This article is a press release written and provided by Wanxiang Blockchain, and does not represent the position of Dongjie.
On October 17, the 10th Blockchain Global Summit hosted by Wanxiang Blockchain Laboratory concluded successfully. The theme of this summit was "Advancing with 'Technology'", attracting hundreds of attendees, many of whom were global heavyweight opinion leaders, and dozens of peripheral industry activities were held.
At the meeting, Wanxiang Blockchain Laboratory's head Du Yu had a dialogue with Kee Global Advisors (KGA) co-founder and managing partner, discussing the impact of the US election on the crypto industry and conducting an in-depth discussion on the development trend of crypto finance in the future. The following is summarized from the on-site shorthand, with some deletions that do not affect the original meaning.
Du Yu: The topic we want to talk about today is "The Current Situation and Hot Analysis of US Web3 Development". The US election will be held in the second half of this year, and both parties are closely watching cryptocurrencies, BTC, and Web3. Trump also gave a speech at the BTC conference in July. Today, we are very honored to invite Kee Global Advisors (KGA) co-founder and managing partner Kevin to talk to us about these issues and the underlying logic. Please let Kevin introduce himself first.
Kevin M. Goldstein: Thank you! I am very happy and honored to participate in today's Blockchain Global Summit. This is not my first time attending the conference, and I can say that I am returning to a familiar place. Five years ago, we also attended the conference in Shanghai, and I am very happy about that.
I graduated from the MBA School of Northwestern University, and later also founded some fintech companies, providing services to financial companies and hedge funds in New York. About eight years ago, my wife led me into the Web3 industry, and we founded a small company. We have been cooperating with partners around the world, from private placements to government agencies, and we have been helping them realize their strategic and tactical plans. So far, we have 8 years of experience in the Web3 industry, and we still adhere to our original intention and are very optimistic and passionate.
Du Yu: Thank you very much for your introduction.
We want to talk about the impact of the US election on Web3. This year is a very important year for the United States. In fact, this year is also very important for the whole world, for Web3 and the crypto circle. Political figures will introduce new regulatory requirements, which will also affect the development in the next few years. It can even be said that Web3 and BTC have already become very hot topics, and American society is very concerned about them.
Both presidential candidates are very positive about the Web3 industry. Trump even said they hope the US will become the "capital of crypto finance", and Web3 has become a very important battlefield in their election.
What are Kamala Harris and Trump's positions on crypto finance and Web3? How will they affect the industry's development in the next few years?
Kevin M. Goldstein: This question is very timely, because we may see the general direction in a few weeks. I believe everyone knows that the impact of the upcoming election is very significant, especially for blockchain, BTC, and crypto finance, not just for the US. To better understand the impact of the election on Web3, we need to review the relevant history.
What did the 2020 election mean for the Obama administration? Who had the most say in regulation? At the time, it was Warren, who later withdrew from the race, but he had a very important position in the US Senate, as chairman of the Banking, Housing, and Urban Affairs Committee. Gary Gensler was also an important figure, and he has deeply imprinted his will on the Web3 ecosystem, but in fact he does not like crypto finance and the blockchain industry, and the fact is that he is moving further and further away from the anti-crypto finance stance.
Of course, there are other political figures pushing the SEC to embrace crypto finance. My wife has worked with Signature Bank, which can be said to be one of our most important electronic payment system partners.
Last year, they did not approve some projects, which was a very politicized decision, and the reason for pushing the Biden administration to make politicized decisions is also very simple. For example, in July this year, Trump said we hope crypto finance can develop vigorously in the US, so we can believe that the Biden administration may hold different views.
I want to remind everyone that the issue of crypto finance has been politicized since the early days of the Biden administration. Why has the crypto finance industry become part of the presidential election? Because Trump stood up and said I want to discuss this issue, and his team behind him said we also want to discuss this issue. And as time goes by, there may be 50 million American residents who already own crypto assets, and their experiences around the world are not the same, and the situation in the past four years has not been the same either.
I want to say that no matter who runs for office or who is ultimately elected, they are actually concerned about two things: one is money, and the other is votes. The Trump team is of course very smart, and these people can't be that stupid. When they can stand up and say they want to build an ecosystem in the US, of course they are speaking for America, and the Democrats were caught off guard, and Harris had to stand up and fight back, so she needs to attract as many black votes as possible in a few weeks and talk about some crypto currency regulations.
Now crypto finance and blockchain have become an important topic of debate between the two parties, and I don't know who will win, the current poll results are very close.
But the national data may not be absolutely accurate, only 7 swing states will determine the electoral vote, and the rest of the states are not that important.
What will happen after the inauguration on January 1st? Many people may pay attention to the situation in the next 4 years, and I don't know the details yet, but the Senate will do a temporary budget in September, probably until December 20th. Then there will be a "lame duck" process, from December to January 3rd when the new Congress takes office, this is the "lame duck" stage of the president, his power is not as broad, until the House of Representatives takes office, then the two parties can make transactions through the government's fiscal budget. So you will see some behind-the-scenes manipulation between the two parties.
But if you talk about the stablecoin position or crypto currency legislation, it has been influenced a year ago, now the hearings may have some amendments that may be passed in December, but they were not passed last December, and it is also possible that they will pass it as part of the government spending bill in December, so don't be too surprised if that happens.
If Trump ultimately wins the presidential election, we need to focus on who will control the Senate and the House of Representatives. If the Republican Party wins across the board, we believe there may be legislation introduced, and quickly, possibly within the next three months or within the first six months of the new administration. If it goes the other way, and Kamala Harris wins the presidency, then it will depend on the situation in Congress.
For example, on infrastructure, if there are enough Democrats to support it, our situation would be different. Some people in Congress have also realized that this is a future trend, and they are also willing to support it, so we need to see what will happen in the next few months.
Du Yu: The next topic is stablecoins. The latest data shows that the market capitalization of USDT has exceeded $1.2 trillion, and the market capitalization of USDC has also exceeded $35 billion. People have been discussing the global financial hegemony of the US dollar. Many views say that the US government has once again achieved the hegemony of the US dollar in the new financial system through US dollar stablecoins. US dollar stablecoins have been around in the crypto finance market for many years, with over $150 billion injected into the crypto finance market. Is this the case? Is the US government supporting stablecoins? Is the US government the driving force behind USDT? Is it allowing private companies to use stablecoins, so that every aspect of crypto finance uses US dollar stablecoins? What is the value of US dollar stablecoins to the US government and US companies in the crypto finance market?
Kevin M. Goldstein: As Dr. Xiao and other speakers have mentioned, stablecoins have made great progress and have contributed greatly to blockchain. For me, the US dollar-pegged stablecoins have not yet achieved the so-called hegemony, and it is absolutely impossible that the US government is supporting it behind the scenes. In fact, the US government feels very uncomfortable about the massive use of US dollar stablecoins in cross-border transactions, as it is outside the US banking system, and US regulators are also very uncomfortable with this.
I believe that legislation on stablecoins must be pushed forward in Washington and the US government, there must be legislation, and rules must be set for the world on how to do reserves and how to do regulation.
It can be said that stablecoin legislation is the best bill to pass, and it is not surprising that the US dollar as a reserve currency and US dollar stablecoins have become mainstream in crypto finance, as this is a future trend, and many US institutions will certainly issue their own stablecoins in the future, which need to be clear and transparent.
In addition, it needs to be understood that the growth is benefiting from Washington's initiatives, and audit agencies and regulatory agencies are also constantly monitoring the growth of US dollar stablecoins. If both parties can support the crypto industry and introduce relevant legislation at the right time, other governments around the world will also be more accepting of US dollar stablecoins. The demand is there, and the Washington government may have already passed this small bill.
Du Yu: Thank you very much. Now we come to the last question, which is the integration between traditional finance and crypto finance. This year, the SEC has approved BTC ETFs. Six months after the approval of BTC ETFs, the SEC also approved ETH ETFs. The total market value of US Bitcoin ETFs has now exceeded $61 billion. The integration between traditional finance and crypto finance is becoming more and more.
In addition, since the beginning of this year, many Web3 startups that were originally in Silicon Valley have moved to New York. I heard that the logic behind this is that with the launch of ETFs, more and more "old money" and mainstream financial institutions are entering the crypto finance and Web3 industry. For Web3 venture capitalists, they hope to attract more mainstream financial institutions' asset management companies as their LPs. New York has now become the center of Web3 in the US.
My question to you is, from a Wall Street perspective, why are these mainstream traditional US financial institutions paying attention to crypto finance, and do they have any deployments at the moment?
Kevin M. Goldstein: In a nutshell, follow the money. The US is the financial center and the home of traditional financial institutions, and the money is in New York.
BTC is much smaller in scale than traditional financial assets, but is developing very rapidly. As you mentioned, the approval of ETFs, the legislative system, the US government and the SEC had to approve BTC ETFs, and the BTC ETF can be said to be the most successful ETF in US history. The ETH ETF launched in July was expected to surpass the BTC ETF to some extent, but it did not meet expectations, for various reasons.
Undoubtedly, BTC has performed very well in ETFs, but the poor performance of the ETH ETF was also expected. We have also seen a lot of institutional participation in the BTC ETF, perhaps with the participation of hedge funds and various pension funds behind it. In other words, traditional institutions are more accepting of BTC ETFs, because for regulated institutions, they can only accept compliant products, they cannot take risks.
Whether we will see new ETFs approved in the US in the future remains to be seen after the election results. But as of now, the success of the BTC ETF is evident.
The motivation of Wall Street is to make money. The New York banks have already obtained approval from the Federal Reserve and the SEC to regulate crypto finance outside of ETFs and obtain relevant institutional licenses.
Now we want to manage and make money from crypto assets, we need the relevant licenses. Whether it's from regulation, infrastructure, who does the regulation of which asset, and whether the SEC's authority belongs to securities or commodities.
The fact we are seeing now is that more and more institutions are accepting the management of crypto asset ETFs, and there will be a vote in three weeks. There are a lot of Gen Z in the US, born between 1996-2005, who will be participating in the election for the first time, and from an institutional perspective, they know the younger generation wants the opportunity to participate in crypto finance.
Du Yu: Finally, I hope you can make a prediction. Who do you think will win the US election, Kamala Harris or Trump?
Kevin M. Goldstein: My answer is Trump, and I would like to share my reasons before the end. I have always been an optimist, and although many people have doubts about the regulation of the United States, I have never been more optimistic than I am now, because the United States has an embracing attitude, and the United States regulation has also realized that the United States has caught up with other countries around the world and made certain progress, which everyone has noticed, so I feel that the ecology of the United States will have a more prosperous development in the future, although the United States has always been in a waiting attitude, but if the timing is right, the United States always wants to play the role of a leader, and once Trump is elected, the United States will play the role of a leader in this regard, which is my bold prediction at the moment.
Du Yu: Thank you very much, Kevin. Let's wait and see in the next month.
