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Are Stablecoins The Killer Crypto App? #CryptoTownHall
Recorded: May 5, 2025 Duration: 1:03:30Space Recording
Short Summary
In a dynamic discussion at Crypto Town Hall, participants explored the bullish outlook for stablecoins, highlighting their potential to dominate the next market cycle and reshape traditional finance. Key insights included the growing trend of individuals using stablecoins for everyday transactions, the impact of stablecoins on U.S. treasuries, and the innovative projects like Elastos' Bell 2 protocol aiming to integrate Bitcoin into the stablecoin economy.
Full Transcription
Thank you. Thank you. Thank you. Thank you. Good morning, everybody.
Happy Monday.
Welcome to Crypto Town Hall. Every weekday, 10.15 a.m.
Eastern Standard Time. Huge thank you. First, Dave Weisberger for holding down the hosting
duties last week while I was abroad in Dubai for Tobin 2049. 100% hit rate of coming home from said conferences sick.
So struggling even today after basically missing it for the entirety of last week.
Would be worth definitely doing a bit of a Dubai recap.
Carlo, I see you in the audience.
Would love to bring you up because I know you were there.
I'm sure a request if you would like to come up.
I found it to be a great week. Obviously, Dave, we kind of discussed this last week as I was
landing. Carlo, are you on stage? Because your show is listener to me.
Yes, I'm here. Do you hear me?
Yeah, the glitch. Good morning, Carlo. Go ahead.
Good morning, Scott. I just sent you a recap I wrote up about Token 2049 Dubai Insanity.
Got the opportunity to obviously visit with you and a lot of the crypto town hall team, and that was fun.
I don't even know where to begin with it other than to say that I'm extremely bullish on the future of crypto.
extremely bullish on the future of crypto. And Dubai is telling me that innovation forward is
the path and that the US is on board and waking up to that. So I think we're going to see some
exciting things coming. Most importantly, did you come home sick?
No, I had a rough flight. Someone had to be taken off of my plane due to a medical emergency.
rough flight. Someone had to be taken off of my plane due to a medical emergency.
I had delays in Houston. It took me over 30 hours to get home, but I'm intact and back to the office.
Congratulations. You did well. Yeah, I share the same sentiment about the conference. I thought
it had the proper amount of FOMO and hype, and it was not peak bull market insanity, which I'm glad because you can pretty
much judge exactly where the market's going by the level of excitement at these conferences.
And I thought that it was relatively measured, probably because Bitcoin has done well, the
rest of the market has lagged. And so token 2049 is pretty much the rest of the market, right?
Yeah, I can't disagree.
And I think my biggest takeaway is that I think we're going to see a massive stablecoin summer.
All indications seem to be that stablecoins are going to be the meta of this cycle as far as I'm concerned. And I think everyone's going to want to build on stablecoins.
And a lot of attention is going to go in that direction if this bill can get through Congress and signed into law.
Agree. Mark.
Hey, guys. Thanks. Yeah, I agree. I like the term, the meta of the next cycle.
You know, we had what was it? ICO season.
We had, you know, DeFi and then this is going to be stable coin just feeds a lot of fishes in our trad fi and digital universe uh but i i don't
know if i wanted to steal the theme so scott put me you can steal it go for it uh go for go run
we kind of have uh recapped it and everybody's seen the conference uh recaps so yeah yeah don't
need to be it today to me it's a it's the two cans of Coke in front of the old guy.
I think Buffett's swan song, it is, you know, with U.S. dollar down, bonds down, equity down, pulled up two and a half percent.
It looks like everyone was watching Warren Buffett's farewell song.
Warren Buffett's farewell song. It was more strident than I would imagine, his focus on
the dollar and debasement and the fact that he struggled to give it. It's kind of like the arc
of the queen dying, the pope dying, and Buffett stepping down. I don't know if there are many
more of the old guard left. So very constructive and a good segue into the whole stable coin adoption.
So that was my sort of five cents.
Anyone wants to take, you know, provide their take on the Buffett speech?
I don't know if everyone heard it, but it was pretty damning, I thought.
Dave?
Well, I'm of mixed opinions here.
I mean, look, Buffett has been the probably single largest beneficiary of financialization on the planet.
And so, you know, if you understand, you know, how Berkshire has made money in the derivatives markets, you know, what they've done, it's been incredible.
And yes, you know, he's done it's been incredible and yes you know he's done
an incredible job of seeing that meta trend and at the end for i find it a bit disingenuous sort
of like you know when he talks about tax policy and he ignores the fact that that it's all because
of capital gains and you know etc etc so there's all sorts of stuff about Buffett. But the interesting thing in my mind is to have a conversation about dollar debasement and not even acknowledge Bitcoin, which is called rat poison squared, considering what everyone else has said there. It's you're in your 90s. You're not going to change. And he goes off into the sunset without seeing, you know, effectively the the antidote to a lot of the financialization that made Berkshire an enormous amount of money.
I kind of wanted to talk about stable coins a bit because, you know, the news that some of the quote Democrat supporters are bailing because, you know, using Trump as an excuse and descending into more partisan politics, I think is fascinating.
I think what happens now will will be really important.
I've said before, I don't think that it makes sense to do it without yield, but I totally understand they're going to.
I also don't think that that really matters.
And I think that the real question, the real philosophical question,
is there are people in our space, we all kind of understand this,
that know that the whole fractional reserve banking system,
which is what is being defended by those who are trying to slow down or stop the stable coin bill,
is under threat because it's no longer necessary. It increases risk. It requires government
backstopping. And frankly, capital formation doesn't really need it anymore. And the increased
velocity of money that will come out of stablecoins, I think is, I mean, Carlo understands
it. You understand it. But I think a lot of
listeners don't really understand, well, why do we care about stable coins? And the answer
is because that's how you reshape the financial system. That's how investors can earn real
interest that the market determines and not their bank determines. That's how most capital raising
is going to happen. It's going to change it. And so it's a very
big deal. And you could go down that pathway. But that's why all this matters. That's why the mood
in Dubai is what it was, which is we're building, our heads are down. And we see, you know, we see
a greenfield ahead of us. But, you know, still, you know, we'll see what happens.
a greenfield ahead of us. But, you know, still, you know, we'll see what happens.
Yeah, the stable court situation is interesting, Dave, I didn't dig too deeply into that. I saw
that obviously, there was some opposition growing, Elizabeth Warren, you know, fired a few shots,
but with the Republican majority, is there really a threat of legislation not getting done? I haven't
dug deeply into this,'m i'm legitimately asking
they need seven democrats to avoid a filibuster or to or or before they have to include it in the big beautiful bill which can and just so people understand that i'm being a little bit sarcastic
but the reason for the big beautiful bill is because the the same way the infrastructure you
know the the whatever the inflation reduction act got, you know, the whatever, the Inflation Reduction Act
got passed, you know, that kind of nonsense is, this is stupid, but it's true. So in the US,
you can avoid a filibuster on something that's called reconciliation. So if it's part of a budget,
then you don't, then you can avoid it. I think the hope is, and it would be great if Ron Hammond or Perry Ann or someone were up here to comment on it,
but the hope is that there would be more than seven Democrats, so that it would be past the filibuster level.
And that's really what a lot of the Washington policy advocates are trying to make happen.
I also saw that this was specific to the Genius Act, which is the one coming out of
the House, right? Oh, no, Genius is the Senate and Stable is the House.
It's the Senate. The House, they're not going to be able to stop it. There's too many pro-crypto
Democrats in the House. And remember the difference, just for those, once again, to understand why,
two years is that the House, you have to go run for re-election every
two years. So, you know, it's more likely that the Democrats in the House, that there are those
who know that they won't get re-elected if they obstruct this. Whereas in the Senate, there are
lots of senators who have another four to six years, so they're like, eh, whatever. And some
of them are really old and probably won't run again. So it is different.
That makes perfect sense.
Carlo, we had a conversation about stable coins literally at, I think, 1 o'clock in the morning at a crypto banter event somewhere in Dubai, because that's what happens at crypto conferences.
Maybe it was a bit earlier.
But you voiced some concerns.
You know, I had some concerns and I actually talked with some people at Aptos the next day.
I went over to their booth and talked with one of their devs. My concern was, are stable coins,
and I've talked about this with you as well, Dave. My concern was, are stable coins,
if successful, going to be the
death of L1s? And their dev had an interesting take on it. Given the throughput speed of stablecoins
like USDC, not great, not huge. They still are going to have to rely on high throughput, high
speed L1s. And they're looking at it as an integration, almost like an API plugin to
whatever stablecoin you're launching. So what concerns I had about that seem to be addressed
by the devs. And I think long term, I have to agree with Dave, it's the future of commerce.
I think there's so much traditional finance backing behind this that I don't see any probability
that this bill is going to die because it would essentially be shooting down the biggest
hope the United States has for financial innovation, not only for the United States, but globally,
because one of the takeaways from talking with a lot of family offices and VCs over
shisha bars and tobaccos and teas over there, is that they also believe that the United States
is open for business again. And I think we're going to see a rotation of capital back into the
U.S. And I think it'll be built on stablecoins. Yeah. And also, I don't think it should be taken
lightly that stablecoin issuers could be the buyer of last resort for U.S. treasuries, depending on
how the world evolves. Oh, yeah. I think that's going to be some quantitative easing in a very stealth way. But yeah, go ahead, Mark.
No, it's hard not to come back to these, you know, core parts of it. Stablecoins are going to be
dollar-based, the majority of them. And if that's the case, I would think even if it's not a mandate
by the Fed, you being a stablecoin user would like to see treasuries back in them.
You know, Tether notwithstanding, I don't know if you believe their audit, I guess they're 85 percent.
So if that's the case, there are two things.
You're right. There's an incentive to make it happen by the U.S. government.
There's an incentive to use it by users because it still is the largest, most liquid asset.
There's an incentive to use it by users because it still is the largest, most liquid asset.
And then the banks, I think, and this is a part, Dave or Carla, you can help me with,
I haven't done work on what the likely dynamic is.
If the interest is not paid out to the holder, but the holder just benefits from the velocity,
then obviously it's a boon for the issuer, I think.
Absolutely.
The banks are going to win big here.
And Dave, I know you're about to hit this,
and I'm going to give you the opening.
This is a fee bonanza for them.
Jesus.
In the beginning, yes.
In the beginning, yes.
And in the medium to longer term, no,
it's going to open them up to competition.
But, you know, look, having been at Citigroup during the entire changes in
the equity markets and the internet and all the stuff that went on, I mean, I kind of understand
how they're going to approach it. But just think of it this way. Right now, when you send money
to somebody else, and it seems like it it's immediate although there's very strict limits on
it try doing a zelle transfer of fifty thousand dollars and you'll see what i mean well incidentally
zelle went down on friday network wide so yeah you're right right but the reason that it that
they put strict limits on it is because they have to because it is an instantaneous transfer. It's sort of like, you know, it's a network,
but it's still relying upon, you know,
the ACH network underneath it,
which takes three days for the money to actually clear.
And so this is going from three days to three seconds,
actually not even, to sub-second in many cases.
And so what does that enable?
Well, that enables a much faster movement of capital.
It means if you're right now,
you keep money in a checking account,
the internet banks are gonna very quickly,
and that's by the way,
why you see Coinbase applying for banking licenses.
The internet banks are gonna very quickly say,
listen, you don't need, you know,
you can do all your payments or whatever,
instead of overdraft, we're gonna give you automatic,
whatever, we're gonna have an account that's a savings account, or we're going to have an account
that's a money market fund, and we'll automatically debit your money market fund from your checking
account if you check this little box on your form.
And so now all of a sudden, instead of $5 trillion sitting in checking accounts and
whatever is sitting in savings accounts at money center banks paying half a percent interest,
people are going to immediately
start to figure out that that that money could be deployed and you could be earning whatever the
market interest rate is through a variety of places well that opens up something very different
so yes it will delay by if the stable coins themselves paid interest well then you wouldn't
need to do any of that but there is is an adaptation coming. It is totally,
it is essentially the, I won't say the death of, I mean, Elizabeth Warren's right. I mean,
checking account balances are going to decrease rather dramatically over time. Why? Because you
don't need to keep them there. The notion of free capital to banks is going to go away.
But what is that actually doing? That's more, that's $5 trillion being placed into the real
economy, earning real interest rates
that real people can do things with.
And so you're taking money from a cartel and giving it to the economy.
That is stimulative.
There's no new ways about it.
It also means holding dollars is much less painful for people.
So there will be more of them.
Therefore, they'll buy more treasuries.
If you ask the treasury secretary, what would he want?
Well, it's like they want that. They want more people to own treasuries and less people to
hold money in checking accounts right you know at the end of the day the backing is what they care
about mark jeff got it yeah yeah i think that's well said dave and when you're talking about your time at Citibank and about maybe, you know, how all the banks will adapt or get involved, I go back to Jane Frazier's statement in March of 23 when she said, you know, when we saw the deposits flee those banks so quickly, you know, we were, She said the word surprise. We were surprised. We didn't know that
the money could leave that quickly. But now, as if it was a revelation, and I think the criticism
is deserved in her statement. I'm not a fan or a detractor of Jane Frazier, but the statement is
very telling. She said, we were surprised that now with mobile banking, the deposits aren't as sticky.
So this is, I just don't know how on top of things these banks are, if anyone has a window,
because I haven't been in a bank in years, but to able to adapt and foster this? Or will it be neobanks? Will it be other faster adjacent fintech companies
running this? I mean, personally, my thought process is you'd be surprised how fast banks
can mobilize themselves. But yeah, it's going to be driven. It's the old innovator's dilemma problem, right? But the fact is that it will become obvious business models,
and obvious business models sweep the industry pretty quickly.
So, yeah, it'll probably take a few years for everything that I'm talking about to happen.
And it will start with Coinbase's bank and Kraken's bank and Revolut and you know, and whatever, you know, those things.
It's not remotely surprising that Morgan Stanley said
they're going to offer crypto via E-Trade first.
Remember, E-Trade, somewhere in their charter, they had a bank as well.
And, you know, of course, it's all part of, you know, corporate Pac-Man now.
But there's a lot of changes that are coming.
But why does this matter for the cryptoverse?
Well, I mean, it unleashes global
capital is what it does. And that is not a trivial thing, right? And so when, Carlo, you go back to
layer ones, I mean, you're talking to the development side, yeah, okay, it's not a problem.
But what does it do? Well, when you can trade autonomously via stable coins and not have to go out into the fiat world, it's essentially, I mean,
it dramatically improves the quality and the ability for the crypto software for things
to operate.
I mean, think of it this way.
Anyone who traded US dollar versus Bitcoin or Ether or whatever, it doesn't matter, in the United States.
When Silicon Valley went down and then Signature and Silvergate were paused, the spreads widened,
the weekends became more volatile, things really were problematic because those dollar
rails were gone.
Whereas Tether trading has never been a problem, and Tether now trades more, you know, more
crypto trades against Tether.
Well, what happens when stable coins are fully legal in the us and everybody has them integrated into their payment
rails it means that d5 to c5 movements can become dramatically easier there's lots of things that
are opened up by that and those second order effects are where a lot of wealth's going to get
made dan and then tomber. Yeah, morning guys.
I wanted to chip in with my kind of experience with stable coins.
I'm a British guy that lives in Singapore,
so nothing to do with the US whatsoever.
But I've only been paid in stable coins for the last five years.
I've never done any work that have paid me in fiat and paid the money into my account.
Currently, I get paid in stablecoins,
and then I put them onto my Cast card.
So I'm working with a company called Cast.
They're really good.
I can spend it on my card.
So I live entirely on stablecoins.
I even pay my rent on my card in stablecoins.
When I have excess stablecoins,
I can move them across the Coinbase,
currently paying 12% on USDC.
So it's very, very common.
I'll have like maybe less than $100 in my bank account.
Coinbase is paying 12% on USDC right now?
Coinbase is currently paying 12% on USDC
if you put it in your Perpetuals account.
So it's probably not available to your Americans.
But yeah, 12%.
One of my buddies in Singapore told me
that there is $2 million in there,
just earning 20 grand a month.
Incredible. Tober? Wow. one of my buddies in singapore told me the other year is two million dollars in there just earning 20 grand a month incredible tober uh wow i i guess i want i want to ask a question and like it's not a loaded question it's just genuine curiosity it's the more we the enthusiasm i'm
hearing about stable coins is um is leading me down a bunch of questions, including, does this accelerate
the debasement of the dollar? There's more sources of capital that can be fractionally
reserved where proof of reserves don't necessarily exist or where there's more potential for
inflation. And this whole cryptocurrency thing started with, hey, let's have a currency that
everyone can verify the supply of and everyone can monitor and and verify every single thing with respect to and now
it's like the attention is wandering off of that core principle and into hey let's get a velocity
of money going so that more treasuries can be bought and more government debt can be issued
but it seems like it's a really shift it's And I appreciate what Dave was just saying, which anticipated some of my question,
but I'm still kind of left with my jaw hanging open and saying, where's the excitement and what's
the excitement about? Is it a hyper fiat world that we're headed to and suddenly everyone from
the crypto space is excited about that? or is there something really fundamental that's an improvement for
transparency auditability rationality so i remember there's always been yeah there's always
been some irony to but perhaps outside of bitcoin the next killer app in crypto being you know uh
dollars digital dollars right right? Which is
why Bitcoin was created, obviously, because as an alternative. So I don't think what you're saying
is a surprise at all to many. So go ahead, Dave. So we were talking about this this morning on
Macro Monday. I think that Bitcoin is the antidote to fiat and is growing in adoption.
And stablecoins, ironically, are going to help that happen.
The rest of crypto are technology platforms that will automate and create more, basically, more efficient, more inclusive, better versions of a variety of different verticals.
And we don't have time to go through all those verticals now.
Stable coins, weirdly, will accelerate fiat world's velocity.
It will help because it will automatically, assuming we do it right,
effectively accelerate the dollar's dominance in the fiat system
because it'll be the one that's
most used. That's because of network effects and critical mass. And so from a US-centric
perspective, they're an incredible help to kicking the can down the road in fiat world.
If you're smart and you're invested in Bitcoin, then you like that because it gives you more opportunity to accumulate and you have your out already.
And so it really is a question.
The divergence is crypto as an alternative to fiat.
I don't like that.
I think Bitcoin is an alternative to fiat.
I know I sound like a maxi when I say that, but I am a Bitcoin maxi when it comes to that use case, which is opting out of
fiat. But I'm not a Bitcoin maxi in the sense of I don't think every other token is worthless. I
think there are lots of other value propositions that will ultimately rely upon Bitcoin as a store
of value in the distant future, but in the interim is going to rely on the dollar more than other
fiat currencies because the US is going to pioneer these stable coins. And Tether has already done an enormous favor for the U.S., not just by owning treasuries,
but by popularizing the U.S. dollar as the currency of trading and the currency of being
paid.
I mean, you just mentioned yourself.
I mean, you didn't, but Dan did.
But when we were at CoinRoutes, we paid contractors in USDC or USDT all the time when they wanted to outside of the country, but only outside the U.S.
Now it's going to happen inside the U.S.
I operate primarily in stablecoins as well within my business, but that do convert to the actual bank account.
I'm curious more, Dan, on utilization of the card and how you actually manage that.
utilization of the card and how you actually manage that.
That's interesting.
Dan is not going to break that down for us.
You're there, Dan.
Hey, sorry.
You speaking to me?
Sorry.
Yeah.
I'm actually interested in a bit more detail on how you basically operate
your life using the card.
How do you pay your rent using the card?
Is it effectively a credit card?
So it's a company called Castor, a client of mine that I work with.
You can deposit stable coins.
The card technically is flagged as a credit card, so it has no limit.
You can spend whatever you want on there.
It immediately works with Apple Pay and Google Play, so that was great for me.
Everywhere I go, I just double tap my phone and pay.
As for my rent, there's a platform in Singapore you can use called iPayMy,
where it's designed for people to pay their rent on their credit cards to get air miles and things like that.
So you pay a small fee.
I think I pay about 1% or 2% on top of my rent.
But then, yeah, it's just automated.
It just comes straight off of my card.
So as long as I make sure I have enough money on my card, it comes off.
I get my 10% cash back on the card and spend everything on my card.
10%.
Yeah, that's incredible.
Yeah, it used to be 12%.
Now it's dropped down to 10%.
And is it strictly for stable coins or is it for altcoins?
Yeah, at the moment it's just stable coins.
You can deposit USTT or USDC.
Immediately it gets created into your account.
It just shows up as a dollar balance.
And you spend on your card, wherever you go.
Currently, the cashback accumulates as points.
They're doing a token drop in Q3, Q4, I think this year.
Yeah, I've referred a bunch of my friends onto it.
So when they spend, I get cashback as well.
It's really great. I was an early user of crypto.com. I referred a bunch of my friends onto it, so when they spend, I get cash back as well.
It's really great.
I was an early user of crypto.com, and I lived entirely on stablecoin, well, entirely on
that card during COVID 2020 or whatever, in Bali, and staying in Airbnb most of the time.
So I'd spend everything on my card that way.
You can go to ATM, take money out, piece of cake.
I don't use my bank account.
I really don't use my bank account at all. I had to use it the other day for something,
and it's just so archaic and backwards. But I had not enough money in my bank account because I keep
like a couple hundred dollars in there only. So I had to very quickly in this bar transfer some
Bitcoin from my Crypto.com account to my Coinbase,
then sell it, and then sell the USD for STD, and then move it. But I did all of that and got it
into my bank account in about 10 minutes. So yeah, that's how little I use my bank account.
I wonder if that's usable in the United States.
The cash card is entirely available in the US yeah absolutely um there's no foreign exchange fee if
you spend stuff in usd so yeah completely works yeah more curious i can drop your link or whatever
yeah i would love that yeah that that for sure but uh more curious also then because i mean
yeah about whether there's probably some service you can use but yeah you probably have to google
it but i'm sure that there would be one because normally you wouldn't pay a one to two percent premium with the structures we have here
for points because usually it's like one percent points are worth right so but if you're getting
ten percent uh it's interesting and for me it's easier because then i don't have to worry about
moving the money into my singapore bank account and then manually doing a transfer i just set it
up it just comes off my card piece of cake so even just for the mind, paying a couple of percent for the peace of mind is like,
yeah, whatever. I used to do that before I had the crypto card. I would do it on my regular credit
card just because then I have one bill to pay at the end of the month. So I'd have a credit card
and everything for the whole month and I just pay the credit card bill at the end. So I would just
sell some Bitcoin or whatever and then pay off the credit card. Now I don't even need to. Now
it's just all my stable coin card. So it works great. I'm in Bangkok right now. Take it wherever
I go. Whenever I go traveling, spend it anywhere. Perfect. You know, Scott, Dan is doing this on a
high level and it's incredible. But you think about what this opens up for the world as far
as the unbanked emerging nations. It's the death of Western Union. I mean, what is the point? If people at Western Union are not
looking at this as an existential threat and adapting, then they are on the verge of extinction.
I just can't see any way they pivot on this. Yeah, that's always been the promise of crypto,
except for that it was supposed to be with Bitcoin. Right. And stable coins have sort of stolen that thunder.
I think it's right.
But Scott, but think of all of a sudden, Dan said it, you know, it allows you to save in Bitcoin seamlessly.
Just think about that.
So now you can save in Bitcoin seamlessly.
So Bitcoin becomes your savings account.
Your checking account pays some interest so you can keep some stuff there. So Bitcoin becomes your savings account. Your checking account pays some
interest so you can keep some stuff there. So what have you done? Well, when this is all done,
what we've done is we've dramatically decreased the friction for every single person in the world,
banked or otherwise, to be able to participate in the economy at the same time, dramatically
increasing how much easier it
will be to use Bitcoin as a savings vehicle.
It's actually quite bullish.
I mean, I know Carlo is probably sitting there saying, yeah, that's what I've been saying.
That's exactly right.
But the net of it is better for Bitcoin for saving, better for the economy for spending, and better for autonomous, more
automated financial market evolution using crypto. So it really is a very big deal. And I don't think
most people have thought beyond just, oh, am I getting interest on my stable coin? Okay, that's
cool. There's a lot there. Mark.
Yeah, and so Dave, are you saying that?
I agree with you on that, and I want to make sure or test why.
If the friction drops and there's more fiat in the digital realm on Rails, then people get more familiar with, again, what I think was it Dan talking about his system,
which I took some notes on.
I'll get back to you later on that.
Is that if it's in the system, then people may get more familiar and have more velocity, even in Bitcoin, where maybe there's a savings technology in Bitcoin that they use, but then they maybe even draw from it to make certain payments where maybe your stack
of Bitcoin, there's 10% of it that's more used for quarterly or annual payments and savings.
Is that what you're saying, that there's just more in a system and Bitcoin gets adopted quicker?
I'm saying if it's easier to transact between fiat, between what, if it's easier to transact between your daily life at a lower fee to Bitcoin at higher confidence, it will make it easier to save in Bitcoin.
It will remove frictional costs.
Now, yes, right now it's still relatively expensive for individuals to trade small amounts of Bitcoin.
small amounts of bitcoin the spreads that are taken out are too large etc a large part of the
The spreads that are taken out are too large, etc.
reason for that is because there's limited numbers of providers and all of this is going to
dramatically increase competition and so yeah you're going to get that that will become much
easier the other big shoe to drop the big one from uh in terms of just raw numbers of dollars is bitcoin as good collateral so if you
increase if you couple bitcoin becoming good collateral with the ability to move fiat and
bitcoin on these rails instantly it it becomes a very different world right yeah that's really my
point it's both yeah i i with that. And you brought in the
collateral of Bitcoin, you know, that folks like Ledin and others are doing on the borrowing
against where you still have the upside in your stack, but you have some, you know, introduced
maybe some counterparty risk, depending on how you do it. But yeah, and then on the other side
of it is the resistance. You can kind of see why the
world doesn't want that to happen. Because once you see the big city, it's going to be tough to
keep the stacks on the old farm, the slower animals. So who was it? Was it you, Dave, saying people embracing or was it Otomer? You were saying that it's like Buffett taking a shot at the dollar after making money on it for 50 years. Is it Bitcoin or celebrating stable coins on Bitcoin's promise? And I don't think so either um i think that they are complementary um and yeah
for reasons that mark i think structurally exactly what dave said what you're alluding to is that
most bitcoin bitcoiners i think can get on board with spend dollars and save bitcoin
and if that's frictionless as dave said i think that works i don't think there's many bitcoiners
left who think that right now you're going to live your life entirely in Bitcoin
or that they actually want to spend it, right?
So if it's a better way to do dollars in the meantime,
it makes a lot of sense, I think.
Yeah, Bill Barheide, I see you in the audience.
If you do want to jump up, I sent you a request
because obviously Abra is at the forefront
of this exact conversation.
Structurally, obviously, lending, borrowing against your Bitcoin in stable coins and doing that.
Something I've actually done myself with them.
It's pretty remarkable how frictionless and easy that is to do.
Steve, you haven't really had a chance to jump in.
Would love your thoughts here on the conversation.
Yeah, I'd love to just get everybody's
take on you know if stable coins we use it at our company to pay you know probably 90 of employees
um but the one thing the issue is i found that like in asia it's a lot more like usd on tron
same with africa and then the u.s in the u.s it's in europe it's mostly usdt on eth um and it's like
there's sort of any cross-chain there you think it's always going to be...
You can see that the market cap of stablecoins on Tron
has been growing very consistently.
I'm just curious what everybody thinks.
Yeah, I haven't looked lately,
but I often quote it's over 50%.
I think people are surprised how much Tron is used,
but I think it's fast and it's cheap.
And people say, hey, I'm going to send you dollars
on this wallet.
And that's the one they tell their friend to download because that's where it is.
And it's had this snowball effect.
But I think people underestimate how much of this is happening on Tron, Steve.
It's really pretty remarkable.
I've also seen some of the banking providers that we use, like the neobanks, like the Dakotas or, you know, like Mercury or stuff like that, they don't switch chains between Tron and ETH. So in the U.S., it's sort of difficult to
get Tron stable coins. Yeah, Bill, thanks for joining. Sorry I missed you yesterday at the
race, although now I'm really sick, so you're probably lucky that you missed me at the race
yesterday. We were just talking about, obviously, this sort of perfect, so you're probably lucky that you missed me at the race yesterday.
We're just talking about, obviously, this sort of perfect world where you're able to never sell your Bitcoin and you can use it as your savings account and take loans.
You guys have finally solved that in the United States.
Bill's here, but not here, it would seem.
I'm here.
Yeah, I'm here. No, it's here, it would seem. Go ahead, Tim. Yeah.
No, it's been a long time coming.
And, you know, we're certainly seeing the uptake.
But, yeah, I mean, very few of our clients ever want to sell Bitcoin.
We do see – I think April is probably the month where we see the most Bitcoin sales from existing clients.
And that's just for taxes.
Yeah.
And, you know, some of that is around our yield products even.
But yeah, I mean, the uptake on the loan side has been clearly the fastest growing business for us, even faster growing than the yield products and staking products.
And it's across the board, you know, people are borrowing in
Tether and in USDC, straight to dollars via BankWire across the board. Yeah, it's been
super interesting to see the lack of pattern emerging.
That was one of my next questions. You know, your clients are American, right?
And, you know, your clients are American, right?
No, we have an international as well.
No, we have an international as well.
I was going to ask if the behavior, because we obviously just had this incredible conversation with Dan about how he lives his life in stable coins, basically.
But most of your clients are taking out the stable coins and putting them into dollars?
I believe that's correct. Yeah. Yeah. I don't think we have many clients that, with the exception of clients that are actually using the loans to buy more Bitcoin. growing in popularity and those those folks are just holding in either tether or usdc to convert
I believe that's correct.
Yeah.
that to bitcoin um on some dca model most likely yeah that that that makes sense do you think
bill just curious are there any if the tax code in some way meaningfully changed around bitcoin
or crypto in general could that meaningfully affect people's urge to take loans?
Like, you know, we've seen it floated sort of by the administration,
or at least we've heard rumors, you know,
no capital gains taxes on American-based crypto and Bitcoin.
I mean, I don't even know what that means, to be honest.
And I don't think anybody here can explain it either.
You know, so, yeah. Give me an example of what that means. And I guess I can answer. I've been
trying to figure it out myself. Yeah, I don't have one. It's a good
talking point, though. Exactly. For them. Yeah. I mean, you know, who knows?
No, I don't think there's going to be any special tax treatment for crypto anytime soon,
especially given the budget gap they're going to have to fill with all the, you know,
all the tax cuts they're about to propose.
And quickly, just to circle back to something you may not have been here at the beginning,
we were talking about how Democrats now kind of shifting gears and maybe coming out against
stablecoins, at least in small numbers in the Senate.
There could be a risk to the stablecoin legislation.
Is that on your radar at all?
It is.
And I think it's clearly Warren re-exerting herself into the narrative, kind of waiting
silently on the sidelines to see how the first hundred days
or so plays out, see how she can re-rally her army against Trump. And this is clearly
one of her nits. I think she's going to lose the CFPB battle to some degree,
the agency might not go away, but its strength or punch is going to be greatly diminished.
And I think she's going to do whatever she can to exert herself or re-exert herself in these crypto discussions.
Why?
Because she believes that at some point Trump, you know, the midterms could go their way.
It's a gotcha.
Yeah, not only is it a gotcha, it's it's a future election
narrative for her. Right. Say, OK, well, what happens in 28 when it's, you know, Vance versus
AOC? Well, they can re-exert themselves and say, see, gotcha. You know, Trump is making money on
world liberty. Well, by the way, if Trump's not allowed to make money in world liberty,
why is he allowed to make money in real estate? You know, I mean, so it doesn't really make any,
the whole narrative is obviously silly, but, you know, it's a narrative. And so I don't think they
really have anything else right now since they've clearly lost the plot. And so that's that actually is the biggest problem.
I actually think they don't know what to stand for that differentiates themselves at this
point when it comes.
I had high hopes, Bill.
I had high hopes that the anti-crypto army had been so unpalatable and was so clearly
the loser on that side of the election i mean you could argue
literally that the election was won by pushback against the anti-crypto army that she would have
just given up you know like so to think that she's still going to push that because maybe
democrats will take one of the you know the house or the senate most likely i guess the house
in two years that's scary it's uh, that's correct, but here we are.
And they haven't learned their lesson because all that's going to happen is the proverbial hat's going to get passed around again.
And the world is just going to line up against these morons who think that the crypto companies have forgotten what happened the last time around.
And trust me, we're never going to forget because of what it cost us both personally and professionally.
And so it's gearing up to make exactly the same mistakes again.
The one thing I will say is, you know, this whole provision around, you know, yield payments still really bothers me.
But that having been said, you know, take the win, fix it later,
and move on, all things considered.
Yeah, totally agree.
Sasha, is that you on the Elastos accounts?
Hey, Scott, yeah, that's me.
Yeah, listen, I want to talk about Elastos a bit,
but just your thoughts on this entire conversation
since you've obviously kind of been building in this space for so long.
Yeah, no, it's very interesting. I mean, the stablecoin, we can see the narrative emerging
and we can see how, you know, fundamentally, like our belief is that Bitcoin has to be the
settlement layer beneath this new economy. So it's the cornerstone of this new financial economy.
And then what we need to enable is,
I don't think Bitcoin was made to be like a stable day-to-day currency
as much so as it was a store of value.
But what the new Bretton Woods Agreement originally tried to create with the dollar
was a gold-backed system where we had then something liquid
we could use in day-to-day expenses.
So something that Elastos is incredibly excited about is its Bell 2 protocol, which is the Bitcoin
Elastos Layer 2 protocol. And really that's enabling Bitcoin to talk to smart contracts
without locking up Bitcoin with custodians. So what you can do is you can actually collateralize Bitcoin
in a decentralized wallet,
send a message to a smart contract on any network,
and then you can perform a function
like taking out a loan in stablecoins.
But actually, a recent Harvard Illumini-led team
are building a native Bitcoin-backed stablecoin
using the Elastos technology.
So I think this is really exciting because, you know, Bitcoin should stay on the settlement
layer.
We should collateralize it in a non-custodial way.
And then we should unlock its value by minting new stablecoins in this new smart contract
led economy.
And blockchain fundamentally is about bringing trust into a trustless environment.
And blockchain fundamentally is about bringing trust into a trustless environment.
So when we start to move away from old systems and we have creative destruction taking place,
we actually we move into Bitcoin as a store of value, our life raft.
And then we open up that value without selling it by unlocking it into all of these smart contracts in this new economy.
So definitely, I think stable coins is the next narrative as we start to establish
Bitcoin as the store of value. And everything's going to be backed by Bitcoin, ultimately,
in my opinion.
You and I had a conversation, what, three weeks ago on YouTube?
Three weeks, something like that. A few weeks ago, and we didn't even talk about the
Bitcoin side of this. And literally, in all our conversations, I don't think I realized
that you were merged mind with Bitcoin.
What does that mean?
And maybe then you could just give us kind of the CLDR on Elastos.
Yeah, sure, sure.
So I think with what we talked about, Scott,
was the monetization layer.
So I'm founder of Elastity, and we're building a data marketplace.
So, Scott, you know, you uploaded a video,
and within three minutes, within a couple of days, you've made $300 selling that directly with the world.
So we tokenized your access rights and we made them available.
With every payment, it was streamed out to every royalty holder.
But in this case, it's you.
But we can fractionalize and tokenize royalties, too.
too. So we can create this whole new tokenized global marketplace. But then when we look at what
So we can create this whole new tokenized global marketplace.
we want to transact in this new digital economy with, it makes so much sense that it's going to
be stable currencies that are on top of a blockchain. And so, yeah, Elastos, which is the
infrastructure we've been building all of this on, it's been merged, mined with Bitcoin since 2017.
It's been merged-mined with Bitcoin since 2017.
So what that really means is in return for Bitcoin miners,
they get ELA rewards in return for providing the same answer
they give to securing Bitcoin to the Elastos network.
So Satoshi actually advocated for merged mining back in 2010.
There's these great Bitcoin forum posts where he talks about why compete against Bitcoin, but instead tap into it.
So right now, Elastos has 50% of Bitcoin's hash power, which is about 400 EHS securing it.
And that, again, that is an insane amount of security. That's roughly like $7 billion worth
of security that's securing this sidechain network, Elastos. And given that ELA, the token
that secures this new digital economy, it's an incredible showcase of how you can leverage
Bitcoin to actually create new networks which provide unique functions that are secured in Bitcoin's
hash rate. But then what we enable then is the ability to stake this ELA token and we then open
up this new stablecoin economy, which we can talk about a little bit more after. But merge mining is
an incredible property. I encourage everyone to explore it because it's something that Satoshi
advocated for, but very few actually implement today, something which Elastos does.
Yeah, obviously, it was interesting.
I do this occasionally when I see that I'm going to have a guest and we speak to the
producers, I actually go try it.
And as you said, I literally went, took me 30 seconds.
I uploaded a video, my thoughts on Bitcoin for the day, uploaded it and actually made a bunch of money, right?
Which I didn't necessarily anticipate or expect after our conversation, but incredibly cool and incredibly important, sort of, as you talked about, the way to actually monetize your own content and royalties instead of it going to a platform.
content and royalties instead of it going to a platform. Maybe talk a bit more about that side.
Maybe talk a bit more about that side.
Yeah, yeah, it's insane considering because I think we forget the value of our data. Like in
the real economy, we're a liability all the time. Like we're increasingly going to get replaced by
AI, robotics, and automation. But in the digital economy, we're actually an asset all the time.
Like right now, we're creating an asset in the time. Like right now, we're creating an asset in this podcast.
But generally speaking, we're creating data day to day in everything we do.
The issue is that the, I guess, the evolution of the Internet required in order to have business models like buy now, subscribe or monetization with advertisers.
We rely, we had to use gatekeepers to help make that happen.
So we had middlemen who supported it.
Now, this is the fundamental need for the internet.
So that's OK.
We got to where we are today, which is really exciting.
And we've seen the birth of Bitcoin and all these new innovations.
So it's inevitable that as technology allows us to become more and more independent over time, that we're going to rely less and less on these gatekeepers anymore because the Internet's maturing beyond that. is that Web3 has focused so heavily on ownership and it's done a great job that it's kind of
forgotten about actual business models and revenue. We have speculations, we have memes,
and we have the buying and selling tokens on the hope to make profit, which again is
open to capital markets and they're extremely important. But what we don't have is sustainable
business models where you can actually license out value.
So, you know, Scott, you encrypted using Elastity a video.
You then released a number of access tokens which were traded, and that income poured directly through smart contracts to your decentralized wallet.
And I didn't know any of that was happening, by the way.
Yeah.
Yeah.
And it's now on autopilot.
But you also put it inside a smart contract, which has a subscription model. So you can add more assets to that contract. And not only can you individually buy and sell the individual assets, but you can actually collect subscription revenue, which for the buyer, they get to unlock a library of assets. So it's almost like it's an even nicer user experience.
to unlock a library of assets. So it's almost like it's an even nicer user experience. But the point
being is like, there's kind of like a digital gold rush that's going to emerge, which is
tokenizing assets. And it can be physical assets, or it can be digital assets. But when we claim
ownership of assets by minting them onto a blockchain, or minting the rights, we can now
begin to think about how we can attach business models to those
assets as well and start generating revenue from them. And when you're collecting 95 to 100%
of the revenue, and you might not even be a creator yourself, you might go to a global marketplace and
buy royalty rights to all types of assets that you love. And every time someone purchases to
use that asset, you get your fractional percent immediately sent to your decentralized wallet. This is what drives new
economies. And just to quickly circle back with the stablecoin narrative emerging,
these are the kinds of tool sets we're building and offering are the kinds of tool sets which just
feed into these stable economies. So we we we have discussions with these um stable coin uh you know entities on the goal of you know why not use this let's
build this all together because it's going to be what fuels new revenue in this new economy
yeah what you were speaking to there was what sort of was the spark for me why i actually
decided to try it i have a obviously many people at least, I had basically a 20-year music career. I tried
all of the, you know, Bandcamp and SoundCloud and every way to sort of
find ways to monetize music and nobody really
perfected it in any way, shape, or form. And this
is really a further step on that path with the promise of Web3.
And then you talk about being able to actually buy those royalty catalogs.
I mean, we've seen people make insane amounts of money buying the catalogs of famous musicians.
You know, I'm not talking about the Web3 market, like historically and normal markets.
And the creator obviously ends up getting screwed in those situations.
And some larger entity or investor makes a ton of money on their entire catalog and this really democratizes that and allows the individual to
yeah it's it's um fundamentally it's about having control and capturing you know the value in which
you offer the world and in the ai agent economies is as relevant to this as possible because,
you know, for your smart contract that you've uploaded some content to, you can just continue
uploading into that contract. And then the goal next is, you know, why not give an AI agent access
to your contract? And then it can learn everything about, you know, your content. And then you can
sell that AI agent to the world as well. And then we can have AI agents talking with each other, doing deals and buying and selling
access to data and understanding it. And everyone who's participating in this economy is actually
getting paid. I think the biggest fear people have actually is we're both loving all these
new technologies, but there's also the fear that we get left behind. So we need to be,
we need to have business models and ways to tap into tokenized revenue and access and all these kinds of things.
And, yeah, that's what we're really focused on with Elastos.
And actually, I encourage everyone just to go to Elastos and learn a bit about Bell 2,
which is how we enable a Bitcoin-backed stablecoin economy and also loans,
because that's just a whole new avenue which is opening up now
which we're really excited to be developing yeah it's incredibly cool so in that instance your ai
agents basically you would own them they'd be for sale on the marketplace and you would earn a royalty
when people utilize or bought those ai agents and would those AI agents then be transacting in Bitcoin,
stablecoins, ELA?
How would that work?
Yeah, so the whole system for us is underpinned in ELA.
And so ELA is the merge mined assets.
The gas is paid in it.
Right now, it's the only currency that can be used.
And for the stablecoin issuance on Bell 2 that's being worked on,
it's basically creating what are called zero-knowledge proofs. So when you collateralize Bitcoin in your decentralized wallet, you generate a zero
knowledge proof, which is then passed into a smart contract to release either to mint a stablecoin or
to release a loan. As a node, you can join this network, you stake ELA and you will earn a small
percentage in Bitcoin for supporting that transaction.
So everything fundamentally underneath the hood is being powered by ELA. And that has 50% of
Bitcoin security as well. So we love holding Bitcoin in our wallet because we know it's secured
by the miners. We know it's the most secure system in the world. I mean, there's even
quantum computing that's becoming a big topic. And so why would you hold ELA in the same context? It's because it has 50% of that hash
rate securing it. So you feel safe with it. When it comes to AI agents, I just think,
you know, we're going to, everything is going to become an AI agent, in my opinion, you know,
all products, individuals, you know you know myself we're going to be
all not necessarily tokenizing ourselves but digitizing our value into some kind of um agent
which can represent us and go do things so um you know with elacity where i really want to take this
project is where um you know scott you set up channel, but think of that channel as an AI agent, and you're actually dropping assets into your AI agent, which are being tokenized,
and people can pay to access that, but actually you're training up your personal AI agent,
which can then support you in day-to-day interactions.
And then we can imagine AI agents with liquid market caps, where anyone can invest in those AI agents and it actually
uses revenue or uses investment to go buy access to assets all around the world and to gain like
unique intelligence and then offer that intelligence as a service with a business model behind it to
the world. So again, everyone can get paid and be a part of this economy, but we have to have
blockchain underpinning it. And
that blockchain has to be underpinned by Bitcoin security. And that's really what Elastos is here
to provide. How far are you along or are we along on that trajectory of what you just described
becoming a reality? So for Bell 2, the whole of last year, we built all the infrastructure for Bitcoin backs finance.
So really, it's, you know, we've done a demo for lending. And next, we're doing the stablecoin,
the stablecoins, the first demo is going to be ready in the next month or two max. But again,
within the next four to six months, there's going to be a Bitcoin backed stablecoin that Elastos will offer.
For Elastity, you know, Scott, that it's a working product now. So anyone can go try it out.
It's on Elastos today, but you can mint a video. We do audio and video markets.
But we're going to continue to open this up towards an operating system environment. So this is where you basically have to build a system that checks against the
blockchain. Do you own the access rights to decrypt a content? So it's like a playback machine.
Right now we have a playback machine for audio and video. But when we open up to an operating
system, we can open up gaming markets, we can open up software markets, we can open up the AI
economy markets, like we can do every single asset. So
we released a very basic minimal viable product for the OS. Only last week, it can be seen on the
Elastos Twitter. But again, we're going to be in the next six months, you're going to see this
develop and become extremely interesting, be it that the Elacity marketplace technology will be installed on this. So yeah,
I really think, you know, first, fundamentally, we need a new economy backed by Bitcoin.
And I think we're seeing creative destruction in financial markets, old monetary systems are
being replaced by new ones. And I do believe the flight to safety will be into Bitcoin.
And then we open the doors to say, you can, you can, without selling your Bitcoin, leverage its value to enter into this new smart contract world where everything is automated.
It's much more efficient.
And we're in an economy where everyone actually can participate.
And we've got markets for every type of asset.
That, to me, is a very exciting future we should all be a part of.
Really perfect that you were here for this conversation today. of asset uh that to me is a very exciting future we should all be a part of really perfectly we're
here for this conversation today because we said you're sort of perfectly into that so people you
can follow elastos info obviously that's sasha mitchell behind the account today talking to
where else can people find out more and any final thoughts anything i might have
sure sure and yeah again stablecoins is the topic.
And I see it being a huge, you know,
the next coming months are going to be huge.
So head over to Elastos, go to Elacity, that's E-L-A-City,
and check out, that's the project I'm a founder of.
And if you want to find me, it's sash, S-A-S-H, underscore, underscore, M-I-T.
But yeah, if anyone's interested in what we're building,
feel free to drop me a message.
Otherwise, check out ELA, which is Merge Mind with Bitcoin
and I think a really interesting asset class.
Incredible, man.
Thanks so much for your insight.
Thank you to everybody else, obviously, on the panel
for the great conversation today.
As usual, it's great to be back for me
after letting Dave take my job for a week.
He might just take it permanently, it feels like.
But, you know, for a week at least.
And we'll be back, obviously, tomorrow at 10.15 a.m. Eastern Standard Time
for another Crypto Town Hall.
Give everybody on stage a follow, especially Elastos Info.
That was a really great conversation.
Glad, Sasha, that you showed up today.
It was perfect.
All right, everybody.
We will see you guys tomorrow. Thanks so much. Bye. Thank you.
