Mm.
As Congress takes its August recess, lawmakers prepping to return with a packed agenda that could reshape how Americans pay, bank, and move money.
Now key issues include crypto regulation, open banking, as well as new financial policies.
So federal agencies are also weighing in on crypto's legal status and consumer data access this fall could be pivotal for the digital transformation of finance.
Well joining me to weigh in this morning.
A Redd, VP and global head of policy and government affairs at TRM Labs.
Ari, good morning and thank you so much for joining us.
Well, the coming months will be critical in defining the future of payments as well as banking and digital assets here in the US.
So how do you see the Clarity Act impacting the crypto industry as well as financial institutions and what are you looking forward to as we head into the final months of 2025?
Well, first, thank you so much for having me.
I am very jealous of Kevin's Labubo and can't believe I wasn't able to come on this morning with my own.
So I'll have to, I'll have to remedy that for next time.
Um, but he did mention a lot of the importance that that are going on in the crypto space, and I think a lot of what's happening on Capitol Hill is driving the conversation.
So now we have genius passed stablecoin legislation, and now we're moving towards something around market structure and you have the Clarity Act, as you've mentioned, which is the House bill, but we've already seen a Senate banking discussion draft that really builds on that and, and there are some significant differences.
So what See over the next few months likely is a marriage of those two bills which will go through the process called conferencing where we'll ultimately see a market structure bill and hoping that that will happen in the next few months, although there is there is a ways to go.
One thing I want to mention sort of at the start is both genius, clarity, and the Senate market structure bill talk a lot about anti-money laundering and particularly around public-private partnership.
And yesterday TRM announced the launch of the Beacon network, which is the first ever public-private partnership and interdiction network.
In other words, how does every exchange in the ecosystem come together to stop bad actors from off ramping cryptocurrency?
So we're Talking about Coinbase and Binance and Kracken and OX and Blockchain.com and then FinTechs like Robin Hood and PayPal and so many others coming together, which I think is really a direct response to we're seeing maturity of legislation and also the ecosystem as well.
Yeah, and Ari, I do want to hear about some of the biggest challenges that regulators face when defining digital assets as well as securities and commodities.
So tell us your expectations when it comes to how open banking will evolve and what are some of the barriers that are still slowing its adoption here stateside?
It's, it's, I do think regulatory certainty is still an absolutely important piece to the puzzle.
We've seen Kevin mentioned in the last segment.
I loved it.
He said, you know, Wall Street is moving on chain, and we're certainly seeing that.
But we're talking about the most conservative institutions in the world, and what they need is clarity from legislation on Capitol Hill.
And they also need it from their regulators, and I think we see that with Genius and Treasury just put out a request for information on the Genius Act from an anti-money laundering perspective, which we'll be responding to Beacon is a very big part of that.
But look, businesses want to build with certainty and clarity, and I think that Um, that's what they are going to get eventually in the United States, but it is still relatively early, particularly around market structure.
And to your point, part of what we're going to see there are key definitions.
What is the security?
What is a commodity?
Is this the SEC?
Is this the CFTC?
And once we have that certainty, I think that's when we really move towards mass adoption.
Yeah, and Ari, earlier you mentioned the Beacon Network and the founding members, as you mentioned, include some familiar names and payments as well as digital assets, not to mention a research as well as investigators.
So I also understand TRM labs and some subjoined forces to fight crypto fraud.
So what's the reality right now in terms of scams and fraud when it comes to crypto?
Yeah, look, I really beacon started because we've seen an overwhelming amount of fraud and scams within the crypto ecosystem, almost 50 billion in the last.
2 to 3 years we've seen a record setting year for hacks in crypto, around 2.3 billion stolen already this year.
We still have a few months here to go.
So we said how do we bring this industry together and we mean the entire industry, right?
You mentioned Coinbase and Binance and Kracken and OX, but also FinTech, Robin Hood and Stripe and.
And and PayPal plus a key network of investigators, right?
Twitter sleuths like Zac XPT and others are part of this.
So, so what we're really seeing is the ecosystem come together to say, hey, look, we need to stop bad actors.
It's always important to mention, look, illicit activity is about 1% of the overall crypto ecosystem.
So we're About 99% lawful users, but that 1% could mean the loss of life savings or North Korea weapons proliferation, and that's why Beacon is so important.
And we've just, I personally have just been so energized to see the entire industry come together really over the last few months and the announcement yesterday was, was, was really significant to see the excitement around it.
Yeah, and finally, Ari, before I let you go, when it comes to the world of crypto, of course people are considering their portfolio allocation to crypto, but at the same time it's so important to remind ourselves of some of the risks and whether we're talking about regular financial services or say cold storage, what do we need to keep our eyes on and hindsight is always 2020, isn't it, Ari?
It really is, and the ecosystem is maturing.
I think Beacon is a great example of that.
I think that we're talking about the vast majority of activity, both lawful and illicit, is captured within the members of Beacon.
So I think what we're really seeing is a real maturation in the industry.
You and I have talked about wrench attacks like violent crimes associated with crypto, where I think cold storage really becomes a really important piece of the puzzle, where being vigilant is important.
But I would say education is absolutely key.
If you're going to invest, as Kevin sort of went through, you know, Bitcoin and Ethereum, that's one thing, but are we talking about meme coins and other types of things?
It's always being vigilant.
It's being a smart investor and, um, obviously so much of the activity is in Ethereum today.
Um, Solana, but Bitcoin is, is digital gold, as Kevin said.
So I think it's, it's understanding what you're investing in and being smart about it, but also being understanding the risks to scams and fraud and other activity.
And that's what we're focused on at TRM and with the Beacon network.
OK, Ari, we will have to leave it there, but as always, great talking to you.
Thank you so much for joining us.
Thank you so much, Rene.
