, live from Money20/20 USA in Las Vegas. The conversation centers around the recently passed Genius Act, which has received bipartisan support and aims to define stablecoin payments, establish standards for issuers, and enforce strong reserve backing to protect consumers while enhancing the U.S. currency's role in global finance.){kind=link}
“This town has a decades long settlement token they have used. This whole beautiful convention center… exists because the widespread use of this settlement token.” – 00:02:48
Remy Blaire engages in a compelling discussion with Kyle Hauptman, the Chairman of the National Credit Union Administration (NCUA), live from Money20/20 USA in Las Vegas. The conversation centers around the recently passed Genius Act, which has received bipartisan support and aims to define stablecoin payments, establish standards for issuers, and enforce strong reserve backing to protect consumers while enhancing the U.S. currency’s role in global finance.
Remy and Kyle delve into the implications of the Genius Act as regulators begin to implement the law. They discuss the various tasks that lie ahead, including drafting capital and risk rules for issuers, setting conditions for non-financial firms that issue stablecoins, and updating anti-money laundering (AML) regulations. Kyle emphasizes the importance of these regulations in ensuring the stability and reliability of stablecoins in the financial ecosystem.
The conversation shifts to the concept of the “great wealth transfer,” where Kyle highlights how credit unions can engage with the younger generation. He notes that many view credit unions as traditional institutions, often associated with older generations. Kyle shares his personal experience of inheriting money through a credit union and stresses the need for these institutions to adapt their services to attract younger customers who may inherit wealth from their parents. He points out that credit unions must work to convince these young individuals to keep their money within their institutions by offering the services they need.
As the discussion progresses, Kyle addresses the regulatory landscape surrounding digital assets and the future of stablecoins. He explains that Congress has tasked him and four other agencies with the rulemaking for the Genius Act, with a deadline of 262 days. Kyle draws an analogy between stablecoins and casino chips, explaining that just as casino chips serve as a reliable form of settlement in Las Vegas, stablecoins must maintain a consistent value equivalent to fiat currency to function effectively.
Kyle also discusses the necessary guardrails for stablecoins, particularly in relation to KYC and AML regulations. He outlines the importance of issuers maintaining sufficient reserves to back their stablecoins, ensuring that for every dollar issued, there are adequate assets in place. Additionally, he raises concerns about liquidity, especially regarding the timing of cash withdrawals and the need for immediate settlement.