Multicoin Capital's Kyle Samani on Internet Capital Markets

**SPEAKER_1** (0:02)
Crypto. Crypto.

**SPEAKER_2** (0:03)
Crypto.

**SPEAKER_1** (0:03)
Cryptocurrency becomes more popular. We're starting to see signs that it could become part of our financial future.

**Kyle Samani** (0:10)
US dollars are the greatest product in human history. But amazingly, most people around the world who want dollars cannot get them because the legacy financial rails simply prevent them from doing so. You want to have the world's most real-time global financial market where everyone is synchronizing using the same open protocol at the speed of light.

**SPEAKER_2** (0:29)
Ladies and gentlemen, please welcome Multicoin Capital's Kyle Samani.

**Kyle Samani** (0:39)
Good afternoon, everyone. My name is Kyle Samani. I'm a founder and managing partner at Multicoin Capital. I'm incredibly excited to be here with you all in Summit today. Today, I'm going to be talking a little bit about Internet Capital Markets. But before we get to the future of Capital Markets, I think a little history lesson is in order. Before we dive in, I do have some small disclosures. You can read all this in about four seconds. Please do know that nothing in this presentation should be considered financial advice. All right, let's jump in. The roots of our modern financial system are about 100 years old. The stock market, as we know it today, was actually born out of crisis. In 1929, the stock market crash lost a third of its value in about a week, and over the next three years proceeded to lose about 90% of its value. At the time, there was no SEC, there were no disclosures, there were no standardized audits. In response, Congress passed three major pieces of legislation. The first is the Securities Act of 1933, and that required disclosures for companies that issue securities. The second was the Exchange Act of 1934, which created the SEC, and the third was the Investment Company Act of 1940, which created regulations for regulating public mutual funds. The government's goal in these regulations was simple. They needed to create trust, protect investors, and most importantly, restore confidence in our capital markets. Those three laws today still stand as the foundation that our modern capital markets are built on top of. In the 90 years since, we've added rule after rule, system after system, typically that's been predicated on these financial intermediaries, whose job it is is they're deputized to process these regulatory functions. We've added layers of complexity, layers of rent seeking. And interestingly, most of these rules have come not from Congress, but from the administrative state. Today's markets are both held together by these intermediaries and made more inefficient by them. Investors have to go through exchanges. Exchanges go through clearing houses. Clearing houses go through custodians, on and on. Each of these players takes a cut. They add a fee. They add a delay. They create complexity. And they also create inertia in the status quo so that it's harder to remove them later. While the intent of these legal protections are generally pretty good, their evolutionary path over the last 100 years has produced in our modern system of bloat and cruft. Markets still close at 4 p.m. Fees are still high. Access is still limited. Inefficiency is baked into the system by design. It still takes two days to settle a stock trade in 2025
If you ask the group of engineers and traders to redesign capital market infrastructure from first principles in 2025, you wouldn't be recreating all of these intermediaries. You'd be building something based on modern software. You'd build something that's global in 24-7, that's programmable and permissionless, and that's secured most importantly by cryptography. You'd build one global ledger that can support Internet-scale capital markets. Until recently, these global ledgers, or as we like to call them, blockchains, couldn't actually scale to support Internet capital markets. No one in this room is going to wait two minutes to send the transaction and pay $20 in gas fees on Ethereum. But blockchains have gotten a lot better, cheaper, and faster, and modern blockchains like Solana can actually process now more than a billion transactions in a day at an average cost of less than a penny per transaction. The tech is finally ready. The tech alone though, is not enough. We need a regulatory alignment as well to get there. And in 2025, we're getting it. President Trump kicked off the year by signing a series of executive orders, aimed to make America the crypto capital of the world. We also owe a huge shout out to our favorite bestie David Sacks, in his role as cryptos are, for helping get these executive orders through. Thank you. Yeah, David. Thank you. For working with the president on getting these EOs through and working with the administration and Congress. In July, Congress passed the Genius Act, which created a foundation on top of a framework for stable coins to proliferate all over the world on permissionless crypto rails. The Genius Act is not only going to have implications for how capital markets work around the world, but global geopolitics as the US dollar permeates every corner of the world. And in the next few months, we expect Congress is going to pass the Clarity Act, which is going to answer a number of open questions about how crypto market structure should be regulated.