1 00:00:04,600 --> 00:00:07,680 Speaker 1: So the big question is this, how do investors like 2 00:00:07,880 --> 00:00:11,800 Speaker 1: us get access to the ideas, information, and most importantly, 3 00:00:12,039 --> 00:00:14,880 Speaker 1: the right people that give us the tools and information 4 00:00:14,960 --> 00:00:19,000 Speaker 1: we need to make informed and educated decisions to have success. 5 00:00:19,600 --> 00:00:22,319 Speaker 1: That is the question, and this podcast will give us 6 00:00:22,400 --> 00:00:25,520 Speaker 1: the answers. This is Mark Moss, your host. Let's get 7 00:00:25,520 --> 00:00:28,840 Speaker 1: this started. Hello, and welcome to another episode of the 8 00:00:28,880 --> 00:00:32,599 Speaker 1: Market Disruptors podcast. Today I am joined by Matt Gurgler 9 00:00:32,680 --> 00:00:36,920 Speaker 1: and he is general counsel for Reserve stable Coin. He 10 00:00:37,120 --> 00:00:39,839 Speaker 1: is a an attorney. He's working with a stable coin, 11 00:00:39,880 --> 00:00:42,040 Speaker 1: but he actually comes from the payment space, working with 12 00:00:42,120 --> 00:00:45,440 Speaker 1: Venmo and also working in a blockchain research company as well. 13 00:00:45,600 --> 00:00:48,760 Speaker 1: He gets the technology side, he gets the illegal side. Man, 14 00:00:48,840 --> 00:00:50,760 Speaker 1: he just gets it. It It was a really good conversation. 15 00:00:51,040 --> 00:00:54,960 Speaker 1: We talk about the remittance industry. We talk about stable coins, 16 00:00:55,040 --> 00:00:57,920 Speaker 1: the pegs, how they work, maybe if they don't work. 17 00:00:57,960 --> 00:01:00,400 Speaker 1: We talk about Facebook's coin which used to be a 18 00:01:00,400 --> 00:01:04,039 Speaker 1: stable coin. We get into regulations, talking about what may 19 00:01:04,200 --> 00:01:07,679 Speaker 1: or may not hold back the industry, and so much more. 20 00:01:07,680 --> 00:01:09,800 Speaker 1: It's a really good conversation I really enjoyed. We're definitely 21 00:01:09,800 --> 00:01:11,480 Speaker 1: gonna have Matt back, so let's go ahead and just 22 00:01:11,560 --> 00:01:14,520 Speaker 1: jump right into this. All right, guys, welcome to another 23 00:01:14,560 --> 00:01:18,280 Speaker 1: episode of the Market Disruptors podcast. Today I am with 24 00:01:18,560 --> 00:01:23,120 Speaker 1: General Counsel of Reserve stable Coin Matt Girdler, and Uh, 25 00:01:23,280 --> 00:01:26,040 Speaker 1: we've had some conversations before in the past. He's super knowledgeable. 26 00:01:26,240 --> 00:01:28,720 Speaker 1: I'm excited to dig intoay because there's some new developments 27 00:01:28,760 --> 00:01:30,440 Speaker 1: in the stable coin space I want to jump into. 28 00:01:30,480 --> 00:01:35,440 Speaker 1: So anyway, welcome Matt. Great to be here. Mark All Hi, good, 29 00:01:35,920 --> 00:01:37,560 Speaker 1: I'm happy to have you. Happy to jump into the 30 00:01:37,600 --> 00:01:40,399 Speaker 1: conversations today. So UM, I gave you a quick intro, 31 00:01:40,440 --> 00:01:42,480 Speaker 1: but for those um that are listening, why don't you 32 00:01:42,480 --> 00:01:44,640 Speaker 1: just kind of tell us who you are and how 33 00:01:44,680 --> 00:01:46,479 Speaker 1: you got to the black blockchain space and what you're 34 00:01:46,520 --> 00:01:50,680 Speaker 1: doing right now. Sure. Um I got involved in the 35 00:01:50,720 --> 00:01:54,200 Speaker 1: blockchain CRYP the currency space back inteen, around the time 36 00:01:54,240 --> 00:01:57,320 Speaker 1: that the bit license was being proposed. I had been 37 00:01:57,320 --> 00:02:00,000 Speaker 1: working during my one of my summers during law school 38 00:02:00,000 --> 00:02:03,240 Speaker 1: at Venmo helping them apply for money transmitter licenses in 39 00:02:03,240 --> 00:02:05,800 Speaker 1: New York. Basically took their money transmitter statute, made it 40 00:02:05,920 --> 00:02:08,760 Speaker 1: more onerous, and applied it to a technology rather than 41 00:02:08,800 --> 00:02:12,239 Speaker 1: how technology is used. And so UM I got involved 42 00:02:12,240 --> 00:02:15,120 Speaker 1: with my background at Venmo and trying to fight against 43 00:02:15,160 --> 00:02:17,760 Speaker 1: the bit license at the time, and I thought, you 44 00:02:17,760 --> 00:02:19,560 Speaker 1: know what, there are a lot of problems in our 45 00:02:19,600 --> 00:02:24,760 Speaker 1: financial system, predominantly dealing with remittances, cross border payments, UM 46 00:02:24,760 --> 00:02:27,880 Speaker 1: clearing and sort of the time, and I realized that 47 00:02:27,919 --> 00:02:31,919 Speaker 1: cryptocurrencies generally are blockchain generally would be intensive solution to this, 48 00:02:32,400 --> 00:02:34,840 Speaker 1: and so that sort of got me down the rabbit hole. UM. 49 00:02:34,840 --> 00:02:37,160 Speaker 1: I realized that a lot of attorneys, because there wasn't 50 00:02:37,200 --> 00:02:39,760 Speaker 1: much legal guidance at the time, so they would try 51 00:02:39,800 --> 00:02:42,320 Speaker 1: to rely on their experience, but they didn't truly understand 52 00:02:42,360 --> 00:02:44,320 Speaker 1: the technology. So that's sort of the bridge that I 53 00:02:44,360 --> 00:02:47,600 Speaker 1: tried to UM. That's why I tried to bridge was 54 00:02:47,960 --> 00:02:50,320 Speaker 1: studying the technology at a level where I could sort 55 00:02:50,320 --> 00:02:52,560 Speaker 1: of bridge between the lawyers that had been practicing for 56 00:02:52,639 --> 00:02:56,000 Speaker 1: twenty years and the engineers who had never realized that 57 00:02:56,040 --> 00:02:59,320 Speaker 1: this law was applicable to them. UM. So the speed 58 00:02:59,400 --> 00:03:02,959 Speaker 1: up my background. I worked in big law law from 59 00:03:02,960 --> 00:03:05,240 Speaker 1: old Mill Bank UM. Then I went off to co 60 00:03:05,400 --> 00:03:10,560 Speaker 1: found an institutional research firm UM for cryptocurrencies, basically writing 61 00:03:10,960 --> 00:03:14,600 Speaker 1: detailed twenty eight page research reports on individual cryptocurrencies for 62 00:03:14,600 --> 00:03:19,160 Speaker 1: institutional investors. Focused predominantly on the legal and regulatory risks 63 00:03:19,400 --> 00:03:22,280 Speaker 1: that might be real and investment. Some of the projects 64 00:03:22,320 --> 00:03:27,119 Speaker 1: we covered were can um paisas so UM. I've looked 65 00:03:27,160 --> 00:03:30,280 Speaker 1: at some of the more unique regulatory athletics there. Unless 66 00:03:30,480 --> 00:03:33,800 Speaker 1: UM did laws of research last year to join a 67 00:03:33,840 --> 00:03:37,080 Speaker 1: reserve as their full time general council UM. What really 68 00:03:37,120 --> 00:03:40,680 Speaker 1: interests me about Reserve is there's two tokens in their protocol, 69 00:03:40,920 --> 00:03:44,520 Speaker 1: a stable coin and a secondary token. So after reviewing 70 00:03:44,520 --> 00:03:47,160 Speaker 1: all the different ways that crypto currencies have been launched 71 00:03:47,160 --> 00:03:49,680 Speaker 1: and the legal and regulatory risk, I was then able 72 00:03:49,760 --> 00:03:53,520 Speaker 1: to apply my background and learnings to the launch it 73 00:03:53,640 --> 00:03:57,920 Speaker 1: to new crypto currencies. Yeah. Cool, that is a that 74 00:03:58,040 --> 00:04:01,280 Speaker 1: is a really um, really good background that you have. 75 00:04:01,400 --> 00:04:03,760 Speaker 1: It's pretty cool. You know. One thing that I love 76 00:04:03,760 --> 00:04:05,960 Speaker 1: about the space bitcoin and and the space is that 77 00:04:06,000 --> 00:04:10,080 Speaker 1: it's multidisciplinary, right, so like you have to really understand 78 00:04:10,120 --> 00:04:13,600 Speaker 1: a bunch of different subjects at depth to really grasp 79 00:04:13,720 --> 00:04:16,919 Speaker 1: how deep this goes. And so you you know, obviously 80 00:04:17,080 --> 00:04:19,680 Speaker 1: being an attorney gives you one side of it. Uh, 81 00:04:19,720 --> 00:04:22,480 Speaker 1: spending time at digital assets research and really digging in 82 00:04:22,560 --> 00:04:26,000 Speaker 1: gives you that technology side. And then having the even 83 00:04:26,040 --> 00:04:29,240 Speaker 1: payment space like at Venmo. Uh So, man, that's that's 84 00:04:29,240 --> 00:04:32,040 Speaker 1: an awesome background that you have that I'm sure helps 85 00:04:32,080 --> 00:04:35,159 Speaker 1: you a lot with what you're doing now. You're now 86 00:04:35,200 --> 00:04:39,280 Speaker 1: with this new um stable coin reserve. Uh. And and 87 00:04:39,360 --> 00:04:41,800 Speaker 1: let's just talk about stable coins for a minute. So, uh, 88 00:04:41,800 --> 00:04:44,880 Speaker 1: stable coins are something that's become very popular like kind 89 00:04:44,880 --> 00:04:47,560 Speaker 1: of like over the last year. A couple of things. One, 90 00:04:47,920 --> 00:04:50,799 Speaker 1: I mean, really, there's nothing stable, right, everything is always moving. 91 00:04:50,839 --> 00:04:55,400 Speaker 1: So what's it stable against? That's that's one thing. Um, 92 00:04:55,480 --> 00:04:57,000 Speaker 1: So why don't you tell me about that? What what 93 00:04:57,160 --> 00:04:59,440 Speaker 1: is it stable against? Is it stable against the dollar 94 00:04:59,520 --> 00:05:03,000 Speaker 1: or what's it stay able against? It's well, this is 95 00:05:03,040 --> 00:05:06,160 Speaker 1: a cop out answer, but it's stable against something. And 96 00:05:06,279 --> 00:05:09,640 Speaker 1: every stable coin is going to be different, Um, the 97 00:05:09,680 --> 00:05:15,800 Speaker 1: more noteworthy ones, Heather Gemini usd um see all of 98 00:05:15,839 --> 00:05:19,479 Speaker 1: the dollar backs, the outcoin. It's stable relative to the 99 00:05:19,520 --> 00:05:23,440 Speaker 1: price of the dollar, subject to counterparty risk and so 100 00:05:24,200 --> 00:05:25,920 Speaker 1: the quote. But when you think about it, the US 101 00:05:26,000 --> 00:05:29,320 Speaker 1: dollar isn't stable. It is an inflationary currency, so we 102 00:05:29,360 --> 00:05:32,719 Speaker 1: can't say that it's a stable and generally, but it 103 00:05:32,800 --> 00:05:35,479 Speaker 1: is stable relative to the price of the dollar ideally, 104 00:05:35,960 --> 00:05:38,880 Speaker 1: and then you can go to different uh, trust tokens 105 00:05:38,920 --> 00:05:42,479 Speaker 1: coming out with their I think their pound back stable coin, 106 00:05:42,760 --> 00:05:44,919 Speaker 1: and so that will be stable versus a town. But 107 00:05:45,120 --> 00:05:47,320 Speaker 1: as we look at exchange rates between the pound and 108 00:05:47,360 --> 00:05:50,680 Speaker 1: the dollar, those fluctuated and so even those won't be 109 00:05:50,680 --> 00:05:54,279 Speaker 1: stable against each other. So stable really comes down to 110 00:05:54,360 --> 00:05:57,000 Speaker 1: what are you trying to do. At least with reserve, 111 00:05:57,080 --> 00:05:59,919 Speaker 1: we're focused a lot more on the developing countries places 112 00:06:00,080 --> 00:06:03,479 Speaker 1: is where their native currency is going through hyper inflation. 113 00:06:04,160 --> 00:06:07,520 Speaker 1: So our initial launch area, um, most likely next quarter 114 00:06:07,880 --> 00:06:12,280 Speaker 1: is going to be UM trying to give Venezuelans an 115 00:06:12,279 --> 00:06:15,839 Speaker 1: opportunity to put their money into their boulevards into something 116 00:06:15,880 --> 00:06:18,560 Speaker 1: that is more stable than the boulevard initially will be 117 00:06:18,560 --> 00:06:22,640 Speaker 1: pegged to the dollar. Right. It's dealing with ten percent 118 00:06:22,760 --> 00:06:26,039 Speaker 1: daily inflation, right, so as soon as people receive boul 119 00:06:26,040 --> 00:06:27,520 Speaker 1: of ours, they have to find a way to get 120 00:06:27,520 --> 00:06:30,280 Speaker 1: out of bolivars otherwise tomorrow will be ten percent less, 121 00:06:30,560 --> 00:06:32,880 Speaker 1: ten percent less the day after, and that's compounding the 122 00:06:32,880 --> 00:06:37,760 Speaker 1: wrong direction. Right. So, um, you know, one thing is 123 00:06:37,800 --> 00:06:40,320 Speaker 1: this This thing is global, and a lot of people 124 00:06:40,360 --> 00:06:42,480 Speaker 1: in the United States we get kind of trapped with this, 125 00:06:42,600 --> 00:06:45,039 Speaker 1: like thinking that everything is like the United States and 126 00:06:45,240 --> 00:06:47,839 Speaker 1: the US dollar is the reserve currency of the world, 127 00:06:47,920 --> 00:06:50,440 Speaker 1: so it's you know, we the dollars seem stable to us, 128 00:06:50,600 --> 00:06:53,400 Speaker 1: but in other countries they deal with this changing in 129 00:06:53,480 --> 00:06:57,120 Speaker 1: value all the time, right, They're always watching these exchange 130 00:06:57,200 --> 00:07:00,440 Speaker 1: rates and so forth. I don't want to I've too 131 00:07:00,480 --> 00:07:02,480 Speaker 1: far down this rabbit hole, but maybe just poke at 132 00:07:02,520 --> 00:07:04,760 Speaker 1: it a little bit. But you know, we talked about 133 00:07:04,920 --> 00:07:08,760 Speaker 1: stable to what right, everything's moving, And it's interesting, I mean, 134 00:07:09,040 --> 00:07:10,840 Speaker 1: if you really want to go into the history of money, 135 00:07:10,840 --> 00:07:13,040 Speaker 1: for five thousand years, the world kind of was on 136 00:07:13,080 --> 00:07:16,360 Speaker 1: the gold standard really up into the early nineteen hundreds 137 00:07:16,400 --> 00:07:20,400 Speaker 1: and so and really I believe and and history shows 138 00:07:20,800 --> 00:07:23,200 Speaker 1: that for a few hundred years, from like the four 139 00:07:23,400 --> 00:07:26,520 Speaker 1: hundreds to the seventeen hundreds, the world saw a massive 140 00:07:26,560 --> 00:07:29,840 Speaker 1: prosperity when the whole world was on this unified gold standard. 141 00:07:30,440 --> 00:07:36,160 Speaker 1: And it's really interesting that we don't have a measurement 142 00:07:36,240 --> 00:07:40,320 Speaker 1: of wealth today. So imagine if I needed to, I 143 00:07:40,360 --> 00:07:43,600 Speaker 1: was building a house and like whatever, the yard was changed, 144 00:07:43,680 --> 00:07:45,320 Speaker 1: Like the yard is this long today, but now the 145 00:07:45,400 --> 00:07:48,320 Speaker 1: yards this long tomorrow, right, Or like the weight was 146 00:07:48,360 --> 00:07:50,600 Speaker 1: this one day and the weights this, Like you need 147 00:07:50,680 --> 00:07:56,040 Speaker 1: these standard units to measure things against, and I think 148 00:07:56,160 --> 00:07:58,720 Speaker 1: that we don't. We don't obviously we don't have that today. 149 00:07:58,880 --> 00:08:01,160 Speaker 1: Every everything is measure it against each other, but not 150 00:08:01,280 --> 00:08:04,640 Speaker 1: against a standard. What do you what do you say 151 00:08:04,640 --> 00:08:09,480 Speaker 1: about that? Well, if you think about gold, just generally, um, 152 00:08:09,720 --> 00:08:11,960 Speaker 1: gold fluctuates in price. So even if it's going to 153 00:08:12,040 --> 00:08:15,000 Speaker 1: be backing a currency like it was with the gold standard, 154 00:08:15,160 --> 00:08:17,120 Speaker 1: at the price of gold, it's going to fluctuate. What 155 00:08:17,160 --> 00:08:21,640 Speaker 1: does it fluctuate against? It fluctuates against the currency. Well, 156 00:08:21,680 --> 00:08:24,080 Speaker 1: and there's the open market for trading, Like if you 157 00:08:24,120 --> 00:08:26,320 Speaker 1: treat gold as a commodity like a lot of virtual 158 00:08:26,440 --> 00:08:30,119 Speaker 1: cryptocurrencies are are are are are going to be argued 159 00:08:30,160 --> 00:08:36,560 Speaker 1: to be um, that's just a volatile asset. Um. But 160 00:08:36,600 --> 00:08:39,480 Speaker 1: if each currency was measured in gold, for example, so 161 00:08:39,559 --> 00:08:41,880 Speaker 1: the US dollars this many dollars to announce the gold, 162 00:08:41,920 --> 00:08:44,439 Speaker 1: the euros this many euros to announce a goal, the 163 00:08:44,480 --> 00:08:46,720 Speaker 1: boulevards this many boulevards to announce the gold, at least 164 00:08:46,720 --> 00:08:51,360 Speaker 1: everything was tied to one general measurement. But and then 165 00:08:51,400 --> 00:08:54,360 Speaker 1: we would have something to stable against compared against like 166 00:08:54,640 --> 00:08:56,439 Speaker 1: so even if we had like a stable coin that 167 00:08:56,520 --> 00:09:00,280 Speaker 1: was paid to a basket of currencies. UM, at least 168 00:09:00,320 --> 00:09:03,160 Speaker 1: we have something to compare what is stable. I don't 169 00:09:03,160 --> 00:09:05,720 Speaker 1: know if it just seems it seems weird, like how 170 00:09:05,760 --> 00:09:07,680 Speaker 1: do you even back into that equation when you have 171 00:09:07,800 --> 00:09:11,720 Speaker 1: nothing to measure stability against. And I think that is 172 00:09:11,800 --> 00:09:15,840 Speaker 1: an interesting perspective, especially where we're the world is going 173 00:09:15,840 --> 00:09:22,640 Speaker 1: through globalization. Everyone's becoming more tied together, they're more international transactions. UM. 174 00:09:22,679 --> 00:09:26,480 Speaker 1: But at the end of the day, UM, it doesn't 175 00:09:26,480 --> 00:09:29,440 Speaker 1: need to be a stable coin. Maybe it could be bitcoin, 176 00:09:29,679 --> 00:09:34,160 Speaker 1: it could be another virtual currency that doesn't currently exist. UM. 177 00:09:34,240 --> 00:09:37,079 Speaker 1: When I when I initially got interested in the industry, 178 00:09:37,400 --> 00:09:40,640 Speaker 1: people are talking about how you would travel around the 179 00:09:40,640 --> 00:09:43,360 Speaker 1: world and not need to convert into the currency of 180 00:09:43,440 --> 00:09:46,400 Speaker 1: that local jurisdiction because there would just be a global, 181 00:09:46,520 --> 00:09:50,280 Speaker 1: universal payment mechanism that you could use. At the time, 182 00:09:50,320 --> 00:09:52,719 Speaker 1: it was the point because there are only maybe a 183 00:09:52,800 --> 00:09:56,600 Speaker 1: hundred cryptocurrencies at the time. But now there's no reason 184 00:09:56,679 --> 00:09:58,680 Speaker 1: that it needs to be a stable point. Of course, 185 00:09:58,920 --> 00:10:00,920 Speaker 1: it could be a stable but then again, if you're 186 00:10:00,960 --> 00:10:03,280 Speaker 1: dealing with something on a global level, if you're stable 187 00:10:03,280 --> 00:10:05,840 Speaker 1: against one currency, you're not stable to the rest of 188 00:10:05,880 --> 00:10:09,000 Speaker 1: the world. Just hold hold the currency right? Why not 189 00:10:09,040 --> 00:10:11,640 Speaker 1: just hold the currency right? And then you could say 190 00:10:11,720 --> 00:10:15,160 Speaker 1: to take what UM libra is trying to do with 191 00:10:15,200 --> 00:10:18,200 Speaker 1: the basket of different currencies. So you're stable relative to 192 00:10:18,240 --> 00:10:21,240 Speaker 1: a basket of currencies. So I guess the question is 193 00:10:21,559 --> 00:10:27,200 Speaker 1: more stable than not. I think it's definitely less small atile. Yeah, 194 00:10:27,280 --> 00:10:29,320 Speaker 1: I want to jump into libra. We're gonna table that 195 00:10:29,400 --> 00:10:32,320 Speaker 1: for now though. But one thing, you know, I've studied money, 196 00:10:32,320 --> 00:10:34,440 Speaker 1: and i've I've I've been a big believer in gold 197 00:10:34,440 --> 00:10:36,400 Speaker 1: of investing goal for a long time. And one thing 198 00:10:36,440 --> 00:10:40,720 Speaker 1: that's interesting if you look at UM prices throughout history 199 00:10:40,760 --> 00:10:44,199 Speaker 1: and you compare them against a basket of assets. So 200 00:10:44,280 --> 00:10:47,280 Speaker 1: what is this home in the medium home price compared 201 00:10:47,520 --> 00:10:49,600 Speaker 1: to how many barrels of oil would it take? How 202 00:10:49,640 --> 00:10:51,720 Speaker 1: many ounces of gold would it take? How many right, 203 00:10:51,840 --> 00:10:53,600 Speaker 1: how how much copper would it take? And you can 204 00:10:53,640 --> 00:10:56,880 Speaker 1: compare it to assets. That's one thing. And I haven't 205 00:10:56,880 --> 00:10:59,959 Speaker 1: really seen any stable coins pegging into baskets of assets. 206 00:11:00,080 --> 00:11:04,640 Speaker 1: Have you seen that? Wow? I and pretty your audience. 207 00:11:04,760 --> 00:11:06,920 Speaker 1: I did not lay that up for you, but that's 208 00:11:06,960 --> 00:11:09,960 Speaker 1: a beautiful softball throw to me. Um, that's actually what 209 00:11:10,000 --> 00:11:12,839 Speaker 1: we're trying to I was I wasn't trying to do that, 210 00:11:12,960 --> 00:11:17,840 Speaker 1: so I guess tell us how you guys are different. Yeah, So, um, 211 00:11:17,880 --> 00:11:19,640 Speaker 1: this was more over the long term, and it's so 212 00:11:20,040 --> 00:11:23,360 Speaker 1: eventually we want to have all of our assets on Chaine. Um, 213 00:11:23,400 --> 00:11:27,400 Speaker 1: we want to put the assets collateralizing outstanding stable coin 214 00:11:27,679 --> 00:11:34,000 Speaker 1: into appreciating but safe assets. Think tokenized treasuries, think tokenized bonds, 215 00:11:34,360 --> 00:11:38,520 Speaker 1: things that are relatively safe but are appreciating. And the 216 00:11:38,520 --> 00:11:41,560 Speaker 1: ideas that if you get these assets all around the world, 217 00:11:41,960 --> 00:11:46,000 Speaker 1: you could create a basket of assets that is stable 218 00:11:46,160 --> 00:11:49,680 Speaker 1: just generally, not against any currency, not against anything else, 219 00:11:49,760 --> 00:11:52,880 Speaker 1: just stable against the portfolio that's back in it. Of course, 220 00:11:52,920 --> 00:11:56,080 Speaker 1: you then have to have a portfolio that is reasonably stable, 221 00:11:56,200 --> 00:11:59,439 Speaker 1: which is difficult and until we could prove that we 222 00:11:59,480 --> 00:12:03,200 Speaker 1: could do it, it's all an idea. But that's what 223 00:12:03,240 --> 00:12:06,160 Speaker 1: we're trying to do is create a portfolio of assets, 224 00:12:06,160 --> 00:12:07,800 Speaker 1: got to have a stable coin that makes it where 225 00:12:07,800 --> 00:12:10,600 Speaker 1: the stable poin long term isn't back to any currency 226 00:12:10,600 --> 00:12:13,480 Speaker 1: of any jurisdiction. Yeah, because I think you know, I've 227 00:12:13,600 --> 00:12:15,880 Speaker 1: I've come out and I've said many times, especially in 228 00:12:15,920 --> 00:12:19,439 Speaker 1: response to this growing thing of modern monetary theory MMT, 229 00:12:20,000 --> 00:12:22,640 Speaker 1: where they want to just print more money. And I 230 00:12:22,720 --> 00:12:28,319 Speaker 1: say that money is not wealth. Money measures wealth. Wealth 231 00:12:28,559 --> 00:12:32,680 Speaker 1: is assets, and so it makes sense to peg it 232 00:12:32,920 --> 00:12:36,280 Speaker 1: not against money, because money is nothing. Money is a measurement. 233 00:12:36,440 --> 00:12:38,640 Speaker 1: To peg it, just peg it to the actual wealth, right, 234 00:12:38,679 --> 00:12:42,520 Speaker 1: the actual assets. That makes sense? Um? So why so? 235 00:12:42,520 --> 00:12:45,000 Speaker 1: So these stable coins have really started to get popular. 236 00:12:45,000 --> 00:12:47,360 Speaker 1: We've seen a bunch of them jumping up, A bunch 237 00:12:47,400 --> 00:12:50,960 Speaker 1: of big companies, institutions, vcs, etcetera are jumping on board 238 00:12:51,000 --> 00:12:54,680 Speaker 1: with the stable coins. Um. I want to know why 239 00:12:54,920 --> 00:12:57,240 Speaker 1: people should care about stable coins. I want to know 240 00:12:57,280 --> 00:13:00,320 Speaker 1: why companies want to develop stable coins, and why do 241 00:13:00,679 --> 00:13:05,560 Speaker 1: individual people care about stable coins? Sure? Um, I think 242 00:13:05,640 --> 00:13:08,920 Speaker 1: that this sort of the interesting stable coins came out 243 00:13:08,960 --> 00:13:12,760 Speaker 1: of the bubble bursting at the end of early eighteen. 244 00:13:13,840 --> 00:13:15,960 Speaker 1: A lot of people were still saying cryptocurrencies are gonna 245 00:13:16,000 --> 00:13:18,520 Speaker 1: solve remittances. They're going to be a store of value 246 00:13:18,640 --> 00:13:22,360 Speaker 1: for people in countries that um, whose wealth is deteriorating 247 00:13:22,360 --> 00:13:26,400 Speaker 1: because of the local financial system. But when bitcoin loses 248 00:13:26,520 --> 00:13:30,880 Speaker 1: or a cryptocurrency generally loses value during a bubble, well, 249 00:13:31,679 --> 00:13:34,000 Speaker 1: what you're trying to solve doesn't really solve it. So 250 00:13:34,040 --> 00:13:36,360 Speaker 1: I think that's sort of where the idea of well 251 00:13:36,400 --> 00:13:39,200 Speaker 1: maybe stable points to be a lot more interesting. And 252 00:13:39,240 --> 00:13:40,960 Speaker 1: also as you have depths, you're going to need a 253 00:13:40,960 --> 00:13:44,720 Speaker 1: stable payment mechanism within the depth anyway. But um, I 254 00:13:44,760 --> 00:13:46,600 Speaker 1: find that more of a long term thing than a 255 00:13:46,720 --> 00:13:49,439 Speaker 1: short term thing. I think the developing countries is more 256 00:13:50,200 --> 00:13:53,680 Speaker 1: um an interesting short term play. So that's like the 257 00:13:53,760 --> 00:13:56,640 Speaker 1: retail play, right, So, like from a retail perspective as 258 00:13:56,640 --> 00:13:58,720 Speaker 1: a user, like if I put all my money in 259 00:13:58,760 --> 00:14:02,640 Speaker 1: bitcoin or whatever point, it loses, like, that's horrible, I 260 00:14:02,960 --> 00:14:05,040 Speaker 1: lose everything. So why don't I just put it into 261 00:14:05,080 --> 00:14:07,360 Speaker 1: a stable coin that doesn't lose value? That's kind of 262 00:14:07,360 --> 00:14:10,680 Speaker 1: like an individual retails perspective. I guess then you have 263 00:14:10,800 --> 00:14:14,000 Speaker 1: to tell me why it's better than whatever currency I'm holding, 264 00:14:14,040 --> 00:14:16,959 Speaker 1: Like why not just keep it in the dollar? Then? Right, 265 00:14:17,600 --> 00:14:21,960 Speaker 1: then there's that. Yeah, and it comes down to um 266 00:14:22,040 --> 00:14:25,280 Speaker 1: remittance of sending money back home like a PayPal Western Union, 267 00:14:25,280 --> 00:14:28,120 Speaker 1: they take ten to twelve percent feets large largely because 268 00:14:28,120 --> 00:14:31,640 Speaker 1: they solve the last mile problems, and whereas a crypto 269 00:14:31,680 --> 00:14:35,280 Speaker 1: currency transaction will range probably from point zero zero one 270 00:14:35,280 --> 00:14:37,880 Speaker 1: percent to maybe a point one percent or one percent, 271 00:14:38,200 --> 00:14:41,160 Speaker 1: depending on which cryptocurrency you're using so all of a sudden, 272 00:14:41,480 --> 00:14:43,400 Speaker 1: un like if you're trying to use the existing financial 273 00:14:43,480 --> 00:14:46,680 Speaker 1: system from the US trying to send money to let's 274 00:14:46,680 --> 00:14:49,680 Speaker 1: just say Europe, even you send a bank wire will 275 00:14:49,720 --> 00:14:53,480 Speaker 1: cost and it will take a day or two um 276 00:14:53,520 --> 00:14:57,480 Speaker 1: to actually get there, whereas I could send that same 277 00:14:57,480 --> 00:15:00,480 Speaker 1: amount of money more cheaply using a crypt a currency. 278 00:15:00,560 --> 00:15:02,240 Speaker 1: And if it's a large amount, maybe I want to 279 00:15:02,440 --> 00:15:04,840 Speaker 1: make sure that it's stable and value so there isn't 280 00:15:04,840 --> 00:15:07,880 Speaker 1: a volatility risk there. I'm able to move money around 281 00:15:08,040 --> 00:15:10,880 Speaker 1: uh much more easily. Um. But going back to your 282 00:15:10,960 --> 00:15:13,640 Speaker 1: question about why would I want to use the sur 283 00:15:13,720 --> 00:15:18,000 Speaker 1: by this, If you're a retail investor, unless you're sending remittances, 284 00:15:18,000 --> 00:15:22,080 Speaker 1: are dealing with international cross border payments, then most good enough. 285 00:15:22,080 --> 00:15:25,040 Speaker 1: PayPal is good enough, voll is good enough. People in 286 00:15:25,080 --> 00:15:28,840 Speaker 1: the US largely don't need this right now. And I 287 00:15:28,880 --> 00:15:32,400 Speaker 1: believe that cryptocurrency stable points are going to more largely 288 00:15:32,400 --> 00:15:36,040 Speaker 1: take place and grow outside of the US and more 289 00:15:36,080 --> 00:15:39,840 Speaker 1: developed countries. UM. So that's who would use it. People 290 00:15:40,040 --> 00:15:43,840 Speaker 1: who think that the cryptocurrency is better than their either 291 00:15:44,320 --> 00:15:46,840 Speaker 1: currency where they live or they're dealing in a country 292 00:15:46,880 --> 00:15:49,280 Speaker 1: like Cyprus, which took a certain percentage out of bank 293 00:15:49,320 --> 00:15:52,560 Speaker 1: account several years ago. And so that's why a retail 294 00:15:52,600 --> 00:15:57,000 Speaker 1: person I use it. Why would an investor UM investment 295 00:15:57,000 --> 00:16:00,000 Speaker 1: a stable cooin UM? Generally you don't invest in the 296 00:16:00,040 --> 00:16:03,080 Speaker 1: stable coin. You're either investing in the company behind the 297 00:16:03,120 --> 00:16:07,320 Speaker 1: stable coin, a profit sharing agreement, or there's a secondary token. 298 00:16:08,040 --> 00:16:10,800 Speaker 1: And so when we're dealing with feed dollars in a 299 00:16:10,840 --> 00:16:13,920 Speaker 1: bank account, the general business model is very similar to 300 00:16:14,000 --> 00:16:17,200 Speaker 1: a PayPal where they're getting a yield on the app 301 00:16:17,320 --> 00:16:19,440 Speaker 1: the dollars in the bank account from whatever bank that 302 00:16:19,440 --> 00:16:21,960 Speaker 1: they're storing it with. And so it's more money that 303 00:16:22,000 --> 00:16:25,040 Speaker 1: you're holding, more stable point upstanding, the more interest revenue 304 00:16:25,040 --> 00:16:30,240 Speaker 1: that you're collecting UM not all or like an insurance company. Right, 305 00:16:30,280 --> 00:16:32,880 Speaker 1: so they have that float, they can invest the invest 306 00:16:32,960 --> 00:16:36,400 Speaker 1: what they're holding, right, And that's actually where it becomes interesting. 307 00:16:36,400 --> 00:16:39,400 Speaker 1: Where's the different types of financial institutions that people could use. 308 00:16:39,480 --> 00:16:43,560 Speaker 1: Whether it's a trust company like a Gemini, whether it 309 00:16:43,760 --> 00:16:48,640 Speaker 1: is an MSP like trust token UM, what you're allowed 310 00:16:48,680 --> 00:16:51,400 Speaker 1: to do and what investments you're allowed to make are 311 00:16:51,480 --> 00:16:53,880 Speaker 1: very different depending on the type of financial institution that 312 00:16:53,920 --> 00:16:57,720 Speaker 1: you're regulated as and so that's just something to consider. Um, 313 00:16:57,760 --> 00:17:00,560 Speaker 1: what is the money that is back in the stable point, 314 00:17:00,600 --> 00:17:02,880 Speaker 1: where is it, what is it being used for? And 315 00:17:02,920 --> 00:17:05,199 Speaker 1: you just want to make sure that people aren't just 316 00:17:05,280 --> 00:17:09,080 Speaker 1: making large debts that you won't get any benefit at 317 00:17:09,080 --> 00:17:11,280 Speaker 1: the end. But then again, a stable coin is meant 318 00:17:11,280 --> 00:17:14,640 Speaker 1: to not appreciate. Yeah, exactly, it's not meant to appreciate. 319 00:17:14,720 --> 00:17:18,520 Speaker 1: So from a from a retail user perspective, UM, if 320 00:17:18,600 --> 00:17:21,880 Speaker 1: that stable coin could hold value better than whatever fiat 321 00:17:21,880 --> 00:17:24,280 Speaker 1: currency I have available to me, that's one option why 322 00:17:24,280 --> 00:17:27,200 Speaker 1: I'd want to use it UM. The other option would 323 00:17:27,200 --> 00:17:31,000 Speaker 1: be UM. I mean the other option is an investor 324 00:17:31,080 --> 00:17:33,080 Speaker 1: doesn't make sense because it's stable. It's not I want 325 00:17:33,080 --> 00:17:34,320 Speaker 1: to invest in something that's going to go up in 326 00:17:34,359 --> 00:17:37,480 Speaker 1: value and the stable coin is not supposed to do that. UM. 327 00:17:37,520 --> 00:17:40,080 Speaker 1: Now why do we see so? And I guess you 328 00:17:40,160 --> 00:17:42,520 Speaker 1: answered so. The reason why we see big companies vcs, 329 00:17:42,520 --> 00:17:47,040 Speaker 1: etcetera starting stable coins UM, the play, the probably the 330 00:17:47,080 --> 00:17:50,760 Speaker 1: predominant revenue play would be to have those assets under 331 00:17:50,760 --> 00:17:55,480 Speaker 1: management which they could invest and make more money on. Yeah, 332 00:17:55,520 --> 00:17:59,320 Speaker 1: that's one reason why people would be interested in it. UM. 333 00:17:59,440 --> 00:18:01,520 Speaker 1: And at the end of the day, data is valuable 334 00:18:01,760 --> 00:18:05,359 Speaker 1: at the bitcoin isn't anonymous, it's pseudo anonymous. If you 335 00:18:05,440 --> 00:18:08,080 Speaker 1: run a node like you would get access and you're 336 00:18:08,080 --> 00:18:11,680 Speaker 1: able to UM parse the data and analyze that data properly, 337 00:18:12,000 --> 00:18:15,040 Speaker 1: you're able to learn a lot about a transaction. And 338 00:18:15,760 --> 00:18:20,639 Speaker 1: when I think about conglomerates creating their own cryptocurrency and 339 00:18:20,800 --> 00:18:24,680 Speaker 1: running the validator nodes themselves, even if they're not collecting 340 00:18:24,680 --> 00:18:28,959 Speaker 1: personal data directly by looking at your idea or anything 341 00:18:29,000 --> 00:18:32,680 Speaker 1: like that, they're able to glean information about your spending 342 00:18:32,720 --> 00:18:35,960 Speaker 1: habits and what you're using this for. And I think 343 00:18:36,000 --> 00:18:38,720 Speaker 1: that is probably I don't know if that's more valuable 344 00:18:38,800 --> 00:18:41,720 Speaker 1: than the interest from the money backing it, but I 345 00:18:41,760 --> 00:18:44,119 Speaker 1: do see that there's value in that as well. Yeah, 346 00:18:44,119 --> 00:18:46,199 Speaker 1: so that's what some of these stable coin companies would be. 347 00:18:46,240 --> 00:18:49,000 Speaker 1: They have a play possibly on the data as well 348 00:18:49,040 --> 00:18:53,000 Speaker 1: as whatever the float they can do with the float. Yeah, 349 00:18:53,400 --> 00:18:59,480 Speaker 1: got it now. Um let's so with stable coins um 350 00:18:59,600 --> 00:19:02,919 Speaker 1: for dominantly, they're all centrally controlled. You talked about the 351 00:19:02,960 --> 00:19:07,280 Speaker 1: counterparty risk as well, they're essentially controlled, and they're trying 352 00:19:07,320 --> 00:19:10,400 Speaker 1: to peg to something more more stable. So whether that's 353 00:19:10,440 --> 00:19:13,960 Speaker 1: a currency of basket of assets or whatever um, And 354 00:19:13,960 --> 00:19:17,040 Speaker 1: I'm guessing there's all different types of ways that they 355 00:19:17,040 --> 00:19:21,879 Speaker 1: can try to hold that peg um. But historically, doesn't 356 00:19:21,920 --> 00:19:24,680 Speaker 1: it seem like all pegs have always broken, even even 357 00:19:24,920 --> 00:19:29,240 Speaker 1: nation states haven't been able to hold their pegs. Yeah, 358 00:19:29,280 --> 00:19:33,400 Speaker 1: you have to get all stakeholders involved interested in protecting 359 00:19:33,400 --> 00:19:36,919 Speaker 1: the peg. And that's sort of I could speak to 360 00:19:37,240 --> 00:19:40,080 Speaker 1: Reserve because I know that much more intimately than I 361 00:19:40,119 --> 00:19:43,159 Speaker 1: know the other stable print projects out there. But the 362 00:19:43,200 --> 00:19:46,399 Speaker 1: way we approach this differently is we have a secondary 363 00:19:46,440 --> 00:19:50,399 Speaker 1: token that incentivizes arbitragers to keep the teg on exchanges. 364 00:19:51,080 --> 00:19:52,760 Speaker 1: You're always like, you're never gonna be able to keep 365 00:19:52,800 --> 00:19:57,440 Speaker 1: the teg unless it's relatively constant on exchanges. But the 366 00:19:57,520 --> 00:19:59,639 Speaker 1: question is how do you do that. You could perform 367 00:19:59,640 --> 00:20:02,240 Speaker 1: your own market making function, but then you're never going 368 00:20:02,280 --> 00:20:05,000 Speaker 1: to get to decentralized and there's gonna be a lot 369 00:20:05,000 --> 00:20:07,520 Speaker 1: of other issues of trying to keep a peg yourself. 370 00:20:08,119 --> 00:20:10,920 Speaker 1: But if you trust that people are incentivized because they're 371 00:20:10,960 --> 00:20:14,160 Speaker 1: going to profit by keeping the peg, all of a sudden, 372 00:20:14,440 --> 00:20:17,440 Speaker 1: maybe that will Like will that work? Um, we haven't 373 00:20:17,440 --> 00:20:19,880 Speaker 1: seen it done yet, so i'd like to think it 374 00:20:19,920 --> 00:20:23,640 Speaker 1: could work, But I think you have to incentivize everyone 375 00:20:24,280 --> 00:20:26,600 Speaker 1: in the ecosystem to keep the peg because it's in 376 00:20:26,640 --> 00:20:29,159 Speaker 1: their best interests to do so. In a normal the 377 00:20:29,280 --> 00:20:32,600 Speaker 1: outcoin back stable coin, why does a user, why does 378 00:20:32,920 --> 00:20:34,720 Speaker 1: the market make The people that are buying it just 379 00:20:34,720 --> 00:20:37,680 Speaker 1: want to be able to arbitrage and on exchanges, that's 380 00:20:37,680 --> 00:20:40,080 Speaker 1: where their profit is. They're not interested in making it 381 00:20:40,119 --> 00:20:42,119 Speaker 1: stay a dollar because they don't make money off of that. 382 00:20:42,560 --> 00:20:47,040 Speaker 1: They'd rather it's be different. Yeah, I mean George Soros 383 00:20:47,080 --> 00:20:49,600 Speaker 1: one of the most famous and prolific investors in the world. 384 00:20:49,680 --> 00:20:52,600 Speaker 1: I mean, he's famous because of breaking the peg, right, 385 00:20:52,680 --> 00:20:55,720 Speaker 1: So he made a billion dollars in a day by 386 00:20:55,760 --> 00:20:59,080 Speaker 1: breaking the peg. And so that's why it just seems 387 00:20:59,119 --> 00:21:02,240 Speaker 1: like man if if if nations can't even do keep 388 00:21:02,280 --> 00:21:05,560 Speaker 1: the peg, how are these smaller institutions going to do that. 389 00:21:05,640 --> 00:21:07,840 Speaker 1: So it's an interesting challenge that I guess we'll have 390 00:21:07,840 --> 00:21:09,879 Speaker 1: to wait and see how that plays out. Yeah, in 391 00:21:09,880 --> 00:21:12,119 Speaker 1: our white paper, we discussed the saurus attack, and we 392 00:21:12,200 --> 00:21:15,960 Speaker 1: think we've created mechanisms to prevent against run on the 393 00:21:16,000 --> 00:21:20,240 Speaker 1: bank and a saurus attack, largely by after a certain point. 394 00:21:20,400 --> 00:21:23,000 Speaker 1: If we're saying that there are certain assets that appreciate. 395 00:21:23,440 --> 00:21:25,280 Speaker 1: If that means are volved filed, they could go down. 396 00:21:25,400 --> 00:21:28,240 Speaker 1: Maybe it tries to read defaults in a foreign jurisdiction 397 00:21:28,359 --> 00:21:31,040 Speaker 1: for whatever reason, it could default, and maybe that starts 398 00:21:31,080 --> 00:21:35,000 Speaker 1: triggering itsel Off. Our protocol has a mechanism in place 399 00:21:35,040 --> 00:21:39,399 Speaker 1: where it basically prevents withdrawing after a certain point, just 400 00:21:39,560 --> 00:21:41,840 Speaker 1: limited to a paradis share of the basket. That way, 401 00:21:42,280 --> 00:21:44,520 Speaker 1: the first people coming aren't going to take it out. 402 00:21:44,840 --> 00:21:47,040 Speaker 1: They have to sort of trust that the pig will 403 00:21:47,119 --> 00:21:49,679 Speaker 1: be restored to a dollar later on. But it prevents 404 00:21:49,760 --> 00:21:53,960 Speaker 1: a run on the bank and prevents a sourrous attack. Yeah, well, 405 00:21:53,960 --> 00:21:58,040 Speaker 1: that's a really good framework for for the stable coin talk. Um, 406 00:21:58,040 --> 00:22:00,360 Speaker 1: we'll get let's let's jump into some stuff. It's maybe 407 00:22:00,359 --> 00:22:02,200 Speaker 1: a little bit more in your wheelhouse, which is more 408 00:22:02,240 --> 00:22:05,800 Speaker 1: on the regulation side of things. Obviously you understand the 409 00:22:05,840 --> 00:22:08,240 Speaker 1: technical side very well with your background, and so thanks 410 00:22:08,240 --> 00:22:11,080 Speaker 1: for jumping into that with us. But on the regulation side, 411 00:22:11,119 --> 00:22:14,120 Speaker 1: you talked about like working with Venmo and the problems 412 00:22:14,160 --> 00:22:17,639 Speaker 1: they had even transferring money. Um, but now we're talking 413 00:22:17,680 --> 00:22:21,439 Speaker 1: about stable coins and global regulations. So you even just 414 00:22:21,480 --> 00:22:23,840 Speaker 1: said right like most stable coins maybe don't make sense 415 00:22:23,840 --> 00:22:26,680 Speaker 1: in the US, but they make sense abroad. And then 416 00:22:26,680 --> 00:22:29,240 Speaker 1: of course you start running into all different types of 417 00:22:29,280 --> 00:22:31,720 Speaker 1: regulations and things like that. So what are some of 418 00:22:31,760 --> 00:22:35,159 Speaker 1: the big I'm guessing regulations is probably the biggest hurdle 419 00:22:35,240 --> 00:22:38,960 Speaker 1: that stable coins will have to make uh to reach adoption. 420 00:22:39,000 --> 00:22:41,280 Speaker 1: But what specifically are you you think will be the 421 00:22:41,320 --> 00:22:46,000 Speaker 1: biggest problems there? Well, the problem comes down to where 422 00:22:46,000 --> 00:22:48,240 Speaker 1: are you located and who do you want your customers 423 00:22:48,240 --> 00:22:51,280 Speaker 1: to be. If we're gonna say that you're either located 424 00:22:51,320 --> 00:22:53,840 Speaker 1: in the US or you want to have US customers, 425 00:22:54,320 --> 00:22:57,600 Speaker 1: your regulatory responsibilities are going to be very different, and 426 00:22:57,640 --> 00:22:59,960 Speaker 1: it's gonna be a lot more onerous doing it here 427 00:23:00,280 --> 00:23:03,400 Speaker 1: versus elsewhere, um in the world. And that's just sort 428 00:23:03,440 --> 00:23:05,239 Speaker 1: of if you live in the US, this is what 429 00:23:05,280 --> 00:23:08,760 Speaker 1: you have signed up for already. I didn't sign up 430 00:23:08,800 --> 00:23:12,920 Speaker 1: for it, right, UM. So I have this conversation regularly 431 00:23:12,960 --> 00:23:16,800 Speaker 1: with founders like, well, people are doing this elsewhere, um, 432 00:23:16,840 --> 00:23:19,679 Speaker 1: and it's so much easier. There's much more complicated in 433 00:23:19,680 --> 00:23:25,000 Speaker 1: the US. Like then leave specifically stable coins. Really the 434 00:23:25,119 --> 00:23:29,120 Speaker 1: target market is out of the US, right, So now 435 00:23:29,240 --> 00:23:32,160 Speaker 1: you have to deal with each individual country has its 436 00:23:32,160 --> 00:23:35,000 Speaker 1: own laws and then I'm guessing because you're a US company, 437 00:23:35,280 --> 00:23:39,040 Speaker 1: you still have to really somehow be with US laws 438 00:23:39,080 --> 00:23:41,960 Speaker 1: as well. I mean, what's that challenge? Like, yeah, that's 439 00:23:42,000 --> 00:23:44,280 Speaker 1: a it's a very big challenge. UM. I will say 440 00:23:44,320 --> 00:23:47,040 Speaker 1: that the US is largely more onerous in terms of 441 00:23:47,040 --> 00:23:50,200 Speaker 1: your regulatory obligations and what you have to do. So 442 00:23:50,240 --> 00:23:52,280 Speaker 1: there are a lot of jurisdictions actually where if you're 443 00:23:52,280 --> 00:23:56,040 Speaker 1: complying in the US, you'll be your compliance prophecies are 444 00:23:56,040 --> 00:23:58,800 Speaker 1: going to be better than what they would require you elsewhere, 445 00:23:59,080 --> 00:24:01,399 Speaker 1: and most regulators as will allow you to do that. 446 00:24:01,440 --> 00:24:04,399 Speaker 1: As you are regulated in the US as a financial institution. 447 00:24:04,960 --> 00:24:07,239 Speaker 1: Of course, you go into EU and some of like 448 00:24:07,359 --> 00:24:09,560 Speaker 1: the more well some of the bigger countries, that's not 449 00:24:09,560 --> 00:24:12,200 Speaker 1: necessarily the case. But if you come in and being 450 00:24:12,240 --> 00:24:15,639 Speaker 1: regulated by the US, like you're going to be more 451 00:24:15,680 --> 00:24:18,800 Speaker 1: respected when you go to regulators elsewhere. But if you 452 00:24:18,840 --> 00:24:21,320 Speaker 1: are regulated by the US, there is certain information that 453 00:24:21,359 --> 00:24:23,560 Speaker 1: you need to collect and so, like one of the 454 00:24:23,560 --> 00:24:26,639 Speaker 1: big issues is sort of the Sincon and o fat regime, 455 00:24:26,680 --> 00:24:30,639 Speaker 1: which I sort of group into an umbrella called financial crime. Um. 456 00:24:30,680 --> 00:24:33,600 Speaker 1: This requires you to collect certain information about the people 457 00:24:33,640 --> 00:24:36,840 Speaker 1: you're doing business with. But the information that you collect 458 00:24:36,920 --> 00:24:39,520 Speaker 1: is going to be different depending on how risky this 459 00:24:39,600 --> 00:24:42,439 Speaker 1: person is to your business model, and so you have 460 00:24:42,480 --> 00:24:45,120 Speaker 1: to sort of make an assessment of what risk profile 461 00:24:45,320 --> 00:24:48,320 Speaker 1: is every customer that comes in. You need to collect 462 00:24:48,320 --> 00:24:51,040 Speaker 1: certain information, but you might need to collect even more 463 00:24:51,080 --> 00:24:54,040 Speaker 1: information if your research shows that this is an extra 464 00:24:54,119 --> 00:24:57,359 Speaker 1: risky person. And you also have to then monitor this 465 00:24:57,480 --> 00:25:02,199 Speaker 1: person's account. Maybe they're sending very transactions, or they have 466 00:25:02,320 --> 00:25:05,720 Speaker 1: a bunch of small transactions then a large transaction. Now 467 00:25:05,760 --> 00:25:08,320 Speaker 1: you have to analyze, well, what is this money being 468 00:25:08,400 --> 00:25:11,600 Speaker 1: used for? Are we uh like, is this being used 469 00:25:11,640 --> 00:25:13,720 Speaker 1: for legal activity? We need to get more information from 470 00:25:13,720 --> 00:25:16,880 Speaker 1: this person. And on the flip side, if you're purchasing 471 00:25:16,920 --> 00:25:19,120 Speaker 1: the stable coin, you need to know where that money 472 00:25:19,160 --> 00:25:23,200 Speaker 1: came from. And so if you're dealing with are developing 473 00:25:23,200 --> 00:25:25,959 Speaker 1: country or a country outside the US, question is how 474 00:25:26,000 --> 00:25:28,600 Speaker 1: can you prove that the funds come from a legal source. 475 00:25:29,240 --> 00:25:32,359 Speaker 1: Maybe you look at people's bank account records, maybe you 476 00:25:32,400 --> 00:25:35,040 Speaker 1: have them signed affidavit. If it's small enough, they're just 477 00:25:35,359 --> 00:25:37,280 Speaker 1: it just sort of depends, and it's going to be 478 00:25:37,359 --> 00:25:41,000 Speaker 1: very difficult because that's not really how you like traditional 479 00:25:41,080 --> 00:25:44,320 Speaker 1: technology scales, and that's not how many of the financial 480 00:25:44,720 --> 00:25:47,760 Speaker 1: UH industry works in these countries. If you go down 481 00:25:47,800 --> 00:25:53,440 Speaker 1: to UH Columbia for example, Venezuela, Columbia for example. UM, 482 00:25:53,480 --> 00:25:56,480 Speaker 1: there are a bunch of UM market makers that just 483 00:25:56,520 --> 00:26:00,919 Speaker 1: don't do ky C, and you can't plug into that 484 00:26:01,040 --> 00:26:04,560 Speaker 1: ecosystem if you're a US financial institution, So you have 485 00:26:04,600 --> 00:26:07,360 Speaker 1: to sort of go around the existing financial systems and 486 00:26:07,480 --> 00:26:10,960 Speaker 1: build it a new and that's not easy. Yeah, And 487 00:26:11,000 --> 00:26:12,800 Speaker 1: then why would somebody want to comply with that when 488 00:26:12,840 --> 00:26:17,080 Speaker 1: they have other options where they don't have to, Because 489 00:26:17,920 --> 00:26:20,200 Speaker 1: if you want to work out of the well, most 490 00:26:20,240 --> 00:26:22,760 Speaker 1: countries in the world have m L KYC policies. But 491 00:26:22,840 --> 00:26:24,960 Speaker 1: I'm talking about from a customer perspective, Like, if I 492 00:26:24,960 --> 00:26:26,760 Speaker 1: can deal with a market maker that doesn't require k 493 00:26:26,960 --> 00:26:28,480 Speaker 1: K y C, why would I go with somebody who's 494 00:26:28,480 --> 00:26:31,520 Speaker 1: gonna request my children so security numbers in ten years 495 00:26:31,520 --> 00:26:33,359 Speaker 1: of bank statements or whatever? Right, Like, why would I 496 00:26:33,359 --> 00:26:35,600 Speaker 1: want to do that? Yeah, that's a very good question. 497 00:26:36,080 --> 00:26:40,160 Speaker 1: Too much, too much friction, you know. UM. So, so 498 00:26:40,240 --> 00:26:43,879 Speaker 1: each country is its own challenge, so that that that 499 00:26:43,880 --> 00:26:46,359 Speaker 1: that can make it very difficult. I I you know, 500 00:26:47,760 --> 00:26:50,560 Speaker 1: looking at the Facebook Libra coin, which made a bunch 501 00:26:50,640 --> 00:26:54,360 Speaker 1: of noise this past week. It's technically a stable coin 502 00:26:54,440 --> 00:26:57,720 Speaker 1: as well, And it seemed like they didn't even plan 503 00:26:57,880 --> 00:26:59,840 Speaker 1: to launch in the US. Really, they wanted to launch 504 00:26:59,840 --> 00:27:01,840 Speaker 1: I think in India, which was their biggest market, because 505 00:27:01,840 --> 00:27:04,399 Speaker 1: of what's app and like the right in India's just 506 00:27:04,440 --> 00:27:06,800 Speaker 1: like nope, you're a launching here, right? Is that kind 507 00:27:06,800 --> 00:27:12,360 Speaker 1: of what happened? Yeah, India's been on and off. Cryptocurrencies 508 00:27:12,400 --> 00:27:16,080 Speaker 1: are illegal, not illegal, but um, they've been very skeptical 509 00:27:16,280 --> 00:27:19,440 Speaker 1: and it felt largely from a consumer protection angle, Although 510 00:27:19,480 --> 00:27:22,879 Speaker 1: I do appreciate that they focused on one country because 511 00:27:23,119 --> 00:27:26,960 Speaker 1: I think that's a much easier and more targeted way 512 00:27:26,960 --> 00:27:30,160 Speaker 1: of going about building your business and use case than 513 00:27:30,240 --> 00:27:32,800 Speaker 1: just going out globally saying Okay, here's a stable point 514 00:27:32,800 --> 00:27:35,479 Speaker 1: everybody uses. You need to solve the real world problem 515 00:27:35,520 --> 00:27:39,560 Speaker 1: for people, and in India this would have potentially solved 516 00:27:39,560 --> 00:27:43,120 Speaker 1: the real world problem. The problem is you have Facebook 517 00:27:43,160 --> 00:27:46,720 Speaker 1: doesn't isn't looked fondly on by the regulators lately. Largely 518 00:27:46,760 --> 00:27:50,160 Speaker 1: these were data privacy issues, um, but now when you're 519 00:27:50,200 --> 00:27:55,520 Speaker 1: talking about adding financial data and control of people's money, 520 00:27:55,920 --> 00:27:57,639 Speaker 1: all of a sudden, people are going to look at 521 00:27:57,640 --> 00:28:00,280 Speaker 1: that even more strongly based on the response be a 522 00:28:00,280 --> 00:28:03,800 Speaker 1: privacy before because there's nothing probably more important other than 523 00:28:03,880 --> 00:28:08,840 Speaker 1: health information than financial information and a person. Yeah, So 524 00:28:09,440 --> 00:28:12,159 Speaker 1: the regulations they just continue to pile up. I know 525 00:28:12,280 --> 00:28:14,440 Speaker 1: the G twenty was just meeting and they were talking 526 00:28:14,440 --> 00:28:16,840 Speaker 1: about this f T A f or whatever, right, the 527 00:28:16,880 --> 00:28:21,160 Speaker 1: fat fat fat or whatever they call it, and uh, 528 00:28:21,280 --> 00:28:24,720 Speaker 1: they're wanting to impose more regulations and this travel rule 529 00:28:24,800 --> 00:28:26,879 Speaker 1: and whatnot, which I don't want to really want to 530 00:28:26,920 --> 00:28:30,560 Speaker 1: jump into too much, but I saw some comments today 531 00:28:30,600 --> 00:28:33,800 Speaker 1: where they said, uh. I think the Secretary of U. S. 532 00:28:33,840 --> 00:28:39,680 Speaker 1: Treasury was saying, um. He said uh. He said, they 533 00:28:39,680 --> 00:28:42,080 Speaker 1: want to make sure that virtual asset service providers do 534 00:28:42,120 --> 00:28:46,000 Speaker 1: not operate in dark shadows, UM, enable emerging fintech sector 535 00:28:46,080 --> 00:28:48,680 Speaker 1: to stay one step ahead of rogue regimes and sympathizing 536 00:28:49,080 --> 00:28:52,400 Speaker 1: sympathizers of illicit causes searching for avenues to raise and 537 00:28:52,400 --> 00:28:55,680 Speaker 1: transfer fund without detection. Um. And so they're like, we 538 00:28:55,680 --> 00:28:57,640 Speaker 1: want to allow cypic currency to become the equivalent of 539 00:28:57,640 --> 00:29:03,160 Speaker 1: secret numbered accounts, uh, etcetera, etcetera. Right, um, And so 540 00:29:03,320 --> 00:29:04,760 Speaker 1: I mean they kind of get it and they want 541 00:29:04,760 --> 00:29:09,480 Speaker 1: to stop this. I'm curious you know, for me, I've seen, 542 00:29:09,560 --> 00:29:11,960 Speaker 1: you know, specifically around the Facebook thing they're talking about, Well, 543 00:29:12,200 --> 00:29:15,960 Speaker 1: we're always control the on ramps and off ramps, so 544 00:29:16,000 --> 00:29:18,760 Speaker 1: it seems like they at least have that. Of course, 545 00:29:18,760 --> 00:29:22,520 Speaker 1: they're gonna always continue to UM regulate the exchanges as 546 00:29:22,520 --> 00:29:24,680 Speaker 1: best they can, specifically the ones that have on ramps 547 00:29:24,680 --> 00:29:27,240 Speaker 1: and off rams. What for those that are listening on 548 00:29:27,360 --> 00:29:29,440 Speaker 1: ramps and off rams meaning the chance to go from 549 00:29:29,520 --> 00:29:32,600 Speaker 1: crypto back to FIAT. So whether I turned Fiat to crypto, 550 00:29:32,640 --> 00:29:34,479 Speaker 1: crypto back to FIAT, that's an on ramp and off ram, 551 00:29:34,480 --> 00:29:39,880 Speaker 1: so always regulate that. But let's go back into the 552 00:29:39,960 --> 00:29:46,200 Speaker 1: money remittance market. So, uh, the big use case is 553 00:29:46,280 --> 00:29:49,240 Speaker 1: money remittance. If I want to and and I've done 554 00:29:49,240 --> 00:29:50,920 Speaker 1: this because I have people all over the world that 555 00:29:50,960 --> 00:29:53,520 Speaker 1: worked for me, and I try to send money Western Union, 556 00:29:54,200 --> 00:29:56,280 Speaker 1: and I got to drive down to the location. It 557 00:29:56,320 --> 00:29:58,080 Speaker 1: takes me an hour while I'm there, it has to 558 00:29:58,120 --> 00:30:00,239 Speaker 1: be done in cash. It takes thirty to forty five 559 00:30:00,280 --> 00:30:03,600 Speaker 1: minutes to do it. It's super expensive, etcetera. Right, and 560 00:30:03,600 --> 00:30:06,080 Speaker 1: and and it's really expensive. So if I could just 561 00:30:06,160 --> 00:30:09,160 Speaker 1: send them crypto, then that that cuts all that out. 562 00:30:09,400 --> 00:30:14,320 Speaker 1: It's way cheaper, um, et cetera. Now, these as I 563 00:30:14,360 --> 00:30:18,680 Speaker 1: just mentioned, is fat these regulatory people trying to manage 564 00:30:18,720 --> 00:30:21,360 Speaker 1: the on ramp, soft frames, etcetera. But where does remittance 565 00:30:21,400 --> 00:30:23,840 Speaker 1: fall into this? So like if I can just if 566 00:30:23,880 --> 00:30:27,160 Speaker 1: if somebody in Columbia or India can just download an 567 00:30:27,200 --> 00:30:30,040 Speaker 1: app and I can just transfer them points, Like, what 568 00:30:30,040 --> 00:30:34,400 Speaker 1: what can a regulator really do about that? Um, there 569 00:30:34,520 --> 00:30:37,440 Speaker 1: isn't much that a regulator can do about it. This 570 00:30:37,640 --> 00:30:39,480 Speaker 1: is this A is this? Do you see this as 571 00:30:39,480 --> 00:30:44,920 Speaker 1: a war they're going to eventually lose? That's an interesting question. Um, yes, 572 00:30:45,360 --> 00:30:49,320 Speaker 1: but over a much longer horizon than anyone expects. UM. 573 00:30:49,480 --> 00:30:53,800 Speaker 1: I haven't used sort of the financial crimes aspect looking 574 00:30:53,840 --> 00:30:55,360 Speaker 1: at this, but I look at it from the SEC 575 00:30:55,560 --> 00:31:00,200 Speaker 1: perspective of the example of decentralized exchanges. The essential eizes 576 00:31:00,280 --> 00:31:04,160 Speaker 1: exchanges as they currently exist are not really decentralized exchanges. 577 00:31:04,800 --> 00:31:07,320 Speaker 1: Yes they're No, they're not taking custody of funds. So 578 00:31:07,360 --> 00:31:10,040 Speaker 1: that's the argument. But you know who's building you largely 579 00:31:10,040 --> 00:31:12,560 Speaker 1: know who's building it, you know who's behind the project, 580 00:31:12,600 --> 00:31:14,080 Speaker 1: you know who put it out there, you know who's 581 00:31:14,080 --> 00:31:17,840 Speaker 1: responsible up key, who to go with problems. That's not decentralized, 582 00:31:17,840 --> 00:31:20,520 Speaker 1: and that's running it's an exchange. But what were to 583 00:31:20,560 --> 00:31:23,800 Speaker 1: happen if there was a truly decentralized exchange, no one 584 00:31:24,000 --> 00:31:27,680 Speaker 1: knew who was behind the project and people were just 585 00:31:27,720 --> 00:31:31,000 Speaker 1: able to with smart contracts posted at ask prices that 586 00:31:31,040 --> 00:31:34,560 Speaker 1: were executed automatically, which I believe, which I believe there 587 00:31:34,560 --> 00:31:36,680 Speaker 1: will be. There's a there's a need for it, so 588 00:31:36,720 --> 00:31:38,880 Speaker 1: someone's going to build it. Yeah, and I think this 589 00:31:38,960 --> 00:31:42,520 Speaker 1: is probably a tend to fifteen year horizon. Um, some 590 00:31:42,560 --> 00:31:46,360 Speaker 1: people might do it quicker. You might think way sooner hopefully, 591 00:31:46,360 --> 00:31:49,320 Speaker 1: but anyway, go ahead, right, But yeah, the question is 592 00:31:49,360 --> 00:31:51,840 Speaker 1: there's no one to go after at the end of 593 00:31:51,880 --> 00:31:54,320 Speaker 1: the day. You can't turn off, like there's no servers 594 00:31:54,360 --> 00:31:57,440 Speaker 1: to turn off because there it's around the world. And 595 00:31:57,520 --> 00:32:00,959 Speaker 1: so what happens when a regulator can't regulated thing that 596 00:32:01,040 --> 00:32:04,040 Speaker 1: it wants to regulate? So they control the on ramp 597 00:32:04,080 --> 00:32:06,640 Speaker 1: off ramp. But if I never need to get on 598 00:32:06,840 --> 00:32:09,680 Speaker 1: or off, what are they gonna do? Right? And what 599 00:32:09,760 --> 00:32:11,600 Speaker 1: happens when you could then spend that in the real 600 00:32:11,640 --> 00:32:16,760 Speaker 1: world like the market. That's a real question. The thing 601 00:32:16,880 --> 00:32:19,600 Speaker 1: is we're not at that point yet. We're currently dealing 602 00:32:19,640 --> 00:32:25,680 Speaker 1: with I c O S quad Quadraga, Quadrialga, exchange UM, 603 00:32:25,840 --> 00:32:29,640 Speaker 1: runaways UM, We're dealing with much larger fraud and other 604 00:32:29,760 --> 00:32:32,440 Speaker 1: things right now, where I just don't think that's really 605 00:32:32,480 --> 00:32:35,240 Speaker 1: on the regulator's mind. There's just so much low hanging 606 00:32:35,240 --> 00:32:40,240 Speaker 1: fruit right now with that actors that that's who regulators 607 00:32:40,240 --> 00:32:41,840 Speaker 1: will go after first. That's not to say that they 608 00:32:41,840 --> 00:32:44,520 Speaker 1: won't go after others later, but what you said, yes, 609 00:32:44,840 --> 00:32:48,680 Speaker 1: curious someone coming from Venmo and then working on stable coin, 610 00:32:48,800 --> 00:32:51,960 Speaker 1: and then the remittance market is the big piece there, 611 00:32:52,760 --> 00:32:55,640 Speaker 1: and the regulators are trying their best to stop that 612 00:32:55,840 --> 00:32:59,920 Speaker 1: from happening. But if you really open up the remittance market, 613 00:33:00,040 --> 00:33:05,920 Speaker 1: which is the big use case, then it almost has 614 00:33:05,960 --> 00:33:08,880 Speaker 1: to get rid of this regulation. It's like you can't 615 00:33:08,960 --> 00:33:11,800 Speaker 1: really open up the remittance market. I think without that 616 00:33:12,000 --> 00:33:14,760 Speaker 1: it seems like, I mean, because as you're saying, right, 617 00:33:14,800 --> 00:33:18,320 Speaker 1: to get all these individual countries with all their individual 618 00:33:18,400 --> 00:33:20,960 Speaker 1: laws to all work together, like, it's almost like it 619 00:33:21,040 --> 00:33:24,080 Speaker 1: probably would never happen, and so you almost have to 620 00:33:24,240 --> 00:33:28,560 Speaker 1: move outside of that. I would think, I think a 621 00:33:28,640 --> 00:33:32,000 Speaker 1: company like a PayPal um if you're not saying that 622 00:33:32,040 --> 00:33:34,120 Speaker 1: the PayPal would do that I'm saying that a company 623 00:33:34,160 --> 00:33:37,040 Speaker 1: that starts for nothing and takes the PayPal model of okay, 624 00:33:37,040 --> 00:33:38,720 Speaker 1: we need to go and figure out how to spend 625 00:33:38,720 --> 00:33:41,840 Speaker 1: money to each of these countries, and to go through 626 00:33:41,840 --> 00:33:45,560 Speaker 1: the process in each of those countries. It's tedious, time consuming, extensive, 627 00:33:46,000 --> 00:33:48,160 Speaker 1: and it's unclear whether it will even work because now 628 00:33:48,160 --> 00:33:51,680 Speaker 1: we're dealing with cryptocurrency as opposed to I don't know 629 00:33:51,800 --> 00:33:55,120 Speaker 1: digital money of financial institution, so that might be in 630 00:33:55,200 --> 00:33:58,800 Speaker 1: an even harder sell um. Or maybe let's say that 631 00:33:58,920 --> 00:34:02,080 Speaker 1: there are still Paypals not available in a lot of places, 632 00:34:02,080 --> 00:34:05,480 Speaker 1: which is why the money remittance is still trillions of dollars, 633 00:34:05,600 --> 00:34:07,640 Speaker 1: which is why I still have the Western Union because 634 00:34:07,680 --> 00:34:12,200 Speaker 1: I can't pay Pal to those locations. Yeah, and there's 635 00:34:12,239 --> 00:34:14,520 Speaker 1: been a big pain point that if you're gonna send 636 00:34:14,520 --> 00:34:17,200 Speaker 1: remittances you have, like you said, you need to use cash. 637 00:34:17,480 --> 00:34:19,960 Speaker 1: The question is at some point cash has to enter 638 00:34:20,000 --> 00:34:25,960 Speaker 1: the system. Yeah, and so at that you don't prevent 639 00:34:26,000 --> 00:34:29,200 Speaker 1: money wandering. The idea is that if money wandering is found, 640 00:34:29,560 --> 00:34:32,520 Speaker 1: you have enough information to have it go back to 641 00:34:32,640 --> 00:34:36,520 Speaker 1: the regulators that are enforcing um whatever law they're up. So, 642 00:34:36,560 --> 00:34:40,839 Speaker 1: for example, if I remitted money to you, and you've 643 00:34:40,880 --> 00:34:43,160 Speaker 1: never been ky C, but you send that money off 644 00:34:43,200 --> 00:34:46,440 Speaker 1: to someone else. I was KYC when I put the 645 00:34:46,480 --> 00:34:49,520 Speaker 1: money in the bank account. And they're gonna the let's 646 00:34:49,560 --> 00:34:52,719 Speaker 1: say Finncent comes or the Department of Justice comes and says, 647 00:34:52,840 --> 00:34:56,040 Speaker 1: here's a subpoena. I need the records of Mark. Um, 648 00:34:56,160 --> 00:35:00,480 Speaker 1: give me his records, um, right um? Or we need 649 00:35:00,520 --> 00:35:02,400 Speaker 1: to know who this went to, Like, well, I know 650 00:35:02,480 --> 00:35:04,160 Speaker 1: I sent it to you. Here's all the information I 651 00:35:04,239 --> 00:35:06,040 Speaker 1: know about Mark. And you could have sent that off 652 00:35:06,080 --> 00:35:08,000 Speaker 1: to someone else, but then they're just gonna go to you. 653 00:35:08,239 --> 00:35:10,799 Speaker 1: And yeah, you could say I'm not going to help you, 654 00:35:11,200 --> 00:35:19,560 Speaker 1: but then they're gonna right you know um about cash, right, 655 00:35:19,880 --> 00:35:23,719 Speaker 1: I mean, none of this was even around fifty years ago. 656 00:35:25,600 --> 00:35:27,920 Speaker 1: The whole rolls cash. I mean when they when they 657 00:35:28,000 --> 00:35:31,920 Speaker 1: raided the Iraq, Saddam Hussein had pallets and pallets and 658 00:35:31,920 --> 00:35:35,120 Speaker 1: pallets of cash. I mean even just a few years ago, 659 00:35:35,440 --> 00:35:40,080 Speaker 1: the Obama administration sent planes of pallettes of cash to Iran. 660 00:35:40,960 --> 00:35:43,000 Speaker 1: Pallets of cash he sent in the middle of the 661 00:35:43,120 --> 00:35:46,600 Speaker 1: night to Iran. Right um. And so like all this 662 00:35:46,760 --> 00:35:49,759 Speaker 1: like financial regulation is to like we need to know 663 00:35:49,800 --> 00:35:52,480 Speaker 1: where every single penny is going and who's who? It's 664 00:35:52,480 --> 00:35:56,040 Speaker 1: all this is all brand new, isn't it. Um. Yeah, well, 665 00:35:56,080 --> 00:35:57,439 Speaker 1: if you want to even go back to like two 666 00:35:57,440 --> 00:36:00,000 Speaker 1: thousand seven, two eight in the financial crisis, I forgot 667 00:36:00,000 --> 00:36:01,879 Speaker 1: which bank was getting a bail out. I don't want 668 00:36:01,880 --> 00:36:05,000 Speaker 1: to see the wrong name. But they need an infusion 669 00:36:05,080 --> 00:36:07,680 Speaker 1: of like a billion or two billion dollars um And 670 00:36:07,680 --> 00:36:10,680 Speaker 1: this was before Monday. The bill opened on Monday, but 671 00:36:11,040 --> 00:36:14,560 Speaker 1: thanks are closed after by PM on a Friday, and 672 00:36:14,600 --> 00:36:16,239 Speaker 1: so there was no way to wire this money. So 673 00:36:16,320 --> 00:36:19,440 Speaker 1: someone had to fly on a plane with a multibillion 674 00:36:19,440 --> 00:36:23,040 Speaker 1: dollar check to New York from Japan to be able 675 00:36:23,120 --> 00:36:26,480 Speaker 1: to get the money there in time. And yeah, this 676 00:36:26,600 --> 00:36:29,879 Speaker 1: could have we didn't have the solution before. But you're 677 00:36:29,880 --> 00:36:32,399 Speaker 1: saying going back in and further it was all cash. Yeah, 678 00:36:32,400 --> 00:36:35,799 Speaker 1: and that's our legacy financial system is something that this 679 00:36:35,880 --> 00:36:39,279 Speaker 1: gets into philosophy, which like again we always have to 680 00:36:39,320 --> 00:36:43,080 Speaker 1: dip into this, but like, oh, this regulation, like it's 681 00:36:43,120 --> 00:36:45,840 Speaker 1: it's all new, Like is it really even that important? 682 00:36:46,160 --> 00:36:48,799 Speaker 1: And the world hasn't always operated like this, and so 683 00:36:49,000 --> 00:36:50,960 Speaker 1: if it hasn't done has if it hasn't been like 684 00:36:51,000 --> 00:36:53,440 Speaker 1: this for very long, if we operated fine without it? 685 00:36:53,920 --> 00:36:57,400 Speaker 1: Do we need it? And couldn't we just moved to 686 00:36:57,520 --> 00:37:00,840 Speaker 1: a crypto only remittance market. We don't have it anymore. 687 00:37:00,960 --> 00:37:03,840 Speaker 1: I mean, it's the world gonna end. No, it's the 688 00:37:03,840 --> 00:37:07,120 Speaker 1: crypto utopia. But um, we're not starting with a blank slate. 689 00:37:07,280 --> 00:37:12,600 Speaker 1: We're starting with many existing financial regulations, most recently got 690 00:37:12,600 --> 00:37:16,120 Speaker 1: more ownerous doctor in the financial collapse because the free 691 00:37:16,120 --> 00:37:19,879 Speaker 1: market was greedy and we decided to be able out. 692 00:37:20,360 --> 00:37:23,320 Speaker 1: Um a lot of these companies. Um, some people and 693 00:37:23,440 --> 00:37:25,440 Speaker 1: that with the crypto ethos would say, well they should 694 00:37:25,440 --> 00:37:27,320 Speaker 1: have all failed and it's a survival of fit it 695 00:37:27,520 --> 00:37:33,920 Speaker 1: like pre market. Um, that's not what the US government does. Yeah, 696 00:37:34,360 --> 00:37:36,560 Speaker 1: that's not what happened. And that's the U s government 697 00:37:36,560 --> 00:37:39,360 Speaker 1: is responsible for protecting its citizens and they decided that 698 00:37:39,440 --> 00:37:41,960 Speaker 1: this is the right thing for us to do. Whether 699 00:37:42,000 --> 00:37:45,200 Speaker 1: you agree with it or not, Like that's irrelevant. What's 700 00:37:45,239 --> 00:37:48,360 Speaker 1: relevant is there are enough people in Washington, d C. 701 00:37:48,640 --> 00:37:51,440 Speaker 1: That agreed that this was the appropriate response to take, 702 00:37:51,800 --> 00:37:53,719 Speaker 1: and then they took it. And that's what we deal 703 00:37:53,760 --> 00:37:57,880 Speaker 1: with by being in the United States. Yeah. Cool, Well, 704 00:37:58,200 --> 00:38:01,400 Speaker 1: this is such a fascinating topic one that I'm I'm 705 00:38:01,440 --> 00:38:03,680 Speaker 1: really intrigued in and we could sit here and go 706 00:38:03,680 --> 00:38:05,719 Speaker 1: on forever and ever, but I know we need to 707 00:38:05,719 --> 00:38:08,359 Speaker 1: wrap this up, so let me just ask you one 708 00:38:08,440 --> 00:38:10,880 Speaker 1: last thing. So I'm just curious kind of in your position. 709 00:38:11,120 --> 00:38:13,960 Speaker 1: You have this unique perspective on on payments and stable 710 00:38:14,000 --> 00:38:16,880 Speaker 1: coins and where you're at. What are you seeing right 711 00:38:16,880 --> 00:38:20,440 Speaker 1: now in the space that has you excited maybe for 712 00:38:20,480 --> 00:38:23,600 Speaker 1: the near term, six months or twelve months out. I'm 713 00:38:23,640 --> 00:38:28,640 Speaker 1: really excited that UM people are more focused on cryptocurrencies 714 00:38:28,640 --> 00:38:31,320 Speaker 1: that have been out for a while. There's less scams 715 00:38:31,360 --> 00:38:36,920 Speaker 1: out there. UM people are not are raising less money. UM. 716 00:38:37,000 --> 00:38:42,000 Speaker 1: The ones that are raising money are raising five million dollars, 717 00:38:42,040 --> 00:38:44,880 Speaker 1: not the hundred million dollars that billions of dollars that 718 00:38:44,920 --> 00:38:49,480 Speaker 1: others have raised to build a technology. UM. So I'm 719 00:38:49,520 --> 00:38:52,520 Speaker 1: excited about that UM for a bunch of reasons. I'm 720 00:38:52,560 --> 00:38:56,440 Speaker 1: excited for the KIN lawsuit, because the Kin FBC battle, 721 00:38:56,520 --> 00:38:59,000 Speaker 1: because I'm really excited to see what we're going to 722 00:38:59,080 --> 00:39:03,160 Speaker 1: get from that court case. Yeah. I don't think KIM 723 00:39:03,239 --> 00:39:05,960 Speaker 1: has great facts to support the Howie tests, but their 724 00:39:06,080 --> 00:39:09,760 Speaker 1: argument that how we tested and apply is a novel 725 00:39:09,840 --> 00:39:12,759 Speaker 1: and interesting argument that I'm curious to see if that 726 00:39:12,800 --> 00:39:15,959 Speaker 1: will hold any muster um under the in the court. 727 00:39:16,239 --> 00:39:17,719 Speaker 1: Do you think we'll see that play out over the 728 00:39:17,760 --> 00:39:23,040 Speaker 1: next twelve months, um, some of it, But we won't 729 00:39:23,040 --> 00:39:25,840 Speaker 1: have an answer in twelve months, but there will be filings. 730 00:39:25,960 --> 00:39:29,400 Speaker 1: I assume Ken will file for emotion to the smiff 731 00:39:29,480 --> 00:39:32,319 Speaker 1: at some point, because that's usually what you will do. 732 00:39:32,960 --> 00:39:37,160 Speaker 1: The SEC will respond to that, the court will likely say, Okay, 733 00:39:37,200 --> 00:39:40,240 Speaker 1: there's enough to go to trial over. And I expect 734 00:39:40,280 --> 00:39:44,160 Speaker 1: there to be a lot of legal that like not 735 00:39:44,200 --> 00:39:45,920 Speaker 1: I want to call them battles, but legal back and 736 00:39:45,960 --> 00:39:49,120 Speaker 1: force to position each side. Um. And. I think we're 737 00:39:49,120 --> 00:39:51,960 Speaker 1: gonna learn more information about what's going on there from that. 738 00:39:52,480 --> 00:39:54,440 Speaker 1: But no, I don't think that this is going to settle. 739 00:39:54,520 --> 00:39:56,680 Speaker 1: I don't think it's going to end in the next year. 740 00:39:56,719 --> 00:39:59,759 Speaker 1: Year now and then we didn't talk about Facebook Libra 741 00:40:00,000 --> 00:40:02,319 Speaker 1: really um and and we don't have any time left 742 00:40:02,320 --> 00:40:05,480 Speaker 1: to dig into it. But I guess that's something that's 743 00:40:05,480 --> 00:40:08,520 Speaker 1: going to happen over the next six months or twelve months. UM. 744 00:40:08,680 --> 00:40:12,719 Speaker 1: Let me get your opinion. They have been asked by 745 00:40:13,280 --> 00:40:16,680 Speaker 1: US Maxine Waters leading the charge to stop, to halt 746 00:40:17,400 --> 00:40:20,319 Speaker 1: until this is get figured out. Do they halt or 747 00:40:20,320 --> 00:40:23,279 Speaker 1: do they continue and what does the next six months 748 00:40:23,320 --> 00:40:26,920 Speaker 1: look like? For that, the question is telling them the 749 00:40:26,960 --> 00:40:29,920 Speaker 1: halt is vague. I'm not sure. I didn't read what 750 00:40:29,960 --> 00:40:33,880 Speaker 1: the exact response was. But Facebook itself isn't in control 751 00:40:34,200 --> 00:40:38,320 Speaker 1: of the Libre Foundation. It's one of the founding members. 752 00:40:38,480 --> 00:40:43,000 Speaker 1: I think either they or Calibra runs a node for validation, 753 00:40:43,960 --> 00:40:49,279 Speaker 1: but Facebook itself doesn't control it really, And if they 754 00:40:49,320 --> 00:40:51,719 Speaker 1: wanted to like show a more decentralized thing, I think 755 00:40:51,760 --> 00:40:53,719 Speaker 1: they should have taken a further step back so that 756 00:40:53,760 --> 00:40:57,400 Speaker 1: they wouldn't get so much regulatory pushback. But hindsight is 757 00:40:58,239 --> 00:41:00,480 Speaker 1: and you obviously want the marketing push and being asociated 758 00:41:00,560 --> 00:41:04,360 Speaker 1: with that. I think what I'd be more worried about 759 00:41:04,480 --> 00:41:08,080 Speaker 1: is you had already been approached by several regulators who 760 00:41:08,080 --> 00:41:11,719 Speaker 1: were talking about Facebook breaking up big tech companies, and 761 00:41:11,760 --> 00:41:14,319 Speaker 1: regardless of how you feel about that, when you add 762 00:41:14,360 --> 00:41:18,480 Speaker 1: financial too something when you're already being talked about as 763 00:41:18,520 --> 00:41:25,160 Speaker 1: being too big and controlling too much of people's lives, well, yeah, 764 00:41:25,239 --> 00:41:27,640 Speaker 1: so it was just a very poor timing. And so 765 00:41:28,360 --> 00:41:33,400 Speaker 1: ultimately I don't think Facebook has any legal obligation currently 766 00:41:33,440 --> 00:41:37,520 Speaker 1: to stop doing it. It's whether or not they are 767 00:41:37,600 --> 00:41:40,480 Speaker 1: worried enough that Congress might take some action that they 768 00:41:40,480 --> 00:41:43,560 Speaker 1: don't like, whereas it would make sense to stop. And 769 00:41:43,640 --> 00:41:46,640 Speaker 1: I just don't have access to their internal conversations or 770 00:41:46,680 --> 00:41:49,799 Speaker 1: their risk profile or not information to guess whether they 771 00:41:49,800 --> 00:41:53,920 Speaker 1: will push back or not. So as a as a 772 00:41:54,000 --> 00:41:57,279 Speaker 1: hypothetical general counsel, do you tell them, hey, let's hold 773 00:41:57,320 --> 00:42:00,279 Speaker 1: off and see what happens first, or like she just 774 00:42:00,360 --> 00:42:04,160 Speaker 1: go for it. I don't launch in the US. Don't 775 00:42:04,200 --> 00:42:09,200 Speaker 1: launch in the US, right, I needed more information to 776 00:42:09,239 --> 00:42:12,000 Speaker 1: the side if you completely stop or not, but at 777 00:42:12,040 --> 00:42:14,960 Speaker 1: the very least you're not dealing with US customers and 778 00:42:15,080 --> 00:42:18,960 Speaker 1: told us is handle got it? Got it? Great? All right? Well, 779 00:42:19,000 --> 00:42:20,719 Speaker 1: thanks for sticking your neck out on that one. I 780 00:42:20,760 --> 00:42:26,440 Speaker 1: know that's uh, that's always a tough one. Absolutely Well anyway, Matt, 781 00:42:26,480 --> 00:42:28,040 Speaker 1: I know we went a little bit long. Thanks so much. 782 00:42:28,040 --> 00:42:30,600 Speaker 1: It was a great conversation. I love talking about this 783 00:42:30,680 --> 00:42:33,440 Speaker 1: kind of stuff and hopefully everyone enjoyed listening. Now you 784 00:42:33,480 --> 00:42:35,759 Speaker 1: have some really good perspectives. Where where would anyone to 785 00:42:35,800 --> 00:42:38,040 Speaker 1: keep up with you if they wanted? Um, you can 786 00:42:38,080 --> 00:42:41,560 Speaker 1: follow me on Twitter at m a Gurgler, or on 787 00:42:41,600 --> 00:42:46,160 Speaker 1: LinkedIn you could add me just Matthew Gurgler, Great, all right, 788 00:42:46,480 --> 00:42:48,840 Speaker 1: well good stuff. Thanks for taking the time to talk today. 789 00:42:49,520 --> 00:42:53,319 Speaker 1: It's been my pleasure. Have a great day. Hey. If 790 00:42:53,360 --> 00:42:56,640 Speaker 1: you like this episode of the Market Disruptors Podcast, please 791 00:42:57,000 --> 00:42:59,759 Speaker 1: help us take this to the top of the podcast charts. 792 00:42:59,760 --> 00:43:03,040 Speaker 1: Just please do me a favor and rate, review and subscribe. 793 00:43:03,239 --> 00:43:06,000 Speaker 1: Taking fifteen seconds to just leave a quick review goes 794 00:43:06,040 --> 00:43:08,359 Speaker 1: a long way in helping us reach more people and 795 00:43:08,480 --> 00:43:11,600 Speaker 1: disrupt more markets. I really appreciate you listening and I'll 796 00:43:11,600 --> 00:43:13,960 Speaker 1: see you next time on the Market Instructors Podcast.