Mm.
It's been over a month since the Genius Act became law.
The passage of the Act represents a milestone in US financial history.
The country's first federal law regulating payments stablecoins, and an example of bipartisan cooperation.
Well, the Act kicking off an 18 month period where federal authorities will create the rules to implement the law while the traditional finance.
The System still holds strawbacks.
Banks wires can't be sent over the weekend, and 80% of US companies still rely on paper checks, which costs an average of about $4 to process.
Now with institutions adopting stablecoins, the slower processes of trad could be revolutionized.
Well joining me to weigh in this morning is Dante Desparte, chief.
Strategy officer and head of global policy and operations at Circle.
Good morning, Dante.
Thank you so much for joining us.
Well, the Genius Act has been law for over one month, and the act does provide regulatory certainty and also consumer protections for stablecoins.
So Dante, tell me how you see it impacting the broader adoption of digital currencies.
Well, first of all, it's great to be back on with you, Remy.
Indeed, the Genius Act is a really strategic regulatory milestone in the United States.
I would go as far as arguing, as it's probably one of the most profound pieces of financial regulation we've ever had, and certainly the very first that addresses this pro-innovation, competitive landscape for the country.
It not only allows for state-based oversight of stablecoins, it creates a much needed federal regime that creates legal clarity across the country and, frankly, an export regulatory regime around the world.
And so it would stand to reason that you see quite a lot of institutional interests in stablecoins, and one of the big questions organizations are weighing is build, buy, or partner.
Um, there's a lot of uh prescriptions in the Genius Act as to why partnering would be the better choice, but it is a very exciting phase.
And even though we're in the rulemaking phase of the Genius Act, you could see a lot of transitions already occurring in the market.
Yeah, and I'm glad you mentioned that, Dante, because some might say the act hasn't had much of an impact just yet.
So what role do you think this will play in shaping the future of finance, not just state side, but also globally?
Well, I would go as far as saying it's a little bit like the cloud computing moment for stablecoins, right?
In the very early days of cloud computing and cloud infrastructure, IT teams and many companies around the world were perhaps reticent to give up their physical server farms, or it was the basis of job security for their IT teams, and you could see in some respects the same type of initial trepidation taking place with stablecoin adoption.
At the same time, virtually every organization on the planet, banks, nonbanks, commercial companies, developers, entrepreneurs, and many others are effectively lining up their own strategy and their own technological readiness for stablecoin adoption because it is just a much better.
Medium of exchange for always on internet scale finance.
I mean, the simplest way to put it is your and my financial needs don't take bank holidays.
And with the passage of the Genius Act, not only gone are the days of internet funny money or stable and name only coins like Tera Luna famously, you now have this assurance coming into place around the world and in the United States that all stablecoins in circulation that are complying with the Genius Act will in fact not only import the trust and safety of the US dollar.
But give us many more ways of transacting and storing value and having a medium of payments designed for the 21st century in a fast, open, and low cost way.
Yeah, and Dante, earlier you mentioned institutional adoption and with the Genius A paving the way for institutional adoption and also of course enhancing cross border payments, can you explain to us how you see blockchain based infrastructure actually reshaping financial services?
Well, I think one of the very first and most profound ways is blockchain-based financial services are solving one of the payments world's most insidious problems, which is the walled garden problem.
The shortest way to describe it is that inside the walled garden, and this could be inside the domains of an established payment network, you might enjoy fast, low cost payments.
The challenge, of course, is that once you start to send payments across borders or send payments across rival financial institutions, Then enter the world of death by 1000 cuts and hurry up and wait.
Even in the domestic context, oftentimes we resort to sending checks, for example, with the COVID-19 stimulus and the payroll protection program during the pandemic, we resorted to sending checks to millions of people across the country.
And so what the Genius Act does is, is that it uplevels the ability to denominate dollars as the currency of reference on the internet as payment stablecoins, and then blockchain-based open finance allows anyone anywhere with little more than a basic internet.
Connected device to have an always on compliant payment endpoint.
I cannot say enough about what that means for payment systems optionality, about US competitiveness and the role of the dollar in the 21st century.
And so the Genius Act is in many ways a cornerstone of dollar competitiveness in the 21st century.
Yeah, and we are indeed in the 21st century, it is 2025 and I know that inclusion is a term that gets thrown around a lot, but what impact could the act have on global financial inclusion and what do you think that actually looks like?
Well, I think one of the most profound aspects of the Genius Act and perhaps one of its more nuanced provisions is that it endows the Treasury Department and, and of course Secretary Besant with the ability to pursue regulatory reciprocity, not just for inward operations coming from overseas regulated states.
A coin issuers into the United States insofar as they come from a comparable regime.
It also enables this notion of exportability and passportability of these regimes to other countries so that a company like Circle, which complies with all of the existing rules for money transmission in the US and of course we're in line to comply with the Genius Act once it becomes the law of the land. that we would also enjoy a home court regulatory regime.
So as we expand overseas, uh, at, at long last, the, the, the seat that has been left vacant by the United States will be occupied.
Uh, with our federal officials and so many countries have not waited for the US to get their crypto rules on the books, but now that many countries can now look to the US and the Genius Act, particularly as a very strong framework, one thing we hope for is regulatory reciprocity and harmonization around the world, which will at the same time drive lots of inclusion outcomes and other outcomes that are important from a public policy vantage point.
Yeah, and finally, Dante, before I let you go, it's been a big year and a big summer for Circle, especially after the company's Blockbuster IPO this summer.
But take us through the new Arc blockchain and explain why this is so pivotal.
Well, for many around the world, Circle, of course, is a hallmark, uh issuer of regulated stablecoins around the world, not just the US dollar USDC, but also our euro stablecoin.
It's probably the largest in circulation at the moment as well.
But a lot of what also underpins Circle, of course, is the technology offering.
And so the ARC uh blockchain is a new initiative coming from Circle that is really designed to be a cutting edge blockchain that will support institutional adoption while at the same time, uh, preserving privacy, which is a cornerstone, of course, of a lot of transactions that institutions will rely on.
Um, in addition to the ARC initiative, you may have also seen that we launched recently the Circle Payments Network.
This is designed to give institutional counterparties around the world a coordination and orchestration technology in which stablecoin-based payments can be supported across borders and around the world in an always on but safe manner.
And then a whole host of other technologies coming from Circle are designed to ensure that blockchain finance is constantly upgradable, safe, and accessible to institutions and people all over the world.
OK, Dante, well, I'm sorry to interrupt you, but we are approaching the opening bell here at the New York Stock Exchange.
So as always, thank you so much for joining me and thank you for your insights.
Thank you, Remy.
