$30k BTC & Beyond? BlackRock Bitcoin ETF with Austin Campbell

Austin Campbell is the managing partner of Zero Knowledge Consulting, an adjunct professor at Columbia Business School, and used to work at Paxos in both Portfolio Management and Chief Risk Officer. He also was Co-Head of Digital Assets in Global Rates at CitiBank at JP Morgan for a decade. Austin knows a thing or two about the TradWorld and we brought him on to help us navigate all of the TradNews that has surfaced in the last two weeks around the crypto space. ------ 🚀 Unlock $3,000+ in Perks with Bankless Citizenship 🚀 https://bankless.cc/GetThePerks ------ 📣 CYFRIN | Smart Contract Audits & Solidity Course https://bankless.cc/cyfrin ------ BANKLESS SPONSOR TOOLS: 🐙KRAKEN | MOST-TRUSTED CRYPTO EXCHANGE https://k.xyz/bankless-pod-q2 🦊METAMASK LEARN | HELPFUL WEB3 RESOURCE https://bankless.cc/MetaMask ⚖️ ARBITRUM | SCALING ETHEREUM https://bankless.cc/Arbitrum 🧠 AMBIRE | SMART CONTRACT WALLET https://bankless.cc/Ambire 🦄UNISWAP | ON-CHAIN MARKETPLACE https://bankless.cc/uniswap 🛞MANTLE | MODULAR LAYER 2 NETWORK https://bankless.cc/Mantle ----- TIMESTAMPS: 0:00 Intro 5:12 Austin Campbell 7:14 TradFi Last Two Weeks 10:59 Political Conspiracy 15:05 Timing Analysis 17:17 BlackRock Bitcoin ETF 20:05 Other Bitcoin ETFs Denied 22:47 What's the SEC's Next Move? 24:00 How Bullish is This? 26:13 BlackRock & Coinbase/Kraken Partnership 31:15 EDX Markets 37:22 Unbundling of Crypto Exchanges 42:22 Stablecoins Landscape 49:55 Stablecoin McHenry Bill 56:50 International Stablecoins 57:55 Closing & Disclosures ----- RESOURCES: Austin Campbell https://twitter.com/CampbellJAustin ----- Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research. Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here: https://www.bankless.com/disclosures

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:16David Hoffman?

  Bankless Nation, it's TradFi season. The BlackRock, with $10 trillion of AUM, the biggest asset manager, I think, in the United States, has submitted an application for a Bitcoin ETF. Is it going to get approved? How bullish is it? What does this mean for the SEC's treatment of crypto? But not only that, Charles Schwab and Fidelity have a new exchange entering into the marketplace. The EDX Markets Exchange has entered the fold. Who is this marketplace for? How is it different? And what is with the timing of all of this? In the worst, most hostile regulatory environment, some of the biggest traditional players have decided to enter the game. What is the deal with that?

• 1:01David Hoffman?

  There's also a bunch of stablecoin conversations to be had as well. Stablecoins are under attack. Some of them are being labeled as securities. Yet also, there is a stablecoin bill going through Congress. Why is this all happening at once? These are some very deep, very big questions about the way that the incumbents of the world are treating our industry. And they're also treating it well. They want to come play the game. The TradFi conversation is definitely a conversation that I need help with. So we are bringing on someone who has been in the TradFi world. Austin Campbell, new to the Bankless Podcast, is going to help us navigate some of these conversations. And I will introduce him in just a second. But first, a moment to talk about some of these fantastic sponsors that make this show possible, especially Kraken,

• 1:46David Hoffman?

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• 2:29David Hoffman?

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• 3:11David Hoffman?

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• 3:56David Hoffman?

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• 4:34David Hoffman?

  Bankless Nation, I would love to introduce you to Austin Campbell. Austin is the managing partner of Zero Knowledge Consulting. He's also an adjunct professor at Columbia Business School. He used to work at Paxos, the stablecoin issuer, in both portfolio management and also as the chief risk officer. He was once the co-head of digital assets in global rates at Citibank. He was also at JP Morgan for over a decade. So Austin knows a thing or two about the trad world. And I'm hoping he can help us navigate all of the trad news that has surfaced in the last two weeks or so around the crypto space. Austin, welcome to Bankless.

• 5:10Speaker 01

  Yeah, thank you for having me, David.

• 5:13David Hoffman?

  So that was my attempt at your bio, but maybe you want to explore a little bit. This is your first appearance on Bankless, so welcome to the show. But also just a little bit more about who Austin Campbell is and where your position is in the crypto world.

• 5:26Speaker 01

  Yeah, so I would say, you know, I jokingly describe myself as ultimately a person who wandered into crypto despite being a grouchy fixed income person from traditional finance. So like my background in that space. So I started my mainstream career in traditional finance after some time in reinsurance was largely around cash stability products. So I was thinking about, you know, and this is going to sound familiar to people who have thought about stablecoins. If I've got this underlying pool of assets and I always need them to trade at a fixed price despite people coming in and out of this pool, how would I make that happen? And the areas in which I was originally working on that were actually in very traditional markets of the US. So it was bank capital markets and then the 401k market.

• 6:09Speaker 01

  So if anybody has ever looked in their 401k, if you're a US person and seen a stable value fund, that you can blame me, right? Among many other people for making those things happen. So I did that for a long time and got interested in crypto, you know, really because of some of the issues around 2008 and how some of the innovations of blockchain technology and the financial structure that underpins that solves a lot of the problems that we had that really, you know, I don't have to preach that 2008 was incredibly destructive to people. So I, I didn't come at it from like, call it an ideological maximalism standpoint. I was very much a functionalist and like, hey, this solves problems. And so from there, I was at Stone Ridge for a while. That's the parent of Nidegg. I was through Citi. I was at Paxos

• 6:53Speaker 01

  for a while and now I do a lot of consulting work in the space.

• 6:57David Hoffman?

  Beautiful, beautiful. And I think you are the, the perfect man to really help us, uh, guide us through this conversation. As I said in the intro, uh, the trad world is not something that I'm familiar with. So I definitely need help here. Uh, bankless listeners will know that I learned everything I know about money and finance through crypto, not through anything, uh, prior to crypto. I want to start with this tweet that came from Delphi Digital, which just says, over the past two weeks, BlackRock files for a Bitcoin ETF. NASDAQ has la- is launching crypto custody services. Deutsche Bank seeks crypto custody services. Soros Fund Management says crypto is here to stay. Citadel, Fidelity and Charles Schwab launch a crypto exchange. The institutions are here. Now, not all of this has happened in the last two weeks. NASDAQ has been doing their custody thing for a long while now,

• 7:40David Hoffman?

  but I think the, the point still stands and what this tweet's really getting at is like, man, in the last two weeks, TradFi has entered the game in a very new and very big way. And in, over the series of, that's been a year of just onslaught from regulators and governments and just, uh, also onslaught from trad leaders, like Jamie Dimon, uh, Larry Fink, all these people. All of a sudden trad, trad is entering the game. So from, and that's what it, that's what it feels like to me as a crypto native, somebody who lives and breathes inside of the industry. I don't know what it looks like for, for the perspective of someone who is also extremely familiar with the trad world. So can you, maybe you could just like summarize

• 8:22David Hoffman?

  the sentiment of someone who is both familiar with crypto and traditional finance. Like, what does the last two weeks mean to you?

• 8:29Speaker 01

  So I would say anytime something like this happens at a traditional financial firm, and you see things come together over about a two-week period, that's probably the culmination of six to eighteen months of work behind the scenes. Everything moves slowly at these places, right? So like, if you're at a crypto startup, if you live in the crypto world, you're used to making decisions by getting together on Telegram, or, you know, maybe getting on a video call, arguing with each other. If it's a long one, doing some research, coming back and doing it again a few days later. I launched a product at Citi that took a year and a half to make that kind of decision, right? So the time scales you operate on are just glacial compared to what you're going to see in the regular world.

• 9:12Speaker 01

  So if BlackRock filed an ETF application, they'd been thinking about it for a while. Part of it is just, why do they pick the current moment? And I would say it's important to remember the history there. If you look at ETF applications for Bitcoin ETFs, there have been many of them from genuinely some pretty top-rate institutions, right? You've got like Fidelity, you've got Invesco, you've got VanEck, you've got Stone Ridge, my old employer. All people who live well within the regulated world, the SEC is familiar with. They're not engaging in funny business, like, these are genuine attempts at ETFs.

• 9:45Speaker 01

  So what's the signal for BlackRock piling on? I would say it's two things. One, it's telling the SEC and the US government, if we can't get our act together here, there's a lot of things that are already happening offshore, like, these products exist in Canada, they exist in Europe, and if you block us here, we're probably just going to take our business there as part of the message. Another thing is that Larry Fink is pretty influential in the Democratic Party. I think this may be a little bit of a signal from the TradFi world of, we would like you to find a constructive solution to this problem, not just keep blocking it. Because when you look... And zoom out from the US and think about the global like situation. You have Project Guardian

• 10:27Speaker 01

  coming out of Singapore, the J F S A in Japan has been very progressive on crypto and also very protective of consumers. Like F T X Japan didn't lose anybody's money. And I think a lot of people don't realize this. Mika just passed in Europe. So I think US traditional financial firms are genuinely at the point of being very worried about being left behind. And that's part of the reason you're seeing these things coming forward because you got to put the pressure on. If we wait another six years, you're, you know, in crypto terms, that's like what eight market cycles at this point?

• 10:59David Hoffman?

  Yeah, certainly. And so there, there's a sentiment out there that in crypto, we like to wear our conspiracy hats. Sometimes I think it's pretty fun to put on. And the, the conspiracy here is that the Democratic Party specifically, the Biden administration, along with Gary Gensler, you know, Elizabeth Warren, that whole axis of power has been hammering all of the crypto native companies and the crypto native industry in order to clear the way for, you know, the, the Larry Finks, right? You said like Larry Fink is very influential in the Democratic Party. So the, the conspiracy is that, you know, the, the regulators have been acting as an arm of the Democrats in order to clear the way for the big traditional incumbents

• 11:40David Hoffman?

  in order to have free and easy access into a market that the regulators have hammered. How on a scale, how, how much merit does this sentiment have? Or is this just crypto people being conspiracy people?

• 11:52Speaker 01

  So there's a great scene in the movie Forrest Gump, if anybody's seen it, where Forrest is playing football, catches the ball, runs down the field, scores a touchdown, and then runs out of the stadium and continues running basically forever. That's kind of what the crypto community does to me with a lot of these conspiracy theories, right? It's like you take an initial grain of truth, but then you're like out the stadium and across the country. So what I would say is this, yes, regulators have hammered a lot of crypto firms. However, I would say there's two things going on there simultaneously. I would not find this like a great plot to empower TradFi. It's that one, just being blunt, some of our regulators are really uninformed on this technology or under informed and don't have a complete

• 12:37Speaker 01

  view of what's going on in the market, why the technology is important, why it should be used, what's progressive. Like there are people in the administration. And at some of the regulators who just think all of crypto is a scam and if it all leaves the country, that's a feature, not a bug. On the other hand, there are many people at these regulators and within the administration, within the Democratic Party, who don't hold that view. So don't take that as a monolith. Understand that as you describe, quote, the Democratic Party, that's kind of describing like, quote, half the United States. Like, there's a big diversity of views. Two. With that said, some of the objections that regulators have to crypto activities, I would describe as completely legitimate.

• 13:19Speaker 01

  Like, one of the problems in crypto is that there are people who are pridefully ignorant about the financial system and banking because they think banks are the bad guys. And so they just throw it all out. In reality, man, they have broken a lot of stuff historically in the banking and finance world, learned a lot of lessons about how not to let that happen. So like, one of the points that the SEC has been on about that I personally agree with is the separation of custody from trading, right? Like, things like FTX can't happen if you have an independent custodian that holds the funds and verifies them. They would know if somebody was taking all the Bitcoin and selling it to buy FTT or something like that. So separating those duties, probably a good thing, and I can see objections to some of the models.

• 14:04Speaker 01

  You know, that exist currently where like a crypto exchange in a very weird way is like just about the most centralized financial like entity that could possibly exist. Right? Which is ironic for crypto to have spawned that. So I don't want to completely say that everything the regulators are saying is bad. Actually, I think some, not all, but some of the SEC's critiques are correct. My problems with them are more how they're going about doing it. Like, I have some issues with rule of law and sort of extra legal and extrajudicial actions. But I think some of the core of their critiques, like, yo, there's some real BS activity around trading going on here, like wash trading, front running, et cetera. And yo, your custody should probably be separated from your trading activities. Those, I think, are valid points.

• 14:49David Hoffman?

  Yeah, and there's a whole conversation that we're going to have as we go into the second half of this episode around the new exchange because that's specifically what this new exchange from Charles Schwab and the other backers from Citadel, etc. It's built around, it's built around, it's an exchange without the assets, right? The assets come from elsewhere. But I really want to first continue down this BlackRock ETF conversation. Okay, so we're putting a pin on the whole like it's not a conspiracy, but crypto people love those kinds of conversations. So that's why they entertain them. On the flip side of things, maybe a more gracious interpretation of events is, like you said, the trad world moves slowly. Six to 18 months of building up to this point of even submitting papers in order to prepare for this.

• 15:32David Hoffman?

  And so all of the, all of these trad institutions have a lot at stake, even though they haven't formally entered the game yet, they are planning to. And so maybe the timing on this also comes from the fact that they are watching the SEC and regulators hammer down an industry that they see profit from. And so maybe they're this, the signal of BlackRock choosing now to submit their Bitcoin ETF, spot ETF with the SEC is also a signal like, hey, SEC, don't kill that thing. We would like to do business there. This perhaps is a more gracious, more charitable interpretation of timing. What's your take here?

• 16:11Speaker 01

  Yeah, I think that's probably closer to correct, right? Like the things you can read from the ETF filing are one, BlackRock thinks it's important enough to throw their hat into the ring, even when they know they're going to catch some PR and public flack about it. And they're willing to do it anyways. So that's a statement of intent. Two, the big guys like the BlackRocks, the Fidelities, the Investos, the Vex, the StoneRidges, don't put their hat into the ring unless they think they can do it safely. So it's also a statement about the fact that they do not think the entire crypto market is a scam. They do think this stuff has some long-term value and utility because they're not going to like do this for something they really think is completely useless, will be gone in a year, it shouldn't exist in the US.

• 16:53Speaker 01

  This is a statement of quite frankly, the reverse, at least in this case about Bitcoin. I would imagine their opinions are probably similar about ETH, if we're being honest. Now, a bunch of altcoins, now maybe there's a discussion to be had, but it's telling you they see some fundamental utility in blockchain technology and decentralization. You know, when done, I would describe it in intellectually honest way.

• 17:16David Hoffman?

  This is a take that I saw from Jake Shrubinsky that's along these same lines. He says, "The SEC has adamantly refused to approve a spot Bitcoin ETF for years, a view so entrenched that it's litigating the issue against Grayscale," of course, a crypto-native trust with BTC right now. "Knowing that the SEC disagrees, BlackRock wants to list a Bitcoin ETF on NASDAQ anyways." And then he finishes up and says, "Everyone gets how big this is, right?" So here is the actual filing. Here, we're looking at the report here. This is well beyond my pay grade to even understand, but I would imagine that this, whatever this document is, this filing with the SEC is, you know, par for the course.

• 17:56David Hoffman?

  Interestingly enough, BlackRock has submitted 576 applications for ETFs of various kinds, and it has gotten approved 575 of them. So almost batting 100% with a very large number of at-bats. Austin, I don't know how to interpret these kinds of documents, but is there anything inside of the Grayscale, or excuse me, the BlackRock Bitcoin ETF that we should understand? Like, how is this thing built? How is it constructed? Is there any nuances here that are worth understanding?

• 18:28Speaker 01

  I mean, so this is one of the problems with the current SEC regime. You read a document like this, and it'll be like, you know, 100 pages long, and probably 10 of them have actual content. The majority of it is just CYA disclosures. So one thing I would say is I've seen a lot of talk about, "Oh, my God, BlackRock has all these things in about forks and risks, and they're planting all kinds of evil." It's like, no. The way you write a prospectus, having been involved in them in the past, is you sit down at a table and you list everything you could possibly think is even maybe kind of sort of a small risk to the thing, and you throw it all in there because you're supposed to disclose it. Like, if BlackRock thought there was a 1% chance that, like, aliens would come steal Bitcoin, it would be in the ETF filing, right?

• 19:11Speaker 01

  So just to be clear, this is the kitchen sink approach, and you do that to cover yourself legally because securities litigation is awful, and people get sued all the time for, "Hey, X happened, I lost money, and you didn't say it could happen," and it's super annoying. So this is more about just plaintiffs' attorneys and how the US legal system works than any statement of intent. So let's be very clear about that. Two, beyond that, it's a bone stock ETF filing. Like, what are we gonna do here? We're gonna buy Bitcoin when people give us money to buy Bitcoin, and we're gonna sell Bitcoin when people want their money back.

• 19:45Speaker 01

  The fact that I stopped talking there is kind of the point, right? Like, that's it. The only thing that's novel about this compared to all of the other ETF filings is something about like surveillance and information sharing. But the reality is everybody else was willing to do that already too. Right? They're just codifying it. So this is almost like a clone of the other ETF filings, which to me is actually the interesting part.

• 20:08David Hoffman?

  Yeah. Why? Why is that interesting? There are a bunch of Bitcoin ETFs that have been submitted and denied. I think there have been many that have submitted and are still in limbo, waiting, kind of waiting to get denied. Perhaps now waiting to get approved if the SEC approves this one. So what's the lay of the land? What's the landscape for the other Bitcoin ETFs that have been submitted? And how does the fact that BlackRock, that they submitted this one, how does that change the game?

• 20:35Speaker 01

  Yeah, I mean, it's kind of a statement that BlackRock thinks a lot of the previous applications were fine. Right? So that to me is interesting, right? Like they're saying, we think it's possible to do a very vanilla, very boring Bitcoin ETF safely. Right? Obviously, we would like to do it. That's why they filed this thing. So I think it's almost a statement more from like, this is why I said it's more of a statement to the SEC and regulators and the government of like, hey, help us out here. Right? They're saying, we think we could do these things safely. We think people should be allowed to do it. That's the real message I'm taking from this. I will also say on the conspiracy theory note, if the SEC approves the BlackRock run while having continued to deny all the others,

• 21:19Speaker 01

  that will be a gigantic scandal. Like you are not supposed to play favorites as a regulator. At a bare minimum, if they're going to approve something, they probably approve basically all of these at the exact same time.

• 21:32David Hoffman?

  Right. And so if, if the example is that they just approved the BlackRock ETF, then all the conspiracies that the people, the crypto people are saying that the SEC cleared the way for BlackRock would come true, correct?

• 21:43Speaker 01

  Well, that, that would also like, so let's leave the realm of crypto for a moment. Yeah. If the SEC starts playing favorites by approving things for like a BlackRock or a JP Morgan in front of everybody else who filed materially identical things first, you're now into gigantic political scandal world because now this is not a neutral rules-based regulator, even if you hate their interpretation of the rules. Now this is somebody doling out explicit political or financial favors to people. That is not how US regulators operate. Right? Like, I am lucky enough to know some pretty senior folks at some of our regulators, right? Like, New York Fed, Chicago Fed, CFTC, you know, the Credit Union Administrator.

• 22:26Speaker 01

  This is not how any of them operate. They actually care a lot about fairness and fair treatment. And so when you look at, you know, somewhat janky decisions that are made historically, there's usually a lot more going on behind the scenes than people realize. But this kind of thing, no, it would be shocking to me. Like, that's credibility destroying for the SEC even outside of crypto.

• 22:48David Hoffman?

  So, uh, in, in that case, are we going to see, what, what's the SEC's move here? Like, I'm, I think, looking at BlackRock's track record, they think that they can get this approved. Like, they've only missed one out of 576. And so, assuming that this does get approved, this kind of means that more also need to get approved at the same time. So we're going to have a handful of Bitcoin ETFs, and they're all going to compete on the open market. What, what's the SEC's move here? Because we know Gary Gensler doesn't like crypto and doesn't want to, I would assume. What, what do you think happens next?

• 23:20Speaker 01

  Yeah, I mean, you're going one of two paths. Either exactly what you just said, or they've got to also deny BlackRock, which I think turns up the pressure in Washington dramatically. Right? And I think if you, again, zooming out, a lot of this is probably happening because Europe just successfully passed MICA and is in the process of implementing it. Right? Before, when you're in a world where no other major large jurisdiction really has functional crypto legislation, we could all just kind of wait, fine. But now you're in a position where if it takes us, again, two to six years to get something going, well, Europe is way ahead at that point. And so I think the pressure is being put on by some of the traditional financial institutions for that reason. Like, the big US asset managers

• 24:01Speaker 01

  and banks do not want to live in a world where a consumer product that is heavily demanded can be offered by all of their global competitors, and they are paralyzed.

• 24:10David Hoffman?

  Hmm. So with the assuming that we move forward and we eventually get this ETF approved and therefore others as well, hopefully, how bullish is this? The idea is like, there's a pipeline now between the world of Wall Street, the world of TradFi, the world of money that's out there that still is uncomfortable with crypto native exchanges. And now there's a pipe between them and Bitcoin, right? And downstream of Bitcoin is like all of the risk on assets of crypto. So what's the timing on this? Do you think you have any speculation on timing? And what does this do to the actual market of crypto assets, would you think?

• 24:48Speaker 01

  Yeah, so I've said for a long time, one of the problems that crypto has is just being completely inscrutable and unapproachable to normal human beings, right? So I kind of, I look at market adoption cycles in like three ways, right? Like sort of canonically speaking is one is can power users use it? We're there with crypto, like I can use this stuff, technologists can use this stuff, fine. The next one is could one of the peers of like my age or a little bit younger use it without incredible brain damage? Maybe like honestly, not really for crypto, like private key security, setting up wallets, understanding what to interact with a normal like 30 year old person who's not deeply invested in this space, actually, it's still pretty hard for them.

• 25:33Speaker 01

  The third stage is could my mother use it? We are nowhere near my mother using it. But the interesting part about an ETF is that's like something people can buy, right? Normal two legged humans can buy it. No, they're not really using the technology, but they're getting closer. And so it's slower than people want, but faster than it could be. It's a very medium step in that regard. The thing that will need to follow it to be like very, very bullish is the situation where people can actually use the thing as it's intended on a blockchain in a more seamless way. We're not there yet, but this is one of the bricks you need to put in the wall to get people there is what I would say.

• 26:14David Hoffman?

  There's one last topic of conversation in this Bitcoin ETF, which is the partners that BlackRock has brought to the table in order to enable this. Coinbase is the custodian for BlackRock. And so, sure, BlackRock's doing the ETF, but Coinbase is holding the Bitcoin. And then also Kraken has a subsidiary called CF Benchmarks, which is providing the price data to the ETF. So the actual price that shows up for the ETF is actually due to another crypto company, Kraken. What do you make of the partnership between BlackRock and two very native crypto exchanges? What would you say is the significance of this?

• 26:51Speaker 01

  Well, so what on the pricing front, my response there is kind of like, duh. Like, where would you go to get good prices on crypto? The people who trade all the crypto, right? So that makes a ton of sense to me. On Coinbase being the custodian, I think one of the mistakes we've made in the US space is blocking our traditional custody crowd from doing crypto custody effectively. So I'm going to specifically lay blame on the SEC and the OCC for this. They have not been able to find a regime to allow people to be qualified custodians in the US regulatory space. Like, you would prefer this to be done by somebody like a State Street, a Boney Mellon, the usual custodians. But Sab 121, and then the OCC's refusal to approve trusts, has really blocked this activity. So who do you go with?

• 27:36Speaker 01

  You go with the people who could do it. So I would tell you, in some ways, one, good job Coinbase. Like, that is not a denigration of Coinbase. I'm glad they managed to make it through an RFP and get that done. Like, well done to the institutional people over there, and I mean that genuinely. But two, also, I would have a hard look again at the US regulatory regime of if your real goal with crypto is we don't like it because it's not safe, and so what we're going to do is block anybody from doing it safely, like, wait, what? Right? So they've kind of, you know, it's a snake eating its own tail. Like, you've really tied yourself into a knot here.

• 28:12David Hoffman?

  Austin, this was a fantastic exploration into the Grayscale, this Grayscale, gosh, the BlackRock ETF, the big one. There's a whole entire other conversation around this new exchange, EDX markets. Charles Schwab, Fidelity, Citadel are all making a big move despite the Gary Gensler crackdown, just like BlackRock is into the world of building an exchange, a crypto exchange. But this one's very, very different. And so this is a whole second part of this conversation. So we're going to enter that conversation as soon as we get back from some of these fantastic sponsors that make this show possible. Metamask has something new. Introducing Metamask Portfolio. Metamask Portfolio is the best way to view your crypto portfolio from a holistic level.

• 28:56David Hoffman?

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• 29:39David Hoffman?

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• 30:21David Hoffman?

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• 31:03David Hoffman?

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• 31:16David Hoffman?

  Bankless Nation, we are back with the other half of TradFi that has entered the crypto world. We have this new marketplace, new crypto exchange called EDX Markets. For some reason, we love our acronyms in crypto. EDX Markets has begun trading and has also completed a new funding round specifically for digital assets. Okay, so this is a different kind of crypto exchange. Are you, Bankless listener, able to exchange on EDX Markets? And that answer is no. There is no place like, it's not like Kraken, it's not like Coinbase, there's no, there's no like UI to look at, there's no place to sign up, there's no place to submit your ID. So, Austin, what's the deal here? Like, what, we call this a crypto exchange, but, but what is going on? Like, what is, what is EDX Markets?

• 32:01Speaker 01

  Yeah, so let's work backwards by talking about how TradFi exchanges work, that we can sort of move forward into EDX. So in TradFi world, when we talk about exchanges and people use something, there's actually three different components going on. One is the exchange itself, which is a place where people come together and buy and sell, right? So you can think of it as, you know, your classic marketplace. But importantly, that's all the exchange does. It's just there to take and match orders. Behind the exchange, there will be a custodian, right, of some sort, which is the entity that actually is holding the assets. That is not the exchange, importantly. And then there's also what's called a clearing agent. They're the ones who make sure that things get from party A to party B when there's a trade, right? Like, that the dollars for shares of,

• 32:46Speaker 01

  you know, JP Morgan stock actually clear. Now-

• 32:51Speaker 01

  Blockchain doesn't quite work that way. This has been one of the problems the SEC has had. So in Greek mythology, there's this dude named Procrustes, right? Who would capture people and he's got a bed and the bed is always a fixed size. And so if you're too short, he stretches you. And if you're too long, he cuts some of your limbs off so that you fit exactly into the bed. This is kind of the approach the SEC has taken with banging crypto into the exchange framework is like, yeah, we kind of don't really care about the damage. Do it this way. So EDX is basically not really customer facing because there might not be a great way to face retail yet. Or they want front ends to face retail for them. And all it does is batch orders on the assets that they think are not securities.

• 33:34Speaker 01

  So this is how you end up with the situation of in 2023, launching a project like this, which is it's really designed to work with what US regulations, which on this stuff, by the way, were written closer to the Civil War than the present day. True. You know, and we have an exchange that now 50% of the products they're offering in 2023 are Litecoin and Bitcoin Cash. So it's like, let's be honest, the good innovation here about EDX is splitting the exchange from custody. I talked about that earlier. I salute them for doing that. That's a good thing. The bad part is the rest of this is really like, you're taking a product that's not really great for consumers or anybody to bag it into the US regulatory framework,

• 34:19Speaker 01

  rather than asking, you know, from a first principles basis, what's good for consumers? What's good for the world? What's good for innovation? What are the good parts of this technology? So 50 50.

• 34:32David Hoffman?

  So just to really define what what this thing is, it does, there's no place to deposit crypto because it doesn't store crypto. It is just, and so inside of all crypto exchanges, traders and bankless listeners, longtime crypto fans will know the term trading engine. Is that all this thing is? It's just a trading engine plus some APIs to custodians who have the actual crypto? Is that basically what this thing is?

• 34:58Speaker 01

  I mean, that's what a TradFi exchange is, right? It's an order matching layer that sits on top of custody solutions. So yes.

• 35:06David Hoffman?

  It seems so simple. Yeah. So, but it also, for again, like for people like me who came into the world of money and finding through crypto banks. I was like, oh yeah, you, you give them your money and then, and then they give you a trading engine to settle with other customers. But we apparently, what you're telling us is that in the world of TradFi, we've learned the dangers of FTXs out there. Where like, sure, in the best cases, that works just fine. In the best case, you have the Coinbase and the Kraken's. In the worst case, or maybe even in the medium cases, you have FTXs where there's a discrepancy between the exchange and the actual custody of funds. And so I think what you're saying is like the TradFi world has learned this lesson throughout history. And there's laws and regulations to separate custodianship and exchange.

• 35:51David Hoffman?

  And so this EDX is an exchange for Tradworld that is now slowly going to be able to custody crypto. But it's an exchange meant for them. That's my interpretation. Is that correct?

• 36:03Speaker 01

  I mean, it, it's somewhat correct. I would say, again, importantly, EDX is not the custodian. They're using another custodian. Cause one of the important parts there really is the separation of duties and security. You want the people doing custody to have one job. Don't lose your stuff, right? And that should be all of their incentives. And that's where it works to separate these things. Cause exchanges will have incentives to boost trading and generate profits and create margins and do fun stuff. But when the custodian, they make money by just not losing your stuff and preventing funny business. Those two forces interacting produces a safer system, right? And there's multiple ways to do it. You could have very strict rules for exchanges about segregate your staff, segregate your funds.

• 36:45Speaker 01

  You can't hold the currency yourself. All the like crypto has got to be in cold storage and externally verified. That's what they do in Japan and it worked, right? You could have totally separate legal entities do it, but the point is don't let people just glom all these things together. The conflicts of interest eventually lead to bad things happening. So that part again is good. The bad part of EDX is like, when you take crypto and you trap it in a walled garden and you only have this janky list of assets, like. We're destroying a lot of the value. It's, you know, there's the old blockchain, not crypto thing from TradFi. This is almost like blockchain, but also not blockchain.

• 37:21David Hoffman?

  Okay, so with this perspective, I can kind of see why institutions like Coinbase or Kraken would offend the regulators. Because, I mean, look at what they're doing. They're trading and custoding in the same spot. How dare they? Yet, also to me, like Kraken and Coinbase have done a bang up job doing exactly the thing that they said that they would do, which is service customers. And so like, I think, hopefully, what I'm worried about is that now that there is E D X markets as this like bastion of compliance for the trad world. Uh, I'm, I'm worried that there might be regulation that's passed that says, hey Coinbase, hey Kraken.

• 38:00David Hoffman?

  Separate your custodianship and give it to some other custodian and only run the exchange and unbundle yourself. Whereas, and that would lose a lot of the magic, right? A lot of what you're, what you're talking about.

• 38:12Speaker 01

  I, I don't think that would lose any of the magic if you do it properly, right? Because think about it this way, all Coinbase is really doing is taking all your stuff, putting it in an omnibus account. Ledgering everybody's like ownership of that and letting people trade against each other. There's no reason you couldn't just have a custodian running that ledger. It's not that hard. Like stocks trade very efficiently in the United States and they use the system that was just described. It doesn't lose the magic. The part that's losing the magic is if you say like 50% of your assets are Litecoin and Bitcoin cash in 2023. That's like pants on head dumb. And two, if it blocks the ability of people to get their crypto in and out of it. Because like, here's a big difference between a share of Apple stock and Ethereum.

• 38:57Speaker 01

  You can use Ethereum to transact on the blockchain for utility. That's not true of Apple stock. Right? So if you ignore that distinction, sort of the ironic effect is the critique of crypto is, oh, it's all just price speculation and like slinging shitcoins. Becomes true because the regulators are forcing it to be that if you can't use the tokens for actual utility. Right? So again, this is why I raised like the procrustian bed sort of methodology is you're saying, well, I've got a regulatory framework from 1940 that didn't even contemplate the internet. And you damn well better fit into that if you want to operate here. It's probably not the best way to do things.

• 39:36David Hoffman?

  Interesting. Okay. Wh-what do you think this means for the long term structure of the crypto markets from the crypto native side of things? Do you think eventually Coinbase and Kraken and all the other crypto native exchanges, the crypto banks out there? Do become unbundled and start to look more like trad? Or do they kind of get to keep what they've built, which is more of a singularity of services all in the same spot?

• 39:59Speaker 01

  I I would say the good case is we get halfway between those two extremes, which is that you want to keep the good part, which is the ability to trade a variety of assets on something like an Omni ledger against each other. And the ability to send assets and receive assets so that we preserve the benefits of self custody and decentralization. But we also move to a world where those services don't all need to be provided by the same guy. Because the problem with the Coinbase and Kraken structure is that while their conduct up to this point has been honestly pretty exemplary in the grand scheme of things. That doesn't mean it will necessarily persist. Like I am not okay with the financial system based on trust me, I'm cool. And by the way, all five of my successors, none of whom you know, will be cool for the next 50 years.

• 40:43Speaker 01

  Right? So like, trust but verify is the way things need to work in this space. Meaning that some degree of unbundling and external verification, I think, is required going forward, or it is inevitable that we will have problems because not all people are good people.

• 40:59David Hoffman?

  Interesting. Interesting. Okay. That's a nuanced take that I now have to interpret and integrate. And so I I guess this is is it's one part, the crypto world is pulling the trad world and being like, hey, this is the new meta. Start to look more like us. And the trad world is like, well, we've learned those lessons before. You look a little bit more like us. And then somewhere the pendulum will rest in the middle of these two extremes.

• 41:24Speaker 01

  That that is correct. Like the reality is having come from both worlds, I would tell you. A global neutral sort of fairly governed, open.

• 41:35Speaker 01

  It's 24/7 is an incredible advancement in technology. The ability to do it transparently is incredibly important and the ability to settle things without counterparty credit risk on either side is incredibly important. These are technological innovations that had they existed in 2008, we wouldn't have had some of the problems we had and we should not lose the benefits of that. On the other hand, missing some of the basic risk management lessons about things like, don't let your position sizes get completely out of control and maybe monitor those. Don't let the exchange people who make money out of activity wash trade with customer assets because you co-mingle things with the custodian like. Those sorts of lessons we should also learn. There are kind of best practices on both sides.

• 42:17Speaker 01

  And rather than saying all one, but none of the other, we should really try to take the best of both.

• 42:22David Hoffman?

  Beautiful. Okay. I feel very content about this, this EDX and exchange marketplace conversation. I want to. Tilt the conversation towards the world of stable coins, tapping into your experience over at Paxos. Recently, BUSD was named a security by the SEC in their action against Binance. There's also a stablecoin legislation bill passing its way through Congress. So Austin, I'm wondering if you can just kind of set the table, give us the lay of the land. What is the state of stablecoins? What arises to your attention these days?

• 42:53Speaker 01

  Yeah. So I would say. You know, I teach at Columbia. One of the things we addressed in my class is stablecoins. And I think the debate around stablecoins is very confused. So I like to start with the definition, which is this. Stablecoins are just a representation of a unit of fiat currency on a blockchain.

• 43:13Speaker 01

  That's it. Right? And so a couple of important things fall out of that. One. I am excluding all of the things that are like securities tokens, gold-backed tokens, things like that. They are tokenized assets, but I would not call them stablecoins. Because when people talk about stablecoins, they kind of mean what we think of in our heads as money. And that is an important distinction. Two. It really means the innovation of a stablecoin is just taking what we already have and putting it on a blockchain. So you're changing the ledger. That has implications around like all the people who are saying like, oh, stable coins are a tremendous threat to the financial system is like, wait, wait, wait, wait, wait.

• 43:51Speaker 01

  If you're telling me taking our cash ledger and just changing the ledger technology somehow destroys the financial system like we are screwed. Right. Like that is incredibly fragile. Yeah. Exactly. What you're telling me is actually the financial system is a threat to stable coins, right? Like causality is backwards. And so, by the way, that actually kind of was true with USDC, but we'll come back to that. Um, so I would say there it's important to understand what they are. So then the question that follows on from that is, okay, now have you done a good job? So craftsmanship is something that I focus on there and frameworks is something that I focus on there. So the whole debate around is BUSD as security is like,

• 44:34Speaker 01

  to me, a horrible misunderstanding of what's going on here because by sort of the description the SEC has given as I read it, I find it hard to draw a distinction between BUSD being a security versus PayPal being a security versus Starbucks gift cards being a security versus maybe your bank account being a security. Because the whole like, well, there's collective efforts between parties and they pay interest and that's why it's a security is true of all of the things I just said. Right? And again, once you understand blockchain is not magic, it's just a ledger technology like, well, Starbucks gift cards are just a ledger technology for cash. So like, again, what's different here?

• 45:14Speaker 01

  So I think it's a really malformed and misguided argument that if it's true, I think actually, one, plaintiffs attorneys, you guys throw a party for yourselves because there's going to be so much securities litigation going around. You're all going to be very rich. Right. But two, it's going to cripple the US financial system because now like Starbucks gift cards have to trade on a registered securities exchange like what?

• 45:39Speaker 01

  It's, excuse me, it is, um, it's a little bit silly. And so I would say that's one part. The second part, though, and this relates to your point about the stablecoin bill, is it also tells us we really, really badly need legislation around these things. If we put ourselves in a situation that because our regulators are all punching each other and can't decide on taxonomy, that nobody can really do stablecoins effectively in the United States, then let me tell you what's going to happen. They'll just be outside the United States. Right? Like, we live in a world where the choice that faces our regulators in Congress is not yes, stablecoins or no stablecoins. It's yes, stablecoins or yes, but offshore.

• 46:20Speaker 01

  Like, the biggest winner in many ways of the drama over the past year in the stablecoin space has been Tether. Why? Because they operate offshore. They don't have to deal with a lot of this nonsense. And so I would say my biggest takeaway here, and like, looking at the McHenry bill, you know, McHenry Waters, if we want to be specific, because the Democrats have had a lot of input there, too. I think that bipartisanship is great. Is that we need that thing badly, because if we cripple the ability of the dollar to be money on blockchain, it's just going to be another currency.

• 46:51David Hoffman?

  Okay, so the, the idea of BUSD as a security, for listeners out there who are trying to understand that and why that is happening, is it fair to just categorize that in the world of, Gary Gensler wants to overreach and grab as much jurisdictional power as possible, and that's that?

• 47:11Speaker 01

  I mean, I think that's largely true. There are ways you could do a stablecoin where it's a security, but one of the things about the whole, like, Howey test that the SEC tries to ignore is the expectation of profit part, right? And it's hard to see how you have an expectation of profit with a stablecoin. Their argument is that because Binance paid interest to people to put it on the platform, oh, now there's an expectation of profit, so it's a security. And my counter is, that doesn't make BUSD a security. It might make what Binance is doing with its users an investment contract, but that interest is not inherent to be USD. It's something Binance chose to do on the platform. Right? Which is why I draw the analogy to Starbucks gift cards. Like, if they give me extra rewards for using that.

• 47:54Speaker 01

  Well, there's a financial incentive for using the gift card. How is that different than your BUSD argument? And that's why I said it's malformed. I would also tell you, I agree with Powell, who recently said, we view stable coins as a form of money. I think he's right. I think this is a product for the banking regulators. They know how to handle those kinds of things. That's who deals with the money in the US. And I think that's what McHenry Waters does. It gives regulatory authority to the banking regulators and basically says, yo, if you want to take a deposit and say it's worth a dollar, we know how to do that. There's banks, there's trusts, there's certain forms of secured assets. You have to do it that way. And that's actually correct, right? Like, it is very simple. This is just money represented on a blockchain. So don't go do

• 48:37Speaker 01

  all the janky pre 2008 stuff, like, real talk for the crypto crowd. Nothing you're building in the stablecoin space is new. I've seen French quants blow almost all of this up in TradFi in the crisis, right? Like, none of this is new. Algo stablecoins, they're just self-referential equity notes, right? Like, crypto-backed stablecoins, that's called a securitization, right? Like, we've seen all of this before. Hey, Tether, that's a private money market fund, right? Like, BUSD, that's a government money market fund. All of it. We've seen all of it. None of this is new. So I would say we've learned a lot of lessons. They'll just do the things that work, that are liquid, that scale, that don't break for users and call it a day. Like, stop overcomplicating it.

• 49:20David Hoffman?

  We've used the line on Bankless, we are speedrunning the history of money and finance in the crypto industry. And there's too many people in the crypto world who are, I'll say, like me, in the sense that I came into the world of money and finance through crypto. And I'm like, algorithmics, I was never like this, but some people were, algorithmic stablecoins, we can make alchemy, like, we, this is brand new, new paradigm, blah, blah, blah, blah. And then there's people who are familiar with the trad world and can pattern match to experiments that have already come and gone in decades of old. Man, that's, that's a funny thing to think about. The, this, the stablecoin McHenry bill, what should listeners know about that bill? Like, what's significant about that?

• 50:03Speaker 01

  Yeah, so I testified at the House Financial Services hearing on that bill for full transparency. So I've talked with some of the congressional staff about it. I've read that thing. I would say here's your key takeaways at a high level. One, It basically says the only thing you're allowed to call stable coins are fiat backed stable coins with very clean reserves. I also think again, that is correct, right? Like the reality is something like algo stable coins, something like the crypto backed things. They're cool. They're financial experiments. I think they should be allowed to exist, but you should not be able to represent safety and soundness because it's a financial experiment. So I don't have a problem with DIA or LUSD existing. I have a problem with them being called a stable coin like it is guaranteed they will hold the one to one peg. I think if you want to call.

• 50:48David Hoffman?

  The, the brand of the dollar is what's at stake here. And so I think what, what the bill is saying is that if you're going to be to accept the brand of the dollar, call yourself a stable coin, then you better be real close to actual dollars. And so I think that's what you mean by clean is that like there's something dollar like backing it.

• 51:08Speaker 01

  Yeah, there's, it's also a consumer safety thing. Like if you're going to imply that you are safe and stable, you need to actually be that thing. And personal opinion, stable coin issuers should have liability. If they break the peg, they should owe the users the money. Right? So if you want to call yourself a stable coin, it should come with all of the consumer protection bells and whistles that come with guaranteed financial products in the United States, right? Like you should not be able to say it's stable. Your money is there and then it breaks the peg and you walk away being like lol JK. It was just an experiment.

• 51:39David Hoffman?

  Right.

• 51:39Speaker 01

  Right? So like I, I'm not cool with that behavior. You want to wrap that, you got to back it up. And so the bill basically says that, like you need to hold T bills, certain forms of like repo, they probably need to expand and fix that a little for financial reasons, but that's super technical jargon. And then the other part is basically saying you need to be licensed to do it, right? Which is to say there needs to be oversight, there needs to be a regulatory framework. No, just trust me, it's fine. I'm not going to disclose things. Like, no, you basically, you need to operate like a money market fund or a bank and disclose everything. And I think again, that's correct. Right? If you're going to tell people, I'm going to take your money, it's worth a dollar. Trust me, it'll be there. You should have to prove it.

• 52:20Speaker 01

  It's not just like, hey, I'm sitting in some non extradition jurisdiction with your money and then I'll just run away if things go wrong. That's how you get more of this three arrows nonsense.

• 52:30David Hoffman?

  What does this bill mean for assets like LUSD or DAI or FRAX? Like all of the decentralized stablecoins? Because it kind of puts a line in the sand between stablecoins is the only way that I think people could actually get the labeling of a stablecoin under this bill are like the centralized fiat backed ones. But what about, where does this leave all the decentralized ones that need to have more exotic assets as collateral? The assets like DAI, LUSD, FRAX? How do we think about what this means for decentralized stables?

• 53:02Speaker 01

  So in the current bill, there's a prohibition on things like algos, which by the way, I think is overdone. I've told them, I think you should just take that out and focus on the consumer representations. I would say the main impact is just those things can continue to exist. They just need to stop calling themselves stablecoins and people offering them and using them like on exchanges for payments, et cetera. Can't use those and call them stable. Right? It's not to say you can't buy DAI or that DAI can't exist. It's just that Maker Dow probably needs to stop representing that it's going to be worth $1 at all times. Right? They should probably be saying, we'll try to keep it at a dollar, but this is experimental and there are ways it could break, so maybe not.

• 53:41David Hoffman?

  But Maker Dow is a Dow. Of all Dows that are out there, and there's a lot of decentralization theater that's out there. Maker Dow is further down along the spectrum of actually decentralized than most Dows. I mean, we can, we can talk about where exactly on the spectrum it is all day. But at least the point of Maker Dow is to be meaningfully decentralized and it is actually achieving some of that. If not a majority, again, we can debate that, but so like, great. So we can't have these non fiat backed stablecoins call themselves stablecoins. But I, as an individual and many others like me out there in the crypto world, will just call DAI a stablecoin. And that is just a brand that we will associate it with and we are not Maker Dow. We are just the public. So how does this all work?

• 54:26David Hoffman?

  This is all seemingly kind of messy.

• 54:28Speaker 01

  No, I mean, that's fine, right? Like if you and five of your friends, like, let's say we get to the other like David Dow, right? We get all people named David in the world, we put them in a Dow and you guys decide.

• 54:37David Hoffman?

  Well, actually, shout out to Dave Dow and the 115 Daves that are in the Telegram on, shout out. If you want to, if you're named Dave, listen to this, hit me up.

• 54:45Speaker 01

  There you go. There you go. Free marketing. Um, but like if you guys get together and want to use watermelons as a medium of exchange, you can do that privately, right? Like in a peer to peer way. You want to trade a watermelon for a chair. You want to trade it for a microphone, like whatever. Have fun, guys. I'm saying it's much more of an issue when regulated financial entities with legal obligations do that. So can JP Morgan, right? Say, hey, we're replacing the dollars in your bank account with watermelons. No. Right? So to me, that distinction doesn't really matter on Twitter. It doesn't matter and people like talking about things is like them. It matters as people offering financial services in a regulated way. Because those people get special blessings and special status and can do things within the US system that other people cannot.

• 55:29Speaker 01

  And along with that comes a lot of restrictions, right? Like, Dave Dow with the watermelon currency is not getting a Fed Master account, right? But a stable coin bank under the McHenry Waters legislation might. And so I'm saying if you want to be within the regulated perimeter and get the special privileges, obligation should come along with that. I think the obligations of the bill honestly are pretty fair.

• 55:52David Hoffman?

  Okay. So if there's all of the orgs that are out there that don't are designed to be decentralized and don't ever care to get a regulatory license. Well, then they just won't care.

• 56:02Speaker 01

  Yeah. And as long as they're not lying about it, like that's the point I also say, like you and I can't just set up an LLC, you know, grab an office space somewhere and call ourselves a bank. That is actually a crime, right? Like you're committing financial fraud. You need a bank charter and capital if you're going to do that. So to me, again, this is where it comes back to decentralization theater and like how you represent things and what people are doing. Where if you're just being honest about this, hey, it's like a decentralized thing. It's kind of experimental. We think it'll work, but guys, it might break. That to me feels okay. That's honest. It's when you're going around being like, no, it is a stable coin. It's worth a dollar. Right? Being kind of absolutes about it, making false representations of safety and implying you have all the bells and whistles. That's where I have a problem.

• 56:48David Hoffman?

  Austin, this conversation has been immensely helpful. We've talked about BlackRock. We talked about the separation of exchange and custody with E D X, talked about stable coins. Is there anything, any rock, any stone that we've left unturned that we should definitely talk about before we conclude things here?

• 57:04Speaker 01

  Yeah, so I would say we talk about stable coins in the U.S., but again, I would zoom out on that one. So in traditional markets, there's a thing called the Eurodollar market, which is basically dollars that trade offshore. Technically, Tether kind of exists in the Eurodollar market as a stablecoin. I would just point out there are other countries working hard on this problem. So shout out to the M A S in Singapore. I think they've been very constructive. Hong Kong is now moving forward. Again, to reference Japan, whose regulator has done a great job. The J F S A has a complete framework for stablecoins in Japan. And now M I C A has one for stablecoins in Europe. So a point I would make to everybody is the action is moving international very quickly.

• 57:43Speaker 01

  You're going to start seeing stablecoins in bigger and better forms that are non U.S. dollar and offshore U.S. dollars. So expect the space to move pretty quickly, even when we zoom out from the U.S.

• 57:55David Hoffman?

  Austin, this has been a fantastic conversation. I've enjoyed this quite a lot. I've learned quite a lot. If people are looking to follow you on Twitter, where should they go? Or is there any other place that we should point them to if they want to keep on learning about what you've been talking about and who you are, et cetera?

• 58:10Speaker 01

  Yeah, I would say I'm at Campbell J Austin on Twitter. You can find me out there. And all of the other stuff I do ultimately, you're going to get to through Twitter. So that's probably the easiest place to find me.

• 58:21David Hoffman?

  Awesome. And Dave in the Zoom chat has reminded me that those are already in the show notes because he is an absolute chat on the Bankless backend. So thanks. Shout out to Dave for that one. Also in Dave Dow. Austin, thank you so much for guiding us through this conversation. I've learned quite a lot.

• 58:35Speaker 01

  Yeah, absolutely. Thank you for having me. I really enjoyed it.

• 58:38David Hoffman?

  Bankless station, you know, the deal ETH is risky, Bitcoin is risky. Bitcoin ETFs that are inevitably on the NASDAQ will also be risky. Crypto is risky at large. You can lose what you put in, but we are headed west. We are on the frontier. We are glad you are with us. I've already said that. We are on the frontier. It's not for everyone, but we are glad you're with us on the bankless journey. Thanks a lot.