Banks & TradFi Declare CLARITY War vs ETH & SOL🔥GRAYSCALE Zach Pandl INTERVIEW🚨

Indexado: 2026-05-21

[00:00:00]All right, so let's jump into it. Today we're going to be talking about how banks are putting on the pressure for clarity. They also have some new friends that we'll talk about and get into all of that. We'll have a special guest for you. Before we start though, I do want to thank our sponsor and that is Tandem where you guys can get into self- custody. Maybe it's for your first time.

[00:00:18]We have a lot of new viewers coming over to the channel. So if you've never done self custody or tried it, this is the way to do it. So, first go over to tandem.com, get in on the threecard set is what you want. That way, you've always got that extra. Very easy to set up. One of the most secure platforms out there in terms of building a self-custody model. So, all you have to do, hit our link down below. It's going to give you a little bit of a discount.

[00:00:43]And the discount stacks on top of the current discounts available. So, use the code and it does help the channel. Let's go to before I bring on Zack Pandle, I want to go to a clip real quick and this will explain a little bit more around where the ABA is and why they're panicking. Take a look.

[00:01:00]>> To be sure, we think there are opportunities to strengthen this bill further and I think you'll continue to see advocacy from us, but yeah, that's uh it's come a long way.

[00:01:10]>> So, just to push on that a little more, Brooke, did banks get what they they wanted or is this compromise vague enough that Coinbase could find a way around it just within a few months?

[00:01:18]Coinbase, for example? Sure. So, unfortunately, I think it is a little too vague at this point.

[00:01:25]>> But if tokenized uh deposits are so compelling, it seems still like every bank is launching a stable coin strategy rather than a tokenized deposit product.

[00:01:34]Is the banking industry building the thing it says it wants?

[00:01:37]>> The banking industry understands those strengths and is very eager to implement them and to better meet our customers needs.

[00:01:45]>> Uh Brooke, I'd want to switch gears.

[00:01:46]Just about 30 seconds left here. the the Fed recently granted Kraken a limited purpose master account. It's the first crypto firm to get one. You've called it quote putting the cart far ahead so far ahead that the horse will will never catch up. What are you specifically worried about?

[00:02:00]>> Access to the payment system is a very um important privilege.

[00:02:06]>> All right. So, I think the the clarity issue is that innovation is what they're worried about. Uh because being able to stay up with innovation, especially as it starts to grow so quickly, is the issue. So, I wanted to bring on uh Zach Pandle, who comes in from Gayscale, has been with us before. How are you, Zach?

[00:02:22]>> I'm great, Paul. Great to see you. Great to be back on the program.

[00:02:25]>> Hey, Zach. We've been covering a few things that continue to kind of push against clarity. We had a video we did not too long ago, Elizabeth Warren going at it. Uh her of course attack has been through the OC going after these banking charters. Why do you think that the banks have not just finally said, "Hey, listen. We're going to be able to innovate. We're going to be able to build new products. We're going to be able to keep our customers with all this great new." Why do you think they haven't done that yet?

[00:02:55]>> Well, look, I think they're they're not ready to lay down their arms at this late stage here. And I think the resistance to clarity reflects how important this piece of legislation uh can be and what it means for the digital assets industry. You know, this is going to unlock tokenization. This is going to unlock decentralized finance, allow institutional capital to be building on all of these blockchains. It's a hugely important thing for the crypto industry.

[00:03:22]I think the banks get that, you know, they uh don't necessarily want that uh that competition. They'd like to uh keep control over these parts of the financial system. Clarity is going to bring in new competition uh and bring benefits to to users uh to asset issuers to bring efficiency to the financial system. That's why we want it. Uh and I think that that's why it's going to happen. Ultimately, this is the right set of policies for uh the United States financial system. And I think we're going to see a bipartisan po vote to get this piece of legislation over the line.

[00:03:53]>> All right. So, you have the banks clearly in opposition here of almost everything when it comes to clarity. And an interesting participant that we've talked about before is the DTCC. I want to play a clip for you because their CEO sounds like he's doing a little bit of the Italian Goodfells uh plan. Take a look.

[00:04:13]>> Let's be a little honest with each other. There's some hype around this.

[00:04:18]When the early conversations on blockchain focused on disintermediation, this thinking was premature at best, and I'm being very polite about how I say it. DTCC will serve as the connector and common ledger for the financial system.

[00:04:36]The digital highway begins with us.

[00:04:38]That's a fact. We will safeguard liquidity from fragmentation. And I cannot stress that enough. We have got to keep an eye to make sure assets are not disagregated and I firmly believe that we as an industry have got to stay focused on that and we feel very strongly about that and DTCC is going to do everything it can to make sure that the industry does not fragment. That is not good for anybody. DTCC will be operating 24x5 and is the center of gravity for blockchain innovation and digital asset adoption. Financial institutions need to take action right now if they want to participate in this journey. So, here are some of the questions we're discussing. Which wallets and L1 networks do you want to use? And are you prepared when our tokenization service launches in October? Which blockchain use cases are most important to your organization? But no matter what, keep in mind DTCC will be your strategic partner. All right.

[00:05:42]So, kind of throwing down the gauntlet here in terms of how they envision this working when you look at tokenization and the use of many of these L1s out there. Um, do you think that the DCC the DTCC is in a position right now to kind of dictate these terms out to the industry? Because it feels to me like this is still a very open opportunity for many different companies.

[00:06:05]>> You know, Paul, that is a fascinating uh clip. Um, I I think that the DTCC and other institutions at the center of the financial system are in a position to help shape this over the short run. Uh, I do think that the financial system is not totally ready uh to move to full decentralization and some of these institutions will help shape the the shortrun outcome. But also in that same clip, you see the limits of what the current model offers. the DTCC will operate he said 245 >> uh you know leaving two 27s of the week uh for other uh systems to operate and help provide liquidity for the financial system. So over time we are going to move to open architecture blockchains like Ethereum, like Salana uh and to the vision of decentralized finance and I believe that we will ultimately significantly disintermediate uh certain institutional players potentially including uh parts of the the custody ecosystem. uh but over the short run the DTCC has a certain important role to play and I think these institution centric blockchain frameworks things like Canton that the DTCC is partnering with have some runway over the short run uh as a as a first step uh towards our tokenized future.

[00:07:28]>> In the beginning there was also um what was it? Alta Vista. Yeah. In the beginning there was Alta Vista. Does anybody get that joke? Do you know what I'm talking about? Look, I think that that's a good I think that's a good metaphor, Paul, that you know, when you saw the internet build out, there were things that helped shape the onboarding of people, online platforms and things that helped with that process and ultimately we moved away uh from that to a more open architecture system. My thesis on blockchains will be similar uh to that.

[00:07:59]>> All right. Well, cool. Here's a clip though, Zach, where they actually go, it feels like they're going directly at DeFi. Take a look.

[00:08:08]>> For example, people often talk about decentralized finance or DeFi. Our view is if you are performing functions that are akin to acting as a broker dealer or another regulated intermediary, venue creation or order routing, the non-custodial wallet providers, uh DeFi user interfaces and automated market makers, you should be required to register. You need to go through a proper process that's broadly consultative, not through an ad hoc no action or exemptive relief process. That that should be narrowly defined, time bound, has some guard rails around the customers that can access it at least in the initial phases and transaction volume to avoid price and liquidity fragmentation around the markets.

[00:08:52]>> So what they're simply saying is uh DeFi no good. We're we're basically trying to kill it. uh that itself is a bad thing.

[00:09:01]I want to back this up with one more clip, then I'll get your comments on this. This is Hester Paris kind of talking about this very issue. She was actually kind of harassed a little bit by the DTCC in reference to this. Take a look.

[00:09:12]>> You know, as you mentioned, I think we submitted maybe a dozen letters now at this point uh to the crypto task force that she leads and and every time we submitted a letter, she came back with more questions than we had to submit another letter. And I think your letters always come back to well there's someone behind that software and we need to we need to put a regulatory uh thumb on that on that someone >> whether it's the person developing the software or the entity where that person is there is somebody who's accountable.

[00:09:40]So I think that's also sort of a foundational principle >> that may be something that you you and I don't see exactly the same way. If Mary and Joe decide they want to do a peer-to-peer transaction, that's a decision that they're making. And I don't we shouldn't stand in the way of people doing what they want to do unless we have a good reason to do that. And I don't think there's any there's any reason that there shouldn't be peer-to-peer trading. But I think most of it is going to be involving some kind of intermediary. And then it's just figuring out how we've got to attach the regulation.

[00:10:15]Hester is always so nice in in basically saying, "Shut the f up. You don't know what you're talking about." What do you think is, especially we've got the crypto task force leader right there taking a look at this and saying, "Hey, listen. This is going to happen. It's really two different people trading out here. It has nothing to do with the software side of it, which is exactly where DeFi is heading." Would you agree on her position or do you kind of side with the DCCC here? Look, I think Hester Pur is exactly right on on this topic and you know our our view and I think the right view is let's let the users decide. Uh you know if if decentralized finance platforms are going to lead to lower liquidity then users are not going to uh use them. If they're not going to have the the effective price discovery then traders are not going to use these platforms. And so uh if they are uh kind of weak uh platforms and not as effective as centralized exchanges then there's nothing for these players to worry about. The reason that they are uh concerned is that these are effective ways to intermediate savings and investment in the financial system and create new efficiencies and create new benefits for users. That's why they're going to be broadly adopted and that's why we need a clear regulatory framework around them. That's exactly what we are getting. I think these are somewhat lastditch efforts to prevent the legislation from getting over the line.

[00:11:36]I don't think they're going to to get the job done and that we are going to get this comprehensive regulatory framework for for DeFi and other parts of the industry. Yeah, I mean we were watching a little bit of a spat between uh Canton and SUI over the uh weekend on X and you had Yvall in there kind of hitting because they were talking about market making and they were pointing directly at SUI and of course Ada came back and said hey we're not we're not doing any of this we've worked basically C or excuse me SUI has zero VC allocation still vesting which is kind of the reference and of course Canton highly partnered with the DTCC here.

[00:12:14]There might be a little bit of turf battle clearly setting up here in the world of DeFi, especially as we start to see tokenization and really Main Street and Wall Street kind of converging at the same time. So, uh, intriguing stuff to watch for sure. I want to leap over to Ethereum a little bit. You guys, uh, put out actually you put out the, uh, the statement here and this was in reference to the staking model that needs an update. Tell me a little bit about where you think this is heading and why it needs the update in terms of the supply cut.

[00:12:49]>> Absolutely. And I'll say at the outset, this is a somewhat wonky uh topic. So, just to try to get the key uh things across, um look, Ethereum uh should be scarce. These are assets that are commodities and they're valued when they're in high demand and when they are scarce. Uh you know, demand and supply just like other uh commodities. And I would like to see Ethereum have maximum scarcity or as little possible uh supply. And so by changing the staking model, we can reduce inflation on the Ethereum network and increase its scarcity. We think that that'll increase the value of the asset Ether over time.

[00:13:27]Now there's other dimensions to the story and things that are motivating it.

[00:13:31]We want to avoid concentration and tail risks among staking service providers.

[00:13:37]We want to account for the fact that uh the burn mechanism on the Ethereum blockchain is not quite as intense as it once was in the past. These are the things that are motivating this discussion. But the key thing to get across is that scarcity means more value for the token and these changes would bring greater scarcity to ether.

[00:13:54]>> All right. So scarcity versus yields really is what you're talking about here. Institutional loves yields >> and that's one of the reason we've seen so much activity in ETH in general. Um, do you think that is a long-term view for ETH, more of a scarcity play versus the opportunity to go in the direction of just higher performing yields to traditional markets? I mean, if you look at a money market and kind of compare that yields matter the most. What are your what's your opinion on that?

[00:14:23]>> I think that framing versus money markets is a great way to think about it. The key difference is that a money market has a $1 value and it holds that value. Ethereum may pay 3% a staking reward, but is an asset that has 60 to 70% annualized volatility. So, it's mostly the price changes that drive your uh returns. Ethereum staking reward rate at 3% today, for example, is about 1 days price volatility. So, it's a pretty small amount of yield compared to the the price returns. I think absolutely Ethereum should steer in the direction of being a maximally scarce asset more along like uh the lines of Bitcoin and there will be yield opportunities onchain uh through liquidity provision uh from lending platforms through stable coins and tokenized assets you know there'll be different ways to provide yield onchain but for Ethereum the asset I think you want a platform that is neutral that is censor censorship resistant and that has a scarce token uh that's what our view is that these these changes are warranted today.

[00:15:27]>> What about ETH rewards versus if we get rate hikes?

[00:15:32]>> Rate hikes challenge the value of every asset because they sort of raise the hurdle rate for everything in the economy whether it's a money market fund or it's an equity or a bond or or a crypto uh asset. So higher rates are generally going to be a headwind for several different parts of the crypto ecosystem. Now, they will be a tailwind to certain things, especially stable coin issuers. So, a business like Circle uh or Tether, they make more money when rates go up. We we estimate that Circle makes about 190 million uh dollars more per year for every 25 basis points that uh the Fed funds rate or the Fed's interest rate is higher for for the year. So, you'll see some things will face a headwind from higher rates. I think Ethereum, Bitcoin, uh, you know, they they will be held back partly by higher rates and other parts of the crypto ecosystem will receive a tailwind, especially stable coin issuers.

[00:16:25]>> Do you think that is going to occur?

[00:16:27]>> I I I think uh that the Fed is probably on hold for for the time being. I think probably rate cuts are off the table uh right now because inflation is just too high. uh and rate hikes I think are still relatively unlikely because most of the inflation is coming through oil prices and gasoline prices as a result of the Iran conflict and that's something that could reverse relatively quickly. So I think the right approach and probably what we're going to see from the Federal Reserve is just to stand pat for now, watch how this plays out and then make a clearer decision later in the year. My guess is rate cuts slightly more likely than rate hikes.

[00:17:04]>> Okay, let's jump over to Salana real quick. Um, I'm looking here at what Mert's talking about. It says, uh, he's kind of talking about right here. Good morning to everyone. Voted against reducing Salana issuance to collect rent. Uh, and then you look at another tweet he had right here. The ETH guys didn't execute it well, but the idea was right. Anything not seen as money has a fundamental ceiling on valuation. So, you look at that and you kind of see where Salana is heading. Do you do you agree with this first of all of how issuance is being kind of proposed out to the communities here as a potential reduction? What are your thoughts?

[00:17:40]>> I I would encourage people to think about this topic like traditional commodities. You have gold, you have silver, you have copper. These are all assets that have different amounts of functional use as commodities and maybe different amounts of monetary or store of value premium on top of that. And they're all a little bit different. I think Bitcoin, Ethereum, Salana, they all a little bit different in that regard. Bitcoin does not have all that much functional utility in the context of its network, but it has a lot of store of value uh properties. Salana has a lot of functional utility. Salana has millions of users and thousands of transactions per second. So maybe it's more like copper, not quite as scarce as gold, but a a commodity that can have lots of value in the context of tokenization and decentralized finance growing. So these are different assets taking different approaches in in general. I think uh the rising tide is going to lift all these boats. Uh all of these leading assets in crypto are going to benefit from regulatory uh clarity over the coming uh years including both Ethereum and Salana and several others.

[00:18:44]>> Staying on Salana, I got to look at the perp activity uh because Per's volume continues to explode right here. When you look at Salana and the per's possibility here in terms of a market, what do you see right now, Zach? Do you think this is going to be the beginning of something really really big and they start to basically take away from what has been, you know, really kind of controlled by other chains? What are your thoughts?

[00:19:10]>> Look, I think the per story is being, you know, run away with by Hyperlid at at the moment. You know, clearly dominating that story among decentralized projects. But Salana is different. Salana is a very diverse ecosystem with all kinds of things going on. Perpetual futures, real world assets, stable coins, decentralized physical infrastructure, something I think is very interesting and where Salana also uh dominates. Meme coins, NFTts, you know, it's a huge ecosystem, a big tent with so many different types of users. I think that that's Salana's strength. It's a diverse platform all happening on a single layer 1 that's very cheap, very fast, great architecture and great infrastructure like wallets and dexes. I think Salana is in a great position even if some other chains are gaining some traction in narrow use cases like perpetual futures.

[00:20:01]>> Well, and let's kind of compare this because uh I've got a clip here of Salana and it's really kind of the Salana Jupiter concept here and why it's exploding. Jup has continued to make a lot of advancements on this, but I want to I want to get your opinion on this uh clip. Take a look.

[00:20:17]>> Perpex has been growing like crazy.

[00:20:19]All-time high. New all-time high on Salana RWAS 2.8 billion growing over 12x. My favorite part of this though, 98% of all tokenized equity spot trading is happening where it's happening on Salana obviously. Uh but the next step where things start to get really interesting is a partnership that we've entered into at Jupiter with Securitize and Jump Trading. Massive deal. My hunch over the next six to 12 months, tokenized equities is going to be one of the biggest talking points on Bloomberg, CNBC, and everywhere else. It's Jupiter at the lead of the pack there. The biggest news across crypto, Bitwise, uh they have more assets under management than all of the TVL on Salana, but the market with Athena, Jupiter Lint, and Bitwise live right now. Race stuff $500 million in a week.

[00:21:02]>> Yeah. I wonder what happened.

[00:21:05]This this is like our biggest win uh so far. It's doing great. Couldn't be happier.

[00:21:10]>> If you're watching this, we need more USDG there. It's been fully maxed out.

[00:21:14]It's all vacuumed up. So, please, if you're watching this and you have USDG, go deposit.

[00:21:19]>> Clearly, they're pumping their own bag there. You know, that's cash with Jupiter. Uh but the point he's getting at, I think, is valid, and that is there's fast growth. Uh there's an opportunity here that I think this market will continue to push on. So, uh it's going to be interesting. I think we've got a battle underway when it comes to the pers market for sure. Who who would you say at the what's happening right now on Jupiter versus what's going on with with Hyperlid? Who would you say wins this in 12 months?

[00:21:46]>> My view in 12 months is that Hyperlid is the per winner and Salana is a tokenized equities and stable coin payments uh winner. I think they're both a little bit different optimized for different things. I think there's room absolutely for both assets and uh institutional investor portfolios and that's generally the recommendation that we make. Both huge use cases. I think each chain has a different set of edges. I I give Hyperlid the edge on pers. I think Salana has a lot going for it uh on tokenized equities and and stable coin payments. Those are the things I'm most excited about in the soul ecosystem.

[00:22:19]>> All right, Zach, you're always you're very political there. I love you know when you answer like that. So, I'm going to go and take you into the lightning round so we can get some hard answers going. Uh, and that is the Iran war pauses clarity progress and kills it.

[00:22:36]What do you think? Yes. No. Basically, the Iranian war pauses clarity progress and it's over.

[00:22:43]>> I think that clarity is going to pass.

[00:22:46]>> Okay. All right. So, you say no. Not going to happen. I'm kind of with you. I think it's going to go through. Let's get into this. Robin Hood will happily migrate everything to DTCC's chain or do you think they'll stay home with their new chain, the Robin Hood chain?

[00:22:59]>> I think they stay uh DeFi and they continue to build on their own chain.

[00:23:03]>> I'm with you on that one. Uh Salana, Jupet, Phoenix, I think you answered this earlier. And GTO uh JTX eat away at Hyperlquid market in the next 12. Now that would be all all four of those. So versus the one. Do you think that would be the case?

[00:23:19]>> Look, I'm going to say no. I think I think Hyperliquid does have great game in the per uh industry. Uh and I think Hyperlid will increasingly compete with traditional futures exchanges like the CME. Uh I think that that's the angle that that ecosystem will go.

[00:23:35]>> Wow. If you're you're there, I'm going to go ahead. I'm going to go opposite. I think uh I think they do eat away at Hyperlid, but I'm listen I think Hyperlid has have obviously done something I think many people are trying to figure out. Are they the early mover?

[00:23:47]Because remember, first time first movers often win how these markets shake out and Hyperl liquid has been in a good spot for sure. So you might be right.

[00:23:56]We're going to go back and look at that one in about a year and see who was right. Um >> privacy chains don't matter unless there's users.

[00:24:05]>> Well, nothing matters unless there's users. So I have to agree with with that. But I think privacy chains absolutely matter. Zcash, a very important asset for team Gayscale and something that I think has lots of further upside here.

[00:24:20]>> Yeah, let's go into this one. Bigger threat to crypto right now, banks or DTCC and Citadel.

[00:24:25]>> Look, I think uh let's say let's say banks, although I I'm going to say that all of these entities are going to get on the crypto bandwagon pretty soon.

[00:24:34]>> I'm going to go the opposite, but I do agree with you. I think eventually they finally succumb to the pressure and I think eventually these these markets the question is is how well do they migrate into the new era is the real question and that's something we will see uh hopefully in the next uh 6 to 12 months.

[00:24:52]Grayscale and bitwise should have been first to wrap stretch.

[00:24:57]>> Um look I I don't know how to answer the failed versus who cares. Look what what I would say is that um I would like to make sure that investors understand where yield comes from in in all products and that they understand the risks of these uh uh products. And that's what I've been trying to do with my own work is just to make sure that the retail investors uh especially are uh fully aware of the the risks uh and the yield sources of the investments that they're making.

[00:25:24]>> I'm going to go no answer on that one.

[00:25:25]Vault curator race begins for asset managers.

[00:25:29]>> True. Yes. Vault vault curation uh race has already begun.

[00:25:33]>> Well, we've got some big ones too that are starting to brew. Uh Salana will be the first to figure out the trusted private markets and SPVS.

[00:25:40]>> Oo, that's a tough one. Um I I am going to say uh you know, I don't know. May maybe I think uh in the middle in the middle.

[00:25:49]I'm going to give you a wishy-washy answer on this one.

[00:25:51]>> I'm I'm kind of with you. I just don't know. But I think they got to I'm going to go actually a little bit more toward yes.

[00:25:58]>> Okay. But uh it's it's a tough one.

[00:26:00]Which hits all-time highs first, ETH or Salana? What are you thinking?

[00:26:06]>> With all the things that are happening on Ethereum, you've got Glamsterdam coming out in the fall. Possibly we could get past this Iranian thing. Macro starts changing. Does Salana get the edge up or does ETH get the edge up?

[00:26:19]>> Again, Paul, you're you're making me choose between my children here a little bit. I I'm going to say Ethereum in this case. um mostly because uh uh it is the second largest asset after Bitcoin and I think slightly more institutional capital will go to Ethereum first uh postclarity >> even I'll go opposite just because I should um but I will say this you have to worry about the inflationary comparison I think because obviously Salana continuing to build up to get to an all-time high that would be something so timing is very critical for that because otherwise that that you know percentage of inflation starts to increase over a longer period which could happen. You know, we could see all-time highs later this year. It could also see 27. Many people kind of pointed to 2027. When you look at the midterms and where clarity is, you feel where are you putting the clarity odds right now, Zach in in a percentage kind of like a poly market. The Zach poly market, the >> the Zach odds are at least 80% uh at this point. I feel pretty good about it.

[00:27:22]I think the two Democrat votes in the Senate Banking Committee were very important to signal that this can get bipartisan support on the Senate floor, which is the key hurdle.

[00:27:30]>> Oh, yeah. With also Brook and Tillis, for sure. Well, I think the concern right now is still those wild cards in the Senate that could come out and just end up messing up everything. And then I'm still worried about, you know, what we're going to see in the midterms if we do get pressure and this doesn't get through in this particular cycle before midterms happen because that could really spoil things for crypto. I think down the road if if clarity does not hit right now while we have uh the what do they call it strike while the iron is hot kind of situation for sure.

[00:28:01]>> Exactly.

[00:28:02]>> Zack, thanks for coming in today. We'd love to have you and all your your cander around where these markets are heading. But appreciate you stopping in.

[00:28:09]Always great to see you, Paul. Thank you.

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