If you were to just take the average bank now and put their deposit rates where money markets are, they'd almost all be unprofitable. And it's like a very actively managed system more so than it I think needs to be. The Federal Reserve itself is operating at a loss because part of its way of managing interest rates is it increases the rates on its own liabilities. But in a world where information flows around faster, banks are kind of stuck having to raise their rates to try to keep up with this.
We are pleased to bring you the second edition of the ARK Crypto Brainstorm; a quarterly conversation between a rotating group of experts in the crypto space, The ARK Crypto Brainstorm is published through the For Your Innovation podcast channels and aims to be an informative and in-depth conversation on the current state of the ever-changing crypto landscape with experts offering diverse viewpoints.
In the second edition of the ARK Crypto Brainstorm, ARK Crypto Lead Yassine Elmandjra and ARK CEO and CIO Cathie Wood hosted 7 leaders in the crypto space including:
- Lyn Alden, macroeconomic investor with expertise in Bitcoin, is leading the conversation on the regional banking crisis and the Fed’s decision-making amidst continued macro uncertainty.
- Jeremy Allaire, CEO of Circle, the largest regulated stablecoin issuer, has successfully navigated the banking crisis while demonstrating a commitment to openness and transparency.
- Paul Grewal, Chief Legal Officer at Coinbase, is at the forefront of advocating for greater regulatory clarity in the US and emphasizes the importance of creating an environment for crypto to flourish.
- Caitlin Long, CEO and Founder of Custodia, is dedicated to building a regulatory compliant bridge between the traditional US financial system and cryptoassets.
- Angie Dalton, CEO of Signum Capital, has built a strong relationship with US regulators, working with startups and protocols to outline a regulatory compliant path for operating in the US.
- Chris Burniske, a partner at Placeholder Ventures, has highlighted the resilience of crypto fundamentals and why this is a compelling time to be an investor despite the uncertainty.
- Michael Sonnenshein, CEO of Grayscale, is trailblazing the path to a US Bitcoin ETF approval, questioning some of the assumptions made by the SEC in its decision-making.
Key Points From This Episode:
- 04:47 Paul and Cathie discuss the current state of the regulatory landscape surrounding cryptocurrencies
- 09:48 Lyn Alden provides a historical perspective on regulation
- 18:57 What Jeremy is hearing from his recent trips to Washington DC on crypto regulation
- 22:22 The potential for a Bitcoin ETF, and Grayscale’s relationship with the SEC
- 27:41 How the FTX collapse may have set the industry back in the eyes of the US government
- 34:38 Michael Sonenshein’s optimistic point of view on regulators idea of crypto
- 40:06 Caitlin’s view that regulators are unwilling to make progress in passing significant regulation in the next few years
- 49:36 Chris compares digital assets to water
- 50:13 Cathie and Yassine transition the conversation to the Regional Banking Crisis
- 58:35 Caitlin highlights the inherent illiquidity many banks currently have and what problems that might cause
- 1:04:56 Lyn offers her end game scenario if the Fed continues to be hawkish
- 1:13:22 Chris highlights the clear differences between the banking system and cryptocurrencies like Bitcoin and Ethereum
- 1:20:42 Coinbase’s latest product launches including Wallet and Base
- 1:24:20 How Bitcoin has responded to the recent regional bank crises
- 1:27:33 We go around the horn and ask: What would our guests like to see happen this year?
