What the GENIUS Act Really Means For Crypto ft. Tyler Williams

0:07Welcome back to Real Vision. I'm Ash Bennington. I'm here today with Tyler Williams, counselor to the United States Treasury Secretary for Digital Assets. Tyler, welcome to Real Vision. Ash, thanks for having me on today. It's a pleasure to be with you. It's great to have you with us, and it's a great time to have you with us. The Monday after President Trump signed the Genius Act for stablecoins, it's been a big week for the digital asset space. Yeah, it was a monumental Friday, and the exuberance enthusiasm was felt around Washington. There was celebrations not only at the White House, but thereafter, and sort of the exuberance led throughout the weekend as well.

0:45So it's a big day, and it's a long time coming for digital asset policy in Washington. Lots to talk about here. First, tell us a little bit about the portfolio you manage at Treasury and a bit about how you got there. Sure. Well, the portfolio I handle is really just all things digital assets, and what does that mean and how does it splice across Treasury? It's a little confusing, so maybe I'll just break down Treasury for the audience. Treasury is obviously the the entity within the government that speaks as the chief economic spokesperson for the administration, collects taxes, is a finance ministry.

1:23And internally within Treasury, there are sort of three core verticals. There's international affairs, there's domestic finance, and then there's the office or the vertical that handles terrorism and financial intelligence. And that is sort of the entity that does all the BSA AML requirements and implementing the money service business regulatory regime. So there's quite a few touch points in Treasury, as you might imagine, for digital asset policymaking. And my work really expands all three of those verticals and even some of the bureaus of Treasury as well. But you think about entities that live underneath Treasury, it's also the IRS, and then the Office of the Comptroller of the Currency, which is a bank regulator that regulates national banks and trusts.

2:08That also lives within Treasury as well. So there's quite a bit at Treasury that we have our fingers on digital asset policymaking. So we've been busy. It's really interesting because all those sleeves, as you describe them, is sort of cut across in different ways the digital assets base. Yeah, it's quite interesting. And if you think back from the early days of President Trump's administration, really at the very beginning of the administration, he issued an executive order on January 23rd. That January 23rd executive order set up a presidential working group on digital assets, sort of established David Sachs's position as the AI and cryptos are.

2:51It established Bo Hines' position as the executive director of the working group. And then Treasury is a core contributor to the working group and Secretary Besson as well. And that work has sort of done a bunch of things since the initiation of the executive order. We did a fulsome review of all of the rules, the orders, the documents that lived within each one of the working group participants to really try to figure out what affects those rules and documents and guidance had on digital asset policy. And then it ultimately has led to the culmination, which is producing a comprehensive report from the working group that really sets the groundwork and frames what the working group as a whole thinks about digital asset policymaking from a regulatory perspective and a legislative perspective as well.

3:40And that work is quite comprehensive. We tried to map that work in parallel as Congress has been working on some of the key legislative items that we've obviously been talking about from the Genius Act and also the market structure of legislation as well that has since been passed out of the House. You know, the United States government is obviously a very large ship. I've heard you talk about this in the past as a whole of government reset in the way that the United States thinks about digital assets. Yeah, I mean, we've just come a long ways in terms of how the government has thought about digital asset policy.

4:17And, you know, having come from the industry and worked on the private sector side of things, I think it brings about a sort of new day and a new era of excitement about the space. whereas people in the industry at one point in time felt as if the government was not their friend. At least they know they now have an open door policy in terms of meeting with people and understanding the issues and trying to borrow from learned experiences what the participants in the ecosystem have felt. And I think that's quite important for people in government to actually listen and interact with industry participants because that's the best way that we can get relevant information and understand the issues that affect their businesses.

5:03And I've said this a couple of times. During this report writing process, I think I've held no less than 500 meetings with industry participants just trying to understand all the nuances. And I came from the industry. I thought I knew a decent amount about it, but you can get into the minutia pretty quickly. So I think that's key. and it's probably important for your audience to understand that, you know, to the extent that they have issues that they want to talk about, we really do mean it. Have you ever wanted to trade Bitcoin but haven't dared try? With Plus 500 Futures, you can trade crypto without the hassle of opening a wallet.

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6:33You know, talking about the scale and the scope of this effort, one of the things that struck me at the president's signing ceremony was the way that he spoke about the industry was this idea of global competitiveness and global finance, really beyond just the narrow parameters of digital assets per se, and more as part of a kind of broad technological and economic vision for the United States. Talk a little bit about the significance of how you guys view digital assets. Sure. I think it's quite simply no different than other technological innovations that we've had throughout time, whether it's the advent of, you know, the television or refrigerators, you know, there was there was a life cycle curve on different tech advancements that have happened in our society.

7:22And really, it's about like the adoption and the life cycle of how they grow and expand. And we saw that very acutely with the advent of the Internet. And I don't think that it's I mean, everyone in the audience uses the Internet in some way, shape or form, like we're communicating, and interacting on a video camera. That was not possible 20 years ago, but here we are today. And I think the posture and sort of the expectations for the industry were put in a very cabined environment for a long time. And I think if we allow them to expand and explore different types of use cases, as Washington likes to say, if we allow them to do so and we don't penalize or block them from interacting with traditional regulatory frameworks, we will be able to explore the benefits that they might be able to provide.

8:17And I think if you think about what the Genius Act really does, is it's a way of putting programmable dollars and other high-quality liquid assets onto blockchains. And that's a big deal for cross-border payments. It's a big deal for payments in the United States. And it's a big deal for innovation. So I think that's that's something that we've seen in the last really six months. We've seen this openness to new technologies be adopted and accepted in Washington. Well, let's talk specifically a little bit about what the bill does in terms of the functional mechanics and how that's going to come online.

8:58Yeah. So, I mean, it's quite simple, I think. It's really a, if you think today about stable coins and dollar backed stable coins, they've lived in an environment where they are licensed and they are regulated by different state regulators. And what the Genius Act does is it puts a federal licensing and a federal framework around those products. So it's very prescriptive in terms of the type of assets that can underpin the stable coins from a reserve requirement. It's really treasuries and cash and other high quality liquid assets that are short dated in their maturity. So they're very liquid.

9:39And it puts the office, the comptroller of the currency into a driver's seat from a federal standpoint in terms of licensing entrants and participants from an issuer level. And then the bill does a lot of things. It also allows us to explore reciprocal jurisdictions. So this notion of how you interact with a foreign regulatory regime and how you have comparability in sort of the framework equivalents for stable coins that are issued in the United States and abroad. So it's quite meaningful in a vast array of different notions. And I think that if you think about some of the concerns that have been raised for the industry, some of them have been around AML requirements.

10:30And I think what this does is it puts our AML regime into the driver's seat so we can export our belief system to the rest of the world. And I think most importantly, what it's really doing is it's putting programmable dollars on the Internet. And we have Internet payments today, but these are very fast and clean processes in terms of transacting cross borders and with commercial businesses. So I don't know exactly where the industry or the adoption lifecycle is going to go. But I would imagine we'd see all types of participants who want to explore using the technology now that has been blessed by the United States government.

11:11It's also really interesting from the perspective of Treasury that you kind of get to see it all. There's the OFAC compliance side and also presumably the demand for those Treasury assets to back those coins. Yeah, and we have at Treasury, there's an advisory committee that really is an external group of industry experts that provides advice to the borrowing side of Treasury. And there's been estimates out there anywhere from 2.8 trillion excess in additional demand for U.S. Treasuries over the coming years. So I think that there's lots of private sector entities that have put sort of growth estimates on what it could mean for treasury demand.

11:52But that's exactly right. I've heard that exact same thing. I mean, that's just massive. I mean, if you think about that as a percentage of GDP, it is a huge, huge number. It's a big number. And ultimately, it's good for like selling U.S. debt. It's good for faster, cheaper, more effective payments. It's good for expressing the dollar around the world. It's good for a lot of things. And I'm excited to see where it goes. Let me ask you this. What's next? I know there's additional legislation. We've got the Clarity Act, some other proposals floating around. How do you see the roadmap going forward?

12:25How do you think about it big picture? I think about there's sort of like three legs of the stool. If you ask me in, you know, three years, five years, whatever it is, like, how would you measure success in your position? Like, I think there's like three big things that I have always stuck in my mind. One, getting durable, lasting legislation on stable funds. So like we've done that. Now we have to go to work and actually implement law, which takes some time. And we're fast at work at it already. The second thing is the government as a whole hasn't really spoken on what it thinks about digital asset policy writ large.

13:01So that is another big leg of the stool. And we have this comprehensive report that we've been working on for months. It'll come come released sometime here soon. And then the third leg of the stool, which we've seen Congress advance in the House is market structure legislation. The House passed with overwhelming bipartisan support, the Clarity Act, the Senate, from what I've heard publicly, is committed to a legislative process in the Senate to consider that. The president wants to get it done. The secretary wants to get it done. Everyone in Washington who matters on like policy making arena in digital asset market structure wants to get this done.

13:44And so I think we just have a lot of momentum. So, you know, five years, if we do this interview again, and you ask me how we measure success, it's like, you know, having a stable stool and all three pillars serving in some type of durability. And on the report, on the report side, let me just say one thing about that. I worked in the Trump administration during his first term, and I worked under Secretary Mnuchin. And the government wrote all these, the Treasury Department wrote all of these core principles reports that really put a level set on many different policy arenas. We did one on banks and credit unions, on insurance and asset management and fintech.

14:25So we had all these comprehensive reports and what the government thought about each discrete policy issue. And it really served as sort of a guiding North Star in terms of what the administration thought about very discrete policy issues. So that's always been my mindset in terms of what we were working on as a working group. It's how do we produce the best outcomes and how do we produce like the most durable results for the industry? What's like, first, you got to put your thoughts on paper. And then second, you got to go work to execute and implement against those those thoughts. And there will be a lot of work, but it's exciting.

15:03Yeah, I mean, just important to point out, we are just at the beginning collectively of this enormous process. Yeah, I think it's a testament to the leadership of the department, testament to the president that we have hit the ground running at the very beginning of the administration. And, you know, if you think about just sort of like on a macro scale, it's really hard to get legislation through Congress. The last time we had sort of like lasting, durable legislation that came out of the banking committee, I think was in 2018. So it's been quite some time since we've seen legislation move its way through Congress.

15:42So it's it's it shouldn't be short shrift in terms of like its impact and how difficult it is actually to execute in Washington. And I think, you know, knock on wood, we're being very successful in terms of like the policy agenda that we want to implement in the digital asset space. Charlie Williams, thank you so much for coming and giving us this flash update on a very busy Monday. Thanks so much for having me, Ash. Thanks for joining us. And thank you for watching, everyone. If you like this episode, I'd love for you to head over to realvision.com forward slash join for a free membership. Start your journey today to unfuck your future.

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