The Wolf Of All Streets - Senator Kirsten Gillibrand Explains Why The New Crypto Bill Is A Game Changer For Bitcoin

Episode Date: June 12, 2022

Senator Kirsten Gillibrand, Democrat, teamed up with Cynthia Lummis, Republican, to propose the new Lummis-Gillibrand bill. The goal? To create a regulatory framework for digital assets with clear standards and definitions, clarity for both industry and regulators, analysis of energy consumption, and ongoing flexibility as the space evolves. Senator Gillibrand sat down with host Scott Melker at Consensus 2022 to discuss the creation of the bill, its early reactions, and why you should get involved and speak up. Full text of the Lummis-Gillibrand bill is available here: https://www.gillibrand.senate.gov/imo/media/doc/Lummis-Gillibrand%20Responsible%20Financial%20Innovation%20Act%20%5bFinal%5d.pdf JOIN THE FREE WOLF DEN NEWSLETTER 📩 https://www.getrevue.co/profile/TheWolfDen THANK YOU TO OUR SPONSOR ►► Vauld is a Smart Investing Crypto Platform which allows the user to invest without any stress! With Vauld, you can earn free passive income in crypto. Vauld lets you earn the highest interest rates in the crypto industry - 12.68% on stablecoins and 6.7% on BTC and ETH.. Sign up below and get a 40% kickback on trading fees, 5% commission on interest payouts and 5% commission on loan interest. Vauld’s ‘Buy the Dip’ function automatically purchases specific cryptocurrencies for you when the price dips below a pre-set level. It’s awesome! Sign up here: http://thewolfofallstreets.info/vauld EPISODE LINKS Senator Kirsten Gillibrand: https://twitter.com/SenGillibrand Production & Marketing Team: https://penname.co/ FOLLOW SCOTT MELKER • Twitter: https://twitter.com/scottmelker • Facebook: https://www.facebook.com/wolfofallstreets • Web: https://www.thewolfofallstreets.io • Spotify: https://spoti.fi/30N5FDe • Apple Podcasts: https://apple.co/3FASB2c

There's uses of blockchain technology we can't even imagine today. And that's why I want to create a framework for thoughtful regulation on what we do know with a space for what we don't know. The crypto industry has long waited for some clarity as to what they can and cannot do in the United States. Finally, we have a potential framework for that being presented by today's guest, Senator Kirsten Gillibrand, who wrote a bill alongside Senator Cynthia Lummis from the great state of Wyoming, offering this potential framework

for how the crypto industry can proceed in the United States of America. This is such an important conversation that you don't want to miss, especially in the context of the fact that this bill was just presented this week. This podcast is sponsored by Vauld. Please stay tuned for more information on this amazing company later in the episode. The crypto industry has long been looking for regulatory legislative clarity in the United States. I think a lot of companies have actually been hesitant to operate

in the space because they haven't had that clarity before. But now we actually have a potential framework for that. Can you talk about how the bill came together? So what Cynthia Lemus and I tried to do is create a regulatory framework based on existing definitions and how the market functions in other contexts, but apply it to the digital asset world. all the recent court decisions as well as how digital assets are used and created a very direct and simple definition that if you're offering your digital asset to raise money for your company, it's very similar to being a stock that's being used to raise money for a business. That would be a security. Under our definitions, some cryptocurrencies will be commodities, something like Bitcoin and Ethereum would

be under a commodity because they are largely decentralized now or entirely decentralized now and have maturity and look much more like a commodity than a security. So we try to make that clarity there. We also look at stablecoins. We decide that you really have to be backed 100% by a fiat currency, that the recent collapse of one based on an algorithm isn't appropriate for a stable coin, but that could be regulated under other means, either a security or a commodity. And we look at issues of just general disclosures, how we can create more safety and soundness, more transparency and accountability,

how we can add consumer protections and make sure that there's a very customer-facing lens so that people know what they're buying and what it is. Do you view this as a starting point for negotiations effectively, that this is what we would ideally want, but knowing that there's gonna be compromise, it'll likely be chopped, maybe it'll take till 2023 to really get. Yes, and I think it's important to understand that a bill of this dimension

probably has four committees of jurisdiction. It would want to go through the Agriculture Committee for the CFTC pieces, the Banking Committee for the SEC pieces, the Finance Committee for the IRS tax pieces, and Intelligence for the SEC pieces, the finance committee for the IRS tax pieces, and intelligence for the cybersecurity pieces. And so we expect this just to be the first draft. We expect to receive substantive comments from the community, from regulators, from academicians, people who know this space well and say,

well, this should be changed a little bit here or maybe add something here. We're welcoming all those comments. And hopefully these committees will hold hearings and actually mark up the bill. If they don't mark up this bill, they'll mark up something like it. And so our goal is just to get the ball moving with some good ideas about how this space could be regulated. What have been the early reactions from your colleagues about the bill in general? I think if you had proposed something like this a year ago, it would have been utterly dismissed.

Well, I don't think people have had a chance to even read it yet, but those who have looked at it are very positive. In fact, Chairman Benham read it and said it was excellent and that it was a good start, especially for the commodities piece that he'd be responsible for. Chair Gensler hasn't read it yet, but I spoke to him a couple days ago and he said he would read it and give us line edits and really give us feedback. We worked with his staff on the definition of securities to make sure it was complete. So we've done a lot of homework in terms of trying to work with the staff of each of the principals who are going to be responsible for this space. Senator Wyden's staff, for example, really worked with us on all the IRS language because it's something that he has strong opinions are. Our CFTC regulatory framework, we've worked with the Ag Committee staff on what it should look like, and they're going to issue their own version shortly.

So we're trying very hard to make sure we just keep people abreast of what we're thinking and why so that we can bring on support over time. I spoke at length with Chris Giancarlo, who was the chairman of the CFTC until 2019, and he is a huge fan of what you've done. Great. So that's progress because we're just trying to get the stakeholders and people who are knowledgeable about this space to spend time with it. Just look at it, read it, tell us if we got it right or wrong, because we, you know, this is just draft one. It can continue to grow and get better and be honed. We just want the process to start now because this industry deserves it.

It deserves that clarity. It deserves rules of the road. And we want to make sure that we're doing our part to make that possible. I think we're the first time in history that the crypto industry is actually welcoming this as well. There was always this sort of pushback, you know, an anti-government sentiment, perhaps in the early days. And now, like I said, I think they just want the clarity so that they can figure out what the

rails are to operate. Yes. And I can't tell you how many businesses I've spoken to or said we are waiting for feedback from the SEC. We are waiting to get our broker's dealer's license. We are waiting to get our bit license. Like they're waiting. People want some kind of oversight and accountability because they want to be able to offer a good product to their customers. They want to be good business people. And so they're looking for this lens of safety and soundness, this imprimatur that this is a stable, good industry that things can be built upon. And I think it is matured enough that they deserve that response. And I'm hoping that over the next six months to a year, we can get pieces of this bill

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5% commission on interest payouts, and 5% commission on loan interest. Guys, sign up right now at thewolfofallstreets.info slash VAULD. That's V-A-U-L-D. Do it now. Seriously. To me, perhaps the most exciting part is that it's, of course, a Wyoming Republican and a New York Democrat that are doing this together. And listen, New York is a notoriously difficult state for financial regulation. Right. So that's obviously purposeful. But do you believe that

this can be a truly bipartisan issue? Oh, for issue? I don't think it's going to be partisan at all because things like regulation, things like economics, they're they're non-idea, ideologic, largely. They're very much something you can find common ground on. And Cynthia and I work very well together. We're both very eager to make this space safe and transparent and we come at all this from very good places. And so I'm optimistic that with our leadership, others can follow and others can build

and begin to add on to what we've done. Well, this community loves her because she was an early Bitcoiner. Yes, exactly. When did you first hear about it? Oh, I heard about it from my now 18-year-old about 10 years ago. Always the kids. And he was like, Mom, I want to buy Bitcoin.

And I said, well, I don't know. So he was very interested in it. And so that's how I first learned about it. And then I followed the industry for the last decade and really got much more engaged in it over the last year because I had a number of constituents come in and want to talk about it from all different angles, from the mining angle, from the environmental impact to industries who want to participate and want regulation because they want to have institutional clients and they want to make this part of their business plan. So I've heard about it from a lot of constituents. So that's why I decided to get involved and really spend the time.

Right. And those are obviously the constituents who have sort of a business interest or superficially are involved in the industry. How much are you hearing it now from your constituents being the average voter in New York? You know, young people talk about it. Yeah, they're very interested. And it's an environmental issue. So you have to recognize that the mining is very relevant to New York state because we have, I think, we have a lot of different mining companies in our state. But one is on the Finger Lakes, and that created a huge turmoil. Yes. And so I had to get an understanding of what was happening there specifically. And that's one of the reasons why the New York legislature decided they were going to have a moratorium on any Bitcoin mining that used fossil fuels.

Because some of these investors wanted to take very dirty plants that are offline and bring them online, which would be a terrible move because it harms our state, harms our tourism, harms our agriculture, other industries that rely on clean air and clean water. So and it would go against our climate goals. So we want to create a mechanism whereby these companies can disclose what kind of energy are using. Are you using green energy? Are you a problem solver? Are you creating a market for wind or solar or geothermal? Or are you using the flares so that it doesn't go into the environment? Those are all good news stories. There's many bad news stories, too. But either way, disclosure helps because then people can decide, do I want to invest in this industry? Do I want to be part of this?

Do I want to own Bitcoin mind in this way? Those are choices that consumers can make. So in our bill, we have a study being done by the FERC with CFTC and SEC on what kind of disclosure and treasury would actually work. So they're gonna do that very thoughtful work and give guidance to CFTC and SEC and we'll be able to implement better environmental disclosures.

I think that's what I love about the entire ethos of the bill or even the idea is that people are finally actually trying to dig into the facts rather than acting on, I think, assumptions. And we've had these cyclical assumptions in the Bitcoin industry, sort of the narratives that come back. So it would be great to actually finally get the data. Yeah. And just know. And just and just and, you know, and just know if you are going to have a disclosure regimen, what works best? Like what is the most useful information? Because CFTC doesn't have experience in that. So FERC does. So

they'll give them guidance. One of the most exciting parts as well of the bill to me was the $200 cap. Minimus, yeah. Necessary. Nobody wants to buy coffee with Bitcoin if they have a taxable sale of Bitcoin to do so. No, no. And you just have to also think about all the 18-year-olds who use it in their computer games. I mean, if playing a computer game and buying some new sword is going to give you a taxable consequence, that is going to be ridiculous. So you have to have some level of sanity. Is that sort of making a statement that perhaps this is money of some sort, right?

It's not just necessarily commodity or security, or is it just saying that there's a certain threshold? Yeah, it's different than money. So it's not quite, it's not quite. But a stable coin is similar to money. So that is. And so it just depends. And, you know, for in the ways it's not money is that the value goes up and down so quickly and and so dramatically.

That doesn't usually happen to money unless you have a failed economy, which is one of the uses of cryptocurrencies, that if you are living in a failed economy, you have a place to go to store wealth or to buy and sell things that you need to buy and sell. So stable coins included. Yes, it's funny. Bitcoin is we always talk about it being a store of value or a hedge against inflation and you're in Venezuela and you buy Bitcoin with your boulevards the second you get them. But what people really want around the world is dollars. Yeah, they want dollars.

Which they don't have access to. Which is why stablecoin is an important market. And the interesting thing about the conversation we just had on the big stage was that stablecoins might be the area we could have some early consensus and maybe even pass a piece of legislation by the end of the year. Because Senator Chumi, Senator Lummis, and I are all pretty much in agreement about where that's going to go. So I think we could get a consensus bill ready pretty quickly. And just in light of the recent collapse, I think it's relevant and something that the White House probably would love to do something meaningful on. So so that's going to be at least a short term aspiration, whereas the long term aspiration will be to socialize this bill across party lines, across these four committees to get consensus built

as soon as possible I would love to see that I think it's unfortunate that we were even called an algorithmic stable coin when it was clearly a speculative experiment that collapsed but it's nice to hear that legislators understand there's a difference we do and there is a difference and and there seems to be consensus around that so that's good so but again it's just a new industry this understand there is a difference. We do and there is a difference and there seems to be consensus around that. So that's good. But again, it's a new industry. This is an industry that's growing, innovating every day. There's uses of blockchain technology we can't even imagine today. And that's why I want to create a framework for thoughtful regulation on what we do know with

a space for what we don't know. And that's why our bill has a committee that's gonna have a member from the CFTC, a member from the SEC, a member from academia, from the industry, a very fulsome committee to look at these issues of first impression and make recommendations to regulators and to Congress. Wow, thank you so much for proposing this framework. It's been long needed and it's wonderful to see that it's finally happening for us.

It's a bit of a dream to even, I think, be on the docket and be considered. So thank you very much. It's exciting. And I mentioned to the community during our panel, it's important that members of this community be heard. So speaking out, reading the bill, making your voice known, asking your Congress members and senators to look at it, to work on it, to find common ground, I think is worthwhile. My favorite hobby is sending the Bitcoin standard off to my local politicians. I encourage everyone else to do the same. To do so, yeah. Thank you so much.

Thank you so much. It really is an honor. Thank you. Let's go.