Biden and Crypto

Jeremy: Hello, I'm Jeremy Allaire and welcome to the Money Movement. A show where we explore the issues and ideas in this brave new world of digital currency and blockchains. It's been a momentous couple of weeks in the US political environment. We now see President-elect Biden and vice-president-elect Kamala Harris, beginning to chart a course for a new White House administration. We're seeing minor shifts so far in the house and the Senate, and most importantly, we expect to see major new appointments announced for critical roles in this new anticipated White House administration.

The implications for this, for crypto, are somewhat unknown. The last four years has seen an evolving political scene with respect to crypto regulation with respect to active interest from congressional committees. We've certainly seen significant increase in the education of policy makers on this issue and a lot of marginal changes, but not any sweeping policies or initiatives around crypto. What does the Biden administration portend for crypto broadly, for digital dollar stable coins, for innovation in the blockchain sector, for so many different dimensions?

This is a major question, and ultimately I believe blockchain infrastructure, the innovation of crypto assets and cryptocurrencies and stablecoins and the like represent one of the most important infrastructure opportunities for the United States in decades akin to the fundamental innovation of the first wave of the commercial internet. Will the Biden administration embrace it and see forward a path where the United States can be a champion and an innovator in this space, or will they seek to rein it in?

These are many of the questions that a lot of individuals and companies and others in the industry are asking. I'm very excited to dive in and explore these more today. I'm really excited to be joined by prior Money Movement guests. John Collins, who is the co-founder and a partner at FS Vector, a leading advisory firm in the FinTech, crypto, blockchain, and other otherwise a deep history as well on the hill. Kristin Smith, who is the executive director of the Blockchain Association, one of the most important industry groups and very, very close to what's going on in DC. Both John and Kristin very, very pleased to have you here this week.

John: Jeremy, thanks for having us.

Kristin: Happy to be here.

Jeremy: What does this mean? President-elect Biden assuming that we don't see a miraculous situation happen for President Trump, but assuming we're moving forward-

Kristin: Don't count him out.

[laughter]

Jeremy: That's what various spokespeople still say, but I think looking at President-elect Biden, he's forming a transition team. Yesterday the Democrat-led house financial services committee hearings with key financial regulators in the United States. Crypto was in the discussion in different ways, and we're getting maybe a small taste of how both incumbent Republicans and Democrats are asking questions around these topics.

I think some interesting indicators, but why don't we just start, Kristin? What are the big questions that you're asking that your constituents are asking about what this new administration might mean for crypto and blockchain?

Kristin: Yes, I think everyone is trying to game out how this might impact the development of crypto policy over the next four years and what it means for organizations operating in the crypto ecosystem. I think the one thing that we do know is that it was going to be different, but we don't quite know yet how different it's going to be and whether it's going to be better than the current situation or worse than the current situation because there's a phrase that was coined during the Reagan administration, that personnel is policy.

We've seen this at the regulatory agencies that matter for the crypto space right now that if you have a regulator who's sitting in the seat who doesn't care for this set of issues, you don't see anything happen. It's just stalled. In fact, maybe there are negative things that happen but when we have somebody in one of those seats, who's motivated and interested and they're excited about it, then we do see things happen.

The big thing to be watching over the next couple of weeks and months is who are the people who are going to fill some of these key positions that matter for the industry, because the policies that are going to be coming out of those agencies are really going to be a reflection of the priorities of the people in those seats.

Jeremy: Let's talk a little bit about that. We have a number of people whose names are being thrown around for a lot of different things. Gary Gensler, who has spent the last couple of years at MIT, a teaching fellow with the digital currency initiative there has published and spoken a lot on this topic. He appears to be advising President-elect Biden on who to appoint in these financial regulatory positions. John, what are you seeing and hearing, just given that backdrop?

John: Well, I think we missed one big point, which is we elected a Delawarian president. As a Delawarian, I feel very excited to have one of our own-

Jeremy: My first testimony to Congress was courtesy of you, Mr. Collins, and your very dear and wonderful Senator in Delaware many years ago. I think Delaware is also a state which has blockchain laws for blockchain-based corporations. Hopefully, that will translate somehow.

John: Yes, no, absolutely. I agree mostly with what Kristin said, and obviously, Gary Gensler makes a lot of sense as an appointment for all kinds of reasons outside of blockchain and crypto, but this is someone who's done some really serious thinking and been briefed and spoken with some very serious people in the cryptocurrency and blockchain industry and he is pretty positive. I think he has a lot of views on the securities and capital formation side of it, but he's probably coming in at a position higher and more informed than we've been before. For sure.

Jeremy: Gary was a guest at an all-hands at Circle years ago, and we vigorously debated in front of my company securities laws and various types of crypto assets. I think at the time we were advocating that we need new classification. We need to define digital assets from a policy perspective rather than interpret currency commodity and securities law. We need to actually come forward and define a policy for digital assets, and how the country is going to embrace that.

This gets to the bigger question. There's regulators and who's appointed and how constructive are they with guidance or other rulemaking as it were, but what about the policy side? Is there any chance that we're going to see a Congress that wants to take up this as a policy matter and look at blockchain technology and digital assets in the same way that the Congress in 1996 looked at the internet?

Kristin: I think there's a growing interest in Congress. I'm not sure we're yet to the point where we're going to see something go all the way through the process and become signed into law in the next Congress, Congress being a two-year period, but we have heard that the Democrats still control the house. We've heard from our conversations with committee staff over there, that this is an issue that will be on the chairwoman's agenda for the house financial services committee next year.

We don't know what form that's going to come in, but I think the fact that it would make her agenda is a positive step forward. In the Senate, I think we still have the Republicans in control over there. Which I think is actually a really good thing for crypto. We have been working through the blockchain association to try to get some positive crypto legislation introduced in the Senate over the past couple of years, and the Senate by its nature is-- they say it's the saucer that cools the hot cup of coffee the cup being the House and the saucer being the Senate.

It takes the Senate a little bit longer time to get interested in some of these issues. I think that this year ahead will actually see some positive legislation introduced in the Senate, which is important because it could tee up for an eventual negotiation between the House and the Senate, which I think would lead to actually really good policy, but maybe even more importantly, it sends signals to the regulatory agencies as to what Congress is thinking about. If there are policies that regulators already have the authority to do, it gives them the political cover to move forward with those policies.

I think we will definitely see legislative activity. I'm not yet confident that we'd be able to cram through something like the Telecom Act of 1996. It really laid the foundation for our modern communication system that we have today.

Jeremy: I guess just building on that, and it's hard not to look at the current situation in the country. Just an enormous public health crisis frankly, a still a very severe economic set of challenges, which presumably will get worse before they get better. That's the word from Jerome Powell and, an apparent president-elect who, who has an ambitious agenda to try and rebuild things.

He want to-- this vision of, "Let's invest in infrastructure. Let's--" some form of the green new deal. We're going to galvanize the public sector or the private sector. We're going to going to try and build our way out of the economic situation that many parts of the country are in. I guess the question there is, could our digital infrastructure, whether it be the infrastructure that we use to secure and have tamperproof voting for example, on blockchain infrastructure.

Could it is that we think about the infrastructure of the payment system, so that the way in which funds can be distributed, new, basic income models? Who knows what may emerge out of the current situation and whether that could be an impetus for bipartisan, hopefully, efforts to embrace a new infrastructure? Fundamentally, crypto and blockchain is a new infrastructure. It's essentially let laying that down.

I wonder, will the ambition to build our way out of some of the challenges that we have aligned with the potential for more sweeping policy, like the 1996 Telecommunications Act. John, I'd love to hear your thoughts.

John: No, I think you're right, Jeremy. When the Biden administration comes in in January, they're going to be focused on getting the economy from-- stopping bleeding. That's the first priority. They've got other priorities, climate, and finance and ESG and that sort of thing, but what COVID-- we talked about this, I think a bit last time. What COVID revealed among many other things is how poor payments work in this country and at least how much better they could work.

There's been a significant amount of interest from Congress on that piece. It dovetails with a huge focus of what this administration's going to focus on, which is financial inclusion and access, which is also a huge focus for chairwoman Waters and I-- stablecoins, CBDCs, blockchain--

That plays a huge role in those conversations. Do I think we're going to have some significant legislation or action as it relates to capital form or securities laws in this administration? Probably not, but do I think there's going to be higher-level attention and perhaps some action that supports the crypto and blockchain industry when it comes to payments modernization? Absolutely. Absolutely.

Kristin: Building on what John says, for your average policymaker, a ranking [unintelligible 00:14:21] member of Congress or maybe a regulator who's not one of the key agencies for this space, payments is really the only application of blockchain networks that they understand. We've tried the discussion about Web 3.0 and some of the other applications that I think are really going to change the way that we do so many things online, and those are really, really hard to get into their minds.

One, because they don't understand-- We've gone in to talk about Orchid, which is a cool project and it's like, "Oh, it's a decentralized VPN." First, they don't know what decentralization is and they don't even know what a VPN is. It becomes a really, really big conversation, but when it's like, "Hey, it's actually a dollar that moves around faster and has all these programmable features." Then they're like, "Okay I can get that." That's a step that policymakers can make.

When we try to bring in some of these other use cases, it's a step too far. I agree with John, I think that payments is going to be the biggest focus, at least from the administration side in the years ahead.

Jeremy: It raises an interesting question and we see this play out in the many hearings yesterday where we saw a discussion around digital dollars and there's the comptroller, Brian Brooks, very clearly pointing out that private sector innovation in the space is happening at a very fast clip.

Obviously, I'm the first party to that and can speak to that as well. It's happening at a very fast clip. Digital dollars are here is the point. The innovation's here. There's the crypto industry driving this, there's more mainstream financial industry participants getting in involved in this. Obviously, big technology companies getting involved in this. This is here. This is here and now.

There's one view, which is, maybe a new administration is going to say, "Well genie's out of the bottle. We don't like the genie. We're going to try and put the genie back in the bottle and we're just going to box this in and we're and make it top."

I think that's the pessimistic view of it. I think the optimistic view is that this is a moment in time. If you think about president-elect Biden, where there's an opportunity to have very significant public sector, private sector collaboration, and to envision public sector, private sector collaboration. That is in addressing the climate crisis, that is the essence of what's being talked about on a massive scale, a trillion-dollar scale.

I think in the financial system and in these areas that certainly presents itself. I think the optimistic view might be, "There is an opportunity to say-- we want to allow open innovation to flourish here. We want to allow private sector innovation to flourish here. We're not just going to answer to the big banks and do what the big banks are saying, which is to tighten the screws on this because guess what, it eats into their profit margins and it eats into how they currently conduct their own business."

I think there is a key element here, which is about building a more open, inclusive, efficient, financial system. I had an opportunity to meet with Senator Warren years ago, and this was before stablecoins. I remember her being very excited about the vision of crypto restructuring the economics of the payment system and frankly giving meaningful competition to big banks who monopolize these payment systems at an enormous cost to the society.

I wonder whether there is an opportunity here with this public-private sector collaboration and from the left-center, an opportunity to also look at this as a way to bring more fairness to access and not do that by the government building something big, but by embracing what's happening out there.

John: All jokes aside about Delaware, Joe Biden was a Senator from Delaware from 1972 until what, 2008. During that time, Delaware became the credit card capital of the world which he gets a lot of criticism for his support and interest in that industry. That was FinTech at the time. This is a guy who at least historically has seen financial innovation in different ways.

He very much is going to govern from the center. He always has and he is definitely going to have to, with a Republican Senate and on the congressional side just really quickly, do I think we're going to move some massive crypto bill of some sort? No, but Senator Toomey is going to be chair likely of the Senate Banking Committee. Gave an interview this week, already said that crypto's very much on their agenda.

They're going to hold hearings. The House FinTech task force, I think, is expected to come out with their report over the next few weeks. Crypto's definitely on the agenda there. It's setting the table for what they're going to focus on next year. I think there's going to be a lot deeper dives by staff and committees into all of these issues that hopefully, we'll set the table to do some significant legislation at some point.

Jeremy: Kristin.

Kristin: I think I agree with John. I'm not sure I've anything to add there other than-- I look at Biden himself. I don't know if he actually understands it. Going back to what we were saying before, what our challenge is going to be is when we go and we talk to policymakers on financial inclusion.

They looked at us like, "Are you sure that this is the tool?" What we need to see more of are actual real-life examples where people are being brought into the system using the technology. I think we might see that in a few areas, maybe with Cash App or something like that. We need to see that evolve a little bit further and then I think that we get the type of support we need.

As we've-- looking back over the past two years, when we engage with Republican offices and Democrat offices, the messaging that appeals to them is very different. The financial inclusion angle has been our single best discussion point that has allowed us to build relationships with democratic offices on the hill. I think when we look to a democratic administration, then we will be able to hopefully use some of that same messaging.

It's still received with a little bit of skepticism. We need to figure out some of the better use cases or actual applications that people are using that are bringing them into the system.

Jeremy: I think this is where, as you were saying, Kristin, the proof's in the pudding. People need to see that you can actually deliver something that is superior from a financial inclusion perspective. Literally every month we're seeing more products in other parts of the world that are connecting to-- things like [unintelligible 00:22:14] that are connecting to foreign currencies like peso or Brazilian real, or in Indonesia or India and other places. The reality is if you have [unintelligible 00:22:26], you can transmit it and convert it into those currencies in minutes. There's not a 5% fee. There's not a 3% fee. There's not a 1% fee. It's actually almost zero and it's fast.

That's a financial inclusion message. That's embracing the relationship between the United States and the rest of the world economy and embracing immigration and the fact that we have a diaspora of people that are sending funds home.

I know that is part of the financial inclusion story that resonates as well. In many ways, it's really incumbent on the industry to deliver some real results there. I know that was one of the key promises of Libra. I think this is something that the Libra association and Facebook have tried to continue to emphasize to bring policymakers over.

John: Jeremy, I think the letter yesterday that the Congressional Democrats or at least a few of them from financial services sent to the comptroller had less to do with crypto although crypto was mentioned heavily. I think more to do just with their criticisms of some of the things that the comptroller's done.

They very clearly were to me pretty centered on crypto and actually made note that they think there are some advantages. I forget what the language was but basically was urging the industry to work more with minority-owned depository institutions. I think that is a really good idea. I'm sure that's happening maybe to some extent. There needs to be a really authentic effort happening.

I do think there's skepticism not only that maybe the story isn't being told well enough, but that it's, to be honest, a bunch of white guys in Silicon Valley talking about how they think poor people live. I think there needs to be a real authentic effort to work with minority-owned depository institutions or to really get on the ground and figure out, what are the problems that we need to solve. I think that will benefit the industry for sure.

Jeremy: Absolutely. I think the DeFi space, the birth of credit markets that happen on blockchains, the theoretical possibility of things like identity and reputation, interacting with credit markets. All that sounds really powerful and interesting and you're seeing steps towards that. The bottom line is, is that just going to reinforce an existing set of implicit biases?

This is this discussion around AI and credit decisioning. Is this an opportunity to actually see some real breakthroughs in terms of access? Real access.

Can an individual who doesn't have a credit score access credit. Can a small business that is, likewise trying to access credit do that more effectively because of blockchain-based payments and banking or not. Again, proof's in the pudding.

I want to turn a little bit to the national dimension here, which I think is also really important. We touched on it when we were thinking about cross-border payments to the degree that that's an important issue in improving access in the financial system, but more of the evolution of our trading relationships, apparent acceleration of digital currency efforts by the eurozone. Christine Lagarde saying this week they're looking at as soon as two years to have a digital Euro. China in beta launching certainly in 2021. The two biggest trade areas for the United States, marching ahead.

Clearly a Biden administration probably more forward-leaning in terms of globalization and global integration and global trade relationships at least in a different form and substance than we've seen in the last four years. How do these impact the digital currency outlook?

Kristin: I think there is a level of competition that we'll see emerge between different international jurisdictions to become leaders in this space. We haven't totally embraced that as a priority for the government yet in the US. I don't think. There's still a lot of uncertainty. Whether it comes to just regular traditional cryptocurrencies like Bitcoin, or US digital dollar CBDC type dollar.

I think the advantage the US has is there are a lot of innovators and entrepreneurs like yourself and others that are out there doing this and thinking through how can we have innovation? That's the American way is to have people go out and experiment with ideas and not have government get in the way of that.

I think what I haven't fully played out in my mind is, how does this work as a public-private partnership? Is this something that will lead to an actual digital dollar down the road that is issued by the fed that either the institutions use or individuals use? I don't know answers to that but I do know that unlike China, or even European and other jurisdictions, it's not always a top-down type of a way we have. It's really just this innovation that happens that drives these things.

I think a lot of that is happening under the radar right now. As we begin to see some of these partnerships and projects take off, I think we'll become more aware and the US will realize that they need to catch up.

Jeremy: I think that's right. John, thoughts on this competitive international dimension?

John: I totally agree with Kristin. I think there are many vectors that are coming together to help this. We talked about payments and COVID. I think that the international competition piece is certainly there too. I think that is something that, at least in this last Congress, has been a big concern for Senator Cotton, for example. Everyone will have their different reasons. What I hope happens is, we have another COVID package at some point and there-- we're already--

Jeremy: Does that package come with the vaccine or two?

John: We'll see maybe-

[crosstalk]

Exactly. Now that we have another one and there were digital dollar proposals made in the last one. They didn't go anywhere and they were primarily ideological, but it got people talking about implementation and thinking about implementation. That is driving a lot too, especially when they're learning more about what China's doing especially and Europe talking about it more in a substantive way.

The thing is, and you know this better than anybody Jeremy, there is real stuff happening. The Fed is doing stuff. I don't know if Congress has learned about it as much as I think they will in this next Congress. Talking about public-private sector collaboration, a number of people that are literally building the tech stack and researching this tech stack used to work in industry.

There's a lot of good stories to tell and my hope is that there's further attention to implementation that Congress invests more in it, serious R&D, and pushes this public-private collaboration and that the fed is more open about what they're doing because I think that's important.

Jeremy: Yes. We expect the private sector innovation in this space not to slow down. I think one of the things that we're tuned into and really part of the discussion here today is, is there a risk of actually an administration or Congress or regulators who are actually hostile to this space? What is the risk that the bank lobby also is hostile to this space and just tries to put this to a screeching halt? What do you see as the risks there Kristin?

Kristin: I think those are risks. I think if we look at our current administration, we do have some bright sprouts with acting Comptroller, Brian Brooks and Hester Peirce at the SEC. We have a lot of people working against our industry right now in the government. Granted, we only have a couple of months to go. We're watching closely to make sure nothing bad happens between now and January 20th, but that is always something we're keeping an eye out for because we could see action from treasury or statements from the administration that try to shut this down.

There is a feeling among-- in a position among some very senior political appointees that any sort of blockchain-based network that either has self-hosted wallets or that is built on open infrastructure is bad. These are huge misconceptions [chuckles] that we need to work against. The hope is that whoever comes in in the Biden administration, doesn't share these views and are more willing to have these conversations because there's-- The equivalent that I can think of right now is that, if back in the early '90s everybody said, "We can't have internets, we can only have intranets." That cuts off [chuckles] all of this conversation.

Jeremy: Yes, I know. The public infrastructure-

Kristin: That's a real feeling that people have [crosstalk]

Jeremy: Open public networks. I think there's an education gap here. This is a huge, huge part of this. It's the giant education gap. It's hard for people to imagine a financial system that's built on open infrastructure. It's almost counterintuitive to people and that's this bridge that you cross.

Kristin: Yes. John has been doing this work much longer than I have, but in the two-plus years of the Blockchain Association's existence, I feel like we've been pretty fortunate in that we've been able to do some education work, which is very slow by the way. It takes a lot, a lot of time to get through to individual policymakers, but we've been very fortunate in that we really haven't had enemies.

We've been able to throw our ideas out there and nobody's really pushing back, but we're starting to see a shift. Particularly with the Bank Policy Institute. They put up a couple blog posts recently that I think are really aimed to going after Kraken going up because of their Wyoming bank that they have or going after Comptroller Brooks for trying to make bank charters accessible to payments companies.

We're starting to see that they realize, "There's a whole wave of innovations coming into this space that we might not control." It hasn't come to a head yet, but I'm starting to see a shift.

Jeremy: It's interesting. I guess this concept of the private sector's continuing to march forward, regulators oftentimes they respond to things when they go badly, but there's also a situation where the private sector is saying, "Hey, look, we need clarity so that what we're building, which is a new technical possibility that we've got clarity that we can do this."

I think one of the interesting things to observe is, I think a lot of times we talk about the crypto and the blockchain industry, that's sort of the innovation space, but clearly, we've got JP Morgan making major investments in blockchain infrastructure and looking to stand up different products. They have a particular view on that. You've got Goldman Sachs making very clear with a new set of leadership focused on digital assets, making many significant public statements about public blockchains, about stablecoins, about the concept of various existing assets becoming crypto assets.

That's non-trivial when you're hearing that from JP Morgan and Goldman Sachs. You've got the biggest money manager I think, one of the biggest money managers in the world, Fidelity, aggressively moving in this space. You're hearing rumblings from some of the biggest ETF companies, some of the biggest money market funds, others who we believe are focused on tokenization, this idea of using digital assets on public chains to create forms of digital securities. This is stuff that's happening now.

This isn't a bunch of San Francisco startups. Sorry to use the metaphor, but it's I think significant players who want to use this and move forward with it. I wonder if some of that is actually going to force more engagement from the SEC, for example, and not just what has been a lot of reaction, but actually, "Let's work this out. Let's figure out how this market infrastructure's going to work for our economy."

John: Yes. Obviously, we live this every day, so we know the companies, but for the average person who doesn't follow the cryptocurrency industry, even a company like Circle or Coinbase, they've heard of, but don't know a lot about. Now when PayPal allows for the purchase of Bitcoin or Square or JP Morgan, that is a totally different thing. That authenticates the industry in a major way. I think it requires policymakers if they did not feel compelled to learn more about what's going on and why these institutions are interested in this, they feel much more the need to do that. It's a net positive, for sure, for sure.

Kristin: I do think to get any of these policies done, the coalition of people interested has to grow. You've heard me say this before, but the little crypto lobby in DC is little. [chuckles] It's a tiny, tiny, tiny force compared to other industries. I think we're all doing the best we can with the little amount of resources that are being devoted to this but yes, the larger, established, highly-regulated industries have teams of people on the ground that can mobilize, that can be thinking about these things, that can use all of the tools available to influence policy change and crypto alone isn't going to be able to do this.

It's going to have to be getting the right partners with some of these other larger established players in order to move the ball forward.

Jeremy: I buy that. Another I think overlay on this is the national security lens. We've had-- In particular the intersection of national security and financial crimes enforcement and the FATF agenda, the US treasury agenda on that. Obviously, there are laws [chuckles] and there's enforcement of those laws, but there's also interpretive guidance. We've seen more of that out of treasury on a number of fronts, but in particular in this area and we've seen international work in this area, but it gets to fundamental issues that exist, where I think there's not a clear either side of the aisle view on some of this stuff.

For example, encryption policy is one of these topics where maybe you could say on the conservative side, it's more aggressive anti-encryption or law enforcement backdoors, but it's certainly bipartisan sometimes in those issues as well. I think when we're talking about crypto and we're talking about blockchains, there's a complex interplay between privacy, cyber security, the resilience of data itself. People want resilient, secure data. Well, blockchains, guess what? They do that better than anything else.

At the same time, they give greater levels of privacy. They cut against the grain of existing frameworks for how say, financial crimes enforcement happens. A complicated set of issues overlay into national security. Does the Biden administration manage from a different center on that or do we see policy shifts in any of those areas potentially that could impact crypto?

Kristin: I worry about this a lot. I don't think we're going to see much of it change in terms of the philosophy of law enforcement. Law enforcement has a very specific mission and that's to get the bad guys and they want all of the information they can to get the bad guys. The problem is we're on this trend right now where there's this expansion of reporting requirements that are on the table.

FinCEN right now has a notice of proposed rulemaking that would change the reporting thresholds that for crypto it's particularly bad because it's hard to tell the location. It's by default. It's going to be a significant burden for crypto companies. I think that that is a trend for more information is out there. I think the problem is more information doesn't always actually lead to better results. There is a huge cost to individual privacy when these policies are in place.

I continue to see as we look to the years ahead efforts to expand reporting requirements and potentially even limits to self-hosted wallets, which could be an entire hour discussion itself. I worry that regardless of which party is in charge of the White House, that we are on one pathway to slowly erode any privacy that an individual has. That's something we're thinking a lot about at the Blockchain Association.

Jeremy: Major issue, obviously.

John: Yes. I agree with Kristin. I don't think the national security apparatus, the intelligence community, the law enforcement, it's not going to change. The personnel is not really going to change significantly, the people on the ground that are doing this stuff. I think they're going to have the same take that this administration has and the one before which is general skepticism about the possible threats that this technology can have for tariffs financing and money laundering and a bunch of other things.

The travel rule guidance from FinCEN is a very good example of lowering thresholds, which is not only of concern to the crypto community but to the entire financial services payment system. We'll see how that ends up, but a good argument for why going from, what is it? 3000, 2500 to 250.

Kristin: Yes, 3000 to 250.

John: The FATF guidance called for 1000. The US and every international body in the world that's focused on this stuff has made abundantly clear time and time again, that international consistency is of utmost importance. Not even separate from running a company where it makes it a lot easier but it works better for the countries who actually are trying to implement this policy because they don't have regulatory arbitrage and leakage and all kinds of other stuff.

I think a focus on international consistency is going to be really, really, really important and the US drives a lot of this at these various bodies. Nothing against the current administration, but I think there's definitely going to be a larger focus on global relations perhaps than we've seen and I think there's going to be opportunities there.

Jeremy: It raises an interesting thing. I was having a conversation with someone yesterday thinking about this very specific issue, this travel rule issue, or whatever you want to call it. Let's just call it the more intensive recordkeeping obligations, et cetera. This interplay between privacy, financial inclusion, openness, innovation, and national security, all these interplay. They're all trade-offs against each other.

One of the things that's attractive about the blockchain space is that as an underlying infrastructure, crypto creates the possibility to achieve fundamental improvements in how those trade-offs work. Right now things like the recordkeeping rules, they're like a blunt instrument that just gets applied and you just say, "You got to keep all this information, you got to send all this information, it's this huge undertaking. You know what? Who cares if it creates the risk of more data breaches or it jeopardizes personal privacy in different ways? We just got to do it. It's just this huge thing."

Identity mechanisms on the blockchain, the ability to do things like crypto-based identity at the stations where you don't actually have to reveal all these records, but you can prove, in fact, that someone's been KYCed, these are breakthroughs. What I was saying to this person was there's policy and there's guidance and there's regulation, and then there's just straight up innovation. From my perspective, if the industry's concerned about this, the industry needs to build better mousetraps.

They need to demonstrate, "We can do this better. We can protect security. We can manage against the concerns that law enforcement has. We can do it way better than the current system. We're going to go do that, we're going to build that, we're going to demonstrate that and then we'll adapt the rules because they need to be because the technology just blew past it in a better way." To me, it's a call to action for innovation.

I think one lesson out of this industry perhaps, is if you think that policymakers are going to somehow rule-make this innovation into existence, that is not going to be the case. Very interesting times ahead. I'm sure we'll continue this conversation and as appointments emerge, as agendas reach legislative committees and others, I'll be excited to have you guys back and talk about where things are headed.

John: I love it. Thanks, Jeremy.

Jeremy: Thank you, guys.

Kristin: Thank you, Jeremy. Good. See you, John.

John: Good to see you.

Jeremy: A lot of exciting things happening in the space of crypto and policy. President-elect Biden incrementally making new appointments. We're going to be paying very close attention here and listening very closely to what's happening on the ground. We'll be tracking that closely with folks like John and Kristin and we'll make that a key topic as 2021 comes around. With that, we're going to conclude today. I hope everyone can stay well, stay informed and stay safe.

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