Crypto week could make or break the industry

The Street

As President Trump turns his attention to new crypto bills, Ric Edelman, Founder, The Digital Assets Council Of Financial Professionals, explains what's at stake for the crypto industry.

Transcript

00:00Lawmakers are meeting this week to deliberate new crypto legislation.

00:05How big of a deal is this moment for the industry, Rick, and what do you want to see come of it?

00:10It's massive. This is an extraordinarily important period of time in Bitcoin's history

00:14because we have been struggling with the fact that for the past 15 years,

00:20there has been no regulation or legislation that provide the rules of the road.

00:25We don't even know in many aspects of crypto how it's taxed, and this has been very frustrating.

00:32It is the big reason why many banks and brokerages have not engaged because they weren't sure how.

00:41How are we allowed? What are the rules of the road?

00:44Are we allowed to allocate? Are there limitations? What are the reporting requirements?

00:48And what is the taxation?

00:49So this legislation is essential not only to provide that clarity,

00:54but equally important to provide guardrails for the safety of the investor

00:58and to protect against the risk of frauds like we've had in the past.

01:03So we are hopeful that Congress will pass this legislation providing the clarity.

01:09And if that happens, you will see massive new levels of engagement of an unprecedented nature.

01:14But if Congress fails to pass those new laws, that will be a big black eye for crypto

01:21and could not only hinder the future growth, it could also lead to a very significant price downturn.

01:27The expectation is that this will pass, though, correct?

01:31Yes, and that's why Bitcoin's price is rising so dramatically right now

01:35in the expectation that Congress will pass the legislation,

01:38that the president will sign the bills into law,

01:41and it will allow, open the doors for institutional investors

01:44and the financial services industry to engage.

01:47So this is why Bitcoin's price is rising.

01:49And if those laws do get passed, why the price will rise dramatically further.

01:54It's funny, though, because oftentimes regulation is seen as maybe a roadblock

01:59that could limit gains, for example.

02:02But this actually, you think, will be a good thing

02:04because it will increase adoption in terms of Bitcoin and crypto investments.

02:10Caroline, isn't it crazy?

02:11When's the last time you saw an industry begging to be regulated?

02:16Normally, you find everybody trying to tell Congress to leave them alone.

02:20But the crypto community has long recognized that the absence of regulation,

02:24the absence of consumer protections,

02:27the absence of tax clarity is stopping many from participating.

02:31So we're basically saying, I don't care what the speed limit is,

02:36just tell me so that I don't get arrested for speeding accidentally.

02:40So this is why the crypto community is so excited about the opportunity for the first time

02:46to get the clarity that it's been seeking.

02:49It is crypto week this week.

02:51What do investors need to know about the Genius Act and also about stable coins?

02:55Stable coins are going to be dominant in the marketplace within just the next couple of years.

03:01Already, stable coins hold 10% of all the U.S. currency in circulation.

03:08That is astonishing.

03:09And the Secretary of the Treasury says that it's going to grow eightfold over just the next two years.

03:15So it's going to be an amazing new opportunity for investors.

03:21A stable coin, essentially, just looks kind of like a money market account that doesn't pay interest

03:27or a bank savings account that doesn't pay interest.

03:31Kind of looks like PayPal.

03:33And the advantage of this for the government is that every time somebody puts a dollar into a stable coin,

03:40they're buying a U.S. treasury.

03:43And that means that stable coins on a global basis are going to be supporting the U.S. dollar on the macroeconomic stage.

03:51This is a huge benefit to the U.S. treasury.

03:54It's a big benefit to policymakers at both Treasury and the Fed.

03:58And it's going to be of tremendous value to not only U.S. investors,

04:02but particularly people around the world who live in countries where there is an unstable currency,

04:09massive inflation, or a corrupt government, where they don't want to buy their local currency,

04:14now they'll be able to buy a stable coin, giving them access to the U.S. currency.

04:19And this is going to be of tremendous value to democracy on a global scale.

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