Hey everyone.
I'm Tony Edward and I'm Amanda Warcraft.
And we're recording at the Salona Policy Summit today and joining us is Miller white House Levine, who is the CEO of the Salona Policy Institute.
Miller, great to have you. Thank you for having me.
Miller told spit about yourself and what led to the founding of the Salona Policy Institute.
A bit of a long story.
I'll try to keep it brief, but I originally got interested into crypto for I would say ideological reasons. So I was living in China twenty thirteen, twenty fourteen. I was very young, and it was a you know, I think,
a formative moment in my life. And at the time, living in China, it felt very different than living in southern California, Los Angeles from a political perspective, like you can really feel the presence of the government there and I think a way that at least was not the same in the United States at the time twenty thirteen, twenty fourteen. So at the same time, these crazy expats in Beijing like you should think about this crypto called bitcoin,
and I was like, oh, what's that? And it really grabbed me I think the idea that a technology can empower individuals via v institutions, be them businesses or governments, is a really powerful one and I think an outlier in the history of technological development over the last fifty years, honestly, So I think it's decentralization based on public blockchains is a very potent concept, and I think force in the world for individual empowerment. So that's why I originally got interested.
I'm too stupid to be an engineer, so I have to do something less big brain, which is what brought me to policy work. So after college started working at the Blockchain Association for Kristen Smith, my current colleague then was that an organization called the DeFi Education Fund, which was really focused on DeFi specific and DeFi developer issues.
And then last year, you know, we saw in my view, a vacuum and a need for ecosystem advocacy, not because of any anyone's like out to get Solona or any other ecosystem, but because policy decisions have to be based on technological understanding, and if that doesn't exist, you can, you know, things can go hey wire quickly. So we set up SBI to get after that problem and try to get you know, the good news about Salon out to policymakers around the world and about a year and now, can you give.
Us the status of where things stand with those Salona spot ETFs. I know you were on Crypto and America not too long ago and you had mentioned the paperwork was filed that you definitely wanted to involve staking as part of that. But we're I know, there's kind of nuance and how because the SEC is pushing back on yielding as part of that launching these these ETFs, So where where do where do you stand with that? With the regulatory framework.
Being what it is.
So these spotytvs are already live, which is great news, and those launched in October. So I think that was the big, the big threshold the moment. And now there are specific issues around staking and how to treat that really for tax purposes is the big one within ETP products. So I think, you know, it gets complicated quickly, but they're like weird tax rules that need to be resolved such that ETPs can pass staking rewards back to their
holders without it creating an insane tax burden. So I think that you know, it's it's kind of makes sense, Like it's not really a controversial policy change. It just has to get done by IRS to make it work. So I think that'll ab and it just you know, isn't super controversial. It's just very complicated on the tax side. And some of these things you have to think through the implications outside of crypto, like, okay, if we ask aaking rewards within ETPs, what's that gonna you know, unleash
in traditional markets. I don't think they're those issues. So it's it seems like we're right on the CUSP. But yes, they did launch in October I believe, and it might have been September, but have have been training since and I think they're about eleven or twelve.
Now, how's the Salona Policy Institute engaging with the SEC and the CFTC to get rule making and things along those lines.
Yes, so rule making is important, Like the agencies can do a ton. There's a lot of focus on Congress and you know, Lord Willing, the Clarity Act will pass and we will not have to do you know, a ninth and tenth year of market structure debates because I'm sick of sick of them at this point. But there's a whole host of stuff that the SEC and CFTC are already working on that are squarely within their own authority.
The two big ones that we've been focused or I suppose the efforts at CFTC and SEC we've been focused on I collectively refer to as the innovation exemptions. So on the SEC side, there was a big development this morning that's somewhat related, so it's good timing. But the vision is we have these amazing public blockchains that allow anyone in the world to participate in these markets, and any asset in the world should be able to be
traded and purchased and used on these blockchains. That's inclusive of securities, tokenized securities, be it Apple stock or you know, Miller wants to issue debt in Miller Inc.
You know, what have you, You should be able to do it.
So the idea is the SEC needs to make that possible by tweaking their regulatory framework. So how can you, for example, have a stock tokenized stock in your cell posted ballet. How can you then go and use a DeFi protocol to trade it on a peer to peer basis with a counterparty? How does that fit within the
existing regulatory regime. It looks a lot different than how trading happens on the New York Stock Exchange today, and so that's what the SEC is working through and on front ends, they answered a lot of those questions this morning under what conditions that is possible, so you know, they're really getting after it. So that's on the one side at the SEC, and we're hoping to do the
same at the CFTC for on chain derivatives markets. Today, to trade derivatives on chain, you have to be an x US person, not not in the United States, and that shouldn't be the case. The CFTC wants to create a pathway to compliance such that if you want to go ahead and you know, trade derivatives or purchase derivatives on chain, you can do so alongside your traditional intermediaries
or you know, centralized intermediaries. I think the SEC and CFTC are committed to giving consumers choice and they can engage with these products and use them in whichever way they're most comfortable. So those are the two big initiatives, you know. I think the SEC is on the brink of releasing this hopefully before before May. But we'll see CFTC.
You know, they're really just getting getting started since cher Sealy was confirmed in December, So I think, you know, have a bit more time to a bit more would to chop, so to speak, but I think we'll move expeditiously. So it's you know, I have to pinch myself every time I talk about this because imagine like eighteen months talking about the SEC allowing US equities trading in in DeFi, and you know someone would laugh at you, if not just you know, shoot you on the spot.
From where you sit. Where does Salona benefit from this new regulatory framework compared to other blockchains?
Well, you know why I started using Solana and got interested in it, It's because it's fast and cheap. Like, as an individual, I'm not sending or engaging in transactions that are tens of thousands of dollars, and so a two dollars gas fee or a three dollars gas fee really mattered to me as an individual DeFi user, and Solona, you know, seeks to solve that problem by creating a super fast, super high bandwidth blockchain that anyone can use for fractions of So that's why I should are using Solana.
And I think, you know, my thesis is not that any of these regulations ultimately benefit Solana in a way that is not in the interests of like another ecosystem. But I think Solana wins on its competitive advantages via VI these other chains for the same reasons that you know, I chose to be using it. So I think that as all of these new businesses and investors are able to operate on chain, they will come to a similar conclusion, which will of course be good for Solana.
Miller Claritiac.
Do you think that passes this year or are we heading into twenty twenty seven.
I think it's going to pass this year.
I have never been more hopeful, and I you know, I know, I've this is my first time on the podcast, but that has not been my view over the last eighteen months. I was a bit more skeptical than most, but I've had a change of heart and it really does feel like the momentums there, all the pieces are in place. As Patrick Wick just mentioned on stage, it's you know, a list of fifteen critical issues has been
welled down to two or three critical issues. I didn't think we were going to get through you know, ten of those fifteen. So I haven't proven wrong, and I think the momentums there, it's the right time, so I hope, I hope it gets done.
That would be awesome too.
Yeah, Millard, thank you so much for your time. It was great having you.
Thanks for having measure. Thank you.
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