White House: Crypto Ethics Rules Must Apply to All

**Patrick Witt** (0:00)
We don't legislate in response to a crisis, but rather we legislate and establish the efficient frontier of regulation just enough to allow an industry to flourish and for market participants to have regulatory clarity, but not so much the overly burden and innovation into irrelevance.

**SPEAKER_2** (0:22)
Welcoming Patrick Witt with us today. We're so very glad to have you here. Patrick is the Executive Director of the President's Council of Advisors for Digital Assets, which essentially means he's involved in every US policy issue you guys would care about, probably.
You'd previously worked with your predecessor there, Bo Hines. We've had on consensus stages before. But he went on to be CEO of Tether US. I promise, I'm not going to start this by asking you, which of you is the superior college football athlete? I would do that. It would be rude if you want to say, that's fine.

**Patrick Witt** (1:07)
But a better athlete, definitely Bo, definitely.

**SPEAKER_2** (1:10)
Oh, that's gracious. So Director Witt, we've seen that a major part of your workload is the Clarity Act.
Just the crypto market structure bill that the Senate is still chewing on. It's a very big deal for the folks in this event. Of course, what's the progress report on that?

**Patrick Witt** (1:28)
So we've been at this for the better part of a year at this point. The House obviously passed the Clarity Act, sent that over to the Senate. The Senate took that up and has made a number of changes and run its own process. And so that happened. I think the House passed it back in July of last year. And we've been we've been chopping at this tree for the better part of a year. But progress has been lumpy throughout. And there have been certain weeks where we've made tremendous progress. And over the past few weeks was really one of those segments where we made a lot of progress. And so we closed out the rewards and yield issue on stable coins that had caused the markup to come down in January.
We've closed out the Blockchain Regulatory Certainty Act with software developer protections. Some of those last few cats and dogs were working on closing out. But you think about the issues in this bill, there's the substance and then there's the politics. And when you look at the ledger of issues that still need to be resolved on the substance side of things, there's not much left there. We've had a steady march of progress through a lot of issues that at one point or another felt unsolvable. And we've been able to work through all of them with engagement from the stakeholders on both sides of these particular issues. So whenever I think about confronting another one of these that it's like, are we ever going to be able to solve this? I just remember back to the last five or 10 of them that we were able to work through it. So we're going to get this done. I'm very bullish, cautiously optimistic, but next week's going to be a big week.

**SPEAKER_2** (2:57)
Yes, it will be a big week. So tune in, everybody. The White House and the president himself actually haven't been shy about expressing frustration with the banker's stance on the stablecoin yield issue. And your economist's report dismissed the concerns that they expressed.
That yield debate is done even if the banks aren't happy? Is that the position?

**Patrick Witt** (3:25)
Look, when the markup came down in January, we convened a number of meetings at the White House. We solicited feedback from bankers, from crypto organizations that were most interested in this. And we fashioned some language, which we then did a handoff to the senators who were leading the charge on the Republican and Democrat sides, Senator Tom Tillis from North Carolina and Senator Angel Olson Brooks from Maryland. And they came together, they looked at what we put together, they ran their own process, they made edits to that language, they solicited input from the same stakeholders, and this process played out over weeks and months. So you think about a lot of issues in this bill have not received this kind of complete, full treatment. Everybody has been heard, everybody has had a seat at the table, and where the senators landed on this language, they felt was really the center of gravity on the issue.
Based on the text getting released, and is the general sentiment, crypto is unhappy, banks are unhappy, but they're both about equally unhappy, and so we know that we got the right compromise. But we believe that language is holding. Senator Alston Brooks and Tillis released a joint statement in which they stood firm, and so we believe that that issue is closed, and we look forward to resolving the remaining ones.