Well, for more on policy, let's bring in the expert, Faryar Shirzad, chief policy officer at Coinbase, joining BMTV now. Faryar, thank you so much for joining us and good morning to you. You've been working hard behind the scenes getting lawmakers on board with the Clarity Act. Obviously, the closure vote did not pass this week. Where do you think it ultimately went wrong and what comes next?
Well, we ran into the buzzsaw of, I think, a few things. One was just the electoral calendar caught up to us. I think Democrats were unwilling to vote on a crypto bill that a lot of their base associated with the president so close to the election day. And I think TradFi and particularly the big banks put up about a $200 million fight against the bill and that created a lot of drag on the process. There's been a lot of effort by, or at least a lot of sort of public statements by a number of the Democrats who say they want to go back at it and try to get it done. But I think Congress had its shot and that we're excited to see the regulators moving forward, including Paul Atkins.
Cynthia Lummis had said if the Clarity Act failed in this Congress, the next real opportunity for market structure legislation would be 2030. How do you feel about that timeline? And more broadly, what does the crypto policy roadmap look like from here?
Yeah, we put a huge emphasis on legislation. I think we should have because legislation provides predictability and certainty. But the broader policy effort, and I've been at it for a bunch of years now, is really a three-track process. One is to get the legislation right where we can, like we did on stablecoins. Get the regulations right where we can, like we have with the announcements from the SEC and the CFTC and the bank regulators over the last 20 months. And then get the international environment right. And that's been moving dramatically in the right direction. And that becomes a hugely complementary forcing function for the US because I think ultimately policymakers understand we don't live in an island and as other countries try to grab market share they need to step up. And so I feel very good. You know, the result on Clarity was disappointing but the broader momentum is very strong.
And you know, both the SEC and CFTC chairs are ready to move forward. They came out with announcements and updates for the market. You know, Paul Atkins saying with or without legislation he's going to act. So, how much regulatory clarity can these agencies actually deliver without Congress and where do you still need legislation?
I think Gary Gensler was able to sow chaos because there were no rules in place. And so, if he sort of clamped down and started bringing enforcement cases, he had the advantage of ambiguity in order to defend the lawfare that he was engaged in. What Atkins, CLE, and the other Trump regulators are doing is they're providing rules. Now in principle a future administration can change those but as market practice adapts to those rules, expectations are set based on what the agencies have said, it becomes harder even for a hostile administration to come in and just do a 180. You know, the rules around arbitrary and capricious rulemaking that will constrain a potentially a future agency. So the job on all of us who are in the industry is to build, promote adoption, get customers to move into tokenized and crypto-based solutions to the things they want to build on and it just becomes, you know, it resets what's possible for anybody who wants to cause mischief in the sector, you know, in a future administration. So I feel really good about what the agencies have done this week. It's sent a really good momentum. I think the markets have responded to that and it's outstanding.
So if that's the case with the agencies and it sets the standard that's harder to repeal, why didn't they go ahead and take action preemptively?
Well, they did. I mean, they did some things, you know, the taxonomy that they put out, even the crypto regs that came out a couple weeks ago. But yeah, I think there were, my sense is, and you know, obviously the agencies will have to speak to this, is that there was some nervousness that they would potentially, you know, upset the balance in legislation. It's very normal in Washington, I've been around for quite a while, that if Congress is moving to, you know, address a certain issue, agencies typically step back and let Congress sort of speak to the issue because they're the legislative branch. So, there was an element of that, but I feel like we have about, what, 28 months left, maybe a bit more between now and when the Trump administration's done. There's a huge amount that could get done, bedded down. Market practice can adapt to it and create a new reality in terms of what the crypto markets look like in the US.
One thing the Bitcoin industry keeps pushing for is a de minimis exemption. So, you don't owe capital gains on small everyday purchases. How important is getting one in place? And what would your preferred number be?
Yeah, it's, look, it's a really important issue. The Ways and Means Committee reported out a bill just the other day and to be honest I don't know what it said on the de minimis exemption. But Bitcoin is a critical part of the ecosystem. We have to make sure the rules are right around the kind of the, you know, the token that started all of this. But it's an iterative process between what the House Ways and Means Committee does, what happens in the House floor, ultimately what the Senate does. And so, you know, we're very focused on that.
