Why Gold Still Matters as Money Goes Digital | Chris Giancarlo
Summary
Stablecoins: The guest argues stablecoins are modernizing the dollar, lowering costs, and likely becoming the primary medium for digital transactions.
CBDCs and Digital Dollar: Extensive discussion on CBDCs and a U.S. digital dollar, emphasizing the need to encode financial privacy to preserve U.S. monetary leadership.
Remittances: Data on USDT shows billions of low-cost transfers, highlighting a major opportunity to cut global remittance fees and boost economic efficiency.
Banks vs. Innovation: Banks—especially regional banks—are resisting change; policy clarity is needed so U.S. banking isn’t left behind by crypto-native rails.
Tokenization: DTCC’s planned tokenized securities platform marks a watershed shift from analog to digital market plumbing, with broad industry backing.
Capital Markets Infrastructure: Movement to on-chain records could give issuers direct relationships with shareholders, reshaping intermediaries and market data dynamics.
Precious Metals: Despite digital advances, the guest is constructive on gold and tokenized gold as enduring stores of value amid monetary innovation.
Risks and Policy: Without privacy protections, stablecoins risk surveillance creep; balanced regulation could make U.S. digital money a global standard.
Transcript
Is the push for a digital dollar a necessary upgrade to protect America's financial dominance? Or is it lying the groundwork for financial surveillance? And if digital money is the future, why are some of the biggest digital dollar players aggressively hoarding physical gold? And today, we asked the man who oversaw the launch of the first regulated Bitcoin derivative market and is now advising Wall Street on the future of your money. >> In Focus with Jeremy Saffron is brought to you by Swan, the real Bitcoin company. Welcome back. I'm Jeremy Saffron. Now, money is fundamentally changing and for the hard asset investors, the rise of stable coins and central bank digital currencies is not just about technology. It's about privacy, government overreach, and of course, the future of the US dollar. Joining me to cut through the noise is Jay Christopher John Carlo. is the 13th chairman of the CFTC. He championed a pro-inovation regulatory approach and today he's executive chairman of the digital dollar project, senior strategic advisor at Ptoic Global Partners, and an author of a fascinating upcoming book, The New Adventures of Crypto. Great uh great to see you, Chris. Thanks for coming on the program. >> Jeremy, really good to be with you. I've been looking forward to this. >> Me, too. Me, too. And and you know, I put I put out some feelers with the audience before. Any questions, that kind of thing. a lot of people focused on this obviously uh before we get into you know all the all the good stuff surveillance CBDC's uh you've been busy you recently stepped back from your legal practice at Wilkar to focus entirely on strategic advisory um you know you you've recently called this current environment the golden age of crypto noting that massive policy reversal where digital assets are now seen as an opportunity rather than a threat um Chris I mean what's what specifically kind of shifts in Washington to to make you realize now was the exact right moment to go all in on policy and advisory. >> Yeah. You know, I I had the honor of serving in the first Trump administration, but then in the second one, we are seeing an unleashing of innovation like quite frankly I've never seen before. My my public career goes back to the early Reagan years, but I've never seen such a tailwind for innovation and and not just uh digital network innovation, but innovation in every area from artificial intelligence to biotechnology, nanotechnology, drone technology, uh space exploration technology, energy technology. I mean, it it's really extraordinary um to be alive right now and to be active right now. And so, uh, part of my move, stepping down from from full-time law practice to move really exclusively into the policy advisory side is to help innovation companies focused on innovations to to navigate this this terrific landscape, but one that's still nevertheless complicated and and early stage companies need the benefit of a steady uh, advis some steady advisor. I not only served in government but I also built a technology company myself and took it public and in the early 2000s. So I know both sides of this both from the regulatory and from the company building side. >> Yeah. I mean you kind of answered it there. I mean when you say that the strongest tailwind for innovation that we've seen I mean what what what's been so dramatic? I mean the regulators is it the courts, Congress, the White House or or is it the markets demand from institutions here? Well, so we've just been through a 4-year period where unfortunately regulators hampered innovation. They they they in in my mind, and I write about this in my upcoming book, The New Adventures of Crypto Dad. I think in their mind they conflated financial stability with m a rigid maintenance of the status quo of the financial system. and and that really hampered innovation because they felt that for some reason the only the only only way to maintain financial stability is to keep everything the way it was. What's changed is we now have an atmosphere in Washington that says just because you're creating something new, we're not going to stop you. If anything, we want to make sure that our capital markets are working, that that IPOs are are able to be done and and that you can cut through the noise and and get out into the public markets, that you can raise capital, that you can build your business, and and regulators are not going to be the impediment. They're actually going to be an accelerant to you building your company. >> Yeah. Yeah. You know, as chairman of the digital dollar project, you're you're focused on on modernizing fiat. you know, something that everybody is curious about. I mean, right now, obviously, a number of bricks aligned countries are trying to reduce reliance on dollar-based payment rails. Uh, is is digital dollar modernization now a defensive necessity to protect the US reserve status? >> I'm so glad you brought that up. I want to make one thing clear to your audience. The digital dollar project is not an advocacy organization for a US central bank digital currency. We're entirely neutral. What we did back in 2000 is look at 2020 is look ahead into the future and we said look the future is going to be dominated by digital networks of value whether they're Bitcoin, Ethereum, Salana, other networks and whether they are central bank digital currencies offered by China and its digital ECNY or the digital euro. Right? >> With that coming we ask the question how do we a futurep proof the dollar for this world? How do we preserve its reserve currency status? And perhaps most important, I think for your audience, thirdly, how do we make sure the dollar continues to represent freedom? Freedom of financial expression, freedom of economic activity, freedom of uh of of financial wherewithal, and and getting the right balance of privacy and law enforcement. Those are the questions we continue to ask at the digital dollar project. And we don't take a position on CBDC or not CBDC. We actually applaud the US's approach of unleashing the private sector to develop stable coins which are a form of digital dollar. They're not a sovereign instrument. They're a commercial liability, but they are a form of modernizing the dollar and and we applaud that innovation. We we're disappointed, however, that the Genius Act, which has authorized the private sector in to innovate a new form of digital dollars, >> does not provide for privacy rights. It's actually quite disappointing in that what it does is it puts the existing bank secrecy act surveillance regime a top stable coin innovation. So we haven't advanced in the area of privacy but we are going to advance in the in the area of of of of digital money um uh innovation >> right I mean this is good because uh when hard asset investors hear CBDC I mean their immediate concern is is programmable money and and and obviously state overreach things you've heard about but again you've you've advocated for a digital dollar that protects democratic values but Chris I mean you know we don't have to look to a authoritarian regime regimes to see the risk. Just four years ago, the Canadian government invoked that emergency act to freeze the bank accounts of of protesters. You know where I'm going here. >> They didn't need a digital uh what's that's Canadian currencies called the looney. They didn't need a digital looney to be able to block people from spending their money in a way that those people wanted to spend their money to protest government policy. >> Uh and so, you know, we we fear central bank digital currency that it could be a tool of government repression. But the existing system is a tool of government repression. I'm one of those who actually, maybe I'm polyianish, but uh I believe that if we were to get a digital money right, it could be a freedom instrument. In fact, I I say that if the United States were to encode privacy rights into digital money, we're going to win the future because the world will aspire to holding digital dollars that protect their privacy as opposed opposed to holding Canadian money where the government can can restrict their rights or a digital uh yuan, the Chinese ECNY, which is designed to be a control instrument. It's designed that if you protest the government, the government can turn your money off so you can't leave your village or you can't pay the rent on your apartment. That's by design. I say what the United States should do is take the opposite approach. What what we the missed opportunity in the Genius Act is we should have written privacy into it. In fact, if I can make another point, Jeremy, >> yeah, >> I think we should do in our country is declare a trademark right over um the the word dollar and anybody that wants to develop any form of digital dollar, whether it's a corporate entity or or a country like um uh Bermuda that pegs their money by by uh by their um constitution to the dollar has to ascribe to US values. And just like if you want to license the Nike trademark, it comes with a 100page book of all of the obligations. Anybody that wants to license the dollar should be subject to all sorts of obligations. And obligation number one should be not to invade your privacy. If we made privacy the the the overwhelming standard of any form of digital dollar, then the dollar would be the currency that all the people in the world aspired to hold because of that right to privacy. Now, throughout history, privacy has always been balanced with law enforcement. Even though you have a right to privacy in your home, if law enforcement has probable cause to believe criminal activity is taking place, they can get a subpoena and they can your door. So, that's not to say the rights to privacy are absolute. We need to regain the balance that goes back to Magna Carta 800 years of what's the right balance between privacy and law enforcement. But if we can regain that balance in a new digital world, I think that's a winner for the United States. And compared to a digital euro, which is going to be a surveillance instrument, and a digital yuan, uh, China's ECNY, which is going to be a control instrument, the US could come out of this the big winner in the 21st century uh, financial um, influence sweep stakes. >> Yeah. Interesting. I mean, it's a fascinating idea. Privacy not not as a feature, but as a requirement for using the word dollar. Uh, what would it look like in law? I mean, if a stable coin calls itself a digital dollar, should it have to meet a privacy standard the same way it has to meet a reserve standard? >> Well, absolutely. First of all, I I've got news for your audience. There's no privacy rights in a stable coin. >> Yeah. >> Unfortunately, the Genius Act did not impose upon these um stable coin operators uh rights of privacy. And that may be because government has found it easy to actually use third parties, whether they be banks or other financial services companies in order to s surveil all of us. >> And they can do that because none of these companies are subject to the fourth amendment. You know, I can make the argument that a central bank digital currency in the United States at least would be better for privacy than a commercial stable coin because at least the government is subject to the Fourth Amendment rights against um um uh inappropriate searches and seizures. Now, that's not the case, but the fact of the matter is the stable coins do not protect privacy and they that data will be mined for all kinds of purposes. >> That's the missed opportunity in the Genius Act. As I said, it would have been ideal if that law had provided for the protection of personal privacy. >> It's interesting a key point. I mean, if if private stable coins are are not inherently built to protect freedom, what would what would force them to? Is it is it regulation? Is it competition? Is it open- source kind of standards? Maybe privacy laws. >> I I think it should be it should have been congressional action. Um, as I say, it's a missed opportunity. Now, I I I'm still positive on the Genius Act because I think only the American private sector will be able to develop digital forms of the dollar that have all the bells and whistles that uh consumers of iPhones and and um and other digital equipment like to see. Um I I can't I would never expect our government is going to create that sufficiently cool apps on on digital money that are going to attract American consumers and global consumers. I think our stable coin companies are going to develop very userfriendly forms of digital money that very quickly we're going to get used to. And beyond that, once we develop artificial intelligence and agents, what they call the gentic AI, I think we're going to find that stable coins are the way money moves. And because of that success, the dollar is going to become the basically reference medium for all transactions in digital forms of money. Nobody's going to reference digital yuan and use a system that is a control system and the digital euro is going to be fine for European domestic use but I don't see it having a lot of global attractiveness. Um so I truly expect that the uh the the genius you might say yeah of Congress's genius act is it's setting up the dollar for utilization uh in in the new agentic uh digital economy. uh we just didn't get the privacy piece right >> right. Yeah. Wasn't written into that into that law. Uh you you recently say said and in a quote uh you know the banks need this more than crypto referring to the digital asset market clarity act. Help our audience understand that dynamic. I mean how are US banks currently kind of being boxed out by Washington's slow pace? >> Yeah it's so interesting Jeremy. If you go back over the last 50 years, you can see in almost every stage of financial innovation, whether it was branch banks, whether it was ATMs, whether it was um uh uh banking apps on mobile devices, American banks use their clout in Washington to slow down the innovation rather than get on board and further it along. And they're doing it once again. They're afraid of this innovation uh of of stable coins. And so rather than in a sense innovate, what they're using is their lobbying power in Washington to try to thwart the efforts toward a new crypto market structure bill. Now, I'm I'm optimistic that that this time around that cloud is not going to work and we're going to get some good legislation out of Congress, but that's what's happened in the past. And the problem with that is every time they thwarted the innovation, they didn't wind up avoiding it. It came to it developed offshore and then it eventually came onshore and they had to innovate anyway. So just I don't know if you remember there was a time where if you travel to Europe, you would they wouldn't take our swipe credit cards. uh they wanted the ones with the chips in them but chips were not available in the United States because once again our banks had tried to avoid that innovation only to find that their customers demanded it because they were able to use it in London in Paris and they wanted that innovation here in the United States and so it's time for the banks to realize you can't stop innovation and using lobbying power to try to slow it down it ultimately you've got to adopt it in the end this innovation is coming the internet is doing to finance and banking and money itself. What it's done to social network and information gathering. It's making everything much more accessible, much more direct access on people's mobile devices. And our banks need to get with the program. Now, our big banks are already with the program. It's the regional and small banks that are that are putting up the resistance. And I understand I'm sympathetic. I understand that a lot of actions in Washington, certainly actions of the Federal Reserve, have have really consolidated power with the big banks and made life much more difficult for America's community and regional banks. We we've had the lowest pace of small bank formation in the United States uh in the 21st century compared to the previous century. And a lot of that is because of actions of the Federal Reserve, uh, what I used to call the Washington whale, uh, sucking up all the oxygen in the room and making life good for big banks and hard for smaller banks. So, I understand their resistance or or concern, but I think this time around they really need to step up to the future in the form of uh, digital networks of value. >> I mean, kind of brings us directly to that stable coin kind of yield fight, too. Is Washington protecting consumers or is it protecting the bank deposit model? >> Well, exactly right. Um, you have to ask yourself, why are they so afraid of the ability of stable coin issuers and stable coin um uh uh trading platforms to pay yield, but for the fact that they might have to pay a little bit more yield themselves. Again, I'm I'm not indifferent to the the concerns of bank balance sheets. >> Uh but it's the big bank's balance sheets that are pretty well protected in this. Um and consumers unfortunately have come out on the wrong side of this. >> Yeah. You know, I was on I was prepping for this this morning. I I was on X and I was looking at a couple of tweets and and we'll show one here. I mean, you say traditional banks need clarity so that they aren't left behind. But look at this data from this morning. It's a tweet from Tether CEO Paulo Arduino. just announced that USDT processed 6.3 billion transfers last year with an average cost of just 9 cents. 3.6 billion of those transfers were under $100. I guess the question is, I mean, if an offshore stable coin is already kind of dominating cheap global micro transactions, is it too late for US banks to even catch up in the retail space? Yeah, it that that what you just showed quite Jeremy is is really remarkable and actually it makes me really optimistic. You know, >> we have uh so many of our of our citizens here in America that have that have followed the course of many immigrants before them of sending money home to their loved ones. But you know, the average cost of sending money through a wire transfer is anywhere between seven and 17%. And so now that stat you just showed, they're saying that for a $100 transfer, the cost is less than 9 cents, less than 1%. I mean, that that is remarkable. What a savings that will be for the global economy at a time when we're seeing really a slowdown in in some sectors of the global world. Certainly European economy has slowed down. If we can get back the cost of moving money, it's been estimated that the cost of moving money just around the globe every year is 1 to 2% of the world's GDP just to move money. If we can reduce the cost of moving money, we can gain one or two percentage points of GDP back into the to the global economy, >> right? >> What a tremendous difference that would make in people's lives. >> Yeah. Yeah. So I mean a stable coin you can materially lower remittance costs. I mean are banks just protecting consumers by slowing them down or are they protecting the legacy fee model I guess is you know going back to it. >> Yeah I I I think we have to ask ourselves why is it that that we look to banks to move money around the globe. I I think banks play a very important role in in money creation in the multiplier effect of of of taking funds, aggregating them and making loans important uh process uh in in the global economy certainly an important process in a lot of the US economy but we have to ask ourselves why is it that banks also have a monopoly on money movement um why can't we do the cost why can't we reduce the cost of moving money around the globe to a fraction of what it is by really looking to technology companies and digital networks like uh based upon uh Bitcoin, Ethereum, Salana and some of the other digital uh digital tokens systems to move money at a much lower cost and we're seeing that already and I think that's a that should be a welcome uh technological breakthrough for the global economy. >> Yeah, it's it's interesting. I mean that that goes right into yields. If if banks earn income on customer deposits and stable coin issuers earn income on reserves, who should get the benefit? The institution or or maybe the person holding the money? Well, I you know, as as something of a populist, why why not make it the consumer? Um, and I think we've had too little emphasis on the consumer and perhaps too much emphasis uh uh on on the banking system and their their balance sheet and their their profitability. So, I think this is a tremendous opportunity for us to reconsider what is the right balance between the consumer and the financial institution. >> Yeah. Fascinating. I mean, we talk about stable coins, obviously modernizing the fiat dollar, but let's look at where the issuers were actually what they're kind of doing with their capital too. Tether just reported that they added another six tons of gold to their reserves in Q1, uh, bringing in their hoard over 130 tons and they're now one of the largest known private holders of physical gold outside the banks in the nation states. Um, for our Kiko audience, I mean, you know, if the if the biggest pioneers of digital dollars are aggressively hedging with physical bullion in in Swiss bunkers, I mean, why should the everyday investor trust a purely digital financial architecture? Well, actually what I would say is what I find so interesting >> is amidst this this this enormous technological um breakthrough innovation of uh blockchain technology, Bitcoin, the growth in different types of tokens. What I find so fascinating is the world still looking to gold and precious metals uh for as a stable source of value. when we've seen one of the biggest run up in precious metals prices in the last few years that we've seen in decades and it's coming at a time uh when um we're having these breakthroughs in in in in the architecture of of finance and money itself and I think it proves the endearing value proposition of gold and other precious metals uh in this environment. >> Yeah. Yeah. I mean that's the contradiction our audience understands immediately after all the breakthroughs in blockchain AI digital settlement. Turning to the oldest monetary asset for stability. What does gold still provide that digital systems can't do you think? >> Well I think it provides something that people have understood really >> you know through centuries >> uh as a stable source of value. It has industrial and and personal uses but it's something that people truly understand the the notion of of you know the physically possess or else leased through custodians and others possess a a asset a commodity of value. You know it's interesting that throughout all of human history almost every every money every fiat form of money has been anchored to a commodity. You know, you go back to ancient Mesopotamia was wheat. Throughout most of history, it was precious metals. The Romans used both silver and gold. The United States, we had a silver system, then a gold system. Um, and the reason for that is because of its its its both inherent value, but also because of its limited its scarcity value. And so, you can anchor money to it and therefore control the debasement of the money. It's when currencies go off a a commoditybased system and become f pure fiat, >> right, >> that that money often loses value through debasement. And often at the end of that debasement period, you see people reaching once again for that that scarcity value commodity a as a as a re-anchor of the things of value. >> Yeah. How do you you know I mean we could bring up tokenized gold, right? I mean, how how do you think about tokenized gold without losing the trust that makes physical gold valuable in the first place? >> Well, I think tokenized gold is bringing those two innovations together and bringing the the innovation of digital networks together with the most uh long-standing uh symbol and and and instrument of value. Uh and so I think there's a lot of uh there's a lot of logical sense in that and I think people have found um uh tokenized forms of uh of precious metals. You know there's PAX gold, there's other stable coins out there that have people have found to be very attractive in this environment. >> Yeah. And I mean this tokenization story is is moving fast. Just today, DTCC, the core Wall Street clearing and settlement utility that processes more than hundred trillion dollars in security transactions annually, is reportedly targeting a July pilot and an October launch for a tokenized security platform. I mean, this is not a crypto startup. This is a core market plumbing here that we're talking about. But does that mean tokenization has officially moved from theory to infrastructure? >> It it does, Jeremy. You know, your audience may not be familiar with DTCC. Stands for the Depository Trust Clearing Corporation, but it's effectively the they run the plumbing of Wall Street. You buy and sell securities and not just equity securities, but debt securities, government treasuries. All of the underlying movement of that, the storage, the the the the value, the collateralization of that is operated by this company DTCC, which people never hear about, but it's consortium. basically all the world's banks they assigned to this company 40 years ago the responsibility to do this and as the market has grown it's the most important piece of infrastructure uh in the world it's the con Edison you might say uh of of New York's financial system and of the global financial system and what they announced that they are moving from an analog system of recording who owns what to to who's transferring what to whom to a digital networkbas based system. I mean, it it's it's it's it is it's truly one of those remarkable um uh statements that that not not enough people are paying attention to, but it really marks that we're leaving the analog state of finance and moving into the new digital network state of finance. It really is a a truly watershed moment. We'll look back 10 years from now when the entire financial system is is in the form of tokenized tokens sitting on digital networks and realize that what the DTCC is doing is really the beginning of that. And by the way, they wouldn't be doing this without the wholesale support of the global financial system who are their shareholders and directors. So this is not just a oneoff. This is the system itself moving to the next phase of financial architecture. >> Yeah. Yeah. Chris, that's a major point. I mean, if tokenization is moving from theory to the plumbing and the DTCC is now preparing tokenized security infrastructures, what are investors missing by treating this is a as as a niche crypto story, everything. I tell this to people all the time. Crypto is much more than just some funky new alternative asset class. It's truly is a whole new digital architecture of the financial system. It it's changing the way we record who owns what and who's transferring what to whom from an entry on some financial company's balance sheet to a a a digital network system. In the same way that the internet changed everything we know about photography. Before the internet, photography was a one-off thing you did with film. You took it to be developed. You got a photograph back. They put it in an album. There it sat for all eternity. Today, photography is an internet activity. You you take the photograph, you send the photograph, you share the photograph, you manipulate the photograph, you know, by changing the color scheme, whatever you want to do, and you and you post it online, you send it to grandma. You do all kinds of things with it. Photography is a living everyday, every minute activity. That's the same thing that's happening to finance. >> Digital networks are going to change finance. They're going to make that immediate. They're going to make it on in an app on your phone. You're going to calculate and do things with it. And eventually, you're going to use artificial intelligence to make you even better at it. This we're we're at a you know, we think we've come so far. We're we're we're just beginning a complete change in how we interact with our money and other things of value that are going to be put into tokenized digital network form. >> Yeah, I just had this moment thinking my son's going to be asking why I was talking about this 10 years ago. You know, uh let's let's stay on about the future here because you recently argued that the onchain tokenized assets could eventually trade at a premium or to their maybe their off-chain counterparts. Uh, you know, obviously for a traditional investor, the appeal of physical metal is that it sits completely outside of the banking system with zero counterparty risk. When we tokenize gold, I mean, you just said it. We introduce custodians, code, auditors. How do you justify a premium on an asset when you're reintroducing counterparty risk? >> Yeah. So, I I'll I'll actually come to gold in a second. I want to start off with when I made that comment, >> I was really referring to securities. Um uh having been uh an executive in a publicly traded company GFI group back uh 20 years ago I knew that at best we could recognize 70% of our shareholders. The other 30% or more held their shares in street names through custodians and other intermediaries. As an issuer, we had a a a very limited interaction with our shareholders because of the pro the analog process by which shares are issued and but tomorrow when shares are issued in a dig in in a digital tokenized format on digital networks, issuers of securities are going to have a direct parody a privity of interaction with each and every one of their shareholders. So from an issuer point of view, digital issuance of securities is going to be a tremendous step forward. From an from a an investor point of view, I'm going to have direct access to the issuer. I'm going to own my shares in in in a digitally native format. I'm going to be able to trade them and move them in ways like I could never do before when they're held through custodians. So from a securities point of view, it's sort of like, you know, the the photography example. I'm gonna have direct interaction with the shares in the companies I own and the and the and the debt and the and the bonds I own and that's going to be transformative. Now, when we think about precious metals, just like with crypto, there are some people out there that want to own their own crypto, want to have it on their own digital wallet, might put it on a ledger stick, and might put it in a safe somewhere. But then then there are also those who are perfectly happy to own their crypto and and have it housed on a wallet on a on a um on a Kraken or or other uh crypto trading platform. I think you may see the same thing with precious metals and other commodities where you'll have a choice between holding it in a digital format but also holding it in in physical format. And I think there might be arguments for both. If I'm in a war torn country uh where people might where there might be a high criminality and people stealing uh digital wallets, I might want a physical um uh holding. It'll depend. I think there's going to be demand for both. >> Yeah. You know, that's it's actually a good point. It's it's a huge shift. I mean, if if issuers can have direct parody with shareholders and investors can kind of own shares in a digital native way. I mean, here's a question because I I got a lot of broker friends. uh you know that'll be going ah because again it comes down to business. I mean if what happens to the old layers in the middle the transfer agents the custodian the brokers the clearing system kind of thing. >> Well I look I used to run a a a global intermediary GFI group. Uh we were a broker between large financial institutions. Um you know brokers have a way of surviving. I I I find some new society gets rid of intermediaries and then creates intermediaries. It used to be that Robu was an intermediary for many American shoppers uh and the internet came along and now it's Amazon. Um I was in a dentist office one time. I picked up an issue of Archaeology Today and there was a story about brokers broking the building blocks of the pyramids to the ancient pharaohs. and the brokers would put their marks on on those blocks that came from their that they that they in fact uh negotiated the sale of um I I I have a comp I have confidence in intermediation there's some scientific evidence that whenever you have seven or more counterparties intermediaries come about but the intermediaries change technology changes who the intermediaries are and so we may find that yesterday's intermediaries that don't adapt uh will be knocked out and then uh new ones will come about. I'm not fearful for wealth managers. Um, even if people have more direct access to their things of value, being able to give them good solid uh uh advice on how to invest their money is still something that's very important. Uh, you may have made your fortune in dentistry, that doesn't mean you actually know how to uh best invest your money. So I I think that the the value proposition will will remain just as I think people are worried about artificial intelligence um uh getting rid of some jobs. They maybe it may create others. >> Uh when the um internal combustion engine came around, a lot of blacksmith's shops were wiped out, but they became village mechanics. Um and I think that we'll find I'm not I never worry about the future. I think that uh technological innovation always creates opportunities. If you if you master the innovation, you'll find those opportunities. >> Yeah. Fascinating. Liz, our time is going too fast, but I want to talk to you about your upcoming book. I mean, it's titled The New Adventures of Crypto Dad, the quest for financial freedom in the 21st century. Specifically, again, I mean, we got almost a million subscribers here. A lot of them are retail investors watching this who hold, you know, some equities, some physical metal, trying to navigate this transition. How should they be thinking about financial freedom today compared to when you first took the helm over at the CFTC? Well, >> I think your audience will enjoy this book. I, as I explained in the beginning, if you're looking for a textbook on on digital network innovation, crypto innovation, this is probably not the book because I'm not a textbook writer. But if you're looking for some good stories, I'm a great storyteller and I've got some stories to tell about this innovation about some of the characters from Sam Bankman Freed and Shane Copelan and others uh the founder of Poly Market in this area and in and I use the stories to tell a bigger picture about really where this innovation is going and how why I believe if we get it right this could be a huge regaining of American citizens freedom of action. and control over our own financial activity. But if we get it wrong, I think this new innovation could be further rob financial autonomy in the same way the Canadian government robbed those truckers of their rights. And so I I I look at the balance between these these two very important issues and and and lay out where I think the future is going. >> Yeah. Fascinating. Uh I know you've seen some things, you know, I mean after FTX, a lot of traditional investors heard crypto and they immediately thought fraud, leverage, political access. Uh what do you say to the viewer who says that the industry has not earned its trust back yet? >> Well, I what I would say is if you look back at history, and I do this in the book, every time there's been a major uh innovation, a technological breakthrough, it's been accompanied by fraud and manipulation. It's almost as if the fraudsters recognize the enthusiasm of ordinary people for this new innovation and find a way to defraud them. You know what? When the when the transcontinental railroad came to the United States, it was an incredibly transformative technology. We were not a national economy. We were a series of regional economies. And the railroad turned the United States into not only a national economy, but the greatest economy the world has ever seen. And yet railroad shares were sold in railroads to nowhere. There were fraudulent uh issuance of securities. There was all kinds of fraud that that accompanied that technological breakthrough. And there were spectacular booms and crashes. And yet every time there was a crash, nobody said, "Okay, that's it. We're done with railroads. Let's rip up those tracks. We'll we'll move on to something else." No, they kept building. And we kept building the railroad and it was critical to us during World War I and World War II to become the arsenal of democracy. And so technological innovation is often accompanied by people that take advantage of our enthusiasm. And yet that doesn't undermine the technology itself. >> Fascinating. Um, always a privilege to get your perspective on these complex market structures. Um, I was going to ask you for a little insight into those fraud cases, but I guess we'll leave that for another time. Maybe I got to get your book first, Chris. I >> I'll get your copy of the book and I'd love to talk about it when it comes out in September to your audience. >> Yeah, I appreciate that. I was just going to say that. Uh, his new book hit shelves this September. Of course, uh, going to be fascinating to watch Jay Christopher John Carlo, senior strategic adviser at POTMAC Global Partners. Thanks for making the time on Kiko News today. We appreciate this. >> Great being with you. Thanks, Jeremy. >> All right, and thank you all for watching. Big thanks to our sponsor, Swan Bitcoin, your partner for generational wealth. You can get started at swan.com/kickco. I'm Jeremy Saffron. Be sure to subscribe to the channel for more deep dives into the markets, the economy, the future of money. We got some great guests coming up this week. >> Swan is the premier Bitcoin wealth platform serving leaders of families and businesses. 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Why Gold Still Matters as Money Goes Digital | Chris Giancarlo
Summary
Transcript
Is the push for a digital dollar a necessary upgrade to protect America's financial dominance? Or is it lying the groundwork for financial surveillance? And if digital money is the future, why are some of the biggest digital dollar players aggressively hoarding physical gold? And today, we asked the man who oversaw the launch of the first regulated Bitcoin derivative market and is now advising Wall Street on the future of your money. >> In Focus with Jeremy Saffron is brought to you by Swan, the real Bitcoin company. Welcome back. I'm Jeremy Saffron. Now, money is fundamentally changing and for the hard asset investors, the rise of stable coins and central bank digital currencies is not just about technology. It's about privacy, government overreach, and of course, the future of the US dollar. Joining me to cut through the noise is Jay Christopher John Carlo. is the 13th chairman of the CFTC. He championed a pro-inovation regulatory approach and today he's executive chairman of the digital dollar project, senior strategic advisor at Ptoic Global Partners, and an author of a fascinating upcoming book, The New Adventures of Crypto. Great uh great to see you, Chris. Thanks for coming on the program. >> Jeremy, really good to be with you. I've been looking forward to this. >> Me, too. Me, too. And and you know, I put I put out some feelers with the audience before. Any questions, that kind of thing. a lot of people focused on this obviously uh before we get into you know all the all the good stuff surveillance CBDC's uh you've been busy you recently stepped back from your legal practice at Wilkar to focus entirely on strategic advisory um you know you you've recently called this current environment the golden age of crypto noting that massive policy reversal where digital assets are now seen as an opportunity rather than a threat um Chris I mean what's what specifically kind of shifts in Washington to to make you realize now was the exact right moment to go all in on policy and advisory. >> Yeah. You know, I I had the honor of serving in the first Trump administration, but then in the second one, we are seeing an unleashing of innovation like quite frankly I've never seen before. My my public career goes back to the early Reagan years, but I've never seen such a tailwind for innovation and and not just uh digital network innovation, but innovation in every area from artificial intelligence to biotechnology, nanotechnology, drone technology, uh space exploration technology, energy technology. I mean, it it's really extraordinary um to be alive right now and to be active right now. And so, uh, part of my move, stepping down from from full-time law practice to move really exclusively into the policy advisory side is to help innovation companies focused on innovations to to navigate this this terrific landscape, but one that's still nevertheless complicated and and early stage companies need the benefit of a steady uh, advis some steady advisor. I not only served in government but I also built a technology company myself and took it public and in the early 2000s. So I know both sides of this both from the regulatory and from the company building side. >> Yeah. I mean you kind of answered it there. I mean when you say that the strongest tailwind for innovation that we've seen I mean what what what's been so dramatic? I mean the regulators is it the courts, Congress, the White House or or is it the markets demand from institutions here? Well, so we've just been through a 4-year period where unfortunately regulators hampered innovation. They they they in in my mind, and I write about this in my upcoming book, The New Adventures of Crypto Dad. I think in their mind they conflated financial stability with m a rigid maintenance of the status quo of the financial system. and and that really hampered innovation because they felt that for some reason the only the only only way to maintain financial stability is to keep everything the way it was. What's changed is we now have an atmosphere in Washington that says just because you're creating something new, we're not going to stop you. If anything, we want to make sure that our capital markets are working, that that IPOs are are able to be done and and that you can cut through the noise and and get out into the public markets, that you can raise capital, that you can build your business, and and regulators are not going to be the impediment. They're actually going to be an accelerant to you building your company. >> Yeah. Yeah. You know, as chairman of the digital dollar project, you're you're focused on on modernizing fiat. you know, something that everybody is curious about. I mean, right now, obviously, a number of bricks aligned countries are trying to reduce reliance on dollar-based payment rails. Uh, is is digital dollar modernization now a defensive necessity to protect the US reserve status? >> I'm so glad you brought that up. I want to make one thing clear to your audience. The digital dollar project is not an advocacy organization for a US central bank digital currency. We're entirely neutral. What we did back in 2000 is look at 2020 is look ahead into the future and we said look the future is going to be dominated by digital networks of value whether they're Bitcoin, Ethereum, Salana, other networks and whether they are central bank digital currencies offered by China and its digital ECNY or the digital euro. Right? >> With that coming we ask the question how do we a futurep proof the dollar for this world? How do we preserve its reserve currency status? And perhaps most important, I think for your audience, thirdly, how do we make sure the dollar continues to represent freedom? Freedom of financial expression, freedom of economic activity, freedom of uh of of financial wherewithal, and and getting the right balance of privacy and law enforcement. Those are the questions we continue to ask at the digital dollar project. And we don't take a position on CBDC or not CBDC. We actually applaud the US's approach of unleashing the private sector to develop stable coins which are a form of digital dollar. They're not a sovereign instrument. They're a commercial liability, but they are a form of modernizing the dollar and and we applaud that innovation. We we're disappointed, however, that the Genius Act, which has authorized the private sector in to innovate a new form of digital dollars, >> does not provide for privacy rights. It's actually quite disappointing in that what it does is it puts the existing bank secrecy act surveillance regime a top stable coin innovation. So we haven't advanced in the area of privacy but we are going to advance in the in the area of of of of digital money um uh innovation >> right I mean this is good because uh when hard asset investors hear CBDC I mean their immediate concern is is programmable money and and and obviously state overreach things you've heard about but again you've you've advocated for a digital dollar that protects democratic values but Chris I mean you know we don't have to look to a authoritarian regime regimes to see the risk. Just four years ago, the Canadian government invoked that emergency act to freeze the bank accounts of of protesters. You know where I'm going here. >> They didn't need a digital uh what's that's Canadian currencies called the looney. They didn't need a digital looney to be able to block people from spending their money in a way that those people wanted to spend their money to protest government policy. >> Uh and so, you know, we we fear central bank digital currency that it could be a tool of government repression. But the existing system is a tool of government repression. I'm one of those who actually, maybe I'm polyianish, but uh I believe that if we were to get a digital money right, it could be a freedom instrument. In fact, I I say that if the United States were to encode privacy rights into digital money, we're going to win the future because the world will aspire to holding digital dollars that protect their privacy as opposed opposed to holding Canadian money where the government can can restrict their rights or a digital uh yuan, the Chinese ECNY, which is designed to be a control instrument. It's designed that if you protest the government, the government can turn your money off so you can't leave your village or you can't pay the rent on your apartment. That's by design. I say what the United States should do is take the opposite approach. What what we the missed opportunity in the Genius Act is we should have written privacy into it. In fact, if I can make another point, Jeremy, >> yeah, >> I think we should do in our country is declare a trademark right over um the the word dollar and anybody that wants to develop any form of digital dollar, whether it's a corporate entity or or a country like um uh Bermuda that pegs their money by by uh by their um constitution to the dollar has to ascribe to US values. And just like if you want to license the Nike trademark, it comes with a 100page book of all of the obligations. Anybody that wants to license the dollar should be subject to all sorts of obligations. And obligation number one should be not to invade your privacy. If we made privacy the the the overwhelming standard of any form of digital dollar, then the dollar would be the currency that all the people in the world aspired to hold because of that right to privacy. Now, throughout history, privacy has always been balanced with law enforcement. Even though you have a right to privacy in your home, if law enforcement has probable cause to believe criminal activity is taking place, they can get a subpoena and they can your door. So, that's not to say the rights to privacy are absolute. We need to regain the balance that goes back to Magna Carta 800 years of what's the right balance between privacy and law enforcement. But if we can regain that balance in a new digital world, I think that's a winner for the United States. And compared to a digital euro, which is going to be a surveillance instrument, and a digital yuan, uh, China's ECNY, which is going to be a control instrument, the US could come out of this the big winner in the 21st century uh, financial um, influence sweep stakes. >> Yeah. Interesting. I mean, it's a fascinating idea. Privacy not not as a feature, but as a requirement for using the word dollar. Uh, what would it look like in law? I mean, if a stable coin calls itself a digital dollar, should it have to meet a privacy standard the same way it has to meet a reserve standard? >> Well, absolutely. First of all, I I've got news for your audience. There's no privacy rights in a stable coin. >> Yeah. >> Unfortunately, the Genius Act did not impose upon these um stable coin operators uh rights of privacy. And that may be because government has found it easy to actually use third parties, whether they be banks or other financial services companies in order to s surveil all of us. >> And they can do that because none of these companies are subject to the fourth amendment. You know, I can make the argument that a central bank digital currency in the United States at least would be better for privacy than a commercial stable coin because at least the government is subject to the Fourth Amendment rights against um um uh inappropriate searches and seizures. Now, that's not the case, but the fact of the matter is the stable coins do not protect privacy and they that data will be mined for all kinds of purposes. >> That's the missed opportunity in the Genius Act. As I said, it would have been ideal if that law had provided for the protection of personal privacy. >> It's interesting a key point. I mean, if if private stable coins are are not inherently built to protect freedom, what would what would force them to? Is it is it regulation? Is it competition? Is it open- source kind of standards? Maybe privacy laws. >> I I think it should be it should have been congressional action. Um, as I say, it's a missed opportunity. Now, I I I'm still positive on the Genius Act because I think only the American private sector will be able to develop digital forms of the dollar that have all the bells and whistles that uh consumers of iPhones and and um and other digital equipment like to see. Um I I can't I would never expect our government is going to create that sufficiently cool apps on on digital money that are going to attract American consumers and global consumers. I think our stable coin companies are going to develop very userfriendly forms of digital money that very quickly we're going to get used to. And beyond that, once we develop artificial intelligence and agents, what they call the gentic AI, I think we're going to find that stable coins are the way money moves. And because of that success, the dollar is going to become the basically reference medium for all transactions in digital forms of money. Nobody's going to reference digital yuan and use a system that is a control system and the digital euro is going to be fine for European domestic use but I don't see it having a lot of global attractiveness. Um so I truly expect that the uh the the genius you might say yeah of Congress's genius act is it's setting up the dollar for utilization uh in in the new agentic uh digital economy. uh we just didn't get the privacy piece right >> right. Yeah. Wasn't written into that into that law. Uh you you recently say said and in a quote uh you know the banks need this more than crypto referring to the digital asset market clarity act. Help our audience understand that dynamic. I mean how are US banks currently kind of being boxed out by Washington's slow pace? >> Yeah it's so interesting Jeremy. If you go back over the last 50 years, you can see in almost every stage of financial innovation, whether it was branch banks, whether it was ATMs, whether it was um uh uh banking apps on mobile devices, American banks use their clout in Washington to slow down the innovation rather than get on board and further it along. And they're doing it once again. They're afraid of this innovation uh of of stable coins. And so rather than in a sense innovate, what they're using is their lobbying power in Washington to try to thwart the efforts toward a new crypto market structure bill. Now, I'm I'm optimistic that that this time around that cloud is not going to work and we're going to get some good legislation out of Congress, but that's what's happened in the past. And the problem with that is every time they thwarted the innovation, they didn't wind up avoiding it. It came to it developed offshore and then it eventually came onshore and they had to innovate anyway. So just I don't know if you remember there was a time where if you travel to Europe, you would they wouldn't take our swipe credit cards. uh they wanted the ones with the chips in them but chips were not available in the United States because once again our banks had tried to avoid that innovation only to find that their customers demanded it because they were able to use it in London in Paris and they wanted that innovation here in the United States and so it's time for the banks to realize you can't stop innovation and using lobbying power to try to slow it down it ultimately you've got to adopt it in the end this innovation is coming the internet is doing to finance and banking and money itself. What it's done to social network and information gathering. It's making everything much more accessible, much more direct access on people's mobile devices. And our banks need to get with the program. Now, our big banks are already with the program. It's the regional and small banks that are that are putting up the resistance. And I understand I'm sympathetic. I understand that a lot of actions in Washington, certainly actions of the Federal Reserve, have have really consolidated power with the big banks and made life much more difficult for America's community and regional banks. We we've had the lowest pace of small bank formation in the United States uh in the 21st century compared to the previous century. And a lot of that is because of actions of the Federal Reserve, uh, what I used to call the Washington whale, uh, sucking up all the oxygen in the room and making life good for big banks and hard for smaller banks. So, I understand their resistance or or concern, but I think this time around they really need to step up to the future in the form of uh, digital networks of value. >> I mean, kind of brings us directly to that stable coin kind of yield fight, too. Is Washington protecting consumers or is it protecting the bank deposit model? >> Well, exactly right. Um, you have to ask yourself, why are they so afraid of the ability of stable coin issuers and stable coin um uh uh trading platforms to pay yield, but for the fact that they might have to pay a little bit more yield themselves. Again, I'm I'm not indifferent to the the concerns of bank balance sheets. >> Uh but it's the big bank's balance sheets that are pretty well protected in this. Um and consumers unfortunately have come out on the wrong side of this. >> Yeah. You know, I was on I was prepping for this this morning. I I was on X and I was looking at a couple of tweets and and we'll show one here. I mean, you say traditional banks need clarity so that they aren't left behind. But look at this data from this morning. It's a tweet from Tether CEO Paulo Arduino. just announced that USDT processed 6.3 billion transfers last year with an average cost of just 9 cents. 3.6 billion of those transfers were under $100. I guess the question is, I mean, if an offshore stable coin is already kind of dominating cheap global micro transactions, is it too late for US banks to even catch up in the retail space? Yeah, it that that what you just showed quite Jeremy is is really remarkable and actually it makes me really optimistic. You know, >> we have uh so many of our of our citizens here in America that have that have followed the course of many immigrants before them of sending money home to their loved ones. But you know, the average cost of sending money through a wire transfer is anywhere between seven and 17%. And so now that stat you just showed, they're saying that for a $100 transfer, the cost is less than 9 cents, less than 1%. I mean, that that is remarkable. What a savings that will be for the global economy at a time when we're seeing really a slowdown in in some sectors of the global world. Certainly European economy has slowed down. If we can get back the cost of moving money, it's been estimated that the cost of moving money just around the globe every year is 1 to 2% of the world's GDP just to move money. If we can reduce the cost of moving money, we can gain one or two percentage points of GDP back into the to the global economy, >> right? >> What a tremendous difference that would make in people's lives. >> Yeah. Yeah. So I mean a stable coin you can materially lower remittance costs. I mean are banks just protecting consumers by slowing them down or are they protecting the legacy fee model I guess is you know going back to it. >> Yeah I I I think we have to ask ourselves why is it that that we look to banks to move money around the globe. I I think banks play a very important role in in money creation in the multiplier effect of of of taking funds, aggregating them and making loans important uh process uh in in the global economy certainly an important process in a lot of the US economy but we have to ask ourselves why is it that banks also have a monopoly on money movement um why can't we do the cost why can't we reduce the cost of moving money around the globe to a fraction of what it is by really looking to technology companies and digital networks like uh based upon uh Bitcoin, Ethereum, Salana and some of the other digital uh digital tokens systems to move money at a much lower cost and we're seeing that already and I think that's a that should be a welcome uh technological breakthrough for the global economy. >> Yeah, it's it's interesting. I mean that that goes right into yields. If if banks earn income on customer deposits and stable coin issuers earn income on reserves, who should get the benefit? The institution or or maybe the person holding the money? Well, I you know, as as something of a populist, why why not make it the consumer? Um, and I think we've had too little emphasis on the consumer and perhaps too much emphasis uh uh on on the banking system and their their balance sheet and their their profitability. So, I think this is a tremendous opportunity for us to reconsider what is the right balance between the consumer and the financial institution. >> Yeah. Fascinating. I mean, we talk about stable coins, obviously modernizing the fiat dollar, but let's look at where the issuers were actually what they're kind of doing with their capital too. Tether just reported that they added another six tons of gold to their reserves in Q1, uh, bringing in their hoard over 130 tons and they're now one of the largest known private holders of physical gold outside the banks in the nation states. Um, for our Kiko audience, I mean, you know, if the if the biggest pioneers of digital dollars are aggressively hedging with physical bullion in in Swiss bunkers, I mean, why should the everyday investor trust a purely digital financial architecture? Well, actually what I would say is what I find so interesting >> is amidst this this this enormous technological um breakthrough innovation of uh blockchain technology, Bitcoin, the growth in different types of tokens. What I find so fascinating is the world still looking to gold and precious metals uh for as a stable source of value. when we've seen one of the biggest run up in precious metals prices in the last few years that we've seen in decades and it's coming at a time uh when um we're having these breakthroughs in in in in the architecture of of finance and money itself and I think it proves the endearing value proposition of gold and other precious metals uh in this environment. >> Yeah. Yeah. I mean that's the contradiction our audience understands immediately after all the breakthroughs in blockchain AI digital settlement. Turning to the oldest monetary asset for stability. What does gold still provide that digital systems can't do you think? >> Well I think it provides something that people have understood really >> you know through centuries >> uh as a stable source of value. It has industrial and and personal uses but it's something that people truly understand the the notion of of you know the physically possess or else leased through custodians and others possess a a asset a commodity of value. You know it's interesting that throughout all of human history almost every every money every fiat form of money has been anchored to a commodity. You know, you go back to ancient Mesopotamia was wheat. Throughout most of history, it was precious metals. The Romans used both silver and gold. The United States, we had a silver system, then a gold system. Um, and the reason for that is because of its its its both inherent value, but also because of its limited its scarcity value. And so, you can anchor money to it and therefore control the debasement of the money. It's when currencies go off a a commoditybased system and become f pure fiat, >> right, >> that that money often loses value through debasement. And often at the end of that debasement period, you see people reaching once again for that that scarcity value commodity a as a as a re-anchor of the things of value. >> Yeah. How do you you know I mean we could bring up tokenized gold, right? I mean, how how do you think about tokenized gold without losing the trust that makes physical gold valuable in the first place? >> Well, I think tokenized gold is bringing those two innovations together and bringing the the innovation of digital networks together with the most uh long-standing uh symbol and and and instrument of value. Uh and so I think there's a lot of uh there's a lot of logical sense in that and I think people have found um uh tokenized forms of uh of precious metals. You know there's PAX gold, there's other stable coins out there that have people have found to be very attractive in this environment. >> Yeah. And I mean this tokenization story is is moving fast. Just today, DTCC, the core Wall Street clearing and settlement utility that processes more than hundred trillion dollars in security transactions annually, is reportedly targeting a July pilot and an October launch for a tokenized security platform. I mean, this is not a crypto startup. This is a core market plumbing here that we're talking about. But does that mean tokenization has officially moved from theory to infrastructure? >> It it does, Jeremy. You know, your audience may not be familiar with DTCC. Stands for the Depository Trust Clearing Corporation, but it's effectively the they run the plumbing of Wall Street. You buy and sell securities and not just equity securities, but debt securities, government treasuries. All of the underlying movement of that, the storage, the the the the value, the collateralization of that is operated by this company DTCC, which people never hear about, but it's consortium. basically all the world's banks they assigned to this company 40 years ago the responsibility to do this and as the market has grown it's the most important piece of infrastructure uh in the world it's the con Edison you might say uh of of New York's financial system and of the global financial system and what they announced that they are moving from an analog system of recording who owns what to to who's transferring what to whom to a digital networkbas based system. I mean, it it's it's it's it is it's truly one of those remarkable um uh statements that that not not enough people are paying attention to, but it really marks that we're leaving the analog state of finance and moving into the new digital network state of finance. It really is a a truly watershed moment. We'll look back 10 years from now when the entire financial system is is in the form of tokenized tokens sitting on digital networks and realize that what the DTCC is doing is really the beginning of that. And by the way, they wouldn't be doing this without the wholesale support of the global financial system who are their shareholders and directors. So this is not just a oneoff. This is the system itself moving to the next phase of financial architecture. >> Yeah. Yeah. Chris, that's a major point. I mean, if tokenization is moving from theory to the plumbing and the DTCC is now preparing tokenized security infrastructures, what are investors missing by treating this is a as as a niche crypto story, everything. I tell this to people all the time. Crypto is much more than just some funky new alternative asset class. It's truly is a whole new digital architecture of the financial system. It it's changing the way we record who owns what and who's transferring what to whom from an entry on some financial company's balance sheet to a a a digital network system. In the same way that the internet changed everything we know about photography. Before the internet, photography was a one-off thing you did with film. You took it to be developed. You got a photograph back. They put it in an album. There it sat for all eternity. Today, photography is an internet activity. You you take the photograph, you send the photograph, you share the photograph, you manipulate the photograph, you know, by changing the color scheme, whatever you want to do, and you and you post it online, you send it to grandma. You do all kinds of things with it. Photography is a living everyday, every minute activity. That's the same thing that's happening to finance. >> Digital networks are going to change finance. They're going to make that immediate. They're going to make it on in an app on your phone. You're going to calculate and do things with it. And eventually, you're going to use artificial intelligence to make you even better at it. This we're we're at a you know, we think we've come so far. We're we're we're just beginning a complete change in how we interact with our money and other things of value that are going to be put into tokenized digital network form. >> Yeah, I just had this moment thinking my son's going to be asking why I was talking about this 10 years ago. You know, uh let's let's stay on about the future here because you recently argued that the onchain tokenized assets could eventually trade at a premium or to their maybe their off-chain counterparts. Uh, you know, obviously for a traditional investor, the appeal of physical metal is that it sits completely outside of the banking system with zero counterparty risk. When we tokenize gold, I mean, you just said it. We introduce custodians, code, auditors. How do you justify a premium on an asset when you're reintroducing counterparty risk? >> Yeah. So, I I'll I'll actually come to gold in a second. I want to start off with when I made that comment, >> I was really referring to securities. Um uh having been uh an executive in a publicly traded company GFI group back uh 20 years ago I knew that at best we could recognize 70% of our shareholders. The other 30% or more held their shares in street names through custodians and other intermediaries. As an issuer, we had a a a very limited interaction with our shareholders because of the pro the analog process by which shares are issued and but tomorrow when shares are issued in a dig in in a digital tokenized format on digital networks, issuers of securities are going to have a direct parody a privity of interaction with each and every one of their shareholders. So from an issuer point of view, digital issuance of securities is going to be a tremendous step forward. From an from a an investor point of view, I'm going to have direct access to the issuer. I'm going to own my shares in in in a digitally native format. I'm going to be able to trade them and move them in ways like I could never do before when they're held through custodians. So from a securities point of view, it's sort of like, you know, the the photography example. I'm gonna have direct interaction with the shares in the companies I own and the and the and the debt and the and the bonds I own and that's going to be transformative. Now, when we think about precious metals, just like with crypto, there are some people out there that want to own their own crypto, want to have it on their own digital wallet, might put it on a ledger stick, and might put it in a safe somewhere. But then then there are also those who are perfectly happy to own their crypto and and have it housed on a wallet on a on a um on a Kraken or or other uh crypto trading platform. I think you may see the same thing with precious metals and other commodities where you'll have a choice between holding it in a digital format but also holding it in in physical format. And I think there might be arguments for both. If I'm in a war torn country uh where people might where there might be a high criminality and people stealing uh digital wallets, I might want a physical um uh holding. It'll depend. I think there's going to be demand for both. >> Yeah. You know, that's it's actually a good point. It's it's a huge shift. I mean, if if issuers can have direct parody with shareholders and investors can kind of own shares in a digital native way. I mean, here's a question because I I got a lot of broker friends. uh you know that'll be going ah because again it comes down to business. I mean if what happens to the old layers in the middle the transfer agents the custodian the brokers the clearing system kind of thing. >> Well I look I used to run a a a global intermediary GFI group. Uh we were a broker between large financial institutions. Um you know brokers have a way of surviving. I I I find some new society gets rid of intermediaries and then creates intermediaries. It used to be that Robu was an intermediary for many American shoppers uh and the internet came along and now it's Amazon. Um I was in a dentist office one time. I picked up an issue of Archaeology Today and there was a story about brokers broking the building blocks of the pyramids to the ancient pharaohs. and the brokers would put their marks on on those blocks that came from their that they that they in fact uh negotiated the sale of um I I I have a comp I have confidence in intermediation there's some scientific evidence that whenever you have seven or more counterparties intermediaries come about but the intermediaries change technology changes who the intermediaries are and so we may find that yesterday's intermediaries that don't adapt uh will be knocked out and then uh new ones will come about. I'm not fearful for wealth managers. Um, even if people have more direct access to their things of value, being able to give them good solid uh uh advice on how to invest their money is still something that's very important. Uh, you may have made your fortune in dentistry, that doesn't mean you actually know how to uh best invest your money. So I I think that the the value proposition will will remain just as I think people are worried about artificial intelligence um uh getting rid of some jobs. They maybe it may create others. >> Uh when the um internal combustion engine came around, a lot of blacksmith's shops were wiped out, but they became village mechanics. Um and I think that we'll find I'm not I never worry about the future. I think that uh technological innovation always creates opportunities. If you if you master the innovation, you'll find those opportunities. >> Yeah. Fascinating. Liz, our time is going too fast, but I want to talk to you about your upcoming book. I mean, it's titled The New Adventures of Crypto Dad, the quest for financial freedom in the 21st century. Specifically, again, I mean, we got almost a million subscribers here. A lot of them are retail investors watching this who hold, you know, some equities, some physical metal, trying to navigate this transition. How should they be thinking about financial freedom today compared to when you first took the helm over at the CFTC? Well, >> I think your audience will enjoy this book. I, as I explained in the beginning, if you're looking for a textbook on on digital network innovation, crypto innovation, this is probably not the book because I'm not a textbook writer. But if you're looking for some good stories, I'm a great storyteller and I've got some stories to tell about this innovation about some of the characters from Sam Bankman Freed and Shane Copelan and others uh the founder of Poly Market in this area and in and I use the stories to tell a bigger picture about really where this innovation is going and how why I believe if we get it right this could be a huge regaining of American citizens freedom of action. and control over our own financial activity. But if we get it wrong, I think this new innovation could be further rob financial autonomy in the same way the Canadian government robbed those truckers of their rights. And so I I I look at the balance between these these two very important issues and and and lay out where I think the future is going. >> Yeah. Fascinating. Uh I know you've seen some things, you know, I mean after FTX, a lot of traditional investors heard crypto and they immediately thought fraud, leverage, political access. Uh what do you say to the viewer who says that the industry has not earned its trust back yet? >> Well, I what I would say is if you look back at history, and I do this in the book, every time there's been a major uh innovation, a technological breakthrough, it's been accompanied by fraud and manipulation. It's almost as if the fraudsters recognize the enthusiasm of ordinary people for this new innovation and find a way to defraud them. You know what? When the when the transcontinental railroad came to the United States, it was an incredibly transformative technology. We were not a national economy. We were a series of regional economies. And the railroad turned the United States into not only a national economy, but the greatest economy the world has ever seen. And yet railroad shares were sold in railroads to nowhere. There were fraudulent uh issuance of securities. There was all kinds of fraud that that accompanied that technological breakthrough. And there were spectacular booms and crashes. And yet every time there was a crash, nobody said, "Okay, that's it. We're done with railroads. Let's rip up those tracks. We'll we'll move on to something else." No, they kept building. And we kept building the railroad and it was critical to us during World War I and World War II to become the arsenal of democracy. And so technological innovation is often accompanied by people that take advantage of our enthusiasm. And yet that doesn't undermine the technology itself. >> Fascinating. Um, always a privilege to get your perspective on these complex market structures. Um, I was going to ask you for a little insight into those fraud cases, but I guess we'll leave that for another time. Maybe I got to get your book first, Chris. I >> I'll get your copy of the book and I'd love to talk about it when it comes out in September to your audience. >> Yeah, I appreciate that. I was just going to say that. Uh, his new book hit shelves this September. Of course, uh, going to be fascinating to watch Jay Christopher John Carlo, senior strategic adviser at POTMAC Global Partners. Thanks for making the time on Kiko News today. We appreciate this. >> Great being with you. Thanks, Jeremy. >> All right, and thank you all for watching. Big thanks to our sponsor, Swan Bitcoin, your partner for generational wealth. You can get started at swan.com/kickco. I'm Jeremy Saffron. Be sure to subscribe to the channel for more deep dives into the markets, the economy, the future of money. We got some great guests coming up this week. >> Swan is the premier Bitcoin wealth platform serving leaders of families and businesses. 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