This is What Happens Next for the Clarity Act & Strategic Bitcoin Reserve! | Patrick Witt
Patrick Witt, Executive Director of the President’s Council of Advisors for Digital Assets, sat down with us at the Solana Policy Institute's Summit to discuss the latest updates on the Clarity Act, the stablecoin yield compromise, the Strategic Bitcoin Reserve, and more. Speaker 1: Hey, folks. I'm Tony Edward and I'm Amanda wick Craft and we are. Speaker 2: Recording at the Salon of Policy Institute summit today and joining us is Patrick Witt, who's the executive director of the President's Council of Advisors for Digital Assets. Speaker 1: Patrick, great to have you again. Thank you for having me. Yeah, good to see you. Speaker 2: Good to see you, And lots happening on the cloudyac front. I would love if you can give us a state of the Union on the compromise between the banks and the stable coin situation and what's happening there. Speaker 1: Yeah. Speaker 3: So when the markup came down in January, we had to step in there and try and serve as a mediator of that very difficult issue, bringing the banks and crypto companies together at the White House for a series of meetings and then a lot of bilateral discussions with them. We worked on some compromise language that was largely based on Section four four that Chair Chairman Scott had introduced and kind of combined that with the tell Us and also Brooks and men Men, which was the other proposal on the table, made some tweaks to that used it to solicit input from the different stakeholders involved, and ultimately get it to a place where we felt like it was ready to hand back over to the Senate. Obviously, they needed to run their own process and see if we had gotten it right. They made some changes to it based on further input that they had gotten, but ultimately have it in a place where they feel confident that they've kind of found the true center of gravity on the issue. Speaker 1: Not to say that either side is thrilled about it. Speaker 3: I think on one side they might want to see stronger language on the crypto side, they wouldn't want to see any language on stable coins, believing that you know, this had been settled in genius. So we wanted to see if we could find a solution that ultimately allowed the process to move forward because as it stood, they're just they're warn't enough votes on the Senate Banking Committee or in the full Senate to move forward with the bill unless there was something on that issue. So we're confident that it's going to be durable, but it was a hard fought battle. Speaker 4: At what point does a stable coin issue or become a bank? Speaker 3: Well, if they they seek out a bank charter, they become a bank. You know, I think what you're getting at is what ultimately defines banking. Speaker 1: What products, uh. Speaker 3: You know, are you offering that ultimately cross you over into territory that that uh make you become a bank. I mean that's more of a philosophical question and and kind of gets to the heart of ultimately what the divide was over the issue. I'm not necessarily gonna say exactly I know what that dividing line is, but I know that a lot of the the banks and and senators who's you know, shared this concern was if you're mimicking bank like products, there needs to be appropriate disclosures and and certain marketing practices in order to uh to to ensure that you're not deceiving customers. Speaker 1: So that was one part of it. Speaker 3: But yeah, it's it's again an issue that hopefully is now in the rearview mirror and holds up under scrutiny. Speaker 1: But you know, other issues to resolve still. Speaker 2: But Patrick, as far as the timeline for the Clarity Act passing, this is a hard question because a bit of a moving target with back and forth and so forth. What's your best guesstimate as to when this bill can make it to President Trump's. Speaker 3: Desk, we got to move it as quickly as possible. I feel a huge sense of urgency. I think everybody else, all the principles involved, if they don't feel it, they need to feel it, because just working backwards, this bill has to get passed out of the Senate Banking Committee, it has to go to the floor, it's got to be reconciled with the ag product that's going to take time, and then it also has to go back to the House and get past there. So, just working backwards from the August recess, if you view that as kind of a drop dead date, you realize that you have to take action now to get this out of the Banking Committee. So I feel that sense of urgency. Secretary Beson weighed in just recently echoing that, saying Congress needs to move now. The time is now to act on this bill. The President has tweeted out about this before, so we all feel it and we need to see some movement here. Speaker 4: Very soon once it does pass. What's the priority? Defy tax? What becomes the first priority. Speaker 3: After this bill passes? I would say on the legislative front, the next one up would be crypto tax. There's a question of whether or not there's going to be a second record reconciliation. If there's an opportunity to get crypto tax provisions into that reconciliation, we would certainly seize that opportunity. I haven't had the conversation with the House Ways and Means Committee in order to determine whether or not A there's going to be reconciliation or b whether or not there's going to be space for crypto tax in there. But we'll certainly explore it and see if we can get it done. But aside from that, all of the regulatory actions that need to occur, the follow on rule makings from genius, from clarity when that bill passes are going to be more than enough to keep us busy. Speaker 2: So once the bill passes, what does the implementation look like? Is it over a few years to get all the agencies and parts of go on board. Speaker 1: Yeah, it takes a while. On a lot of these issues. Speaker 3: What the Congress is doing is giving clear mandates to the agencies to make rules on certain topics, or if they pass a bill or pass a law that has you know, clear language, but need to flesh it out further and add some more meat on the bone in a post Chevron world, in the lower or bright world that we live in, becomes that much more important for Congress to definitively give an agency authority to rule make on a particular topic, so that takes time. These are going to be very hotly contested rule makings. There's going to be a lot of input that crypto stakeholders, traditional finance stakeholders are going to provide, and to give a proper treatment for all of these rule makings is going to require months and in certain cases years, just because it's a bandwidth issue, so it takes a while. But if you don't get the law passed not entirely clear that the agency can rule make on that, and if you don't get the law passed in time, then sometimes you run out of runway and you leave a rule making for a future administration that may not see the issue the same way. Speaker 2: Well, the agencies, the SEC and CFTC, they've already started doing some of that rulemaking getting ahead of the bill. It seems like. Speaker 3: No, I would say, what they're doing is trying to be consistent with what the bill is doing. So they're fashioning anything that they're doing to leave space for the bill so that ultimately they don't have to run another rulemaking process. So we stay in coordination with them all the time, keep them apprized of what is in the bill so that they're not getting in front of it or deviating from it in a way that they would have to course correct. Speaker 1: We will David Sachs role be replaced. Speaker 3: No, So David changed titles really just a formality more than anything. He's still working on crypto We still talk every day, so nothing really has changed. Speaker 2: Are you going to become the cryptos Are or that title still floats out? Speaker 1: No one. Speaker 3: We'll have the ZAR title for all intentsive purposes. David is still the cryptos Are and I'm still the the emissary. Speaker 2: Are there any updates on the Strategic Bitcoin Reserve and when we may see an update? I know all all efforts are on the Clarity Act right now, but would the Strategic Bitcoin Reserve be something that we continue to focus on after. Speaker 3: Yeah, we'll be banking an announcement on that probably in the coming weeks or the next month or two on the executive branch front, and then we're staying in touch with the leaders on the hill Representative Beggitch is introducing some new legislation. Speaker 1: It's going to track largely. Speaker 3: The Bitcoin Act, but with some change, with some changes based on feedback that they've gotten. So the legislative front is continuing to move forward on codifying that into law, and then on the executive branch side, the actual implementation of the SBR Executive Order. We'll have some announcements on that soon. Speaker 2: From an economic standpoint, how is the White House looking at crypto and blockchain as a sector. It is AI, of course, and other robotics and things happening, but are used tracking adoption of the technology because all of Wall Street is looking at token eyes, going to blockchain and things along those lines. Speaker 1: Absolutely. Speaker 3: I mean there's there's headlines every day coming out with new banks and existing financial institutions opening up digital asset practices, hiring for digital asset leaders UH starting to partner with different financial you know, crypto financial infrastructure providers to token eyes or adopt blockchains and see if they can implement it into their UH to their businesses. They recognize that this is part of the products suite that they're going to need to be able to offer their customers in order to compete in this new uh, this era of financial infrastructure that's being built. So we're staying abreast of all those updates. Usually the people will reach out to us and try and give us an update, a little bit of a forewarning, which we always appreciate, just knowing the big announcements that are coming. Speaker 4: Do you think I kind of side note, but do I will press and Trump run again? Speaker 1: Just to will he run again? Yeah? Because he don't know. Speaker 3: That's far above my pre grade, outside of my my remit. But the president's obviously doing all sorts of different things, managing world affairs, taking time to weigh in on crypto, and I don't know how he juggles at all. It's it's an incredibly difficult job. Speaker 2: Finally, when blockchain voting, when do you think that might happen? Speaker 3: Man, the promise is there, I mean, the application is certainly there. It's just a question of security concerns, privacy. Those would all still need to be solved. But what's interesting about our framework in the US is we have a federalist system, and so I think the states could experiment in that regard, and maybe there would be certain states that are a little bit more innovation friendly on adopting blockchain to implement voting, and perhaps they could be a model for the rest of the country. Speaker 2: Patrick, thank you so much for taking the time. Looking forward to the updates in the coming weeks, but I appreciate you right. Speaker 1: Thanks, Thanks all. Speaker 2: This episode is brought to you by I Trust Capital. I Trust Capital allows you to invest in crypto as well as precious metals like gold and silver via an IRA and this gives you huge tax advantages. So you can invest in over ninety crypto assets including bitcoin, etherorem XRP, Solana, and many more. You also get access to stable coins such as Circles USDC and Ripples r L USD. And as it relates to precious metals, you can invest in gold and silver and these are the physical assets, so you're not investing in paper gold and silver. So on this platform you can redeem the gold and silver if you choose to, and not many platforms offer that. Now, the big advantage to investing via I Trust Capital's IRA is the huge tax advantages. Many of you know you incur capital gains taxes when you sell at a gain. 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