Agencies Back Bitcoin with Guardrails Amid Bull Run After Clarity Act Fails

SPEAKER_1 (0:00)

So joining me right now, let's welcome in Joe Sticco, CEO of Cryptex Finance. I'm so glad you are with us. I mean, first up was the non-event of the Clarity Act, twice.

There are even some rumblings, it may still be slightly alive. Did you hear some of that as well? I mean, I saw a 6% chance that maybe it still has a chance. Do you think it has a chance before we move forward?

Joe Sticco (0:25)

As of right now, I think Congress got stuck on the stable coin rewards and the ethics rules, specifically around certain crypto interests. However, what we are seeing is the regulators that are picking up the ball and running. So over the last 48 hours, within 48 hours of that happening, the SEC and CFTC were shipping.

They're giving us speed. I mean, obviously only Congress can give us permanence, but we're seeing things that are really, really important. We're seeing rules that are coming in. And that's one thing that this industry has lacked for such a long time, which is rules. And now that we're seeing rules, I think it sets up some really big moves ahead.

SPEAKER_1 (1:07)

So we may not have the legislation, but the rules are extremely helpful, right? From the CFTC, the SEC. Is there anything in particular that stands out in mind? I mean, do these kinds of trades get a boost on this to have more clarity from the rules, not the Clarity Act?

Joe Sticco (1:27)

Absolutely.

The drum is beating and it's already started. Tokenized stocks received an exemption on September 17th. You had CFTC framework at the White House on the same day.

We've had token buyback guidance last Friday and an amendment to that on Monday, which is something that this industry has desperately tried to understand for many years where the staff say a buyback now on a functional network with no central party is not a promise of a managerial effort, which is critical because institutions are always looking for assets that are generating returns and income. Now that we have Clarity, no pun intended on that, these are major things from tokenization to buyback improvements. We're learning a lot, the rules keep coming, and I think that that's going to be a trend that continues.

SPEAKER_1 (2:19)

You've spent decades in digital assets. You were ahead of your time with this. So now for investors who may be more interested in this, we're certainly seeing institutional investors showing a lot of interest in crypto assets. What kind of trends do you expect going forward? I mean, obviously, the adoption, right? I think that's something that we're watching for more and more digital assets. I always think of Bitcoin and Ethereum as sort of the leaders and the go-tos, but there's so much more, isn't there?

Joe Sticco (2:49)

Absolutely. And I think if you look at previous cycles, institutions asked, am I allowed to own this? You know, can we even hold this on our balance sheet? And I think what you're seeing this cycle, given the rules that are coming out of DFTC and SEC, while they're not laws yet, what you're seeing is how big should our position be? You know, the wrappers exist. We have a federal stablecoin law called the Genius Act that exists and regulators are now writing rules instead of, you know, pursuing or persecuting open source code. So I think the only question that is left for institutions is permanence, when these things actually get put into law.

But as of right now, the wrappers are there, institutions are coming in and we're seeing very different movement than we have seen in previous cycles.

SPEAKER_1 (3:42)

I mean, we always think of crypto used for cross border payments and things like that.

As it becomes more and more useful in the world, do you think Bitcoin goes higher? Do you think, you know, how else are we using this? Because now we're starting to hear about 24-7 settlement for trading, right?

Joe Sticco (4:02)

Absolutely. And I think big drivers are going to be, not only Bitcoin, which I believe goes a lot higher from here, Ethereum as a world computer that powers other blockchains and other networks that institutions may build. You know, we're seeing that with Robinhood Chain, which is built on top of Arbitrum, which is a settlement layer of Ethereum.

We're seeing all different types of things that are coming. And I think that continues. I think the bigger trends are going to be with the emergence of 24-7-365 trading, which is native to us on chain, but kind of foreign to everywhere else in the world. You're going to see the continuing of tokenization of stocks, real world assets, metals, bonds, rates, currency markets. All these assets are going to find their way on chain in time. And right now, that we have rulemaking coming on board, the question is just how the institutions choose to set this up and position themselves going into the next 6 to 12 months.