Lummis-Gillibrand Responsible Financial Innovation Act

hi this is charles hoskinson broadcasting live from warm sunny colorado always warm always sunny sometimes colorado today is june 7th 2022 first happy birthday to my brother he's 37 today but more importantly for the industry it's a interesting day something just dropped today that we've all been waiting for and i have a personal connection to so if you look at let me share my screen real quickly screen there we go if you look at coindesk you'll see this responsible financial innovation act has dropped from senators gillibrand and cincia lummus cynthia is one of my senators in wyoming and she is a known to be a great crypto advocate and has for a long time been a big fan of our industry but of course as a lawmaker has a responsibility and moral obligation to make sure that the industry is is well regulated so she's been working with for quite a bit of time and trying to understand what's the best approach to regulate the crypto industry in a way that protects consumers but doesn't disrupt the marketplaces or favor one actor over another actor or promotes regulation through enforcement where instead of we all know the rules the rules are unclear and then it's whoever gets hit by the watchdog is the loser of the year which is what's been going on right now so she's working with christine gillibrand who's a democratic senator from the state of new york and her office lumas office reached out to us i believe in december of last year and we've had numerous conversations and i know that they've had numerous conversations with tons of leaders in the cryptocurrency space and they put together a comprehensive piece of legislation so here's the summary of it it's about six pages the summary and the whole bill is quite large the copies that we got were over 140 pages and when we saw them actually just a few weeks ago when we were in dc it it was still growing and still changing but it covers all kinds of things so title one covers definitions title two responsible tax for digital assets different sections de minimis exclusions broker clarifications trading safe harbor for non-us persons to suffice autonomous organizations digital asset lending agreements irs guidance riaa guidance you have digital asset mining and staking guidance then there's conforming amendments then there's stuff on the security side and it creates a lot of legal classifications and what they do is they basically kind of talk about the howie test and they talk about its relationship to commodities and basically what they do is they create a situation where things that are obviously a commodity ought to be a commodity and things that are behaving like securities should be securities so it's not saying nothing is a security or nothing is a commodity but it kind of clarifies this a little bit in section 301 302 303 304 and so forth then under title four covers commodity innovations it gives a lot of definitions there's a lot of jurisdictional considerations and they actually reference one of my favorite bills hr 7614 and that's this bill right here which actually is the digital commodity exchange act which again is a is a big step forward in innovation and how one would regulate a cryptocurrency so there's a bunch of stuff for payment stable coins and it says by the way if you you claim to be asset packed then you you really need to make sure that your asset backed and there needs to be checks and balances there because you're in a position of trust you're not a full cryptocurrency your only reason you're valuable is people trust that you do something and they can't see that with the code then they put in a consumer protection issue payments innovation section and banking innovation section some studies are here and certain federal reserve services and other things and then there's an interagency or coordination including a sandbox guidance and estate money transmission law modernization all kinds of stuff here cyber security standards for digital asset intermediaries and it's it's just been a joy talking to their office and learning from them and engaging with them i get the sense that senator lummus first she's a great leader and i really enjoy all the people that they have and gila brand has been nothing but kind but more importantly i think there's a very strong desire to actually solve the problem it's not a perfect bill there's a lot of things that need to be discussed worked out and the reality is that i think there's going to be a convergence of forces so this bill combined with biden's executive order the things that will come out of that working group are probably going to smash into each other and there's going to be a big massive discussion in the industry as a whole and i think what's going to end up happening is through iterations the industry is going to converge to kind of a canonical bill and then it's just a question of how the hell do we get that thing passed and if we get it passed it will give us the clarity that we need as an industry to really stabilize everything and it'll still take care of bad actors and and there's certain things i care a lot about i really want a cryptocurrency user's consumer bill of rights i really care about a definition of decentralization so we can actually get to sufficiently decentralized and also there's a lot of transnational discussions that ddb had about algorithmic law and algorithmic compliance and so forth but this is a massive step forward and frankly it's an example of where washington actually did listen to the industry and engaged with people and it didn't bias it towards one crazy standard or another and a lobbyist hasn't gotten hold of it and turned it into some toxic monster that only benefits one actor over another it's unlikely in its current form to path it has to go through four different committees and that's very very hard obviously there's going to be a lot of conversations a lot of work behind the scenes to see what's necessary there and it's unknown whether the executive branch fully supports this or not but i do know that there's been conversations between the legislative and executive branch but i do believe they're waiting for their clarity to come before they have an official position but what's nice is this creates a foundation upon which we all can read and talk and if you take a look at the links in this video or just google the the bill name or take a coindesk article you can read it yourself and have your own opinion and my hope is over the next 12 24 months if we all work together i think we can get to a point where we finally get something passed and then it's done we actually have a foundation of regulation that's not intrusive and it allows us to innovate as an industry and be able to build great things as an industry so it's a thank you to the leadership of lumis's office and all the people that have been working and support her i know there's a lot of heroes to get this over the the hump with tyler lindholm and many others and it was a lot of work on their part do not underestimate the amount of conversations that they've had and the and the the difficult back and forth that they've had and how many lawyers they've had to deal with and very technical issues and certainly a lot of conversations with the sec and cftc and so forth and it is now the end of the beginning there will be some bill that gets passed if not in this house in congress than than another one but some bill will pass at some point it depends on the politics and we'll just see how things go but we as citizens supposedly are in control of our government so we have let our voice be heard and let our voice be known that regulation through enforcement is a terrible precedent and systemically damaging to the industry you need to have the legislative branch do its job and and create the frameworks necessary for us as entrepreneurs to click into nothing in this bill would be difficult for me as a company to do anything we're a software developer and there's plenty of things that would make our lives a lot easier and make the industry's lives a lot easier and stop costing jobs and innovation to other people i do think that different bodies need to step up and get highly involved i've been a big fan of the commerce department getting involved and standards being created through nist and nsf programs being used to create big subsidies for foundational research in the space but all things considered i'm pretty happy today and i'm excited to see that alums of staff i think are gonna be at consensus and doing some presentations there and then we as an industry now have to show up because they showed up we asked the lawmakers to come and give us their best ideas and now it's our job as an industry to go up and read these things and really go deep and have a great conversation and i think a few more iterations and a few more converging factors we really can get to something where the united states has the best regulation in the world for cryptocurrencies and this will lead to the creation of thousands if not tens of thousands of high-paying jobs and billions of dollars if not tens of billions of dollars of economic growth in the very short term and over the long term the creation of the next microsofts and apples and googles but built with decentralized principles as always a lot more work to do as always some people are going to have some issues as i mentioned before there was a lot of lobbying from certain bitcoin maximalists to basically legislate the destruction of their competitors calling anything but proof-of-work security which was bizarre and counterproductive but lucky for us stronger minds prevailed and we now have a better foundation to stand on and i think it is a is a balanced approach as the end of the beginning so i just wanted to to give you guys a little update there and encourage you to take a look at it read it get informed about it i will be at consensus tomorrow we're having a giant community event i think 1400 people have registered for it so that's i think the largest cardano community event we've ever done and obviously there's a large cardano booth that will be at consensus and a lot of the cardano core team is there and a lot of dap developers are there projects are there so it's going to be a fun time a very exciting time i can't wait to see all of you there tonight i'm doing a twitter space with martin lawrence as well that's going to be a lot of fun as well there's tons of people entering the cardano space and some are engineers and scientists and some are musicians and some are celebrities and some people are everything in between so when they they come in they usually like doing some sort of twitter space and we we tend to do it and it's just fun to do i i really enjoy it it doesn't take a lot of time and gives people a chance to kind of develop a new perspective and think about things a little differently i will do an ama while i'm in texas and maybe i'll even do it live at the community event with everybody we'll see if we can get the av set up for that so that we can take audience questions in addition to your questions but 50 50 on that because there's it's a huge venue and there's a lot of moving things and there's so much that we do i have a 16-page dossier here all the meetings and things that we're going to and so everything's looking pretty positive and pretty exciting it's our engineers are deep in the weeds right now and working real hard on vossel a massive amount to do huge amount of testing to do after the collapse of luna we decided to add an additional test harness to what we're doing and think really carefully about some things it's taking a bit more time but we figured that the abundance of caution is well rewarded these days so we'll get that out soon and then you guys will just keep building it's a great ecosystem i just did a podcast yesterday with ledger live the guys behind ledger live and they're announcing ada support for ledger live and they talked about how they did the entire thing over catalyst and it was pretty bizarre to work with instead of a single customer and ecosystem and i was like well yeah guys that's that's how decentralization works you don't you don't ask charles for permission you actually have to go to the community and talk to them and they're like yeah but we're we're not used to that well maybe these other guys aren't so decentralized then huh i don't know you should come up with a definition for that maybe that's coming maybe there's going to be some sort of decentralization index who knows maybe somebody's working on that a paper out anyway and we'll also have the input endorsers video at consensus amazing work it's a real tie up it brings mithril and extended utxo and a lot of other concepts together and boy it's it's really special it's going to make all the reddit trolls look like idiots and we'll buy some extra paint chips just for them okay quick update on regulation and these other things and i will see you guys soon i hope to be able to see in person smoke some scars together have some chats together and we'll get it done the future will be decentralized my friend cheers