Time is of the essence.
Congress could leave town for the summer session, for the summer recess this Friday, and over the weekend, President Trump reviewing an ethics proposal on the legislation that could give state AGs enforcement power alongside the DOJ.
Now joining me to discuss this and more is Kristen Smith, president of the Solana Policy Institute.
Kristen, thank you so much for joining us.
It's been a busy last couple of days and a busy week ahead of us.
So let's start with the first question.
The industry may only have until Friday to get clarity passed this summer, with such a pivotal week ahead for legislation on Capitol Hill.
What do you think the clarity Act stands and will it get across the finish line?
Oh, that's a great question.
Well, first of all, good morning.
Thanks for having me.
Um, yeah, it's definitely crunch time in Washington right now when it comes to the Clarity Act.
The biggest challenge that we have is that the Senate is currently scheduled to be in 5 days.
They could extend that, and that's definitely a possibility, uh, but they have a lot of different items that they need to get done.
There was a deal over the weekend on sports legislation.
There was a deal on funding the government through the midterm elections, and there was also a deal related to Attorney General Blanche's nomination.
So it's a very crowded field, uh, but we've been talking with folks on Capitol Hill and the White House, and everyone says, uh, that they're still intending to move forward and try to kick off the process on the Clarity Act before the Senate goes into the August recess.
So we're very hopeful, uh, but we're also very mindful that there's a lot going on.
So I think, uh, the folks on the ground here in Washington working on behalf of the crypto industry, like, like us at Salana Policy Institute, uh, are very focused on pushing forward and trying to get the process started so that the Senate can come back, uh, and finish the job in September.
So certainly a critical week, uh, and, uh, all eyes are, are on the Senate right now for that vote to get scheduled.
All right, Kristen, and we've seen institutions such as Black Rock and Goldman Sachs expressed support for clarity.
So where do we stand in terms of support overall?
Yeah, I think there's growing support for the bill, so this is obviously not something that only the crypto industry wants.
Uh, there are a lot of law enforcement groups that are very eager to see this done.
Uh, there are church organizations that want to see this done, uh, in traditional finance.
It's, it's really a large, a large group, and there's reasons for that, and the reason is today.
There are holes in the gaps of the regulatory framework for crypto, and when you have 67 million Americans that hold and use crypto, and you have the traditional financial world that's looking to upgrade their technology using crypto rails, you know, we want to make sure that the right kind of safeguards are in place, so the Clarity Act fills important gaps, it gives tools to law enforcement, it provides oversight and regulation of the Crypto markets and there is a new disclosure regime that is put in place every time a new crypto asset is issued.
So, um, you know, this is, I think, really important to get done.
I think we're seeing it across the board from a consumer protection standpoint, from a national security standpoint, and from a US competitiveness standpoint.
So, I think there's a lot that this bill can do, and I think that's why there's such broad support for getting it across the finish line.
All right, Kristen, and a big topic is the ethics package.
So take us through the ethics package proposal and are you expecting Trump to be OK with it?
Yeah, no, that's a great question.
Um, you know, one of the issues that has come up, um, as the Senate has debated this is putting some guardrails around what federal officials, including the president, can do with digital assets.
Now the president has agreed, uh, to a proposal that would prohibit the issuance or sponsorship of a digital asset, um, and require divestment, divestment or Putting those assets into a blind trust if they already exist. it was reported last week that there was a bipartisan agreement that was sent back to the White House, and it's unclear at this point if the White House is going to accept that or not.
So that is one of the big pieces of news that we will be looking for this week because the bill can only get through the Senate if you have bipartisan support.
There is a 60 vote threshold.
In order to get some uh stand-alone bill through the Senate, and so it's very important, um, given that there are only 53 Republicans, uh, that we get, uh, you know, a broad base of, of bipartisan support.
So this is a must, a must-have provision.
It doesn't actually relate to the regulation of crypto itself, but to the elected officials' use of crypto.
So it seems a little bit out of it, but it's important for political reasons that we have it in there.
Right.
Another big topic is the Genius Act.
It is still being implemented.
So, I want to ask you, how much confidence does it give you for the potential of the Clarity Act if the Genius Act is still being implemented?
Well, it's really interesting in, in our travels, uh, throughout the world, you know, you often are sitting in meetings and someone's speaking a foreign language, and they utter Genius Act in English in the middle of it.
So, I think what's really interesting is that we see so many jurisdictions around the globe that are looking to the US to stablecoin regulatory framework, the Genius Act, uh, as their own model for how they Do regulation.
So I think similarly, uh, clarity will be exported to many jurisdictions around the globe, um, once it is passed.
I think that, you know, the US has always had the best capital markets in the world because they have appropriate regulation of those markets, and I think what we will see with clarity, will have the same impact around the globe.
All right.
Excuse me.
So where do you think the crypto industry in Solana stand currently?
Yeah, well, listen, I think, you know, it's been an interesting year for crypto.
I think, you know, uh, if you look at Solana, for example, it has been outperforming its own metrics.
Itwana is the highest, uh, fastest, most used blockchain in the world, um, and we're seeing, um, since the Genius Act, more than triple the amount of stablecoins that have been issued on Solana.
We have well over 95% of all, uh, real-world assets that are issued on Solana, so the numbers are looking really good, and I think the The piece that's missing is this regulatory framework.
I know that when I'm traveling and I'm talking to asset allocators or traditional financial institutions, they are waiting.
They're sitting on the sidelines waiting to jump in, but they don't want to do it until they know there is appropriate regulation in place.
And so I think that, um, you know, I think that there's a lot of opportunity if we get this, uh, legislation done that that this technology will be further integrated within our system, um, and there's a lot of potential that lies ahead.
All right, Kristen, last question, how important do you think it is that America specifically wins this race on crypto?
Well, the US has always, at least for the past 100 years, been the leader in technology and the leader in finance, and so I think if we want to maintain this position, uh, you know, we want to make sure we have the right rules of the road, because if you look at what blockchains are, blockchains are technology for finance, they can help.
With the issuing and trading of assets, they can lower the costs, they can make it faster, uh, and more accessible.
So this is, I think, you know, a, a critical and important step for the United States to lead, and I think it's one of the reasons why we're seeing such a focus on clarity in the Senate this week.
Kristen Smith, thank you so much for joining us.
Kristen Smith, president of the Solana Policy Institute.
Until next time.
Thanks for having me.
