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JUN 07, 2024

Gemini Talks Web3, US Crypto Regulation, and Talent Drain at Consensus Panel With Crypto Industry Heavyweights


Last week at Consensus, Gemini COO Marshall Beard (pictured far right) joined Dragonfly partner Rob Hadick and Sheila Warren, the CEO of the Crypto Council for Innovation, for a panel discussion about “Which Countries Will Win The War for Web3?”

Led by podcast host Aubrey Strobel, the discussion hit on a wide range of topics impacting the digital asset ecosystem, including crypto legislation making its way through Congress, which countries have emerged as crypto and Web3 leaders, and a lot more.

Here are a few takeaways:

When It Comes to Crypto and Web3, the US Is Trailing

Strobel kicked off the discussion by asking which countries are winning when it comes to crypto and Web3 and what winning entails. Each panelist was clear that the United States could be doing a lot more.

Hadick said he judged success through the lens of retail and institutional adoption as well as capital formation.

“From a venture perspective it is really around adoption and who's actually using it,” he said. “And so when I look at it from that lens, my perspective is that we're seeing a lot more winning happening right now in Asia than we are in places like the US.”

Warren cited the lack of regulatory clarity as part of the reason the US has lost developers to Asia but noted that plenty have stuck it out in the US. She also pointed to the notion that operating in an environment with elevated risk–regulatory or otherwise–is simply not appealing to companies, especially if the rules constantly shift.

“We know that people do not want to build in places that feel really risky and risk is everything for a company,” she said. “If I have to suddenly change operations that could be extremely expensive.

“The rules might change around me, you know, and it feels like quicksand,” she said. “And so the United States is certainly not leading the charge in that area.”

Beard echoed Hadick and Warren, noting that winning ultimately comes down to what the customer wants. For crypto, that often depends on the jurisdiction in which they live, according to Beard. For instance, a stablecoin is often more appealing for a user in Africa, where the payment rails are less reliable, compared to one in the US.

Either way, it’s clear US regulators could be doing more.

“You're seeing more developed nations do this a little quicker in Canada, in the UK, Europe, and Dubai,” Beard said. “You're seeing countries kind of follow the lead.

“No one's really following the US right now, which is unfortunate,” he added. “But I think that real adoption globally will actually need to stem from the US."

Political Winds in US Favor Crypto, but Challenges Remain

Crypto investors in the US do have reason for optimism.

Last month, the US House of Representatives passed FIT21, a comprehensive bill that offers regulatory clarity and consumer protections for the digital asset ecosystem in the US. Even though the bill was authored by Republicans and cosponsored by Congressman Patrick McHenry (R-NC), it received 71 votes from Democrats.

Warren, whose team at the Crypto Council for Innovation lobbied for the bill, said she wasn’t ready to celebrate until it goes through the US Senate. But she was encouraged that the House version had received bipartisan support

“What we demonstrated was that people are making up their own minds,” Warren said. “They're not following a party line, they're not lining up like ducklings behind Elizabeth Warren.”

Hadick had a less favorable view of the recent stablecoin bill introduced by Kirsten Gillibrand (D-NY) and Cynthia Lummis (R-WY). He cast doubt on whether anything would get signed into law in 2024, noting the way it is currently written could send the stablecoin market into chaos, in part because it would create a US agency which would have to enforce stablecoin laws internationally.

“I think it's just gonna be a quagmire, especially with over $100 billion outstanding and mostly being used in places like Latin America and Southeast Asia,” he said. “It opens up this can of worms for that potential enforcement that throws the whole stable market, I think into disarray.”

Meanwhile, Beard said he didn’t think crypto would be a single-issue topic for many voters, including himself, but was encouraged by the fact that Donald Trump, president Joe Biden and third-party presidential candidate Robert F. Kennedy Jr. had embraced crypto to varying degrees.

“You see Trump take a liking to crypto in the past few weeks and then all of a sudden, Biden is backtracking a little bit and being more positive toward it as well,” Beard said. “I think all of that is generally an incredible thing for the industry coming into the election.”

RFK Jr. attended Consensus in person, speaking on the main stage to offer his support for the industry.

“He's here around the conference, you know, this week, which is incredible to show his support,” Beard said. “Our presidential nominees taking an interest is a positive for the industry.”

It’s Not Easy to Keep Talent From Heading Abroad

Late in the panel discussion, Strobel asked if the APAC region was truly “kicking our butt” when it came to attracting crypto developers and other Web3 talent. Hadick would not go that far but acknowledged he was seeing some founders and developers moving elsewhere.

“We've seen a lot of these multiple passport founders who came to the US, they maybe went to Stanford or MIT or Harvard, who are saying, you know what I'm gonna go back there and I'm going to build (in APAC), when before they might have stayed in New York or the Bay,” he said.

Warren noted that some APAC countries have a distinct cultural advantage when it comes to Web3 and crypto adoption.

“A lot of these countries potentially were digitally native half a generation before the United States, they were more primed to be crypto native,” she said.

Gemini has a Singapore office with roughly 50 employees. The company is currently operating through an exemption from the Monetary Authority of Singapore, pending a full license. Beard said he’s noticed the exodus.

“I think in the last couple of years the US has been forcing talent into APAC,” Beard said. “I've seen teams, big trading firms and folks that basically stopped having US personnel and moving them all into the APAC region.”

Beard also said Canada is a “sleeping giant” when it comes to crypto. One reason: Canada has commissioned spot Ethereum ETFs going back years; the US only approved spot bitcoin ETFs in January and has yet to officially approve spot ETH ETFs, though the SEC appears like it will grant approval soon.

“They were the first global player to list bitcoin and spot ethereum ETFs,” Beard said. “We made a big deal of them being launched in the US, but they've been live and active in Canada for many years now.”

Onward and Upward!

Team Gemini

*This material is for informational purposes only and is not (i) an offer, or solicitation of an offer, to invest in, or to buy or sell, any interests or shares, or to participate in any investment or trading strategy, (ii) intended to provide accounting, legal, or tax advice, or investment recommendations, or (iii) an official statement of Gemini. Gemini, its affiliates and its employees do not make any representation or warranty, expressed or implied, as to accuracy or completeness of the information or any other information transmitted or made available. Buying, selling, and trading cryptocurrency involves risks, including the risk of losing all of the invested amount. Recipients should consult their advisors before making any investment decision. Any use, review, retransmission, distribution, or reproduction of these materials, in whole or in part, is strictly prohibited in any form without the express written approval of Gemini.


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