We brought some very interesting speakers to Consensus 2022 earlier this month, and while I believe the plan is to publish the full videos in the near future, I’ve always found it easier to pick information up by reading it than by watching or listening to it. This week, I’m continuing my exploration into transcripts with snippets from two conversations held at Consensus: fireside chats with Deputy Treasury Secretary Adewale Adeyemo and Ripple CEO Brad Garlinghouse.

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Financial stability

The narrative

I sat down with Deputy Treasury Secretary Adewale Adeyemo earlier this month at CoinDesk’s Consensus 2022 for a fireside chat. I think it was quite enlightening, and I hope you do as well. To that end, some of the discussion is below.

Also: My colleague Zack Seward sat down with Ripple CEO Brad Garlinghouse. I’ve posted a partial transcript of that conversation as well.

Why it matters

Both Adeyemo and Garlinghouse have played significant roles in the crypto industry, particularly over the past 18 months.

These are only partial transcripts that have been edited for brevity. I’ll send around a link when we publish the full videos.

Breaking it down

Nikhilesh De: We’ve all seen the President’s Working Group report, and I know Treasury is working on reports related to that. Could you just provide an update: How are these reports looking? Are there any specific additional policy recommendations you think will come out of them? Or what are you looking at just with stablecoins in general now?

Adewale Adeyemo: I think the truth is that the President’s Working Group laid out in lots of ways where we are in terms of stablecoins and went beyond just what Treasury was doing. But the President’s Working Group reflected the views of regulators in the space, and it called for legislative action. Now we’re engaged in conversations with members of Congress, across parties, because we know this is a bipartisan issue. What we can do here is to provide a regulatory framework that protects financial stability, but also, as we think about the digital asset space, I think it’s important for us to think not only about financial stability but also about consumer and investor protections. How do we also think about national security? And how do we think about these things in a way that allows us to promote what I would call responsible innovation, and gives those people who are in this space the ability to innovate, within a sense of “this is the regulatory architecture that will govern here in the United States.”

While we’re focused on the United States, I recognize that one of the benefits of digital assets is they’re global in nature. And we want to make sure that in the United States, we lead in thinking about these regulatory issues. But in leading, we also bring the rest of the world along with us so that you’re facing a regulatory regime that looks similar around the world, rather than differentiated.

As you alluded to, terraUSD and luna collapsed dramatically last month. Are algorithmic stablecoins, which weren’t really mentioned in the working group report, something that you’ll now be taking a look at? Is that something that Treasury will publish more reports on or recommend action on to prevent that from happening again?

I think the challenge that you have is when a stablecoin isn’t very stable, that leaves people with a great deal of concern. Ultimately, one of the things that is true of digital assets, that’s true of fiat currency, is that trust is a major part of this. You want to be in a position where people understand the products that they are dealing with. My view is that ultimately, that’s why we think legislation in this area is needed in order to give regulators the authorities they need for stablecoins at large.

But I do think you have to look at algorithmic stablecoins and think through what kind of special disclosures, if any, need to be provided there. From my standpoint, one of the most important things we can do for consumers and investors is make sure that they understand the products that they are dealing with, not only in the digital asset space, but in all spaces. Providing them with information that allows them to make better choices is going to be critical here. I think that the reality is that people need to understand where they’re putting their money, and what’s backing it, frankly, going forward.

You also mentioned the unhosted wallet rule earlier, which I know was kind of put on the back burner in the beginning of 2021. Is that something you’re seeing as a rule that the U.S. will actually look to implement? Or is that just more kind of like a framework that you’re looking at for potential future rulemaking?

I’m not going to get ahead of our rulemaking process. But I do think that one of the things that we’re focused on is how do we address the challenges that unhosted wallets create for national security and for illicit finance. We understand and respect the need for, and the desire to [have] privacy, but we need to make sure that we’re also in a place where we’re not creating avenues where those who want to move funds illicitly are able to use digital assets more than traditional assets.

We know that criminals and those who are looking to move funds illicitly don’t only use digital assets, they use traditional assets as well. The thing we don’t want to do is create an advantage for them to move into the digital space. That’s not to your advantage, and it’s not to our advantage. That’s why we think that thinking about the travel rule and the unhosted wallet rule make sense. But we want to do it in a way that addresses the fact that the thing we know that the way we solve these challenges, the way we address them, is about innovation and making sure that we give you the room to innovate within a regulatory architecture that allows us to protect our national security, consumers, investors and financial stability.

Treasury is obviously working on policy recommendations around stablecoins. But a lot of the conversation that I’ve been hearing, at least from the folks I interact with, is there’s this growing question of whether existing laws make sense for addressing digital assets. So that’s taxes, as we just mentioned, KYC/AML, but also even some of the independent agencies and how they’re approaching it. What are your thoughts? Does it make more sense to try and come up with a “from the ground” brand-new regulatory regime or are the existing rules sufficient?

Yeah, I think it’s both. Honestly, you’re going to need in some places additional legislation because when you envision some of the rulemakings, no one thought about digital assets. But in other places, we’re going to be able to, if we’re innovative and meet the innovation of industry, be able to find ways to bring digital assets into the regulatory regime that already exists.

I think this is like when we’re trying to think about the travel rule. We think this is a place where we have the tools to be able to think through a regulatory regime that makes sense. I think you’re right that all of the regulators are going through this conversation internally in terms of “how do we think about our regulatory regime” and how it applies to digital assets. There you may also see them take some regulatory steps, but also over time, you may also think about what additional regulation is going to be needed.

What I know to be true is something you all know far better than me, [which] is that the digital asset landscape that exists today is not going to be the same one that exists two years from now, three years from now, five years from now. I think the thing as regulators that we need to be able to do and policymakers we need to be able to do is to think through how we build a regulatory architecture that is flexible enough to create opportunities for that innovation in a way that is responsible, and gives people confidence that being engaged in this space is something that is happening within the rules of the road that people expect.

Are there any ideas, tools or projects in the sector that you’re really paying attention to, that have your interest on a personal level?

I think the thing I’m paying attention to in this space, and the same thing I’m paying attention to, across the financial sector in general, is, what can we do in terms of financial inclusion? It’s a major issue for me, not only internationally, I mentioned Afghanistan. But even think about here in the United States, there are so many places where you don’t have access to finance. I think the question is, “how do we make the payment system more efficient and effective going forward?” I think the key is going to be how do we ensure that as more people participate, you have the right types of consumer protections in place, and you have the right types of transparency.

Ultimately, you want to be able to provide remittances at far lower cost to people. I know that there are communities all over this country where people are sending money back to families and other countries, and they are being charged a great deal of money to do that. What we can do to reduce the frictions and the cost and that space, I think it’s critical. It’s also critical in our country to think through how we can use digital assets to reduce the cost of transacting here. So those are the things that I’m paying the most attention to.

Ripple’s Garlinghouse

CoinDesk Deputy Editor-in-Chief Zachary Seward spoke to Ripple Labs CEO Brad Garlinghouse at Consensus 2022. A partial transcript follows.

Brad Garlinghouse: The headline for me is I feel like [the Securities and Exchange Commission’s lawsuit] looks good in large part; I think it’s very clear. The more that has come out, the facts are on our side. I think it’s more and more clear [that] the law is on our side. But we have spent … when this is all said and done, we will have spent over $100 million on legal fees fighting the SEC, and the dynamic there is, in my opinion, the SEC bullies companies into settlement because they can’t afford to fight.

The reason why this fight is so important isn’t just for Ripple. It’s really for the whole industry. It was literally four years ago this week that Bill Hinman, the [then] director of Corporation Finance at the United States Securities and Exchange Commission, gave a speech saying that ETH was not a security. And by the way, let me be clear, I do not think ETH is security. I don’t think XRP is a security. But at the time we viewed this as “isn’t it great that four years ago, we’re starting to provide some leadership and some clarity.” And I view this as actually a very positive sign. I remember there’s emails which now the SEC has read from our internal documents, where I sent the team a note saying, “Hey, this is great news. We now have clarity of how the SEC is thinking about this. They used some parameters around decentralization and what have you.”

Look at the fact that four years have gone by. And we still don’t have clarity about how the SEC is going to say what is and is not a security. It’s worse, actually. Now the SEC, the current chair, [Gary] Gensler is really walking back the statement around ETH. He has been asked directly “is ether a security,” [but] he won’t answer the question. How can we be competitive in the United States in an industry where the primary regulator will not provide that clarity?

My experience in crypto is the vast, vast, vast majority of people want to do right by the rules. But you’ve got to know what the rules are. I think the Senate bill that you’re describing, I think is a constructive step in that regard, and [can] provide some clarity. There’s a bill that was introduced in the House side called the Digital Commodity Exchange Act, which we certainly have been very active advocates of.

I think maybe the most important thing is this is forward progress. I expect there will be some hearings around these bills, and when there’s hearings that bring attention to the lack of clarity, and I think it catalyzes and builds momentum to win, I think it’s open for debate. I’ve talked to some very smart people that think realistically, either the House side or the Senate side, it’s you know, a year away before something gets passed, which, you know, that’s a long time from now. And I think the U.S. every day is losing competitiveness, relative to other markets that have clear regulation, you know, clear leaning in.

Zack Seward: So it’s been 18 months, it’s been a bit of stasis. But certainly, you’ve been doing a lot of work, the business of running this company does not stop, how are you describing the value proposition of Ripple Labs here in 2022?

We only work with regulated institutions, globally. Ninety-five percent of our customers are non-U.S. customers already. Certainly the U.S. case has – we’ve been able to have one or two contracts we signed here in the United States, but it’s been slow going in the U.S. But the great news is demand for one of our core products, we call On Demand Liquidity – that’s the product using XRP to move liquidity for institutions that grew already at a billion (dollar) run rate last year, that grew 8x year-on-year and Q1. The demand is clearly there.

And I think one of the opportunities for everyone in crypto is to make sure we’re solving real problems. I get super excited about real-world enterprise solutions. NFTs [non-fungible tokens] are certainly an area that I think is here to stay. I maybe somewhat controversially said recently that I thought NFTs were underhyped. People were kind of surprised because they’re pretty hyped. What I was calling out is I don’t know how to think about NFTs in the context of [say,] is one artist better than the other? Is a Van Gogh worth more than Picasso? I don’t know. What I do know is there’s a lot of NFTs in terms of tokenization of assets, around real estate, around patent portfolios, around licensing rights. There’s all kinds of stuff that I think NFTs will manifest in a way that is great for industries by reducing transaction costs, making these industries more efficient. That’s where I think NFTs are underhyped, in terms of how they will integrate into our economy broadly.

I also will say … I think all boats rise, and one of the most frustrating things and you know, CoinDesk has certainly written about this, the tribalism in crypto is holding us all back. We just got to f**king stop it. We have to, we’re all on the same team. I really believe that what’s good for crypto is good for Ripple. I try to be really careful about, even on stuff that I feel like I don’t understand, I’m not trying to bad mouth … But I think what’s good for crypto is good for everybody in the industry. I think the tribalism holds us back in a really big way. I am a person who believes in climate change. I’m a person who believes that carbon production is something we got to pay attention to. Again, we’re all on the same team here. I think the extent we can use more efficient technologies for solutions, then we should use those. I will pick on the Yuga Labs experience, the transaction fees – let’s just boil down. Blockchains are all about removing middleman costs, right?

So the Yuga Labs experience, the transaction fees were 40%. I own bitcoin, I’ve said that publicly before, I own ETH, I own XRP, not surprisingly – I think all of them can do well. I think the energy dynamic is a real one. I think we should be intellectually honest about what the real math is, and what are the implications? … I didn’t go sell bitcoin because it’s proof-of-work.

Biden’s rule

Changing of the guard

It’s starting to seem unlikely we’ll see any rapid movement on filling in some of these current roles that have acting heads.

Elsewhere:

• (I’ve actually been on vacation the last few days so this will remain blank.)

Outside CoinDesk:

• (This space intentionally left blank.)

Kevin, you just don’t get it. They didn’t actually pay for Snoop. They paid for a receipt saying they know Snoop exists somewhere, and that they can think about him anytime they want.

— Ben Collins (@oneunderscore__) June 21, 2022

If you’ve got thoughts or questions on what I should discuss next week or any other feedback you’d like to share, feel free to email me at nik@coindesk.com or find me on Twitter @nikhileshde.

You can also join the group conversation on Telegram.

See ya’ll next week!

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

By Michał Domarecki, CEO and Co-Founder of Synapse Network

Despite Bitcoin’s recent market struggle, its market cap still exceeds over $390 billion, showing an increasing interest in the asset class. But the industry has much to learn from the retail-investing surge that occurred at the start of the COVID-19 pandemic. As crypto receives some bad press regarding the recent Luna crash, it becomes critical for the industry to be more accessible than ever to achieve its lofty goals of decentralization in order to pull more HODLers into the fold.

But crypto entry barriers hold many of these potential crypto enthusiasts back. It’s challenging to enter the crypto space without an in-depth understanding of the crypto ecosystem and without the knowledge required to begin trading in the space. But how can crypto become more accessible? The answer to this question is critical for the industry to endure what could become a crypto winter. 

Making investments accessible for normies

The post-pandemic boom paved the way for a new surge of investors via online brokers. One of the biggest motivations for new investors during this time was the ability to make smaller investments, as stated in the FINRA Consumer Insights: Money & Investing 2021 report. For example, Robinhood, a platform allowing newbie traders to dip their toes in the stock market pool, exploded during the pandemic, with a current user base of around 31 million verified users as of May 2022.

In addition to trading small amounts of money, Robinhood’s easy-to-use platform made investing less daunting to younger investors and proved a great entry point for those looking to use their spare change to open a crypto portfolio. While Robinhood’s platform offers crypto trading with little fees, it only supports taxable brokerage accounts and doesn’t offer any fixed-income investment products.

But other crypto trading platforms that offer more crypto options, such as Coinbase, have their own set of issues to sort out, mainly navigating a seemingly complex UX. Artkai, a global digital product design and development team, ran a study with more than 30 blockchain-related projects and found that most crypto platforms’ UX design was inaccessible for those who are not crypto and tech-savvy.

In order to be accessible to newcomers, the crypto space needs to think strategically. Combining the UX of Robinhood and the plethora of crypto trading options of Coinbase could help break down the crypto-entry barriers and bring new players into the space.

Crypto Education 

But solving the UX issue only skims the surface of some of the issues crypto newbies encounter. Twenty-nine percent of people who have never bought cryptocurrency say their doubts about what to do with it prevent them from buying, according to a study conducted by CES Tech. That would’ve been expected three years ago. But considering the undeniable push towards mainstreaming digital assets in the latest bull run, that over a fourth of investors don’t even know what to do with the novel assets should worry developers across the board.

Educating the public on how and what they can do with their crypto assets becomes crucial in moving the needle towards mainstream crypto usage. Digital payments have entered a new era, one where many are living with crypto and digital assets, but there are still those who are clueless. Just like credit cards weren’t immediately accepted, a new form of digital assets needs time to become normalized. A recent bill signed last year in Georgia perfectly exemplifies how currency education in high schools pushes forward educating the public about crypto.

But a more pressing problem arises from the abundance of crypto scams. Scams and security issues hold back normies from entering the crypto market, and for good reason. Therefore, before investors can even start small, they need to know what they are getting into and have some baseline of education about what crypto is and what to look out for.

Creating apps or educational materials helps users understand how to spot a scam and educates the public on what to be aware of when investing. Along with this, creating accessible user-friendly wallets will push normies towards joining the crypto sphere. Hopefully then the market can jump back and even prosper in the next bull cycle. 

About the author:

Michał Domarecki is a multi-entrepreneur and investor with over 15 years of experience in business management. After founding and running successful international businesses, in IT, transport, and logistics, Michał became co-founder and CEO of Synapse Network. Passionate about cryptocurrencies and blockchain, Michał also founded a crypto community and acts as an advisor and investor in promising blockchain start-ups.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In 2012 when Superstorm Sandy hit New York City, I found myself walking from my apartment in Queens to my office building that had flooded in the Financial District. Even though the city was shut down, I spent the day trying to ensure everyone got paid. That meant typing up wire letters, printing them out, walking to the CFOs office for signatures, faxing them to the bank and then waiting for the bank to call and confirm the amounts.

Even back then, the system was obviously broken – a company should be able to pay its people without requiring its accounting staff to go to such extremes.

Megan Knab is the co-founder and CEO of Franklin, a new crypto-native payroll company. This article is part of “Future of Work Week.”

In the 10 years since, so much of our daily workplace technology has transformed, and yet the most basic pieces of payments infrastructure have not kept pace. Cloud computing has largely beat on-premises software. Zoom is now an essential tool for most businesses and workers. The Great Resignation means workers are empowered to dictate their daily habits, including remote work and time off.

The U.S. payroll industry is a $62 billion behemoth, according to IBISWorld, and fit to be disrupted by the emergent and powerful tools enabled by blockchain.

Payroll today is built on top of traditional banking rails, meaning it is rife with inefficiencies, barriers to entry and high cost. An entire ecosystem of payday lenders, overdraft fees and expensive check cashiers has emerged to “support” the payroll industry. These intermediaries cost Americans upwards of $15 billion annually.

See also: It Can’t Be ‘Decentralization or Bust’ | Opinion

Unlike other areas of fintech, payroll innovation has been largely limited to risk shifting. Some payroll companies simply float cash to their corporate customers, facilitating the feeling of “instant” payroll while actually not addressing any of the underlying inefficiencies. While there has been experimentation with prepaid debit cards, mobile payments and digital wallets, there are additional ways companies ought to employ to ease the accessibility of workers’ paychecks.

One of the core building blocks of the future of work must be a digitally native, significantly cheaper payroll infrastructure. It should allow for the meshing of digitally native payment features and legacy medical benefits, retirement accounts and tax requirements.

The new payments stack of Web3 offers the ability to instantly settle transactions – potentially cutting lending costs down almost to zero. A crypto-native stack also has crypto-native innovations:

• Streaming payments so that workers are accruing their earnings in real time.
• Faster, cheaper cross-border payments.
• Ease of integration with investment and benefits products.

This oft-overlooked part of fintech, payroll, is one of the fundamental building blocks for the health and wealth of society. In the United States and Canada, we have payroll-based insurance models meaning that healthcare for many is dependent upon employment. Payroll infrastructure and data was an integral part of facilitating COVID stimulus payments.

See also: Not Everyone Can Afford to Be Satoshi | Opinion

It is the mechanism by which our government collects tax revenue, a part of how our justice system levies fines and one of the key motivating factors in workforces. Economists and analysts look to firms like ADP for early data on payroll trends in advance of jobs reports to gauge economic health.

The Web3 industry has been innovating for years on payments and other kinds of wealth creation products. All of that creativity and talent could be lost if the most basic and fundamental business operating activities are not reformed.

While the accounting office of today may not always be as bad as sending faxes during a natural disaster, technological innovation has been tepid. Web3 technologists have so much green space to innovate in and a responsibility to build the applications of tomorrow on solid ground.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

PSA to traditional hiring managers: You’re doing it wrong.

Over the last two years, a movement has emerged in Web3 that is turning the status quo talent acquisition process on its head – and creating a more constructive method for attracting and retaining talent.

Decentralized autonomous organizations (DAOs) have paved the way for this paradigm shift, offering an inverse approach to the current process that many professionals have experienced on their journey to employment.

Avi Meyers is the director of governance and partnerships at Flipside Crypto, a blockchain analytics firm. This article is part of CoinDesk’s Future of Work Week.

Most businesses hire by inclusion via exclusion. They interview a bunch of candidates in a formal setting, exclude most of them and include the winners.

DAOs actualize the opposite: exclusion via inclusion – create an open environment, incentivize behaviors, reward top contributors.

While simultaneously building teams for Flipside Crypto and MetricsDAO, I became aware of the stark differences between these two methods – but also the merits of each.

See also: Pussy Riot, Political Action and the Future of DAOs | Opinion

And by reflecting on my own experiences, I’ve been able to identify a few easy steps that hiring managers can take to blend the best of both worlds. To explain, let’s first travel back to 2009.

Traditional Hiring: Inclusion via exclusion

Like many college graduates looking for employment during the Great Recession, I began frequenting job fairs in the Boston area. On one fateful evening, I wandered into a dreary downtown hotel for a financial technology job fair.

Going in I had zero expectations, and maybe that’s why two weeks and 10 grueling interviews later, I got my first job offer.

My skill set definitely did not fit the role. The interview process was generic and the firm’s approach to hiring was narrowed to a few select schools with candidates of a certain pedigree. This meant the company was forcing a target persona onto candidates who were then forced to fit the mold. The recruiters weren’t much interested in exploring an individual’s diverse talents.

Unfortunately, my experience in the hiring process is quite common and causes a lot of young hopefuls to land jobs where they don’t belong. It’s not the people who are the problem, it’s the foundational process:

Inclusion via exclusion.

That is the way traditional companies find talent: exclude most, include the winners.

They evaluate on a finite set of criteria, assess abilities through a formal and confining process, and develop a set of assumptions about the candidate based on collective feedback from the hiring team.

Sure, it works, but could it be better? Of course it can.

Web3 Hiring: Exclusion via inclusion

So what does better look like? First, some perspective.

In 2018, I made the leap full time into what is now called Web3, joining Flipside Crypto. Our business model took off at the intersection of data analytics and Web3 community growth, and after fostering a community of over 12,000 data analysts, we began contributing to and incubating DAOs as part of our core objectives.

MetricsDAO was the first one we bootstrapped. Incubating it meant rolling up our sleeves, building teams (referred to as pods), and growing a brand new type of organization from zero to one. The amazing thing about DAOs is how porous and fluid they are. Contributors come and go as they please, following their passions and delivering meaningful work to the organization when they feel like it.

Read More: What Is Web 3 and Why Is Everyone Talking About It?

As DAOs scale, the team must produce incentives to keep core contributors involved. These incentives come in the form of compensation (monetary or otherwise), privileges (like gated access) and leadership opportunities. In other words, through a free-flowing, inclusive model, talent is identified and rises to the top.

In this sense, DAOs are creating a talent pipeline and selection process opposite that of traditional businesses. It is more open, exploratory, creative, and natural. It is:

Exclusion via inclusion.

And yet, DAOs are beginning to integrate certain aspects of the traditional hiring process. For example, infrastructure providers, such as Wonderverse, Drepute and GitPOAP, are competing to build tools that could be used as Web3 “resumes,” where DAO contributors can track their contributions and experiences. Unlike traditional resumes, which require the hiring manager to trust what’s written on the paper (or verify it themselves), the new versions will display non-fungible or proof-of-attendance protocol tokens (NFTs or POAPs) attesting to past work and verifiable on-chain. This model also consolidates inherently diffuse DAO work into a single attributable form, making it easier for DAO leaders to assess a contributor’s relevant experience. New builders emerge in this field daily.

See also: DAOs and the Coming InDAOstrial Revolution | Opinion

On the other hand, traditional businesses have yet to adopt any strategies of the DAO talent acquisition funnel in a meaningful way – much to their own detriment. By integrating a more open, fluid model, traditional companies would find it easier to attract the right talent for open roles by allowing candidates to explore more freely, and ultimately end up with a more passionate and engaged workforce.

With that in mind, here are three easy steps that hiring managers can follow today to become more like Web3:

In the end, if you’re going to have to exclude people, at least do it by including them first.

Further Reading of CoinDesk’s Future of Work Week series:

How to Get a Job in Crypto

Cryptocurrency jobs are on the rise. Here are some top tips on how to start your new career in the booming crypto industry.

What You Need to Know and Do to Get a Job in Crypto

There is a boom in crypto jobs, but do you need to be “crypto-native” to qualify? Here’s how to land a job in crypto.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.