Why do you say we won't see a bank run?

Because not everybody's going to move.

It's simply not true that everybody's constantly chasing simply the best yield.

There's lots of things that you consider with your banking relationship.

There's trust, there's checking accounts, there's services, there's lending, all kinds of things.

Banks should compete along with stablecoin issuers and others to win business.

And they can compete.

Anyway, I don't

Um, and, and from your perspective and from what you're hearing in these conversations and what you're observing, what needs to change in the US regulatory framework, besides just clarity, for America to actually lead in digital assets?

Well, remember, like, this group here, and most of your audience, is the people that have already started to learn about digital assets and what are they and, you know, Bitcoin and stablecoin, et cetera.

But there's a much larger chunk of people that are barely aware of it.

So BitGo, we went public earlier this year.

You know, as part of that process, you meet with all of these traditional investors that frankly, they're kinda newbies to the digital asset space.

They've heard about it.

They've heard about Bitcoin.

Why does the cons- or why ought the consumer care about tokenized, uh, securities or tokenized equities?

you believe that if Bitcoiners sat together and just decided to have a conservative block size increase and there was never a Bitcoin cash or Bitcoin SV or whatever, would we be better off today? Or do you think that the split was inevitable?

Well, just to be clear on kind of what happened, because I think it gets portrayed almost from a religious perspective, and it doesn't necessarily need to.

Like I said, I'm a technologist.

I worked on HTTP version 2.0. I'm the lead author of that product.

In the case of internet protocol standards, they go through this process.

body called the IETF, the Internet Engineering Task Force.

It's been around since the early 70s.

So, yeah.

So what I think is going to

happen is the same thing that happened with traditional finance.

I mean, there was a time when people held on to their own assets.

You had it in your house, right? It was the wild, wild west.

And then banks did start to emerge.

And then you had this problem of like, well, that looks like a reputable guy that's going to hold my money.

He says he's a bank, but like, What if he runs away? And were there rug pulls in the 1800s? Absolutely there were rug pulls from folks posing to be banks.

So on the Bitco wallet side or the self-custody side, can you talk to us about how that's working? Is there, can you use like a hardware wallet with that or is it more just like a phone and a server or what's the model there?

Yeah.

Okay.

You don't want to hold cash anyway.

But let's say cash was not inflating away.

You still wouldn't do it, right? And 100 years ago plus, the world moved away from holding onto your own gold coins and your old cash.

Instead, you put these into banks and whatnot.

And do you think it took time to build the trust around like, well, wait, how do I use these things? Of course it did.

But how do you see as Bitcoin evolves, like what percentage of people are going to self-custody versus trust a custodian?

Meanwhile, you have, by the way, everybody close to it on TV saying it's getting done.

We have deal fatigue.

When you let these things linger, people just kind of get tired and they get skeptical that it's going to pass.

To be honest, it's really hard for me to read whether it's going to pass or not.

I do think we had a real window.

I'm disappointed that Coinbase had a point in time where they said they wanted to withdraw their support for it.

I think that they actually accidentally blew it up.

It's been a rough couple months for self-custody.

What are your general thoughts on the timelines here? And what are your overall like what's your overall thesis in terms of what clarity will mean in terms of the crypto industry in general? Is it going to kick off this sort of Wall Street super cycle that a lot of people have been talking about, especially with this move towards tokenized equities on exchanges like Bitcoin, for example?

Well, we get some we get excited about particular silver bullets that can solve all problems.

Look, I'm a huge fan of clarity.

Don't get me wrong.

Having a legislative pathway forward is a huge step.

Remember, there's a lot of unanswered questions by clarity.

It sets basically You know, a lot of work and rulemaking to be done by CFTC and others that hasn't been started yet because the law hasn't even been passed.

But the camera's there, so it could be...

But really, like, what is the temperature check for, for that uptake currently?

Well, look, we, we just talked about how quantum can really inhibit the adoption of a Bitcoin.

They don't quite understand it, all this.

The good thing about stablecoins, they're really easy to understand, right? So first you had to kind of understand that there's this blockchain primitive which allows you to kinda move this value around seamlessly very quickly.

But then the idea of a one-to-one, uh, correlation between the, the stablecoin and the dollar, that's super easy to understand.

So Genius Act, of course, was passed last year already.

It was not only easy for people to understand from a how it works perspective, but it was also pretty easy for legislators to understand how they might regulate it.

But I think, uh, you know, yourself being right at where this is taking place could offer some insights.

I am so glad you said the pronunciation of that moniker for it because I was wondering is it is it my good so it's Mika for the average investor at home what is that you know what does that mean for especially for the U.S. investor how should they interpret that you know is it a signal

It sort of is.

I mean, I think it tells America, our legislators, that we need to get our act in gear and make sure that we have a legislative path forward.

I find it a little bit odd.

I'm a technologist by background, not a financier, but I find it odd that we have an asset class that needs special type of consideration just in order to be able to be handled in our existing markets.

I naively thought long ago that it's the activity that you do which should be regulated in particular ways, not necessarily the asset itself.

Certainly, crypto assets bring a few new challenges to the table, but most of what we're talking about when you're talking about trading, you're talking about broker-dealer activity, you're talking about custody activity, you're talking about exchanges, is not new.

Mike, what would you want to see on the regulatory front here in the U.S.?

Right.

And frankly, you know, the banking era that we have was invented a very long time ago, and it's inundated with regulatory rules, safety and soundness, which apply to when you're taking deposits from people, retail, and lending them out and taking risk, and how do you do that responsibly? With computers, with digital assets, we now have an opportunity to have reserve banks finally take a seat again as a positive thing.

Uh, you know, custodial banks, they're sometimes called.

Uh, and it's gonna change, change banking.

I mean, we talk so much about Clarity passing, um, soon, hopefully, but what actually changes for you if it passes?

Actually, probably not much on day one.

You know, uh, we've already built the regulatory rails to do pretty much all the activities we, we, we wanna do.

We can do tokenized equities, all the products that are coming.

So with the race of tokenization and different assets getting tokenized, is BitGo seeing a lot of demand from these traditional institutions for custody of tokenized assets?

Um, absolutely.

Look, so there, there's a bunch of different ways forward.

We just did a, um, we did the work with figure going public on the blockchain, uh, I think in February.

And there's a few different approaches.

So you've had already the special purpose vehicles, SPV, single asset products, where they create these wrappers.

And these are security, so they can't trade them inside the U.S. And then they give access to non-U.S. people.

What do you think happened? Was it kind of macro conditions affected or stunted the bull market? And do you think the four-year cycle continues?

How do you balance those three dynamics?

Well, look, we've been building it over a long time.

I'd like to point out that the foundation of traditional finance, if you want to call that custody, it's been building for 100 plus years.

State Street, JPM, and BNY, they're all 100 years old.

So look, we're one of the, I guess, elder companies in the space.

We're at 13.

And it takes a long time to build this.

How do you think about the role of intermediaries, intermediation in the future?

How is BitGo unique in the service it provides relative to maybe a traditional custodian?

Well, let me start by saying I don't even think we're a custodian.

It is true that we have licenses to do custody.

So we are an OCC national bank, and we do custody through that.

We have a license in Germany under Boffin.

We have a license in Dubai under VAR.

We have a license in Singapore under MAS.

And so how do you see kind of why there's this alignment?

insured bank, yeah, I feel like has become the expectation, yeah.

Of course, right? And when we're talking about insurance here, we're talking about FDIC insurance, Federal Depository Insurance Corporation.

And, you know, insured sounds better.

Well, wait, but why are they needing that insurance? What is that insurance for? Well, that's depository insurance.

So a depository is one type of bank where they take your money and then they lend it out.

And when they lend it out, of course, they're taking some amount of risk.

And...

What is the state of tokenized securities and where is liquidity right now?

How do you separate the political brand risk of that partnership with BitGo's institutional credibility?

Well, this political tie is nonsense anyway.

So look, I don't want to play politics.

Digital assets are not political.

They shouldn't be political.

It's a shame that they've gotten to the level of politics that they have.

I think, you know, my own interest in politics is solely because I'm trying to make my business be successful.

mike last question looking forward and now into that new phase that new market phase at least for crypto 20 26 27 what are you personally looking forward to for bitcoin but also personally in in digital assets

But, you know, it's going to come from the industry to get sensible views on how that should be structured.

Yeah, well, first off, let's talk about clarity.

We would very much like to see clarity get done.

Having spoken to all kinds of participants that have been mostly on the sidelines heretofore, having clarity is really like the government stamp of approval that there's a path forward.

Clarity itself, it clarifies a couple of things, but for the most part, it delegates that out to the CFTC to determine over the next couple of years.

Nonetheless, we think we as an industry would greatly, immensely benefit from having clarity done, even if it's got imperfections.

And we can talk about the stablecoin component In a moment, but but let's talk about market structure market search is something most people don't know quite what it is And you know, it sounds good.

So why is stablecoin yield such a big question for the Clarity Act, especially when we just passed the Stablecoin Act, Genius

so you guys were very early back then it was like sto's and things like that so i'm curious how you think about you've got kind of the custody business obviously then you have kind of this trading and financial services side of the business and then there's all the more like very crypto native stuff that you call it like staking and stuff like that how do you think about your business

So we're calling it infrastructure is what we're calling it right now.

But on the custodial point, look, I think it's convenient for some competitors to try to push us down into a custodial bucket.

But here's how you know we're not a custodial – We never had a goal of being custodian.

It's a means to an end.

And you want to build financial services.

You need to build on a rock solid foundation.

Does this replace what – was it Silvergate or Signature had

But why now?

Yeah, great question.

Look, a lot of what we've done over the last, you know, 12 years of our existence is make sure we're as transparent as we can possibly be as a company.

That's meant, you know, how do we audit our technology? How do we do our SOC audits? What insurance do we have? What regulatory background we have? And as you know, we've been constantly upgrading all of these parts.

Most recently, we just moved to an OCC Federal National Bank charter.

So this is all part of being ready for the world's largest financial institutions to be able to come into our space.

And we think it's actually a really important unlock.

What does the IPO of 15 years from now look like? I mean, what is your vision for how that process goes? I mean, how you end up raising the money, how the distribution works? Just talk future sense with me.

What do you tell the folks that are maybe nonbelievers at this point? I mean, what you've seen over the last decade, for example.

Yeah, well, let me let me give you background on me.

Yeah.

So I'm a Silicon Valley technology expert.

I haven't really been on Wall Street really at all.

What happened is I spent all my career kind of working through the internet era.

I was at Netscape before it was a public company.

What kind of regulation are you waiting on in 2026, either near term or in the back half that you think will make a difference?

I'm just curious if you have any comments about that.

I think there's many use cases on top of the digital technology that we have.

So Bitcoin deserves full credit for having pioneered this space as the first token that we had.

Initially, it was designed to be potentially a payment system.

On the payment side, it hasn't gotten a lot of traction there, but it's certainly very clearly a great store of value.

I think all the cryptocurrencies are going to continue to see strength over the long arc of time.

But then on top of that, we now have new use cases, right? So stablecoins, you're very familiar with, may turn out to be an easier payment system for most people because it's one-to-one tied to the price of the dollar.

And if you have any point of view on whose kind of chatbot is superior and what that means for the valuations of a lot of these names.

And so I think it's just another asset to be traded and it will be... you know, at some point I think it will become less a unique, you know, less of a disparate asset and more, you know, part of the options that people have when they want to express a view on the market.

What you said about client-centric growth, it reminds me actually a bit about how Silvergate became Silvergate Exchange Network back early on, right? What's Just crypto starts getting bigger and bigger.

And of course, the crypto moves pretty quickly.

Of course, the dollars and wire transfers don't move that quickly.

But then the problem becomes actually the weekends and nights.

And as the volumes got high, all of a sudden, you know, companies like Cumberland had exposure over the weekends where like they, they just had, you know, they either had to decide to stop trading or just, you know, hope things don't go, go, go South.

Those practical solutions are the best ones.

Mike, what do you think of is the what is the role of a qualified custodian? And if you think like five to ten years into the future, like how are you guys different than kind of an exchange or a brokerage or even like a BNY or a State Street? Like where does BitGo fit in in the future?

is there any crypto insurance in place today or how is it evolving after all these hacks and institutional adoption

Look, insurance is an interesting thing.

People say the word insurance, it's a single word, but it can mean a lot of things.

What does that insurance cover? Does it cover hacks? Does it cover insider thefts? Does it cover natural disasters? These are all different types of insurance that you can get.

If you ask Boney Mellon, they're probably here somewhere, are you guys insured for your I don't know how many trillions of assets.

They're gonna be like, no, they're not, they're not insured.

There's only one guy that can write an uncapped insurance policy.

So I want to get your opinion on this.

Do you see that as a positive development for the industry, especially as one of those incumbents? Or do you see it as Wall Street kind of infringing on our turf?

No, no, no.

Of course it's positive.

Look, we want as many parties being able to participate that are going to do a good job as possible.

And to some degree, I think all of us want the right level of regulation.

here in the United States.

Once the regulation is understood by everybody, it allows everybody to participate, whether you're on the buy side or the sell side, the service side, the investment side.

I think