Digital Currency Goes to Washington

The rapid rise of digital currency has driven accelerated engagement with policy makers and regulators in Washington. Notably, the rise of global stablecoins and the prospects for central bank money digital currency have intensified policy maker interest. Amid the COVID-19 induced economic crisis, discussions have accelerated around the benefits of ‘digital dollars’, which are increasingly seen through a national competitiveness lens, as advanced nations such as China make blockchain technology and digital currency a foundational infrastructure for the future of their economy and their role in the broader global landscape, portending geo-political considerations.

Jeremy Allaire: [00:13:39] Good afternoon and welcome to the Money Movement, a show where we explore the issues and ideas driving this brave new world of digital currency and blockchains. Obviously, we are continuing to see this rise of digital currencies and that rise is represented in a lot of different ways. Major projects that are launching from major technology companies, from major governments and obviously the continued organic rise of crypto currencies more broadly and stablecoins in particular. And all of that has really accelerated engagement with policymakers and regulators, not just around the world, but especially in Washington. This emergence in particular of global stablecoins and and very similar issue, the sort of prospect for central bank money backed digital currency have really intensified policymaker interest. So we've seen that over the last year and that's accelerated. And now, amid the COVID-19 induced economic crises, there's been this accelerated discussion among policymakers around the benefits or perspective benefits of digital dollars, which are now also increasingly seen through a national competitiveness lens as advanced nations such as China make blockchains technology and digital currency a foundational infrastructure priority for the future of their economy and arguably their role in the broader global landscape. [00:15:14][94.7]

Jeremy Allaire: [00:15:14] And so this is portending geopolitical considerations, which are certainly also very much on the minds of policymakers today. So the crypto and blockchains industry have had a very long history of engagement with policymakers in DC. This dates back to 2013 when the Senate held its first public hearings on virtual currency. And so very excited this week to be joined by several guests who have really been at the forefront of working the digital currency scene in DC over the years. That a really great lineup today. Kristin Smith, who is the executive director of the Blockchain Association, one of the leading industry associations dealing with Blockchain technology in D.C., Perianne Boring, the founder and president of the Chamber of Digital Commerce, which has been very active in working with industry and policymakers and regulators over several years in DC as well. And John Collins, who is a founding partner at FS Vector, which is a premier advisory firm in the Blockchain policy space and fintech more broadly in DC. [00:16:24][69.8]

Jeremy Allaire: [00:16:26] Very pleased to welcome everyone on the show today. So hopefully we'll have them here in a moment. [00:16:37][11.1]

Kristin Smith: [00:16:45] Hi, how's it going? [00:16:47][2.5]

Jeremy Allaire: [00:16:48] Hey, Perry. [00:16:48][0.2]

Jeremy Allaire: [00:16:50] Hello, Joe. All right. You made it. Good stuff. Awesome. I'm really, really psyched to have all you guys on today. You collectively probably know more about what specific Congress people think, what specific Senate staffers think, specific regulators. You guys are connected to a lot that's happening in this space. And so I think you're going to be able to provide great perspective. Maybe we can just start very quickly just for for the audience. So people are familiar, Kristin, maybe you could just start just give us 30 seconds on on the Blockchain Association and what you guys are up to. [00:17:32][42.2]

Kristin Smith: [00:17:33] Yeah. So the Blockchains Association has been around for about two years. We are a trade association that represents companies in the crypto industry and we work to change federal public policy can have a better regulatory environment for the entire ecosystem. [00:17:50][17.2]

Jeremy Allaire: [00:17:52] Excellent thank you. Perianne. [00:17:53][0.5]

Perianne Boring: [00:17:54] Yeah. Hi. Chamber of Digital Commerce. We're the world's largest trade association representing companies in the Blockchain space are actually turning six years old this Sunday. So we've been focused on policy issues that impact the digital assets blockchains community for a number of years. The mission of the chamber is to promote the acceptance and use of digital assets and blockchains based technologies. And we strongly believe that policy regulatory issues are some of the biggest challenges impacting the growth of this ecosystem. So we're based in Washington, D.C. and spend the majority of our time and resources working on the policy challenges to this space. [00:18:38][43.9]

Jeremy Allaire: [00:18:40] Excellent. Awesome. Thank you, John. Yeah. FS vector. [00:18:44][4.5]

John Collins: [00:18:45] Yeah. So if this vector is revised, financial technology firms across that sector but do a lot of work with cryptocurrency and blockchains firms specifically around regulatory compliance and political risk. Advice on all those aspects. [00:19:00][15.4]

Jeremy Allaire: [00:19:02] Excellent. Well, great. You guys obviously, you guys, you know you know all the issues that we're facing. If we're going to drive, we're gonna drill under a lot of that today. John, I actually want to start with you on something which is kind of taking a little bit of a trip down memory lane and it sort of sets the stage, which is, you know, back in in in 2013, you were a Senate staffer. [00:19:27][25.5]

Jeremy Allaire: [00:19:29] You were working on the policymaking side of the House. And I think you played a really critical role actually in in galvanizing the Senate to really convene for the first time publicly on virtual currency issues. The framing of the issues back then was sort of on the back of fin sends guidance around, you know, the financial crime risk and sort of guidance they'd given. [00:19:56][27.2]

Jeremy Allaire: [00:19:56] But there was a lot of activity around then. Tell us about that moment in time. What was going on in the Senate with policymakers and framing it? And then we'll fast forward and a little bit to kind of where we are today. It was certainly a very different lens on it. [00:20:10][13.7]

John Collins: [00:20:11] Yeah, no. And again, Jeremy, thanks for for having me on today. I will get to you because you played a pretty pivotal role in that. But, you know, I work for Chairman Tom Carper at the time. He was then chair of the Homeland Security Committee. I'd been familiar with Bitcoin for a while, but had not bought any and not done anything with it. And it presented itself in the news in some way or another. I can remember it was a market crash or a market uptick. But, you know, it was clear that you had on one side of the spectrum, Marc Andressen, saying this is going to be the next generation of the Internet. And then on the other side saying it's only useful for crime. And so, you know, how do we mitigate whatever risks are there? But also, if it is this next generation technology, shouldn't the government be paying attention to it and talking about it and sort of working through whatever issues it presents? And I think you one of the first people that I talk to and you came in with Jon Betcha, who I don't know where the hell that guy is, but but yeah. And, you know, you came in and I got to say, you're probably the only person in crypto that looks better today than the day you started it. But, yeah. And you really, you know, here was a very successful business person and you came in. You're like, look, you're very humble. You're like, look, here's what I'm working on. Here's why I'm working on it. I think it's incredibly important. And so that meant a lot. And so that's why we did that work. Talk to leaders like yourself VCs, law enforcement. And I'm just trying to figure out where this thing was going. [00:21:45][93.8]

Jeremy Allaire: [00:21:46] Yeah. Yeah. Back then, I know you advise on political risk. Early on, we hired, you know, Promontory Financial to to help assess my my investors are like, are we going to go to jail if we do this? Can you help us? Let us know if this is actually going to be legal? Obviously, there's been a huge amount of progress there. So obviously, things have changed dramatically since 2013. Fast forward a little bit, Perianne. Like you said, you got started pretty early in this as well. Maybe just describe like you had to make a pitch six years ago, you know, and, you know, things like Ethereum didn't even exist. But like, you know, you had to make a pitch six years ago and why, you know, there needed to be a chamber of digital commerce and why Blockchain was going to be important. What was the pitch then? [00:22:35][49.2]

Perianne Boring: [00:22:36] Well, I'm like John. I'm a former congressional staffer as well. And I worked for a member who was on the House Financial Services Committee. And so I spent years meeting with all the lobbyists, special interest group from the financial services space. And I I took a deep interest in Bitcoin and some of the earliest of days. And 2013 was a pretty big year for the industry, for me, and I think for everyone's understanding of where this was going to go. But there were a lot of big things that happened that year that led to the hearings that John was talking about. We had that the takedown of Silk Road, you know, this huge online market where they were selling, buying and selling illegal drugs with Bitcoin. You had the Mt. Gox collapse at the time. That was the largest Bitcoin exchange in the world. Over 70 percent Bitcoin purchases were going through Mt. Gox and they lost close to a half a billion dollars in customer funds. I mean, these were huge black eyes for the industry that were really still recovering from today. And policymakers were reading about this in the news and felt like they should be doing something. And so we had a couple of hearings. That's when guidance was issued by a fence. And that was in March of 2013. Fencing issued their guidance. There were multiple members of Congress that came out and said very negative things about the dangers of this technology. Joe Manchin called for a straight out ban on crypto currencies and bitcoins. And so if you read beyond the headlines, the idea that there's an inherent security risk with Bitcoin is wrong with that, with a lot of people's understanding that the idea that Bitcoin is only used for a purchase, illicit drugs, obviously, that the person that was the perception was not the reality. And I felt strongly that this industry needed to have professional resources in Washington, D.C., to work with policymakers, to work with people like myself and John, who advised members of Congress on these types of topics and make sure they have the opportunity to truly learn and understand this technology. Most of the conversations back then were out of fear of the unknown. They weren't coming from a position of knowledge or understanding. [00:25:10][153.3]

Perianne Boring: [00:25:11] They were coming from a position of fear and anxiety and a lot of. [00:25:14][3.5]

Jeremy Allaire: [00:25:15] A lot of negative news and damage control and negative news and come back to that, given the negative news yesterday. But I'm sure there's a few phone calls from from policymakers on Twitter hacks. But it's interesting. I mean, I certainly it resonates with me from that time as well. Like in any conversation you went into, it just started with, like, you know, here's all the terrible things. [00:25:38][24.0]

Perianne Boring: [00:25:39] And what are you really a drug dealer? Yeah. What do you do about those bitcoin? [00:25:42][3.3]

Jeremy Allaire: [00:25:44] I can't talk to you. It's like, you know. But obviously things have evolved a ton and and things are getting you know, they're getting very real right now and they're really heating up in a positive way. And I think, you know, we have global stablecoins. We have the rise of digital dollars Stablecoins like USDC. We have China's digital currency. We have crypto really becoming an asset class. And then from a policy perspective, I mean, we've got the Financial Stability Board working on policy recommendations. You've got the Fed very engaged on on issues here, the O.S.S. and Brian Brooks, who's who's now leading the FCC, putting some of these topics front and center. We've got multiple hearings that are continuing to go on. So really a very, very different. And and sort of the the policy game and the policy attention is really different now. Maybe maybe Kristin just to start, you know. What are you seeing? I mean, this is sort of getting real. What are the big you know, what are the big policy attention focus areas that that are happening right now? [00:26:48][63.1]

Kristin Smith: [00:26:49] Yeah, I think you're right. The focus right now for most policymakers is on something called a digital dollar. I think I think there are a lot of different versions of what that could be. And if you talk to a House Democrat or a Senate Republican, they're going to have different ideas of what a digital dollar is. But there is now consensus among policymakers that it is a good idea to upgrade our money. And I think that that's progress. I think for a long time, crypto currencies weren't particularly tangible or useful in their minds. But there is this first step of let's figure out a better way to do payments. Let's figure out a way to compete with China. Let's figure out how to bring more people into the financial system. And they're seeing a digital version of the dollar as a way to do that. So I think the challenge that we have as an industry and what we're trying to talk about is that, you know, yes, China has this very committed plan that has come from the top down. And, you know, the American system is different than that. Right? What we have here are innovators and entrepreneurs that are going out and experimenting and building and growing and that it's this marketplace of innovative ideas and services that I think is going to keep the U.S. competitive going forward. And it's, you know, kind of incumbent upon us at the Blockchains Association and others to to help policymakers understand all of the great work that is going on, like with U.S.D.C. and and and other projects that are out there. So I think we have a pretty optimistic future. I'm happy to go into more detail on F.S.B and O.C.C. As well. [00:28:34][105.6]

Jeremy Allaire: [00:28:35] But yeah, but yeah, I'm sure I'm curious for you from Perianne or John, you know, like, yeah, there's some concrete stuff that's coming down the pike. Right. The O.S.S. is trying to figure out how to our banks going to be watching banks involvement be with this. The FSB is going to set guidelines, you know, that's going to ultimately drop down at the legislative level or around the world. Like, you know, some of this is is is a response to what's happening organically in the market. Some of it's in response to what Facebook is doing. But you know what? What are what are you seeing as some tangible policy issues that may emerge out of all this? [00:29:12][37.4]

John Collins: [00:29:14] Yeah, I mean, I think, you know, going back to sort of where we started, right payments was really the only thing we were talking about. I mean, there is this nebulous idea of like these. This is an open protocol. Anything could be built. But no one was talking about DFI or crypto kitties or Stablecoins. Right. USDC or others. So, you know, I think, you know, the big existential issues continue to be, you know, I think at the supernational level and I think, again, you know, Kristin and Perianne could definitely comment on this. You know, does it affect monetary stability or not? And at what point is that? Is that, you know, flipping and when it happens? How do we make sure it doesn't actually get to that point? How do we know true innovation, but actually then not get to a point where we can't cut back? I think that seems to be sort of where the global folks are. And then at the you know, at the federal level here, I think, you know, AML, any money laundering, terrorist financing, all of those are continue to be serious risks. It's what people seem to know the most about the securities issues. And then, you know, there's still a lot of really, really important tax issues and they're only getting more complicated as these new applications get built. So it's difficult for policymakers to keep up because there's just so dynamic. [00:30:29][74.7]

Jeremy Allaire: [00:30:31] Perianne, have the engagement level changed, like, you know, given that these are now, you know, lots of three letter agencies are now focused on this or whatever? Everyone describe it as the engagement level change. Are people leaning in more? Is this is this is this a time that's that there's critical mass that's kind of being built there? [00:30:48][17.1]

Perianne Boring: [00:30:48] Yeah. One of the things that I think is really interesting, we have seen a huge change in the tone of the conversation towards Blockchain technology in congress since the pandemic. And remember, like, let's take a step back. Just a year ago when Facebook had announced the Libra project and there was this huge pushback to Facebook, to crypto, to digital assets, and we have seen almost a one eighty in that conversation, the pandemic has forced Congress to go digital, which is kind of funny because most members of Congress, the average age is like 50 to 64 years old. It's a much older generation. They're very traditional. They're now conducting business on their smartphones. They're holding hearings remotely. They're doing things they never thought they would ever have to do. And it's highlighting the need to have strong digital critical infrastructure. And then when Congress passed the stimulus bills, the point of that was to get cash in the hands of Americans as fast as absolutely possible. [00:31:52][64.0]

Perianne Boring: [00:31:53] And it forced Congress to reexamine big issues in our financial system. And just for example, according to the Fed, in 2018 twenty two percent of U.S. households were under banked. So Congress had this response to the pandemic of distributing these stimulus funds through the banking system. And that highlighted some of the problems, but also the need to ensure that our most vulnerable populations are not being left behind, especially in the middle of a global health pandemic. And that has led to Congress taking a much closer look at things like digital currencies and digital payments and digital dollars and in projects like Stablecoins, like the USDC so it's we're in an incredibly impressionable moment in history and it's pushing the conversation forward in a very positive way to sort of some some catalyst moments. [00:32:47][53.9]

Jeremy Allaire: [00:32:47] Yeah, go ahead. [00:32:48][0.3]

Kristin Smith: [00:32:49] Well, I was going to say I think I think we are I think experience. Right. We are at sort of a Catalyst's moment. And, you know, I don't think if you look at the landscape in general for policymaking in Washington right now, you know, Congress is almost at a total standstill due to the election unless it's something directly related to the pandemic. So I don't think we're gonna see any great legislative victories. But I do think in addition to the issues that John mentioned, I do think we're going to see some great stuff out of the O.C.C. You know, we've got one of the industry's own over there now who really understands the technology. And I think that there are policy clarifications that can be made that will make crypto less scary to the traditional financial services world. There will be acceptance of the fact that, you know, that that banks should be able to interact with this technology and then hopefully ultimately potentially get a payments charter. I think I think what's important to know about the O.C.C. is that it is a very special agency. It's it's independent. It's housed under Treasury, but it's independent. So it doesn't have to go through the rulemaking process. Are getting approval from the OMB and IRA and all of the traditional regulatory processes that most executive branch agencies have to do. And it also does it need a vote of a commission? Because unlike the S.E.C. or the CFTC, the five voting commissioners, that may disagree. You know, this is this is a one man operation. So I think that we'll be able to see some fast action. You know, this this summer and this fall coming out of there. And I think that will help pave the way for other regulators over at the FCC. And since then, to have more comfort with with advancing at some clearer, more better policies. [00:34:53][124.4]

Jeremy Allaire: [00:34:54] That's very, very encouraging. And and hopefully you can see some real progress there. I think one of the themes that's going to come up here a little bit and it has to do kind of where we were where we are today is just sort of, you know, the education issue here. Like I've obviously I spent a lot of time on the Hill over the past seven years. And, you know, you have conversations and you kind of see how the education has evolved. And it's certainly not evenly distributed at all. And in agencies and in other places, you know, I think the prior head of the FCC was not at all well versed in crypto. And now Brian Brooks obviously exceptionally versed. So, you know, this this sort of what I call the education and knowledge gap. You know, so many of of in particular policymakers, they come to the table, you know, thinking about like, you know, what are the negatives, what are the risks? You know, sort of reacting to news. But not necessarily committing the time to to really understand this as a technology, what it can do for for, you know, for Americans, for for businesses, for others. You know, Perianne, what do you see as that education gap? And how do we address it and where are we headed with that? [00:36:15][80.6]

Perianne Boring: [00:36:15] Yeah, well, there is a massive technology knowledge gap and an even bigger knowledge gap when it comes to things like digital assets and blockchains technology. And I do think knowledge and education is our strongest tool as a community. And I'll tell you why. I'm going to steal a quote from Jason Weinstein, who's one of our advisory board members at the chamber and former head of the criminal division of the Department of Justice. And he said, I've met a lot of people who are Bitcoin skeptics and I've met people I've met a lot of people who know a lot about Bitcoin, but I've never met someone that knows a lot about Bitcoin and is a skeptic. Now, one of the challenges that we have is you can't teach crypto currencies or blockchains technology in like a 15 or 20 minute briefing, you can't learn, really understand this technology in a full day's study or even a month study. It's complicated stuff. And we have to inspire people to want to make that personal investment in themselves, to read and understand and study and really take the time to to understand how this technology works. Understand what it is and understand what it's not. And we've made a lot of progress in doing that over the years. But one of the things that is hard is learning by doing is, I think, an important exercise. It's the best way I learned is I actually roll your sleeves up, getting your hands dirty and just try trying it out. The problem with something like crypto currencies is these are things of value. So we can't go walk around D.C. or walk around Capitol Hill and just start handing out crypto currencies to people. [00:37:54][98.8]

Jeremy Allaire: [00:37:55] Biden and Obama, we're giving our crypto yesterday on Twitter, apparently. So we're all set. We're all set up. [00:38:03][8.0]

Perianne Boring: [00:38:04] So I think this year is actually a really interesting time. We're in an election year. As Kristin said, not a lot is going to happen because we're going into a lame duck session. But everyone's out campaigning. And I think we should be putting crypto currencies in the hands of the campaigns at the hands of the members and let them receive some. Let them sense and let them receive a transaction. Everyone remembers the day they got their first crypto or their first Bitcoin. It's an an impressionable moment in anybody's journey in this space. So let's do that for members of Congress. [00:38:34][30.6]

Jeremy Allaire: [00:38:36] John, any thoughts on the education gap? You're in you're in talking to people all the time. What what what are what are the tactics and where do you think we are on that journey? [00:38:46][9.4]

John Collins: [00:38:46] Look, I mean, I think there's still a lot to be done. I mean, you know, they're certainly champions for the industry, but you can never have enough. I do think one thing that's changed is, you know, you don't necessarily have to explain how Blockchain works to everyone because either they do get it or they had heard about it so much. They don't want to pretend that they don't know what it is. So they just kind of let it go. So I think that's that's been helpful. But I mean, in terms of like, actually. How do I get people's attention? You've got to be able explain what this can actually do for them and their constituents, right. And so as much and as cool as a lot of these different applications are, you know, it's just not it's not going to hit, you know, the average member of Congress. Got it. And so we really started, frankly, Jeremy, with payments seems to be kind of where we're looping now back around, you know, on the financial inclusion stuff and USDC and others, as it seems like. [00:39:40][53.5]

Jeremy Allaire: [00:39:40] And Kristin and I know I've gone into various members of Congress with you and sort of seen firsthand kind of where people in that learning. And one of the other things that's always interesting is sort of, you know, obviously we have a very partizan Congress. We have had a partizan Congress for a little while now. And and one of the big issues and, you know, for me at least, is as a technologist, I look at digital currency as a completely nonpartisan issue. Right. Blockchains technology, the Internet, these these these are you know, these are fundamental breakthroughs. And and they they shouldn't be partizan. But I still feel like on some of this subject matter, you really have you you have themes that are really important to the Democrats. You've got themes that are very important to the Republicans. And you've got, you know, very different audiences. You're a libertarian part of the Republican Party and you've got a law and order slash. You know, you have focused on national security area that crosses over and the Democrats as well. You've got the financial inclusion. And what are we doing for people who are who are under banked on the underprivileged or the underprivileged? You know, Kristin, you know, how do we how do we cross the political divide here with digital currency issues in D.C.? [00:41:01][81.1]

Kristin Smith: [00:41:02] Yeah. No, I think that that there should not be a partizan issue. And it isn't it isn't necessarily partizan today. But I do think there are different messages that appeal to different parts of Congress. So, you know, I think just to step back for a second and maybe tie together what Perianne and John were saying, I think there are three ways to get policy change in D.C. One of them is through very strong relationships and being married, going to the Hill. And the reality is a lot of relationships are built in political fundraisers. And so, yes, it's important for the community to support its champions and the people we want to be our champions. Because that's that's that's an important part. I also think, as John was saying before, crypto needs to be more useful to people because today, you know, you have look at your wallet and you have some Bitcoin in there. But, you know, my my dad does that every day. He gives me updates on the prices, but he's never actually took him. Take him a crypto out of his while working on that. It's just that down there. So I think when something like USDC comes along or some of these other tokens that help with payments and people start realizing they can move things around, that's great. But the other that's sort of the third prong that that can lead to policy change is messaging. And, you know, with the Democrats, we have had a lot of success by talking about financial inclusion. We did a great event back during Black History Month when you could do events in person that was focusing on the financial inclusion issue, and it was well attended by Democratic members of Congress. But on the Republican side, they tend to be more driven by U.S. competitiveness issues with China. The Senate Banking Committee hearing it's going to be holding a hearing on China next week to talk about these issues. And also just supporting private sector innovation, supporting startups, supporting capital formation. These are certainly issues that Republicans tend to get more excited about. So I think at the end of the day, that can all get us to the same place where we want to have, you know, sound policies that, you know, make payments easier, that allow crypto projects to get up and running and started and all of the things that we want to see. But it's it's definitely a different conversation, depending on which which regulator, which policymaker we're speaking to. [00:43:36][153.3]

Jeremy Allaire: [00:43:36] Yeah, for sure. It's been the last year in particular has been this this this huge upgrade in the conversation. And again, we've touched on some of the things that that have driven that, you know, Libra, China, the pandemic, you know, what's happening there, all this accelerating that. I actually want to just focus in for a minute on one of those kind of tipping point issues, which was Libra is Libra, I think. Yeah. There was a initial let's just call an allergic reaction to two to two some of the initial ideas and and the way it was sort of handled. But it feels like the Libra Association has pretty definitely adapted their approach at the at the supranational level with the Swiss government. And I think probably also with with the US government, Singapore government and other key governments really of all of that. But, you know, I feel like the conversation around Libra is is a little bit of a proxy for the conversation around the acceptability of things like global stablecoins the idea that blockchains are going to be a mainstream payment infrastructure. It ties to things like what we're doing, too. But, you know, John, maybe you could comment a little bit on, you know, how is the conversation evolved around Libra in particular on the Hill? [00:44:59][82.8]

John Collins: [00:45:00] Yeah. And I mean, to disclaim, you know, we advise Nobe, which is the Facebook wallet that's going to be built on the Libra network. But look, I think to your point, you put up the White Paper the Association took comment in, probably got maybe more comments than they expected regulators across the world, but worked really hard to try and include them and represent them and work with policymakers. And they put out a second one just a month or two ago and third taking comments again. So, you know, it did certainly cause people to take notice because what had been discussed, this theory, like what if Bitcoin will become so widely adopted that it could destroy the financial system, too? [00:45:44][44.5]

John Collins: [00:45:45] Well, this network is going to be built and it could be implemented on day one to how many hundreds of millions of people that really got people to go get away from theory and start thinking more practically about it and cause literal nation states to start thinking about, OK, well, maybe we're behind the eight ball on what we should be doing with our own sovereign currency. So, you know, look, I think it's been a net positive overall. I think it's gotten more people interested and involved than ever before, understanding terminology and in parts of the industry that they wouldn't have. [00:46:18][32.9]

Jeremy Allaire: [00:46:19] Yeah, it seems like that. Thoughts from from Perianne or Kristin. [00:46:23][4.0]

Perianne Boring: [00:46:24] Yeah. I mean, I think what was so amazing about watching that whole process is if Facebook released a white paper that they put out ideas, they put words on paper and the world and this huge, as you say, an allergic reaction. There was a significant push back and it created this catalyst of a conversation. We had the U.S. secretary of the Treasury, Steve Manuchin, giving a press conference on the project. It caused the first sitting president of the United States of America to start tweeting about crypto currencies. And while those responses came from a position of fear and skepticism, what it did was it forced some very important conversations to happen at a much higher level of government. Going back to what I was saying earlier about education and knowledge is one of our most important tools. It forced people to spend more time understanding this technology, what it is and what it's not. And where we are today is we have people in the highest levels of government who have a deeper appreciation for this technology. And we've been able to move the dialog forward and we're seeing that materialize in a very real way today in Washington and globally. [00:47:33][69.5]

Jeremy Allaire: [00:47:35] And Kristin, I know you guys have been putting out more around Stablecoins in particular, private sector innovation, public private partnership, lots of ideas here. I feel like that whole dialog has been upgraded a lot. There's a lot more openness on these things. You know, maybe you could just touch on some of the core positions that that B.A. has been taking around this topic. [00:47:57][22.2]

Kristin Smith: [00:47:58] Yeah. I think for us, it's like Perianne said, it's educating about the terminology and the fact that there isn't one ideal type of dollar back stablecoins, but what we believe should be multiple, multiple different ways to do it. I mean, I think USDC is a fantastic model, you know, in terms of having our reserve back stablecoins. But there are also some really interesting protocol driven stablecoins that are out there that, you know, have different features. And we think that should be tested out in the marketplace and let people figure out how to use them. And so it's really just letting letting people know that digital dollars exist. And there are, I think, some policymakers that think the U.S. is far behind and only only the Fed can allow for this type of technology to happen. But we can get all these same benefits by just having a really good sound policy that supports these these different initiatives. So we've been talking about that. We've also been trying to break down some of these root causes of why are people, banked and unbanked. And a lot of the time it's because there's a lack of trust or the fees are just really high or there's not enough of a balance to do that. Dollar back Stablecoins are dollar denominated stablecoins can can reduce these barriers and they might not be off the shelf solutions that people are using every day to do that. But those are under development and they're on the way. And then, you know, it's keeping pace with China. If if we don't have the right regulatory environment or we take new regulatory actions that stifle innovation here in the U.S., China has a state run plan and they're implementing it. And they're they're going and we don't want you know, I think that the U.S. can stay competitive as long as we have the right environment to support that competition. [00:49:53][114.6]

Jeremy Allaire: [00:49:53] I want to latter off that for a second and really drill into that. I think, you know, at the end of the day, the policymakers in Washington, they work for the American people. Their job is to help build the economy, create opportunities for people, you know, bring people out of poverty, continue to give them a good standard of living, enjoy economic freedom, all these all these sort of things. And clearly, like Blockchain is this unbelievable opportunity for global economic leadership, global technology, leadership. I think the smartest people in the room understand that this is like fundamental new infrastructure for how the world is going to work over the next decade. But in the U.S., policymakers really seem to be much more focused on the risks on upgrades to the legacy financial system or legacy financial systems issues. Whereas in China has been has been noted, this is a front and center strategic national priority. As you said, it's from President Xi down to every city, every mayor, every you know, every major financial institution. They're all they all have a blockchains strategy. There's just an unbelievable amount of effort there and it doesn't seem to be connecting to, you know, to to leadership on the policy side in the U.S. and I'd be interested in all of your thoughts on that and how we how we can move the agenda. And by the way, I am not a you know, of the view that this is a U.S. vs China thing at all. I certainly believe in free market innovation, private sector innovation, open Internet standards and open Internet as a whole. And, you know, I think the benefits of digital currency are inherently global. And this is about everyone in the world and bringing everyone in the world into a more inclusive financial system. But, you know, the U.S. plays a major role in this existing world economic order, and that order is being is being changed right now. [00:52:05][131.9]

Perianne Boring: [00:52:07] Yeah, you're absolutely right. The perspective and the majority of the activities happening in Washington today around Blockchains technology and digital currencies are about addressing the risk where we're not having the other half of the conversation, which is which is realizing the benefits of this technology. And this is why at the Chamber of Digital Commerce almost two years ago, we issued a national action plan for Blockchains Technology, where we have called on our national leaders in the United States to do just that and put together an action plan to put together a strategy on how we're going to lead in the development of blockchains globally. I think it's absolutely imperative for the United States, both economic and national security, to have blockchains technologies developed and built in the United States by U.S. companies. And we must support the private sector's efforts to innovate with Crypto and Blockchains. [00:53:02][55.0]

Jeremy Allaire: [00:53:05] Any other thoughts on on that topic. [00:53:07][1.6]

Kristin Smith: [00:53:08] Yeah. I mean, I think it would be fantastic to have a coordinated approach. I worry that the government is not maybe its most functional at the moment right now. And so what we have to do is rely on the areas of support and the champions that we have to move the conversation forward. And I think that as we see greater consumer adoption and new USDC and other other crypto currencies, you know, I think I think that the markets can actually prove out and win this one. And and when it becomes some when the benefits become so obvious because people are using it every day, then that's when we'll see that's when we'll see the types of kind of comprehensive policy change we need. I wish we could have it on the front end. I really do. And I echo and support any efforts we can to make that happen. I'm just not optimistic in the current political environment, but that that's going happen. But we can still make progress and and I hope that, you know, new people cycle in and out of our government, that we can get that kind of leadership that we need. [00:54:19][70.8]

Jeremy Allaire: [00:54:20] Yeah. John? [00:54:21][0.7]

John Collins: [00:54:22] Well, Kristin, I mean, Joe Biden is going to fix everything as a good Delaware Democrat. I can tell you that. But but now, I mean, look to echoed second when everyone said, yes, certainly competitiveness with China is going to be a driving factor. I think obviously China's doing it for entirely different reasons. I would hope, than we are. You know, lack of privacy is not the knock on effect. It's perhaps the primary goal of that system. But, you know, look, I think if you look back and we've said this a billion times, you know, the what Clinton did with the Electronic Commerce Act in the Internet was useful. And it happened in part because of the things, Jeremy, that you said, your testimony, which I read and it's held it well, things that Jerry Brito has been saying well before he was a Coinsetter. But when you have a big networks that allow people to communicate peer to peer, it is inevitable that it will grow and some of it. So if we accept that inevitability, everybody needs to come together and figure out how we're going to nurture that innovation and to deal with whatever risks come up. [00:55:22][60.3]

Jeremy Allaire: [00:55:22] Yeah, that's awesome. Well, I want to thank all of you for a really enjoyable conversation today. I can certainly say with firsthand knowledge we have come a very long way in this period of time and it seems to be accelerating. And that's really exciting. And so I think in the next two to three years, we're gonna see, you know, probably two x the progress that we've seen in the last seven years. And so being on that curve is great. And you guys I know are all playing a really pivotal role in shaping this as well. So thank you for joining the conversation today. [00:56:01][38.2]

Perianne Boring: [00:56:02] Thanks, Jeremy. Yeah, I mean, a fair way. We've come a long way and it feels like we're just getting started at the same time. So I'm super excited about the future of the space. [00:56:09][7.7]

Jeremy Allaire: [00:56:10] Totally awesome. All right, guys, thanks so much for joining next year. Thank you. [00:56:15][4.9]

Jeremy Allaire: [00:56:18] So obviously, some some very exciting developments that are continuing to happen on the policy side and a lot of themes that we've touched on here. [00:56:29][11.3]

Jeremy Allaire: [00:56:29] And actually one of the major issues that was just touched on that has actually vexed policymakers and regulators. And it's really fundamental to the growth and adoption of cryptocurrency in Blockchains is these issues around financial privacy and how can we be assured of our privacy with blockchains payments? Are the risks of government and the law enforcement overreach? And really, on the flip side. What are the boundaries of financial privacy for individuals and what risks to privacy preserving technologies pose to governments? And then ultimately, what about corporate and commercial privacy? Public blockchains are these really transparent infrastructures? How can a company or a business adopt this and not be at risk of disclosing private transaction activity as a firm? So next week we're gonna be going deep, doing a deep dove into digital currency stablecoins and financial privacy with, I think, two exceptional guests, Jerry Brito, founder and executive director of Klingender, and he's one of the preeminent think tanks on digital currency and a firm that has done a lot of thinking on this topic. And Paul Brody, a principal and global blockchains leader at Ernst and Young and one of the drivers behind the Nightfall project, which aims to enable privacy preserved payment transactions on a theory and while also enabling trusted third party audits. And so should be a really interesting show next week. I really enjoy today. Until next time, stay well. Stay safe and stay informed. Thank you. [00:56:29][0.0]

Perianne Boring
Founder & President, Chamber of Digital Commerce
John Collins
Partner, FS Vector
Kristin Smith
Executive Director, Blockchain Association