54: Today’s Crypto Regulation, Explained

Yeah, I mean, as you said, like, it's not that, I think you said this in the introduction, it's not that the industry doesn't want there to be rules and regulations.

It's that the rules and regulations were written 100 years ago.

Like, actually, the Securities Exchange Act of 1934 is still the thing that we are interpreting today.

So, you know, it didn't contemplate the internet, let alone blockchain.

So it's really about updating those rules, making sure that they make sense with the technology at issue.

Well, speaking of which, I know that you've been doing a lot of research to understand how are people and developers using this digital asset technology so that you can then, you know, inform your work and the conversations you're having with lawmakers and beyond.

And I just saw new data that you did at the DeFi Education Fund in partnership with Ipsos that found that 40 percent of Americans would be at least somewhat likely to try DeFi if it was available to them.

And I believe that among those who are open to it, the top use cases are the everyday ones, and they're growing.

85% would use DeFi to save money, and 82% would use DeFi to send money to friends and family, which is both up from what we saw last year.

Why do you think that more people are opening their eyes to using DeFi for everyday financial tasks?

Yeah, I think it's really interesting.

And we're very happy to partner with Ipsos.

Part of that research actually, I think, answers the question, which is that it's showing that Americans are increasingly frustrated with the current state of the financial system.

Only three in 10 Americans strongly agree that the financial system works for them.

So if you juxtapose that with the reality that we're seeing more threats every day to giant software systems, whether that's from AI or just cybersecurity issues generally, it starts to become a clearer picture, right? People are worried about their money and their data.

The research also shows that they want more control over their personal data and money.

And DeFi is a technology that allows them to have greater control over their finances.

So while there's obviously still a gap in people understanding what DeFi is and how to use it, it's not the most user-friendly thing if you don't already have some background in crypto, but it's becoming more and more user-friendly.

So it makes sense to me that as it becomes more and more user-friendly and people have less faith in the traditional financial system, people are going to look for other options.

Yeah.

As you're saying that, I'm connecting the dots with some research that the NCA did not too long ago with Harris Poll that found that about 40% of crypto holders today see digital assets simultaneously as a investment, you know, long-term savings opportunity, an everyday financial and payment tool, and a technology.

And that's what's so interesting is it's, we're, again, trying to put these old rules onto this new tool, and it doesn't quite fit squarely into either box.

It's like a square peg, round hole situation.

So, again, I can't thank you enough for the work that you're doing on the Hill to help policymakers and regulators understand how what exactly this new thing is and how it works and how people and businesses and developers and communities are using it so they can make smarter, more informed regulatory decisions, which is probably a great segue into let's talk about the rules, shall we? So like we said, you know, the last few years, there's been a lot of conversation happening on the Hill about how to regulate this new asset class.