The GENIUS Act to regulate stablecoins, marking 'a big crypto win'

They're embracing us as opposed to chasing after us and prosecuting us. And now we're getting legislation. And so, you know, it's a huge tailwind for the industry, not just for Galaxy, but the whole industry. And we plan on taking advantage of it. That was Mike Novogratz of Galaxy cheering the changing regulatory regime for the crypto industry, which could see even more changes as soon as today. Stablecoin legislation is expected to clear to the Senate this week. Stablecoins underpin most of the $3.3 trillion market for Bitcoin. The so-called Genius Act would require stablecoins to hold reserves of liquid safe assets like treasury bills. Issuers would also have to follow anti-money laundering and terrorism finance rules and to give holders of coins priority to recoup their money in the event of a bankruptcy. Joining us to break down what this means for the broader crypto space, we have Kavita Gupta, Delta Blockchain Fund founder and general partner. And still with me is Amy Woo-Silverman of RBC. Kavita, great to have you on this morning. Talk to me about the stablecoin legislation and what it signals specifically for crypto investors. Thank you, guys. I think it's a very good start move with this administration, especially because it's a bipartisan deal where we are saying, hey, let's legalize having stablecoins, but let's put very strong and very good positive and very structured rules around it that, hey, if you want to issue stablecoins, you have to hold treasury bills. You have to have some sort of a collateral to support that you're not going to disappear. Also, at the same time, there is certain sort of transparency and accountability around it, which people can check. What sort of a percentage of treasury bonds do you have? We have seen that trend, which has been questioned by SEC two years, three years back by Tether and Circle and different treasury bills circulations. And I think the accounting has always been a question what is acceptable or not acceptable. So finally, having a very positive, structured rules and regulations around stablecoin is, I think, is a very big path forward and is a big crypto win. Yeah. And I wonder from your perspective, too, about the dissolution of some of the headwinds to the bill. The two main ones that I've heard come up are big tech companies issuing their own stablecoins, which seems to have been a headwind that has resolved itself. But then the other concern is the president profiting from crypto specifically. How are you thinking about that as a risk to the legitimacy of crypto going forward? I think when we think of stablecoin, it is not a crypto which anybody or any token like Solana or like any of the two thousand, ten thousand tokens which we have, any private company can just go issue and create a value associated with it. We have to put stablecoin in a different basket. Stablecoin are US or European or Indian, like whatever currency you take. It is a government issues currency back and it is pecked to it one is to one. So I think it is very different than the two issues which you highlighted. The first issue which you highlighted is very clear that can private companies like Meta or Square or any other tech finance company can issue their own coins? Yes, they can. They can do the stablecoins with the right regulations. But that is also very similar to digital payment system which we are already using. When I do Venmo, I'm using digital payment system. Can they do their own crypto? That is not in the stablecoin basket. The other question which you asked about President Trump's benefiting from it. I think if it's a stablecoin payment system, it's a fair game. Anybody and everybody can do that. But if it is about launching your own crypto, again, that's a different basket. And if it's a conflict of interest where the president knowing everything, what regulations are coming, is participating in a financial deal, then yes, it is a very clear conflict of interest. Yeah. And just zooming out beyond stablecoins, just to crypto in general, Kavita, can you talk to me about how that potential conflict of interest reads into consumer sentiment, investor sentiment around crypto? And I guess, is that a potential headwind in your view to a wider adoption of cryptocurrencies? It is a big question. I mean, on one side, I want to look at it positively saying that we are seeing the biggest, like the president, the first president of the United States who is very positive about blockchain and crypto is actually having his extended family participating in creating a lot of products around it and having commercial financial interest into it. So is that a positive long-term vision around it? Yes. But at the same time, if it stays within the extended family without having any conflict of interest from the government position, that is much better. Because when we start seeing this as a tool of short-term benefiting by people in power, which could be anybody around the world, then of course the investors start thinking that this is also going to come down heavily by the opposition who may be in power in the future. And that is not a sentiment that does create volatility in the market, which we are seeing even though that the government is so pro-crypto, but the market is not showing that strength in trust for the investable dollar amount. Kavita, really appreciate you joining us. I hope you'll come back when we've got a little bit more time. Thank you so much for your insights. Thank you.