The push for comprehensive crypto legislation is entering a critical new phase.
A coalition of over 200 digital asset companies just delivered a letter to Senate leaders demanding a floor vote on the digital asset market Clarity Act.
While the bill recently passed the Banking Committee with bipartisan support industry veterans do say it still needs tweaks to truly fix the US market structure at the same time, Wall Street.
And I continued to merge just this morning, global crypto trading firm GSR announced it has secured federal approval to officially launch an SEC registered broker dealer named GSR Securities.
Well joining us to discuss this breaking news and the state of US regulation is Josh Riezman, Chief Legal & Strategy Officer at GSR.
Thank you so much.
Well, first and foremost with that big. this morning about GSR securities.
Tell us a little bit more about this and the significance of the FINRA approval.
Yes, look, on one hand, firms have been registering for broker dealers all the time.
We see this all the time, but I think for those of us in the crypto industry, especially, there was a whole period of time where crypto native firms and crypto native trading firms were told effectively to.
Stay away from broker dealer registrations, mostly because of the kind of regulation by enforcement, I would say anti crypto stance of the former administration.
I think it's fair to say.
And then what we've seen is a kind of 180 degree change by both the administration and the commission to say no, let's bring people into the tent and regulate them.
So GSR was able to.
Purchase and then you apply for a change of control for this broker dealer and it's a super important time for that to happen.
So I think you mentioned it at the open, what we're seeing is this convergence moment between kind of the blockchain infrastructure and the traditional finance infrastructure and so firms like GSR need to be able to operate across all lines of business and that's.
Digital assets, that's commodities and that's securities, and so this is a very important step for a firm like ours to now be kind of in the club as it were, with Finner with our broker dealer license now approved.
Yes, and of course while I have you here, we're here on Wall Street, but I do want to get your take on what we're seeing unfolding at the nation's capital, especially when it comes to clarity here.
So as we edge closer.
To that July 4th dateline.
What do you expect to see and what still needs to happen when it comes to clarity?
I'd say a couple things.
One is a lot of work still needs to be done.
So where we are now, obviously, is the bill has passed out of the Senate Banking Committee.
A version of the Senate Agriculture side of the bill has also passed, and now we need a combined bill. to the floor.
But not only do we need a combined bill, but we need a combined bill that we think can actually pass with enough to get to the president's desk.
And how does that happen?
That happens with an intense bipartisan engagement from both sides to address kind of the main outstanding issues.
I think for weeks and weeks and weeks we heard about things like stable coin yield, which still surprisingly is an issue to this day.
But I think now you're getting down to what's the brass tacks, what do especially certain Democratic senators need for the clarity to pass.
I think what they've clearly identified is there is bipartisan support for this bill, which is not common.
There aren't that many bills moving through Congress now, and this is definitely one that's getting a lot of attention and a lot of work, but there's some real crucial outstanding issues, and we can talk about them that need to be addressed before we probably see this pass.
Final Four.
Yes, and I'm glad you brought that up because I do want to expand on this.
It is a midterm election year, of course, and there are a lot of moving parts here when it comes to clarity.
So what are some of the risks if this does not pass?
That's a great question.
So what have we been trying to address with the Clarity Act in the first place is to say, hey, we need a safe and regulated environment that is good for entrepreneurs to bring well-meaning entrepreneurs to bring projects in the United States, bring.
Volumes from kind of offshore unregulated facilities to onshore trusted regulated facilities and if we don't have something like clarity, the ongoing concern is that activity and those entrepreneurs continue to kind of focus on offshore markets and I think that's a big miss for the United States.
I think just being around New York, you see it with FinTech Week now the intense focus and energy around digital assets still exists even through this bear market.
There are so many entrepreneurs and businesses that want to engage, but in order to do so in a way that companies feel confident through cycles, we really do need legislation to pass.
You bring up an important point because we have been talking about how a lot of this talent when it comes to digital assets as well as Defi have been moving offshore versus coming back onshore.
But given what we're seeing not just here in the US, but the regulatory landscape.
Overseas in areas such as the European markets, especially ahead of the July 1st MICA deadline, as well as what we're seeing in the Asian markets.
What are the challenges as well as the opportunities globally?
It's a great point.
If you look at legislation that was passed in Europe, really well meaning legislation, very thoughtful, intense engagement, but what they ended up creating was a walled garden that I don't think has really attracted the The energy and the entrepreneurialism that they hoped, but maybe going a step too far and making it a little too closed off.
And so what the opportunity is with getting this right is creating a customer protection focused bill that controls for things like anti-money laundering, so all the things we want to bring under regulation, but then also creates an open environment for entrepreneurs to create in this really dynamic space.
I think a lot of people are wondering what's next for crypto.
I think what we know is we're in this in-between zone where there's a whole design space for digital assets, for blockchains that we're just now starting to get into, but we need to create the space and the pathway for entrepreneurs to bring those ideas to market in a way they feel comfortable if they're going to put their energy, their career, and then investors put their money into it.
We need to have a sense.
That we're here to stay and Josh, you bring up a very important point.
So as we count down to the second half of 2026, there are a lot of expectations in terms of what we will see unfold when it comes to that intersection of Trad as well as D.
We've been hearing about so many announcements even coming out from the major exchanges, including the New York Stock Exchange.
I know you speak with many stakeholders, not just stateside, but also overseas.
So what are your expectations when it To adoption in the second half.
So absolutely most things that can be tokenized, people will try to tokenize them, and in fact most of it will be tokenized.
Why is that?
Ultimately it's a faster road to settlement.
In a lot of cases it can lead to increased liquidity, and so it's just what we're seeing is a better form factor for a lot of traditional finance, so increased tokenization, including RWA, which has obviously been a theme of this year.
I think what you also see is developers starting to kind of include everything around crypto that benefits more in the background, right?
So in the Dei world we kind of look at this as a Dei mullet where maybe it looks like web 2 on the front but it's Web 3 on the back end, and that's the type of abstracting the technology.
Where we need to get to make this a more broader widespread use technology.
Well, Josh, when it comes to crypto, a lot of us have been paying attention to the price action for the crypto majors versus what's happening on the legal side.
So I appreciate your time today, Josh.
Thank you so much for joining us and thank you so much for sharing your.
