YouSaid · the spoken record

Bill Barhydt

lines on the record: 71
first: 2021-09-01
most recent: 2021-09-01
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“Yeah, so I'm pretty active on Twitter on occasion. Bill Barheitz, and also obviously my day job at Abra. So please download Abraha, check it out. You can also follow Abra Global on Twitter. And we're Abra.com. But yeah, I'm pretty easy to find. So I'm sure your listeners will find me real quick”
2021-09-01 · We Study Billionaires · BTC041: Bitcoin Banking & Infrastructure w/ Bill Barhydt (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“You've given them a lot of credit right now. I think they hear the word Bitcoin and like we're done. I honestly don't think it's as sophisticated as what you're giving them credit for. And this is with firsthand knowledge, by the way. So it's hard for me to speak for every bank making these decisions. But I personally went through this. And a lot of the feedback I got made no sense.”
2021-09-01 · We Study Billionaires · BTC041: Bitcoin Banking & Infrastructure w/ Bill Barhydt (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“So they're two different loans, right? So, one is crypto collateralized, the other one is not. But if you can't get the other loan any other way, and let's just say at scale, that's worth 100 basis points. That's huge.”
2021-09-01 · We Study Billionaires · BTC041: Bitcoin Banking & Infrastructure w/ Bill Barhydt (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“But they don't want to pay capital gains or just being smart. The banks can't get out of their own way. So I think this is a huge opportunity. And the answer is, yeah, I wouldn't be surprised if we end up going full tilted to the mortgage business”
2021-09-01 · We Study Billionaires · BTC041: Bitcoin Banking & Infrastructure w/ Bill Barhydt (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Well, that's different. What I'm saying is that you may be willing to use Bitcoin as collateral for a down payment, but that doesn't mean you qualify for the mortgage because most banks, if you simply borrow against Bitcoin on Monday, won't take it for the down payment on Tuesday. Is they're going to insist on the source of the funds and they're going to see it's a Bitcoin collateralized loan and go, whoa, done. We're done. And so now they'll come back to Aber and say, can you help me? And they have been. So, I could easily see Abra now needing to get into that primary business because the source of the equity for the down payment part of the business isn't recognized by the banking system. And by the way, these tend to be very wealthy people in the US who have a higher net worth and more stable income and are probably better borrowers.”
2021-09-01 · We Study Billionaires · BTC041: Bitcoin Banking & Infrastructure w/ Bill Barhydt (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Now we're talking about home mortgages. So how do you basically deal with qualifying for a mortgage if you're like, let's call it crypto rich in any way whatsoever? It's a big problem. So my answer to that person's question is I hope so. I hope we do end up having to solve this problem because it is a big problem and our lending business is growing quickly and it's created this problem.”
2021-09-01 · We Study Billionaires · BTC041: Bitcoin Banking & Infrastructure w/ Bill Barhydt (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Wow, I'd love to know who asked that. I didn't see that in your Twitter feed if it was public. I hope so. Here's an interesting tidbit for you. So we in the app, you can borrow in, I think this is now a US part of it. We can borrow globally pretty much, but in the US, I think we're up to like 46 or 47 states now. I think we just turned on, was it Wisconsin or another state today? And so California and New York are coming. And then, you know, there's, I think, one or two other states. So, and then if you want to borrow more than 100,000, we'll onboard you directly outside the app. And so we've had a lot of borrowers in the VC space moving from San Francisco to Miami who've actually borrowed the down payments for their home from Abner. And now this is creating problems in the mortgage space. And I went through this recently because buying a home in Northern California. I'm one of the holdouts who's not leaving. The banks won't deal with crypto. They just will not, back to the original comment around lending.”
2021-09-01 · We Study Billionaires · BTC041: Bitcoin Banking & Infrastructure w/ Bill Barhydt (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“I think look, he's been fantastic for the Bitcoin world. And we need a lot more people like him who are going to go out there and take risks. But I think from an economic perspective, I don't think that's a huge announcement, honestly.”
2021-09-01 · We Study Billionaires · BTC041: Bitcoin Banking & Infrastructure w/ Bill Barhydt (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Way the app is set up today, it's not going to eat into the speculative buyer markets, at least I don't think so, beyond a lot of the hardcore Bitcoin Maximus who are huge fans of his, and deservedly so. But beyond that, I don't see, there's a lot of competition out there. It's not just about price. And so he will get some business there, but I think he's going to find that he's going to end up subsidizing that at large scale in an Uber-like model. And at some point, his investors are going to demand that they figure out a business model. And it's hard enough to create economic incentives around lightning, but doing it where you have a zero spread business is going to be even harder. I really want that to succeed. I mean, we've looked at it ourselves to try to figure out what economic incentives will be in place to run Lightning those long term to deal with remittances and other things. Or is that one area of the business that we actually do subsidize? I don't know. We'll see what happens.”
2021-09-01 · We Study Billionaires · BTC041: Bitcoin Banking & Infrastructure w/ Bill Barhydt (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“I like what Strike is doing. I like the idea of using light. I mean, look where I came from. I like the idea of using Lightning for money transfer. I'm enamored with it. I've spent probably too much time on it right now in terms of my own time digging in, understanding how nodes work, the economic incentives of nodes. I realize it's not what you're asking, but that's their core business right now. Now, he's extended that by saying if you don't have the Bitcoin, I'll give it to you with no spread. And I think that's what he's saying. I haven't really dug in. I don't know how their app works in detail. I think they have an ACH function.”
2021-09-01 · We Study Billionaires · BTC041: Bitcoin Banking & Infrastructure w/ Bill Barhydt (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Probably. Dan Hild has done a really good job of tracking the space in a what I would call a responsible way. And he publishes a Google Sheet of where he's testing services. He puts a lot of time into this, which has nothing to do with his day job. And he's, you know, I call him a friend. We talk on occasion and we just met at an event in Mexico and caught up. And I'm very impressed, not just because he's also chosen News Aver, but because of the level of detail and amount of time he's put into this. So people who don't follow Dan, you can go and look at his Twitter feed and read about what he's done to capture what's going on in my world of both yield high interest services as well as retail lending.”
2021-09-01 · We Study Billionaires · BTC041: Bitcoin Banking & Infrastructure w/ Bill Barhydt (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Would this be because I think I agree with you. I think that if you would present this as a product, the people out there, at least the people that I've talked to outside of like your hardcore Twitter, Bitcoin zealots, and I mean, I'm one of them. So I'm not like not making fun of anybody.”
2021-09-01 · We Study Billionaires · BTC041: Bitcoin Banking & Infrastructure w/ Bill Barhydt (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“About this. And as a customer, I've thought about it. I don't think the demand would be there quite yet because the, I would venture a guess, a lot of the people listening right now wouldn't be able to dig into the detail of the question. So they wouldn't want the lower yield because what are you talking about, Preston? I don't understand the difference. Just tell me how much yield I can make. Now, on the other hand, I'm all in. I've got I manage my liquid assets this way, cash and crypto. So I'm not looking for a junk bond return here. And so we're managing this as if it was our own money because it is. Now, that having been said, I don't say I'm not saying I don't like the idea you just outlaid. I'm just saying that I think the demand, you don't think the markets scale is there for that. If you had the guess, how much of a drop in years?”
2021-09-01 · We Study Billionaires · BTC041: Bitcoin Banking & Infrastructure w/ Bill Barhydt (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Have you ever considered breaking the company into almost two different entities that would firewall the risk of, because your institutional books, my understanding is the model for a lot of the borrowing and lending platforms in the crypto space is that the institutions aren't necessarily held to the same over collateralization that retail person is if they're going to take out a loan. And so those rates, or so that systematic risk that's introduced by those institutions for not being over collateralized can spill over into the retail investors. Have you ever considered firewalling through a different EIN number so that if retail people wanted to ensure that there was no rehypothecation and that they were absolutely over collateralized and that the risk of institutions couldn't spill into their deposits, do you think that there'd be a market for this? Is this something that you've entertained? And do you think that this is a good idea in the first place? Yeah, I thought a lot of”
2021-09-01 · We Study Billionaires · BTC041: Bitcoin Banking & Infrastructure w/ Bill Barhydt (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“We're onboarding new counterparties. I listen in on the risk management. So, firsthand, I know what's going on. It's not tenable for every customer to sit in on that meeting, but it is my job to articulate in forums like this that I'm comfortable with that process because I helped create it, approven, and present it to our board. So incumbent on all of us to understand that this is not a riskless investment, right? So any service out there that's offering yield on crypto that's telling you that this is a risk-free return, They're lying to you. And so I think it's important that as a space, at least that we're upfront about the fact that we're making investments here.”
2021-09-01 · We Study Billionaires · BTC041: Bitcoin Banking & Infrastructure w/ Bill Barhydt (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Goldman. So there's lots of ways to generate yield. All of it has different risk models. And so let's be totally honest and transparent when we talk about risk versus yield. This is not a riskless investment that you're making. We map each individual deposit to a specific lending opportunity. And we have a risk management process for doing that. I personally keep all of my liquid cash and crypto in this because I also know how the risk management model works and I am comfortable with that level of risk. I perceive it as relatively small, but it's not zero. Your comfort level is because it's over collateralized? No, my comfort level is in I know who the borrowers are. I know how we onboard the borrowers, how deep we go and due diligence. I know how the DeFi piece of this works, et cetera, et cetera. And so I sit in on those investment committee meetings.”
2021-09-01 · We Study Billionaires · BTC041: Bitcoin Banking & Infrastructure w/ Bill Barhydt (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Transparent. I get the same question every Friday on Money Talks, and every Friday I'm happy to go in depth and much longer than I am even right now on the explanation of how we generate that yield. Talk to us about stablecoin yields. What's your expectation for that in a five, ten year time frame? Because right now your yields are in a different universe compared to the 10-year treasury and anything you'd get from a traditional bank is your expectation in five years from now that it's even more extreme than that? Yeah, but so is venture debt. The fact that I can earn 50x what I might earn in a bank account is not really the operative point, but there's lots of ways to make 10% yield via lending. I mean, yield street and fundraise and by the way, I went out and tested every single one of these services before we launched Aber for a few years, and I still have, I'm still waiting to get money back that I lost in some of those services. So I get high yield, and I also worked in fixed income.”
2021-09-01 · We Study Billionaires · BTC041: Bitcoin Banking & Infrastructure w/ Bill Barhydt (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“You could do it in very small amounts. The interest is very small amounts so that it becomes unsustainable over a very, very long period of time. But the interest rates are high enough right now where it's unsustainable, probably more likely, certainly less than five years out. I would suspect given the rate of growth in the crypto space, Bitcoin rates specifically will have to come down unless you're paying in something other than in kind, meaning in dollars or another token or rewards coin or something besides Bitcoin, which is the deflationary nature of Bitcoin, the number of people coming in, the math just doesn't work. But for the other pieces of the business, it's unclear how this is going to evolve over time. Now with Ethereum potentially becoming deflationary for the first time, and it actually did have a few days last week where it looked like it was deflating. Who knows how that will evolve? Super interesting. But again, our take from day one has been either responsible method for generating yield and be very”
2021-09-01 · We Study Billionaires · BTC041: Bitcoin Banking & Infrastructure w/ Bill Barhydt (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Returns. When the market is screaming higher, some of the exchanges that offer leverage are borrowing dollars to do that, borrowing stablecoins directly. Those markets are a function of where the Bitcoin prices, as opposed to just hash power. And so there's different things going on, different dynamics that are at play here across the board. And then there's different coins and different DeFi projects that might basically have different price action for different reasons. If Cardano is launching a smart contract system and the staking numbers are going through the roof, well, there's less Cardano in circulation and that has implications for interest rates, et cetera. So all of this is happening at the same time in a way where the crypto kind of banking system has evolved in its own unique way versus the traditional banking system. Now, you can't pay interest on in-kind on Bitcoin deposits forever because Bitcoin is a deflationary asset. Back to your other question about where this is going. So that's unsustainable.”
2021-09-01 · We Study Billionaires · BTC041: Bitcoin Banking & Infrastructure w/ Bill Barhydt (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“But it's actually been extremely lucrative for the small amount of the relatively small amount of our business that we've done it with. And I wish we were in a position to go faster. I just don't think that the market is really ready for that accelerated level of support just yet. And we've seen that in other hacks. But we also do a lot more code auditing, I'm guessing, than a lot of consumers do who use DeFi directly. the net net of all of this is that the rates that we offer today are a direct function of all of those different lending models i just described, which have a demand model based upon where the markets are. If right now there's a lot of demand for dollars because miners are setting up shop in the US, but they can't get a business fast enough, right? The facilities are ready, the transformers aren't ready, the ASICs aren't here yet. So in some cases, there's a 12 to 18 month wait and line function for scaling up hash power in the US. So that's limiting some of the dollar.”
2021-09-01 · We Study Billionaires · BTC041: Bitcoin Banking & Infrastructure w/ Bill Barhydt (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Curve obviously for a few different reasons, right? The banks traditionally, or most banks won't play in our space. If you're a miner sitting on a billion dollars worth of crypto and you want to expand your business and use that as collateral, most banks won't talk to you, at least not banks that do collateralized lending of some kind. Now, a company like ours that will gladly take that Bitcoin as collateral, it's a fantastic model. And so that's part of why this space has evolved, right? So we've got a combination of miners, we've got hedge funds, all basically sitting on myriad forms of collateral. And then obviously retail depositors that we can marry that with who've done quite well. And then, of course, there's DeFi. That's the smallest piece of our business, but it has grown significantly. And we've taken a very slow, methodical tack to that in terms of contract audit.”
2021-09-01 · We Study Billionaires · BTC041: Bitcoin Banking & Infrastructure w/ Bill Barhydt (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Off the bat, I'll say a couple of things. One, we use a model of what we call responsible yield. And responsible yield means we never intend to subsidize yield. Never. And we always look to generate a positive net interest margin on the business. We want most of the interest, the vast majority, in fact, to go to the depositor, whether it's a consumer or an institution. But we want a self-sustaining business. So we're not in the business of subsidizing yield, and we know for a fact that there are other companies out there doing that in order to grow the business. It's not sustainable by definition. It's not sustainable, right? Because nobody has infinite resources to subsidize interest payments to someone. And I'm not even talking about the legality of any of that. I'm not an expert, but I would venture a guess that some regulators would have some questions about subsidizing you, at least as a core business model, maybe as a one-off promotion. I don't know. But anyway, so we'll start off there. Now, the crypto space has evolved kind of its own yield.”
2021-09-01 · We Study Billionaires · BTC041: Bitcoin Banking & Infrastructure w/ Bill Barhydt (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Right now buying. And it's very similar to what we saw in like December of last year. It's actually a lot of high net worth family office money. People were using the word institution incorrectly. Starting to see more of that institutional buying in the first quarter. But yeah, so I would say those two things have been super interesting for us to watch.”
2021-09-01 · We Study Billionaires · BTC041: Bitcoin Banking & Infrastructure w/ Bill Barhydt (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“iOS and Android and you just if you're if you're using it from a country where we support a cash deposit you'll actually see that option in the app but you won't see it if you're obviously a US user well we don't have that option so that's one thing I would say you know we're also seeing a very different evolution of our retail and institutional businesses right now the interest in the speculative aspect for the businesses is right now is much stronger on the retail side it was growing quickly in the first half of the year it's definitely died down it's still growing relative to the fact that it didn't exist a couple years ago but but clearly like the retail interest right now is like way out ahead for us and we're seeing and i think you're seeing that right now and when we bounced off the i'll date the podcast a little bit but but you're seeing bitcoin bounce off those lows the last few weeks it's all retail driven right now and some of it is wells right we're seeing a lot of whales that are accumulating and basically looking at prices to come in but what we're not seeing is the institution”
2021-09-01 · We Study Billionaires · BTC041: Bitcoin Banking & Infrastructure w/ Bill Barhydt (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“There's a lot of it. We have kind of a dual track in our company in terms of who our customers are. We have high net worth people, high net worth customers depositing millions of dollars to earn yield, for example, right? Bitcoin dollars of stable coins, et cetera, et cetera. We have people in developing markets using the exact same service, walking into retail with $50 in pesos or Philippine pesos and Guatemalan, El Salvador doing the same thing, literally walking in with cash, walking out with Bitcoin earning yield in their Aber wallet. And it blows my mind. They're also doing slightly different things. But that overlap is mind-blowing to me. That one will wire million dollars and the other one will walk in with cash and both for exactly the same reasons. So that's something that 10 years ago, that wasn't happening anywhere on planet Earth with the same with the same app. It's the same binary download for both.”
2021-09-01 · We Study Billionaires · BTC041: Bitcoin Banking & Infrastructure w/ Bill Barhydt (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“The on-ramp because you're trusting someone. Proof of reserves means you're trusting somebody who's taking a look to give you that data. But that's fine. It's better than what we have right now in most cases.”
2021-09-01 · We Study Billionaires · BTC041: Bitcoin Banking & Infrastructure w/ Bill Barhydt (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Just started looking at it, so I have to marry that with how we manage reserves. So we don't issue, for example, retail accounts directly. They're issued by a trust bank. And we work with different lending licenses and different models for different things. But that's legal. From a technology perspective, I think it's super interesting and it makes a lot of sense. I'd love to be in a position where it's just all out there in smart contracts and on a web page and everybody can validate it. You're marrying two different worlds. It's another hard line into the matrix. and you're trusting that the hard line is actually looking at the right matrix, right? So when you say proof of reserves, you're always trusting whether you're trusting the entity that has the look inside to get you the data. It's like digital identity.”
2021-09-01 · We Study Billionaires · BTC041: Bitcoin Banking & Infrastructure w/ Bill Barhydt (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“An unregulated entity by U.S., I would guess by US state and federal standards. And they're just one company, right? We can end up with these tether-like actors all over the world rehypothecating smart contracts against assets that maybe don't even exist. We'll ultimately have no way of knowing. And you're starting to see things like, I think BitMex put out this proof of reserve.”
2021-09-01 · We Study Billionaires · BTC041: Bitcoin Banking & Infrastructure w/ Bill Barhydt (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“That's I'm talking about the entire market, right? So, yeah, but you could end up with a model where this thing, if you've got people leveraged short and this thing goes to infinity because retail's gone crazy, there's got to be systemic risk there. It's a very low probability for a company like GameStop, but it's a non-zero probability. I just think that that prime broker market is way bigger in the aggregate than the stablecoin market is today and with the rehypothecation going on and with certain players in the market. But our space is growing way faster, an order of magnitude faster. And it is going to catch up over the next 10 years. And the bigger problem, in my opinion, is what's going to happen with the non, let's call them the quasi-unregulated actors, right? And I'll put Tether in that bucket for now, even though they've agreed to with the state of New York to issue audited statements on their reserves. They're effectively”
2021-09-01 · We Study Billionaires · BTC041: Bitcoin Banking & Infrastructure w/ Bill Barhydt (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“This is a much smaller market than that today, but it's growing way faster. I look at our lending business that didn't exist 18 years.”
2021-09-01 · We Study Billionaires · BTC041: Bitcoin Banking & Infrastructure w/ Bill Barhydt (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“I don't know. Look, I mean, the prime broker model has been around for a very long time. I talked about this when the GameStop thing was happening that we didn't know what kind of systemic risk was being created by prime brokers lending out stock rehypothecating those shares. And who was going to be left holding the bag if retail and institutions end up fighting it out that way with equities that are basically being managed by banks because Goldman's a bank? So I think”
2021-09-01 · We Study Billionaires · BTC041: Bitcoin Banking & Infrastructure w/ Bill Barhydt (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Is but again, I'd rather trust something right now, like Circle with 100% reserves, whether the reserves are treasuries or whatever, then a bank that's issuing a DDA. It's actually safer for everything I know. Minus the issue she's raised.”
2021-09-01 · We Study Billionaires · BTC041: Bitcoin Banking & Infrastructure w/ Bill Barhydt (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Enough to tell you what the answer is, but I understand the problem on both sides enough to know where I place my bed in terms of what has a better chance of being fixed in terms of the risks.”
2021-09-01 · We Study Billionaires · BTC041: Bitcoin Banking & Infrastructure w/ Bill Barhydt (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“And a lot of this comes down to FDIC rules because they're the ones at the banks ultimately report to for these prepaid access products because they're considered in many cases high-risk products, not just crypto, but prepaid cards and other products. And my understanding is they have to maintain one-to-one reserves. Now, they don't necessarily have to be purely dollar-based. They can be treasuries and other things. But they do need to maintain 100% reserves. It was always my understanding. Now, Caitlin's point is a little bit different in terms of the risks associated with reconciliation and settlement and the way things move on a blockchain and settle on a blockchain versus the way they move in traditional banking markets. I get that. And I agree in terms of how things work today. My response is that I think that there's a better chance of fixing that than there is of the Fed, the Treasury, IRS, FinCEN, and everybody else with the state getting together and figuring out how to build a digital senior assistance. That's my gut. And I'm not deep in it.”
2021-09-01 · We Study Billionaires · BTC041: Bitcoin Banking & Infrastructure w/ Bill Barhydt (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Slightly different perspective. We've talked about it, Caitlin and I, and I totally get where she's coming from. I think that the existing banking system as it relates to reserve management can be mostly fixed to address this. I think that the stablecoin model is actually in some ways better because banks that can participate in fractional reserve banking, meaning traditional bank DDA based issuing banks, can't with funds earmarked for prepaid stored value products or prepaid access products in general. That's my understanding.”
2021-09-01 · We Study Billionaires · BTC041: Bitcoin Banking & Infrastructure w/ Bill Barhydt (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“You're talking about digital seniorage, first of all. And most people don't really know what senior G is. So, I mean, it's the process of creating money out of nothing effectively, right? You know, it's a debt-based instrument, but effectively out of nothing. And so I'm not a macroeconomist, so I'm sure I got it wrong. But that's how I look at it. It's way easier to get a money transmission license, a money transmitted license, to put a bunch of reserves in a bank account and issue a smart contract to give you access to that reserve than it is to replace a hundred years of senior edge processes and the contracts that underlie what a federal reserve note is from scratch in digital form. I haven't looked at all those regulations, but I know they're extremely complex. The processes are extremely complex. What goes on behind the scenes to get that money minted is extremely complex. And it's not going to be easy. And we'll have 10 competitors to circle in the market before we have a central bank figuring out how to replace.”
2021-09-01 · We Study Billionaires · BTC041: Bitcoin Banking & Infrastructure w/ Bill Barhydt (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“I think it's going to be tough. I think the fact that she's servicing institutions only and not retail is probably the main reason why she'll be able to get it done in the next couple of years. I think somebody doing what she's trying to do directly for retail would have it five times harder at least. But we'll see. And I think that's one of the reasons why I'm bullish on, for example, Circle. I think there's a much better chance that Congress will enable the Fed and others to work with private industry to back stablecoins than necessarily just to come up with a central bank digital currency and just given the politics of it, it's going to be very difficult.”
2021-09-01 · We Study Billionaires · BTC041: Bitcoin Banking & Infrastructure w/ Bill Barhydt (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“We've come at this from a different perspective. I understand originally the money transfer kind of FinCEN guidance on prepaid access. I've been a prepaid card issuer. It just turns out that in the early days of crypto, the regulations, most of the regulations stemmed from that world because we didn't have the idea of Bitcoin or virtual currencies in that regard in existing regulation. So FinCEN, IRS, and others states use that existing regulation and layered on top turns out I came from that world. She came this more of an eye from the traditional banking world. And, you know, so we're kind of meeting in the middle now in terms of our understanding of where this is all going. I mean, she's taking a very ambitious approach in terms of being able to issue true dollars, not just even stablecoins. True dollars through Avanti and being able to access the Fed directly. And we'll see. I think she'll get it done.”
2021-09-01 · We Study Billionaires · BTC041: Bitcoin Banking & Infrastructure w/ Bill Barhydt (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Super interesting. We talked every once in a while, she's brilliant. I mean, her ability to go deep on this stuff is just awesome. Thank God we have her in the community, not just for Avanti, but in the community at large. So, Caleb, thank you for what you do.”
2021-09-01 · We Study Billionaires · BTC041: Bitcoin Banking & Infrastructure w/ Bill Barhydt (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“You can have bills that fix wording in the definition of a broker. You could have bills that actually make it worse in theory, right? To your point about it won't be adjudiated for a few years. You don't know who the interpreter is going to be on the regulatory side. And that was my point earlier where if you get some, sorry, some nut who just doesn't understand the original intent and decides to go full tilt towards our worst fears, who knows what that could mean. It could mean another China too where we migrate mining out of the US again three years from now. I pray that's dreaming that that could even happen. But I don't think it's a zero probability outcome that given the current wording that you could end up with someone in a regulatory position of power who could interpret this that way for whatever political reason they choose to do so. I would say the odds are against it happening, but it's a non-zero probability, which is why this needs to be fixed.”
2021-09-01 · We Study Billionaires · BTC041: Bitcoin Banking & Infrastructure w/ Bill Barhydt (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Well, they don't want to lose. But if you're an enforcement lawyer, part of what you're going to do is you're probably going to go work in private practice at some point. You really don't want to have a track record of losing and picking bad cases, I'm guessing. On the other hand, right now, crypto is a shiny object. So if you're an enforcement and you have the ability to choose what kind of case you're going to work on, I'm guessing right now if you could choose, you'd probably prefer to work on a crypto case. So you got to combine that. You want to work on a crypto case and you want to work on a crypto case you don't want to lose. So in there somewhere is the belief on someone's part that what Ripple is doing as a company is a security offering. They're wrong and we can win. Otherwise, I don't think they go into this thinking if we have no chance of winning this, but we'll make life difficult for them for five years. I just find that hard to believe.”
2021-09-01 · We Study Billionaires · BTC041: Bitcoin Banking & Infrastructure w/ Bill Barhydt (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Offering. You can make that, maybe make that case, but that ship is sailed. They had no guidance. They didn't go after anyone in those days. And to do what they did, for example, in the Ripple case now makes no sense. I believe what Ripple did was a security offering when they raised the money. But to wait seven years, I'm guessing billions of dollars later to go after it makes no sense.”
2021-09-01 · We Study Billionaires · BTC041: Bitcoin Banking & Infrastructure w/ Bill Barhydt (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Circumstances. The lawyers would tell you it's facts and circumstances. Okay, what are the facts and what are the circumstances? Because fortunately, he's not going to get the army of people he probably wants from Congress. He's going to get more, but he's not going to get an army. They will pick and choose their battles and they'll go cherry-picking people who are probably running basically either issuing security tokens or enabling the exchange of security tokens and DeFi services, whatever. They're certainly going to go after them. I have very little doubt about that. I do think that a lot of the comments around everything is a security don't resonate with me, right? Ethereum is not a security. I'm sorry to my maximalist friends. Migrating the proof of stake does not turn Ethereum into a security Cardano is not a security. These systems are use utility tokens as gas. Maybe the way they raised money by today's standards was a security.”
2021-09-01 · We Study Billionaires · BTC041: Bitcoin Banking & Infrastructure w/ Bill Barhydt (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Was an interesting public comment from, I think it was a Republican, I want to say congressperson who's on the oversight committee related to the CFTC who said, hey, you're overreaching here. You should have all people know the difference between the CFTC's writ and your writ in the SEC. Now, he understands crypto tech better probably than his counterpart overseeing the CFTC, and I don't know that for sure, but I'm guessing having taught at MIT and I've spent time with him when I presented there, that he does know what he's talking about, at least in terms of how it works at a very high level, like kind of like mine. You know, I'm not a coder anymore, but at a high level, he can explain. But he's totally wrong. A lot of what he said at Aspen's, I agree with him in terms of their ability or the CFTC's ability to go after some of these DeFi services under certain circumstances. But the automatic assumption that everything is a security is just nonsense. Even enforcement will tell you it's facts.”
2021-09-01 · We Study Billionaires · BTC041: Bitcoin Banking & Infrastructure w/ Bill Barhydt (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Before they'll go after Bram, the protocol creator. So I do think there's going to be a lot of cases brought against services that market themselves purely as DeFi but aren't truly D. And we'll see how that plays out. But I think there's going to be a lot of rude awakenings in the coming months.”
2021-09-01 · We Study Billionaires · BTC041: Bitcoin Banking & Infrastructure w/ Bill Barhydt (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Something else, by the way. You said we're going to fight, they're going to fight DeFi. And I have, I'm struggling with that one because I don't think that they can. And I think that the SEC and the CFTC understand the difference, meaning most services today that call themselves DeFi aren't D, meaning there's an off switch, right? And so if you can go after the off switch and you fall under existing regulation in their opinion, you should expect they're going to come after you. It's the difference between running Uniswap, the web page and Uniswap the protocol or AA DeFi protocol that you can't shut off because it's sufficiently the contracts are out there and are running on a, let's call it sufficiently decentralized system like Ethereum with no off switch. I believe that they would recognize that they can't shut off those services and they would also recognize there's no one to go after unless you want to put somebody in jail for doing something that is already out there and can't be shut off, which BitTorren has already shown us. They'll go after the users and”
2021-09-01 · We Study Billionaires · BTC041: Bitcoin Banking & Infrastructure w/ Bill Barhydt (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“My opinion matters? Probably not. The fact remains that they have broad based leeway according to this document to do that. And you get another nut in FinCEN or the IRS or the SEC who interprets this some other way. Look out. And so that's very worrisome and I think it deserves a fight. And I have to agree with Senator Cruz on this. They don't know what they're doing. And so they do know what they're doing, which is even scary.”
2021-09-01 · We Study Billionaires · BTC041: Bitcoin Banking & Infrastructure w/ Bill Barhydt (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“If this is your intent and you're in cahoots with the people who are writing it, fix It's not that hard. And so since it's not that hard, really, given that they are in cahoots, you have to take a step back and go, okay, why are they really leaving it this way? Why are they giving themselves such broad leeway to interpret the word broker any way they want to potentially go after a software developer or a miner? Do I really believe they're going to do that in the next three years? Probably not.”
2021-09-01 · We Study Billionaires · BTC041: Bitcoin Banking & Infrastructure w/ Bill Barhydt (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Yet we're willing to regulate it to help. He's absolutely right, right? It makes no sense whatsoever. So, okay, so let's put that aside. Those of us on the inside, we accept the fact that they don't know what it is, but they're going to do something anyway and accept that. I mean, look at the bit license, right? I mean, the bit license shouldn't exist in that form. It was hastily written, you know, before Bitcoin was really even a big thing, mostly in response to the FinCEN guidance, right? So without actually understanding where the market was going to go. And that's my big fear here. And the other thing I'll say is words matter, right? So the IRS or Treasury is trying to make the case now. Well, that's not really our intent by basically extrapolating this potentially broad definition of broker. Well, as a citizen, I have to look at this and go, well, yeah, I guess you can try to interpret intent. And we do that all the time. Back to the original, you know, federalist papers, whatever, but you don't need.”
2021-09-01 · We Study Billionaires · BTC041: Bitcoin Banking & Infrastructure w/ Bill Barhydt (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Right. So I think that there's so many things happening at once here. And I was shocked. I don't know if you saw the video that I shared that Ted Cruz put out, which went total, I think it was the most tweeted, retweeted tweet I've ever had in my umpteen years on Twitter where he basically said, there's not five of us in the Senate who actually understand what the hell this thing is.”
2021-09-01 · We Study Billionaires · BTC041: Bitcoin Banking & Infrastructure w/ Bill Barhydt (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT