Bitcoin Is Winning As Treasury Takes Power From The Fed | Caitlin Long

SPEAKER_1 (0:00)

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Scott Melker (0:30)

What if the biggest transformation in banking isn't coming from banks at all, but from the technology they spent years trying to stop? Today, I'm talking with my friend Caitlin Long about the explosion of tokenized deposits.

Caitlin Long (0:41)

The tokenized securities piece is dragging the banking industry into the tokenized dollar piece.

Scott Melker (0:47)

Why she believes they could eventually overtake stable coins.

Caitlin Long (0:50)

Tokenized deposits access the entire liquidity of the banking system as a whole, and all the network effects for the banks being networked in the back end of their back offices already.

Scott Melker (1:01)

And how traditional finance is being pulled onto crypto whales, whether they like it or not.

Caitlin Long (1:06)

Now you have the entire securities market going tokenized, and all the derivatives and treasuries and commodities going tokenized. It's unstoppable at this point.

Scott Melker (1:15)

We also get into the Genius Act, the Clarity Act, Operation Chokepoint 2.0, the Fed's resistance to crypto, and why all of this could ultimately be incredibly bullish for Bitcoin. The financial system is changing fast. Let's go.

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Caitlin Long (2:49)

Oh my gosh. Wow. Yeah.

All the bank projects are being announced.

Scott Melker (2:56)

Yeah, I was just going to say in the last three weeks or month, so first of all, we have a consortium of tech companies that are launching OpenUSD, their own stable coin platform. Then I don't know if the order is right, Bankchain from the Community and Regional Banks, 39 state banking associations, saying that because they're going to get squeezed by the crypto companies and the big banks, they need to launch their own stable coin network. And then of course, we have all of the big banks coming together and saying that they're going to launch their own stable coin. So, yeah, I'd say it's happening.

Caitlin Long (3:29)

My big thing, of course, this is not a surprise to me, and we've been playing in this, Custode has been working on this since 2020 My big observation is the Fed should have listened to us when it had its Faster Payments Initiative in 2016, where we said, don't build Fed now, build tokenized deposits. And look what's happening now. It's overtaking Fed now. Now, the Fed's making a huge push to have a settlement vehicle for these tokenized dollars be Fed now because it's 24-7.

But there are limits on the size of transactions that can go through on Fed now. And the problem is that the large value payment system in the banking system is Fed wire, which is not programmable. So it's not really interoperable with all these tokenized dollars. Now you have the entire securities market going tokenized and all the derivatives and treasuries and commodities going tokenized.

It's unstoppable at this point, Scott.

Scott Melker (4:32)

And it's incredible. Did you expect it to happen this fast? Because it seems like it's at least in the hockey stick of ways.

Caitlin Long (4:38)

Is it fast? You know, I mean, some of us have been working on this since 2014