Senator Pat Toomey's Concerns about the SEC & Crypto

We brought on our first United States senator, Sen. Toomey. He's a senator from Pennsylvania, a ranking member of the Senate Banking, Housing, and Urban Affairs committees. He's also crypto-friendly. Hear how Capitol Hill is digesting the FTX collapse, what America's crypto competition looks like currently, and what it might look like if we still have no regulatory clarity. And finally, what you can do to impact our government's view on crypto. ------ Infura | Join the New Decentralized Infrastructure Network www.bankless.cc/infura http://www.bankless.cc/infura ------ SUBSCRIBE TO NEWSLETTER: https://newsletter.banklesshq.com/?utm_source=banklessshowsyt ️ SUBSCRIBE TO PODCAST: http://podcast.banklesshq.com/ ------ BANKLESS SPONSOR TOOLS: ️ ⚖️ ARBITRUM | SCALING ETHEREUM https://bankless.cc/Arbitrum 👯 DESO | DECENTRALIZED SOCIAL BLOCKCHAIN https://bankless.cc/Deso 🦁 BRAVE | THE BROWSER NATIVE WALLET https://bankless.cc/Brave 📡 TRUEFI | CRYPTO FINANCIAL HUB https://bankless.cc/TrueFi 👾 SEQUENCE | ALL-IN-ONE PLATFORM https://bankless.cc/Sequence ⚡️FUEL | THE MODULAR EXECUTION LAYER https://bankless.cc/fuel ----- Timestamps: 0:00 The Big Picture 3:40 America's Competitors 6:10 The FTX Collapse 8:50 Crypto Sentiment in Congress 13:00 We Want Reasonable Regulation 16:53 Lack of Clarity 22:15 Fallout from Contagion 24:25 Hope for Solutions 27:48 Preventing Sloppy Legislation 31:06 Cautious Optimism ----- Resources: Sen. Pat Toomey https://twitter.com/SenToomey ----- 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.

• 0:03Ryan Sean Adams?

  Bankless Nation, we are live here with Senator Toomey. Senator Toomey is a senator, Republican senator from Pennsylvania. He's also a ranking member of the Senate Banking, Housing and Urban Affairs Committee. This is a very important committee. He's also in the past been somewhat friendly to crypto and some of the things we've been up to. Senator, welcome to Bankless. It's great to have you.

• 0:23Speaker 01

  Thanks for having me.

• 0:24Ryan Sean Adams?

  Can we start with the big picture? We want to cover a few things today. We want to talk about FTX and some other things, but can you give us the big picture of the upside, the potential that you see in crypto? Why have you defended it before? And how do you think it might help the American people?

• 0:41Speaker 01

  Well, so here's the way I think about this. When the internet first came along and we could exchange emails, that was great. And at that point, it never for a second occurred to me that someday, like all consumer products would be happening over the internet, that I'd be able to use an iPhone to hail a car. I mean, the list is endless. It was so transformative of our entire economy. So now I look at what crypto means to me, and I think of different

• 1:22Speaker 01

  crypto projects as like these various protocols. And a lot of them are like, like operating systems on which people can run these apps that are gonna do all kinds of things that probably exceed my imagination as much as everything we take for granted today exceeded my imagination back in 1999 when I first started doing emails. So I don't know all the way. I mean, there's the obvious categories like, like payments and identity verification and ownership issues and things like that. Those, those are already pretty clear. But I think the potential of this sort of freestanding, independent, disintermediated software is enormous.

• 2:13Speaker 01

  I'm not necessarily sold on the value of any particular token, but I don't think it's really about the value of individual tokens. I think it's about the underlying technology.

• 2:23Ryan Sean Adams?

  So your argument is this is an important, underlying technology like the internet. It's innovative in that capacity. Can we frame the question another way and ask it the opposite way? Which is like, what's at stake if the US misses crypto? Let's say, I mean, the US is very supportive from a regulatory and legislative perspective of the internet in the 1990s.

• 2:45Speaker 01

  Right.

• 2:46Ryan Sean Adams?

  What's at stake if we don't take a similar approach to crypto now?

• 2:51Speaker 01

  Well, an amazing, maybe completely transformative wave of technology happens somewhere else. And someone else, and I don't know where that is. It maybe it's dispersed, maybe it's concentrated, probably happens in a context that's not entirely consistent with things that we value very much, like the rule of law and intellectual property and privacy. And who knows the kind of jobs and the economic growth that we would be foregoing? And frankly, probably even national security issues.

• 3:28Speaker 01

  So, so I think it would be unbelievably misguided for us not to create an environment where Americans can drive this technology.

• 3:40Ryan Sean Adams?

  Is Capitol Hill talking about maybe what China is doing in the blockchain space? Just like there are different kinds of the internet, there's the open internet, and then there's sort of a more closed internet behind firewalls. China is very active in what it called like the blockchain space, but it has its own centralized technology that's kind of replacing it. Is there any talk in Capitol Hill of like what some of America's competitors are doing? You know, and you're keeping up with them? Or like, are we even talking about that right now?

• 4:19Speaker 01

  Yeah, there is some discussion about that. And one of the ways that comes up a lot is a discussion about a central bank digital currency. As you know, the Chinese have already deployed one to a pretty significant extent. And look, I think their motivation is pretty bad. I think a lot of their motivation is the dramatic extent to which it enhances their ability to surveil their their population. And they would love to see adoption everywhere it's possible because then they could surveil everyone else, too. I don't I don't like the idea of authoritarian regimes having those powers. By the way, I don't want the US Federal Reserve to have those powers either.

• 5:01Speaker 01

  But but to your question, yes, it's come up. And one of the one of the questions that people have wrestled with is if the Chinese are using a technology that allows their currency to be used in ways that a dollar can't, does it give them an advantage and give them an opportunity to erode the presence of the US dollar as the leading reserve currency in the world? My own view is there are other reasons why the dollar is the reserve currency of the world, and it's hard for the Chinese to displace us, especially given their closed and authoritarian society. But why wouldn't we want to have the most technologically sophisticated currency

• 5:46Speaker 01

  in the world? By the way, that doesn't mean a central bank digital dollar. I think stable coins issued by private issuers can play that role. But I want the dollar to it's a huge advantage to Americans for the dollar to be the leading reserve currency. And having stable coins proliferating would enhance that.

• 6:10David Hoffman?

  Senator Toomey, I know you're a big proponent of some some stable coin regulation. I definitely want to get there later in this conversation, especially after we talk about some of the the role that the SEC has to play in how crypto is regulated. But of course, we would be remiss to talk about or not talk about the fallout of FTX. And I'd just like to take a peek into what the current state of Capitol Hill is now that we are hearing this news about FTX. What is the gossip? What is the conversation that's happening with regulators on Capitol Hill about about this news?

• 6:44Speaker 01

  Well, actually, you know, we had a hearing this morning where we were evaluating nominees mostly for the governance of the FDIC, and this came up. And you could actually get a real sort of condensed version of this discussion. I had some colleagues who have used the collapse of FTX as a way to paint the whole sector with this broad-bush, "Damn everything. Crypto is all a big scam, and thank God you're doing everything you can to keep it out of the real economy," and so on, right? I've tried to make the argument that it's a profound and fundamental

• 7:27Speaker 01

  mistake to confuse bad action by a bad actor with the asset with which the bad action occurred, right? So what do we know about FTX? We know that they took customers' assets and lent it to a related hedge fund, apparently, or, you know, family office, whatever you want to call, Alameda. That's wildly inappropriate to do that, right? In any kind of financial service that does that, it's outrageous. But guess what? It's been happening in the fiat world forever. I mean, there's an endless list of financial institutions in the conventional

• 8:12Speaker 01

  old-fashioned form who've done the exact same thing, and by the way, people who've gone to jail for having done so. So this is not a new offense, and it is not at all specific to crypto. Like I've said, you know, the code committed no crime, but somebody, it looks like they probably did commit crimes. It's crazy to blame it on crypto.

• 8:35Ryan Sean Adams?

  You said that, Senator? You said the code committed no crimes?

• 8:38Speaker 01

  Yes, I did.

• 8:39David Hoffman?

  Are you alone in this chant in Capitol Hill with the regulators?

• 8:44Speaker 01

  That particular one, the code committed no crime, I might be.

• 8:48Ryan Sean Adams?

  We might steal that from you.

• 8:49David Hoffman?

  What about just like the broad concept of FTX and Sam Bankman-Fried are not crypto, are not DeFi, and this was a centralized actor doing fraud? Like, are you the only person telling this story?

• 9:00Speaker 01

  No, I don't think so. I don't think so. I mean, look, so in the House, let me just be completely candid here. In the House, there are Democrats and Republicans who are very open to this new technology. You could say pro crypto, want to get to a thoughtful, sensible regulatory framework that's going to work. In the Senate, unfortunately, it's become a little bit polarized because the most outspoken Democrats have been extremely hostile to this whole space, while I and some of my Republican colleagues have been very open to this and in fact enthusiastic about what is possible.

• 9:41Speaker 01

  There are Democrats, let me be clear, there are Democrats in the Senate who are pro crypto. Definitely, I work with some of them. We have legislation together. There is a very real likelihood even that we'll do bipartisan legislation soon. But there's been a little bit of polarization. But no, I'm not alone in defending the proposition that what Sam Bankman-Fried did cannot be blamed on crypto.

• 10:06Ryan Sean Adams?

  Is there any way to convince your more skeptical colleagues in here to me? Or what would it take to convince them? Or do you think some are just, they've made up their mind on this and nothing could happen? No facts, no arguments could convince them otherwise?

• 10:19Speaker 01

  So some are definitely in that category. They made up their mind, they don't want to hear the facts. So we're not going to win them over. But there's a lot who just don't know about this, just haven't had the time, taken the time, had the interest to do the work. And let's be honest, you know, it takes some work to understand how this goes, especially if you're, you know, an old geezer like me who's grown up with his whole life in the fiat world. It takes some time and effort to understand the nature of this technology. It's two things that I think are important ways to communicate with people who are still open-minded about it. One is get people to not necessarily focus on a particular token, like

• 11:06Speaker 01

  Like, what's a Dogecoin worth? And how does it change when Elon Musk puts out a tweet? I like, like, that is like, kind of ridiculous to focus on that and make that your understanding of this. But rather, think about the technology. Think about a series of operating systems that are gonna make, make processes and applications possible that could never be possible before. Oh, and by the way, make it possible without a central intermediary, taking a fee out. I mean, my friends on the left should be very enthusiastic about the possibility of, you know, bypassing the central intermediary, right? They, they, they take a lot of money out of transactions. It's their business.

• 11:51David Hoffman?

  You're talking about the banks. You're talking about the credit card processors.

• 11:53Speaker 01

  Yeah, the banks. Everybody in the, look, how about the folks that like, validate title insurance? I mean, why the hell do we pay so much money for things like validating ownership? There's a much better way to do this. So the list goes on and on, right? And if, what, what I think we haven't done a good enough job is explaining to people the practical, real-world applications that are in the works, some already up and running, like, like file storage and things that are coming down the pike. And it's hard, right? To talk about what's possible in the future and what could be coming. But I think getting people to focus on that, rather than, you know, the latest collapse

• 12:36Speaker 01

  of, you know, Terra and Luna, would, would help a long way, go a long way.

• 12:40David Hoffman?

  Well, it's certainly rare to be able to see through the forest for the trees in the crypto industry and understand the technology separate from the actual expression of what we see today. So, and it's even rarer that these people are regulators and are elected representatives. So, Pat, thank you so much for, for being able to see through the noise. It's difficult. This industry makes it very difficult to do that. I know that there's a Senate hearing tomorrow about the FTX collapse from the Senate Ag Committee. Are you privy to what might be discussed there? Like, what can we expect to come out of that hearing tomorrow? Do you have any insight there?

• 13:17Speaker 01

  So I'm not on the committee, and so I really don't know, you know, exactly what's going to happen. I don't know how this play, I'm not even sure who all they've invited to testify. But I hope it represents people who can make a persuasive case to look at this for what it is. A very bad actor that did some very bad things, and we need to get to the bottom of it. And let's by all means look into that. And I think the Department of Justice is looking into that as well as they should. But I hope that gets separated from the underlying technology.

• 13:49Ryan Sean Adams?

  I think there's a myth and, you know, people put forward about crypto, like people in crypto don't want regulation or they don't want legislation. And the reaction to that is like, no, like, we want reasonable, good regulation and legislation that protects a kind of values that this country was founded on and doesn't stifle innovation. Is that too much to ask? I want to ask, people listening to this podcast might not be as familiar with how laws are kind of created and how the different committees work together, right? There is the DCCPA that was talked about recently, which is some legislation, I believe, coming out of the Ag Committee. Is anything going to happen with that? Do we know anything about that?

• 14:32Ryan Sean Adams?

  And like, how do the different various committees talk about crypto legislation? Like, what are you seeing from your perspective on the legislative front?

• 14:42Speaker 01

  Well, there's a lot to try to unpack there. Part of the challenge is that the Senate's not functioning the way the Senate should be functioning, the way the Senate actually functioned when I first got to the Senate, which is not like a different century or anything.

• 14:59Speaker 01

  So the committee process isn't working well, right? The way it should work is if there's committees that have overlapping or tangential or related jurisdiction, they should each produce the relevant legislation and then you work out the differences. You put that on the Senate floor, you have a big debate, you have amendments and something passes. And meanwhile, the House should be doing the same thing. Now you've got two different products and you have a conference where you iron out the differences and you end up with a single product that is the consensus that you can achieve through the conference. And then you take that product back to both chambers for an up or down vote. That's the way, that's the textbook way that it's supposed to work.

• 15:42Speaker 01

  That is the way that it used to work, including when I first got to the Senate, but it's not working that way now. So unfortunately, we've devolved to a situation where what happens is, so you could take my legislation to fix the broker definition in that came out of the infrastructure bill from a year and a half ago, or you could take my stablecoin bill. I look to find a Democrat counterpart who is going to be a champion on their side. I act as the champion on my side. We try to get broad buy-in and then we get the key players who are the gatekeepers for extraneous legislation going into a must-pass bill,

• 16:25Speaker 01

  of which we have three or four typically every year. And there's a, this is a, this is a very opaque process, which is part of what's so bad about it. But that's, that's what we're left with at this point. And frankly, I'm going to use that process to the maximum extent I can for some of my crypto priorities. And the year's not over yet. We still have a shot at getting some of them done this way. But it shouldn't work this way, but that's where we are at the moment.

• 16:52David Hoffman?

  One of the big reasons why this FTX disaster got so big was because a lot of the lack of clarity that's on the inside of the United States for our own regulated crypto institutions like Gemini and Coinbase, they just haven't been able to produce some of the products that were so attractive that FTX was able to produce because they were in the Bahamas. And a lot of the ire out of people in the crypto space has been directed towards Gary Gensler and his hard-handedness towards American companies and his also neglect of external companies like FTX. Is there, what's the, is there any, do you share in that frustration of Gary Gensler and the SEC? Or what's the role, what's the opinion

• 17:34David Hoffman?

  of, of that, the Gensler's administration by your fellow regulators?

• 17:39Speaker 01

  Well, let me just tell you, I have been arguing with Gary Gensler publicly and privately for two years now, since he took this job. And the central argument that I make, my, my central problem is to say, Mr. Chairman, you have repeatedly stated that virtually every token is a security. I don't happen to agree with that, but given your assertion, you owe it to us to lay out publicly a very clear way in which people who want to comply with the law and regulation can do so. How does an issuer comply? What is the criteria?

• 18:20Speaker 01

  What is the rules? How do they do that? If you're operating an exchange, what does that mean? What do you have to do in order to be in compliance with SEC? The rules that we have for a stock exchange, for instance, don't all apply, right? I mean, custody and settlement and things like that, it's different in, in crypto. And, and my big criticism of Chairman Gensler is he has never laid out that clarity. He says, oh, come on in and talk to us and we'll talk to you. But that's no answer. By the way, during those conversations, their enforcement lawyers are in the room, taking down notes, and next thing you know, you get hit with an enforcement action. Regulation by enforcement is a terrible,

• 19:01Speaker 01

  terrible approach. And the problem with this uncertainty that hangs over just about everyone who's developing a protocol is they don't know whether they're going to be, you know, there's going to be a knock at their door from the SEC. About what they've done. And, and so the SEC has created the incentive for people to go offshore. This is, this is terrible. It's terrible because America loses the opportunity to have its leadership role in this space. It's terrible because when they go offshore, they're going to go to a place that has a very lax regulatory environment. Then customers are going to experience the kind of things that we've seen at FTX.

• 19:43Speaker 01

  So at all levels, this is a disaster. This, this is why we, Congress needs to step in, provide the guardrails, create the clarity and let the regulators, which may or may not be the SEC, but let whoever we authorize through legislation,

• 20:01Speaker 01

  objectively enforce the law and provide that certainty. It would be so helpful for this whole space.

• 20:08Ryan Sean Adams?

  But by the way, I think everyone in crypto, maybe a lot of people listening to this saw your clip of you putting Mr. Gensler on the hot seat and asking those questions of like, hey, what actually is a security? Like, can you define it? Well done. We appreciate you asking those questions because obviously we're not in the chambers in the halls where those questions can be asked. I, I do also, like, I guess if you were to steal man a regulator's argument on this, or Gary Gensler's argument, maybe he'd push back and point to Congress and say, hey, we don't have clarity. We don't have clarity.

• 20:39Speaker 01

  No, that's not his argument. Right.

• 20:42Ryan Sean Adams?

  Say it, say it.

• 20:42Speaker 01

  That would be understandable. You, you, you could, a reasonable person could say that, could say, well, look, the securities law and the case law, right? Securities law to a large degree is court cases that have, have emerged over decades.

• 20:57Ryan Sean Adams?

  The Howie test.

• 20:58Speaker 01

  The Howie test being one, right? These are not well suited for this brand new technology. So rather than try to bang a square peg into a round hole, Congress, why don't you address some of these difficult issues like? Under what circumstances is a token actually a security? And under what circumstances is it not? For instance, but they won't do that. That would be reasonable if Gary Gensler said that, but he doesn't say that. He says, everything's a security. It's all my territory. I own it. And by the way, I'm not going to tell you how you can comply with my rules until I show up and whack you with an enforcement action. That's what's so objectionable to me.

• 21:39Ryan Sean Adams?

  Why?

• 21:40Speaker 01

  Why? Why is it objectionable?

• 21:41Ryan Sean Adams?

  No, why is he doing this?

• 21:44Speaker 01

  This is.

• 21:44Ryan Sean Adams?

  Why is that? This the approach of a regulator?

• 21:47Speaker 01

  I, I, I'm not sure is the honest truth. I don't know. I have asked him this. He, he would, of course, completely reject my characterization. He would say, I've done nothing of the sort. I've been very clear. The law is very clear. Everybody can read the law. Everybody should know that their projects are all securities. It's obvious. And I don't know what you're complaining about. That's, that's basically some version of that is what he would say. I just completely disagree.

• 22:14Ryan Sean Adams?

  Do you think that there will be some fallout from the FT, the recent events of FTX? That will come back to regulators like the SEC? Is it the question of why didn't you do more this sort of thing? Do you think that that's fair? Do you think the SEC or CFTC could have done more in this situation? Or what's your explanation of who is at fault? I guess in this particular situation?

• 22:38Speaker 01

  So there's, there's a technical question and then there's a more broader question. Right? The technical question to my mind is to what extent do they actually have jurisdiction over a foreign entity that's operating out of a different, you know, political entity? Right? Obviously the SEC does not have jurisdiction over the Bahamas.

• 23:01Speaker 01

  But to the extent that Americans are investing or are involved, does that give them some jurisdiction that there's some legal questions? I don't really know the answer to, but these are well known. So we'll get answers to that. The bigger question, though, the bigger fallout should be that, hey.

• 23:19Speaker 01

  The lack of clarity probably contributed to this whole mess. Because if we had provided clarity and we had provided clear rules and they applied to everyone, then the Coinbase's of the world, the other exchanges that all they want to do is be in compliance so that they can compete on a level playing field. That's where business would gravitate to. And you wouldn't be able to successfully operate this outpost on the Bahamas where no one would know what you're doing if their competitors had the certainty of this regulatory regime. So I would argue that what the SEC has done probably contributed to the growth of FTX.

• 24:02Speaker 01

  And that's something that they ought to feel some heat for that.

• 24:06David Hoffman?

  Yeah, I think I can speak for the entire crypto industry, which we definitely feel that that was the case. That's from users who lost funds in FTX to builders like Brian Armstrong, the CEO of Coinbase, all feel very, very frustrated that the SEC created the paradigm that allowed for FTX to get so incredibly big. Senator Toomey, what do you hope Congress does as a result of this? One thing I've learned while talking to so many legislators and regulators out there is that everyone is saying that the solution for this mess is legislation on Capitol Hill. So if you had a message to all of your fellow congressmen and senators, what would you say?

• 24:46Speaker 01

  Yeah, I've been saying this for a long time. And we're late to the game, but it's not too late. Let's pass legislation. My suggestion would be, let's try not to do a whole comprehensive, all things crypto, all at once omnibus bill. That's probably not going to work, but we don't have to do that either. We could do a little bit. So I've got a bill right now with a Democratic cosponsor that would fix the problem with the broker definition so that we wouldn't be technically obligating validators to come up with information about individuals behind transactions when obviously they don't have that information, right? So we can fix that. I think we actually have a pretty good shot at fixing that before this year is over.

• 25:31Speaker 01

  I've got a bill with Kirsten Sinema, which would allow for small transactions to be paid for with crypto that is sold and for which there wouldn't be a capital gain. So we would alleviate the huge You know, compliance burden of tracking all of that. But really, what I think we really need to do. Let's, let's start with stable coins, right? Stable coins are a discrete category. They're relatively easy to understand. I've got a framework out there that's very similar to the framework that Cynthia Lummis and Kirsten Gillibrand came up with. If we could get something done on stable coins, that would be like this huge step forward. I think it would be extremely encouraging.

• 26:14Speaker 01

  It wouldn't by itself solve all the problems. We still have the issue of how you, how you decide what's a security and what's a not, what's not a security. But if we could, if we could resolve the question of who can issue stable coins, under what conditions, how is it regulated? I think that would be very, very constructive. Be a great first step. And then, hey, after that, we, you know, we take on the next challenge.

• 26:37Ryan Sean Adams?

  How close do you think we are to doing something like that?

• 26:41Speaker 01

  I'm, I'm hoping that I'm quite close to announcing a bipartisan stable coin bill. Getting it across the goal line this year will still be very difficult. I'm not gonna, not gonna kid you. I, I think we could get to a, you know, introducing a bill that has a bipartisan list of cosponsors. And that's a huge step in the right direction, right? The House was trying to negotiate something between Maxine Waters and Patrick McHenry, the chair and ranking member respectively, on our counterpart committee in the House. They never were, really were able to quite get there. If we could get a bipartisan product that dealt with this,

• 27:23Speaker 01

  it put a lot of pressure on the administration to come to the table and, and get this resolved. And the administration, I will say in fairness, the, some in the administration understand that we really should do this. We really need to get it done. Question is, can we get them to a place where they'll do it in a fashion that allows the space to thrive as opposed to be stifled?

• 27:43Ryan Sean Adams?

  I think that's very important and that's kind of key, right? Is, you know, which is a reason I think we like stablecoin regulation as a starting point is because at least when you're talking about the centralized stablecoins like the stablecoin USDC from Coinbase and Circle, right? These are very kind of known quantities. These are centralized products. In order to do that in a way that doesn't stifle innovation of some of the things that we're building in DeFi. Interestingly enough, it was revealed that SBF was, that same Benjamin Fried behind FTX was very involved in some of the legislation behind the proposed legislation of the DCCPA. And some of that felt to the crypto industry, the crypto community, like there was sort

• 28:27Ryan Sean Adams?

  of a pulling up the ladder, an entrenchment of regulatory capture, entrenchment of larger institutions now. FTX had become an institution, these banks, and kind of a, you know, a push against DeFi. So making certain things in decentralized finance illegal, making all front ends of decentralized finance have to register as a broker dealer, as something. And so we're very worried about, about, I guess, Congress passing legislation on topics that are still emerging and not understood. Stablecoins is not one of them necessarily, but it also could be if it's done in a sloppy way. How can we prevent the sloppiness?

• 29:09Speaker 01

  Look, the, there's always a danger of that, but I think the danger is greater if we do nothing, right? Because if we do nothing, then I expect the administration to act. And then you'll have regulators simply declaring that they have the authority, they'll find a lawyer who can make the argument, and that might be extremely hostile to the space. Look, I have a lot of respect for the governors of the Federal Reserve, for instance. However, I'm also of the view that it is like fundamental to the DNA of a central banker to be very hostile to anything that faintly resembles privately issued money. So I don't want them regulating this space because I don't think it's really gonna be...

• 29:53Ryan Sean Adams?

  You want treasury.

• 29:54Speaker 01

  Well, and then treasury, there's a whole set of reasons, but, but still, there's gonna have to be, so for instance, if you advertise yourself as having an asset-backed stablecoin. And you're claiming that it is backed with fiat assets, then it really ought to be backed by those assets, right? And so a disclosure requirement where it can be proven that you do in fact have the cash and cash equivalents that you claim you have, that is a reasonable thing for someone who claims to have an asset-backed stablecoin. But I've got some colleagues who think we should just have an outright ban on algorithmic stablecoins. Well, I for

• 30:34Speaker 01

  one, I'm actually skeptical about whether you can develop a workable algorithmic stablecoin. But what do I know, right? Somebody might very well figure out how to do that. So I wouldn't presume to ban it. That's a terrible idea. Disclosure, you know, making sure that somebody who's offering a stablecoin that is not backed by any fiat assets, that ought to be very clear so that investors know what they're getting into. But I don't want to be shutting down whole potential categories.

• 31:05Ryan Sean Adams?

  Honestly, this whole conversation, Senator Toomey, makes me optimistic. Actually, I didn't expect all of this coming in. But I think many in crypto take kind of a skeptical lens to legislative process and Capitol Hill. But talking to you, it's pretty optimistic. And honestly, I mean, this is what the legislative, you know, assemblies in DC are supposed to do. They're supposed to represent the people. And crypto, after all, is a technology by the people and for the people, right? It is a technology that I think that the framers of the Constitution would very much support. I guess my last question for you as we close here, Senator, is how can crypto people who are maybe jaded by the politics of things

• 31:50Ryan Sean Adams?

  they see in Washington, how can they make their voice heard? How can they get involved in the process? Many of them feel sort of powerless. But what can they do to support efforts towards good legislation in DC to make sure that we don't miss out on this?

• 32:04Speaker 01

  So I would say that there is a very significant number of members of the House, members of the Senate, who don't know a lot about this space, don't actually have a well-defined set of views, but they're open-minded. They need an education and it's much better if people who actually know what they're doing because they're active in this space, provide that education rather than if it all comes from whatever they read on the front page of the daily paper, which of course is going to be the FTX blow up. So don't underestimate your ability to have an influence, especially

• 32:46Speaker 01

  with something as new and new to members of Congress as this space is. Reach out and you sit down with the staff that handles this. Most of them will take a meeting with you if you're a constituent. So look up your member of Congress and go, go have a meeting. You'll, you'll meet with their staff most likely, but you may find that the staff is actually pretty well informed. You may find that they don't know anything about it, but engage, right? And if you are seen as a knowledgeable person who is trusted to be a straight shooter, you'd be surprised how quickly people will, will start to seek your, your input. That, that's what happens in this space. So engage, engage with your members of Congress.

• 33:30Ryan Sean Adams?

  Good thought to end with engage in the political process as well as we are evaluating crypto to Senator Toomey. Thank you so much for your time. We appreciate you coming on Bankless.

• 33:39Speaker 01

  All right. Thanks for having me, guys.

• 33:41Ryan Sean Adams?

  All right. Keep fighting.

• 33:42Speaker 01

  All right. Will do.