▶ 0:18:03The subcommittee on digital assets, financial technology, and artificial intelligence will come to order. Without objection, the chair is authorized to declare a recess of the committee at any time. Today's hearing is titled Building the Future of Finance: How the Clarity Act Unlocks Innovation. Without objection, all members will have five legislative days within which to submit additional material for the chair to include in the record. I now recognize myself for four minutes for an opening statement.
▶ 0:18:32In America's 250th year, on the site of the building of the first Congress, in one year to the day after the House of Representatives passed the Clarity Act, we gather amongst the pillars of history. For 250 years, American markets have powered innovation and economic growth. And each time te technology and financial innovation leapt forward, Congress met the moment. We did not stop the engines of growth.
▶ 0:19:03We gave them clear, consistent rules so they could run. Right here in this building, the very first Congress debated Alexander Hamilton's revolutionary vision for a national financial system, including a plan to turn state war debts into the first federal government bonds backed by the full faith and credit of our new nation.
▶ 0:19:29A 100 years later, as a patchwork of paper notes and counterfeit flooded the states, Congress stepped in again, the National Bank Act swept away the chaos of wildcat banking and created the first American dollar bills we carry in our pockets to this day.
▶ 0:19:48In the next century, when opaque and disorderly markets ruined millions, Congress passed the Securities and Exchange Act to restore transparency and increase the public trust. Consistency and clarity conquered chaos. Today, we're here on Wall Street again. We gather at the threshold of the next generation of innovation.
▶ 0:20:14As the Senate prepares to consider the Clarity Act, we can complete nearly a decade of work. Since 2017, the House Committee on Financial Services alongside our colleagues at the Committee on Agriculture have worked to craft a durable framework for digital assets that fosters innovation while protecting consumers and investors. Our goal is clear. replace regulation by enforcement with clear rules of the road for digital assets.
▶ 0:20:44For 250 years, America has led the world in financial innovation. For 15 years, blockchain technology has redefined what's possible. For 10 years, Congress has worked to write the rules of this new financial frontier. And for one year, we have had a statutory framework for payment stable coins. Now, it's our turn to meet the moment.
▶ 0:21:10Today, we'll hear from experts who are building the next generation of financial innovation, and we'll hear from them on why they believe the Clarity Act is essential. I thank all of our witnesses for being here today, and I thank my colleagues for making the trip up to our up up to New York uh for this important discussion. I think it's our opportunity to unlock the next 250 years of innovation here in the United States of America. It's time to pass clarity.
▶ 0:21:37I yield back and I now recognize the chairman of the full committee, uh, Chairman French Hill, for one minute for his opening statement.
▶ 0:21:44Well, Chairman St. Thank you for convening this hearing in historic Federal Hall. such an incredible place to be in our semiquinn centennial and and as you say echo the success that Congress has had in spurring innovation and economic growth here for 250 years. Our leadership in finance and technology depends on clear predictable rules that's been at the heart of financial oversight throughout our nation's history. One year ago today, we passed the Clarity Act and also saw Genius enacted into law.
▶ 0:22:14If we want to have the ultimate success in our economy and see the transition of a traditional finance on an analog basis to a distributed ledger, blockchain basis, the country has to have the rules to make the US the center of that digital ecosystem in the world. This is President Trump's goal. This was the work behind Genius and Clarity last year. So, we stand ready to help our Senate colleagues complete the work and get it to the president's desk.
▶ 0:22:44And I thank you for convening the hearing and I yield back. Gentlemen yields back. Uh today we welcome uh the testimony of four distinguished witnesses. Uh we have Miss Sarah Aberg, chief legal officer at Nova Labs. Uh we have Miss Randy Abernathy, head of clearing and group risk at Bullish. uh Ryan Lovar, chief legal officer at Wisdom Tree.
▶ 0:23:07Uh and J Jason J apologize, Jason Smanato, the director of policy at Coin Center. We thank each of you for taking the time to be here. Each of you will be recognized for five minutes to give an oral presentation. Without objection, your written statements will be made part of the record. Uh Miss Aberg, you're recognized for five minutes. Thank you, Chairman uh Steel, Chairman Hill, and members of the subcommittee. Thanks for the opportunity to testify. [clears throat] My name is Sarah Aberg.
▶ 0:23:38I am the chief legal officer of Nova Labs, the company that created and supports the Helium network, the world's largest decentralized wireless network. Helium is a physical telecommunications infrastructure, wireless access points deployed in communities across the country that provide real coverage to real people every day. Blockchain is the technology that makes the network run and cryptocurrency is the incentive that built it.
▶ 0:24:08Today, that network is more than 140,000 hotspots. It provides carriergra Wi-Fi offload to major carriers including T-Mobile and AT&T and serves millions of American users every day. Nova Labs provides telecommunication services in all 50 states and holds an FCC section 214 authorization. The Helium network has been operational since 2021 and it was not built in the usual way.
▶ 0:24:38Instead of spending billions on towers, the Helium network was built by tens of thousands of individuals and businesses who deployed hotspots because a token reward made it worthwhile. Compensation for verified wireless service measured and paid automatically by the protocol. That model has proven itself under pressure.
▶ 0:25:03When Hurricane Helen knocked out cellular service across western North Carolina, Helium and the veteran led nonprofit Team Rubicon deployed portable beacons on satellite backhole and reconnected tens of thousands of devices within days. In Rodondo Beach, California, a waterfront district had near zero cell coverage for years because high-rise buildings blocked the signal before it reached the pier.
▶ 0:25:30The city closed that gap simply by enabling helium offload on Wi-Fi. It already had no new hardware, no capital expense, and now it connects more than 2,000 people a day. The Helium network has also absorbed cellular surges during major events like Marty Gro and Super Bowl weekend.
▶ 0:25:52It is being used to improve indoor 911 location accuracy where the FCC's own data shows that today fewer than 1% of wireless 911 calls deliver a usable dispatchable location and to bring affordable broadband into public housing. These are public benefits built by communities investing in themselves. I want to be direct about why I am here.
▶ 0:26:21In January of last year, on the last business day before the new administration took office, the SEC sued Nova Labs. Its theory was that selling hotspots that rewarded deployers in tokens for delivering verified wireless coverage was an unregistered securities offering.
▶ 0:26:42It went further, alleging that our mobile phone plan, a phone plan, was also an unregistered offering because subscribers could opt in to earn rewards for helping map coverage. Each of these digital asset claims was later dismissed with prejudice. We were glad to be vindicated, but we spent years and significant resources defending claims that were ultimately abandoned.
▶ 0:27:10Those were years not spent deploying hotspots, not building emergency communications capabilities, and not connecting underserved communities. That is the real cost of regulatory ambiguity. It does not protect investors. It deters the companies that want to follow the rules and it doesn't stop bad actors from breaking them. The Clarity Act fixes this and that is why Noval Labs supports its passage.
▶ 0:27:38Clarity is not a call for deregulation. It is a call for the right regulation from the right regulator under rules that market participants can understand and follow. It distinguishes between digital assets that function as securities and digital commodities that power operational networks and it assigns oversight accordingly between the SEC and CFTC. For a network like Helium, that clarity is not abstract.
▶ 0:28:06It determines whether the incentive that built the network up to 140,000 hotspots can continue to drive deployment and whether the public benefits that flow from the network, emergency communications, broadband access, and resilience during disasters and network congestion can reach more communities. The community has already done the hard work. The House passed clarity a year ago, and I respectfully urge the committee to see it through to enactment. Thank you. Thank you very much.
▶ 0:28:36Uh, Miss Aberthy, uh, you're now recognized for five minutes.
▶ 0:28:40Thank you, Chairman Hill, Chairman Style, Ranking Member, and members of the subcommittee. Thank you for the invitation to testify and for bringing this hearing to New York, the financial capital of the world. My name is Randy Aberthy. I'm head of clearing and group risk at Bullish, a publicly traded digital asset firm listed on the New York Stock Exchange just a short walk from here. I've spent my career in clearing and risk management for regulated market infrastructure at LCH, at Barclays, and at Nodal Exchange before joining Bullish.
▶ 0:29:12Let me tell you briefly who we are. Bullish is an institutionally focused digital asset platform. Our chief executive, Tom Farley, ran the New York Stock Exchange, and we built Bullish deliberately to look and operate like the regulated exchanges and clearing houses that made American markets the envy of the world. Because the United States had no federal framework, we built under regulators abroad in Germany, Hong Kong, and Gibralar. But when American regulators opened a door, we walked through it.
▶ 0:29:42Last September, New York's Department of Financial Services licensed us to serve US customers, and we are now working with the CFTC and NFA on the registrations needed to operate a federally regulated exchange, clearing house, and We are not asking to operate in the shadows. We are asking for a rulebook and we intend to build under it. That is why the Clarity Act matters.
▶ 0:30:06One year ago today, the House passed it 294 to 134 with strong bipartisan support by drawing a clear line between the SEC and the CFTC. It gives responsible firms what they've asked for over a decade of uncertainty while capital and innovation moved offshore. And I want to be direct. Regulatory clarity is not a favor to industry. It is how Congress brings this activity onshore under American regulators with American investor protections.
▶ 0:30:36From where I sit, running clearing and risk, that's the heart of it. The failures that hurt investors, most notably FTX, happened offshore, beyond the reach of any American regulator. Under this framework, registered exchanges would live under the disciplines that have protected investors for generations, segregated customer assets, capital requirements, surveillance, and federal examination. Bullish follows these principles voluntarily today.
▶ 0:31:05We are eager for oversight that makes them mandatory for As the Senate takes up its bill, I want to focus on one detail that matters enormously in practice, the treatment of exchange affiliates. While early drafts would have flatly banned affiliates of an exchange from trading on it, we have appreciated that Senate leaders have shown a willingness to align itself with the House version of the bill, which instead permitted affiliate activity subject to guard rails. That's the right answer, and for three reasons.
▶ 0:31:35First, affiliate trading is not some novel feature of crypto. It's common and often necessary in the very markets this legislation uses as its model. Futures exchanges clear through affiliated clearing houses. Clearing houses trade for their own account to manage defaults and correct errors. Exchanges rely on affiliates to provide liquidity in new markets until independent market makers arrive.
▶ 0:31:58And the SEC expressly permits a broker a broker dealer running an alternative traders trading system to trade on its own platform. If a ban were necessary to protect investors, our securities and futures markets wouldn't be built the way they are. Second, these structures are safe because they come with guardrails that work. Strict segregation of customer assets, conflict of interest management, disclosure, and anti-manipulation enforcement.
▶ 0:32:27The Clarity Act applies that same proven architecture to digital assets. Third, FTX is invoked in this debate and invoked incorrectly. FTX did not fail because affiliates traded on it. FTX was an unregulated offshore exchange whose affiliate misappropriated customer assets, deploying them largely on other unaffiliated venues. A trading ban would not have stopped that.
▶ 0:32:55Every element of that conduct was already illegal for registered firms. In fact, the one piece of FTX that survived was Ledger X, its CFTC regulated exchange and clearing house, precisely because it was under federal supervision. Not a dollar of customer assets were lost there. The lesson of FTX is not to ban practices regulated markets have used safely for decades. The lesson is to bring these markets inside the federal perimeter, which is exactly what this bill does.
▶ 0:33:23Bullish is the kind of company this legislation is designed to reach and we want to build the future of finance here in America under American rules. I encourage Congress to finish the job and get the details right. Thank you and I look forward to your questions.
▶ 0:33:38Thank you, Miss Abberthi. Uh Mr. Lovar, you're now recognized for 5 minutes.
▶ 0:33:41Thank you, Chairman Hill, Chairman Style, and distinguished members of the subcommittee. Thank you for the opportunity to testify today. My name is Ryan Lovar. I serve as the chief legal officer and head of business and legal affairs digital assets for Wisdomree, a $ 160 billion asset manager listed on the New York Stock Exchange and headquartered here in New York City.
▶ 0:34:03I've spent more than 25 years working at the intersection of asset management, ETFs, digital assets, and tokenization focused on legal compliance, risk management, and policy.
▶ 0:34:17The Clarity Act matters because it can provide the market structure certainty around asset classification and SEC and CFTC jurisdiction with broader modern modernization provisions needed for responsible tokenization and blockchainbased infrastructure to scale in the United States. Section 505 is particularly important because it preserves the principle that a tokenized security should remain the security it represents.
▶ 0:34:46At the same time, it fosters the proposition that regulators should be able to modernize how operational requirements apply to blockchainbased infrastructure. That is the right balance. Same regulatory substance, modernized operational mechanics. Tokenization is often described as a new asset class, but it is better understood as a new set of rails for owning, transferring, and settling financial products.
▶ 0:35:14What changes is the infrastructure through which the asset can be held and moved. An analogy to ETFs is helpful. ETFs did not invent stocks or bonds. They gave investors greater transparency and access to those asset classes at lower cost. Tokenization can do something similar and potentially more compelling by modernizing the speed and flexibility of financial infrastructure while preserving investor protections.
▶ 0:35:43That is especially important in markets that increasingly operate around the clock. For most Americans, the focus is not really about blockchain, but realizing the benefits that may come from it. Wisdom Tree is proof that this can be done responsibly.
▶ 0:35:59Earlier this year, Wisdom Tree became the first and to date only firm to receive SEC exemptive relief, allowing SEC registered broker dealers to trade an SEC registered money market fund, the Wisdom Tree tokenized Money Market Fund, 24/7, 365, enabling instant settlement for tokenized fund shares for the first time under US law. We also offer the largest lineup of SEC registered funds that are tokenized in the market.
▶ 0:36:3015 funds spanning equity, fixed income, alternative, and asset allocation through our Wisdom Tree Prime and Connect platforms while also making available tokenized gold, Bitcoin, Ether, and a dollar stable coin available through our Wisdom Tree Prime platform. Importantly, Wisdom Tree has chosen the more regulated path rather than the easier one.
▶ 0:36:52Our tokenized fund business includes a variety of SEC registered entities, SEC registered investment advisor, transfer agent, investment company, and broker dealer. And the tokenized gold, Bitcoin, Ether, and Stablecoin side of the business is operated under a New York limited purpose trust company under seen by the New York State Department of Financial Services and a money services, money transmission licensed business.
▶ 0:37:19This structure reflects our belief that responsible innovation requires identifiable regulated entities accountable to investors and regulators. The Genius Act has already shown that clear congressional rules can bring serious institutions off the sidelines. Clarity can do the same at far greater scale for the broader digital asset market. And that makes ma that matters for US leadership.
▶ 0:37:46The question is no longer whether finance will become more digital. It will. The question is whether the United States will continue to lead in developing the next generation of financial infrastructure while preserving the strengths that have made its capital benchmarks uh global the capital markets, excuse me, a global benchmark for innovation and investor protection. Wisdom Tree's experience shows that responsible tokenization is possible today.
▶ 0:38:14the Clarity Act can help make it repeatable, scalable, and available to more investors. Thank you, and I look forward to your questions.
▶ 0:38:23Thank you, Mr. Lovar. Uh, Mr. Zman Sato, you're recognized for five minutes.
▶ 0:38:27And Chairman Hill, Chairman Style, members of the subcommittee, I was first asked to comment on a draft crypto market structure bill back in 2018. At the time, one Bitcoin had fallen to roughly $3,000. The term DeFi had only recently been coined to describe a small and experimental corner of the ecosystem. And beyond a relatively small group of developers, users, and entrepreneurs, many people viewed crypto as a technology whose moment might have already passed. But even then, the core policy challenge was clear.
▶ 0:38:58Congress needed to find a way to empower regulators to protect customers and ensure market integrity while preserving the open peer-to-peer architecture that makes blockchain networks unique. Nearly a decade later, much has changed. Many are worried because Bitcoin is only up 2,000% since the lows of 2018. DeFi has grown from an obscure idea into a term that is used in legislation, regulation, and enforcement actions.
▶ 0:39:24and the industry built around crypto networks now includes not only startups but some of the largest companies in technology and traditional finance. For me personally, I've spent the past eight years engaging in the development of market structure legislation from several different perspectives. At the CFTC, including my roles running lab CFDC and working for Chairman Benham, I provided detailed technical analysis to Congress on what authority the CFTC would need to oversee these markets.
▶ 0:39:52At Chain Analysis, I engage policy makers on illicit finance issues involving crypto networks. And now at Coin Center, the place that I got my first opportunity in this ecosystem back in 2014, I focus on the public interest in civil liberties issues raised by open blockchain networks. From all of those perspectives, I believe clarity answers the call. The work is largely done. The provisions have been negotiated. The stakeholders have been engaged.
▶ 0:40:18And most importantly, the House passed a bipartisan bill one year ago that would create a robust framework for regulating crypto markets while protecting the underlying networks and those who develop them from inappropriate regulation. That latter point is essential. Blockchain networks are not merely a new way to trade assets. At their best, they are open computing networks that allow individuals to hold and transfer value without depending on a bank, exchange, payment processor, or other centralized intermediary.
▶ 0:40:49They give individuals the freedom to transact in a peer-to-peer fashion without being censored or unnecessarily surveiled. That is why developer protections are key to market structure legislation. If Congress creates clear rules for centralized cryptocurrency businesses, believes developers exposed to open-ended liability for building non-custodial software, then the legislation will have protected part of the market while undermining the technology that makes that market possible.
▶ 0:41:17The Clarity Act recognizes this in several ways. First, it includes protections designed to ensure that software developers and infrastructure providers do not are not required to register with the SEC or CFTC simply because they write code, publish software, validate transactions, transactions or otherwise support the functioning of a blockchain network without taking control of customer assets or acting in a trusted capacity as a traditional intermediary.
▶ 0:41:45Second, Clarity protects developers through the Blockchain Regulatory Certainty Act, a long-term priority for Coin Center. The BRCA addresses the most serious risk facing non-custodial software developers of being treated as an unlicensed money transmitter and clarifies that developers and service providers that never take control of customer funds shall not face such a threat in the future. These provisions effectively protect developers without weakening the regulatory protections core to clarity.
▶ 0:42:16Securities law laws still apply to securities intermediaries. Clarity even creates new categories for businesses operating in the digital commodity markets and imposes stringent regulations on those newly defined intermediaries. And where a business is properly regulated as a f financial intermediary, the Bank Secrecy Act still applies to prevent money laundering and terrorist financing. Clarity keeps regulation focused on the people who actually perform intermediary functions.
▶ 0:42:45And for these reasons, Coin Center applauds the House for its work in passing clarity and encourages the Senate to pass equivalent legislation as part of its market structure efforts. This has been a long process, but the pieces are now in place. Congress can meaningfully improve market integrity and customer protection while also preserving the open networks, non-custodial tools, and peer-to-peer architecture that makes this technology worth protecting. Thank you, and I look forward to your questions.
▶ 0:43:10Thank you very much, Mr. Sansato. Uh we'll now turn to member questions. I'll recognize myself for 5 minutes. Uh history teaches us when transformative technologies uh come online, they also often face skepticism before becoming foundational to our economy. A century ago that was electricity. 50 years ago personal computer, 30 years ago uh commercial uh internet.
▶ 0:43:34Um each of these technologies matured though and policy makers developed legal and regulatory frameworks that gave businesses, investors and consumers confidence uh to innovate, invest and drive widespread adoption. Uh blockchain technology has now existed for more than 15 years. Uh is no longer a theoretical concept. It's a practical technology powering real businesses, real networks and real economic activity.
▶ 0:44:00Uh yet despite its maturity, entrepreneurs and developers are still facing significant uncertainty about how the digital assets are classified and regulated. Which brings me to you, Miss Aberg. Um is it fair to say that without blockchain technology, Helium would not exist? In other words, are blockchain and digital assets found fundamental uh to Helium's business model rather than simply being an added
▶ 0:44:25Absolutely. Um the network would not exist without blockchain. Uh the network operates across 140,000 unique access points deployed by uh thousands of individuals and small businesses. That's a distributed uh decentralized network infrastructure that
▶ 0:44:43No, go ahead. I'll let you finish. that infrastructure needs to be coordinated between all these discreet points. Blockchain is the technology that allows us to do that.
▶ 0:44:52So knowing that, what's the real world consequences of the lack of clarity in this space from a regulatory standpoint for your business trying to deploy um internet and access to consumers across the country. So the status quo is that there's not a distinction between tokens that operate a functional network like Helium and tokens that are sold uh as part of an investment contract and for raising capital. Uh we suffer the consequence of that directly on January 17th, 2025. Thankfully those claims were dismissed.
▶ 0:45:22But uh right now without codification of that into law, we could face those exact same claims again by uh under a new administration, new chairman of the SEC. Thank thank you. Thank you very much. I want to jump to you Mr. Summensato and talk DeFi a little bit. Uh building on a similar theme here. Financial markets have grown along uh technological innovation. Um 200 years ago finance relied on handwritten ledgers, horsedrawn or horsedivered communications.
▶ 0:45:49100 years ago uh telegraph and then telephone connected markets. 50 years ago uh we got closer to the internet. uh today blockchain technology is giving us an ability uh to decentralize networks that can coordinate financial activity without a centralized or without a central intermediary. Um blockchains uh enabled that growth and decentralization.
▶ 0:46:12So the question comes to you why is it important that a regulatory framework recognize the unique characteristics of decentralized networks rather than treating them as if they were traditional centralized networks. Yeah.
▶ 0:46:26So, I think the the fundamental innovation of what we're talking about here is this ability to transact in a peer-to-peer fashion as you mentioned and uh part of that recognition from the regulatory perspective is identifying what are the technology tools here that are being used versus those individuals who are participating in activities that would traditionally trigger reg uh registration and regulation. And I think uh you know the technology is fairly novel and new in the way that it interacts with uh financial infrastructure.
▶ 0:46:56But um it is important to understand that like the key innovation here is equivalent to having a tool in place. Just like when you know the markets went from open floors to electronic trading, right? It wasn't the computers and the network wiring that we started regulating. It was [snorts] the institutions that uh use those for regulated purposes. And the same is true in this transition.
▶ 0:47:18Thank you. Thank you very much. I want to jump to you, Mr. Lovar, uh, if I can. Um, digital assets represents the next chapter. You talked a little bit in your testimony about how you use ETF and EFT, ETPs, uh, to navigate around some of the roadblocks that are standing in the way. Um, what what are those roadblocks? How do we unlock them? And what happens uh, when we do?
▶ 0:47:41Yeah. Uh, I look at it from a couple of different angles. First off, um, you know, digital assets under the umbrella of sort of crypto assets and then tokenization. So, let me start off with crypto assets. And so, we develop products, exchange traded products that invest in those assets. So, that was our first fora nearly 8 years ago.
▶ 0:47:59One of the roadblocks at the time and then and then fast forwarding was that um you know there wasn't a clear delineation of how those assets were categorized and ultimately we had an SEC at the time that was really looking at these uh in terms of a um you know not a way under the traditional securities laws and types of disclosure but more market-based regulation and so our goal was to launch products investing in those assets at the same time through our US business and through our Europe business.
▶ 0:48:28But ultimately what happened is we were able to launch due to the regulatory environment in the US going back a few years. We were able to launch in Europe uh many products investing in many digital assets that have now garnered a couple billion in assets where we we're way behind in the US.
▶ 0:48:46This is our this is our big opportunity is to put forward a clarity and a regulatory framework so that folks are investing and developing and deploying here in the United States, not in Europe, not in locations around the globe. cognizant of the time, I'll yield back. I'll now recognize the chairman of the full committee, uh, Mr. French Hill of Arkansas for five minutes.
▶ 0:49:04Thank you, Mr. Chairman. In to commemorate the fact that we're in this historic location in our semiquincential, I'd like to ask that uh, a talk I gave about Hamilton's restructuring of the debts negotiated in this building uh, be inserted in the
▶ 0:49:20Without objection, and I encourage folks to read it.
▶ 0:49:24Well, that won't happen, but we'll insert it in the record. Well, I think we've heard a clarion call today for clarity and that's really helpful because we've worked in the house and many of you have been involved in that really since 2018 under Max even Maxine Waters chairmanship. We dealt with Libra. We dealt with David Marcus going from PayPal to try to explore that.
▶ 0:49:50We dealt with FTX's collapse and Maxine gave important leadership there. And then certainly under Kevin McCarthy as speaker and Patrick Mckenry as chairman of the committee, you've seen us systematically try to educate members on both sides of the aisle of the importance of making this transition and having fitfor-purpose rules that do not confuse a functional uh blockchain token uh for a security contract.
▶ 0:50:19And that's been at the heart of FIT 21, which we passed two Congresses ago. and then of course the Clarity Act last summer that we commemorate today with 78 Democratic uh votes. So this has been a bipartisan priority and your clarion call today really I think helps us focus why it's important and I want to start out I'm going to start out uh Mr. Mr. Luvar.
▶ 0:50:44Um, there's a lot of conversation particularly on uh, I'd say blockchain ecosystem chatter on X and elsewhere about, well, if the Senate can't pass clarity, don't worry. We can just do all this through exemptive relief. You're a beneficiary of exemptive relief. Could you tell us how much more important it is to have something put in law for the regulatory and legal certainty of that?
▶ 0:51:12Yeah, I mean, you know, we're we're very grateful uh you know, the positioning that the SEC staff has taken under the current leadership and in being innovative and forward thinking and
▶ 0:51:23but the exact opposite of the last SEC.
▶ 0:51:26Would you agree with that? Was it is this different from Gary Gensler's SEC?
▶ 0:51:30It it is different. Um certainly we're seeing the winds of innovation behind our back. um you know very much a different atmosphere if you will very pro- innovation but um you know we really need durable rules that are embedded within what Congress has approved that's what's important you know so understanding that those asset classifications the distinction between the SEC and CFTC jurisdiction the ability to modernize is not just up to the agency which should embolden
▶ 0:52:00and empower the agency and provide the agency with the resources it needs but really needs to be embedded in law so it can carry administration to administration. I agree. I agree completely that we've as as the chairman outlined in his opening statement, we've seen the migration of our legal and regulatory structure to meet the need for advancing American economic performance uh no matter what generation.
▶ 0:52:24And we're at another one of those turning points as we were in the 90s uh with the decisions taken by Congress to not regulate the internet, to let it be an open-source network, but to regulate activity on the internet. And once again, we're at that fitforpurpose moment.
▶ 0:52:40Um, Miss Iberg, uh, such a great compelling testimony about the success of the Helium network, and I think it's very educational for members and the public to see block distributed ledger technology used in a practical way that's not tangled up in Wall Street jargon. And so you're not the only company with a big success story there, but I think it is a way to illustrate what it is that we're talking about in a way that a lot of people can understand.
▶ 0:53:07Uh but you are a victim of regulatory and legal uncertainty. And again, you echo, I'm sure, this comment that the statute is the only way to achieve that for innovators in the country and to make America the safe and sound leader in this. Do you agree with that?
▶ 0:53:24Uh absolutely. absent clear rules uh which we intend and want to comply with compliance becomes impossible. It is at best guesswork. Um the regulatory environment that changes with an election cycle is not sustainable. It's not durable and it does not support long-term infrastructure projects like ours. So the only way to do that is through legislation.
▶ 0:53:50Um, and that precludes the next SEC chair from simply, you know, changing his mind and reversing the the guidance that we're under now.
▶ 0:53:58Right. Thank you for that. And I yield back, Mr. Chairman.
▶ 0:54:01The gentleman yields back. The gentleman from South Carolina, Mr. Timonss, is recognized for five minutes.
▶ 0:54:06Thank you, Mr. Chairman. It is wonderful to be here as we mark the one-year anniversary of the Genius Act being signed into law. We are also getting closer to bringing the Clarity Act across the finish line with the goal of ensuring America leads the world in digital asset innovation and emerging technology. As we discuss what a fully implemented Clarity Act would mean for the future of digital assets in the United States. I want to begin with you Mr. Sansato. One of the acts central goals is to establish a clear regulatory framework that promotes innovation while strengthening market integrity and consumer confidence.
▶ 0:54:35How will the Clarity Act encourage responsible innovation while also safeguarding its illicit finance, market manipulation, and operational risks?
▶ 0:54:43I I mean, I think the key is in defining those entities that will fall within the regulatory perimeter and then empowering regulators to actually oversee them. I mean, truthfully, the discussions around the regulation of this industry for the past decade have been, you know, one of excitement and newsworthiness. And as a former regulator, it's it it should be a fairly boring job, right? you should know the entities that are under your jurisdiction and be able to implement that.
▶ 0:55:06At the same time, we're talking about a novel technology that has the potential to be very innovative and come, you know, be used in a bunch of different ways as you've heard from some of the witnesses today. And what that requires is an understanding of where that line is, right? So many have been acting in an environment in which uh, you know, there's kind of unclear unwritten rules out there.
▶ 0:55:24there's evolving interpretations between various regulators and that's just not an environment in which if you're a software developer, somebody who wants to see some of the future innovations be built that you can really operate easily in and so the fact that clarity kind of draws those very clear lines gives guidance both to the regulators and to the individuals participating in these networks is really powerful.
▶ 0:55:42Thank you for that. Regulation by enforcement during the previous administration drove much of America's digital asset innovation overseas. How will the Clarity Act help reverse that trend and what impact do you expect it to have on bringing companies, investment, talent, and technological innovation back to the United States? I
▶ 0:55:58I think one of the like unique aspects, I'm not an expert on kind of like which jurisdiction is ahead and which one is behind, but like at least from my perspective, seeing a lot of the individuals who are in the US are probably some of the people at the cutting edge of thinking about this innovation. And then there's a lot of like structuring to get out of the country to avoid potential regulatory hiccups over the last few years. And like that is an environment that is just not conducive to seeing the development that you would want to see in a country. Right?
▶ 0:56:26Again going back to that point of if you have the clear established rules plus the clarity of who is outside of that, right? Right. And we think it's very important from Coin Center's perspective on like the BRCA and some of those developer protections to create the environment in which you know individual ingenuity like absorbing some of the American values of like liberty and freedom of speech that are like inherent in this technology allowing people to kind of build off of those is really important.
▶ 0:56:53I'm going to expand on what you just said. It's just very fitting that we're here. federal hall 250 years ago. Uh the American experiment literally created the most freedom in the history of human civilization. And I actually think that uh emerging technology, digital assets, blockchain technology is going to help freedom flourish in a way that few other things have in human human history because of uh the decentralized nature of it.
▶ 0:57:18So we had a hearing on my subcommittee on the oversight committee military and foreign affairs about the the the challenge that emerging technology will pose to authoritarianism. And if you think about uh the the tools of authoritarianism of autocracy uh is information control and capital control. If you can control what your citizenry uh believes to be true and if you can control their resources you can control them.
▶ 0:57:44And this is going to have a huge opport it's gonna have a huge impact on authoritarian governments ability to control uh their population's wealth. Do you agree with that?
▶ 0:57:53Yes. I and I mean I think honestly [clears throat] blockchain technology is even just one aspect of that, right? We're in a time now where technology is changing so quickly and how governments choose to interact with that and with the people is uh an extreme new risk, right? And it really important to kind of ensure that the values that protect the individuals from participating in these and developing these and you know allowing the development of that digital space to look like the development of our like physical space in this country 200 years ago is extremely important.
▶ 0:58:24The clarity act is in incredibly important in maintaining uh the US economy as the center of the global economy. Do you agree with that? Yeah, I mean to the extent that this is going to be a technology that is infused into the businesses of all these other witnesses here, like it is imperative that that be within the structures just like our securities markets are, just like our derivatives markets are. Right. I think part of the reason of their success over the years has been the regulatory environment in which they get to operate.
▶ 0:58:53Thank you for that. We're on the one yard line. We just got to score the touchdown. With that, I yield back. Thank you.
▶ 0:58:58Gentleman yields back. Um the gentleman from Indiana, Mr. Stzman is recognized for five minutes.
▶ 0:59:05Thank you, Mr. Chairman, and it's great to be here. Thank you to the committee for hosting us here at at Federal Hall. Uh it's neat to be sitting here discussing future technology in uh these hallowed halls here. Last night we were at uh Francis Tavern and I was thinking as like, you know, that used to be one of those uh central points of information.
▶ 0:59:26Uh but uh you know it was fun just to be there and thinking about the history of our great country and the founding of our country and uh what we've done in the last 250 years. But our conversation today really is going to affect what the next 250 years is going to be uh like in our our country. As we discussed earlier, one year ago today, this house passed uh the the Clarity Act with one of the strongest bipartisan votes in Congress. Uh it cleared Senate banking two months ago, yet it is still sitting on the Senate calendar.
▶ 0:59:56Every witness here today has a story about what delay cost, faster payments, markets open around the clock and American innovation that flees overseas. In business, we have a saying that I can handle a yes or a no, but I can't handle suspense. And that's what it feels like we're dealing with today. Uh I want those costs on the record today and to send one clear message that it's time to pass the Clarity Act. Uh, Miss Iberg, I'd like to ask you because I represent northeast Indiana, a lot of rural communities.
▶ 1:00:26Uh, we have a lot of underserved areas that uh uh are underserved by major internet providers and we've spent billions of taxpayer dollars subsidizing broadband in this country, unfortunately, with not so much to show for it. Can you tell us how rural American, especially Hoosiers watching at home, how your network can benefit them?
▶ 1:00:48Absolutely. So, one of the um [clears throat] problems with uh the effort, the initiative to roll out broadband to rural communities under the bead program is that the fiber uh and cable came out to those communities gaz, but the last mile was not met. And so, you have pretty much useless unlit cable and fiber in the ground.
▶ 1:01:08Uh what Helium can do is you is connect to that back hole and then create a sharable signal for that community in central spaces where they're used by the the people in that community. The advantage of doing that is that one you're using not bespoke equipment but any any typically any Wi-Fi hardware can be um converted or uh to connect to the Helium network. You don't have to buy special equipment.
▶ 1:01:35The deployer of that hardware then is able to earn token rewards that are uh programmatically and automatically distributed via the Helium protocol which is a blockchain protocol to that deployer. So that deployer is incentivized to create a signal that then benefits the community that deployer is in. So it empowers the people in those communities to serve themselves and help their neighbors.
▶ 1:01:58You mentioned the lawsuit by the Biden administration uh in your testimony. If the Clarity Act had been law, do you think that frivolous enforcement action would have happened at all?
▶ 1:02:08Absolutely not. As written, the Clarity Act clearly exempts uh transactions like those uh that are that pay H&T to Helium deployers under the programmatic and automatic distributions within the gratuitous distribution carveout. that recognition explicitly identifies tokens that power functional networks like ours that versus tokens that are used to raise capital.
▶ 1:02:33They're two completely different things, two completely different risk profiles, and we should not have been categories in the other.
▶ 1:02:39What a huge setback. Um, Miss Abernathy, I'd like to ask you, your exchange is already regulated in Germany, Hong Kong, and Gibralar, but has only just gotten a foothold here in the US, and I think that sequence speaks volumes. Why did a company like Bullish have to go abroad first before setting up shop here in the United States, where you think that this would be a no-brainer for us?
▶ 1:03:03Yeah. Um, so your microphone, please.
▶ 1:03:09Thank you. Um that that's better. So when when we launched the exchange that was back in 2021 um at that point there was very limited um regulatory jurisdictions um that actually had proper investor protections as part of any kind of regulatory framework and to us that was and always has been still is very important. Um and that that was why we needed to find that that regulatory structure.
▶ 1:03:37Um so again in uh 2021 when we launched the exchange um we went to Jibralar because it was actually one of the few that had a regulatory framework with proper investor protections.
▶ 1:03:48Wow. It's fascinating. My time is almost set to expire, so I'll just yield back, Mr. Chairman. But thank you both uh for your answers.
▶ 1:03:55Gentleman yields back. The gentleman from Florida, Mr. Herodopoulos, who was recognized for five minutes.
▶ 1:04:00Thank you, Mr. Chairman. And as a history teacher, I love being here. This is fantastic and I could not be more appreciative of the fact that the opportunities that will afford so many Americans with this new legislation will will clearly uh be enhanced and and one of the fundamentals I've always worked from is the idea that uh the key with government is offering certainty and stability. Um Mr.
▶ 1:04:20Saber, I I'm I'm I'm really saddened to hear your story today and and the unfortunate nature of what has happened and I'm so glad to see we're finally moving forward with some clarity so that you can operate here in America and grow these opportunities and this this uh financial framework we're talking about is is really what makes America the unique place. Everybody wants to do business here.
▶ 1:04:41Unfortunately, the previous administration did not provide that certainty and stability and thus um the uh the dollars are going elsewhere, jobs are going elsewhere and it's so important uh that we do it this the right way. And I again I would applaud the chairman uh Mr.
▶ 1:04:55style from Wisconsin where walking us through the historic nature of when America acts with with that certainty and stability starting with Hamilton and others uh providing the the an haven where people can invest with confidence knowing that the rules will be there uh in part and that means our kids and and grandkids will actually have the jobs of the future that are in places around the world we never thought they would be uh Mr.
▶ 1:05:18Lovar, if I could ask you, uh, traditional crypto and, uh, traditional companies, uh, will now compete under these equal rules or same rules. How does this bill in your mind create that level playing field we've all been looking for?
▶ 1:05:31Yeah. So, I think, you know, look, we're, uh, you know, proponents and we have been, you know, operating under a regulated infrastructure. I think you know bringing that you know uh recognition that requires you know governance uh risk management uh you know an understanding of clear rules whether the asset you're operating under or the regulatory jurisdiction you're operating under SEC or CFTC whether you're an established financial services firm like Wisdom Tree or a fintech just having those knowable
▶ 1:06:02rules will allow you to continue to build your business and more particularly build it here in the US under those knowable rules.
▶ 1:06:10And Mr. Smansento, if I could on on the on the DeFi issue in the in the bill, they it's specifically excludes that certain uh rules with DeFi. What would happen if we did not have that same clarity? What would happen to you DeFi if we did not provide the the structure that's in this bill?
▶ 1:06:28Yeah, I mean I think it would continue the environment that we've been in for a while now, which is uh listen, the developers are are creating pretty novel technologies, right, that do test the questions around what should and shouldn't fall into to a regulatory environment and uh it's really incumbent on Congress to kind of come forward and say this is where we draw the line and from us for perspective like there are important protections to be had right first amendment protections to be able to write code uh protections to participate in these networks in put your peer
▶ 1:06:58management without having you know surveillance from the government that might be unnecessary. And so uh clarity is really important at just again making that line clear so that that development activity can continue right and that people can understand when the development activity and the business activity flows into something that's inter uh regulated that they know where that falls as well and clarity is very specific on that that line.
▶ 1:07:20Thank you. And and I'll just close by saying this I I really appreciate the chairman and also our full chair chairman Hill. I mean, we a lot of people look at Congress as very chaotic place and and the way that you've been able to navigate this with the ranking member really makes a difference. I mean, we go back home, we say we actually made this a bipartisan bill. Everybody had kind of not only a stake in this, but more importantly, a say in how we change the rules on how we we modify this emerging technology. And I couldn't be more pleased to be on a committee that focuses on solutions, not playing politics.
▶ 1:07:50And so, uh, with that, Mr. Chairman, I yield back. And again, thanks for taking this time here at a special place in a special time in our
▶ 1:07:56Thank you very much. The gentleman yields back. Uh the gentleman from North Carolina, Mr. Moore, is recognized for five minutes.
▶ 1:08:01Thank you, Mr. Chairman, and good morning to our to our guest today. Thank you for the candid testimony. And Miss Aberg, I uh while you were testifying and some I actually was doing a little other research, reading some articles about uh what all happened. And I think to to you know, Mr. Heropoulos's comments, unbelievable the way that the company was treated. And I do want to thank you again for the efforts you all made in western North Carolina after Helen. That was very helpful to allow commerce to pick back up.
▶ 1:08:29So, thank you for those efforts that uh that cannot be expressed enough. I do um it always strikes me as odd. You think about it, roughly a third of all Americans either own or use digital assets in some manner. So, this isn't some fleeting thing that's going to go away. And there are those who look at it and they they resist technology. Well, guess what? If we banned automobiles, we'd have 40,000 less deaths you a year, but that's not uh we're not going to get rid of cars, I don't think.
▶ 1:08:58So, there's inherent risk in certain technologies, but the guidelines and the proposals and the the law that's being worked on with respect to of course to genius and with clarity are designed to do that. So, it's understandable why companies with the failure particularly the four years before under the Biden administration were having to look to go offshore. So I think it's important that we we work hard to bring that stability and that's why I'm proud of what this committee has done and what the house has done to to pass this legislation.
▶ 1:09:26But it did bring me to another question and that is it's clear why these you know the market structure is important for financial firms but tell me about when it comes to companies who are developing blockchain applications outside of traditional finance. Why is it important to have these guidelines as well for them? Uh it's critical um for for pretty much our history embodies why it is so critical.
▶ 1:09:51Uh the SEC sued Nova Labs over allegations that the hotspots so hardware uh uh could be plugged in and in exchange the the deployer of that hardware could earn tokens. had also said that uh users of a mobile phone plan that that was also an unregistered securities offering because the user of that phone plan could potentially earn tokens if they voluntarily opted into a program where they provided useful information for mapping the network.
▶ 1:10:20Um that we're trying to build infrastructure. We're not trying to raise capital through selling tokens. We've never actually sold tokens in the secondary market other than OTC sales that were constructed with regul reg to be regulation decompliant. Clarity and allotss tokens that are used to run functional networks like ours uh to the to the regulation under the CFTC.
▶ 1:10:44the CFDC still has its full regulatory toolkit um and can bring claims for fraud, manipulation, and abuse uh in the sale and purchase of those tokens like it always has been. I don't think clarity is an a call for deregulation. I think it's a call for the right regulation per the right regulator. And without that clarity, infrastructure projects like ours are not going to be durable in the United States.
▶ 1:11:11We need the certainty of legislation codified into law that cannot be changed at the whim of whoever happens to be sitting at the share of the SEC or the White House.
▶ 1:11:21And so and so to your point of course jurisdictions like the European Union, Singapore, the UK, Hong Kong, and the the Emirates have aggressively moved to establish clear digital asset frameworks. Uh Mr. Salado, bring me to you. What lessons can Congress learn from the jurisdictions that have already um adopted these digital asset regulatory frameworks and uh and where have those framework succeeded or fallen short? I
▶ 1:11:47mean, I think the the key lesson is is more the initiative, right? It is the recognition that there's something novel here and that the markets are developing in a way that requires some kind of regulation and that there are jurisdictions that have kind of leaned into that and said okay we're going to tackle this problem and we recognize that kind of existing regulation is being tested in a way that we can't just rely on some of the principles that have been there and so one I think it's that you know that lesson of hey you need to take the initiative and that comes down to congress and then I think the second part is you
▶ 1:12:17know naturally markets are global uh environments right it's very difficult to put jurisdictional boundaries around markets and that requires you know all the regulators to kind of come together and be able to marry where they make sense and that requires again that initiative to put some regulatory environment in place.
▶ 1:12:34And in that same thing just as a followup on that why would you say it's important that any market structure legislation preserve the ability of decentralized finance to innovate while ensuring there is the regulatory oversight focus where there are risk.
▶ 1:12:48Yeah. I mean for us that is the core innovation here right it is the uh development of a network that is permissionless to participate in and to be able to transfer value in a peer-to-peer fashion right um it is the truth that there has been a large development of financial institutions and technology firms building in this environment um but even without those the the technology is still important and that requires the protection of those people who want to participate at that level
▶ 1:13:13thank you and my time is expired Mr.
▶ 1:13:16gentleman yields back. Uh, the chair now recognizes the chair of the subcommittee on Oversight in Investigations, the gentleman from Pennsylvania, Mr. Muer, for 5 minutes.
▶ 1:13:24Thank you, Mr. Chairman, and thank you all very much for being here with us. This is really a a great hearing. It's very, very important. Uh, and it's certainly fitting that we're here at Federal Hall, uh, where capital formation uh, began in our country. And the Clarity Act is about extending that same opportunity to more Americans, not fewer.
▶ 1:13:45And I I'm sure my colleagues as well are certainly hoping that the Senate is watching your testimonies and your comments because they're compelling uh and they certainly need to be aware of it. I'm also a little disappointed none of our Democrat uh colleagues are are here. They were invited. Um and certainly uh Republicans and Democrats will all benefit all of America by passing the the Clarity Act.
▶ 1:14:08Um we've um uh passed the Genius Act as as you all know into law signed by the president. Uh so you know stable coins has got its federal framework. Um the House has done its part uh in passing clarity and truly it's now we're it's up to the Senate to finish the job. So uh Mr. Simmons, let me start with you, please.
▶ 1:14:31Um, with your experience, uh, working uh, at the CFTC and now the private sector, how does the Clarity Act make sure we're not creating new gaps for illicit finance and market manipulation while we're trying to give legitimate businesses certainty?
▶ 1:14:47Yeah. So, I think uh, it does a few things. I've talked already about how it, you know, sets the clear uh lines of which entities are going to be regulated, but then core to that is uh building off of that to use the traditional anti-moneyaundering structures that are in place, right? To say that these newly regulated entities are still going to be bank secrecy act regulated and that they will have an obligation to surveil for uh illicit activity. Um I used to work at chain analysis.
▶ 1:15:14It's a company that, you know, recognizes there's something unique in these networks in the ability to process some of the data and be able to identify potential uh bad actors. And what you've seen is even something unique in this market of companies that operate using that kind of technology to do, you know, enhanced screening or or uh kind of a different form of risk management on their customers and on elicit activity.
▶ 1:15:38And so I think kind of putting all of those pieces together with uh this bill and kind of ensuring that those intermediaries that are rightfully defined as so also have those AML obligations and kind of uh you know the the u the kind of I don't want to say motivation but the the the the call to to implement that is really important.
▶ 1:15:59Thank you Mr. Louver. Um Wisdom Tree Prime mobile app tokenized securities for sales. uh do you think this will expand access to everyday investors to trade on blockchain and how does clarity uh what role does clarity act play in
▶ 1:16:15Yeah, most certainly. I think you know if you look at one of the core benefits and this gets to a point Mr. Timmans made as well is you look at the investor being able to have greater control. So we can deliver that tokenized fund share to their own wallet. They control that wallet and then they can move that fund share to anyone else's wallet instantly. If you think about the power of that, that instant movement, instant settlement, right now that is intermediated.
▶ 1:16:41Believe it or not, if you tried to move a traditional share of stock, if you just said, "Hey, I want to transfer this share of stock to my son or daughter." That is actually not a simple process. It requires a lot of paperwork, multiple days just to do that simple action. Now I can hold my tokenized, share in my wallet, move it immediately. So just bringing back the power to the investor is is critically important.
▶ 1:17:04The Clarity Act embodies and and and notes the the power of tokenization that securities that are tokenized or securities themselves also empowers the FCC and CFTC to continue to innovate. So that's really what's going to continue to allow innovation and growth in this space.
▶ 1:17:21Great. From your perspective, Mr. Lver, uh where does today's uncertainty over whether a digital asset, which of course the Genius Act uh tried to clarify, falls under the SEC's or CFTC's jurisdiction, does that create a operational or compliance burden?
▶ 1:17:37It has historically yes. I mean, from our historical experience, for instance, we tried under the prior administration just have comfort that our tokenized gold product was in fact a commodity. If you think about certificate of title to physical gold in a vault, it seems like pretty clearly a commodity. But it was such a complicated environment that we, you know, didn't have complete comfort.
▶ 1:18:01We we then said, "Okay, help us understand um, you know, why this shouldn't be just considered a commodity." And we we just could not get an answer. And this clarity act would provide those knowable rules, those durable rules to make clear that answer. I mean, we ultimately launched because, you know, we knew we were in the right there. Um that uh that that we had the clear answer, but uh but you want the durable rule to allow you to to really have the ultimate comfort there.
▶ 1:18:30Thank you. I'm glad I believe we have a second round. So, I we'll have more questions after that. I yield back, Mr.
▶ 1:18:35The gentleman yields back. And in do indeed we do have a second round. So, we'll go into a a second round of questions for our witnesses. Um, I want to dive in if I can uh with you, Miss Abernathy. Again, um, a lot of crypto intermediaries and exchanges have been relying on licenses like the state money transmitter license, uh, New York bit license to operate.
▶ 1:19:00Uh, but these requirements, um, differ, uh, require compliance with up to 50 regulatory frameworks. And so the question then is how will clear definitions of digital asset intermediaries roles uh impact crypto exchanges such as bullish? Uh but then in particular how will providing these types of frameworks at the federal level enable greater consumer protection uh in the process.
▶ 1:19:27Yeah, thank you. Um I mean having clarity over roles and responsibilities is is obviously always very very important. So, you know, firms know the rules of the road. They know what they can do. They know how they can do it. They know what's uh you know, part part of the framework, what isn't. Um and and what they need to comply with. Uh to your point, yes, the state byst state is is tricky. Um and not all states have a regulatory framework either or license.
▶ 1:19:57Um so you know we actually believe you know one of the uh biggest investor protections of a federal framework is the fact that it would be federal that it would be across all states that there would be a consistency in the licensing and in the requirements and that everyone would be protected.
▶ 1:20:15That consistency across 50 states uh that obviously allows businesses to scale. That's one benefit, right? You're going to see hopefully capital deployed in the United States. The other side of this that that I'm focused in on not only is making sure that we're investing here in the United States rather than abroad, uh, but also how we're protecting consumers in the process. How does that uh having a national framework benefit consumers rather than the patchwork that we just discussed?
▶ 1:20:40Well, again to to the point um having having the framework um will bring liquidity on shore to your point. It will make the markets actually have a structure within which they can grow and develop um which which just we have not had to date and that is why liquidity has has certainly has certainly left and we've seen it in the past when new regulatory structures have come in to even traditional markets.
▶ 1:21:10they have done so with the right protections that have allowed a market to grow, evolve and and effectively protect all consumers involved. I
▶ 1:21:20I I think there's a real opportunity as this framework builds out. Not only do will you see more innovation development in the United States, I think this is also our opportunity to make sure that there's consumer protection standards in place to help people. The good actors want to root out the bad actors uh in this space. I think making sure that we have clear lines uh as to what regulator has, what authority where as clarity does provides us uh huge opportunities uh in this space. I'll stay with you just for a minute here since we're we're in a second round.
▶ 1:21:46Um the the the the clarity act really shores up the SEC's authority with respect to digital assets commodities sold uh as part of an investment contract and allows the SEC uh registered entities to offer uh digital commodities on their platforms. Could you just give a little flavor as to why you think that is an important provision in sight clarity?
▶ 1:22:08Yeah. So, so that's really important as it it kind of helps um towards the the development of of kind of a dual registration if you like um between the the FCC and the CFTC. Um and you know as we've seen recently um from March 2026 um sort ofou between the SEC and the CFTC um as well as the the interpretation that that came out that the the agencies are trying to harmonize um and and working towards that which I think would be an incredible benefit because there are overlaps there are intersections um and they do
▶ 1:22:38need to work together. uh some some of the important ones um one in particular I've been looking at is the portfolio margining that is recently being discussed which um can provide not only more effective and efficient risk management but it can also actually unlock capital which then provides more liquidity into the market.
▶ 1:22:58Thank thank you very much. I appreciate everybody being here. I'll yield back and I'll recognize the chairman um Mr. Hill for five minutes.
▶ 1:23:06Thank you sir. Uh let me stay with you Miss Abernathy. Um talked about you've got the base exchange and people are now writing applications on this base layer which clarity gives some real benefits to but can you walk through the migration of certain traditional finance intermediated settlement activities to a decentralized blockchain approach and uh talk about how you see that Uh, and for example,
▶ 1:23:36in the consolidated audit trail plans of the SEC, not my favorite subject, but nonetheless, the law of the land, um, you know, blockchain ATS's or blockchain registered exchanges have an obligation to show that lit market, too. Tell me how you're going to comply with that. so we operate a centralized exchange um, primarily. So we're we're not moving into sort of the the decentralized um space.
▶ 1:24:06Um and so that is is how we are evolving as as noted start starting with sort of um you know we we have applications in right now with the CFTC um to have our centralized uh futures uh futures exchange clearing house and intermediary. Um we have also had also recently announced um an acquisition of uh Equinity and the purpose of that was to move into the um tokenized securities um infrastructure.
▶ 1:24:36Uh and we believe um combining the platforms does sort of give that full uh life cycle from issuance and registry to trading and connecting um effectively a trusted sort of reporting and regulated transfer agent. um that that was a Quinity uh or is and with Bullish's sort of blockchain and um trading infrastructure and and that this is um this is represents the future of the securities market.
▶ 1:25:05Thank you Mr. um uh Lovar. Same sort of question to you since you run a big well-known traditional finance uh company that's you're using tokenization. There are a lot of people that you know uh they don't want to be bombarded with information from you seven days a week 24 hours a day.
▶ 1:25:25So tell me uh the value of tokenized settlement with 7day a week settlement for your customers who's using it now that you're offering it and what kind of volumes are you seeing?
▶ 1:25:37Yeah. So um you know one of the things I'd note is that um you know we've seen increased volumes just since the passage of the Genius Act. So, you know, one of the important things there is, I think, just Congress, you know, putting its stamp on actually approving a federal framework for even though that was for stable coins, I just think it underlies the importance of the passage of clarity. So, we've seen increased activity since then, including increased stable coin issuers.
▶ 1:26:03So, those stable coin issuers, for instance, are interacting with our money market fund as a reserve asset. So they want that instant liquidity, instant availability can move into their reserve and then as their users are moving in and out also instantly out of that stable coin, they can similarly move that reserve asset.
▶ 1:26:24We're also seeing stable coin holders that aren't able to obtain yield through holding their stable coin similarly access our assets, our tokenized funds, particularly our tokenized money market fund, but also the other exposures. You know, I can move my digital assets instantly. I want also if I'm going to access and interoperate with traditional financial services, I want that similar experience.
▶ 1:26:46So, you know, every user should have that similar experience and and have the availability to instantly settle and also work 24/7 around the clock. I think as well as you know as as others are you know you're entering into different spaces it can be difficult to have a financial position that you want to um you know liquidate for instance and not be able to do that on a Saturday when the markets are you know maybe volatile otherwise. So providing that access point 247 we found to be very
▶ 1:27:16Uh and Mr. Samosato, similar with your regulatory experience too. Um, tokenization of collateral pools. We talked about net margining, but wouldn't that be a big issue? And couldn't that have been helpful in some catastrophic situation like Silicon Valley if the collateral pool of the Federal Home Loan Bank and the Federal Reserve Bank of San Francisco had all been 20 24-hour accessible with blockchain accounting?
▶ 1:27:44Isn't that a way to have more liquidity and more safety in the financial system? Yeah, I mean I I'll take even a different example which is you go back to 2008 and there was a lot of questions about you know to what extent was the crisis a result of the derivatives market and a lot of it was just an unknown exposure between counterparties you know and and so when you have
▶ 1:28:03uh something with more you know uh uniform infrastructure and information available to a regulator it's a it's a lot more information to glean that maybe it wasn't the case that any one business was underwater but now we know the credit exposure to each business and can manage that risk. better.
▶ 1:28:18Yeah, I think I think that's an important point, Mr. Chairman, when we think about the benefits and scale of this technology. Yield back.
▶ 1:28:24Gentleman yields back. The gentleman from South Carolina, Mr. Tims, is recognized. Five minutes.
▶ 1:28:28Thank you, Mr. Chairman. It's critically important that Congress continue to create the rules of the road to make sure that emerging technology um has certainty. And the B administration's regulation by enforcement was the exact opposite approach. And now Congress has acted. We uh put a lot of points on the board with genius.
▶ 1:28:49We're about to put more points on the board with clarity, but we need to continue to build to to maintain the the certainty for businesses to invest and to to to give them the rules of the road. And I think the the next step I hope is going to be around tokenization. Um I have an NFT bill that we've been working on and plan on filing it after clarity passes. I think that the all of this emerging technology changes lives in a way that we can't really fathom. I mean, think about that.
▶ 1:29:17The iPhone came out and just 20 years ago and the the world has changed just immensely. I still remember the Blackberry. So, I mean, I can't think of what 20 years from now is going to look like. And I think that there's some areas that um are are exciting. And again, all of this emerging technology has value because it streamlines processes. It removes middlemen.
▶ 1:29:41It creates transparency and it it it gives people more freedom to move their assets, their it makes their lives easier. So, as it relates to tokenization, there's also a potential for the government to use it. So, one thing that I've been thinking about is vehicles. I recently got a new car to register my car. uh you got to pay taxes, all this stuff. So, I mean, Mr.
▶ 1:30:06Lovart, could the government tokenize vehicles and then streamline taxation? I mean, we're having this issue of the gas tax. Uh we got electric vehicles. We're going to have hydrogen vehicles soon. So, I mean, could could we use blockchain technology, tokenized vehicles to register and to tax vehicles as they use roads?
▶ 1:30:26Yeah, I think, you know, look, there's many opportunities for tokenization. you know, we're focused in the financial services space, but as you note, um, you know, if you just focus on the underlying fundamentals of it's a, you know, transparent, uh, you know, blockchain, uh, database essentially that is immutable.
▶ 1:30:44Um so having that recordkeeping functionality that as you mentioned can potentially you know provide more seamlessness uh greater functionality quicker functionality you know having that uh you know in what may traditionally be very you know um spaces that that aren't typically you know functioning as fast as they want them to be in terms of cars registration taxes I think you know it's potentially a very very significant use case certainly
▶ 1:31:11I got another fun one um land So I mean how many people across uh this country work at the recorder of deeds office? I mean I chat GPT said over a million. So I mean if you think about it we have uh records that go back hundreds of years to show who owns what and who passed it across title uh all of this stuff.
▶ 1:31:34So I mean we theoretically could tokenize land and we could in 20 years no longer have these questions of deeds or title insurance. Is that fair?
▶ 1:31:44Yeah, I think that's fair. I mean, that's the importance of, you know, you have an immutable transparent record and that immutability, it can't be changed. Uh, so that's incredibly important. You know, you potentially reduce uh potential for forgery or the like. Well, you have that transparent record. You can see where it moved and also you can tell, you know, how it's moved as it moved to, you know, different uh, you know, types of of of actors. So, uh, so yeah, I think there's a lot of potential there as well.
▶ 1:32:14Well, I I think that uh it's hard to even imagine what the world's going to look like in 20 years, but in order for us to continue to be the center of the global economy and to continue to to provide the American dream that people have enjoyed for 250 years, we've got to get this right. And that's the importance of passing clarity. And we've got to then build on it.
▶ 1:32:34And there's other uh pieces of legislation that will continue to uh give the rules of the road to the the free market to continue to innovate and um it's exciting times and um I appreciate that. Mr. Chairman, I yield back.
▶ 1:32:47Gentleman yields back. Mr. Stsman's recognized for five.
▶ 1:32:50Thank you, Mr. Chairman. Uh after Mr. Timonss' comment, it reminded me of a a picture that I sent to my boys a couple of weeks ago, and it's I don't know if you've seen this, but it's a a guy holding a a camera, you know, one of the old video cameras, VHS cameras on his shoulder. He's got a a I can't even remember the names of these things. VHS, CDs, these big phones, uh all these different um devices that we used to use back in the 80s and 90s. And now it all fits in our hand.
▶ 1:33:20I mean in one hand and we can stick it in our pocket and that's how far technology has come and I think one of the things that is important especially as we discuss uh this particular issue is how do we explain to our constituents and to the American people um what this actually does for them in their their everyday lives.
▶ 1:33:39I mean, I'm trying to schedule a closing here in the next couple of weeks and, you know, we're having to get everybody there all at the same time and, you know, land at the same spot and signatures and, you know, obviously there's some ways to get around some of that, but um, Miss Abernathy, we were talking a little bit about, you know, companies that are going overseas. Can you talk a little bit about, you know, enacting clarity? It would encourage more firms to to be here in America. We know the race that we have with China. we know the race that we have with other countries.
▶ 1:34:09Um, you know, if we don't get this right, you know, what happens? What what do Americans miss out on? I mean, because, you know, I know like even um, you know, some of the the blockchain technology, how does it apply to a restaurant owner? How does it apply to uh, you know, people in small businesses and healthcare, things like that? And I'd like to open up to the rest of the panel, too, but Miss Abernathy, if you could comment on that.
▶ 1:34:34So I mean absolutely if if we don't get this right um then there would be a lot of things that are that are missed out on um you know again from from my perspective you know from from an exchange getting this right means liquidity comes into the US but what that also means is obviously more capital to do more with to develop the technology more to innovate and to figure those kinds of things out.
▶ 1:35:00Um, I'm probably less in that, you know, very technical exactly how how it might help a restaurant or or or another um thing of that nature, but I do, you know, from the exchange perspective, um, getting this right will absolutely bring liquidity on shore. And bringing liquidity on shore means more capital, means more innovation. Um, and through that innovation, I mean, we've we've seen it. It's already been mentioned. What's it going to look like in 20 years? Yeah.
▶ 1:35:29um you know we don't know but it all is moving in a digital direction
▶ 1:35:35and a direction that benefits customers. It's you know otherwise there'd be no point but it's all benefiting consumers. It's it's all benefiting all of us.
▶ 1:35:43Yeah. I mean it reminds me a lot of what the chairman said earlier about the internet. you know, we're building the the interstate highway and you know, we really built the interstate highway for commerce, but also for military purposes. And then all of a sudden, you have businesses that are just sprouting up and doing all these different new innovative uh services and building products for the American people. And that's what we're where we're at uh today and what uh what can be done. But, you know, whether it's, you know, blockchain technology is, you know, it's still so new.
▶ 1:36:14We probably use it in some ways that we don't even realize. Um, Mr. Sman, you're shaking your head there. I'm kind of curious what some of your thoughts are on how what should the American people why should they support the Clarity Act because it's going to help them in their daily lives.
▶ 1:36:28Yeah, I I think it kind of comes in layers, right? I think going back to what Mr. Tim said it's very difficult to like project ahead what the future of technology looks like other than we know it's going to like drastically change things over time and like the we've seen development encouraged in this area and a lot of new technologies coming on board and then I think as you've seen early adoption it becomes incumbent on Congress to say here are the rules of the road so that the companies who do want to build that infrastructure that might be more usable to the end
▶ 1:36:58individual can create something right the goal goal of technology should be to make things easier, to make them safer. Um, and I'm not some technoutopian who thinks all of it is going that way, right? Again, it requires each like step in the in the path to kind of focus on that. I mean, one practical example I'll give you, which is like I run my kids swim team, right?
▶ 1:37:18I'm like the parent volunteer and this is the first year that we've like required credit cards because everything is through online, you know, and it's like I'm just looking at our small nonprofit swim team and looking at like how much you're paying on credit card fees and how many different accounts I have to set that up. And I'm not saying like I don't think crypto is necessarily at a point where it's going to like replace all of that, right?
▶ 1:37:37But the concept of hey a new technology that makes payments easier and that allows them to be in peer-to-peer coming back to the users and to like the individuals in this country hopefully the development is down a path where at some point you go hey this feels more like when I just used to pay for something in cash right and it's easy and it's online and and and like I think that is the hope of building the regulatory structure allowing the companies to build is you kind of get that incremental approach towards that
▶ 1:38:00thank you yields back gentleman from Florida Mr. Herdopoulos is recognized.
▶ 1:38:07Thank you, Mr. Chairman. Uh then we get to the DeFi issue as well. Again, one of the defining features of DeFi is that many applications operate through open-source software rather than traditional uh financial intermediaries. As innovation continues in the space, it's important that developers who write and publish software are not treated the same as entities that take custody of consumer assets or control transactions.
▶ 1:38:29So um the question to you uh is how does clarity help distinguish between software developers and regulated financial intermediaries and why is protecting developers who build decentralized technologies uh important for fostering innovation while maintaining appropriate consumer
▶ 1:38:48Yeah. Uh, so I I mean I go back to the fundamental innovation here being that ability to write up code, offer it up for anybody to use, and that allows you to participate in a network or you do a transaction in a peer-to-p peer way. And at DeFi at its best is intended to do something along those lines. And so when you look at clarity, there's a few ways uh that it addresses this issue. Let's start with like what is our key priority, which is the BRCA, which is right now money transmission, right?
▶ 1:39:17There's different cons of that at a state level, at a federal level, but uh at a baseline interpretation, it involves somebody taking your money and transmitting it to another person, right? And you play that trusted role because you're taking, you know, hold of their money. You're offering up something to the customer that like, you know, that they should put their trust in you.
▶ 1:39:36And uh what crypto networks and DeFi at its best will look like is actually it is your ability to take an open- source tool uh and send those transactions direct in a peer-to-peer fashion. In that case, the developers who created that network are not the same thing as money transmitters. But we live in a world where the interpretations around those provisions are flexible, right?
▶ 1:39:58and you've seen aggressive prosecutions go after developers, you know, basically on the premise of you develop something and you're going to be allowed for the illicit use. What Clarity does is says no, you know, there are still moneyaundering laws in place and there are still important criminal provisions that apply to uh a developer who might intentionally try to, you know, assist in some moneyaundering scheme. But if you are developing a neutral platform that's open source that other people can inspect and allow them to do a peer-to-p peers transaction, that is not the type of activity that is going to suck you into a regulatory environment.
▶ 1:40:28So that's like really key and clarity. And then it also does something similar from the SEC and CFDC registration perspectives.
▶ 1:40:34Thank you. U Mr. Lobar, you you brought up a great example before talking about transferring stock, right? And and the old way and hopefully the new way, right? And I I I'm sure we all do wired transfers. It's a pain. 30 bucks. you got to go in and do all these different steps. Walk us through what a traditional situation you describe if you want to transfer some shares to your daughter in the old way versus what the future might be just so that we could educate folks who are watching why this is so important.
▶ 1:41:01Yeah, I think you know it really boils down to just you're having a number of steps and number of intermediaries you know in involved in the process. So you know first off it's that I have my account at a financial institution. So, they're going to require a certain level of paperwork just to be able to say, "Hey, I now want to transfer to this account." Whereas, so I I've lost the control of the ability to be able to move my asset because I'm dependent on that financial intermediary to do so.
▶ 1:41:29So, it's it's part of that being able to to, you know, instruct, if you will. Um, so, but I have a reliance there. And so and from there once that instruction is made then you have the plumbing to be able to do that to be to have to move it which typically that plumbing you know takes a good day or two to go through the system of intermediaries to move from you know one account uh through say the DTCC uh to another account.
▶ 1:41:55So it's that plumbing that is is uh you know not needed within the walletto-wallet direct peer-to-peer example. None of that is needed actually. So that's really the power of it and that and that instantaneous settlement essentially
▶ 1:42:10Great. And Miss Abernath, if I could, you you guys are the experts at this. We're we're playing catch-up with you all and we're trying to create the best legislation possible. Wouldn't when you're talking to your friends who aren't in the finance world kind of the answer Mr. Lobar just gave, how do you describe what digital assets are to the lay person who's who's in this field?
▶ 1:42:33I I do get asked that often and it's one that you have to stop and think about you know do you do you want a sentence a chapter or a book um I mean you know digital assets there's so many things from my perspective from an exchange perspective they're another asset class they're another they're another asset that can be traded but they can be traded in in ways that are similar yet different is more down to the technology technology and some of the enhancements
▶ 1:43:03um that that can be done again from a from a risk management perspective given that that's one of my key focuses. You know, we can run margining calls so much more frequently than what is currently under the regulations today and and we can use collateral in a way that again the the existing regulations haven't thought about. Um
▶ 1:43:26and I yield back Mr. Chairman. Yeah, sorry. But thank you. It is it's a complex issue and and that's why it's always helpful to get the folks to understand how as as Mr. Lobar described it's just trying to make our life simpler but also have that transparency so if you have the confidence you make that transaction. So thank you Mr. Chairman I yield back.
▶ 1:43:42Mr. Mars is recognized.
▶ 1:43:44Thank you sir. Um you digital assets really should not exist or in isolation from the traditional financial markets that we have in the United States. I would submit that one of the reasons that we are that we have been as great and prosperous a nation as we have been uh really falls down to a safe reliable financial system that underpins all that that allows that that creative that entrepreneurship that growth uh that balances the the the forward thinking to to
▶ 1:44:14advance and to grow but also those protections that need to be in place. And so my my my question and I would I would first ask this over to Mr. Louvar is first of all what benefits do you think there are by allowing the traditional financial institutions to participate in the digital asset markets?
▶ 1:44:32I think it goes back to some of those hallmarks that we we've touched on earlier in terms of you know what is the investor experience potentially benefiting from in terms of you know leveraging this technology and I think ultimately for us the reference to tokenization or blockchain will in time you know fall behind the scenes you know the investor will not really be focusing on is it blockchain is it tokenization but what are those benefits that I'm getting can I seamlessly move my asset do I have transpar parency and
▶ 1:45:02seeing, you know, where it's potentially moving to. Is it quicker than what I'm historically experiencing? And most importantly, you know, can I control my own experience to to a greater extent? I think the other important aspect, we touched a little bit on interoperability earlier, but if you think about it, you know, there's multiple rails that the asset can move on, multiple different blockchains. And so as an issuer, we support uh asset movement on eight different blockchains, Ethereum, um you know, Arbitum, Avalanche, uh Stellar.
▶ 1:45:32Um and so that allows the investors even greater control to say, okay, here's a financial rail. Here are the benefits of that one uh attributes that I want to take advantage of, and I want my asset to move within my wallet through that financial rail direct to uh my counterpart. Um, so really it's that holistic I think set of benefits that are that are really investors are looking for.
▶ 1:45:55So let me ask you this and this is going to be open to any of the four that want to comment on it. Assuming that we get clarity passed out of the Senate, signed into law and done. Where do you see thing where do you see things five years, 10 years, and even we're going to do the 20 year on that one? Like uh I I don't think VHS VHS is going to be back though, Mr. Stman. I think that I think that's gone. But uh where where do you think we are and how does that apply to the a to the consumer out there across the country?
▶ 1:46:26If I may respond, Mr. Moore, so I I think that I I I think Helium represents a non-financial application of blockchain and it is already serving millions of Americans on a daily basis and uh millions of people in Mexico and soon in Brazil and potentially the United Kingdom.
▶ 1:46:45I think what we are showing is that blockchain can be utilized and integrated into incredibly interesting infrastructure projects and other projects uh to enhance the cost efficiency of the the delivery of those services um and make and empower people on a local level to to create those services for themselves and their community. It's not limited to wireless. It can happen with sharing uh it it could help update the energy grid. There are projects using distributed energy models.
▶ 1:47:16It can happen on the compute level. There are people sharing uh gigabytes for for running AI programs for running uh graphics programs. This uh enriches communities that are are deploying that uh technology and um it is a way to enhance the delivery of those services already and blockchain makes that feasible by being the connective tissue between all those discrete contributors. Anyone else want to comment on that, Mr.
▶ 1:47:44Yeah, I think you know we uh I think naturally as a as a large ETF sponsor, we we looked at some analogies there. I think we've seen the growth and it took the ETF industry, it's only 30 approximately years old, but time to grow in from its infancy and now eclipsing mutual funds. So, you know, 10 plus trillion dollars and that goes back to the benefits that those investors are experiencing. as we look at this industry, we're actually seeing a greater growth trajectory and I think that that really goes back to the benefits I talked about earlier.
▶ 1:48:13Um, so we're excited for the growth trajectory and really leading and innovating uh in the space there and I think clarity will really be the catalyst um you know to really put those durable laws in place just so we're not guessing, we're not uncertain about kind of especially the future um you know make an administration proof.
▶ 1:48:31Thank you.
▶ 1:48:32With that, I yield back. Mr. Chairman,
▶ 1:48:34gentlemen yields back. Mr. Muser is
▶ 1:48:36Thank you, Mr. Chairman. Uh, Miss Aberg, the um status quo is clearly not protecting consumers or investors or providing an environment that fosters innovation. How would the Clarity Act better protect consumers from cryptoreated scams?
▶ 1:48:54I think by creating rules for clear rules for companies who want to comply to be able to comply with those rules. Um right now that under the status quo there are so many resources being spent by projects like mine on defensive structuring on uh outside council on trying to guess at what the regulations require how they will be applied by a very mercurial uh SEC.
▶ 1:49:18Um with uh codified legislation we have certainty about what the rules are and how to comply with them. I think that that uh is a unquestionably objectively a better s uh environment for business and a better environment for innovation, a better environment for builders and for consumers because consumers know what they're getting into. Uh investors know how to scope the risk if they want to contribute capital.
▶ 1:49:46Um counterparties that we deal with can uh understand what regulations may apply to the activities they're coming into. right now all of that is a gray area and that's just not a sustainable workable uh framework for us to exist in.
▶ 1:50:00Right. Thank you. And we hope our current SEC isn't so murial in your in your view. Uh Miss Abernathy, uh how do traditional IPOs compare to digital asset capital raises when it comes to investor protection and how companies can use the money they raise? So you know [clears throat]
▶ 1:50:21sorry not getting this uh microphone thing correct. Um so you know with regards to uh capital raising uh you know we you know investors should get transparent sufficient and accurate information. Um they they need to have you know enough information to make informed decisions and to ensure there's no fraud or manipulation.
▶ 1:50:46um that should be no different whether it's a traditional security or a tokenized asset or a digital asset. Um the the investor protections that are involved um and that have been um the same principle applies there there should be absolutely no difference between the two.
▶ 1:51:06Okay. Thank you. And Mr. Lover, I see you're sort of biting at the bit to maybe answer that question, but I got another question for you first. if you were speaking to the Senate, what would you say to them about the importance of passing the Clarity Act? You
▶ 1:51:18know, I think that um you know, what we've seen so far is certainly, you know, while while Wisdom Tree is sort of focused on the US, we've seen a lot of innovation go offshore. Um we've seen a lot of players uh offshore. Um and so you know really the Clarity Act and and providing that durable framework that that it's uh proposed to provide I think will really ensure that America continue to be the powerhouse of innovation in capital markets and and we want to build here and and continue to do so to have that durability.
▶ 1:51:48So I would say you know if you're going to keep America at the forefront of innovation you know pass the Clarity Act.
▶ 1:51:53Great. Mr. Sado same question.
▶ 1:51:57You know there's like a lot of divergent views on crypto right? Um and I think that even from my perspective, right, there's uh some really fascinating and interesting developments and innovations in this area and at the same time there's a lot of fluff, right? And uh I don't think that changes the way that I think Congress should approach this, which is you have constituents who are interested, excited, want to participate in this network, see different value through different products and through different platforms.
▶ 1:52:26And the job of Congress is to understand that need of their constituents and create an environment in which, you know, the regulatory requirements that we can put in place and the other laws that need to be there to ensure that that's as safe as possible while still giving them the freedom to do that is extremely important. And so it's like put aside that viewpoint of like do you like this technology? Is this the cool development or not? And understand that like people are engaged in this, right? Regardless of what number you use, right? If it's 12 million people, 25 million people, right?
▶ 1:52:55There's a lot of Americans who are engaging in this technology in good faith and it's incumbent on Congress and on the Senate to recognize that and put into place the regulations that are necessary for that to to
▶ 1:53:05Very well said. Uh Miss Hayabberg, uh if you were speaking to the Senate, what would you say to them about the importance of passing the Clarity Act?
▶ 1:53:13It's critically important for um innovative projects to thrive and flourish in America. Um I think that uh America has always been the standard setter u in the financial markets and in technology.
▶ 1:53:27Failing to pass clarity risks losing that leadership position and it puts us in the country in a reactive posture uh where we are responding to um regulations that are imported by other countries rather than exporting the standards that we want to set and have the world follow.
▶ 1:53:45Excellent. Thank you. I yield back, Mr.
▶ 1:53:47The gentleman yields back. appreciate everybody's testimony today. Thank all of our witnesses. I I also thank uh everybody from the House of Representatives. There's a lot of staff uh here from the Recording Institute uh in others who helped put this uh on in 250 years of American history. Uh this is the building where Congress first met in 1789 uh on Wall Street and the United States has been the leader in financial innovation and that has given the United States such amazing opportunities.
▶ 1:54:17We dominate the globe uh in the capital market space. Um this is our opportunity to seize the moment. A year to the day since the House of Representatives passed uh the Genius Act uh which will be was signed into law a year ago tomorrow. Uh this is our opportunity to finish the job and have clarity which passed the House under the leadership of Chairman Hill a while ago. get all the way across the line to unleash um further capital development uh here in the United States.
▶ 1:54:47So, I thank all of our witnesses for being here today. Uh formally, I say without objection, all members have five legislative days to submit additional materials uh to the witness and questions to the witnesses. Questions will be forwarded uh to you and we ask you to respond no later than August 21st. Uh the hearing on the subcommittee on digital assets on the financial services committee is