Transcript:
slava (00:01.893)
Welcome back to the show. Today's guest I am super excited about. I've known him for over a decade and he knows so much about the industry. And when we talk about alternative investments and pushing the industry forward, this is one of the people that has helped create everything that we are working on top of. Congressman Patrick McHenry, thank you very much for coming.
All right, so you obviously have been pushing forward so many regulations, but we don't know the backstory. Where did this all come from? How did you get involved with ALTS even before you became a congressman?
pmc (00:25.994)
You obviously have been pushing forward so many regulations, but we don't know the backstory. Where did this all come from? How did you get involved with ALTS even before you became a congressman? Well, so frankly, you know, I came to Congress with experience in the real estate market, buying and selling a few properties for myself and my brother, and it came to Congress with a couple of assets, mainly real estate.
But I've been motivated around advancing different investment options because of my father's experience. He had a real challenge getting a loan to start a business. And so I've been trying to fix the problem my dad had and his business partner had when they were starting a small business in the backyard. And so I've been thinking about that a lot. And my work with the Jobs Act was born out of my dad's experience and my motivation was
basically because I grew up with a family without financial connections. And so a bank loan was the best option. And there were a few alternatives. And so when my dad started his business, the first piece of financing he got was because he got a credit card. And this is when credit cards were the original FinTech mover in the space in the late 70s. And that's a reason why I was able to buy his second piece of equipment.
was through using a credit card. So I wanted to build on that and update the technology footprint so that people have different financing options. So you mentioned the Jobs Act, just a level set. What exactly is that? How far back are we going? What's been the impact? Well, so let's rewind to quite a while ago, 2011. And so we had this
slava (02:02.077)
So you mentioned the jobs act, just to level set. What exactly is that? How far back are we going? What's been the impact?
pmc (02:22.046)
you know, a Congress that wasn't doing much, a huge partisan divide, which is nothing new in Washington, and an economy that was not recovering at the pace it needed to. And so in combination with the Treasury Department and the Obama White House, I and a number of others in the House put together a bill called the Jobs Act to address financing needs and both on debt and equity. And in
really had a major move the first time in two generations that we'd updated securities law. And so that bill enabled private offerings to happen in a better way, simplified regulation around modest size offerings, including a piece of legislation that I wrote around investment crowdfunding. And then on top of that, we had the ability for folks
with a lot less expense structure so smaller IPOs could happen. That's what's happened enormously in the biotech space and over the last two years the American people benefited from a massive amount of investment that came over the last decade in biotech as a result of the jobs act. So that was a bipartisan piece of legislation, a real roadmap for how we should be operating in Congress and in Washington.
And you mentioned this, so equity crowdfunding or investment crowdfunding, as you said, was basically invented with the jobs act, is that right? That's right. Because folks like you that were doing this already with a unique approach and what we did was expand the opportunity for different types of crowdfunding to occur. And that really taught me a big lesson on legislating because the 11 page bill that I wrote
slava (03:49.893)
And you mentioned this, so equity crowdfunding or investment crowdfunding as you said, was basically invented with the jobs act, is that right?
pmc (04:18.846)
on investment crowdfunding became well over 600 pages of regulation from the Securities Exchange Commission. And so that's informed me over the last decade that I've got to be quite specific with regulators and quite intentional on the fact that we're supposed to make things less onerous and less complicated, not more onerous and more expensive. So today it's obvious that equity crowdfunding is interesting. Was it easy to pass?
slava (04:42.513)
So today it's obvious that equity crowdfunding is interesting. Was it easy to pass? Was it easy to get through in 2011, 2012?
pmc (04:49.078)
Was it easy to get through in 2011, 2012? Not really. Frankly, the idea came to me because you had somebody who put together a Facebook page and said, you want to buy a beer company. And it was Pabst Blue Ribbon was for sale. And there were no American buyers. And so they put together this, somebody put together a Facebook page and said, look, why don't we all band together?
those of us that love PBR, and buy it. And so they put together a Facebook page and they started getting pledges. And then federal agents knocked on this person's door and said, you're breaking federal securities law, which was a huge shock to him. All they wanted to do is get a whole group of folks together. So the idea was not from me, it was from this idea of buying a beer company.
And while I love craft beer and beer generally, my motivation was around how you helped other small businesses access that pool of capital. And it seems like what was intentional for me on investment crowdfunding didn't come to full fruition until we had digital assets come to the fore like they are now, and a variety of alternatives in the digital asset space, where you're actually having
real investment crowdfunding happening at a very quite vigorous pace with now with DALS and with DeFi, but in particular with DALS answering this question of owning an asset in a distributed fashion and a low dollar way and having people be able to participate in the upside. So there's a lot, you know, the technology transformation has occurred at such a pace that is really gone.
beyond what I had dreamed possible with my approach to investment crowdfunding. So going from Pabst Blue Ribbon to Dow, it was very quickly you're fluent with all these progressive innovations as it relates to investments. Why is this important to you? Why wasn't it just a one and done with the jobs act? Why this seems like, you know, it's becoming associated with you and your legacy. Tell me more about that.
slava (06:50.993)
So going from Pabst Blue Ribbon to Dow's, very quickly you're fluent with all these progressive innovations as it relates to investments. Why is this important to you? Why wasn't it just a one and done with the jobs act? Why this seems like it's becoming associated with you and your legacy? Tell me more about that.
pmc (07:10.134)
Well, again, back to my dad. What kind of business did my dad start? What was it the next tech startup, right? It wasn't. It was a lawn service, mowing grass for other people. His first piece of equipment, he borrowed from somebody who wanted to sell him the lawn mower, and he wanted the best, fastest lawn mower you could possibly get so that you had the technological advantage over...
having a lot of employees. And so he got that and then needed to buy a truck in order to put this lawnmower in the back of. So he used a credit card to buy that truck. So I think of that and I think of that person trying to get investment capital. And if you make this very expensive, if you make it if you if you make it very expensive for legal, you know,
legal bills for accounting bills, to get a little investment capital, you price people like my father out. You have debt financing that is perfect for people in certain situations, but you have banks that are not able to make the loans that they were able to make 30, 40, 50 years ago, even 20 years ago. And so now you see bank balance sheets not geared towards small business lending, but geared to big business lending.
a whole variety of other things. And so I think we've got to fill the space with more diverse offerings and what better than people investing in one another. Technology is the best way to root out this cost structure. And so I think the big move here is going to continue to happen like, frankly, web, the first innovation around internet technology and web, you know, the initial approach to
internet protocols and I think we're at a similar stage with digital assets and in all the technology potential that is coming out of it.
pmc (09:19.435)
So.
slava (09:19.569)
So you just mentioned digital assets. I read recently some comments around being concerned about over-regulating crypto or tech. Do you want to give some thoughts on that?
pmc (09:22.538)
You just mentioned digital assets. I read recently some comments around being concerned about over regulating crypto or tech. Do you want to give some thoughts on that? Well, you think about where we were in the early 90s, where you had dial-up connections into this new innovation of the World Wide Web.
And you had a couple of initial companies that figured out that you had to have a browser in order to make this thing effective. And for us to be able to communicate in substantive ways. So, what government did then was say that we're going to move slowly to understand this technology. We're gonna understand what is necessary for regulation once we understand what the heck this thing is.
slava (10:13.661)
This is the 90s.
pmc (10:14.546)
This is in the 90s, right? So and then by the mid 90s, what Congress did was pass a resolution saying, we're not going to tax the Internet. We should not tax the ability for people to access the Internet, nor should we tax the Internet. And I think that was a that was a foundational that was a massive foundational element for what we've benefited from over the last 25, 30 years.
So the pipes are not taxed now what happens in terms of transactions on top of that? That's a different question of course But but what we have to do now is to take the best lessons of the early 90s Bipartisan lessons that we're going to be measured that we're going to be slow and we're going to make sure that we're we frankly measure twice and cut once when we when we do any regulations and so
That's the measure that I'm trying to push, saying fully that this is not simply about a tradable asset. Everybody talks about Bitcoin, but let's think in terms of the digital asset, Bitcoin. We should not think of it just as a tradable asset. It is an enabling function for the next generation of web technology. And what rides on it, we don't want to destroy the opportunities.
of what rides upon this new set of technology. That's the measured approach I am taking. Right now we have Washington, many in Washington, looking at this and saying, this is a new asset that we have to form into a previous asset type that we know and understand, a commodity or a security. And those are the two things, one is fish, one is fowl. What we now have with the digital asset is something
in most regards that is different and unique. We have some that are certainly a security and some that are certainly a commodity that fit neatly into those established regulatory parameters. But we have this whole other realm that is distinct in this offering and we have to understand that and have a proper approach to what those things are. So if you got what you wanted personally, like in the 90s, which is, we're not gonna tax access to the internet
slava (12:34.449)
So if you got what you wanted personally, like in the 90s, which is we're not gonna tax access to the internet or tax the internet, what would be the equivalent today? What would be that precise resolution today? What would you want to have?
pmc (12:40.654)
the internet, what would be the equivalent today? What would be that precise resolution today? What would you want to have? Well, what I'd want is the Securities and Exchange Commission to say that there are things in the digital asset space that are not securities and the Commodities Future Trading Commission to say that there are things that are not commodities. Right now we have both agencies saying we see all this space is within our ability to regulate and to...
have mastery over. What I... So I think of this as, how do we build the cathedral? And the cathedral is an overarching piece of legislation that deals with tax implications, deals with platforms, and then deals with the substance, the sum and substance of what is a digital asset. What is not a security, what is not a commodity, what is this new thing? And if you form yourself in that...
slava (13:13.677)
Sorry, I'm sorry, go ahead.
pmc (13:39.626)
realm, you have a, you're separated from the SEC and you're separated from the CFTC. That is the space that I think enables us to have this massive amount of creativity that can come out of this. And do you have an example in mind as to what should not be considered a security that is, for example, not Bitcoin or ETH? I mean, I think, so I would...
slava (13:54.353)
And do you have an example in mind as to what should not be considered a security that is, for example, not Bitcoin or ETH?
pmc (14:08.402)
Under current regulation, I think you would have to define a Dow as something distinct. You would have to define an NFT as something distinct, as two examples. And right now, you have both agencies not recognizing that an NFT is a distinct asset. And it is as distinct as somebody who seeks to buy...
a Picasso and put it on their wall. And it may look, frankly, to some people that are not engaged in the space as odd. Why would somebody pay for this, right? I hear all this stuff, like just, use your mouse and save it, it's a gift. Why are you paying for this? Like, and all this stuff that misses the damn point. But frankly, that's just a...
that's just recognition they don't understand the space or the asset, right? That a digital asset is in fact digital gold or, and that gets way overused because gold is a commodity, right? But it is as distinct as owning something physical, even in the world of bits and bytes. So...
I use a Dow and an NFT as just two examples of things that are distinct from securities regulation in most respects and from commodities regulation in most respects. Now obviously there are applicable laws, like copyright laws and trademark laws and things like that have to be adhered to. You can't go steal somebody's intellectual property and call it something that it's not. Right?
There are obvious existing laws that we all have to abide by, but in this realm of securities and commodities, this distinction is very important. The utility of smart contracts should not be the purview of the Securities Exchange Commission. It should not be the purview of the CFTC, just as you know. And those are the utilization piece.
pmc (16:28.598)
So stepping back, if you have a key in order to open a door, do you get to regulate what's inside the door?
So right now, people conceive of a digital asset is in and of itself the thing. Which is like saying a fight over the dial-up connection is the internet. No, it's just the entry point into the internet. And again, my abilities for analogies, as you just heard, are really weird and bizarre. But to the best of my ability, when I think of
the space in Washington, they just want to, they want to regulate that key and everything that it unlocks as the same thing. And that doesn't, that doesn't really keep with the realities of the space. You brought it up on your own. Do you think NFTs will end up being regulated as securities? I hope not. And, you know, the idea that you're going to have
slava (17:27.445)
You brought it up on your own. Do you think NFTs will end up being regulated as securities?
pmc (17:39.382)
You know, think of a 48-by-night club. Okay, so you have that. Well, what is that? In essence, you're talking about churning off a large variety of different, distinct things. So it should probably be regulated more like we regulate.
baseball cards or how we regulate art sales, which is to say there is an admission that those things are not securities. And so I think you have to have a similar understanding in securities law that there are distinct assets that are...
digital in form, they're enabled by a new type of technology, but are distinct in its final product. So, how do you regulate, how do you have an offering around one piece of art that is in a stack of offerings? I think that becomes really cumbersome, especially when you're talking about
you know, if you go on OpenSea and you see a wide variety of things that you can purchase very, very cheaply. Right. I guess, I guess you could regulate one piece of our security if it was fractionalized like through a Reg A plus or something. Yes. But there's a means to that. So if you want to, if you want to go into the backend and we all joined together and, and do something that is regulated. So the fact that you and I,
slava (19:12.321)
I guess you could regulate one piece of R as security if it was fractionalized like through a Reg A plus or something.
pmc (19:33.174)
could decide that we're going to invest in a company. Well, our relationship is our relationship in that investment. There are existing laws for how we can create a partnership or whatever that may be. But then our activity is regulated. So that distinction of your action on what you're doing, either with your own money versus other people's money, there's that distinction already. And then the distinction between
types of action, right? So we could raise an investment fund and buy real estate, buy commodities, buy securities. And I mean, there's a ready mechanism to do those things. So I think you have to have this distinction of action and intent that is very different than the current approach. I mean, that is...
There's more. It's more to a traditional approach to securities and commodities regulation. So you mentioned before Congress, you were buying real estate and that was going well. Today, are you buying these NFTs? Are you going into crypto? You're still doing real estate investments. How do you think about your alt exposure today? Well, it's quite minimal, frankly, because in as a matter of our ethics policy in the Congress.
slava (20:39.045)
So you mentioned before Congress you were buying real estate and that was going well. Today are you buying these NFTs? Are you going into crypto? Are you still doing real estate investments? How do you think about your alt exposure today?
pmc (21:01.494)
conflicts of interest or actionable offenses. And so what I entered this space following digital assets very closely for the last decade, and I've watched Bitcoin from roughly 500 forward. And so.
I wanted to be engaged in this place in terms of public policy without personal conflicts, questioning my motives or my actions. And so that's how I've operated here. In this space though, I think it's really important for members of Congress to understand these assets. That's why you need to... You need to... I mean...
There are a large variety of things that members of Congress need to use for themselves and understand how it works. And then you can have a better understanding of the policy implications for those asset classes. So to me, it's been really frustrating that I can't, because of the commitment I've made, that I can't...
proactively engage in this space. Because I think it's fantastic, interesting, exciting, and to me is both an investment class and in a hobby. I'm just fascinated by the different types of, different types of NFTs that are available and the creativity around it.
And then you have on top of that. If you were able to, without having a conflict, which one would you be buying? Sheesh. I would have had the wisdom to buy, I mentioned Borda Club because I just think that the look of it is pretty cool. I've got a staffer of mine who has a graffiti artist that he's loved.
slava (23:00.993)
If you were able to, without having a conflict, which one would you be buying?
slava (23:20.465)
nice.
pmc (23:25.826)
who's rolled out some NFTs and blanking on his name right now. But the look of it's just so cool, right? And that's the part that I just, there's just something that just like hits ya and you just, you either think it's cool or you don't, right? And there's no explaining it. I mean, and I know most people are talking about the board apes because they've done the valuation and all this stuff, but.
I just think it's just cool.
slava (23:59.517)
I love it. If we could turn the page and actually get into some of the regulations and get your point of view on report card and how they're doing. So let's start with equity crowdfunding. So we just advanced from 1 million to a 5 million cap early in 21. How do you think that's going?
pmc (24:01.538)
turn the page and actually get into some of the regulations and get your point of view on
So let's start with equity crowdfunding. You know, so we just advanced from one million to a five million cap early in 21. How do you think that's going? Better, not great. I wish it were great. The fact that the Securities Exchange Commission came out with rather onerous, not rather, significantly onerous regulations out of the gate delayed this space in a really unhelpful, unsatisfactory way. And.
the updates that were put in place, within the last year and a half, two years, is given this space, the type of changes necessary for it to come together. So at this stage, I give it a C minus, sadly. What needs to happen to advance even further to give it an A plus? Well, I've...
slava (24:57.549)
One needs to happen to advance it even further to give it an A+.
slava (25:03.781)
tactically, which changes would you have?
pmc (25:04.526)
I've carried. I mean, they took care of about 80% of the concerns I had. I think what has happened here is that you've seen this advancement in digital assets that have given us a an alternative that is that is seemingly more interesting. So I think the merger of crypto with investment crowd funding.
gives us this potential over the next decade. I think there's real opportunity. Is that your prediction? Is that what's gonna happen? Equity crowdfunding meets Web 3? Yes. And I think it's gonna be interesting on how people, you know, create a DAO in order to access that type of regulated offering. And I think the technology enabled investment
slava (25:37.479)
Is that your prediction? Is that what's going to happen? Equity crowdfunding meets Web3?
pmc (26:01.582)
crashes the cost structure in such a way that you know low dollar Raises a low dollar raise for a company becomes much more viable
pmc (26:15.586)
What do you think of Reg A pluses, which are great on that? Better, I would call that a B plus. Because they provided, with Reg A plus, the regulations out of the gate were less expensive than investment crowdfunding, Reg CF. And so therefore it became a more viable alternative. So I think that's done quite well.
slava (26:15.644)
What do you think of Reg A pluses? What's your grade on that?
pmc (26:45.13)
I think we've got broad work that we have to do to reduce the expense structure for all this space. So we can have a broader set of capital formation and more alternatives. How would you reduce the expense structure? What would you take out? Well, a couple of things. You've got to, you've got to, you've got to, I mean, what we try to do with, with Reg CF is to regulate the portal rather than, than the individual offerings. So if you then have a.
slava (26:56.049)
How would you reduce the expense structure? What would you take out?
pmc (27:13.558)
very simplified offering structure, that means you don't have to do the individual legal work to the level that you would have to do for a major offering, like a Reg D offering, then that reduces the expense structure. So if you can simplify that and make that quite straightforward, that helps significantly. So to bring that,
The main point though is that we have these breakpoints in regulation between reg CF, reg A, reg A plus, and reg D. And so you have these expense structures that come into place at set points. So 0 to 5 million, that's one set of regs. And you have on top of it 5 to 50, and so in the 50 plus.
What we should have is a temperature gauge that sort of ups the expense structure or ups the disclosure structure rather than expense, but disclosure structure as you get larger. So then we smooth over those break points. So if you're raising 4 million versus 6 million, it shouldn't be night and day. If you're raising 49 million.
versus 51 million, it shouldn't have a significant differential. And unfortunately, our break points in securities regulations are such that you kind of feel the hammer at certain break points. Therefore, you cap raises, or you have to have people raise, instead of 51 million, they raise 60 million in order to deal with ramifications for the different type of raise.
The passing of public solicitation was a really big deal as part of the jobs act. How do you think that's going? Well, they tried to screw it up. The SEC tried to screw it up. But the idea was that a private offering could be heard by the public without destroying a private offering. And I think that's gone pretty well. I would give that an A over the last five, six years.
slava (29:11.473)
The passing of public solicitation was a really big deal as part of the Jobs Act. How do you think that's going?
pmc (29:40.606)
And I think that that's been helpful as well. I mean, this, you know, the fact that we had to legislate this shows that regulators can be aggressive but misguided. It's one thing to have people follow the rule of law. It's a different thing when you're enforcing a novel concept, because somebody
talked in public about a private offering that the public doesn't have access to, right? So, you know, it's like you telling me about your bank account, that doesn't mean I have access to your bank account. And just because people were bragging about a type of offering doesn't mean that the public is entitled to that same offering. So I think that really shows that
Congress in a bipartisan way can respond to things that are wacky and out of date.
slava (30:40.765)
Speaking about a day, accredited investor rules. Yeah, I mean, why do we still have that?
pmc (30:43.826)
investor rules. Quite out of date. Yeah I mean why do we still have that?
pmc (30:54.594)
The foundation of securities law is the assumption that the public is too dumb to understand and see fraud, or is too dumb to make decisions with their own money. And I think that is a fundamentally flawed approach.
I think it is not in keeping with where, especially technology is right now. We're going to still police the bad guys. We absolutely should. Buyer beware. Absolutely. We need to make sure that laws are upheld and we go after fraudsters and bad guys. But people should be entitled to make decisions with their own money. And so the credit investor standard is kept.
the massive potential, upside potential, especially of what we've seen over the last four, five years in what has happened in private offerings, the valuations of private offerings, it has kept this massive economic potential from retail and everyday investors. And therefore, retail and everyday investors have done things like,
invest in a narrower group of securities offerings. We have fewer public offerings, fewer public securities to invest in today than we did 30 and 50 years ago in the United States. And so we have a narrow range of offerings that more investors than ever are investing for themselves and accessing the markets. So what happens is, with a wider number of investors and a narrower set of
of securities to invest in, we have some wacky things that have happened. Think of one year ago, the ride on GameStop and number of the meme stocks. Well part of that was investment, part of that was hobby decisions, and another part of that was just cultural. A bunch of Reddit users saying, let's stick it to the shorts and let's support companies that we like, that we don't want blown up and destroyed.
pmc (33:17.654)
and sold off for pieces. So, you know, you have this broader retail engagement than ever before, so we need to open this up. And I think opening up the credit investor standard is a way to ensure that people have a broader array of good investable options, and that they can make better decisions for themselves with their own money, with those greater options. So I'm definitely a little biased here, but you know, anybody in America can take a driver's license
slava (33:42.257)
So I'm definitely a little biased here, but you know, anybody in America can take a driver's license test and be able to then be able to drive. Anybody in America can decide what to do with their own money when they go to a casino. So what needs to be done for us to change the laws to allow anybody in America to take a test to be able to show that they're allowed to invest in anything they want.
pmc (33:47.17)
be able to them be able to drive. Anybody in America can decide what to do with their own money when they go to a casino. So what needs to be done for us to change the laws to allow anybody in America to take a test to be able to show that they're allowed to invest in anything they want? Elections have consequences. And most of my Republican colleagues are with me on this issue of the credit investor standard. And a handful of my Democrat colleagues are with me. I need more help to make this a bipartisan approach.
There's nothing partisan about it. It's just trying to open up greater investment opportunities for the people that want it. You can go buy a lottery ticket, a state run lottery, and that has far less potential than investing in a startup. It's far riskier, and your downside is almost locked in, almost guaranteed, frankly. And the upside potential for startups is enormous.
So, you know, I think in order to focus on income and wealth disparities, we have to think of a broader approach. The old line left versus right approach does not work to solve income and wealth disparities. We have to, and so the way I think of this is we have to open up more investment options
to help narrow that wealth gap between those that are already wealthy and have access to the best performing assets versus those that are not as wealthy but may be highly educated in investments. They should have that opportunity for those best performing assets as well.
So if you're trying to raise a venture fund or like a private fund which is focused on venture, you're limited to only 250 accredited investors. And if you're trying to raise a fund that's not venture in another asset class or a multi-strategy asset class.
slava (35:38.109)
So if you're trying to raise a venture fund or like a private fund which is focused on venture you're limited to only 250 accredited investors. And if you're trying to raise a fund that's not venture and another asset class or a multi strategy asset class, multi asset strategy, you're limited to 99 accredited investors. That's so few. Why what can we do to expand that?
pmc (35:54.198)
multi-asset strategy, you're limited to 99 accredited investors. That's so few. Why, what can we do to expand that? Well, I did this with angel investing to expand the number of partners you can have in these funds. I think we have to expand this. We have to expand it because that enables less wealthy people to...
to invest in the space. And that also means that you can have, and the reason why that works is if you still have a high dollar amount you have to target to raise, and instead of having 99 investors, you can have 250 or 500. That means that each investor can have, has a lower commitment amount. So I think we have to update that number and, you know.
build on the work that I put in for Angel's Consortiums to up the number of investors. We have weird breakpoints like this across securities laws that we have to update for modern society and new technology. So outside the questions I've asked, what is one or other...
slava (37:09.597)
So outside the questions I've asked, what is one or two other pressing topics very specifically that you'd like to try to change around these investment regulations?
pmc (37:12.35)
two other pressing topics very specifically that you'd like to try to change around these investment regulations? Well, the credit investor standard is really hot on my list, but I think we have to define digital assets. We had really bad legislation that passed, very bad language that passed as a part of the infrastructure bill, defining crypto brokers as something that they're not.
If you're providing a server to a miner, that does not make you a broker. And so they pass really bad language and I think we have to fix that. We don't need bad regulation coming out of an infrastructure bill to define digital assets. That's really very high on my list to get action on. In the short term, I think we have to...
have a smart regulatory regime around stablecoins as the access point to a variety of crypto assets. You have to have a US dollar stablecoin that is in some respects like a money market fund and other respects is like a payment scheme. And so we have to have regulation around stablecoins.
And I think we have to have a longer term study around a central bank digital currency. I don't think we should move quickly on legislating a central bank digital currency for the US government, for the Federal Reserve. I don't think we need to act quickly on that. I think we have to be quite measured and understand the ramifications for that. I think stable coins can fix and a broad offering on stable coins.
in smart regulation on stable coins can give you the benefits that people are touting that a central bank digital currency could enable in our country and around the world. And so I want to be quite measured with central bank digital currency discussions, but quite aggressive on defining digital assets so that we can have some homegrown innovation here for the next 10, 20 years.
pmc (39:34.978)
and use digital assets to power this new version of the internet. Awesome. So if our listeners want to be more like you, learn like you, what are you listening to? What are you watching? What are you reading? What are the specific things that they want to copy you? Look, I think Twitter is a huge learning platform. It is also a wretched place.
slava (39:43.869)
Awesome. So if our listeners want to be more like you, learn like you, what are you listening to? What are you watching? What are you reading? What are the specific things that if they want to copy you?
pmc (40:00.79)
But if you curate smartly, you can find some of the best minds in the world sharing some of the deepest insights. And if you don't curate very well, then you can be in a deep labyrinth of hell. So I've tried to curate well the folks that I follow closely that are big thinkers in the space. And, you know, you can look me up on Twitter.
I'd love the feedback on people I should be reading or things I should be reading. I'm always trying to consume in this space. There are so many different substacks right now and so many different folks that can go down the rabbit hole in a niche. And so I'm always chasing those things. You're actually a great read on Twitter as well. That's been helpful. And so...
It's a whole grab bag of things, frankly. And I'm always looking to get smarter in the space. And if I have a day that I feel like I have a really good understanding of where things are with digital assets, I then will read something that tells me that I don't know anything at all. And so I'm always trying to consume to get smarter because this space is so dynamic and it's got such great potential. And it's such an early stage.
We don't know what's going to come. So I'm, you know, I'm always trying to consume podcasts and Twitter are significant ways that I'm listening and engaged. So anything you got, send my way. So the last question is here we are in Q1 2022. What are your predictions for three years out in terms of either investments that you think will do well or two regulations that, you know, will be evolving or.
slava (41:42.801)
So the last question is, here we are in Q1 2022. What are your predictions for three years out in terms of either investments that you think will do well, or two regulations that will be evolving or it'll be changing?
pmc (41:58.242)
Well, I think within three years we'll have a definition of a digital asset that is distinct from a security and a commodity. That's prediction number one. That will happen at the federal level, number one. Number two, we'll have a regulatory formula at the federal level for stable coins, which will give people a great deal of assurance that when you take your fiat into the digital
whatever digital asset you want to invest in, that money is safe and secure. I think there'll be plenty of state alternatives as well, but at the federal level, we'll have a regime there. That's prediction two. Prediction three, I don't know what is gonna be the top performing asset in the world of digital assets. But what I do know is in three years, everything will be up from where it stands now.
across the board. I think there is such massive potential here that we cannot, I can't say that this digital asset is the answer. I think we're going to have, I think we're going to have a significant number that are going to provide answers.
that are going to provide a better user experience, that are going to make it easier. And I think we're going to continue to see innovation, not just for the next three years, but for the next 30 years in this space, built off of the crazy idea that Satoshi brought to the world. And I think...
I think that's what we're looking at for the next 30 years. And I'm really excited about it. And the fourth thing, my fourth prediction is we will fight like hell in Washington, but we will beat the bad guys from destroying this space. And that's the fourth prediction. Fifth prediction will, the reason why the fourth prediction won't be able to happen is because my fifth prediction is
pmc (44:20.958)
we're going to have crypto voters. And crypto voters are going to be on the left, the right. They're going to be communards and libertarians. They're going to be across the board from the left to the right. And these crypto voters are going to encourage those in public office to be pro crypto and punish those that are not.
And I think that will happen in the next three years as well. That we're gonna have a serious number of crypto voters that seriously engage, and that will make a serious impact in public policy. So those are my five predictions for what they're worth. That was amazing. Well, such as it is, right? We'll see if any of them come true, but I made five because I thought that...
slava (45:07.845)
That was amazing.
slava (45:12.029)
So I want to.
pmc (45:21.116)
I have confidence in those things.
slava (45:24.421)
I love it. I love it. Well, it's been quite the journey and discussion. We really appreciate your time. We covered everything from crowdfunding, you know, PBR to board apes to really pushing forward the accredited investor rules to your big five predictions for 2025. We really appreciate you coming to the podcast. Thank you very much, Congressman McHenry.
pmc (45:26.626)
been quite the journey in discussion. We really appreciate your time. We covered everything from crowdfunding, you know, PBR, to board apes, to really pushing forward the accredited investor rules, to your big five predictions for 2025. Really appreciate you coming to the podcast. Thank you very much, Congressman McHenry. Slava, thanks for what you're doing. Thanks for what you're doing. It's a really cool concept and great user experience, frankly. So great to be with you and thanks for what you're doing.
Until next time.
slava (45:55.549)
Until next time.
