Trump Signs Stablecoin Bill, Delivering Win for Crypto Industry

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2:12Bloomberg Audio Studios. Podcasts. Radio. News. This is Bloomberg Business Week Daily. reporting from the magazine that helps global leaders stay ahead with insight on the people, companies, and trends shaping today's complex economy. Plus, global business, finance, and tech news as it happens. The Bloomberg Business Week Daily podcast with Carol Masser and Tim Stenevek on Bloomberg Radio. I want to bring in Frank Spizer right now. He's CEO of Medified. He joins us from Myrtle Beach, South Carolina. Medified is a blockchain ratings company. Frank joins us once again from Myrtle Beach. Frank, good to have you with us this afternoon.

3:00Before we get to your comments on the Genius Act and everything you guys are doing at Medified, and perhaps differently now as a result of what's happening in Washington, just tell everybody what Medified does, because it's, I think, not clear to people who aren't in the space? Well, thanks to this kind of legislation, now we can be transparent and fully open and say gamifies a global competition amongst humans and AI to make a sport out of predicting asset price movements. And we do that through our own token. And now that President Trump and the administration have come forward with this legislation, we can get to work, just like a lot of founders that have been waiting to hear this.

3:43What weren't you able to do before this? So we were able to understand the movement of asset prices and run AI models against the trends and trades that are going on in the market. But now what we're able to do is link it up with what's going on in the real financial markets and add value to allowing people to be accurate and early in predicting these asset price movements. How do you see the recent U.S. stablecoin legislation shaping the market? Could possibly tighter oversight drive stablecoin issuers offshore? I actually don't think so. I think this is a great thing for the market because the requirement of the Clarity Act and now the regulation framework from the Genius Act is that stable tokens now have to be backed one to one.

4:32So what I think you're going to see is stable tokens that adopt the U.S. regulations to be the ones that are trusted, and people will see them as a viable on-ramp to link the digital asset world with the traditional finance system. What is your view on CBDCs? We have President Trump earlier, just minutes ago, saying that he will cement an order banning CBDCs. This seems to be always kind of hand-in-hand with stablecoins when it comes to conversations or discourse in this space. Yeah, so what I think the administration is making clear on that is that you're going going to have the innovation in the hands of builders and entrepreneurs.

5:08And what they're not going to do is turn the currency itself into a surveillance mechanism, which if a CBDC were to become available in some other countries and were adopted, I think people would be a little hesitant to get involved with it because all that's doing is letting people track your move and turn you off from the financial system whenever you run afoul saying something somebody doesn't like or or take an unfavorable position. What this does is decentralizes the authority a little bit into the hands of builders and investors. If you're watching on YouTube or Bloomberg Originals right now, you can see the president is about to sign S1582, the Genius Act.

5:51He's in the East Room of the White House. He's surrounded by people within the crypto industry, lawmakers who've been supporters of the crypto industry. You heard him call out a few of the people who were there, Brian Armstrong of Coinbase, the Winklevoss twins of Gemini, in addition to Vlad Tenev of Robinhood. David Sachs, the crypto and AIs are there as well. I want to get back to Frank Spizer, CEO of Medified. Frank, what legislation would you like to see when it comes to regulating crypto that is not yet law? Well, right now, there's clarity in the Genius Act as to what is a commodity. which is Bitcoin and Ethereum tokens, and the pathway to define yourself as a security.

6:37But I'd like to see some more clarity and some more help in determining what's a utility, because a lot of founders are building things with utility that link the two systems together that carry value, but have a clear utility to them and are not such the case that they're a security. So it would be really great to see that. But I actually anticipate that we'll be able to work with the government to evolve that. And they seem really open to being able to have a conversation hour before it was a little less clear on how to make that happen. It's a big day for the crypto crowd today because the entire market cap of this space just hit$4 trillion, which is a big deal.

7:14So in light of that. It's like the size of NVIDIA, right? Yes, exactly. And really, the story got a lot of views. I see it on Twitter. Everyone's really celebrating. Do you think that macro factors like Fed policy, inflation or rate cuts still affect the risk appetite or because of the maturation of the space? Do you think they're kind of isolated and, you know, they have their own factors going on? I think what we all just witnessed was the mainstreaming of crypto. So given what's happened in the markets recently, I think the stable tokens allow an on ramp to connect people in their everyday lives to be able to use digital assets.

7:48they're going to find their way into assets like Bitcoin and other projects that are worth investing in. And I think what you're going to see is you'll start to see the continuation of the Bitcoin asset, especially become unhinged from inflationary policy, or in some cases run counter to the markets. Because the original intent of Bitcoin was to hedge against central bank inflation. And now, with a way to on-ramp dollars into the asset in a digital format, like stable tokens like USDC trading into Bitcoin, you're going to see people understanding, well, when they're printing more money, maybe I'm going to move into an asset that hedges inflation like Bitcoin does.

8:33Because there's a fixed supply and they're never going to make more than 21 million Bitcoin. But how do you view Bitcoin? Because sometimes it behaves like a risk asset and moves in step with the Nasdaq, but sometimes it's a haven asset and behaves more like gold and then Bitcoin lives up to its digital gold status. I feel like critics will say that it's still in the melding phase of discovering its role in a portfolio. What is your take on that? Well, I think you're right in your observation there. Bitcoin has gone through several phases. So the first was it behaved like digital gold because there was a fixed and finite supply of buyers.

9:12And they were basically just voting, a vote of no confidence in the inflationary aspects of the monetary system. And then what you saw was people investing in the speculative potential of Bitcoin. But now that it's becoming more and more mainstream, I think more and more people can look and say, well, if they're just going to keep printing more money and they're just going to keep sort of devaluing the purchasing power of my money, maybe I'm going to move some into a commodity that holds value and is non-inflationary. So I think we're moving back to the original intent. And it's just a phase shift of Bitcoin behaving like it was originally intended.

9:51I think it's going back that way. Frank, I think it's fair to say there people listening and watching right now who are not sold that crypto is even a good thing not just for the united states but also for their own portfolio sell it to them well first of all let me let me say not all crypto is great crypto there's a lot of junk projects out there we hear that a lot floating around yeah and it's what but it's one of those things where you shouldn't throw the baby out with the bathwater if you look like the original web 1.0 revolution where there's a bunch of companies that came about that got a lot of hype and hoopla just because they added dot-com to the end of a dumb idea, right?

10:30That's essentially what we're leaving behind right now with crypto, where we're going to move into the potential of the technology to remit money across various regulations and various economies in a very cheap and efficient manner. You're going to allow people to trace things by ownership through a blockchain, that's all great technology. And now with some clarity around how it's supposed to be used here in the United States, I think we can lead the way and show people that there are actually viable, great projects that follow the rules. And the technology itself is great technology because it allows you to be transparent about who's owned it before and who you're being transferred to.

11:11So you can shift compliance. You can make quick work out of a chain of custody. And I think today is a real big step forward in getting us to where the potential of the technology is. We're speaking with Frank Spizer. He's the CEO of Medified. Frank, correct me if I'm wrong, but Medified as a company has evolved in the last few years. Can you talk a little bit about that in the way that you've changed as the industry has changed? Yeah. So we've always had an AI component to the company and, you know, in understanding the movements of asset prices. But we started off as sort of a ratings company to help people understand which was a healthy asset, which was real and which was, according to my last point, junk.

12:00And we wanted to do that to help people. But where we've landed now is there's a lot of movement and back and forth with these asset prices. And there's a, you know, there's a real need to predict the movement of these prices through AI systems. We use neural networks to help predict the movement, but there's gaps that could be filled by people. And what we do is we, we gamify that competition, turn it into a sport of predicting like a, like the same way that video games have evolved to be a sport. And we help people fill the gaps in the machine predictions. And we've found a real momentum right now.

12:39And we're moving to market very quickly. We'll be out in September and people will be able to get into our games and participate in adding signal to the market and get real value for it. It seems like that's what we see as the crypto landscape really just grows. Companies also learn to adjust. You earlier mentioned that not all crypto is good. And it's true. From where I sit, it seems like Bitcoin is still really the dominant coin when it comes to Wall Street interest. Are you seeing other coins like EtherSlan or XRP gaining traction as well when it comes to institutional interest? Well, if you look at Ethereum, the Ethereum token has moved about 40 % in the last month up.

13:21It's about 20 % up for the week. And what that is, is a signal that the decentralized finance ecosystem where all the innovation and smart contracts and stuff are happening, those are waking up, coming into the market. Ethereum is worth looking into if you're an investor because it's indicating that people are developing new and innovative ways to interact with blockchains. Solana is a way to accelerate the speed and efficiency of transacting on the Ethereum network. So it's not so expensive. You know, XRP has its own sort of purview of things. It's more institutional in the way that they're approaching things.

14:07And, you know, the, I think the jury's still out so we could see where that goes, but it's a strong project and it's worth, worth paying attention to. But, you know, I think you're going to see applications evolve on top of the, the, the tokens themselves, because, you know, if you go back to the early days of the internet and people in TCP IP, for instance, no one walks up to you and says, Hey, are you using TCP IP? They say, no. Do you know Facebook? Do you know Google? Do you know Amazon? So the way that things have evolved to help people's lives be better, be it faster, cheaper, easier. Uh, that's the, that's the next phase in what this is all going to bring.

14:45Frank Spicer. Good to talk to you again, co-founder and CEO of Medified, joining us from Myrtle Beach, South Carolina.

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17:18You're listening to the Bloomberg Business Week Daily Podcast. Catch us live weekday afternoons from 2 to 5 Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business App. Or watch us live on YouTube. U.S. housing starts, rebounded in June on the strength of multifamily building, while weakness in the larger single-family market pointed to some ongoing struggles with bloated inventories and affordability constraints. New residential construction increased 4.6 % to an annualized rate of 1.32 million homes last month. It's picking up after an almost 10 % slide in May. That's according to government figures that were released earlier today.

17:56Our next guest watches all aspects of the housing market. Great to have back with us Katie Hubbard, Executive Vice President of Capital Markets at Walton Global. It's the privately owned asset and real estate investment company. It's got over$4.5 billion of land assets under management and administration, and more than 80 ,000 acres under management and administration. Walton Global is in retail, industrial, commercial, and more. Katie joins us from Denver this afternoon. Katie, you were last on with us just about a month ago. Is the residential housing market now better, worse, or no different than it was then?

18:32Hey, Tim. Thanks so much for having me. I would say the housing market machine is definitely gummed up right now, and it is continuing to flatline with the increased housing prices going up 60 % from 2019 to 2024 and mortgage rates doubling over the same time. It's just affordability is keeping really everybody stuck. What do you make of mortgage rates going forward? If you have a 10-year yield that has been pretty sticky, we have reached roughly 4.5 % again this week, although we are below that level right now. What does it mean for the potential for mortgage rates to eventually go down? A lot of people think it will be the Fed that could help, but if longer term rates stay sticky, then is there a chance that mortgage rates just don't follow on the path lower?

19:18That is really the challenge. And so we obviously are hearing President Trump wanting to send rates down. However, the 30-year fixed rate mortgage sitting rate 6.7 right now is tied to the 10-year Treasury more closely than the Fed funds rate, typically sitting 150 to 170 basis points spread. However, when the market perceives the risk for long-term debt to be greater, the spread increases. And so we really need the 10-year Treasury to come down. Right now, if you're looking at technical analysis, it is channelizing. So it is looking to make a move. Hopefully, that move is going to be to the downside, bringing rates down.

19:52And really, that's going to be the biggest driver, I would say, for how we get the housing market unstuck. Even with the big, beautiful bill that was just passed, we saw home builder sentiment increase slightly because there are some tax incentives that are going to be helping out in housing, but it definitely isn't going to do as much as it would if we could bring the 30-year fix down. What is your view on the Federal Reserve's role in this gumming up? And the reason I ask is because of a post that the president made to his true social platform earlier today. Here's partly what it said. He said too late, which is a nickname he uses for Fed Chair Jay Powell, and the Fed are choking out the housing market with their high rate, making it difficult for people, especially the young, to buy a house.

20:35He is truly one of my worst appointments. Is the Fed partly gumming up the market? I mean, like I said, the Fed funds rate doesn't directly impact. It does work in lockstep with the 30-year fixed rate. So I would say the positive that we're seeing in housing is that at the state and local level, we are starting to see some reduced regulation to help with affordable housing, changing zoning laws. For example, Governor Newsom just changed the CEQA Act, which was enacted in 1970. So he's saying it's the biggest reform California is going to see in over 50 years, which is going to enable developers to have less red tape, making it easier to develop in urban areas that have less than 20 acres.

21:21So not having to go through all of the environmental red tape that they had to and making it faster and cheaper. Because historically in California, it's really been a rich man's game to develop. And now people that have just written off development there are going to be taking another look. And so hopefully that and things like that at the state and local level are going to be able to help with the affordability. While, you know, President Trump's comments on the Fed, even if we do bring the Fed funds rate down 3 percent, like he tweeted a few days ago, that means we're probably going to be in a recession at that time.

21:56So there's going to be bigger economic waves and impacts that come along with bringing the rate down. Of the potential headwinds moving forward, and there could be many when it comes to construction and when it comes to just the creation and proliferation of new homes in this country, one question I have is actually around tariff still. Because you have those Section 232 tariff still very much up in the air in a lot of ways, particularly with a lot of the housing inputs, like lumber in particular. Meanwhile, there's still a big question mark around how some of the immigration policies could impact the labor market when it comes to housing construction.

22:30How do you weigh those factors when you're thinking about new home starts in the next year? Yes, Chanel. And what's really interesting is that Walton's home builder clients, which we work with mostly publicly traded home builders, they are reporting no increase in costs across the board. In fact, in some cases, they're reporting their costs to have come down. even since the talk of tariffs. So we're definitely looking out for labor because of, you know, deportation issues. So places like California, they might be reducing regulations, but they could have labor shortages. So we have not seen the impact of tariffs from our clients.

23:08They're not reporting that. And what's interesting is that publicly traded building supply companies are still operating at near 30 percent gross margins, while home builders peaked at about 27 % gross margins in Q2 of 2022, and they've reduced their gross margins 600 basis points. The building supply companies are still operating at that high gross margin. So what we think is going to happen is that there's really going to be a balance and a dance between, yes, the home builders are really eating into their margins to drive home prices down. They're buying down mortgage rates, offering incentives to keep people buying their homes.

23:46But they're going to be going back to their suppliers and saying like, hey, now it's time for you to eat into some of your margins so that we can keep the homes as affordable as possible. So Lennar is actually offering 13.3 % incentives across the board to their homebuyers. And in places where they dominate, like San Diego, they have 50 % market share. They're offering upwards of$100 ,000 discount on an$800 ,000 house to just their strategy right now is pace over price. So while that's good news to see a very muted impact on tariffs so far for the homebuilders. One big problem is that some of the tariffs that have been proposed are not enacted, lumber in particular.

24:23Of course, they're not seeing yet the impact of the tariffs. We haven't seen the tariff yet. And so how are you starting to calculate what future tariff rates could look like on the impact of these homebuilders, given that there's still so much up in the air? Is there a potential for the industry to be shouting louder about this if they think it's going to create an impact, unless they don't think it is? Well, for lumber specifically, our clients are using Lumber Futures. So the lumber that they're going to be building within six months is what they're pricing in today. And then also, you know, the president has really discussed how to open up federal lands for milling lumber in the United States and adjusting taxes to make it more incentivized to have lumber from the United States.

25:12And we do have the ability. I was just coming from Portland, Oregon today, and that's a hot topic for them as well. So we're hoping and we don't really think that the lumber tariffs are going to impact the home building industry as much. In addition, our clients are really trying to use new technology and ways to really reduce lumber and use alternative materials to reduce the dependency on that as well. Hey, Katie, thanks so much for joining us on Bloomberg Businessweek. We got to run. Katie Hubbard, Executive Vice President of Capital Markets at Walton Globe. It's the privately owned asset and real estate investment company.

25:51This is the Bloomberg Business Week Daily podcast. Listen live each weekday starting at 2 p.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa, play Bloomberg 1130. Let's go to Washington, D.C. now and bring in Jordan Fabian. He's Bloomberg News White House editor. He's at our Washington, D.C. Bureau. Jordan, I want to start with one of the most read stories on the terminal. You wrote it. It's about President Trump authorizing the Justice Department to seek the release of grand jury testimony from the prosecution of Jeffrey Epstein.