Banks vs CLARITY Stall Tactics⚖️Consensus Lawyer Bill Hughes INTERVIEW🚨

0:00Let's get into some delay tactics that the banks are putting in play now into genius. And this has an effect on crypto in a very big way. So we wanted to get basically an attorney to come in and tell us a little bit more about it. We'll break it all down for you. Let's get started. I do want to thank our sponsor today. And that is I Trust Capital. You guys can get going over on your own crypto IRA. Very easy to set up over there by cell crypto, gold and silver. Super simple and get access to some of the biggest digital assets out there. So if you haven't diversified into an IRA, you should start looking at that. Always consult your own tax advisors and your attorneys if it's right for you. But this is where you start. Get a $100 funding reward just to get going and use our link down below. All right. So I wanted to bring on Bill Hughes, who is the Senior Counsel and Director of Global Regulatory Matters over at Consensus Bill. How are you? I'm wonderful. How are you? Thanks for having me. Obviously, a lot of things are happening now.

1:00The banks have dropped this most recent comment period extension to I assume delay tactic was happening around all this regulatory alignment. Can you give us why this is happening right now? Well, they say it's about sequencing. They want to wait for the OCC's element of the final treasury rule to be fully finalized before commenting on any of the other agency rules, the FDIC, FinCenenoFAC, and a broader rule from treasury. The problem is that the delay they are asking for. The banks are asking for a common period to stay open until 60 days after the OCC would issue its final rule. The OCC rule is still in its own common period until May 1st. And then once all those comments come in, finalization typically takes months at the quickest. If treasury gave them what they asked for, that could push these deadlines for all these other rule makings, all of which are important to putting genius into effect, all these deadlines

2:05into late 2026 more likely in the 2027. The act technically goes into effect January 2027 at the latest. So we need these rules in place. So the banks are not asking for a modest extension. It's really an open ended pause to this rule making tide to the OCC's rule making. And the results is everything would go off the rails. But it does look like treasury has no interest in extending this period. So that's good. That's good news there. I'm curious though, in terms of policy that the OCC is laying down right now under the guys of what the Genius Act dictated, is there anything that we should be concerned around? I was looking at your tweet right here. What about some of the things that would be implemented through the OCC and how would effect crypto? So I think two things to pay attention to. First, expanding the prohibition on stablecoin yield beyond what the Genius Act actually says. And thus sweeping in rewards programs, affiliate payments, third party arrangements, that

3:09Congress didn't explicitly prohibit when they could. I think the second thing would be making OCC's final framework, the effective ceiling for every other agency. If the banks get both of those, essentially, it would be using the rule making process to refashion genius into something different, much narrower than what Congress had passed. And so look, these are legitimate substantive discussions to have in the common process. But the question is, how should we be having that common process? And we shouldn't be trying to extend a regulatory clock here, we need these rules now. How does this tie to clarity? So it's all connected. The common process, you see a lot of the same arguments from the trade groups that you see on the clarity side of things. The same trade groups pushing to extend the Genius Comment period or the ones fighting the stablecoin rewards provisions and clarity. Genius governs stablecoin issuance.

4:10The clarity is the broader market structure framework. Both are happening at the same time, the discussion over clarity and this genius rulemaking. The overlapping stakeholders and overlapping issues really hit home with the yield issue. Yeah. If the rulemaking drags that affects the legislative calculus in the Senate and the House, if clarity slips, it affects the rulemaking environment. So these things were really working in tandem. What if the OCC bans yields entirely on the policy side? Will the banks be okay with passing clarity then, do you think? Well, I think to the extent that clarity would be new law and would be inconsistent with the prior rule, clarity would be, clarity, the legislation would be construed as overwriting whatever rule an agency would put in. But I just want to be clear, clarity and the rulemaking are definitely on separate tracks. They both touch on the same issue. But the reason why the discussion at the agency level can really impact the negotiations in the Senate as to the stablecoin issue.

5:11If it seems that treasury is siding with the banks, then people on the fence in Congress wonder whether or not to support stablecoin yields or not. Having treasury on the bank side would be a big thing. But treasury certainly has not been on the bank side. The treasury in the White House really want there to be a meeting of the minds in some sort of negotiated solution here. What do you make of this post from the Bank Policy Institute? They're wanting to do Congress is now considering whether to extend AMLCFT obligations to all digital asset service providers. What do you make of this? AML on everything? Well, I think the doubles in the details. The question is what sort of services? There are services that look at kind of broker dealers or services, kind of money transmission. There are also lots of services which are just very technical in nature. And so to the extent that they want to expand the definition to cover more technical non-financial services, that would be a dramatic augmentation of the Bank Secrecy Act and a lot of people

6:13in crypto and the broader economy would feel very strongly about that. No doubt. You look at one thing right now and this kind of makes me think Scott Besson and do you think Scott Besson is actually defending yields now because of the most recent activity over on tether. The Trump administration froze 344 million in crypto, primarily it was tied to Iran. So this gives Besson and essentially the Treasury the ability to do a little bit more pressure now in the crypto realm as well as the traditional banking rails. What do you think? Besson has been fantastic. He has been consistent. The stablecoins are good for the dollar, good for Treasury demand and the genius needs to work as Congress wrote it. He's also publicly called clarity and national security priority. We agree. He has been very bullish on innovation in the markets generally. That is a tremendous breath of fresh air. But on yield specifically, Treasury really hasn't drawn a bright public line. But the fact is that the role makings need to be moving on the schedule that was set

7:17out by Treasury and that Treasury seems to be sticking to that schedule and that tells you something about the administration's posture. I think it's no surprise that the White House's council of economic advisors just released a report in the last couple of weeks finding that if you prohibited yield, the effect on bank lending would be the impact would be de minimis, it would be a rounding error. So I think that lens credence to what crypto has been saying is that the case against yield that it's a meaningful threat on the banking system, especially community banks is overdone, isn't valid and that what we really need to be talking about is the traditional banking system can an upstart, start to compete against that and offer consumers an alternative which may in fact be better. Well, and for our audience, we've done a couple of videos on that very report that Bill is talking about, which was done, I think independently, they had a lot of universities

8:18involved economists all over the world, but the banks came back and pushed back against it. They pretty much just took a dump on it. It was pretty hard on basically telling the economists, hey, no, actually you're wrong. The economists were saying no, we outlined it. So it was a back and forth with where this goes, but it kind of goes into another area that we've been watching, which is these banking licenses. Do you think that the banks themselves are trying to slow down the banking charters for these crypto companies as they start to go through the OCC? Well, there's been an opposition to OCC approvals of national trust charters for crypto firms. That's certainly true, but the banks, and I'll give them a little harbor here, they've been whipsawed by public policy over the last couple of years. Just a couple of years ago under the prior administration, they were told to shun crypto entirely. My own company was debanked during that period right before the election, right after the election, the very same bank called us up and said, hey, can we take you to a basketball

9:19game? So I can be somewhat charitable here about their situation, but the moment now is different. The right answer is to bring these companies inside a federal regulatory perimeter where they can be supervised, where they can innovate and operate safely. And yes, there may be on the margin some ways that a charter or the regulatory ramification of it may need to be tweaked to fit the model of their business, but this is why we iterate on regulation all the time as to get a better situation for the American consumer. And so the traditional finance, they can engage in comment with the agency, but the time for obstructionism is over. Yeah, for sure. What's your position right now in terms of clarity passing? Cautiously optimistic, they're conflicting reports on where we are with stable coin rewards, whether there's a compromise, how far along is it? DeFi provisions have been negotiated heavily, some reports that they're finalized, maybe that's true, maybe that's not.

10:21The problem really is the calendar. The Senate Banking Committee markup is targeted now. My latest intel today is for sometime in mid-May. And maybe that's a partisan markup, where what that means is the Republican majority basically ignores the objections of the Democrat minority and pushes through a markup. Not ideal. Fit 21 and other legislation never got a partisan markup, it was basically the end product can go to the floor as more of a bipartisan product, which is better for its treatment on the floor. The clears committee, we'd be targeting a floor vote. This is when the majority leader's office would be targeting a floor vote for sometime this summer before the August recess. And then after that, you'd need to reconcile what clarity says against the House text that already passed. So there's lots to do. But the White House is pushing. We have senators like Lumis and Marino and Tillis and Jeremy Scott signaling that this

11:24has to move forward, the floor type of scares, and really the hour is getting late. We need to move this thing forward, but it can pass. So you're feeling it still has a window of being able to get through, even if it does stretch into early summer. What about Trump? The administration, he's done this already with one truth post out there, saying, hey, we need to get this done. Do you get the best at coming out there, kind of validating that this is, it's basically an issue of national security. What do you think? Do you think the White House is going to come out with a more impressive post to the banks to try to get this across the line? Well, if there's one thing this president knows is how to wield a bully pulpit. So I would not bet against it. So as you mentioned, he already did it once, he said, Americans should earn more money on their money. I don't think you can find an American who disagrees with that. So that single post moved the negotiation material materially, but if I had to guess,

12:25these are sent strategically and you don't just send them whatever you send them when it can actually affect an actual debate. So I would expect more weigh-ins. And I think he's been clear, the president has been clear about where he stands. Everyone in this debate is aware of that dynamic. It is a tremendous benefit to getting this thing resolved that the president is so clear throated about where he wants this thing to end. And I think his support is critical in all of this. Bill, what do you think would be another wrench that the banks could throw in to try to delay this? I think it's DC and there's always procedure that is the inside baseball ways of getting trains off track. So I don't want to speculate. I don't, there isn't an idea that I could offer that they probably haven't already thought of. Thought about. But it's a very fluid situation and it's really in the hands of Senate right now to keep

13:29the ball moving. And so we have exceptional leadership on the Senate Banking Committee really on both sides. And Senator Warner and some of his colleagues on the minority very much do want to get a job done. We just need to join issue and resolve some of these outstanding items. But look, this is this is brass knuckles politics. A lot of people on the fence are wondering like who are they more comfortable making that? Yeah. And they need and they need to figure out whether that's crypto or the banking industry. And the fact that crypto is going toe to toe with banking on this in such a landmark bill and and really we're fighting to the 12th round tells you we are we have very much derived and everybody understands that this is very much the future. Well, I also think that, you know, the Trump administration has also, you know, aligned very heavily with trying to get this across the line. So for whatever, you know, concessions need to be made, it'll be intriguing to see what actually falls at the end and where both sides end up. One position though, kind of a more of a defcon position.

14:33If it doesn't go through whether we miss a deadline and it just, you know, it's not physically able to get passed and clarity doesn't make it through. Do you think the market goes out and spends this as a positive? I think a lot of work is getting done that makes things dramatically better and dramatically clear for the industry. There are going to be some issues if clarity doesn't get done. First of all, that doesn't mean we throw clarity in the dustbin. I think this is the legislation that would be re-rased in the next Congress. There's actually some people optimistic that it would receive, even if it was a democratic controlled house or Senate or both, that it would receive more attention than some people are fearing. But the work that Treasury is doing on the rulemaking process, the work the SEC is doing in creating an innovation exemption, putting tokenized securities on chain, which I think we're going to see. Really is going to open a door to Wall Street and broader tradify to get more invested in the space, open a door for crypto to expand past the current watermarks that it's used

15:40to treading. We're in an era of crypto expansion right now, which is tremendously positive. Clarity would be a great watershed moment for us. Is it essential for us to move forward? It is not. And just because we don't get it done this here doesn't mean it's not going to get done eventually. I think it is kind of the seal of approval, but to your point, there's many factions out there within crypto that are looking at this in either way, whether it gets done or it doesn't get done. Most of which they're looking for long term, I agree with you, is clarity is almost a necessity for sure. Bill, it's been good having you on. Thanks for some clarity here and trying to understand what's going on with all these things. So we do appreciate it. My pleasure. If you like this video, hit like and subscribe, drop a comment down below and also join our free private member group, the link is in the description.