Hey, folks.
We are recording at Chainleing Smart Coon event and joining me is Patrick Witt, who is the executive director of the President's Council of Advisors for Digital Assets.
Patrick. Great to have you, Thanks for having me.
Great to be here, Patrick, I was looking forward today's conversation all day because a lot of eyes are on the Market Structure Bill and what's happening in DC. Tell us a bit about what you're doing and any updates around the.
Market Structure Bill.
Well, I'm pretty much camping out on Capitol Hill these days. It feels like going from office to office and dealing with both Banking Committee members and ad Committee members. Very encouraged, especially over the past few weeks, some of the traction that we're getting with different offices, different members who are really starting to engage. You know, many of them have been engaged for months and years, you know, on this
text and these different concepts. But there's a lot of them that are you know, going to be asked to vote here pretty soon and are now starting to really grapple with these issues and ask for the explain and kind of the you know, job aids if you will, to help them understand the bill.
And what it does.
Nobody wants to get this wrong, you know, and so as you get closer to a vote, kind of you know, sharpens the focus. But very encouraged Republicans and Democrats are engaging with this this text now offering you know, improvements, edits asking good questions, and I think we're going to get there. But you know, clock's ticking, and we're trying to keep the pressure on. Gentle pressure, but make sure that folks know what a priority this is for the president and for my boss David Sachs.
Absolutely.
If you heard President Trump say he wants to make America number one in cryptodigital assets, so I'm assuming him making those statements is lighting some fire or on the deceits of some of these folks to get things done.
Well, he said it again just the other night on sixty Minutes, you know, reiterating that commitment that he made on the campaign trail, and he means it, you know, I mean, he understands what an engine this is for American growth. You know, our economy, the innovation engine, you know that it unleashes. And so we're doing everything that we can to to make that vision to make the US the crypto capital of the world, or as David likes to say, of the planet, you know, a reality.
So every day I wake up, you know, wondering about what we can do to move the ball forward, not only on Capitol Hill with the legislation, though that's definitely taken up you know, the vast majority of my time, but also with inner agency actions and guidance and you know, removing regulations or previous policy statements from from the Biden you know, Gensler Elizabeth Warren era that we're still trying to to, you know, remove some of the vestiges from I.
Have so much trauma from that era, being in the crypto industry, and it's a breath of fresh air under this administration to have the openness to innovate and to build, and I see a lot of entrepreneurs are breathing a sigh relief and they feel more optimistic about where things are at.
We're you know, we're working hard to make sure that there is appropriate regulatory clarity, you know, with DOJ, with Deputy Attorney General Blanche's memo that he put out in April, ensuring that we're reversing course and making sure that we're not criminalizing innovation, right, and so I think that's providing the protection and the certainty that innovators, developers need in order to build their products here, because.
That's what we want.
You know, everything that we do we filter through the lens of is this going to drive innovation offshore? And if it does, then you know, we need to think very very hard about whether we want to pursue that path, because I think the misconception that the you know, again the Genstler, you know, the Warren crowd had is that if we just you know, stiff arm crypto, it's ultimately going to kill the industry. Well it didn't. That proved to definitely be incorrect. It just drove it off shore.
So do we want to be number two or you know, a distant third, or perhaps even farther down the ladder, or do we want to dominate this industry as we have dominated the financial you know, ecosystem for the past, you know, one hundred years.
So this is the future.
We've got to make sure that we retain the United States place of primacy in it. And that's what we're committed to doing every day.
Many are calling the time we're in the Fourth Industrial Revolution where you have the convergence of different technologies crypto, blockchain, AI, new space exploration opportunities. Is that how the administration is looking at it, that we are in the midst of the next tech boom and could be incredible for the United States to create wealth, jobs, and much more.
Like you mentioned, I think that's exactly right. You mentioned a few of them. Crypto obviously, you know, my primary focus, but also AI the other side of the house under David you know, I would throw in there as you mentioned the space race, some of the defense tech innovations that are taking place with autonomy, you know, there's there's a number of others. Probably bio would be another area where these you know, different molecules, and AI has a lot to do with that too, with some of the
development of different medicines. Sure, it's it's an incredibly exciting time to be alive, and so I think it's appropriate to call it the fourth Industrial Revolution.
But it's not just one.
There's there's many different ones happening in a lot of different fields, and they're unlocked by these different technologies that cut across them.
But it feels that blockchain may have a bigger reach because it seems like it's going to be the fabric, kind of like the Internet, another layering that the economy, the markets will all run in because you see Wall Street firms and banks now looking at stable coins, tokenization, and much more.
Yeah, I would say there's the point that I make, you know, when when talking with folks, you know, when we're regulating crypto right now. You know, cryptocurrency is one application.
Obviously it's you know, the one that most people know when it comes to blockchain, but what we're doing also has implications for you know, decentralized infrastructure projects, you know, Helium and these others that are approaching, you know, the buildouts of different infrastructure using decentralized you know, blockchain models. I think there's going to be a lot more that pop up in that space. So very excited about what that could do. And you think about, you know, autonomous
vehicle fleets for exams. You know, there's different ways that you could conceptualize business models that crypto and decentralized blockchains and applications can can enable. So I'm incredibly bullish about the future. But that's why it's so important that the Market Structure Bill that we get done here provides those developer protections, allows people to innovate here at home so that they could build these products and these companies in America.
So are you anticipating once this bill makes it the President Trump he signs it into law, we see massive innovation here in the United States.
I think there's going to be a lot of folks that continue to resure. We've already seen some of them. And I point to, you know, the Genius Act that we got passed for stable points. You know what happened shortly thereafter Tether decided to open up their US operations. You know, So I think that kind of you know, flash to bang, clear connection between the two is what we want to see.
And we love telling good news stories.
You know, anyone that comes in to meet with us in our office, we always make sure to tell them, you know, if there's a good news story to tell, we want to amplify it. Because there are very few times when you actually get to pass a particular you know, piece of legislation, or repeal a policy, or pass a new regulation that you then immediately see the benefits that
come from it. But we're seeing that very much in this industry because you know, it's it's such a one eighty from the treatment that it got previously that you know, folks, folks are excited, they're grateful. You know, they come in and they think, you know, they thank us, but really they should be thanking President Trump and David for setting the tone in the direction, and we're just there to execute.
We're on the front lines, you know, trying to lead it forward, but the direction comes from the top.
You know what it feels like, Patrick, if my history is correct here nineteen nineties President Clinton and I believe Al Gore, they got to write with the Telecom Bill at which allowed the Internet to flourish, and it feels like we're at that moment for blockchain and crypto.
I think that's exactly right.
Brad garling House brought that up this morning when I was talking with him, you know, and the point that we were making is, you know, we need to establish the appropriate safeguards, you know, the rails here to ensure that we're not overburdening the industry. But we're providing that you know, efficient frontier of regulation that will allow these
markets to flourish. And you know, back then they did exactly that, right, It was a base layer of regulation and rules of the road that allowed the Internet industry and everything that was enabled by the Internet to grow there. But you know, twenty years from now, I don't think anyone can predict exactly, you know, what the future will
hold for you know, blockchain, for crypto. So we need to make sure that there's appropriate play in the joints and there's the ability for the you know, regulatory framework to adapt to all of the things that are coming you know, down the pike that we can't even predict
right now. You know, who could have predicted exactly what the Internet would do and enable in the late nineties now, So we need to make sure that what we're doing allows for that appropriate level of adaptation and evolution that will inevitably happen in this industry.
Oh absolutely, I'm very fascinated how government will adopt blockchain technology and maybe solve some of the legacy issues, will current issues that we deal with it and which we may may become the legacy issues for example, blockchain with voting, blockchain for payments via whatever it is, IRS, tax payments and so forth, and even with communications more more out trust in communicating with the government and agencies are there
talks with David Sachs and other folks about integrating blockchain in these things?
Well, I think you saw it already with commerce, you know, Secretary Lutnik, you know, putting some of the economic data on chain, they publish that on chain. I think there's going to be more of a movement to get other government data on chain. I mean, the government has tremendous amounts of data that are out there that putting that on chain, they can then integrate through oracles into different applications and use that data.
Couple that with you know, the AI element of it.
You know, you've got this massive trove of data and now you've got the engine that can parse it and develop real insights off of that.
You know.
I'm passionate about other areas that we can you know, enhance our cybersecurity, you know, and also deliver products and services to citizens, you know, in a way that's more efficient. Yeah, you know, you mentioned some of the benefits you know that could potentially be distributed in a more secure way that can also root out a lot of waste, fraud, and abuse that might exist in the system. I'm thinking
healthcare in particular, right, you know, benefits distribution. But yeah, the possibilities are endless.
You know.
The difficulty we have is trying to filter through all the different opportunities that we could pursue because your bandwidth is limited and so you're trying to get the biggest bang for your buck. But that's a trend that's going to continue beyond just this administration.
My ideal scenario from my own perspective, of course, is that having blockchain integrated with my tax payments, voting, my digital identity and just makes things more efficient and whether I'm interacting with the federal agencies or whatever it is, is just faster and more secure, and yeah, hopefully also curb some of the wasteful spending if you put things onto blocked. I know Elon tried to do that, but I think maybe eventually we'll get there.
I'm hopeful. I think we will definitely make improvements. But yeah, I think there's we as citizens have every right to demand that our government, you know, not only delivers certain services, but delivers them in a customer you know, friendly way, right right, And there hasn't been as much attention paid
to that. Uh. Joe Gebbia, you know, uh, founder of Airbnb has kind of been you know, it got some press a few weeks ago or months ago, I'm not remembering the exact timeframe, but it's kind of this you know, chief chief customer, you know experience officer like you know, citizen experience officer. So, uh, he's got some interesting ideas and some projects that he's pursuing to enhance, you know,
the the interaction of citizens with their government. So I think block chain is absolutely a technology that can be used to get after some of those problems. So, you know, more to come on that. But you know, we're thinking about government differently. We're thinking about you know, the relationship of citizens to their government differently in a way that I think everybody's going to benefit from. It's not partisan
at the end of the day. You know, folks have every right to demand that their government is responsive to them and as efficient as possible.
Absolutely well said.
A big topic that folks are very curious about is the big strategic Bitcoin reserve. What can you tell us there as far as the process of identifying revenue sources to buy and set up that.
Yeah, so you know, kind of two parts to it. Number one, we've got to get the custody and kind of the safeguarding of the existing assets right with those that have been seized, you know, the different sieging agencies make sure that they can centralize those over at the Treasury, put in place appropriate cybersecurity protocols sure to ensure that
those assets are you know, safely kept. And then second, you know, having discussions with different agents ncies about creative ways that we can in a budget neutral fashion, add bitcoin and other digital assets potentially to the balance sheet. So my other hat over at the Department of War is as the acting director of the Office of Strategic Capital. You know, that's a large federal credit program with two
hundred billion dollars balance sheet. You know, there's interesting ideas that are being kicked around about ways that you could potentially over capitalize some of the loans that the government is making, you know, not just in the Dow space, but also you know fhf A, you know, on housing loans, because you know, we want you know, digital assets on the government balance sheet, we also want them in the hands of everyday Americans, and so one of the ways
that we could do that is potentially through you know, housing and urban development and some of the loans that the government is making there, so early days of discussions there, but I know that there's interesting, innovative, you know, forward thinking folks at these different agencies who when you have some of these discussions, they don't go, oh, you know, reject them out right, They say, huh, that's interesting. Let's have another talk, you know, discussion about that, sure, and
see if we can move out on it. So you know, we have we have the right mindset of folks in this administration.
Is there any chance, terror for if you could potentially be used to buy some of these.
Assets potentially, I haven't had that conversation, but yeah, I would say all options are on the table. And again, we have some creative folks, uh, you know, deal makers, business people, whether that's Secretary lut Neck over at the Pentagon, Deputy Secretary Fineberg, you know, obviously Secretary Besson at Treasury.
You know, these are these.
Are folks that are are creative in their thinking and uh, you know, deep business minded oriented folks. So I think that there's going to be exciting discussions that happen in the future.
Patrick, thank you so much for taking a time. I would love to have you back on as things progress and I'm Fringers crossed this market structure bill goes through.
Yeah, we'll talk again once the bill is done. Thank you so much for the time.
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