 largest asset managers in the world here
11:28 at the Hondo Summit. Um so that's just
11:32 one piece of of the whole crypto
11:34 conversation is stable coins. Important,
11:39 yes. Uh but less than 5% of the total
11:42 dollar value of crypto is in stable
11:44 coins. Let's talk about the 95%.
11:46 [snorts] Okay, this is the complex bit
11:50 that needs to be uh needs to be wrestled
11:53 with. Talk about the complexities of
11:55 market structure. What is the Clarity
11:57 Act that the House passed with a very
11:59 wide bipartisan majority that the Senate
12:02 is working through? Uh give us the state
12:03 of play there and and a bit of the the
12:07 the the topline struggles. Mhm. Um well,
12:08 I think it starts with what you just
12:10 mentioned, which is this is this is
12:13 covering and affecting a much larger
12:15 orders of magnitude larger uh size of
12:17 the pie here. So, um as you mentioned,
12:19 stable coins incredibly important.
12:20 They're going to continue to grow. Some
12:22 projections have them just with
12:24 incredible uh compounded annual growth
12:26 rates into the future, but still a
12:28 relatively small portion of the crypto
12:30 industry. So most of the tokens out
12:32 there that are trading, most of the
12:33 companies that are engaging in this
12:35 space are intermediaries, exchanges,
12:38 broker dealers, uh custodians, you name
12:40 it. This is the bill that that sets the
12:42 rules of the road for them. How are the
12:44 tokens going to be treated? Um
12:45 ultimately, who has jurisdictional
12:47 authority over them between the SEC and
12:50 the CFTC? It grants spot authority over
12:52 digital commodities to the CFTC.
12:55 Currently, a large gap. Uh that's not a
12:56 partisan issue. both uh sides of the
12:58 aisle recognize that that's a major
13:00 issue right now that there's all this
13:03 econ economic activity um and market
13:05 manipulation potentially and and bad
13:06 actors that are just ultimately outside
13:09 of the regulatory scope. Um so some of
13:11 those are are kind of basic table
13:13 stakes. In addition to that, it goes
13:15 into a definition of what is what is
13:17 this thing we call decentralized
13:19 finance? What is truly decentralized? um
13:22 which regulators uh can can opine on
13:24 that and help flesh out some of that
13:26 because within DeFi there are multiple
13:28 different business models. Um and and
13:30 what are the obligations for those
13:32 different protocols? Um, at the same
13:35 time, um, which of these do we want to
13:37 make sure are not being captured in the
13:40 the regulatory umbrella here, um, that
13:42 are ultimately just developers writing
13:44 code, software, uh, in the same way that
13:46 someone publishing a website doesn't,
13:48 you know, it's it's similar types of
13:51 ideas. Web 3 truly, this is kind of the
13:52 extension of that, just mainly into the
13:55 the financial space. So, um, it has
13:57 developer protections in it. It has
13:58 certain activities that we are saying
14:01 explicitly are not subject to. uh
14:04 Securities Exchange Act, 3334 act, uh
14:06 Commodities Exchange Act on the on the
14:09 CFTC side. Um so there's there's a bunch
14:12 uh in there. Um and then this this other
14:14 piece which we can get into in a moment
14:16 which unfortunately we we thought we had
14:18 kind of put to bed in the genius act but
14:20 uh the issue of of stable coins um
14:22 coming up again in the context not of
14:25 stable coin issuers themselves how how
14:28 they can uh pay or not pay rewards and
14:30 yield uh but in this case through the
14:32 digital asset intermediaries the
14:34 exchanges the broker dealers those those
14:37 third parties in between. Um that is now
14:39 another uh point of contention that
14:40 we're working through with the
14:41 interested state.
14:43 >> So about that [laughter]
14:46 um uh you know you saw the delay in the
14:48 Senate Banking Committee markup of
14:50 clarity because there was they couldn't
14:55 work out a compromise on on um what some
14:57 Democratic supporters and some
14:59 Republican consorters had which was a
15:02 concern about uh stable coins offering yield.
15:03 yield.
15:06 Genius Act has some permissibility for
15:10 rewards. Um, this has become in banking
15:12 terms this this major issue where they
15:15 they're they're talking about deposit
15:18 flight from banks and a concern about uh
15:22 bank failures as a result of this. Um, I
15:24 think that's hypothetical. Uh, there's
15:26 no data that that bears that out, but
15:28 that is the terms of debate that the
15:31 banks have had. Um, I it's noteworthy
15:33 that you brought both the banking
15:37 industry together uh and major crypto
15:38 players in the stable coin regime
15:40 together for uh a meeting at the White
15:43 House yesterday. I think that shows the
15:45 importance to the president to the White
15:48 House of getting a market structure
15:49 bill. That's how I read it from the
15:52 outside from the cheap seats here. U but
15:54 you organized the meeting. You invited
15:56 uh everyone that you invited attended.
15:59 Um and and I think it would be useful
16:02 for us to hear your description of what
16:04 happened and how we should think about
16:05 uh that prioritization. For my chief
16:07 seats, I I think it's a welcome sign
16:10 that you brought these waring factions
16:13 together and say and and made a made a
16:14 major statement to them.
16:16 >> Yeah. Well, it it absolutely is an
16:17 indication of the importance that we put
16:19 on this legislation. Uh the president
16:21 spoke, I guess, a couple weeks ago over
16:23 in Davos about the market structure
16:25 legislation. um again just the other day
16:27 in the Oval Office. He wants to see this
16:29 get done. He wants another bill on his
16:31 desk ready to sign. Uh we'd love to have
16:33 another big uh signing ceremony like we
16:36 did with Genius. Uh and we view this as
16:37 as kind of the the last at least
16:39 legislative piece that we have to get
16:41 right. This is kind of the crown jewel
16:43 um that's that's missing right now. But
16:45 um we wanted folks to to come together.
16:47 There have been uh conversations on on
16:49 both sides of this debate, the banks
16:51 amongst themselves and the crypto
16:53 companies amongst themselves. And
16:55 ultimately there there wasn't that
16:57 dialogue happening across across the the
17:00 chasm here. So um it's a it's a first
17:02 step. It was intentionally not CEO
17:04 level. This was more policy leads,
17:07 lawyers, technical experts in the room.
17:10 Uh come forward um swords down. Uh make
17:12 it as as professional as we can. This is
17:14 not about feelings. Let's keep it
17:16 fact-based and uh let's have a
17:18 constructive dialogue about where we
17:20 are. What are the red lines? where are
17:21 the areas that there's actually some
17:23 agreement here and there are. Um and
17:25 then where do we have uh the sharpest
17:27 disagreement and let's let's close the
17:29 gap on those and and potentially even
17:32 think creatively about um different ways
17:34 that we could potentially pull things in
17:36 that that aren't necessarily germanine
17:38 just to to stable coins. But there's
17:40 other uh regulatory priorities of of
17:42 both sides uh of this debate that that
17:45 are also priorities. And so, uh, to the
17:46 extent that we can't necessarily solve
17:48 it exactly word for word on a page, uh,
17:50 potentially adding some some carrots and
17:52 sticks, if you will, uh, to close that
17:55 gap. So, it was a good good dialogue,
17:56 uh, the first of of several
17:59 conversations. Um, but as we
18:00 communicated to the individuals that
18:02 participated, and I do thank them for
18:04 for coming and participating. It was a
18:06 good good debate or not debate, it was a
18:08 it was a dialogue and it it stayed uh,
18:10 it could be a debate at points, right?
18:12 at points but um
18:14 >> but no um as I communicated to them time
18:17 is time is not on our side here and uh
18:19 to the banks in the room the genius act
18:21 is law and that is the current status
18:24 quo. So if if the arguments made on the
18:26 bank side are to be believed that this
18:27 is uh the sky is falling, this is the
18:29 end of the world, um this is your
18:31 opportunity to potentially make a
18:32 material improvement over the status
18:35 quo. But if ultimately this bill fails
18:38 or falls down because of this issue, um
18:40 you get nothing. You get genius. It is
18:42 what it is. So uh approach it with a
18:44 little bit of humility. And then also on
18:46 the crypto side, what we've communicated
18:48 to them is this bill, as we just talked
18:50 about, has so many other good pieces to
18:53 it. Um, and there's so much that is
18:55 necessary and and positive for the
18:58 industry. Um, the stable coin rewards
19:00 yield issue is an important one, but
19:02 it's not it's not the core of this bill.
19:04 And so, let's keep things in perspective
19:06 and and approach things um rationally
19:09 and uh see if we can't land the plane on
19:11 this. But I do think this is ultimately
19:14 with stable coins, it's a new product.
19:16 It's it's uh threatening to some people
19:18 that aren't the the most uh familiar
19:20 with blockchain technology overall. and
19:22 stable coins in particular. But
19:24 ultimately, we do believe as as my boss,
19:26 David Saxs, communicated over in Davos
19:29 recently, this this is actually an
19:31 opportunity. This is a product that can
19:33 be a win-win for the entire financial
19:35 system. Not just crypto at the bank's
19:37 expense, but actually the banks have a
19:39 real opportunity here to offer new
19:42 products um and and new business models
19:44 can be can be built on top of these
19:46 products. So um we're managing through
19:49 an interim period but ultimately I think
19:51 uh folks in in call it a year two years
19:53 three years once they get more familiar
19:54 with this this is going to become part
19:56 of the financial fabric and uh we'll
19:58 certainly not be as threatening and
19:59 people will be quite excited about it.
20:02 >> Yes. And and look we're here at the
20:04 summit and is the market leader in
20:07 bringing uh securities and real world
20:10 assets on chain. uh this has been
20:13 largely a a product offered to non US
20:15 citizens until this year and the big
20:18 announcement of this uh of this summit
20:20 is about bringing this back to the
20:21 United States. That would not have
20:23 happened but for the election of
20:25 President Trump and but for the work
20:26 that you two gentlemen are doing and
20:29 your teams are doing. Uh that that
20:30 should be a very welcome thing to the US
20:34 economy. Um, but riding on that, the
20:37 most important thing in for Ono and for
20:40 real world assets is making sure you you
20:42 have permissionless systems that can
20:45 operate and compete in the marketplace.
20:49 Permissionless systems um are are really
20:52 the core of what makes crypto a a
20:55 long-term value proposition. Um, how do
20:58 you view uh permissionless systems? How
21:00 do you view that concept and where does
21:03 that fall in the regulatory uh ambit?
21:06 >> It's it's hugely important. Um as you
21:07 mentioned the real innovation with
21:10 crypto are these decentralized systems,
21:12 permissionless open blockchains. Um
21:14 that's not to say crypto doesn't have
21:16 applications in the traditional sense
21:18 through through fintech and taking
21:20 existing centralized business models and
21:22 making them more efficient. Um lower
21:25 cost, lower lower friction. Um, but we
21:27 want to make sure that we're preserving
21:28 uh what is really unique and special
21:31 about crypto. So, within the bill, as I
21:32 mentioned, there are developer
21:34 protections for those developing
21:37 non-custodial software um in a
21:39 decentralized fashion. So, we we've
21:41 taken a strong stance in preserving
21:45 those in there. Um mindful of uh and it
21:46 is not just on the the Democratic side,
21:48 but also on the Republican side. Nobody
21:50 wants to pass something that ultimately
21:52 provides a license to engage in a bunch
21:53 of illicit activity or that could be
21:57 used to uh to further adversarial ends.
21:59 Um so we're we're striking that balance
22:02 and then on um the exemptions from from
22:05 the different regulatory acts here. Um,
22:08 we're engaging with with SIFMA, with the
22:10 traditional players on the the commodity
22:13 side, CME, ICE, and others, uh, to make
22:15 sure that we're we're threading the
22:18 needle between, um, where something goes
22:20 from just publishing software and and we
22:21 don't want to criminalize code or or
22:23 subject that to overly burdensome
22:26 regulations while also making clear that
22:27 when you do cross over into that
22:29 commercial sphere and it becomes
22:31 something that you have control over or
22:33 custody of assets, you you are going to
22:35 have some some responsib responsibility.
22:37 So, um trying to bring as much clarity
22:39 to it as possible, but uh knowing uh
22:41 that we have many members that are still
22:42 getting up to speed on on what this
22:43 technology means.
22:45 >> Yeah. And Tyler, you mentioned the
22:47 coordination between agencies and and
22:50 how vital that is. Uh Treasury usually
22:52 stands in the midst of these financial
22:54 regulators and and trying to get them to
22:57 uh talk to one another. uh uh that is a
22:59 always a difficult thing uh with the
23:00 competing interests of credit unions
23:03 versus banks and we see this with state
23:05 banks versus federal
23:08 versus national banks. Uh it seems like
23:10 all that is even more heightened right
23:12 now uh given what's happening in the
23:16 market. We saw um the CFTC and SEC
23:19 traditionally adversarial agencies uh
23:22 for territory uh you know have joint
23:24 announcements and and a goal of
23:27 coordination. Uh where does Treasury sit
23:28 with with those coord with that
23:30 coordination across all these uh uh
23:33 regulatory agencies? Well, so we we do
23:36 it across a wide range of uh topics
23:38 whether it's like banking issues,
23:41 whether it's modernization for different
23:43 um previous acts that have been put in
23:45 place. What you and Patrick were just
23:47 talking about uh the legislative side of
23:50 things. You know, we live that with
23:52 regard to the the effectuation and the
23:54 implementation of the bank secrecy act.
23:55 So that has been delegated across
23:58 regulators. So a lot of what this market
24:00 structure bill would do is contemplate
24:02 different organizational structures for
24:04 how different registrons would be
24:07 subject to the bank secrecy act. So this
24:09 debate about what is DeFi and what is
24:11 true DeFi. You hear a lot of Washington
24:14 talk about this, you know, it's often
24:16 referring back to the guidance that
24:19 Finson put out in 2019 and what does
24:21 control over user funds actually mean in
24:24 law. Um, so when we work with the
24:26 regulators, we're working with the SEC,
24:29 the CFDC, and all of our touch points
24:32 that we have uh from that. Treasury sits
24:34 on the board of CIPC. Many people may
24:36 not know that. So like we have different
24:38 equities in uh no pun intended, we have
24:40 different equities in many different
24:42 debates just because of how Treasury is
24:45 situated in the US government. Um, but I
24:47 think a lot of our work that we've been
24:50 doing with uh Patrick and team on the
24:52 market structure side of things is just
24:53 trying to be as like factbased and
24:55 evidence-based of like here's how the
24:57 law works, here's how sanctions work,
24:59 here's how the bank secrecy act worked
25:01 and like getting all of our experts from
25:03 like the the Fininsson team and the OFAC
25:05 team to talk to policy makers because it
25:08 is hard and it is confusing and you know
25:10 you you know this very well like it's
25:14 hard to have experts on very specific
25:16 minutia on congressional staff. So if we
25:18 can lend ourselves to the debate and be
25:21 constructive like this is a bipartisan
25:22 issue and like we can do that. So that's
25:23 our role
25:25 >> from the outside world. The marketplace
25:28 looks at redundancy of law, right? And
25:30 says, well, we have five different laws
25:31 that try to do the same thing. Why do we
25:34 have this? And from my stance as a
25:37 former lawmaker, uh the reason is
25:39 because lawmakers don't know what the
25:42 law is. So they create they're like well
25:47 this this example on um uh OFAC right we
25:50 don't want rogue regimes uh being able
25:53 to use digital assets to carry out their
25:56 ill ill intent well first of all it's an
25:58 open permissionless blockchain we can go
26:00 watch them on this right number one
26:02 number two we already have laws to go
26:04 get the bad guys we just need to make
26:06 sure they're well adapted to the
26:08 technology of the day and that agencies
26:09 have the capacity to get the best
26:11 technology to go do that and go get the
26:13 bad guys. So, a lot of this is an
26:16 educational uh is a lot of educational
26:18 work that I know you both spend a
26:20 massive amount of time on educating
26:22 policy makers about what is existent um
26:25 and and why you shouldn't uh kill an
26:28 opportunity for the United States out of
26:29 something that they don't quite
26:31 understand, a fear that they don't quite
26:34 understand or have grounds to uh to to
26:36 hyperventilate about. on on the point
26:37 that you mentioned around certain
26:39 lawmakers don't necessarily know what
26:41 the law is. This is not to call any one
26:41 individual out.
26:43 >> I mean, I'm I'm the one that called them
26:46 out and I spent 20 years
26:47 >> in in in the context of the Senate
26:49 Banking uh committee, for example. I
26:52 won't necessarily say who, but one of
26:54 the members said we're talking about
26:56 Title One, the classification, token
27:00 taxonomy, SEC versus CFTC authorities,
27:02 and um they're going back and forth on,
27:04 okay, this is for securities, but what
27:06 if what if something's not a security?
27:08 What about Bitcoin or Ethereum or one of
27:10 these other ones? And it's like, well,
27:11 there's this other agency called the
27:14 CFTC um that we're going to be giving
27:16 authority to to regulate these markets.
27:18 And there's a another committee called
27:20 the Senate Agricultural Committee that's
27:22 debating provisions of of that right
27:25 now. So there is a bit of a blind spot
27:26 uh between the two committees because
27:27 the dual nature
27:30 >> and I feel a bit called out by that uh
27:31 because that was part of the struggle of
27:33 of legislating when I was chair last
27:36 Congress is that we understand the
27:38 regulatory uh perimeter around
27:39 securities and the financial services
27:41 committee and we just think the egg
27:43 committee doesn't know anything about
27:45 commodities. Uh but when we start
27:47 talking you realize well wait a second
27:48 you have a resilient market here we have
27:50 a resilient market here why don't we
27:52 take the best of both rather than try to
27:57 reinvent the wheel um uh but okay so we
28:01 are sitting still February of 2026
28:04 uh you're 13 months into the Trump
28:06 administration 12 12 and a half months
28:09 into the Trump administration uh success
28:11 for this last year was passage of the
28:14 Genius Act years in the making a huge
28:17 revolution for for crypto in the United
28:22 States. Um, we saw what 20 2025 was.
28:25 Tyler, at the regulatory level, what is
28:28 success look like in 2026? Patrick, at
28:31 the legislative level, what is what does
28:33 success look like in 2026, Tyler?
28:35 >> I think um success would look like we
28:38 have rules in place. We have given the
28:40 public the information to consume and
28:43 give us feedback on. So we'll have uh a
28:45 constructive engagement with the public
28:47 on the regulatory implementation. You'll
28:49 see that not only from us but from the
28:52 other regulators. And then I think uh uh
28:54 take the contents of everything that we
28:56 put in the report and make forward
28:58 progress on all of the recommendations
29:00 that we made in there where we don't
29:01 need Congress to act on.
29:04 >> Okay. And that is at break neck speed
29:05 for government is what you're
29:07 suggesting. What is break neck speed for
29:09 government? Just so you can say it out
29:12 loud. uh for for the world to hear
29:15 >> not on genius implementation uh but on
29:17 the other things I think there in the
29:19 report there's tons of stuff that we put
29:21 in there on uh tax policy issues for
29:23 example I think making forward progress
29:27 on that would be uh in would be so big
29:28 for the industry so like we'll we'll try
29:30 to keep pushing on all that
29:33 >> Patrick building off of that um you
29:35 mentioned tax um on the legislative side
29:36 obviously market structure is is
29:39 priority number one two and three as as
29:42 my boss David Sax says. So, uh, we are
29:43 deeply focused on that. We're in the
29:44 thick of it right now with the
29:46 negotiations. Uh, success would look
29:48 like obviously passing it out of the
29:50 banking committee, reconciling those
29:52 products from the banking and a
29:54 committees uh to getting a bill that is
29:57 ready to be voted on on the floor um and
29:59 and passing that obviously on the House
30:01 uh side as well. So, getting market
30:03 structure enacted and then also there is
30:05 movement on on some tax bills in
30:07 Congress as well. Um there's there's one
30:08 that's been introduced on the House
30:11 side. Uh Senator Crapo on the uh the
30:13 Senate side has has recently held
30:15 hearings. So there is optimism that we
30:18 might be able to get a product uh uh
30:20 ready for for prime time. In a short
30:21 amount of time, relatively speaking.
30:23 >> So if I can put you on the spot,
30:26 Patrick, when does the president sign
30:28 the Clarity Act into law?
30:30 >> Uh well, I have a birthday coming up, so
30:36 from your your lips to God's ear.
30:37 >> Here we go.
30:41 >> Um, April April 3rd. So, we started here
30:44 first. I've killed the microphone again today.
30:56 I can't get a microphone.
30:58 >> Uh, this is the third microphone I've
31:01 killed today. Um so Patrick Wit said
31:03 April 3rd president [laughter] will have
31:06 a uh the Clarity Act signed signed into
31:09 law. Um that that is optimism but I
31:11 think it's quite realistic given the
31:13 level of work that you your boss and
31:16 your boss's boss have put into uh crypto
31:20 being made in America once again. Um,
31:22 and I must say and and to wrap uh this
31:27 section, um, these are two examples of
31:29 fabulous people working in government,
31:31 uh, working for the public interest
31:33 here. Um, and I think what you've just
31:36 heard from, uh, this panel today is the
31:39 best of this administration in
31:41 Washington. Uh, they are committed to
31:43 the public service and to getting quick
31:47 and solid action on digital assets. This
31:49 is a reason why we should be optimistic
31:51 about digital assets in the United
31:53 States and the United States being once
31:57 again uh the capital of uh crypto for
32:00 the world. And so with that, thank you
32:02 all for being here. Uh Mr. W, Mr.
32:04 Williams. Uh and that is a wrap for this section.
