Coinbase Vice Chair Ryan Vangrack Talks CLARITY Act

SPEAKER_1 (0:02)

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Tim Stenovec (0:07)

US senators are set to take a critical vote on the crypto industry's top priority when they return later this month. Firms like Coinbase have been working with lawmakers to get the Clarity Act legislation passed. So let's bring in Coinbase vice chair and head of corporate affairs, Ryan Vangrack. He says the dog days of clarity delay are over. So you are in town here. You just came over from Washington, DC.

What is your confidence that this will get resolved before the midterm elections? Give us your odds.

Ryan Vangrack (0:34)

Yeah, well, the important thing is that it's time to stop talking and start voting. Right. Over the last few weeks, what we've seen is actually a broader coalition of groups, law enforcement, major Wall Street heavyweights, and millions of crypto voters coming together because they've taken the time to digest what's in this bill and they realize it's critical because after a year of bipartisan negotiations and compromise, the Senate is faced with a very stark choice. Do you adopt comprehensive federal oversight in the space or do you stick with the status quo? And the status quo prevents a stark contrast, which is to say, if you fail to pass this bill, the Senate fails to pass this bill, you get no new consumer protections, you get no new law enforcement tools, you get no new framework to help address illicit finance. So I'm hopeful that senators will elevate policy over politics and get this across the finish line.

Scarlet Fu (1:29)

But if they don't, if they don't, and midterm elections come and go, what's the plan?

Ryan Vangrack (1:34)

Well, it's important to keep two things in mind. First, the last year and a half have been a sea change for the crypto industry. You look at the pace of innovations and even what's happening at the regulatory level.

It has exploded domestically and abroad. You see regulators like the SEC and the CFTC making very clear that they intend to issue and propose rules in this space. And it's very unmistakable internationally that there's progress being made, both with international regulators and with innovations like tokenization and agentic trading. So the pace of progress is going to continue and accelerate. It's simply a question of whether Congress can keep pace.

Tim Stenovec (2:15)

Do you see the banking industry giving any ground since the last time we thought we were really close?

Ryan Vangrack (2:20)

Well, it's interesting because it's not a surprise that incumbents would fear competition and take some issue with innovations and providing more choice to consumers. But if you look beneath the surface, you look at the reality, not the rhetoric. It paints a very different picture. Just a week or two ago, about two dozen major banks announced a consortium to issue a new stable coin. And the reason that's critical is because it shows that traditional finance is no longer asking whether they should be engaging crypto. They're asking how. And that's something that we at Coinbase identified over a dozen years ago. And we think inevitably they are moving in our direction and recognize the importance of this technology.

Scarlet Fu (3:01)

Okay, so let's look beyond clarity. Let's say it does get passed. What's sort of the next big hurdle for you and the team at Coinbase? Like, what do you still need to see from lawmakers? What do you still need to see from Washington beyond this bill?

Ryan Vangrack (3:14)

Well, I think of opportunities, not hurdles.

But if clarity passes, people forget the next step is rules and regulations that flow from clarity. You're going to see the SEC and the CFTC very active in enshrining some of the principles that we have in place. Now, that's from the DC side of things, but in terms of innovations and developments, areas like tokenization, like agentic trading, are going to continue to accelerate domestically and internationally, and that's going to happen whether or not clarity passes.

Tim Stenovec (3:45)

Now, speaking of the SEC, Coinbase last week filed with the SEC and CFTC to offer single stock perpetual futures for US investors. You already offered them internationally on seven stocks with up to 20 times leverage, which is just kind of mind boggling. CME just launched single stock futures across 50 names in July. You are now asking regulators to let retail investors make leveraged 24-7 bets on individual stocks without owning them. We were talking earlier about the feud between Robinhood and AMC.

How is what you're doing different from what Robinhood is doing with synthetic tokenized stocks that AMC called contemptible, among other choice words?

Ryan Vangrack (4:25)

I think there are two distinctions that I want to make. First, when we talk about tokenizing stocks, for example, having a digital representation, what we are doing at Coinbase internationally is we're making sure that these are essentially one-to-one backed, that you're not getting some synthetic representation, you actually get the underlying shareholder rights, including the ability to vote and have the evidence.