WEBVTT 00:00:00.000 --> 00:00:04.320 align:middle line:90% 00:00:04.320 --> 00:00:06.480 align:middle line:84% ZACK GUZMAN: And Elizabeth, we were talking about regulation 00:00:06.480 --> 00:00:07.500 align:middle line:90% heading into break here. 00:00:07.500 --> 00:00:09.900 align:middle line:84% And it is interesting to kind of get your insight when we talk 00:00:09.900 --> 00:00:11.880 align:middle line:84% about that, given the fact that this year, 00:00:11.880 --> 00:00:15.460 align:middle line:84% we've seen El Salvador adopt Bitcoin as legal tender. 00:00:15.460 --> 00:00:18.570 align:middle line:84% We were talking about the ease of efficiencies in regards 00:00:18.570 --> 00:00:21.600 align:middle line:84% to whether we should look at Bitcoin as a commodity 00:00:21.600 --> 00:00:25.130 align:middle line:84% or a currency when it comes to transactions across state lines 00:00:25.130 --> 00:00:25.930 align:middle line:90% here. 00:00:25.930 --> 00:00:29.190 align:middle line:84% Talk to me about how big that is for the sector 00:00:29.190 --> 00:00:31.500 align:middle line:84% and what it does maybe to change the way regulators 00:00:31.500 --> 00:00:32.327 align:middle line:90% think about it. 00:00:32.327 --> 00:00:33.460 align:middle line:84% ELIZABETH ROSSIELLO: Well, there's 00:00:33.460 --> 00:00:37.030 align:middle line:84% a lot to be said about accepting multiple currencies 00:00:37.030 --> 00:00:39.220 align:middle line:84% as legal tender for smaller nations 00:00:39.220 --> 00:00:40.790 align:middle line:90% who struggle with liquidity. 00:00:40.790 --> 00:00:41.920 align:middle line:84% But I think what we need to think 00:00:41.920 --> 00:00:44.380 align:middle line:84% about with regulation is that it's 00:00:44.380 --> 00:00:46.580 align:middle line:90% not apples to oranges here. 00:00:46.580 --> 00:00:48.010 align:middle line:84% There's a lot of different products, 00:00:48.010 --> 00:00:49.930 align:middle line:84% a lot of different uses for this technology 00:00:49.930 --> 00:00:51.220 align:middle line:90% and for this asset class. 00:00:51.220 --> 00:00:53.620 align:middle line:84% And we can't have one regulation fit them all. 00:00:53.620 --> 00:00:56.890 align:middle line:84% We work with a lot of large Fortune 50 companies 00:00:56.890 --> 00:00:58.660 align:middle line:84% and their corporate treasury teams. 00:00:58.660 --> 00:01:00.610 align:middle line:84% And they settle with us in stablecoins. 00:01:00.610 --> 00:01:02.470 align:middle line:90% For example, USDC. 00:01:02.470 --> 00:01:04.930 align:middle line:84% They shouldn't have to have a specific license 00:01:04.930 --> 00:01:08.080 align:middle line:84% to trade via USDC as opposed to another currency 00:01:08.080 --> 00:01:09.380 align:middle line:90% pair going forward. 00:01:09.380 --> 00:01:11.290 align:middle line:84% This is just going to be one other currency 00:01:11.290 --> 00:01:12.680 align:middle line:90% pair in the basket. 00:01:12.680 --> 00:01:15.400 align:middle line:84% So I think when we think about should this be legal tender, 00:01:15.400 --> 00:01:19.180 align:middle line:84% should this be a CBDC or a central bank digital currency, 00:01:19.180 --> 00:01:21.670 align:middle line:84% should it be holding as a portfolio 00:01:21.670 --> 00:01:24.400 align:middle line:84% or as an asset in a wallet that were trusted third party 00:01:24.400 --> 00:01:28.240 align:middle line:84% provider, there's a wide range of regulation 00:01:28.240 --> 00:01:29.140 align:middle line:90% for this industry. 00:01:29.140 --> 00:01:30.920 align:middle line:90% And it is an entire industry. 00:01:30.920 --> 00:01:33.130 align:middle line:84% So we really need to be specific when we talk about it. 00:01:33.130 --> 00:01:35.710 align:middle line:84% I think what's most interesting is when we see governments get 00:01:35.710 --> 00:01:40.360 align:middle line:84% involved, like in China, and the PBOC issue its own coin 00:01:40.360 --> 00:01:42.550 align:middle line:84% and really set the scene for what it thinks 00:01:42.550 --> 00:01:44.470 align:middle line:84% all of the industry within China should 00:01:44.470 --> 00:01:47.320 align:middle line:84% look like based on its own government participation. 00:01:47.320 --> 00:01:49.960 align:middle line:84% I think in other places, we've seen the private sector lead. 00:01:49.960 --> 00:01:52.900 align:middle line:84% We've seen a mixture of private-public partnerships. 00:01:52.900 --> 00:01:55.510 align:middle line:84% And in some spaces, we've seen regulators simply 00:01:55.510 --> 00:01:58.720 align:middle line:84% include trading in this currency or using this infrastructure 00:01:58.720 --> 00:02:00.517 align:middle line:90% under existing regulation. 00:02:00.517 --> 00:02:02.350 align:middle line:84% So I think we need to be a little more specific when we 00:02:02.350 --> 00:02:04.810 align:middle line:84% talk about it because this is a major issue 00:02:04.810 --> 00:02:06.306 align:middle line:90% for a major movement. 00:02:06.306 --> 00:02:08.139 align:middle line:84% ZACK GUZMAN: Yeah, and I mean, on that front, you know, 00:02:08.139 --> 00:02:09.320 align:middle line:90% we talk about it. 00:02:09.320 --> 00:02:11.320 align:middle line:84% It's good headline material when we 00:02:11.320 --> 00:02:14.350 align:middle line:84% talk about crypto killing traditional finance or banking 00:02:14.350 --> 00:02:15.370 align:middle line:90% or anything like that. 00:02:15.370 --> 00:02:17.560 align:middle line:84% But you've kind of looked at it as a complementary model 00:02:17.560 --> 00:02:19.180 align:middle line:84% to kind of work around some of the issues 00:02:19.180 --> 00:02:21.670 align:middle line:84% that traditional banking runs into, particularly 00:02:21.670 --> 00:02:23.140 align:middle line:84% when it comes to cross-border payments 00:02:23.140 --> 00:02:24.970 align:middle line:90% and transactions and the like. 00:02:24.970 --> 00:02:26.740 align:middle line:84% I mean, is that maybe the right way to be 00:02:26.740 --> 00:02:28.390 align:middle line:84% thinking about it now here in 2021, 00:02:28.390 --> 00:02:31.270 align:middle line:90% that it's mostly complementary? 00:02:31.270 --> 00:02:32.170 align:middle line:90% ELIZABETH ROSSIELLO: 100%. 00:02:32.170 --> 00:02:35.020 align:middle line:84% I mean, I have a t-shirt that says, "Normalize crypto." 00:02:35.020 --> 00:02:38.380 align:middle line:84% But I think we need to think about it in terms of the future 00:02:38.380 --> 00:02:41.740 align:middle line:84% of monetary policy, the future of alternative assets 00:02:41.740 --> 00:02:45.010 align:middle line:84% to invest in, the future of technology 00:02:45.010 --> 00:02:46.750 align:middle line:84% and how we're running companies based 00:02:46.750 --> 00:02:51.220 align:middle line:84% on open source software, interconnected 00:02:51.220 --> 00:02:52.580 align:middle line:90% self propelling software. 00:02:52.580 --> 00:02:54.250 align:middle line:84% I think it's a lot of different topics 00:02:54.250 --> 00:02:56.830 align:middle line:84% that we need to think about, but it's affecting everything 00:02:56.830 --> 00:02:59.800 align:middle line:84% from how we trade to how we interact with each other, 00:02:59.800 --> 00:03:02.110 align:middle line:84% to how we move money and the infrastructure beneath it. 00:03:02.110 --> 00:03:04.480 align:middle line:84% So I'm sorry to be general when we talk about it, 00:03:04.480 --> 00:03:07.460 align:middle line:84% but I think it's-- we need to separate what's going on here. 00:03:07.460 --> 00:03:08.740 align:middle line:84% I mean, there's some very cool things 00:03:08.740 --> 00:03:12.880 align:middle line:84% at the edge of the industry in terms of DeFi and NFTs. 00:03:12.880 --> 00:03:14.500 align:middle line:90% It's a lot of young startups. 00:03:14.500 --> 00:03:17.200 align:middle line:84% There's Fidelity and JPMorgan getting involved, 00:03:17.200 --> 00:03:18.430 align:middle line:90% governments, like I said. 00:03:18.430 --> 00:03:22.420 align:middle line:84% So it's really across all industries from the front 00:03:22.420 --> 00:03:25.870 align:middle line:84% to the back office, not only just the technology, but also 00:03:25.870 --> 00:03:27.820 align:middle line:90% a new way of doing business. 00:03:27.820 --> 00:03:29.320 align:middle line:84% ZACK GUZMAN: Yeah, and Adam, when you kind of 00:03:29.320 --> 00:03:32.110 align:middle line:84% dig into the new way of doing business back here in the US 00:03:32.110 --> 00:03:33.820 align:middle line:84% when it comes to regulation, there 00:03:33.820 --> 00:03:35.590 align:middle line:84% have been a lot of complaints in terms of just not 00:03:35.590 --> 00:03:39.850 align:middle line:84% having regulatory clarity from the SEC or maybe other agencies 00:03:39.850 --> 00:03:40.790 align:middle line:90% as well. 00:03:40.790 --> 00:03:43.240 align:middle line:84% I mean, how do you kind of, I guess, 00:03:43.240 --> 00:03:46.240 align:middle line:84% iterate when it comes to the technology there at Bakkt 00:03:46.240 --> 00:03:48.040 align:middle line:84% if there are those uncertainties? 00:03:48.040 --> 00:03:49.870 align:middle line:84% Because you're dealing with a lot of digital assets, 00:03:49.870 --> 00:03:53.170 align:middle line:84% not just airline rewards miles, but all kinds of loyalty points 00:03:53.170 --> 00:03:55.430 align:middle line:90% and crypto assets as well. 00:03:55.430 --> 00:03:59.010 align:middle line:84% ADAM WHITE: Yeah, good regulatory starts 00:03:59.010 --> 00:03:59.810 align:middle line:90% with partnership. 00:03:59.810 --> 00:04:02.690 align:middle line:84% And what most people don't know is we spent years 00:04:02.690 --> 00:04:05.330 align:middle line:84% working closely with regulators before we ever launched 00:04:05.330 --> 00:04:08.990 align:middle line:84% our first product, namely regulated Bitcoin custody, 00:04:08.990 --> 00:04:12.500 align:middle line:84% and then the first physically delivered Bitcoin futures 00:04:12.500 --> 00:04:14.210 align:middle line:90% contract here in the US. 00:04:14.210 --> 00:04:18.050 align:middle line:84% That partnership is what helps provide regulatory clarity. 00:04:18.050 --> 00:04:19.970 align:middle line:84% So a lot of the work we do at Bakkt 00:04:19.970 --> 00:04:22.190 align:middle line:84% is regulated as a money transmitter 00:04:22.190 --> 00:04:23.570 align:middle line:90% in nearly 50 states. 00:04:23.570 --> 00:04:25.070 align:middle line:90% We have a New York BitLicense. 00:04:25.070 --> 00:04:27.470 align:middle line:84% We have a New York trust license as well. 00:04:27.470 --> 00:04:31.310 align:middle line:84% That-- those licenses and that partnership with regulators 00:04:31.310 --> 00:04:34.770 align:middle line:84% allows us to offer new products and continue to be innovative. 00:04:34.770 --> 00:04:36.620 align:middle line:90% So to us, it's-- 00:04:36.620 --> 00:04:38.210 align:middle line:84% regulatory clarity is not something 00:04:38.210 --> 00:04:39.290 align:middle line:90% that happens overnight. 00:04:39.290 --> 00:04:40.640 align:middle line:90% It's something that takes time. 00:04:40.640 --> 00:04:44.030 align:middle line:84% I think we're optimistic that we're seeing the US 00:04:44.030 --> 00:04:45.320 align:middle line:90% ask those tough questions. 00:04:45.320 --> 00:04:46.640 align:middle line:84% And we're seeing the crypto industry 00:04:46.640 --> 00:04:49.710 align:middle line:84% rally behind that, provide education and partnership. 00:04:49.710 --> 00:04:50.870 align:middle line:90% But it's going to take time. 00:04:50.870 --> 00:04:54.200 align:middle line:84% And that's kind of, again, the heart of what Bakkt does, 00:04:54.200 --> 00:04:57.200 align:middle line:84% is we launch products that we're confident meet 00:04:57.200 --> 00:05:02.600 align:middle line:84% regulatory requirements, but can still innovate and leverage 00:05:02.600 --> 00:05:05.570 align:middle line:84% all the unique things that crypto provides, like DeFi, 00:05:05.570 --> 00:05:08.810 align:middle line:90% like NFTs, like the web 3.0. 00:05:08.810 --> 00:05:10.610 align:middle line:84% ZACK GUZMAN: We didn't even get time to get into NFTs. 00:05:10.610 --> 00:05:12.650 align:middle line:84% I know you guys were real jazzed to talk about that. 00:05:12.650 --> 00:05:15.770 align:middle line:84% But we only have about two minutes left to wrap up here. 00:05:15.770 --> 00:05:17.660 align:middle line:84% And we started this conversation with kind 00:05:17.660 --> 00:05:19.620 align:middle line:84% of where we are and where we're going, I suppose, 00:05:19.620 --> 00:05:20.630 align:middle line:90% in the timelines. 00:05:20.630 --> 00:05:23.360 align:middle line:84% Maybe we'll wrap up with quick one minute each here, 00:05:23.360 --> 00:05:27.050 align:middle line:84% bold premonitions for what could happen in the crypto world 00:05:27.050 --> 00:05:30.890 align:middle line:84% that you see some big events and evolution points to maybe 00:05:30.890 --> 00:05:33.857 align:middle line:90% keep out eye for in 2022. 00:05:33.857 --> 00:05:35.090 align:middle line:84% And Elizabeth, we can start with you. 00:05:35.090 --> 00:05:38.147 align:middle line:84% Any bold calls for what could happen here? 00:05:38.147 --> 00:05:39.280 align:middle line:84% ELIZABETH ROSSIELLO: I think we're 00:05:39.280 --> 00:05:42.970 align:middle line:84% going to see the regulatory map start turning much more green. 00:05:42.970 --> 00:05:45.340 align:middle line:84% We've been eight years in this process, even longer. 00:05:45.340 --> 00:05:47.320 align:middle line:84% I was on the committee in several countries, 00:05:47.320 --> 00:05:50.650 align:middle line:84% writing regulation, you know, in 2014. 00:05:50.650 --> 00:05:51.730 align:middle line:90% It's time now. 00:05:51.730 --> 00:05:53.920 align:middle line:84% And as Adam said, we're working together 00:05:53.920 --> 00:05:55.250 align:middle line:90% over a long period of time. 00:05:55.250 --> 00:05:57.340 align:middle line:84% And you're going to see those lights start to turn on. 00:05:57.340 --> 00:05:59.740 align:middle line:84% And we're at the place where there's no turning back. 00:05:59.740 --> 00:06:00.860 align:middle line:90% This is happening. 00:06:00.860 --> 00:06:03.100 align:middle line:84% I think the-- seeing the large banks move in, 00:06:03.100 --> 00:06:05.950 align:middle line:84% in the last bull run was a big indicator-- seeing 00:06:05.950 --> 00:06:07.450 align:middle line:84% a lot of the institutional investors 00:06:07.450 --> 00:06:10.840 align:middle line:84% come in with big tickets and a lot of sticky investors. 00:06:10.840 --> 00:06:12.490 align:middle line:84% I think now we're at the place where-- 00:06:12.490 --> 00:06:14.080 align:middle line:84% I don't want to say it's too big to fail, 00:06:14.080 --> 00:06:16.930 align:middle line:84% but it's too much velocity to stop moving forward. 00:06:16.930 --> 00:06:18.610 align:middle line:84% And I'm not just talking about the price, 00:06:18.610 --> 00:06:21.470 align:middle line:84% I'm talking about the technology, the integration, 00:06:21.470 --> 00:06:23.950 align:middle line:84% and the idea that we're building something radically new 00:06:23.950 --> 00:06:26.910 align:middle line:84% for a new kind of financial system. 00:06:26.910 --> 00:06:28.110 align:middle line:84% ZACK GUZMAN: And Adam, take us home. 00:06:28.110 --> 00:06:31.547 align:middle line:84% Your bold claim-- your bold call, rather. 00:06:31.547 --> 00:06:33.180 align:middle line:84% ADAM WHITE: I think one of the biggest challenges 00:06:33.180 --> 00:06:35.100 align:middle line:84% for the crypto space over the past decade 00:06:35.100 --> 00:06:36.360 align:middle line:90% is, what's the killer app? 00:06:36.360 --> 00:06:38.010 align:middle line:84% What are people using crypto for, 00:06:38.010 --> 00:06:43.620 align:middle line:84% beyond speculation and maybe some early proof of examples 00:06:43.620 --> 00:06:45.420 align:middle line:90% of remittances or payments? 00:06:45.420 --> 00:06:49.410 align:middle line:84% And I think we're going to see in 2022 the first very 00:06:49.410 --> 00:06:50.860 align:middle line:90% clear example of a killer app. 00:06:50.860 --> 00:06:54.570 align:middle line:84% And if I had to guess, it's going to come across in a way 00:06:54.570 --> 00:06:56.160 align:middle line:84% where people have no idea they're using 00:06:56.160 --> 00:06:59.910 align:middle line:84% crypto, predominantly probably through gaming/the metaverse 00:06:59.910 --> 00:07:00.990 align:middle line:90% and NFTs. 00:07:00.990 --> 00:07:03.030 align:middle line:84% What's happening with Axie Infinity 00:07:03.030 --> 00:07:05.490 align:middle line:84% and Zed Run and Star Atlas, we're 00:07:05.490 --> 00:07:06.960 align:middle line:90% keeping a very close eye on. 00:07:06.960 --> 00:07:10.200 align:middle line:84% And that is bringing in millions of new users 00:07:10.200 --> 00:07:12.840 align:middle line:84% into the crypto ecosystem that were never 00:07:12.840 --> 00:07:14.410 align:middle line:90% involved in crypto before. 00:07:14.410 --> 00:07:16.410 align:middle line:90% And I think that's fascinating. 00:07:16.410 --> 00:07:19.140 align:middle line:84% And I think it's time for that to happen. 00:07:19.140 --> 00:07:23.360 align:middle line:84% And we're very excited to see it play out over the next year.