The GENIUS Act Passes the Senate: Lead Sen. Bill Hagerty Discusses The US Stablecoin Bill

Today, we discuss the recently passed Genius Bill with Senator Bill Hagerty, a key architect behind the legislation aimed at stabilizing the U. S. stablecoin market. Following a significant bipartisan Senate vote of 68-30, Sen. Hagerty shares insights on the evolving congressional perception of cryptocurrency, moving from skepticism to support. The bill seeks to foster a regulatory environment that encourages innovation while protecting users and maintaining America’s leadership in financial technology. The episode also highlights the potential economic benefits of a strong stablecoin framework and addresses concerns regarding Central Bank Digital Currencies (CBDCs). ------ 📣SPOTIFY PREMIUM RSS FEED | USE CODE: SPOTIFY24 https://bankless.cc/spotify-premium ------ BANKLESS SPONSOR TOOLS: 🪙FRAX | SELF SUFFICIENT DeFi https://bankless.cc/Frax 🦄UNISWAP | SWAP ON UNICHAIN https://bankless.cc/unichain 🛞MANTLE | MODULAR LAYER 2 NETWORK https://bankless.cc/Mantle 🌐CELO | BUILD TOGETHER AND PROSPER https://bankless.cc/Celo 🟠 BINANCE | THE WORLDS #1 CRYPTO EXCHANGE https://bankless.cc/binance ------ TIMESTAMPS 0:00 Introduction to the Genius Bill 5:43 Welcoming Senator Bill Haggerty 8:55 Next Steps for the Bill 11:16 Why America Needs Stablecoin Law 14:07 Fostering a Domestic Stablecoin Economy 15:23 Addressing Detractors of the Bill 18:06 Understanding Stablecoins vs CBDCs 20:27 Who Can Issue Stablecoins? 21:01 Path for Offshore Issuers 23:54 Surveillance Concerns with Stablecoins 26:10 Addressing the Trump Loophole 27:34 The Bipartisan Nature of Crypto 28:52 Senator Haggerty's Evolution on Crypto 32:17 Establishing a Clear Regulatory Framework 34:51 Future Steps for the Crypto Industry ------ RESOURCES Sen. Bill Hagerty: https://x.com/SenatorHagerty The GENIUS Act: https://www.congress.gov/bill/119th-congress/senate-bill/394/text Sec. Bessent’s Tweet: https://x.com/SecScottBessent/status/1935027160374210573 ------ Not financial or tax advice. 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.

• 0:04Ryan Sean Adams?

  Welcome to Bankless, where we explore the frontier of stablecoins on today's episode. The genius bill just passed in the Senate. David and I have Senator Bill Hagerty. He's one of the co-authors of the bill. He's on the episode today. David, what'd you think?

• 0:18David Hoffman?

  Yeah, Bill is, he's bullish. He also shared with us a story of his first interaction with crypto and illicit payments, and that was his first impression about crypto, like way back, I think it was in like 2018, 2019, when he told that story?

• 0:31Ryan Sean Adams?

  I think it was sooner than, yeah, yeah, sooner than that. Like, remember 2020? And Treasury Secretary Steve Mnuchin was very anti-crypto, anti-stablecoins. I think he was part of that cohort, too.

• 0:39David Hoffman?

  Yeah, so he gave us kind of a peek behind the scenes, it felt like, about a lot of congressmen, legislators' first impressions about crypto, and how he changed his mind downstream of just learning more about the technology, which all culminates in the Genius Act, which, again, like you said, Ryan, is his bill that he is pushing over the line. The Senate just voted overwhelmingly in bipartisan support. It goes back to the House in order for the House to hopefully vote, or amend, but hopefully vote on that bill, and then it will eventually land on Donald Trump's desk. Donald Trump has said that he wants it on his desk. He wants to sign it. And so his message to the House, and the message that you will hear from Bill Hagerty is to the House is, guys, just vote yes, and let's get this thing done, which I think is my message to the House as well.

• 1:24Ryan Sean Adams?

  That's your message to the House. It's mine as well. Okay, let's get it done. And I think there's a fair chance of this, with, with kind of Trump and the executive branch kind of giving it a push. Secretary Besen was very optimistic about the bill yesterday, talked about in the context of relieving kind of US debt, finding some market for the bonds, all the bonds that we have to sell. So there's a lot of tailwinds, I think, going into this, into this bill's progress. And I think what you'll find in this episode with Senator Hagerty's conversation is a complete 180 with respect to US legislators on crypto in general.

• 1:58David Hoffman?

  Feels good.

• 1:58Ryan Sean Adams?

  Yeah, he called this the first of many. So I think we'll probably have him and others like him on the podcast talking about positive pro-crypto legislation. That is now coming. This is the first large crypto bill. That we've ever seen coming out of the US. And I think it's very, very bullish.

• 2:13David Hoffman?

  Yeah, stable coins feels like a solid early win to get a bill over the line. It's just bipartisan support. We have more ambitious bills that we're going to need to get over the line. The market structure bill is not going to be as easy. This feels like a free, a single or a double, and it's just free. That market structure bill is going to be something much more ambitious and it's going to be much more contentious. But I'm glad that our senators and legislators are practicing, negotiating about crypto things. And then also they want to espouse their thoughts and then they come on bankless to do it. So we look forward to hosting more senators, more congressmen as more and more ambitious bills get pushed through Congress to help support the just clarity about crypto inside the United States. Let's go ahead and get right into the episode, all about the genius bill and Senator Bill Hagerty.

• 2:56David Hoffman?

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• 5:44Ryan Sean Adams?

  Bankless Nation, very excited to introduce you to Senator Bill Hagerty. He is a senior Republican voice on the Senate Banking Committee. He's also the lead author of the Genius Act, which is the Senate Stablecoin Bill that yesterday just passed in the Senate. I think the votes were 68 yeses, 30 noes. Senator Hagerty, welcome to Bankless.

• 6:04Speaker 02

  It's great to be with you. Thank you.

• 6:06Ryan Sean Adams?

  Congrats on the passage of this bill in the Senate. How's that feel?

• 6:09Speaker 02

  Oh, it feels great to get it done. It's taken a very long time. And if you think about it, we went through basically every procedural nightmare one might have to endure because a very powerful member of the Senate did not want this to happen. That was one, Elizabeth Warren. She's the ranking member of the Senate Banking Committee. And on the eve of our introduction of the bill on the Senate Banking Committee floor, she unloaded 84 different amendments.

• 6:34Ryan Sean Adams?

  Wow.

• 6:35Speaker 02

  At 11:30 PM. The amendments were designed to crater the bill, to make it so toxic it wouldn't work, et cetera, et cetera. And we went back and forth. She's very talented. Back and forth with these bills, you know, with these proposed amendments to the bill that would destroy it for almost four hours. But at the end of the day, Senator Warren, after, I would say, an admirable showing, held five Democrats with her, and five Democrats came and voted with me and the Republicans on the committee to pass this out with the most overwhelming Republican support that we've had in over a decade from the Banking Committee.

• 7:04Ryan Sean Adams?

  That's fantastic. And 18 Democrats as well in the final vote.

• 7:08Speaker 02

  Yes, in the final vote.

• 7:09Ryan Sean Adams?

  Okay.

• 7:10Speaker 02

  It's taken some time to get people comfortable with what we're doing, where we're going. And there's been a lot of disinformation, disinformation around this. But as people understand the basic fundamentals of what we're doing, I think everybody nods their head and says, yes, this is what we need to do. Take our payment system into the 21st century, acknowledge that this is a wonderful technology that we can utilize in a unique way, and frankly, make the dollar the dominant currency around the world if it works.

• 7:34Ryan Sean Adams?

  Yeah, this wasn't, I mean, there have been previous attempts at simple coin bills in the Senate, as far as I understand, all the way back to 2020. There was one in 2022. There were other leads of this. And so, you know, getting the genius act even to this point and to the vote, this has been submarined in the past, and it could have happened here, too.

• 7:53Speaker 02

  Well, there were numerous opportunities for it to go the wrong way. I must, you know, acknowledge and thank Leader Thune. John Thune was, you know, willing to work with us, give us the fore time necessary, watch us at near death at a time or two, but be able to sort of stay with me, have the confidence in me that I could get this done and I could get enough Democrat support to deliver a conservative, clean, very focused, targeted bill that's going to take, again, our payment system into the 21st century and utilize digital assets, finally, in a regulated manner that's light touch, but provides regulatory clarity here in America. So we avoid what we experienced in the prior four years, which is regulation by enforcement action. The lack of clarity really meant a lack of clarity.

• 8:36Speaker 02

  Of investment opportunity and frankly, a lack of career opportunity for people that we wanted to be here innovating here. They're going to other countries. And when I started hearing about that, I said, we have got to fix this. We've got to put in a regulatory construct that works here for the for the technology, for the industry and for the American people.

• 8:53David Hoffman?

  So overwhelming support for the bill from the Senate. The Senate, the bill now goes to the House, which as I understand it, there are opportunities for the House to amend the bill, propose changes to the bill, which would then have make the have to go back to the Senate. Maybe you could clarify what is the next steps for the bill and what messages that you have for the House that might be interested in making amendments to the bill?

• 9:15Speaker 02

  So I just left the White House. I was in the Oval Office talking with the President about this bill. And the necessity to get this done quickly. If you watched the turns that this took to get to the point that we have with the United States Senate, and the fact is, we have to have 60 votes to pass anything in the Senate. It's not done by a majority. That means I can't do it with the majority of Republicans. I have to have Democrats on my side. To get through market structure, we have great momentum with this bill, but it's going to take some time. And if the House Representative sends back something that's that's different, then that's going to give those who are already opponents of the bill, the opportunity to say, well, you know, we tried, we gave you our vote, but you know, you changed it on us and we're going to be right back to square one

• 9:57Speaker 02

  with a much more complex situation. I think the President wants to see this done quickly. Take the win, I think is how he said it. And what we do then is build momentum from that because I think the market is going to react in a very positive manner to this. The scare tactics that were used and you know, by those who wanted to see this thing torpedoed, those things aren't going to materialize. And we're going to start to realize as a nation that this technology can actually yield a tremendous amount of value for America.

• 10:23David Hoffman?

  So you, you, you want this to not get intermixed with ideally the, you know, the Clarity Act as well, kind of the, the market structure bill that's going on the House. And also there's a stable bill going on the House that has some differences from the Genius Act, as I understand.

• 10:39Speaker 02

  I think this, as the authors of the stable bill look at this, this legislation we've put through, it is very close. I think that they'll be happy with what we deliver. And on the Clarity Act, that means they've done some great work on this. But we're going to have to have a lot more work in the Senate because again, we have to come to a significantly bipartisan result over here. Again, the 60-vote threshold is different from what it is in the, in the House of Representatives. And it's going to take more time, more work. And there's a divide in terms of understanding the technology where there may be more people that understand it or comfortable with it in the House of Representatives. We've got more work to do here in the, in the Senate for some of the other aspects of the market structure bill that are going to require more education.

• 11:17Ryan Sean Adams?

  Senator, let's, uh, let's zoom out and talk about why America needs Stablecoin law in the first place. And this is how Treasury Secretary Scott Besant made the case yesterday. He, he put this out on Twitter. He said, there's been recent project, uh, projections that stablecoins could grow into a $3.7 trillion market by the end of the decade. And he said, that scenario becomes much more likely with the passage of the Genius Act. He says, "A thriving stablecoin ecosystem will drive demand from the private sector for US Treasuries, which back stablecoins. This newfound demand could lower government borrowing costs and help rein in national debt. It could also on-ramp millions of new users across the globe to the dollar-based digital asset economy. It's a win for everybody involved."

• 12:00Ryan Sean Adams?

  He's almost making the case, it seems like this is a win for US dollar dominance and dollar supremacy. What would you add to this? What would you say to the American people about this bill?

• 12:09Speaker 02

  And there's not a great deal to add because I think Secretary Besant hit the nail on the head with this. He did a beautiful job describing what's going to happen. And our objective, of course, is to bring clarity to an area of innovation so it can thrive in America. But a benefit, a side product, uh, an outgrowth of this, however you want to describe it, is that it will inevitably stimulate demand for US Treasuries because each of these stablecoins, and that's the, the fundamental backbone of this legislation, are backed dollar for dollar by either cash that US dollars, or more likely, short-term US Treasury securities. And in fact, the, the analyst I just talked with, the CEO of Citibank, they believe that by 2030, if not soon... Sooner, stablecoin issuers will be the largest holders of US treasuries in the world.

• 12:53David Hoffman?

  Wow.

• 12:53Speaker 02

  Not China, not Japan, but benign institutions that are issuing this. I think that is very favorable from Secretary Besse's standpoint, or anybody that will eventually have his job in the treasury in generations to come. And in terms of dollar dominance, I think if a person that's moving into the digital age and wants to be able to transact in that manner, certainly it's much faster, much cheaper to do it this way. But also, as they think about what currency would I like to transact in, would it be the digital one? We know what that is. It's centralized. It's certainly something that can be surveilled. Or would it rather be the digital dollar? I think the dollar is going to win that argument 99% of the time.

• 13:31David Hoffman?

  There's a huge geopolitical conversation downstream of stablecoins, as you just highlighted. But there's also a domestic one as well, especially really kicked off by Circle going public and also just having just a crazy price action going from like $31 to where it is today at like $170, which has turned the heads of Visa, Amazon, Walmart. Everyone's now really interested in stablecoins domestically. What would you say are the arguments about why we should foster a stablecoin economy domestically? On the domestic economy side of things?

• 14:02Speaker 02

  I think it's actually rather simple. What we're able to do is take this payment mechanism. This is basically a digital dollar, if you will, and we're putting it on rails that are much faster, much cheaper to operate. And if you think about the clearance system and the time that it takes to clear a transaction today on the rails that have been built over the years, we take time out, we take counterparty risk out. That means the party on the other side might go bankrupt, but it's not going to happen in an instant. And again, on the blockchain, this transaction can happen in an instant. If you're actually doing things overseas, you take currency risk out as well, because you're waiting five to 10 days to clear something, currencies can move significantly on you. And that's a risk that, again, comes out of the system.

• 14:42Speaker 02

  And finally, to the extent that there are funds tied up, your receivables are caught up in a payment system. Those are funds that aren't in your working capital. Those are funds that you aren't able to deploy to build your business, to hire more people, et cetera. Bringing that working capital back into the system is going to have an immediate beneficial impact because it's another investment in America. So there are a variety of reasons why this is very, very preferable to the current system in addition to those that Secretary Besen mentioned, which is that it will stimulate demand for treasuries, therefore more demand will create more price pressure that lowers the price of treasury securities and lowers our borrowing cost.

• 15:19David Hoffman?

  What do detractors have to say about why this bill should not go forth? I know Elizabeth Warren tried to smother it. Maybe we don't necessarily trust her arguments, but there are people who are anti this bill. How would you steel man their arguments? What would you say are the best arguments as to like some of the concerns of this bill? And how would you address them?

• 15:40Speaker 02

  Yeah, it goes down to something very fundamental, I think. And again, I'm not a psychiatrist and these people aren't telling me their thoughts. But here's what I believe. I believe that Elizabeth Warren has been a big champion of a central bank digital currency. The ability to centralize and control transactions, to observe transaction, that gives a tremendous amount of control to the government. China's doing just that. I'm from Tennessee. We're fond of liberty and freedom. That's not what the vast majority of Americans want to see. This sort of control is not desirable. It would absolutely destroy the value of our currency as a reserve currency. Were that the case, by making an investment in a decentralized arena like stable coins,

• 16:23Speaker 02

  we're basically saying we're going to allow this sort of freedom, this sort of liberty to exist, and we're not going to try to constrain it with some sort of centralized choke point opportunity. And if you think about the abuses that the American public has seen, Operation Choke Point, Choke Point 2.0, I was just meeting with bankers earlier. They feel a real sigh of relief that they aren't being told that they can't bank a certain industry because it's politically out of favor and this is all done quietly. That's over. And having the stablecoin regime move forward is just going to continue to support that that freedom and the lack of ability of regulators and supervisors to come in and control your transactions.

• 16:59Ryan Sean Adams?

  Yeah, those of us, many bankless listeners in the crypto industry certainly appreciate the removal of the grip on our throats, which was essentially what Operation Choke Point was, and are very enthusiastic about this bill. I guess for the layman sort of listening, who doesn't really understand the difference between a digital stablecoin, let's say, and a CBDC, a central bank digital currency, that someone like Elizabeth Warren has proposed in the past, what is the difference between those two?

• 17:28Speaker 02

  It's very fundamental. A central bank digital currency basically means the central bank will control the currency. It'll control the transactions, it'll have visibility on the transactions, and it literally can choke any sort of purchase that they'd like to choke. Today, it might be you drove your car a little bit too far. That might create more emissions than we like, and so you're not going to be able to purchase fuel. You pick your disfavored industry, and we can see something happen. In traditional banking, I've already seen it happen. We have disfavored industries in my state of Tennessee, whether they be private prisons, gun manufacturers, you name it, that have gotten de-banked. That makes it so easy to do when you have a centralized system. We don't want them to have that sort of power and authority. So let me go back to what is a stablecoin. A stablecoin is

• 18:13Speaker 02

  issued by either a bank or a private financial institution. They go through the same type of rules and disclosures. It's not exactly the same set of rules and disclosures, but it's a parallel to what happens when one issues a stock on a public market. You've got to give disclosures. You've got to demonstrate that you have the assets behind it, again, one-for-one backing with high-quality US Treasury securities. You've got to prove that on a regular basis. And to the extent you violate that, that would be like violating the law as a stock issuer as well. There are consequences for that. This stablecoin has preferences of bankruptcy that are superb. That means they are the first ones out if there is a problem with the issuer. Your stablecoin is going to come back and be backed dollar for dollar with all the assets that are available at that institution that has issued it. So

• 18:56Speaker 02

  there's a regulatory construct that feels more like the trade in a security, trade in a commodity, but it doesn't require centralization to do it. It requires reporting.

• 19:08Ryan Sean Adams?

  So let's go over who can issue a stablecoin right now and maybe who can't, just to make that clear. So you mentioned banks, which of course are one of the parties that can issue a stablecoin. But there are also some that are eligible that aren't banks, right? Circle, for instance, is not a bank. So this idea of OCC licensed federal non-banks, there's a path for a state charter, trust as well, as long as it's under 1 billion in stablecoin value. What are the types of entities that you expect to be able to issue stablecoins? And then on the other side of this, who can quite clearly not issue stablecoins under this regulation?

• 19:42Speaker 02

  I think the most important thing to note is that we're not trying to create any sort of unlevel playing field here. Banks and non-bank financial institutions are all going to be regulated the same. The disclosure requirements will be the same. Banks already have a number of things in terms of Bank Security Act requirements, knowing your customer, et cetera, et cetera. A number of those get carried over into this new cryptocurrency regime where you have non-banks that are going to have to comply with the same set of rules. So it's typically going to be, if it's a non-bank institution, one that is comfortable and is complying with rules with respect to who your customer is. The Bank Secrecy Act rules, those sorts of rules and reporting are all going to be required. Whether you're a bank or a non-bank financial institution. Who can't do it?

• 20:27Speaker 02

  It's going to be an entity that doesn't have the sort of financial backing, that doesn't have the wherewithal to do the reporting, that doesn't have the ability to back the currency dollar for dollar. You've got to get through the regulatory threshold. You can do it at the state level and that you can do that freely up until 10 billion dollars of currency being issued. You could do it at a federal level and that presumption is that you'll move over to federal jurisdiction, if you will, after 10 billion. But you can also ask for a waiver from that. Some state jurisdictions are more than competent to handle even larger issuers. That'll be determined as we move forward in the marketplace here.

• 21:02Ryan Sean Adams?

  Now Senator, you mentioned one of the benefits of this bill is to bring some of this talent, some of this capability back onshore. However, there are some fairly large offshore issuers of stable coins, at least to date. And my understanding is they wouldn't quite qualify, at least out of the gate, under this bill, but maybe there's a path for them. So let's talk of an entity like Tether, for instance. The largest stablecoin issuer in cryptocurrency, at least right now. Things could change post this bill. Maybe some of this comes onshore, but $150 billion, I believe. What's the path to someone like Tether under this bill? Is it any different than the path for more domestic onshore entities?

• 21:39Speaker 02

  An offshore entity like Tether, and I don't know what Tether's exact plan is, but I've heard that they are at least contemplating putting a US operation in place that could abide by all of our rules. I think that's an obvious path that one might follow, no matter who you are. Tether's got a large position here, and I think a lot of eyes are on Tether. But that would be a path that is rather obvious, is creating an institution here in the United States that's subject to the regulations that we put forward in this bill.

• 22:04Ryan Sean Adams?

  Today, why doesn't Tether fit inside of the Genius Act? What about Tether makes it not compliant with the Genius Act?

• 22:11Speaker 02

  Well, Tether can begin to comply, but the disclosure requirements with respect to revealing exactly what securities, they're segregated, they're US dollar-denominated, they're treasuries, that sort of disclosure has to be compliant, it has to be compliant with our laws here. And Tether would have to have an operation that was doing that. It can't be backed by other types of collateral. It's got to be very high-quality collateral, like US Treasury securities.

• 22:38Ryan Sean Adams?

  As I understand it, Tether is backed by US Treasuries in a large, to a large chunk of it, but there's also things like Bitcoin and gold, things that are very much not United States dollar-denominated. So that really should kind of change-

• 22:49Speaker 02

  It doesn't have value, but it doesn't meet the requirements here. And I think that's, you're hitting right at the difference.

• 22:53David Hoffman?

  Yeah, exactly. Okay, so if Tether wanted to be United States compliant, it would have to be completely backed by cash-like instruments. What would that unlock? What would compliance unlock for Tether? If they did decide to trade their Bitcoin and their gold backing for just only cash-like instruments, what would that enable them to do?

• 23:10Speaker 02

  They could also create an entity that can do this, and I would think that might be a logical path for them. But what it does is it opens the door to them for what I would call the 21st century payment system. And if you think about what we're stepping away from, it's a pretty clunky system that's been developed in 1970s, 1980s, the SWIFT system. If you think about the time that it takes to transact, particularly overseas transactions, and I'm presuming Tether is involved in a lot of that. The efficiency that this brings to bear is enormous, and the fact is that the dollar will be dominant in this system. And I think you want to be a player there. So I think there's going to be a lot of attraction for people who want to be involved in payments to make certain that they comply with our laws here. And again, that's going to be great for dollar dominance around the world.

• 23:55Ryan Sean Adams?

  Let's talk surveillance again, because you mentioned earlier that we don't want the dollar to become the digital one. And so we don't want that level of kind of a surveillance society around our financial instruments. And so let's talk about kind of the Bank Secrecy Act requirements with respect to stablecoins. One of the things I think that we have been relieved to see is there's no mention of BSA requirements filtering down to individual self-custodial wallets. From our perspective, at least David and mine and Bankless, meaning the crypto industry, we basically view that as kind of a non-starter. That's a massive invasion of privacy. We don't see that here. What we do see is BSA at the issuer level, which is similar to what we've already seen with stablecoins.

• 24:36Ryan Sean Adams?

  However, there is a worry, and I think the Cato Institute pointed this out in a recent April report that I read. Basically, there is some vagueness in the language that potentially a future regulator, let's say we had a different Treasury Secretary in the future, who takes a much more dim view on our rights within non-custodial wallets for stablecoins, and allows to kind of like flex up their regulatory authority to try to block, impede, put BSA requirements, AML KYC on individual non-custodial wallets. Do you have any worries that this bill leaves that door open to regulators in the future? Someone at FinCEN maybe, or a future Treasury Secretary?

• 25:19Speaker 02

  Yeah, I think what this bill does is actually create momentum for us to move on to the next phase, which is market structure. And there, I think we have the opportunity to flush out a lot of these concerns. And as you say, institutions like Cato, others, have spent a great deal of time thinking about the third, fourth, fifth order effect, what might happen under certain circumstances. My goal is to move quickly on market structure and continue to answer those questions in a legislative product that we can move on. So these questions are very valid. But again, we're not trying to solve every question and solve every problem with one piece of legislation. We're trying to open the door for what I think will be a massive set of opportunities that are adjacent to the stablecoin arena. And the kinds of questions you're raising are the exact kinds of questions

• 26:04Speaker 02

  we want to address as we move on to market structure.

• 26:07Ryan Sean Adams?

  There was a criticism of this bill, and I want to get your reaction here. Some have called it the Trump loophole. So the bill does bar members of Congress from profiting off of stablecoins, but not the president. And so that's why some people have called this the Trump loophole. Of course, Trump, kind of the, you know, the Trump media empire does have various holdings in stablecoins, World Liberty Financial, and others. Is that a worry in this bill? Like, why not fill the Trump loophole and put the president under the same sort of, you know, like bar that members of Congress face in their, you know, like making sure that they don't profit off of stablecoins?

• 26:43Speaker 02

  There's an emoluments clause that actually deals with this. And it's not the legislative branch to go in at that level, the president, and begin to impede his authorities. Those are constitutionally set. And there's a lot more work that would be required to go in and target a president. So what we've done is, I think, acknowledge the fact that there is an emoluments clause there that will take care of the concerns that have been raised. These are precisely the concerns that have been raised by opponents that want to sort of obfuscate what's happening and get people concerned. Or if you dislike a certain president, then you're going to vote against this bill. This is about a modern day digital payment system. That's what we're trying to get forward here.

• 27:19David Hoffman?

  Yeah, notably, this is one of the most bipartisan bills that we've seen in recent history, and I think in 2025, finding a bipartisan issue is harder and harder these days. What's your opinion about the crypto industry or crypto technology as it relates to bipartisan nature? Because there's been a shift towards the right downstream of a reaction to the Biden administration's oppression of crypto in Chalk Point 2.0. And so naturally, the industry shifted towards the right. But what do you think about the long-term status of crypto as a political issue inside of the United States?

• 27:50Speaker 02

  Well, one, I think it shouldn't be a political issue. And that's the point I've tried to convey to my colleagues here. It shouldn't matter what your party is. This is an obvious move toward greater efficiency in a system that if we don't address it, and we'll go back to the point earlier, if we don't address this, we're going to lose one of the most innovative industries in the world to other countries. And it was heartbreaking for me to hear, as I dug deeper and deeper into this, that young developers, people with great ideas, are moving to places like Portugal, even Hong Kong, given the proximity to the CCP, that's concerning. But if you think about what was happening, we did not want to see this ecosystem uplift and move overseas. The innovation is happening here. We have all the potential to do it. We have the talent here. I want the United States

• 28:32Speaker 02

  to be a magnet for that talent and not have a set of unclear regulations that can be utilized to push that sort of innovation offshore. It's critical to me because I see the potential in the technology. And it might bear discussion to give you sort of my history, my evolution on this. And I've had to share this with a number of my colleagues who are new to this. I certainly had heard of cryptocurrency and the technology before 2017, 2018. But at that point, I was serving as the United States ambassador to Japan. We were working hard every day to stop ship-to-ship transfers of coal from North Korean ships to Chinese ships. We were blocking guest workers from North Korea going to other countries to stop

• 29:14Speaker 02

  a, we're talking, single-digit, low double-digit, millions of dollars, sorts of transactions, hard currency transactions, because we were putting maximum pressure on North Korea. And I walk into my office one morning, and above the fold, in Japanese, but when you converted it to US dollars, over half a billion dollars had been heisted in one night from a wallet shop, the coin check heist. You probably remember this. I call my team in. I said, are you tracking this? They say, yes, sir, we are. What you know, who's behind it? We don't know because the Japanese authorities haven't shared the, and I'm going to use the wrong term here, but haven't shared the malware with us. It took me less than an hour to get that, send it back to the States. Turns out, sure enough, it's a state actor that has done it.

• 29:57Speaker 02

  I had my own suspicions, we couldn't say exactly who. But a half a billion dollars, over a half a billion dollars in one night. That led me down a path where I think a lot of my colleagues, you know, were when, when we started these discussions here in the Senate, that this is used for illicit finance. Frankly, we've been dealing with illicit finance since biblical times. But, but that was a deep concern of mine at the outset. I remember sitting down with Steven Mnuchin, our Treasury Secretary, shortly after that, talking about what we could do. But then I started digging into the technology and realizing what could be done here. You know, whether it's self-executing contracts, tokenization, there is so much efficiency here. And what I also realized is that with the proper authorities, you can find out who's touched a transaction. And you know what started to happen with Coincheck?

• 30:42Speaker 02

  The people that were involved in it started turning up, started to get, the consequences were paid. You know, I, I was not surprised, but Senator Warren was quoted in an article that came out right before a very important vote here in the Senate where a Russian, a Russian criminal had used stable coins to launder money. Well, they caught him. And you know, this is, this is the type of thing that it just takes some evolution in your thinking, but as I dug into it and realized the potential to technology, like my background, I started out at Boston Consulting Group, but most of my career, venture capital and private equity. And to see a technology with this much potential and starting to think about, wow, this could be transformative. It should happen here in America. We should not be pushing this overseas.

• 31:26Speaker 02

  And so, complete mind shift for me. And then seeing this opportunity, the way, the way I've approached it is that stable coin is the thing that opens the door for the technology. It's something that I can easily explain to my colleagues. The benefits are, are well-known and easy to see, but there's so much more that could be done here. And what we're doing with this legislation is establishing the United States as, as a clean regulatory framework.

• 31:52Speaker 02

  So that issuers here, people that want to participate, know that there's a clear set of rules. They don't have to think about what happened the past four years of Gary Gensler and the SEC, regulating by enforcement. You don't know what you did wrong until somebody shows up and said you did. And not giving any guidance to those who would try to abide by the rules. You know, it was almost impossible even to figure out what the government wanted you to do until you stepped over a certain line that they didn't tell you about, and then they hit you with a fine and a lawsuit. So we're clearing that up, we're cleaning that up, and we're creating an environment here that I think with this innovation is going to thrive in America.

• 32:25Ryan Sean Adams?

  That's fantastic. Yeah, and that's something that the crypto, crypto natives, crypto industry has been frustrated with is we haven't had the clarity, we haven't had the clear guidelines. And so it's driven a lot of activity to dark markets and shadow markets when you don't have clarity on, you know, the regulatory stature of these things. One thing you said yesterday is with Genius, the United States is one step closer to becoming the crypto capital of the world. So you've said this often in our conversation today. This is the first step, but first step of many. So what's kind of next in your mind to establishing the US as the crypto capital of the world? Of course, we got to get Genius over the finish line, but once we do, then what?

• 33:06Speaker 02

  Yeah, I think my most immediate job, as you say, is to get Genius over the line, get it through the house and get it to the President's desk as quickly as possible. He told me he's ready to sign it. And I think there'll be a message coming from the White House, maybe as soon as right now or later this afternoon, where that will be clear. This is an important first step, and this is going to allow a reallocation, if you will, of resources, not just from the current players, but I've talked with a number of traditional banking system players that want to get into this industry. So what we're going to see is an intersection now between digital technology of this nature and traditional finance. I think we're going to see a lot more creativity come from that. And as that sort of intersection happens, we're going to see more great ideas, things that I couldn't even imagine right now,

• 33:49Speaker 02

  perhaps even the two of you couldn't imagine. But as we bring those sort of resources together, we're going to see more and more new opportunities. In the next stage, the market structure stage, I think we have to be careful to create, again, rules of the road. But not so prescriptive that we're going to, again, send new innovations that we haven't imagined today offshore because we've somehow closed the door. So it's going to take, you know, a lot of thoughtful, you know, many people will be involved in this, but I think we need to take a very thoughtful approach to it, as open minded as we can possibly be. But there are a number of people that are expert in this industry that have almost attained, you know, a profit level of recognition. They're going to be very helpful to us as we move forward.

• 34:31Ryan Sean Adams?

  Yeah, I mean, we think you've done a fantastic job with this bill. We're, we're supporters. I mean, even things like consideration of not closing the doors on algorithmic stable coins, at least not yet. I mean, looking at studies rather than complete closure so that innovation can propagate. I think that was well done. So Senator Bill Hagerty, we, we certainly wish you luck on this bill in, in the future. And give us maybe as we close, best case scenario for when this could reach the president's desk.

• 34:57Speaker 02

  Well, I, I've told the president, I'd love to see it on his desk by the 4th of July. I think we're going to have a great 4th of July. This would be super. That'll take a lot of work. I don't want to say it's Herculean, but it'll take a lot of work to get there. But I think we've got, you know, a team in the House of Representatives that very well, you know, very much understands this. They've been tracking it. They've been talking with us all the way along. White House wants to see it, so it literally could be a matter of days. It, it could take a little bit longer than that, but I, I think the time is of the essence here, and I'll tell you why. We're getting ready to move into the reconciliation process here in the Senate. That's going to be a wholly partisan process. Tempers will flare, and if we don't get this done, or if anything is sent back to the Senate, I'll put it that way, it's going to get extraordinarily hard to, to pass something new.

• 35:40Ryan Sean Adams?

  All right, well, let's get it done. Let's get it done now. And I just want to reflect, this is, and I could not have imagined this bill going forward a year ago. A year ago was a completely different climate in, in US legislation with respect to crypto. So monumental, it's like been a 180 change that we've seen as external observers to this. So I know you've been part of that.

• 35:58Speaker 02

  I had my whole team working on this. Luke Bettet and his team on my staff, the banking committee staff and, and teams on both sides of the aisle have done just a fantastic job of, of making this happen. So I appreciate the input, a lot of input from the industry, a lot of input from the administration. The Treasury is ready to work with us on this and, and implement it, and I think we're going to be very, very pleased with the results.

• 36:16Ryan Sean Adams?

  I do think there's a lot of crossover between crypto values and American values. They're kind of like one in the same, so we appreciate you pushing on that. Bankless Nation, got to let you know, of course, crypto is risky. You could lose what you put in, but we are headed west. This is the frontier. It's not for everyone, but we're glad you're with us on the bankless journey. Thanks a lot.

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