How Crypto Changes Everything: The Future of Finance & Culture | #𝐒𝐀𝐋𝐓𝐍𝐘

[Music] all right well good morning everyone uh we have a fantastic panel here this morning um i feel like any one of these speakers could be a keynote at an event like this so really honored to have them all on stage together um so we have a very bold topic how crypto changes everything uh the future of finance uh and culture um i think for those of us who work in the crypto industry uh we really do see on the horizon that crypto networks and the tokens involved with them are incredibly powerful and are going to change the way we do so many things not just finance so very excited about the discussion today real quickly i'd like to introduce everybody then we'll dive right in i'm kristen smith i'm the executive director of the blockchain association which is a trade association based in washington dc we work on crypto policy issues on behalf of the crypto industry uh to my left here we have sam bankman freed um for those in the crypto space this man needs no introduction he is one of the youngest brightest minds in this space i also super love his personal style and his hair ftx that is a crypto derivatives exchange and then ftx us which is the uh us component to that and he's also co-founded alameda research um to his left we have anatoly yakavenko who is the founder and ceo of solana labs which is the creator of the solana blockchain which for those of you who follow crypto prices last week everything was down double digits but solana tokens were up it's been an amazing ride for solana they're definitely having a moment right now very exciting uh to his left we have jeremy alaire who i've had the pleasure of knowing for several years now um jeremy is the ceo and founder of circle uh which was founded way back in 2013 so they've been around for a long time circle helped create uh usdc which is a dollar back stable coin which is very important um for many of the d5 applications which we'll get into later today but um also one of the founding members of the blockchain association so i wouldn't be here without jeremy um and last but not least we have kevin o'leary who is um many of you probably already know is the um co-host of shark tank um but also has become a recent convert into the cryptocurrency space and has um as a primary investor in a platform called wonderfuy which aims to bring defy uh to the masses so really a fantastic panel um one quick thought before we get started is several years ago mark andreessen wrote a very famous um piece i believe it was in the wall street journal that said software is eating the world uh crypto is software and as a good friend of mine amanda cassette pointed out to me last week that means crypto is eating the world and i think um what our conversation today will hopefully help you hone in and grasp this point um so with that why don't we start with you sam um i want to talk about culture a little bit before we get into the finance piece um fdx has engaged with some major celebrities before we get into how crypto's impacting culture can we talk a little bit about how culture is impacting crypto and what you see that role is in bringing crypto to the masses totally um you know i thanks for having me first of all everyone um when we think about you know where crypto is today and i think even more so where ftx's were one of the newest crypto platforms certainly the newest of the large ones um you know we're really proud of what we've built and i think there's a lot of exciting things going on in crypto um and despite all the adoption that we've seen for the ecosystem over the last few years it still is touching a pretty small fraction of the world when you put it into context you know a pretty small fraction of transactions are happening through crypto a pretty small fraction of you know people transact with crypto in any ways and so i think a lot of what we've been thinking is like what are ways that we can take what we see is an exciting growing set of products and industry and sort of introduce them to tens of millions of people in a way which doesn't dilute the brand but instead sort of strengthens and underscores it um you know we've been working with with tom brave been working with steph curry with major league baseball uh with uh tsm and others and and i think that a lot of what we're looking at there is how do we get tens of millions of people engaged with the cryptocurrency ecosystem um and you know we could buy tens of millions of facebook ads and i don't know maybe we should um at some point we'll hire a team to look into to whether that that is worth doing but that's not a thing which is going to really make it the same sort of impact on people anyone can sort of you know potentially do that um and instead what we've really been looking for like who are partners that we're really excited about and are really excited about us um and you know who can help represent us and who we can really work with in a way to build something kind of stronger and more powerful than what we had and and you know i i think i'll let him talk about more but we've been working you know with with uh kevin as well on this which you know really excited about um and uh and serve on other medicine work i've been working with jeremy and tully on the product side a lot which has been super exciting too awesome um anatoly maybe we could go to you for a second uh so solana i always thought of solana originally which by the way i had heard about for the first time from your son jeremy who told me to buy it like 18 months ago and i really regret not doing that but um uh but anatoly when i first thought about solana i thought of it for uh decentralized finance or deep fi applications but it turns out it's also been a great place for nfts and actually just like over the weekend there was an nft that was sold on solana that was valued at over a million dollars for the first time so super exciting can you talk a little bit about what the role of blockchains is on culture and how artists are getting involved and some of the cool things that you're working on there for sure i think the the beauty of this technology is that it really gives the tools for artists to scale their work globally without depending on you know traditional finance infrastructure where if you're an artist that wanted to sell paintings you know 100 million dollars with a volume of paintings you would need galleries lawyers you know like legal support in every jurisdiction in the world and that's just a huge ask right for for an up-and-coming artist you really need to build up to that level but with blockchain those rules are enforced with software and they're unbreakable so somebody that you know catches the right idea at the right time can you know spend you know maybe a day maybe it took him like years to build this but if they release it on chain they're guaranteed that the financial support that they need is already there that and it's free right and the the code and kind of the infrastructure that is based on blockchain is designed to you know really give as much value to the artist as possible and extract the least amount of value from the process that's really the goal of this technology is like how do you eliminate the the sand and the gears um so jeremy nfts are for much more than um just artwork can you talk about some of the other types of assets that um can be incorporated into nfts and then also um what circle is doing um to help empower some of these businesses sure yeah i mean i think the way that that we look at it i mean the the general concept is crypto's really good at uh you know kind of proving uh a record it's great at establishing providence of ownership it's um you know and allowing that ownership to be highly liquid and exchangeable and tradable and i think a lot of people years ago if you remember like the the the interest in the space was like how do you tokenize real estate or how do you tokenize uh stock in a company or real world things and i think what nfts really represent is that the the friction um is pretty high when you cross over into those established kind of juris you know sort of legal um frameworks but with intellectual property especially digital intellectual property the barriers are super low and so it's naturally i think the first place where you're seeing this really explode and that obviously is is finding its way in particular kind of creative expression creative outlets but it's it's now kind of you know moving into other arenas so owning moments owning entitlements um owning brands that are attached to entitlements all these kinds of things that were hard to do are now really easy to do and so there's just a huge amount of experiment experimentation beyond that um and uh you know i think i don't know if i have it right sam but i think you could buy like a pair of ftx socks that includes a lunch with you or something like that but something like that pretty powerful stuff um but in all seriousness i think um what we're seeing is just lots and lots of people who are trying to take lots of categories of intellectual property and digital intellectual property and represent that using this kind of methodology and and so what we're doing i mean basically i mean we provide kind of payment and treasury infrastructure for digital currency applications for financial applications and the one of the very fastest growing categories is just people building different types of nft apps nft markets these kinds of things and we're really just trying to make it really simple and seamless for people to go from the legacy fiat system into actual digital currency so you can transact in these markets and transact with these items so we're a bit of a arm supplier to all the different people who are trying out lots of different stuff in creating nfts um so kevin as a bit of a cultural icon yourself what brought you to crypto it seems that that this wasn't something you were always bought in on what what changed your mind and what makes you excited about this space you know i was a very vocal uh non-advocates in back in 2017 because i i i'm forced to live in a world i service uh pension funds and institutions with indexing we we are 100 compliant 100 of the time and my first purchase was not an in our operating company i just bought some ethereum and some bitcoin in a wallet myself back in 2017 and one day just talked about it in the in on you know on television on business press and my compliance officer called me up while i was still in the green room saying are you out of your mind are you out of your mind you know we cannot have this dialogue and because we're going to get a call and sure enough we did and what's changed is the regulatory environment because i don't have the option to be non-compliant i don't even have that at all but slowly and surely in other jurisdictions first switzerland germany france australia england canada which has allowed uh etfs now with with uh ethereum and with bitcoin so i changed when the regulator changed and i'm very interested in krypton now as an asset class and in my world let's say let's say you're running a a billion dollar mandate which is a typical mutual fund or etf or whatever and generally if you're compliant with your own compliant department they'll there's 11 sectors in the s p for example you're allowed to go up to 20 in one sector and up to 5 percent in any one name that's generally how it works i argue today that crypto is the 12th sector of the s p that's what it is it doesn't mean i have to have everything in bitcoin and i don't want to have everything in bitcoin i want to have a portfolio of crypto coin chain you know tokens whatever is compliant and what's going to happen here and what what we need to do and why i'm so happy we have these dialogues in these conferences think about the typical institution every night at 401 they mark to market every position they have the internal compliance department sees it how much leverage is used what the positions are is it within mandate not over five percent whatever it is then their external auditors come in on a weekly or quarterly or annual basis and sign those audited statements then they issue that report to the regulator we don't have that infrastructure in crypto right now there's on this stage there's two guys trying to do it sam and ftx and jeremy here at uh with circle and i'm definitely involved with both of them because i want to be getting that but it took me months just to get my first purchase done with on circle with my own compliance department barking at me like a dog saying no no no we can't do this and i'm saying we got to do it we got to get there we have to figure it out and my auditor and the regulator reports we're going to put out and it's working same with sam i want to build a portfolio in fts you know because it's big enough that i can be compliant it's i'm the and i'm saying everybody on this if we solve this there's trillions of dollars coming into this in the 12th sector of the s p that's what it's going to be so that's our job we got to solve for compliance it's boring but it really matters well yeah and as somebody who's on the ground in washington looking at the regulatory side uh we have had some great progress but there are still um some things that if we could clear up i think would address that misconception that that many um compliance teams have so um well why don't we pivot then into financial services um a little bit because um you know we do believe that that finance is one of the first places that we're seeing um crypto networks have an impact um and maybe we'll start actually with you anatoly can you talk a little bit about solana and why it's different from other blockchains and what are the types of decentralized finance services that are being built on top of solana sure um in a lot of ways solana is you know ideologically very close to every other blockchain it's a decentralized ledger that records every event that happens on it the differences in in terms of like the architecture how it's built is that it's designed for speed it's a technology and when i think of technology i think of moore's law intel the folks that you know build chips that are faster and faster every two years if you you're building a technology then as those guys make progress your technology should get cheaper and faster and this is the core thesis of how we architected the whole thing is that every two years when intel amd ships a faster and cheaper chip then the network itself gets twice as performant has more bandwidth more capacity and the cost to users should drop accordingly and that's really the thesis of it can we build a network that extracts the least amount of value from the applications running on top of it um and the rest is a high performance operating system that you know my in my case i spent my year at qualcomm building you know brew and a bunch of mobile operating systems a lot of the ideas that went into developing those are now being developed on top of solana um and we see it as a kind of a technology that is very well aligned to the tools and development practices that were prevailing at like you know places like apple intel google and stuff like that it's very cool um sam you own an exchange you own a derivatives exchange and crypto exchange um but you've also been involved with project serum a decentralized exchange can you talk a little bit about that and how that works and um you know and maybe to slowly ease into the regulatory conversation um any sort of regulatory concerns you have around that yeah so really the genesis for that was you know we started looking at d5 a year ago i guess a year and a half ago now um and what became clear really quickly was that first of all there were some really cool things going on in d5 um and i think just to illustrate part of that if you have a d5 protocol right which which basically it's a company or a program or you know some protocol some sort of system which is built entirely into a blockchain it's all transparent it's 100 transparent 100 predictable what will happen given how people interface with it and that means that if a third party comes and wants to integrate that protocol they can and you can get potentially the sort of exponential explosion of creativity and innovation because all of these different parts can be composable into each other if you build a borrow lending protocol then any other protocol on that blockchain can integrate it natively in which just doesn't work in centralized finance in the you know in the same way um and so it was really cool there's a ton of hype around it um and it also absolutely sucked to use like it was unbelievably bad um and for those who i think for those who haven't used d5 and a lot of those who have it's worth just running side by side a d5 protocol in a centralized one just reminding yourself of how painful it sometimes is um and the reason is it was taking five minutes to finalize a transaction because the blockchain was completely overwhelmed it cost fifty dollars to click a button because you had to outbid everyone else trying to get their transactions in um and what became clear really quickly was that scaling the sort of problem of scaling of blockchain wasn't one of the 17 constraints on a blockchain it was the single blocker to mass adoption you cannot have a billion people using a chain that has 10 transactions per second it just doesn't work like there's no two ways around it that math doesn't work and in order to take these programs and scale them to masses um or even scale them to a single large enterprise you needed to get into tens of thousands hundreds of thousands millions of transactions per second just take your favorite big enterprise right whether it's a protocol a company a messaging protocol whatever it's going to have a million transactions a second that's sort of like what it means to have a billion users um and you needed a blockchain that could keep up with that so you sort of had phone calls with a lot of blockchains um and i don't know our call with salon was very different than our calls with other blockchains like sort of you know one of the first things that that nandholi said was like hey you know we've been thinking about like how many transactions do we need to do things like we want to get wherever we need to get and like here's where we are now and here's a place you can go test it out and and and so anyway you know what we've um i think gotten really excited about is a lot of the applications everything built on solana um and i i think it's it's one of the few places in d5 right now where you can see it scaling to a billion users and it's not there right now um it probably has another factor of what 50 to go or something um but that's a lot better than a factor of 50 000. um you know and and and like tully said one of the founding served principles of solana is that it gets better over time that it gets better with moore's law that it has an ambition to be able to service billions of users with millions of transactions per second um and and we just see that sort of the holy grail of what defy could become and soon we've helped um you know people build out uh dexes on the salon blockchain you know serum being one of them um you know we've you know i've sort of invested in a number of projects on the salon blockchain in the syrian ecosystem uh we've worked a lot with jeremy um who uh you know circle has uh added salon support for uscc stablecoin which now all of a sudden you have sort of a massively scalable stable object that can act as a pricing reference and pricing currency for transactions happening and for payments happening on solana and again you go to a payment company and and you're like hey can you try to integrate crypto and they're like great we have 17 000 payments per second in this subclass that we'd like to test out on your network how does that sound and your your answer better be like yeah we can make that work rather than like you try 17 without the thousands um and that's really where it all came from nothing is there yet no d5 protocols are at the level where you know centralized protocols have to be quaking in their boots because they're going to be over taken tomorrow but that's not the goal the goal is moving making progress and building the fundamentals and the infrastructure something that could get there that could get to a point where real large systems decide that it is the correct decision for their business to build on a blockchain i think optimistically were you know a year or two away from from getting real adoption there if the industry kind of builds its products right places cards right um and i'm really excited about sort of that progress yeah no i think um when i'm in washington and i'm talking to policymakers they don't they're like this stuff isn't useful there's nothing that anyone's actually doing with this it's improving their lives and i'm constantly having to reframe the conversation too this is still early stages and there's a lot of great development that's going to lay the groundwork for for all of these things to come but um jeremy um why don't you tell us a little bit about usdc and stablecoins and how um what their role is both on kind of the payment side but maybe also as they work with the decentralized finance world because i think as sam alluded to uh there is a lot of a lot of use of usdc um in the world of d5 yeah sure i mean i think the the problem that we set out to solve was even when starting the company and then eventually when the technology got to a point where you could actually build something like usdc was how can you build a protocol for dollars on the internet um how can we actually have something akin to being able to have you know photos like jpegs on the internet or music files or streaming video but actually have a protocol where anyone anywhere connected to the internet can transact with anyone else anywhere um with the backing of something like a dollar and um that technology really only became viable with second generation blockchains um to sort of do it well and and that's when we introduced we started working on it four years ago and introduced it a few years ago but a lot of people ask well what's the use case for this and my use case is what's the use case for a dollar and so i i really think that it's actually going to have more use cases than existing dollars because you can do more things with a digital currency dollar than you can with a traditional dollar you know and we we see this even today you see you know micro payments for a piece of digital digital intellectual property on a network like an nft on solana to people who are using this to settle like billion dollar trades um and everything in between and i think um you know there's there's been a bootstrapping of this in the capital markets function of crypto and so it's been really really important for people who are trading to have like stable settlement irreversible settlement around the world and i think that's that's been really key and we're just now as sam was pointing out and and really looking at infrastructure like solana as well we're really just now getting to a point where this can now start to be connected to everyday payments and if you have a way to um i mean the usdc on solana today as an example you can settle a transaction in milliseconds uh you know several hundred milliseconds it has throughput to handle like um real consumer scale applications and at a tiny fraction of a cent that's incredible and that's not with a centralized network that's running on a decentralized infrastructure and so i think we're just now starting to see and we're seeing this in our own business you know mainstream institutions whether they be financial institutions fintechs consumer companies commerce companies connecting up to this and i think that's that's tremendously exciting and i think i think the timeline of one to two years is right in terms of when this will reach many many hundreds of millions of people and then eventually billions of people so i think we're we're making progress and then you know the the payment utility piece is is great and i think our vision has always been that payments is just gonna be a commodity free service on the internet there's not really gonna be a business model in payments in the future it just like there's not a business model for transmitting data or emails or things like that those are just commodity free services for everyone and the real value is gonna be once you have hundreds of billions or even trillions of dollars in these stable value digital currencies that they'll be used in capital allocation capital markets they'll be used really really broadly in a lot of other applications and so i think part of what we're excited about is all these building blocks in um decentralized capital markets infrastructure which is what like serum represents and and and uh and so on are starting to come online um and will be you know major major uses of of this in the coming years um kevin tell us a little bit about wonderfuy and how you see a road map for bringing d5 from this sort of early stage to something where a consumer can actually go and get a loan um or or do some financial service without going through the traditional intermediary well what i hope wonderful becomes uh and i'm very proud of it the genesis of it is that it's it's a use case in our operating company about 18 months ago we reduced our exposure to commercial real estate and it generated a lot of cash and we went to our cash desk and said what can we do on short duration and they said 20 basis points 21 basis points inflation is 2 so that was the first time i said wait a minute this isn't going to work and we started to look at platforms like ftx and circle to try and solve for that that's what got me into stable coins because we started to explore that but if you're a consumer and you're 18 years old and you're making zero in your bank of whatever account and you want to actually get some yield that keeps pace with inflation you can't do uh it's not easy to set yourself up unless you're really out there in the crypto community wonderfuy is going to attempt and i think it's they're going to do a great job to really simplify this for anybody an app-based product you download it you ach x dollars into your account it writes the contracts for you it generates the 1099 for compliance it does everything you have to do to stay compliant even as a regular individual being taxed in whatever jurisdiction you're using it in and that's the beginning of it very fortunate i took it public a couple of weeks ago and now it's it's it was well received it's one of the very first public defy consumer platforms in the world it's in canada where the regulator is very accommodative it will soon be in germany and we will continue to do it around the world and then you know have the different case different use cases for it i'm very interested in nfts for example but not every nft i'm investing in nfts for high-end watches there's a community of people out there that have billions of dollars tied up in watches they're all insane i'm one of them and we want to be able to have a way to authenticate our inventory of of ones we own with the maker approving it i want the wonderfi app to also be able to allow people to easily own those nfts without knowing anything about you know how to set up a wallet or anything else it's attempting to simplify it now i'm very fortunate i have a very large social media following i'm getting a lot of uh you know feedback from our base josh richards who's a phenom on tick tock is an investor as well as sam i think he supports democratization of this and we uh we're very excited about where this is going but it's really about simplifying it and making it really easy i mean we're all in tuned and excited about crypto but it's not easy to use and it's nearly impossible to be compliant you cannot afford not to disclose your capital gains and your income if any to the tax man i don't care if you're 18 or 84. i'm the compliant guy that's i live in that world saying okay how do we get the forms out how do we get the 1099s how do we make sure these people never get in trouble that's the value of wonderful um well in the last third of the conversation here i do want to talk about something you brought up earlier kevin and that's the regulatory issues but maybe we'll start with sam sam where do you live and why it's a good question and um i and i grew up here in the states i i i worked uh actually here in new york for a number of years uh for jane street had a great time there um i've i was in the bay area until 2018 um and then spent a bunch of time in hong kong um and you know a lot of the context there is there are a number of pieces of it one of which is that crypto is really a global business and uh there is a u.s economy there there's an eastern economy there's a european economy there's an african economy um and i especially i think coming from a western background it was really important to be able to meet um a lot of people in person to form those connections in those relationships to build up a multicultural team um that could help understand where different users are coming from and i think you see really different demands and use cases um from different parts of the world i think especially you know if you have less trust of banks in a country you're gonna start to see a lot of demand for an alternative way to store your assets um and i think that that that creates very different dynamics in different places um you know we've recently been building out our uh our offices in in a number of places um uh in uh bahamas gibraltar um and we also have a u.s operation which is at this point biggest offices in chicago i've been flying between them um because you know helping to foster the international exchange um helping to uh foster the us exchange uh we've hired a really great leadership team um there with with brett and ryan and others in chicago um i've been kind of a little more stuck than i wanted to be recently because of quarantine and coped as the world hopefully opens up um i have to be mobile one way or another um you know we're frankly trying to decide where the right places are to have the bulk of our workforce and i think that the factors that are going into that basically are a combination of who's taking the lead on crypto regulation who's taking the leon licensing we have you know licenses in number of jurisdictions and we're applying for licenses in a number of other jurisdictions and i think getting to your questions here that's a really important piece of this is right now many many regulators are looking hard at crypto um and i think some of them are taking the lead on building out regulatory frameworks um you know some examples that obviously be mis in singapore we've um you know been in discussion in singapore um you know been working on uh licensing we don't have one but we have we have uh we've started that process um we've i been in the united states you know recently acquired a uh futures exchange license through ledger acts which we're really excited about really excited about the uh paradigm the cftc has i think built for a while there i think it's been sort of living a little bit below radar um but i think that could be a huge piece of the industry going forward um because it allows for for futures um and and derivatives and frankly a lot of other contracts and you look at what call she has built on top of of ledger through the cftc regime um you know with uh event contracts um we're really excited about that and there are a number of other regulators who are sort of popping on the map and so i think basically you know the biggest things we're looking at internationally are where is their licensing and i think especially there are a lot of countries that have started the licensing process but haven't yet built licenses that can accommodate uh futures or derivatives that haven't built licenses that can accommodate a lot of the types of products that frankly are the bulk of volume in every asset class um and then frankly honestly quarantine it's really important to us to be able to get you know employees into and out of your jurisdiction this is not something we were thinking about three years ago when we're choosing office locations it's now like our number two criteria can we get people physically in to the country if we can it's it's hard to hire it's hard to grow and i think that that's becoming like one of our top criteria for where we're going to be building out uh offices where where people are going to be moving and frankly that's changing on a monthly basis it's pretty frustrating not to have sort of long-term clarity on that but um i those are sort of the factors i think going forward um and uh i'm gonna be help building out our regulated offices in you know probably four or five jurisdictions over the next year okay um jeremy circle is one of the most regulated crypto companies i think um in the united states you have just about as many licenses as anyone has um can you talk a little bit about your regulatory structure that you have to deal with um but then maybe also talk a little bit about there was some news last week that uh coinbase announced that they um aren't going to be moving forward with their lend product which was related to usdc maybe your thoughts on that and i know kevin you have some thoughts on that as well yeah sure i mean i think when we got started in 2013 there was like zero regulation um but the the treasury department had basically said if you're going to sit at the intersection of the banking system and virtual currency as they called it you needed to be a money transmitter um so that was the first thing we did is we went out and got licensed in all the states as a money transmitter it was the sort of first crypto company to get all those licenses and and then new york had a special license called the bit license and we got the first bid license um and then you know we did the same thing in europe and you know went after an e-money issuer license we also operate a broker-dealer and an ats so those are a few of the things i think the um you know the the yeah and then an international entity a couple international entities that are licensed as well um but um you know i think the big thing is is regulation around like global scale stable coins is definitely a moving target um you know the the framework for kind of electronic money transmission and stored value money transmission i think has been a good one but clearly as these go from you know tens of billions to hundreds of billions to potentially trillions of dollars of value banking regulators and national regulators are looking a lot more seriously at it and so that's one of the reasons why um we're in the process of preparing an application to be a national commercial bank um and uh but we're interested in in you know full reserve banking not fraction reserve banking and and uh so there's a a journey ahead for us on that um but um you know i think you know the reality is as these you know get used um at scale and if other financial institutions want to build on top of this and do that at scale that that structure is definitely going to evolve we think certainly for for uh you know centrally issued stable coins like usdc um i think the um you know and there are a lot of other major regulatory issues in the space not just related to like payments and banking obviously exchanges and securities and all that fun stuff um but i i think that maybe ties in you know we we we all know that um and referencing you know kevin's comments as well there's been a rapidly growing kind of lending and borrowing market in usdc itself and in other crypto assets um but usdc has become a really common uh form of of digital currency to borrow and lend and that's really grown uh significantly so we we have a product which is a yield service uh that's available exclusively to businesses so we're not offering it to um retail individuals um but but our view is that if you're gonna offer a product where people are essentially making an investment um and uh and you know getting essentially like a fixed income type product that that's a security so we um we designed and launched our yield service as a security um and it's exclusively available to accredited businesses and it's offered through a regulatory regime as well where there's a supervisory framework around it and around the risk management and i think you know for these markets to really take hold and get scale and if you really want this to be something that is you know ultimately growing into tens or hundreds of billions of dollars of borrowing and lending it it's gonna have to you know fit in those in those kinds of models i think that's somewhat different than than uh some of the retail products that are out there kevin did you have any thoughts on the coinbase news last week about regulators the regulators yeah you know um i would make this comment somehow over the last i don't know two years um the popular press positioned the crypto community as an adversary to regulators globally and that's simply not true and it's very stupid because probably some large percentage of the constituency in this room is somehow tied to financial institutions one way or another and we have not even tapped uh it's so nascent there's so many institutions that don't even play in this space although although they want to and the primary reason is their compliance departments and the tone of that relationship between the crypto community and the regulator and every week we hear another case of somebody in you know in a position of of uh power let's call it that that's running a large uh crypto uh company striking out at the regulator really bad idea like there is zero upside in that because the the regulator wants to solve for this because this and i'll say it again it's going to be the 12th sector the s p there's no question about it it's not going away and the demand is huge the tone should be that of accommodating their concerns i'll give you a case study this nft investment i'm making in watches is it a security or is it a piece of art i can't go forward till it's resolved i can't just throw it out there and start trading it all over the place not knowing that outcome and so i i'm willing to reach out uh as an advocate to that one little sliver of nfts and say to the regulator give me guidance let's work together and if it is security tell me i'm good i'm good with it i will treat it that way i'm not fighting you on it just give me the rules so i can play football you can't play football without the rules and that's where we're at here and the upside to solving this problem is trillions of dollars of assets that will pour into this you want to see bitcoin at a hundred thousand dollars you to let the regulator determine what terms they'll allow it to go into an etf it's that simple look what happened in canada they got a billion dollars demand in a matter of hours in just the first bitcoin product and it wasn't even institutional it was just simply retail saying oh must be safe i can buy it and put it in my my account online and the regulator said it's okay so my thing is as a as a community we have to form a lobby voice and say we are here to serve and protect just like you are give us the rules so we can go back and play football that's simple well and as that voice um we represent 50 companies in washington dc that are part of our trade association and we do go and speak with regulators and are actively trying to bring ideas to them that makes sense um because what we don't want is to just put regulation on this new system and that doesn't address the actual risks but we need something that is appropriate and gets the same goals but doesn't in a way that's that makes sense but you know one of the things that we focus on when we're interacting with regulators is it's very important to distinguish between the people developing the software and the centralized you know yes crypto does have centralized intermediaries that are interacting with customers or taking custody of funds but um anatoly have you can you give us your thoughts as you guys have built out and your company has helped contribute to these projects um have you had regulatory concerns or do you feel um that you're free to do what you want without having to think too much about regulation um the challenge i think it really hits uh teams that are trying to build it and innovate in the space so you know like the example that uh kevin brought up this idea that every you know at 401 they check all the positions and check leverage and manage risk two guys built this as a smart contract it runs on solana those checks happen every 400 milliseconds and they balance a bunch of lenders and a bunch of borrowers without ever taking custody of the funds it's just a bunch of software so what does this team do in terms of regulation right like how do they how do they like define the risk for themselves as founders where should they base base their product out of like which jurisdiction so if you're a startup and you just raise you know a really successful one and a half million dollar seed raise which is massive amounts of runway for two three people and the compliance in the us is going to cost you three million compliance somewhere else is going to be much much cheaper like those folks are making those choices every day and that's really i think the the risks aren't in the it isn't the risks aren't that these products are not going to get built they're going to get built because they're awesome it's that they're going to get built elsewhere and that that's really you know me as somebody that's been living in the united states since my family were you know refugees from the soviet union in like 91 that's really sad for me to see like i just want all this to happen to happen here um we only have a couple minutes left but i want to do one more quick question before we get some final thoughts from everybody um how do we see and maybe like 30 seconds or less uh the traditional finance world or i guess trad five is that what we're calling it these days um will they be embracing defy um or is that gonna be uh the attention between those two worlds but maybe just quick answer sam i mean i think there's a lot of work that has to be done before that decision can even be made i think that right now d5 isn't quite ready um i am optimistic it will be in the next couple years um once it does i think you're gonna see some companies decide that they are best off working with decentralized ledgers i think we've already started to see those i mean you've seen visa as an example really embrace blockchain technology in in a large number of ways um and and they've you know seem to have made the decision that they want to try to find a way to work with i think you know emerging technologies and and grow stronger from it um i'm guessing you're seeing a number of companies make those statements i'm guessing you're gonna see a number of companies not make those statements and i think that's gonna be a tacit way of saying maybe they're not gonna be actively fighting against crypto um but they're not planning to work with d5 they're not planning to work with blockchain and you know they're going to be sort of trying to hold their turf there i think you're just going to see a split depending frankly on kind of gut calls from the leadership of a lot of different companies with some going in one way some going in another way it's going to be messy um i see we only have about five minutes left so i'm going to just cut to the last question which i want to ask of everybody maybe we'll start with you kevin so what is your prediction for where we will be 10 years from now in the crypto space since it's going to change everything let me tell you one of the reasons that i'll make it short and sweet let's say a traditional mandate such as um i want to go long europe i'm going to buy 50 stocks i have to buy swiss francs euro bay stocks and british pounds because i want to trade them on their domestic exchanges in between me and that transaction is what's called the bain of the earth the fx trader the currency trader who clips me every time i buy and sell adds zero value zero value and sucks friction out of the system and has my entire adult life as i've traded in europe i can't wait until we solve this problem and give them a new career shining shoes because they add no value whatsoever this is where d5 can take us on just one use case but it's a multi-billion dollar one and i want to be alive to have a regulator domestically allow me a payment system to a swiss franc back and forth if i want to trade it 50 times a day with zero fx traders that's my mission in life to help them find a real job um jeremy where will we be ten years from now yeah i mean i guess i look at this from a couple of lenses i think from the kind of payments finance kind of commerce lens um i mean i i think we'll be in a world where um you know exchanging value is just this ubiquitous commodity free thing and people don't even think about that and things like what kevin described will be obviously the case um uh i think um i'm really interested in the impact on capital markets and you know the internet has been amazing at creating these multi-sided platforms that create these incredibly like long tails so long tail markets in advertising and content and media and retail um and i i think that access to capital um will be transformed you know on internet capital markets and that will be a radically different world than things like nasdaq or the new york stock exchange um but but i guess the final comment is just um i look at this way beyond finance i mean i think we this is these are operating systems that are going to really restructure how the basic units of the economy function corporations everything else anatoly um i mean in 10 years imagine a world with more than a billion people with self-custody with cryptography that hold their own keys and understand how to use them at the same level of people understand how to browse the internet that that world is going to be as unpredictable as you know the internet in the 90s trying to predict that you know sharing pictures that are cats is going to be worth a trillion dollars um it's just something that i feel will revolutionize like like jeremy said every industry that we know today you know communities will never need advertisement to self-monetize folks can communicate and make you know financial decisions without any intermediaries at like global scale so what you see today with 10 million users in crypto it's really going to be a dramatic change sam i think i think the downside is the industry can't find its footing um but i think in the upside case which i'm i'm sort of optimistic we'll be able to reach um you know i know 25 of activity could be on blockchains you know i don't think 100 will be um i don't think a bagel really will be because you can't eat a blockchain or a blocker but um you know when you tweet i think that tweet could be natively on blockchain when you pay for something that payment can go through blockchain rails when you invest i can go through blockchain rails you know huge swaths of industry can be rebuilt in open composable efficient uh ways on on you know on blockchain technology and i think it could really lead to a cambrian explosion of of innovation uh if if it's sort of done right and if it's done in a compliant way and if the industry can work with regulators to make that happen i'm going to make my own prediction and that is that we are going to spend more money on digital goods than on physical goods um in our home so all i know i don't know about you guys but i usually just wear yoga clothes and i stare at a computer screen all day long so i would like that world to be um more reflective of my personality so um well we are right at time so why don't we give a round of applause to our fantastic panel

Channel: SALT

Views: 23,054

Rating: 4.868217 out of 5

Keywords: Sam Bankman-Fried, Kevin O’leary, Jeremy Allaire, Anatoly Yakovenko, Kristin Smith, FTX, WonderFi, Circle, Solana, Sol, Sol Crypto, FTX Exchange, FTX crypto, SALT, SALTNY, SALT NY, Investing, Finance, Politics, Tech, Technology, Business, Crypto, Bitcoin, btc, Cryptocurrency, NFT, blockchain, Financial Education, Venture Capital, VC, Media, Leaders, Leadership, SALT Conference, SALT 2021, SALT New York, SkyBridge, Scaramucci, Anthony Scaramucci

Id: e2ukdn23lgk

Length: 51min 49sec (3109 seconds)

Published: Thu Sep 30 2021