Our next guest comes to us from Washington DC.
This is Patrick Witt, executive director of the President's Council of Advisor for Digital Assets at the Trump White House.
It is great to have you here.
Welcome to the New York Stock Exchange and welcome to the show, Patrick.
Good to have you.
Thank you for having me.
It's great to be here.
First and foremost, give me your sense the latest state of play on the market structure legislation continues to work its way to the other end of Pennsylvania Avenue.
What's the latest?
So the latest is it's passed out of the Senate Ag Committee, the portion dealing with CFTC.
We are actively working to get it back on the books for a markup in the Senate Banking Committee.
The main issue that's been the sticking point is the stablecoin rewards and yield coming back up in the context of the digital asset service providers, the intermediaries, potentially being able to offer rewards and yield on stablecoins to their customers.
We at the White House have convened a number of meetings over the past month to try and solve this issue and broker a compromise here.
Crypto, to their credit, has made considerable strides in coming to.
A compromise position.
It's time for the banks to reciprocate and ultimately strike a deal on this because this is the issue that we believe is the domino that will fall and ultimately everything will fall into place after that.
So kind of the Cliff Notes version or the too long didn't read version of that particular dispute over stable coin yield.
The crypto firms wanted to offer rewards.
The banks say no, no, you could in doing so essentially pull away from our core deposits.
In what ways have you seen the crypto companies somewhat maybe adjust their earlier Thinking as those negotiations have continued, so I think they've conceded on a number of points on restricting certain kinds of idle interest or yield on just balances sitting there, which obviously feels a little bit more like a deposit, but preserving a list of permissible activities for activity-based rewards and yields.
So things that look a little bit more like credit card rewards, you know, the stable coin in motion or the user undertaking some kind of activity and getting rewarded for that.
The United States obviously cares a lot about the proliferation of US.
Dollar back stablecoins has a material impact on our borrowing costs, has a major impact on the ability of the dollar to maintain its role in global trade and global foreign exchange as the reserve currency of the world.
So ultimately we're going to deliver a compromise on this issue, and we believe that it's going to be a win-win. stable coins will proliferate.
That's in the interest of the United States, and we also believe that this market structure bill is absolutely critical to bringing digital.
Assets into the regulatory fold normalizing them as an asset class and we think there are probably trillions of dollars of institutional capital waiting on the sidelines for this regulatory clarity to come into effect.
Patrick, you know, as well as I do, it's one thing to get something through the House of Representatives.
The US Senate likes to call itself the cooling saucer when they say cooler heads prevail.
Are there specific provisions in the market structure legislation the White House is either actively advocating for or actively advocating against?
We've been, you know, in addition to staple corn rewards and yield and in that we're really just trying to broker a compromise here on this issue.
But the other areas that we want to see strong language on is protecting developers, software developers.
We want to bring this activity back home.
Ultimately during the Biden administration, they didn't succeed in killing crypto.
They just succeeded in driving it offshore.
The United States needs to lead on this issue.
The president wants the US to be the crypto capital of the world, and that requires bringing the developers back.
Here bringing the capital back here and growing crypto businesses here in America.
So that is critical for us that we protect developers in here and that we also allow for decentralized finance, defy an opportunity to innovate and create new business models that we think is going to unlock the true promise of crypto.
Bitcoin, the way Bitcoin is priced right now, it is down 45% as an asset off of its October highs.
Does the asset pricing part of the conversation concern you, or That's sort of outside the main purview of trying to get this particular legislation across the finish line.
I think there would be a positive effect from this bill passing.
I think it was JPMorgan just the other day said that they see some, you know, tailwinds by mid this year, I believe, so they recognize that ultimately there's going to be positive movement into this space from institutional capital once there is that regulatory clarity, you know, ultimately the price action for anybody that's been in crypto for a while.
Doesn't concern them.
They kind of yawn for the newcomers.
Maybe it's a little bit concerning, but we're still long term very bullish on crypto.
We believe that ultimately getting this bill passed is going to lead to more people getting in space and allow the banks to also start to engage in some of this activity.
You know, there's this unfortunate divide of crypto versus tradfi, crypto versus the banks.
We believe the future is ultimately convergence.
Crypto is going to start engaging in banking-like activities.
Banks are going to engage in crypto.
It's all going to become one thing.
This is the future of finance.
It's part of updating the financial infrastructure of the future, and we're managing through this interim period where it's, it's antagonistic or adverse, but ultimately they're going to update their business models and take from one another the parts of it that make the most sense.
So ultimately consumers are going to win when they have a choice, you know, ultimately, but compromise does not have to be a dirty word.
We say it all the time in Washington between parties, Democrats versus Republicans, but maybe it's true for Trad F and the New look for the crypto space as well.
It's cliche to say, but there really is a win-win here.
And you know, as we've talked about with a number of banks, they're very bullish on the tax, you know, there are some issues that they want to see worked out.
Same is true of crypto participants, but there's a lot of people on traditional finance that also want to see clarity ultimately get.
Absolutely, Patrick Whipp, best of luck as negotiations continue down our nation's capital.
Come back to the big board anytime.
It's good to have you on the broadcast today.
Thank you very much.
Thanks for having me.
