JD Durkin: This time, I am so excited to say, truly, someone who might be one of my favorite all-time guests we’ve had on the show. Caroline D. Pham, welcome back. Now the CLO and CAO at MoonPay. We’ve got a lot of news to get to. I’m really grateful for a few minutes of your time.
Caroline D. Pham: Thank you so much, JD.
JD Durkin: It’s been a big news day. You were one of the first people I thought of when I saw that the CLARITY Act did not pass that Senate procedural vote. Your take on what happened. What do you think now happens from here?
Caroline D. Pham: Yeah, absolutely. So I think you might remember, on one of the times I’ve been on the show before, I’ve always said we need to have a Plan B in case the legislation doesn’t pass, because the fact of the matter is, it’s incredibly hard to pass market structure legislation, which I actually wrote in a note in 2020 when I was still at Citi.
Because changing the securities laws, when we have the greatest capital markets in the world, is something where, if it ain’t broke, you don’t want to fix it. And you want to be very careful what you’re doing because we’re talking about the market cap of all of American companies, trillion-dollar companies that we have here. I mean, we’re here on the floor of the New York Stock Exchange.
So what’s that Plan B? Last year, when I was part of the President’s Working Group on Digital Asset Markets, I worked together with my colleagues to make sure that we had an agency path put into the White House crypto report, where the agencies would write the rules that would provide the regulatory clarity that’s necessary to not only make America the crypto capital of the world, but more importantly, to modernize our financial system using blockchain technology so you can have institutional adoption of blockchain technology.
JD Durkin: You can see that we have real-world assets getting tokenized, securities getting tokenized, equities getting tokenized, the New York Stock Exchange working on its own on-chain execution venue. It’s been a wild ride.
You sat on both sides of this conversation as a regulator, now deeply steeped in the industry. What do you think Washington, D.C., still may not be quite getting right about where crypto is today?
Caroline D. Pham: I think that there’s still a bit of confusion about crypto assets like Bitcoin that people like to hold because they think it might increase in value, protocol or network tokens that are actually used to power a particular blockchain. Think about how Ether is the gas that powers Ethereum, and a lot of the different real-world assets are being traded on EVM-based chains.
And then finally, just tokenization of financial instruments. So this last one I think is so important because when people hear about all of these different products coming on-chain, banks coming on-chain, asset managers coming on-chain, we announced today our partnership with WisdomTree to put WTGXX available on blockchain to more U.S. everyday investors.
That part, I think people need to understand, is no different from when, here on the floor of the New York Stock Exchange, they went from paper order tickets to computers and electronic records to now digitization on blockchains.
And that’s where the agencies really need to focus the rulemaking to make sure that the books and records rules, the rules for reporting, the rules for execution, all of that understands and adapts to this new technology in a way that’s flexible and principles-based.
JD Durkin: That is a really good historical comparison. Let’s talk more about your big news today. You were just talking, well, hey, 1092 every time we’re down on the trading floor, teaming up with WisdomTree, like you just said, to expand access to its tokenized money market fund.
Talk to me a bit more, Caroline, what you think or most hope that may ultimately unlock for investors.
Caroline D. Pham: So I think today, when you consider making sure that everyday investors are able to access safe, regulated SEC products, you know, you have your money, you want your money to grow, right? And people have been using these wallets, crypto wallets, because it’s so easy. It’s so easy to use a crypto wallet.
But what if you could have that same ease of use but apply it to a tokenized money market fund? And what do money market funds invest in? U.S. Treasuries, the safest asset in the whole world, the gold standard of assets.
And so using our technology, this is a platform where we can take tokenized money market funds and we can surface it to our partners that have these crypto wallet front ends.
The SEC provided guidance on this several months ago. They’re continuing to put out more and more rules now that we have a way forward on agency rulemaking. And this is just something where it’s been so important for us to do this in a way that’s SEC-regulated, SEC-compliant, making sure that we have the right partners who understand that as well, whether it’s working with the largest asset managers in the world, like WisdomTree, or whether it’s working with front-end wallets, our partners as well.
JD Durkin: I want to make sure I got it right. WTGXX, is that—
Caroline D. Pham: That’s right. That’s right.
JD Durkin: Congratulations.
Caroline D. Pham: Thank you so much.
JD Durkin: Thank you for your expertise to help us better understand what is still going on down in Washington. It’s always really nice to see you.
Caroline D. Pham: Such a pleasure.
JD Durkin: Come back.
