Yeah so Jason there's a lot going on Right now in the Middle East with just Middle easn conflicts taking place Between Israel and the Hamas and Obviously we've seen come out over the Last few weeks finsen trying to use this To their advantage to regulate Cryptocurrencies and virtual currency as A whole you what what are your thoughts On Vincent's approach to this regulation Is this good or bad for Bitcoin Especially in a time where everybody has Got this opium in the markets they're Seeing these green candlesticks what Does this look like for the crypto Markets moving into the next few months Well so I think um if we take a step Back for a second and recognize we can't Really gloss over like how the last few Weeks have changed so much and so we Talk about like is this good policy Should we be doing this thing should we Not be doing this thing it's sort of Like because it's a the way it was Decided uh at the executive level like With you know secretary Ellen we're Either going to I'm either going to do It I'm going to pull the switch or not And and so I think there's a danger when We have to to start sure create policy At a time when we feel like we're at our You know maybe most down because of Another issue just similar to 911 yeah I Mean definitely that's that's very much
Fair uh with this Elizabeth Warren Specifically there's been a lot of bills Being pushed through Congress right now At least trying to get through the house Uh nothing's necessarily been completely Established other than letters that the OCC has kind of implemented for strategy Purposes over the last few years uh but You know what are your thoughts on the Bills that are pushing through our house Committees right now do you see anything Is there anything that's like grabbing Your attention in terms of this is good For us or are they trying to just come In and wreck Defi and crypto as a whole Well so I think a a positive note on the House side that was reflected in the Senate side was a bill called that you Know um your keys your your coin type Bill that avoids custody by any you know Federal agency and I think that's Important you know that's really Something that that matters a lot and so You know with where we are right now There is probably and has been a long Time an agenda to wck defy you know I Mean to clear it out so it's not like It's a surprise that there this is Another possibility I don't know that This is necessarily a defi moment as Much as it is it's asking about our Whole ecosystem and can we report the Way as if you were the head of JP Morgan And me like well Spargo can we just give
Them the information like there's a Still a huge learning curve that affects Us as well through all of this Definitely I think that's you know Definitely here at Discover crypto I Know you've been on a lot of shows Advocating for that regulatory clarity Just got back from a policy meeting with The santis last week uh we were Discussing the anti-bd Sals they had That they actually pushed through in Florida which got adopted across the the United States luckily uh they're Starting to approach Bitcoin mining Anti-g and all of that of course Conflates but for finsen specifically Can you just give a broad overview for The viewers what finsen is and why this Is important for the industry because I Feel like in the crypto world you know a Lot of us a lot of people a lot of Holders a lot of investors like to kind Of just try to separate themselves from The government from the banking system And you know unfortunately uh we're Going to come in with Regulators they're Going to try to regulate onramps and Off-ramps they're going to try to Control stable coins or defi as a whole And you know so with fincent how are They doing that who are they and why are They doing this approach sure so well I Think it's important to understand the History of finsen and that finsen
Started in about 1970 the original Concept was the concern people had about The connection of using cash uh for drug Money and before you knew it you know it Was a big deal I mean you could have a Treasury agent who could take away you Know a suitcase full of cash if they Found a trace of cocaine on it from you And that was sort of the way the Government was so spooked by what was Happening and that was their reaction at The time to that form of money you then You know fast forward from the moment When you know you had finsen in 1970 to All of a sudden we now have the internet And different ways that they look to you Know regulate that from a financial Crimes perspective where we are today With finsen is it's it's an enforcement Body that has a couple parts of its Mission relating to the BSA and Protection of not using bank money in The US you know for other operations so For instance there was during the Ukraine conflict finsen immediately sent Out a note to all the banks you know to Be careful about moneya laundering you Know when we get to where we are here The problem with the latest sort of you Know objective of this finsen measure is That it it could override or take on Some of the bills you know we were just Talking about that we may like or not Like in Congress because then they just
Sort of get forced through on the Administrative side and that's what we Really need to be cautious about at this Point is what direction are we going to See this approach if they actually say Hey we now have to start getting all This recording information considering Their money laundering concerns yeah you Know that's it's funny that you brought Up the uh cocaine uh part of the United States I think if you still trace it Today like 99% of your dollar bills have Uh whether it is cocaine or even I think Human feces on on the dollar bill They're like the nastiest dirtiest thing You could possibly ever hold so Seriously never let your kids put change In their mouth that is like one of the The worst things you can do for your Dental uh you know just for uh as you Grow up and just in general but you Can't do that with Bitcoin luckily I Don't know if you want to put a hard Drive into your mouth you know like as a Ledger it's not gonna be fun to chew on Yeah you know that would be terrible but You just mentioned actually to me before We hopped on here that you actually Joined as an adviser to a Bitcoin policy Institute uh so you brought up a really Good point between fincent and all of Our financial Regulators what it's the SEC it's the cftc it's finen it's the OCC how do we navigate and approach
These policy concerns as it's kind of Regulation by enforcement and each Policy driven group is trying to get More control than the other while Completely ignoring the retail audience And it's ultimately going to end up Hurting us so what are you doing from a Policy standpoint why did you join this Board uh and more importantly how do we Just stay ahead of being suppressed by These agencies yeah so the reason I Joined it with the Bitcoin policy Institute is is it had a really good Framework and thought about the issues That affect us from perspectives of Human Rights issues um you know the Bitcoin mining aspect of things and the Ability of doing that kind of work and Using the energy that you you know pay For and then you know from a national Security perspective and so what I like About that approach and I think it's Important to have voices like this in The ecosystem is if you and I aren't Talking about it no one's talking about What's happening with finsen with the Way they have taken the concept of Bitcoin and virtual currencies and Really sort of sunk their teeth into Them in a way where they're saying hey This is operating like money and we have To be able to do what we need to to Regulate this ecosystem but not really Let it not really give guidance and look
As an ex you know FDIC regulator during The financial crisis in 08 and 09 when Bitcoin was invented I'll tell you like Seeing the way Bank exams go the most Important part of a bank exam is the Safety and soundness meaning if I come Into your bank I'm going to want to know Hey can you operate the bank you have Enough money is everything good that's Number one number and you know you're Not making risky loans or whatever you Know number two you know what kind of Compliance you know operation are you Going to have for your bank and then That the other main part of the exam and Then BSA would be like a day it'd be a Very small part of the exam so you're Talking about a very small slice of What's overall all the risks that could Happen because in the world of banking At least there's always a risk to Something that you do definitely and you Know I kind of actually want to get your Thoughts I know everybody listening in Is going to want to know Regional banks Are struggling right now there is you Know with higher interest rate based Markets we're seeing essentially an Operation choke point 2o hold take place Where monopolies are just running rampid Through these markets they love it we Just came off a third quarter GDP of you Know a 4.9% growth and a lot of that was Obviously valued to The Magnificent
Seven and that valued to these Institutions so you know moving into What could be a very rough soft Landing So to speak is what the feds have been Trying to approach how do you see this Playing out as someone that has seen This behind the scenes has seen the Regulations has seen the barring The Lending all the protocols have been set Up you know what does the road ahead of Us look like for regional Banks yeah so I mean this is a a dangerous Trend that I think really has been going on for Years now where our banking system is Becoming larger and larger made up of JP Morgan Wells Fargo and everything else Continues to get sort of swallowed up by Them because what you have there is you Have an issue of really the marketing Brand and the Affinity name and the fact That like when during the financial Crisis you know Wells Fargo didn't Really want their bailout money but they Took it along with every other bank Because it had to be shown in solidarity For all the banks that that no one would Think oh we got to pull all of our money Out of one of the L and go to one of the Large Banks that's like safer or not Safer the problem now I think that's Scary is the regional Banks offer a Really important service and I think in Down the road import offer important Services like cryptocurrency custody and
Things like that and they're really not Able to compete because of these larger Banks and you're seeing the what's Really an irrational decision right of Moving your money from One bank to Another where you still have $250,000 of FDIC insurance but you're afraid that You might lose that so it's worth it for You to to make that change yeah there's There's there's definitely a lot of fear Uh coming from the sides of you have the Whole topic of dollarization now bricks Using alternative currencies but it's It's very interesting that you're coming From this from that perspective I just Watched a uh Dave Ramsey video of him Saying you know Bitcoin is going to go To zero it's just it's a nothing Burger It's you know money laundering Etc it's A scam it's a Ponzi you know this seems And a lot of Millennials J and of course You know a lot of Institutions now are Starting to realize that hey there is a Lot more Merit to this ecosystem since 19 the 1970s ever since we came off the Gold standard we've seen inflation run Rampid we've seen the wage versus Prosperity Gap grow and it's I think it Was just last week or two weeks ago we Saw one of the largest oil providers in The world purchase another acquisition For a $60 billion company that would Further centralize even that industry so Whether it's Pharmaceuticals it's the
Banking sector it's Insurance everything Is starting to become more and more Centralized and it's it's it's hurting The little guys it's hurting the middle Class it's hurting poverty uh so you Know you running a company now and you Left FDIC was this like early 2000s uh When did you leave that and what was the Acquisition that you made out of that Yeah so I left I left the FDIC and I Went to work for Obama's Making Home Affordable program in 2015 and since 2016 I was doing a lot of advisory work With my uh company at the different Banks and Regulators but I came across Bitcoin I got introduced to what was Happening all the way back in 16 i' been Part of this policy sort of you know Ever since and it's great I like it Because it's the same perspective I had During sort of the financial crisis Looking at all the large Banks being Able to sort of see everything and Understand it and try to piece it Together so do you see us approaching a Larger financial crash in the coming Years or decade that would be a Significant is something we saw in 2008 And also a side note on that if you Could please go back to the Administration because you know housing Is just getting incredibly incredibly Uncostly so someone that has just you Know have now enough credit it'd be
Really nice to see that affordable Housing come back into play but yeah do You see you know a really big downside To the financial markets coming the Following years yeah and that's a good That's the most important question I Think of all because we've had in 2008 We saw you know this crisis and we've Had these very low interest rates for Such a long period of time now we're Finally you know starting to pick it up Again I mean if you look at the Great Depression it took how long the Dow got To be back to its value was a really Long period of years so the question is Are we coming out of this and is we're Going to experience an Aftershock from What we had to do right have to but Survive our banking system by keeping These 0% ridiculously risk you know Risk-free you know money for the banks And that's going away that's why there's The pains now in the housing market That's why we're now shifting into this New environment that we're facing and You know supposedly if fed's you know Cooling off not going to you know raise Any more rates for a while but there's Still a lot of banks out there we just Don't know what we learned obviously Earlier this year is We Know One Bank Silicon Valley Bank that didn't manage This correctly but are all the banks Really on their balance sheets managed
In a way where they don't have all these Paper losses and it puts them at a Critical point yeah which you know Coming directly from the FDIC Silicon Valley Bank got build out of deposits Well over $250,000 and now we're seeing you know a Fast forward a year Janet Yellen trying To borrow nearly a trillion dollars to Pay for whether it's foreign conflicts In the Middle East or you know whatever Lending or whatever interest I guess you Say we own upon these debts it's going To be like $11.25 trillion this year Coming up you know so how did the FDIC Get around this and how are they able to Kick that can further down the road and How far can they kick this can down the Road because it feels like they've been Kicking it for years we've watched you Know I watched my parents do it they Watch their parents do it they watch Their parents do it this has been Happening since the Federal Reserve was Instated so you know when is that going To end and what do we look for uh to Kind of you know what are the signs or Indications that it is coming to an end So the one thing I really hope that we Have happen at some point is some real Examination into these larger at the FDIC the larger uh Banks and sort of get A good understanding of what they're you Know up against but yeah we just don't
Know if we're going to have a Reverberation of that right and that's What we need to understand that's why There are these pains in the housing Market and where we are from an interest Rate perspective and at some point or Another you know we talk about what the Federal reserve's mission is and how That's changed over the last like 40 50 Years used to be unemployment it's now You know unemployment and inflation and Now we're saying it's like unemployment Inflation and Equity um you know and at Some point we have to think of like how How far are we going to stretch the Mission of one organization that we need To be figuring out what the Right Moves Are with contr trying to control what What will be just a reverberation of What we saw in 2008 if we're not careful Yeah it it amazes me especially with Michael bar right now trying to really Progress towards a way where the Federal Reserve has control over private money Specifically control over stable coins It's like another body trying to come in Here and start to actually have that Regulatory oversight which you know Unfortunately we've seen letters pass Through the office of com control of Currency I think all the way back to 2014 that was already you know as we Were all these talks of anti- cbdc bills We can't have this happen they were
Embedding these laws that would allow Them to pursue regulations at least or Take it to court and we're now starting To see that ramp up more and more and it Just seems like there's it's almost it's Almost like the NFL there's 30 different Teams right now trying to approach the Regulation and it's like just pulling us In one way or another at the same time We're dealing with this you know Collapse potentially of a a financial Sector uh you know in the United States And that that even go for what's Happening in China with their real Estate sector as the second largest GDP So you're in value technology now Correct is uh is this going to be your Company as CEO yeah value technology Foundation it's a a 501 C3 nonprofit Think of as kind of like the Rand Corporation or you know that sort of but Specifically for this space you know Evaluating digital assets the Technologies in a way and we already do Some work for a couple of government Agencies and supporting them to Understand what all this is and how it Works that's awesome that when did you Guys find that when was to found it Sorry yeah I founded it in 200 19 right After I had left I was working at Consensus for Joe Luben at ethereum and Then I left him after a year and then I Ended up you know creating my own I do
My own Consulting work for folks too but Primarily this you know value technology Foundation I want to build out and sort Of examine all the different and and Provide it in a broker you know there's No bias here to what I'm showing to you When I go to the different government Agencies definitely oh definitely you Know working for Joseph Luben that's That's huge were you there part of the Uh JP Morgan acquisition I think we're Looking at 2018 2019 might have been 2020 yeah it was before that so I was There from 17 to 18 so I was there for Sort of as we saw the Ico boom and we're Trying to figure out utility tokens and Everything else and and and Understanding that I was is sort of First policy Ambassador for E the Ethereum you know networks and both in DC and across the US um and then yeah Did that for about a year and then just Wanted to focus in sort of this Direction because I think it's important To have an opportunity to explain to our Regulators and and administrators like How this all works because the less Guess work there is in their minds the Less chance they'll like make bad policy You know so we can get them comfortable With the technology just get to play Around with it just like if they're Someone's not familiar with an iPhone is That same thing then they'll have that
Comfort and understand better you know What they should be doing from a policy Perspective as well definitely Especially as we approach the hopefully One of the greatest Seasons that we'll See but we got Bitcoin spot ETFs we got Ethereum now rumors of an ethereum spot ETF with the Delaware trust fund coming From Black Rock what are your thoughts And outlook on these ETFs do you expect These to be actually approved at their Proper timing in January or March or is There a potential that we could see them Actually just not approve these at all And do what every other regulatory body Has been doing and just force these Companies to court yeah well it's funny Because the you know they've already Been to court with the grayscale ETF Right I I think that there's going to Have to be a little bit of um honesty And Reckoning you know when it comes to You know figuring out uh all of this Until we can have the right kind of Conversations with people and it it's in A way that's not you know threatening And it can be you know from a good place Of learning and I think that's really Where this technology at this point Point really needs a break in Washington DC so I've been through a lot of the Sort of the policy conversations and Just allow us to breathe allow us to Start doing things playing with things
Breaking things because what I always Say is if we're not if we're going to do That we should be doing that here not You know uh in other countries it just Doesn't make sense you know we should Even if you decide all this is really Like a waste of time fine but invest the Time to really understand what it is Yeah it's it's definitely a great Point As as we approach these election Cycles Coming up just a year from now now There's a lot of concern like fire Gary Gendler get rid of so and so replace Them with people like Hester Pierce are You worried at all that this next Election cycle depending on the Presidency that it is going to push this Technology out no matter what we do or Is there something as retailers or just People and advocates in the web 3 Industry that we can be doing today to Make sure that it isn't pushed out to Other countries like China yeah I think Talking across party lines both Democrats and Republicans sharing you Know what's important to you why you Think this technology needs to be here Very often people don't realize with This type of advocacy that if you don't Not sharing or talking about it and That's the most important part about the ETF right because if you can argue with The SEC and explain to them that this ETF is you know for competition purposes
You know you could have the breaking Point the heartbreaking point I think For them is the idea that there's the Bitcoin ETF that uses a lot of energy And Biden's whole Administration has Been very very climate focused right so Maybe gendler's been afraid to just say Yes to an ETF because he doesn't want The wrath of of Biden but remember in Terms of election Biden's running for Election re-election right in 2024 and Gendler's criticism outside of the Crypto world has been sometimes he's not Too business friendly like kind of Upsets all of Wall Street so gendler's Going to have to make some kind of Decisions as a regulator what kind of Future is he going to have going into 24 Biden election if he's like so anti- bus And it just doesn't match up with what Biden's trying to do uh then you might See some change um and I think that's Really going to be critical we've Reached a point now where we just have Entirely too much um decision-making by One person as a regulator for entire Ecosystem whenever you have that that's That's a problem yeah it's like musical Chairs you know whoever's going to fall First you know who's GNA take over we we Have no idea what this Outlook looks Like which is like leads right into the Next question of what do you think Crypto regulation looks like in the next
Two to three years especially as we Potentially enter this new significant Bll run with the amount of capital Billions I mean we're talking billions Of capital capital inflow that can fled Into this industry by institutions with The announcement and approval of a spot ETF yeah I I think that um the next two Or three years are going to be focused a Lot on um the evolution of I think we'll Finally have ETFs and we'll be a we'll See how the market interacts with them Questions about is the Bitcoin price you Know manipulated or not manipulated Along those lines kind of be satisfied For everybody I think privacy is going To be a big deal over the next couple of Years we're going to kind of have a gdpr Moment with the world of digital assets At some point uh as to how much Information the government actually Needs to know about us or should know About our finances so I think you're Going to see that really um shape and I Think you'll also see an interesting Sort of back and forth that we've seen For some time now between sort of the Federal Reserve and what they're saying Is going to be as you say this soft Landing and sort of people in our Community they're like well maybe we Could do it some way better and sort of What that monetary policy debate is Going to look like a couple years from
Now I mean will they at some point Acknowledge maybe we need a backup plan For the way we're doing our money today Yeah definitely it's approaching we're In a world right now where you have Multiple alternative currencies starting To prop up I mean you had the ACU in the 1970s when we first you know came off That gold standard almost immediately so It's not like India Pakistan or Iran Have been you know just sitting on the Sidelines for years ever since we had That Cuda back in the 1950s it's like we Knew this is how it would approach the United States took this control by force After the world war or post war and That's you know that's what led us to The oil embargos that's what led us to The valuation the the denominated Dollars so we're starting to see this Retraction we're starting to see the the Ties starting to break you had El Salvador completely being bashed by the World Bank for adopting Bitcoin as a Legal tender yet had Michael sailor Getting thudded by I think every single News outlet that exists out there and is Now well over a billion dollars in Profit do you expect Bitcoin to kind of Emerge as this asset class because of The decentralization and the Uncontrollable focus a government can Have on the industry start emerging more In second world and third world
Countries or do you look at as this Something as black rock or these Institutions are going to just come in And try to control instantly yeah I mean I think that's where we are going to see This Bitcoin standard and I think we've Already started to see that in certain Countries that are having a currency Crisis right what's the one thing you Always hear about the minute that There's a crisis is you know is Bitcoin A way out or how can I opt out of Whatever you know system is happening Here look I think if anything we have to Realize as a society the amount of trust That we're giving to just a few select People sort of decide what the next Outcomes are but what I think that at The end of the day is that Bitcoin is Very special and I was at this this one Conference where someone was sort of Saying well how do you really know what It is or how to buy it or all these Questions and but you know you can Always have questions about all those Things like why should you buy gold or Whatever but if you've you've been Discerning enough and you think that That's the right type of digital asset Then that's you know the approach that You should take so yeah no I would have To definitely agree on that so with the Adoption and the Emer merging of Bitcoin As potentially a reserved status what
Should users and these countries and Anybody just retailers in general be Doing with that Bitcoin should it be Focusing on self- custody or do you see Us as someone that worked at the FDIC Being able to trust banks with these Assets or being able to trust Black Rock Vanguard State streets fidelities with Our retirements and being able to store Our Bitcoin for us what is the Outlook There and what should we probably be Looking to do I mean that's such a great Point because the idea is what what do We expect from our banks today right What do we expect them to do and what do We expect them to help us with is it a Good idea to put money in your mattress Is it a good idea to just put it into a Bond that doesn't earn any money I mean There's but at the end of the day though When you're talking about like this new Type of asset understand that the Potential that it has and and sort of The game-changing technologies that it Can bring into the world you know you're Always going to experience problems when You're faced with whether you know You're going to get approval for or Something or not so definitely yeah I Would have to say uh get that crypto off Exchanges we've seen it with voyager Celsius FTX you know all of the Collapses which are primarily due to Just over lending and doing what our
Fractional banking system does which is You give them money and they actually Don't store it for you they just go Spend it and put into this money-making Mechanism that just doesn't land it's Kind of again back to the musical chairs You can keep going around till there's No more chairs to sit on right so you Know got to get that Bitcoin off these Exchanges here yeah so Jason as the Chairman and founder of value technology How are you guys using DLT to spread it Not only to other societies but just Enhance society as a whole what is your Vision with the LT for the future well I Think right now what's important is some Of the aspects that I've seen through Value technology other countries and Other Industries look at and that is Looking at blockchain as a way maybe for Supply chain tracking for let's say you Know dual use weapons of mass Destruction right and how can you avoid China from increasing you know its Nuclear proliferation of weapons so I Think that that's an important you know Aspect of of understanding you know Where we're coming from here and I would Say too that ultimately you know going Forward what we look at for the next 3 To five years in this space it's going To be really important to keep educating Policy makers and keep educating Regulators on exactly how this works
Recognizing that there are real people In the space who are doing things with This technology that's that's critical The education can never be um under Underestimated definitely and I've Noticed you guys you mentioned supply Chain which I think is one of probably The biggest use cases with Logistics on A global scale especially as we approach D globalization in general we need more Efficiency we need to integrate that Blockchain that AI to be able to track Just for traceability and transparency Reasons but I've noticed you guys are Actually partnered and closely working With hadera hashgraph R3 Corda uh IBM of Course some of these Heavy Hitters and I Think theoy as well I saw on your guys' Web page you guys obviously are not Bitcoin maximalists which I want to give A round of applause for that as well Which is amazing uh you know as you guys Approach as DLT what are the biggest Utilities you guys see in the crypto Industry in blockchain as a whole are You guys focusing specifically on Companies like hadera or is it anyone Just in this broad aspect where it's Anything in supply chain Logistics uh That is just providing that use case It's anything in um Supply chains Logistics but specifically we started Out by talking to some folks in Congress Particularly Congressman Darren SoDo who
Helped us uh write the forward to a Paper where we combined with Amazon um IBM de and other uh folks in the crypto Ecosystem too like consensus and so on To write this white paper that would Help explain the potentials for Blockchain technology could do from you Know supply chain perspective um you Know a variety of other different Reasons and then the biggest part of What we sort of worked on and prescribed For Congress to think about is if you Could have some sort of a uh research And development center for all of this Industry for everyone to understand Exactly how it works and take out some Of that friction you know that would be A critical thing to do as well I think You know one thing that's underestimated Is the possibility of not having this Here right not having this here in the US so we need to you know take steps to Make sure that we position ourselves That we can have this technology and Benefit from it just the way we Automatically assume and really do enjoy The internet today yeah it sounds like You kind of have some insights on the Markets that are emerging outside of the United States do you see more you know Rising I'd say advancements in the Southeastern like Asian markets where Are you guys closely working with how You guys coordinating to understand that
Yes there is competition against the US Is this bullish for crypto is this Bullish for blockchain or is this Something that you're worried about That's going to cause a discrepancies uh And kind of Ripple effects into altcoins Utility aspects of these projects in the Future yeah so I mean I think that What's important is with the the Prospects for when you look at different Countries is we had the India G20 Presidency come in and say you you Shouldn't ban this technology but all The countes should be coordinating what They're doing together and right now we Don't quite have that you know it's Surprising when you think about the fact That you have uh you know UK Singapore Hong Kong is all these potential next Future places for the center of finance And we we don't have New York as part of That conversation yeah hopefully we'll Start transitioning progressing towards That uh you know we got we're getting Beat down right now by it seems like Hong Kong out of China they're really Starting to force which this could be I Do want to get your thoughts on this cuz This is also there's no way our Administration doesn't realize the Emergence of this industry in China Itself they have the second largest GDP Obviously bricks they're massively kind Of hounding down the US dollar as they
Bring on more members like Saudi Arabia Egypt Etc more than likely in January You know why are they pushing this out Is it you know by Design or is it just Because of an economic incentive that's Been established in the structure of our Government over our years yeah I think That China's been dealing with this Since like 2017 you know they've had Their own research and development Center they've thought a lot about the Technology obviously critical Differences is there of the totalitarian Regime and there's different uses you Know for that type of technology in that Setting but what's upsetting to me and If you think about it is even in Davos This last year is this company red dat Technology that was originally part of The Chinese government it was Acknowledged what that's what it was That introduce the possibility of sort Of a blockchain Services Network so they Adverti to get all these developers Around the world working you know for Blockchain and you know maybe they're in Singapore or wherever but then they go On to the Chinese blockchain Services Network because they're off low prices Low costs come work with us and don't Realize what kind of setting you know They're being you know brought into a Lot of this is you know understanding What the BSN is what their Forward
Thinking position is on digital assets We obviously see what they decided to do About Bitcoin um but I think there's Also a lot of aspects of what they're Trying to do with their cbdc which now At least in the US is you almost can't Say cbdc sometimes right part of is Legislation saying anti- cbdc you know So now we're sort of at a point where We're saying Society we can't Necessarily have a central bank digital Currency but what are the potential Alternatives then or what are we looking At is the future of money over the next Five to 10 years yeah which is quite Conveniently stable coins being able to Back themselves with US Dollars and People don't realize that that's farming That yield which allows them to print More money and it kind of turns into This second fractional banking system uh That allows these institutions now to Continue to print more money that's kind Of an Outlook I've been worried about as We've watched this emerging industry is You know great yeah maybe we are Disrupting the banking system and we're You know eliminating that middleman but We're still relying on these asset Managers coming to this industry to Spring that you know that amount of Capital we need to make this an asset And transition it really into commodity That's worth something such as gold so
It's no longer this volatile asset class And with that Outlook you got to realize Okay well what does that mean like who's Controlling what on-ramps regulations Who's lobbying how are they going to Approach us why would they even launch a Product how are they making money off That product and it's it's a very good Point that you're bringing to the table Here is like okay well what's the Alternative and in that case I do think It's going to be unfortunately uh the Rise of Regulation around stable coins And I I actually want to get your Thoughts on I don't know if you paid Attention to the CME today there was a Huge announcement uh with open interest We have in the United States now through The Chicago mertile Exchange that they Have passed binance now in the amount of Open interest which could very Potentially mean we're setting ourselves Up for more Market manipulation in the Future and again coming from the FDIC we Saw this in 2004 with the precious Metals markets through the 1990s are you Worried or expecting or is it kind of Just something everybody is just cool With nowadays where we're like oh yeah The the government takes our data oh Yeah meta sells it off to the Chinese oh Yeah you know we're everything watches Us now we're going to be scanning our Eyeballs for our information are you
Worried that we are approaching a market That's going to be massively manipulated In the coming months well I think the Question is like who has the ability to Manipulate the markets right and Question is you know like where we have Markets now I mean it's quote unquote Manipul ated by the fed and other Regulators are trying to get it to a Certain point um but the question I Think is can we see this ecosystem exist In a way where we don't face those Headwinds and I think that um the more That we get into you know the these the Finer granular aspects of the regulation Then you know that's when we'll really Be able to see I think this ecosystem Take off because we're we're still Trying to find that ground zero moment To sort of just show the use case Explain to the regulators and policy Makers here where we are you know what Was crazy to me is that they just Announced uh at the OCC this last week At DC fintech week that for AI that The Regulators could use AI they could use Chat gbt according to policy because They need to use it to understand how it Might be affecting the market you know And I mean it was without hesitation That his Regulators could use AI but Regulators have never been allowed to Use crypto or blockchain right they Can't even I mean the second it was AI
It's like oh that's a worthy technology Let's let people you know play with it And our aen but crypto is not something They let the kids play with if you and I Were Regulators at a shop we would learn It better if we could actually play with It a little bit and so you know I say That to say of course there's a I'm sure A lot of reasons why they're worried why Anyone would even own crypto from sort Of the government you know obsc Perspective but I think that um we risk Not understanding the technology for This exact issue losing it yeah I I Think we've definitely seen that you Know we have people that have never even Use this technology trying to regulate An emerging asset class that is Completely different than the 1933 Securities exact right like this is Something that there wasn't even Internet or computers around for when This digital currency was emerging and Now we're accessing Global markets and Liquidity and they'll La illiquid assets 247 instantaneously all over the like It's just something that does need that Change but we just got to be a very very Careful for how we approach it but I Think the biggest takeaway from all this Is we have some that worked formerly at The FDIC you're very bullish about Bitcoin you're very bullish about Blockchain technology as a whole what
Are you expecting from you know the Outlook for this next 2 to three years Are you expecting us to see you know a Lot of good price action coming to this Market just kind of bring some life back To the conversation I know we've been a Little bit more dull on the regulation Aspect of this and the control but does Sound like you're very excited for Bitcoin in general yeah I mean what I Learned in 08 and 09 as a regulator was The fact that how fragile our ecosystem Is and what I really thought about as a Regulator at the time is you know we Have to really defend what FDIC Deposit Insurance is because a minute people Stop believing that concept of FDIC Insurance there isn't enough money to be Printed to go around to pay everybody Right in the overall system that's one Of the consequences of your you know Fractionalized banking you know setups But at the end of the day I think that Understanding how this this asset is you Know going to change the world going to Change the world of banking how people Do things like with distributed Ledger Technology I'm very hopeful because I See this as a trust engine right and the A lot of regulars are kind of given up On that notion but I feel like we didn't Have a trust engine in 2008 2009 except For showing a symbol that says FDIC Insurance and I think we can figure out
Maybe something like At a next Evolution Model for our next Generation how this Is going to work in a way that really You know helps explain you know what we Should and shouldn't be doing with our Money well Jason it's been an absolute Pleasure having you here today I'm super Excited to be able to take Discover Crypto on this new Journey where we Start talking and discussing web three Policies the future of regulations in These markets how macroeconomics can Impact whether it's a Commodities Market Or Bitcoin as a whole but where can the Audience find you I would love to have You come out here soon we have the Bitcoin policy Institute we have value Uh your value company where can they Find you and what's or what should they Be looking for next sure so you can just Follow me or DM me on uh X at regulatory Json that's really the easiest way or Visit me and and email us at Www.val technology.org I'm really proud Of sort of value technology in terms of The things we're trying to build on and Right now we're really specifically Looking for some people who might be Interested in doing a research project Around all the different you know Technologies that exist and comparing That and contrasting that some of the Regulatory headwinds you know to help Our policy makers make the right
Decisions for this industry going Forward well Jason hopefully I'll see You at Capitol Hill this year all right And until next time guys we'll see you On Discover Crypto
