Transcription
Banks are winning. I am definitely paying attention now. You have all of my attention. Let's break it down today.
I do want to thank our sponsor and that of course is Tandem. Speaking of self-custody, which is going to be a big theme today, you guys need to start doing it. And of course, you can do it over at tandem.com. Using our link down below, you can get into your own secure crypto hardware wallet that works with your phone, Apple, Android, doesn't matter. Start now, guys, because we might have some clarity around this. this. We're going to break it all down for you. Use our link down below. Get some uh get some juice there.
Listen, Clarity Act signed into law. This is what happened this morning. We get the House markup. It drops into the market and immediately people thought there was going to be a delay. So, it dropped all the way down to 21%. People came back and said, "No, no, no. We're going to have the vote." And now it has risen back up here to 51% as we're recording right now, which has been climbing over the last few hours. And we're going to break down all of what happened in the Clarity Act markup and what this means going forward.
The biggest issue that you kind of have to consider is what Chair Paul Atkins is doing here. This is a big week for crypto. Congress is on the cusp of upgrading our financial markets for the 21st century. I'm wholly supportive of Congress on doing this. And of course, the key here is it puts more power into the SEC and the CFTC, which is very critical going forward as we see a lot of these assets are going to turn to a commodity immediately. And I'll explain that here in a second.
Other things that were driven out on this, this is Senator Lumis, of course, talking about after months of hard work, don't retreat from our progress. And this is in reference to the digital asset market clarity act. So if she's saying don't retreat and one of the big takeaways from the markup was that we lose all of our passive yields and the bank gets to take those away. That seems like a retreat already. So I don't necessarily like that. So that either puts me in a position where Senator Lumis is pro bank right now or maybe there's another play into this that she's considering uh further into this as the vote takes out. But right now the banks are in a position right now going forward.
Uh here was Ellanar Terret talking about the yield update which is the whole issue of today. Banks have may have won this round on stable coin yield. The latest draft this was on page 189 uh says companies cannot pay interest uh for just holding balances. So if you're passive that's over. It's banned. Uh if you're active it's a different thing. And I'm sure there's going to be new products all that kind of thing. And I just wonder, you know, when you look at this, because the winners of this will be if the way if it goes through the way it is right now, and there's a lot more here to break down, but if it goes through the way it is right now, the banks will get these stable coin yields because they're going to continue to go out there and pull this. Uh, but they're just not going to give it to you unless you're active and you're doing some sort of risk management within these. But other things that play into this, of course, is KYC AML rules that will play into it. Still holding strong. and the other is self-custody, self-custody being protected and also DeFi being carved out, which these are both good things going forward. So, it's a real question of whether or not you would say would you be for this if they take away these yields or should you hold the line as a voter out here.
Let me go to this clip real quick because this will get into Patrick Wit and what he is talking about in terms of the banks. Take a look >> and I want to read your tweet out. says, "For the anti-rewards/yield crowd currently threatening to withhold their support for the Clarity Act, I would remind you that tanking the bill over this issue preserves status quo which you allege is intolerable. You will have achieved nothing. Be reasonable." >> Great, great tweet. >> I think we do have a compromise um that that is going to make, you know, the banks happy and also make the crypto industry happy. As you mentioned, you know, a week ago, I didn't think that was going to be possible. We've we've given enough concessions. We've arrived at enough compromises where as high as six Democrats voting for it. So, >> all right, that was Patrick Wit, who is the executive director on the president's council of adviserss for digital assets. Do you agree though? Do you think that we should forego something that's already been ruled on in the Genius Act and allow the banks to get a second shot and a second bite at the apple? That's the real question mark because this takes away passive yields which is what you're earning today on most centralized exchanges or do you think that this is something you are okay with giving up just to get through the other components of the bill? Let me know in the comments. I'd like to kind of hear what you guys have to say about this.
Now, I want to go to another clip here because this is him saying that this is the thing that draws a line in the sand of what they won't do. And we're talking about the Republicans. Take a look. you guys have reached an agreement with the Democrats over ethics? >> Not yet. What we've made clear to Democrats throughout this is, you know, we're not going to tolerate targeting the president. Um, and so, you know, we've provided that red line to them. >> You kind of have to look at here is the fact that they are are prioritizing this particular line in the sand. That's the part that I disagree with, and I think this is the thing that's kind of will most likely get a lot of people in crypto a little bit upset about this. And it goes further because we're already starting to see other things happening right now. And there needs to be a stop to this just like there needs to be a stop to insider trading uh in Congress.
Here's Eric Adams and this was him tweeting about of course his token NYC token. And then I've got a clip of him talking about this. Take a look. So over the last couple of weeks, Adams has been taken to the streets, taken to your television screens to tell you about New York City Token. He says it's part of an effort to fight anti-semitism using cryptocurrency. >> Yo yo what? >> I am not going anywhere. >> Boo. You lost all your money. Goodbye. That's a one minute chart, man. >> $580 million market cap and then it crashed 80% in just a matter of minutes. He actually removed the USDC attached to this $3.4 million scam. Well, after 30 minutes, he decided to let anti-semitism win. >> Moving Eric Adams net worth up from 2 million to 3.7. >> 70% belong to one wallet and one wallet only. The top 10 holders accounted for 98% of all the tokens. Crime season, you're going to prison. You're going to jail, bro. You're going to jail. >> And that's what they do have to stop. So I'm dis I'm definitely in disagreement with where the position of what uh Wit is talking about. This is not a good thing. Hopefully this will get resolved in the outline. Again, I don't know if this is one of the things that will forego the Clarity Act in its entirety. That will be the real question.
Really, it boils down to rewards. And here's the chief legal officer. This is Paul Greywall. He's been on, you know, kind of fighting this issue for quite some time. Here's what he had to say about it. Take a look. It's clear there is a a concerted effort on the part of the banking industry to not only relitigate an issue that was resolved when the Genius Act was passed, but to really fundamentally entrench a competitive advantage for the industry when it comes to paying um the economic benefits to to holders and users of tokens in ways that we think are entirely counterproductive. But we think it's very important to call this out for what it is and to hold firm on this basic idea. Sharing economic benefits with participants in networks is frankly what crypto has always been about and it's not up to uh to Congress or anybody else to pick winners and losers.
In agreement with that, the real question is is should we delay it? That was kind of one of the things that came out early this morning is that we thought we might get a delay. Uh the late night plea from Democratic senators on the banking committee for a full hearing on Thursday's markup. They're basically coming in and saying the same thing. Maybe we should delay this a little bit so we can get our heads around this. Uh, and I think this might be in order based on what we're getting right now. The question is is do they rush or try to rush this through and end up having to do some lastm minute um, you know, concessions, which is is the big issue here.
Now, Patrick Wit comes on and he says there will be more concessions. Wait for it. The Senate is going to hit it. Take a look. >> I do expect a bipartisan vote on on Thursday >> once the bill clears the Senate and goes back to the House. do expect a lot of changes. >> We're a biccameal legislature at the end of the day. The Senate was going to have its own pass at a lot of these issues and it's a different dynamic there. Uh we're not ignoring those concerns. So, we're making sure that those issues are continuing to be addressed um in the Senate product so that we don't have uh any issues over on the House side. So, I'm not necessarily in agreement with this and I would I would invite Patrick Wit to come on to the show here and let's talk about these because these concessions I think are no-go zones for most of the crypto community for freedom in general. If you believe that, let him know. Hit him out on Twitter. We'd love to have him on the show explaining why would you concede any of these scenarios into the Senate. It sounds to me like you're basically giving them the the rule book of how to go in and get some concessions versus actually going in and saying this is the way we need to do it for the constituents that we represent. You know, freedom of the American people, especially around this issue.
Now, Charles Hoskinson is very upset about this because he simply says, "You need to get this right." Take a look. >> They run crypto the same way as that. They run healthcare the same way as that. They're running the tariff policy. You just see one after another and after another and it's so deeply frustrating to me. I start with principles, then frameworks, your rules and strategy, and then your execution. They're just doing execution. What's the philosophy upon which the strategy comes? And then what are the checks and balances to regulate? Make sure that this strategy doesn't go crazy. And financial regulation is the most important for this because you live with it for a long time. So if they just go pass a law and it's really law, we could end up living with that law for 93 years in this industry. So you start with principles that was step one and it was easy because we all wanted to do it and then it became political and then it became patronage. Donate money to participate.
All right. So you know the situation I think you know the position I'm in and that is you got to hold the line on a lot of these issues here. You cannot give in. I think the yield thing is still a huge issue even though a lot of people would say let that go. Let the banks win a little. No, I don't think she's win a little. This is a changing of the guard and they need to come in and align by what has already been put out in the Genius Act and I think that's the issue and when you look at the banks so just don't say hey let's give it to them. I want to show you their earnings for the that came in this week. Take a look. The big banks kick off earnings season when JP Morgan Chase reports on Tuesday morning. And big banks have outperformed over the last 12 months. You can see it on the chart here that nearly 70% in that time. >> Uh the bullish trend is still intact for JP Morgan. >> I think all of them not only had a phenomenal year, but I think they're going to kick it off and have another year. >> David, I think it's just flat out a really good environment for the banks. >> I think 2026 will be a year of large cap bank earnings strength. We we >> there's 4 and a half thousand banks and the opportunity for them to to merge, to acquire, to consolidate. We're very focused on that deserving of higher multiples. Well, what could go wrong that we're not thinking of?
President Trump has also decided that credit card companies will have to cap rates at 10% per year. This is another where Wall Street just doesn't seem to care because it's too over the top because the bank stocks actually opened down and spent the rest of the day rallying. >> Does it make you a little bit concerned? Uh, no, not at all, Melissa. This administration has done an incredible job that they were going to loosen the corset of bank regulation around the banks, and they've done that very well. >> Oh, it's simple. This is Wall Street betting that it's not going to happen. What What could go wrong? >> You read my mind. What I really worry about is there's nothing to worry about. That's the worry.
Well, I think there is something to worry about here, guys. uh and that is the eventual flight of the entire population in terms of next generation finance and investors and that's the concern right now. I would rather forego this clarity act getting passed if we end up with a bad act and this is the issue if these banks push it too far. This, of course, puts this back on the back burner, meaning no clarity this year, and it continues to be the wild west, and banks continue to lose because there's no clarity there. This would be a bad thing if they don't get it through, cuz it's only going to double down on them.
Here's another interesting section in the bill. All right. So, at the end of the day, when you look at this, um, there is a little hope here and I I would say when you consider some of the upside to it. So, if we do get a a semi average bill or a bad bill, there are some potentials here. One of course is the uh token classification, non- ancillary assets. These are ETPs and the ones that would play into that right now would be XRP, Salana, Litecoin. These are all the ETPs and ETFs. Uh, Doge is out there, Chain Link, Bitcoin, and of course, ETH. those day one would be considered commodities and that immediately starts to put a lot of activity in these tokens because that's where the major part of traditional finance would start to migrate to. So think about that. Can you imagine Doge winning big time on this?
Another thing that was a big benefit of course the way the markup comes in is it does protect self-custody. A federal agency u may not prohibit, restrict or otherwise impair the ability of covered or user or self-custody digital assets including a self-hosted wallet. meaning self- custody is intact the way it is right now. Now, could they do something down the road in terms of you coming out of self-custody into onboarding, which means most likely KYC AML, you know, frames and rails. Yeah, some of that could be. But I think the other bigger picture you have to look at is that this is just the beginning. Once you approve this, DeFi starts to proliferate throughout the land around the world. I think it starts to shift the dynamics, meaning there's going to be a whole slew of new products and services, including off-ramps, on-ramps, and all the assets that are traditionally in normal finance are going to start to migrate. This is where I think the banks lose. It might be a Trojan horse that's good for the industry in general.
The last clip I want to go to is one where Vlad is talking about this as well. This, of course, is the CEO of Robin Hood. Take a look. Retail investors are smart. They're not only smart and doing like careful analysis and posting it on social media. AI technology is very popular. People are adopting it, but the AI companies themselves are very unpopular. They don't have that many fans. The people rushing to defend them are either venture capitalists or, you know, AI researchers that work at these companies. Compare that to crypto. you know, if the crypto industry is under threat from regulatory overreach, even if just someone says something negative about Bitcoin, you just have an army of retail people that just take the knives out. And I think it's because the one thing crypto got very very right. I mean, from basically the genesis of it is making it so that normal people can have crypto. And I think AI uh doesn't have that property. I think people are going to get angrier and angrier if regulations come. The everyday person might not be on the side of the big AI companies. If you're in Venezuela, you don't have access to those things. And that's actually why stable coins have been so popular. A lot of these people are in countries that have unstable governments, unstable central banks if they don't have functional banking systems. Crypto will evolve with tokenization to make it easy to distribute US stocks and other investments overseas as easily as stable coins have have done it to dollars. Yeah, this is going to become a little bit of a tugofwar and it's uh it's kind of the halves and the have nots. I talk about this often is that you have a certain class that right now is sitting on most the wealth. You have another class that is emerging that are very tech savvy, very oriented and very easily adoptable into crypto in general. Those are the ones that are the future. And I think this stops no matter what. Like you know Alden says, nothing stops this train. And I think if you look at what's happening just in uh RWAS and tokenized stocks, this is a good example of it. We're talking about X stocks right there. This is the kind of the yellow. You can barely see it, but right there you see XTOX versus securitized backed finance. We already talked about this before. Uh this is where it outruns traditional finance and Xtocks is retail. This is what Vlad was getting at is that there's no way you can keep this from the emerging population that understands where this technology is going. And I think that is the problem that right now Congress does not have their head around uh in terms of how this clarity goes through.
So, it's still up in the air. There's only one thing you can do, guys, and that is go out there right now, let your congressman know. When you log in to Stand with Crypto, it's going to pop up a deal where it gives you your name, address, all that good stuff. finds your senator and it finds your house rep. You guys can put out information that says protect my yields. That's all you have to say. Stay away from my effing yields. That's it. And I think that is the thing at least we hope that will pull this across. Of course, the big issue right now is still dealing with um the future of how clarity is going to be. It's going to be a crazy week. If you like this video, hit like and subscribe. Drop a comment down below and also join our free private member group. The link is in the description.