In mid-week trade, the crypto majors are slightly lower but continuing range bound trading. All eyes are on crypto market structure following the second White House summit on stablecoin yield. While no compromise was reached, the power dynamics have definitely shifted back. Executives recognizing their leverage and also demanding a permanent seat at the negotiating table.
And it's also become evident that policymakers must engage beyond the usual crypto CEOs to reach a real consensus. Well, joining me to weigh in this morning is Cleve Mesidor, Executive Director of the Blockchain Foundation. Good morning, Cleve. Thank you so much for joining me again. Well, I do want to start out with that friction we're seeing between trade as well as the crypto native world.
So the recent summit did not exactly end with a compromise. But you were on the ground in Davos as well. So that conversation is something that you were hearing about. So from your vantage point, what was the real vibe in that room between the CEOs of the major financial institutions and the crypto execs.
Well, two summers later, there is no compromise. But there's conversation and that's a positive. Right. So but what was clear to me is that each time the banks and the banking trades came with a serious ask, but they were very clear. After the first white House summit, they put out a joint statement. And after this most recent second one, they actually came to the table with principles with specific outlines around yield.
And you know that as as you said in your intro, it's clear that they want a seat at the negotiating table for on crypto policy in the long term. But it's also clear, I think, from my vantage point, that the white House is listening, that the white House sees that they have specific rules and and the white House is going to negotiate, you know, a deal.
I think as a member of the crypto industry, I want to see us, you know, be more specific. We saw the digital chamber put out a set of principles a few days after that second white House summit. But I think in order for the white House efforts to be fruitful, we need the industry to actually come come up with some specific counters to what the banks are asking for.
And of course, you know, so far CEOs have really led this conversation. But we saw when the Senate Banking Committee markup fell apart that stablecoin firms, tokenization firms said, wait a minute. We we thought that was a decent deal. What's going on? So I think as as policymakers as well as the Trump administration officials seek to negotiate terms.
They have to recognize that crypto is not a monolith. There are different various players within the industry that want to say, and now that we see that traditional banks, Wall Street have a seat at the table, we're going to see smaller crypto operators as well as entities like myself. Blockchain Foundation won a bigger role in framing policy.
Yeah. And you just mentioned the Senate Banking Committees digital assets market structure, bill markup. But why do you think it is so difficult for policymakers to get everyone on the same page here? Well, I think there's a lot of confusion. One, I, I, I love that the White House and the Trump administration supports crypto, but we have three branches of government and legislation falls under part of Congress.
And Congress can only move on a bipartisan basis. And when whenever there's Partizan gridlock, we see shutdowns. And right now there's a partial shutdown going in Washington with, you know, the Department of Homeland Defense. So we don't want great gridlock. We have to let Congress do its work. We have to make sure it's bipartisan, you know, and there are lots of headwinds we're going into Midterms. The first midterms are next month. And there's nothing bipartisan about midterms, but we have to bring both parties to the table. I have to say that I believe both Democrats and Republicans want to go into midterms as it evolves. The spring and summer, with a win and market structure, can be that win.
And the Senate Banking Committee is where we need to see action. But we need to have both both both parties, you know, at negotiating table speaking. I will say I am concerned about. You know, yesterday we saw the CFTC assert, assert its authority over
predictive markets and push back on states. And I worry that, you know, the timing of such efforts can make bipartisan that much harder. But I think at this juncture, with such a short runway because of midterms, because when the we're about to be in the thick of midterms going into the general election, we need to focus on bipartisanship.
That is the only way we ensure that market structure legislation passes this year. And as a Democrat myself, I want that win on a bipartisan basis. But I want that win for the crypto industry. I want that win for the future of digital finance. We need it now. We can no longer delay market structural legislation.
That's just crazy. Yeah. And Cleve, as you mentioned, there are a lot of moving parts and a lot of areas to keep our eyes on, especially given the fact that it is a midterm election year. But you mentioned a specific amendment proposed by the Blockchain Foundation, and it does involve the OCC, the FDIC, as well as the fed.
So break down what the goal is here. And for viewers who may not be familiar. Tell us about your proposal. Yeah. One of the biggest sticking points for crypto policy continues to be with risk. Risk. So how do we mitigate mitigate risk. One of the biggest concerns has been the crypto ATMs. And whether they're predatory, whether they're hurting local communities.
So for Blockchain Foundation, our amendment calls for federal study of Cdfi and MDIs. It's a small subset of the banking industry. They service financial deserts. They're in rural communities, urban and communities, city office and MDIs, these small financial institutions. They do provide small business loans and mortgages, and they serve as consumers.
But let's be honest, they operate in the 20th century, not even in the 21st century, but they have an important role to play to ensure that all consumers have access but safe access. So our proposal calls for a federal study of the regulators that have oversight. And that's the fed, that's the OCC, and that's the FDIC.
Right now, these institutions don't have authority for digital assets. And we're not saying they should have authority. We're saying that their regulators need to provide clarity, need to look at how to and if they should have authority. We saw the NCUA do this. It took them about 3 to 4 years to provide guidance to credit unions.
And federally regulated, regulated credit unions have oversight over one regulator and that's the NCUA. And it took NCUA about four years to provide two sets of guidance. Imagine. Imagine how long it will take for three regulators to come together and provide guidance. But we can't leave these financial deserts outside out of the future of digital finance.
We need to really look at what is the future of Cdfi and MDIs. We've seen, you know, President Trump say he's concerned about the Cdfi fund and he's taking steps to actually potentially eliminate the Cdfi fund, but it doesn't. This is about the future. This is about how we can innovate these institutions.
And let's be honest. A federal study is just that, a study. And that clarity is going to take years, maybe even a decade. But now is the time to start the process. And within the market structure bill, within the Senate banking bill, we can include an amendment to fund that study to begin that process, to ensure that the institutions that that service rural America and urban America are not left out of the future of finance.
Yeah. And very quickly, Cleve, before I let you go. Of course, data is critical when we're talking about shaping digital assets into community banking safely. So what do you think needs to happen as we head into beyond 2026 and also within the next decade?
Yeah. So the the the wonderful thing about art and and we Blockchain Foundation did a study in 2024 which caught the attention of Kellogg Foundation. Kellogg Foundation has a lot of Cdfi and MDIs board grantees. So they actually funded a study. And we were in the field last year with a study. Next month, the report and the data will come out in terms of what our CDF is and MDIs thinking they don't have authority for digital assets, but they're getting demand from their patrons.
But I will preview that. One of the findings is that we need policymakers to listen more to the rank and file CFOs. They they blanket the country. They they have different roles. They they they have different value add. And right now, we need policymakers to be thinking about what are the data sets. We need to make sure that the entities that continue to drive finance the future of finance, digital finance are consumers, and we don't have enough data in terms of how they are looking at digital assets, as well as the innovations that are happening across fintechs.
And finally, I do want to add that consumers are not just driving and fueling, you know, the, you know, crypto and digital finance. They're also crypto voters. They're also core to this midterm election. And, you know, we need to have much more analysis. We need more people at the table, but we also need to be armed with more data.
During the previous segment, I saw, you mentioned that, you know, there's a lot of runway for traditional financial instruments that we don't have to help predict the price of, you know, digital assets. So that runway we needed for consumer data as well, and we needed to better understand how this industry is moving forward.
So we're excited about the results for our study with Kellogg Foundation, along with Prosperity Now and Intersect Public Affairs that will be coming out next month.
Well, Cleve, we will have to leave it there for today. But always great talking to you. Thank you so much for sharing all of your insights as well as your perspective. Thank you.
