Remy: We are 2 weeks out from election Tuesday, and the industry is actively following and involved in this year's midterm elections and just this month crypto super political action committee their shake endorsing 32 House candidates and also spending big on Ohio Senate race while payments giants as well as institutions continue to embrace stable coins, but the. Industry also looking to the nation's regulators and even the US judiciary branch to support the acceleration of prediction markets. Well, joining me live on the ground in Vegas is Cody Carbon, CEO of the Digital Chamber. Cody, good morning. Thank you so much for getting up so early on West Coast time to join me today.
Cody Carbon: Of course, good morning, Remy. Always.
Remy: Well. The last time you and I were at the New York Stock Exchange, it was right before the Clarity Act stalled. But at the same time, we're looking at plenty of rule-making activity coming out from the SEC, the CFTC. So where are we right now and what are you hearing on the ground?
Cody Carbon: It's really interesting to be a month out now from the ultimate clarity vote where the bill didn't move forward. But you've seen the SEC and the CFTC immediately try to fill those gaps, and now their goal, not over the next few months until the end of the year, but over the next two years really for the entirety term of this administration, is can we implement the goals, objectives, ethos of clarity through rulemaking and guidance. So I imagine that the This is just the beginning. The SEC and CFTC will move very, very fast. Over the next two years, we will see a flood of rulemaking. The SEC and CFTC have already promised to be very aggressive. I expect that to be almost the entire administration's posture as it comes to rulemaking, especially with the election just around the corner.
Remy: Yeah, and Cody, for viewers out there who may not be following what's happening step by step in the nation's capital, how will the midterm elections affect some of the momentum on the ground?
Cody Carbon: So less than a month now, about 2.5 weeks until the midterm elections. Then there's this lame duck period. So after November 3rd until the end of the year, it'll still be the 119th Congress that is there right now. Not much is expected to happen at that point. There is a very slight slim chance that clarity could be revived, but I don't think so. I'm pretty pessimistic on that. Then starting in January, the first week of January, the next Congress will be sworn in. So whatever the ultimate results are of this election, that new Congress comes in. We are expecting at this point, and if you look at the calci odds or if you look at some of the predictions and political prognosticators, that Democrats have a really good chance of taking the House and possibly the Senate. So then as you're going into next year, you're looking at potentially a full Democratic Congress, so a complete switch from what we have today, and then a Republican administration. When that happens and there's divided Washington between the two parties, you're not expecting a lot of legislative progress. There's going to be very few opportunities that a Democratic Congress agrees with the. President and the president says, I want to sign what they just passed. So when there's an absence of legislation, you, that's when you expect the agencies to be very active. That's when the SEC and CFTC say, OK, we have 2 years right now where there's a divided Washington. Can we implement the president's agenda through that rulemaking and guidance? And that's what we expect for the digital asset space.
Remy: And of course, Cody, you and I are here in Vegas at the Money 2020 conference and While we're trying to get to this event in the mornings, we have to walk through casinos. So I think it's befitting that we're talking about prediction markets as well as event contracts. So where do you stand when it comes to jurisdiction and the role of federal versus state?
Cody Carbon: I believe that the law is pretty clear that the federal government has ultimate jurisdiction here, that the SEC under the Commodity Exchange Act can regulate event contracts, and that was given to them by Congress. Now we're seeing a lot of circuit court split decisions here as it relates to specifically Calci and the prediction markets versus the states and the gambling associations and the gambling agencies at the state level. Ultimately this is going to have to be settled by the Supreme. Court, I think that will happen next year where the Supreme Court will decide, and I think they will decide favorably that the federal government has the right to regulate event contracts, and that role right now sits squarely within the CFTC under the Commodity Exchange Act. So federal government will have the ultimate say. That's the best thing for prediction markets. It's the best thing for the consumer where there's not this patchwork of state regulation. Hopefully that decision comes next year.
Remy: Yeah, and speaking of patchwork, what is your take on Illinois's cryptotax?
Cody Carbon: I hate it personally. I think it is discriminatory. We are fighting it right now. We were the first association alongside the Illinois Blockchain Association to sue the state of Illinois to stop this discriminatory tax. Right now we were granted a six month injunction, so the tax was initially supposed to take effect on January. 2027 they now pushed that by six months. We're continuing to fight. We're going into this litigation very hopeful that we can kill this tax once and for all, but it's just not fair that you're going to, uh, discriminate against digital asset transaction activity when there's no other tax like this in the state of Illinois. It is squarely to make sure that digital assets don't thrive in the state, and we need to end this tax once and for all.
Remy: And of course, we are here at Money 2020 USA and every year it flies by, and we're already on day three. So what are you hearing on the ground that has surprised you? And of course, you've been on plenty of panels and attended panels. So, give us your sense of what people are talking about this year, and what you didn't expect.
Cody Carbon: It's interesting. Last year, I thought the entire conversation was around stablecoins. We were in this post genius act. Uh, era and it was the banks, the fintechs finally adopting stablecoin payments to say, OK, this is the future. Now it has moved into how can stablecoins help with Agente finance, and it's all about AI. AI has dominated the conversation here in Vegas. Every single bank, FinTech, whether it's Community Bank or GIP, is trying to think how can I leverage AI. And when we talk about Agente payments, we talk about this new AI economy, a lot of the conversation is, well, what is going to be the method of payment. And that's where I think stablecoins, digital assets become hopefully the rails of a new on-chain economy. So I am shocked that it's all AI. It is AI. It is quantum. It is robotics. I've heard a lot about too, but it seems like every year there's a new theme, and AI has dominated so far.
Remy: Well, Cody, I appreciate your time. Thank you so much for joining us early in the morning on the ground in Vegas, and thank you so much for sharing your perspective.
Cody Carbon: Of course, thank you, Remy. Thank you.
