Hi, this is Charles Hoskinson broadcasting live from warm, sunny Colorado. Today is March 5th, 2025, and there’s been a lot of speculation on many things. The crypto industry is special in that it takes a rumor or news and blows it up to enormous proportions, going in as many directions as possible. The latest event is this interesting little get-together at the White House on March 7th.
Here are the facts: many of my people know people on that side; that's a true statement. I have emails and text messages to prove that. There’s been some engagement on whether people are invited or not. Nobody knew anything about the list. We were told that there’d be a list coming out on Monday, but we did not get an invitation on Monday, Tuesday, or today, Wednesday. So, I’m going to operate under the assumption that I have not been invited to this gathering. It’s a four-hour gathering at the White House; I guess the president is speaking, and it’s going to be a round table. I don’t imagine much policy work will be done.
For the last few months, I’ve been reminding everybody of one fact about the American government that may be lost on our international viewers: the president signs the laws, and the legislative branch writes the laws. The vast majority of the sustainable, permanent action will be done at the legislative branch level. The stablecoin bill has to be passed, the market structure bill has to be passed, and dozens of other things are going to have to be written into law or authorized by the bureaucracy of the United States to standardize things.
For example, when people say Elon Musk is going to use Doge and blockchain, the U.S. government has to figure out how to write an RFP. What standards are they going to use? Is there a FIPS for it? Is it like FIPS 190 or FIPS 203? The Department of Defense is going to have to get involved, and dozens of other agencies will have to create a baseline of definitions: what is a blockchain, what is a digital asset, what is a consensus algorithm, what’s good, what’s bad, what’s decentralized, and what isn’t decentralized. Before you can even write an RFP for people to bid on, you can’t award no-bid contracts to people. I’ll refer you to the Jedi program back in the day.
You need an active Congress; you need a lot of work in the administrative agencies. The gears of the federal government are slow and methodical. A lot of people are trying to jump the fence; they’re trying to create optics because that’s what our industry does. It’s a very optics-driven thing. I consistently have dinner with congressmen and senators, both former and current, and I will continue to do that. I consistently get pieces of legislation. When I say “I,” it’s the royal “I”; it’s my organization. People in the organization are affiliated with it, and the lawyers look at it, mark it up, and we have an opinion. It’s something we’ve done for years, whether it was back in 2022 when we were looking at early drafts of the FIA or later on when we got drafts of FIT 21 as they were working their way through the House. You can see pictures and events throughout the years.
I said back in November that we don’t really know what’s happening on the executive side, but on the legislative side, we will continue pushing forward because that’s where the action is. I’m not entirely sure, and I don’t really think anybody knows what exactly the administrative policy is going to be on the executive branch. These summits, while they’re important because they put a spotlight on the topic, require many people from across the spectrum to work together to get things done.
We have a policy office led by Joel Telner and Cynthia. Cynthia was the one you all saw recently with Bo Hines and other industry leaders. There’s a picture on Twitter; it’s public. She’s also talking to the policy groups that Perry and Boring and others lead. We constantly engage and ask, “What’s going to happen? Who needs help?” For example, if there’s a standards effort to standardize cryptocurrency definitions, is that working group going to exist in NIST or somewhere else? Is it from the Department of Commerce, the Treasury Department, or somewhere else? There are working groups at the SEC that are going to be spawned; the first round has been announced, and more rounds are coming. There are working groups at the CFTC that haven’t been announced yet but will probably be announced sooner rather than later. They have to work together, and that’s just two of the many agencies that will be involved. The defense industry hasn’t even gotten involved yet.
Cybersecurity standards, for example, have to be set. There are dozens of things to do. The U.S. government is a leviathan. Everybody focuses on the president and the White House because it’s simple and easy to do so. We have tried throughout the last three months to have meaningful engagement and get a better understanding of everything from how they were thinking about creating a crypto advisory council. It’s absolutely true that before and after the election, we made meaningful attempts to reach out to the transition team and talk to them about what they wanted to do and how they wanted to do it. Nobody really knew.
Then AAR was announced, and other people were announced, which was confusing. We’d hear that they were going to have an advisory council, and for a while, that was the narrative. Then we heard on the other side that they were going to have these White House gatherings where people would come together and talk. When and how? We’ll let you know. They announced it on Sunday, six days’ notice, and everybody’s clamoring to be in the room. There are so many who want to be in the room that there’s now a second event, which I guess has an extra 75 people. They’re all going to talk to each other, and they’re going to set some policy. That policy has to go through the ringer because it has to go to the Treasury Department, the CFTC, and the SEC. The vast majority of it, they’ll say, “Actually, we kind of need to pass a law.” Then they’re going to go to the Senate and the Congress, talking to Congressman Hill, Tim Scott, and dozens of others. When it hits there, they say, “Yeah, I don’t know about that. Hang on a second; have you thought about this?”
Whatever is discussed, by the time it gets there, it has to make a significant impact. For example, no tax on crypto American cryptos. What is an American cryptocurrency exactly, and how is that standard set? Is it Harbinger? We can make an argument for it. Is it Polkadot? We can make an argument for it. Is it Ethereum? Well, Ethereum was founded in Switzerland; the ICO occurred in Switzerland. The inventor is Canadian, and the majority of the controllers are non-American. All the development companies were outside of the United States, with very minimal U.S. nexus, except for ConsenSys in the beginning, which came after the ICO. There’s a lot of holding and ownership in the United States, perhaps more than 50% of the token. It’s hard to say: is it an American crypto? What about Bitcoin? Is Bitcoin an American crypto? We don’t know who the founder is; the majority of the supply wasn’t mined in the U.S., and the majority of the hash power isn’t in the United States. So, when you say no tax on U.S. crypto, what does that exactly mean? It’s a feel-good statement, but it doesn’t really have any teeth behind it and certainly would not survive litigation. It wouldn’t survive the existing laws.
If you’re actually going to take the duty of writing a law, how would you write that law? What would you do? It’s why both branches have to work together, and they have to figure this out. As much as we as an industry want this to be a short process, it’s going to be a long and methodical process, which is why we focus most of our policy engagement on the legislative branch. As I’ve told you consistently from November, December, and beyond, we’ve tried some engagement with some degree of success on the executive branch side. We worked really hard to see if there were any opportunities to be in those rooms, and the frustration and challenge for us is that we could never get clear answers on such things—not for lack of trying. There have been occasional times when we’ve had the ability to be in the room for various things, but none of those were meaningful from a perspective of setting policy.
For example, I said on David Gins’ show that we knew nothing of ADA being selected for the reserve. It was news to me. I woke up on Sunday, looked at my phone, and had over 150 messages saying, “Congratulations, great job!” I had no idea what was going on. I said, “What are you talking about?” Then I saw the tweet and said, “Wow, that’s absolutely amazing.” I guess something was done, but we never knew anything about it, and no one ever even talked to us about it. We tried really hard to have those conversations, and there was always, “We’ll call you back,” or “We’ll figure it out; stuff is busy.” The executive branch is the busiest of them; they’ve got wars going on, tariffs, deportations, and dozens of policy objectives and considerations. I don’t fault them for being busy and having challenges keeping up with the enormous demand for contact, which is why, again, it’s better in many cases to engage with the legislative branch. They have the luxury of depth and time.
The Securities Exchange Act of 1933 was passed in 1933, 92 years ago. That’s a long time. FDR was president; Robert Kennedy’s grandfather was the first chairman of the SEC, and that law is still relevant today. You all know it from the Howey test, which was an interpretation of that law from the 1940s as a result of a Supreme Court decision. There’s a lot of case law there, and the definition of an investment contract has been updated from time to time, but seldom to accommodate what we need. A cryptocurrency market structure bill could have as meaningful of an impact 50 years, 100 years from now; those definitions could still be in use. This transcends one administration, one Congress, and one set of industry leaders and actors. If you don’t believe me, tell me what CEO from 1933 is still running his company today? What president from that time period is still around? What lawmaker from that time period is still around? What judge from that time period is still around? Maybe they’re receiving Social Security benefits, but they’re sure as hell not in a position of power and authority. You pass it on from one to another, and now we have a window of time—two years and some urgency behind it—to be considered and deliberate. A broader group of people needs to be brought into this process.
One of the things that I’m a bit flummoxed by is that there are a lot of people who really need to be in the room—domain experts who have enormous knowledge about the industry—who aren’t yet in the room. For example, Lehman Bar from Hashgraph thoroughly impressed me when I spent some time with him, or Silvio Micali from Algorand, or Avery Chang from Aptos, or Benjamin from Multiverse X. There are hundreds of these people that we know, we’ve engaged with, and we say they understand the technology, the markets, and the underlying science behind the technology. They understand how people make money lawfully and not so lawfully because they’ve run into all these different people throughout the years, and they understand every dimension and aspect of the industry. You can’t get all those people in the room if it’s a 25-person invitation-only event at the White House; it’s just not possible. So, there need to be alternative structures for those people to participate in a considered, systematic, and deliberate way. Perhaps the executive branch can bring some of them together, but will it also bring the international regulators together? What about the ADGM in Abu Dhabi or VARA in Dubai? What about the FCA in the UK, FINMA in Switzerland, or Japan’s JFSA? Many of these places have been regulating cryptocurrencies longer than the United States and have billions of dollars of assets there. They’ve had to deal with agency failures, regulatory events, scams, and all kinds of things, and they have a lot of wisdom and foresight.
More importantly, this is a global industry, not just an American industry. As an American, I’d love to see this industry grow and thrive, but we have to concede the point that these global 24/7 markets are just that—they’re global. They’re 24 hours a day, seven days a week. So, we kind of need to be interoperable with the global regulatory standards. Where are those agencies going to engage in this process to make sure that U.S. law harmonizes in a way where assets can freely flow? I can construct a crypto transaction that goes to every country on the planet at the same time. UTXO makes that pretty easy; you just have one output matching each country. I guarantee you that’s the most illegal transaction you can do. That’s the problem with how this technology works: a cryptocurrency can be 12 things at once. They’re financial stem cells. Every jurisdiction has a window and a view of a particular notion of such things but does not have clear 100% coverage, and they all have to work together. The law has to reflect that and give the regulatory agencies of the United States enough flexibility to work with their counterparts globally, or else the industry is not going to work as a whole.
Notwithstanding the extremely complex custodial tax standards and a litany of things that we have to keep up with, there’s also a question of how much needs to be done with self-regulatory organizations versus actual administrative organizations. This is hard, and no one person is going to solve it. No one bill is going to resolve it. Those of us who live in this industry have to live with the consequences of it, and we’ll be touching it again and again through different Congresses and different administrations. It wasn’t too long ago that Biden was president, and we had to deal with that. It wasn’t too long ago that I spoke with Congress in 2022. It feels like a lifetime ago, but it really wasn’t that long ago. I’ll be back at some point, and it’ll be different congressmen and different senators. We’ll be back, and we’ll have that conversation. Perhaps their opinions have changed, but people who have had negative opinions have been emboldened by certain events. It is what it is; you deal with what you deal with.
It’s not helpful as an industry to treat all of this as some sort of popularity contest and view it like The Bachelor—who gets the rose, who’s in the in-crowd, and who’s in the out-crowd. If you believe for a moment that your cryptocurrency is going to do well because somebody went to a vanity affair, you’re a fool. It tells you that you know absolutely nothing about how the United States government works and absolutely nothing about how policy is made and how people deal with things. You also have to understand that the in-crowd and out-crowd change very quickly. People who were favored in the beginning could suddenly be thrown away by a single anonymous source somewhere, or vice versa. Politics change, and there’s nothing permanent about anyone’s position or standing. Power is directly connected to the perception of it and the results of elections, and we’ve witnessed that.
It wasn’t too long ago that the U.S. government was brutally attacking Coinbase, Kraken, and XRP. Now, ADA is something they said when they were going after Coinbase was that the security is apparently going to be inside the national reserve. It’s a bit of a whiplash if you think of that; it’s the full embrace. It’s pretty interesting how quickly things change. So, be nice to everybody, don’t speak in absolutes, and be open to working with everybody. The policy office will continue pushing legislation along, working with the lawmakers, and trying very hard to have a meaningful impact to ensure that things are written in a way that stands the test of time. My personal goal is for the crypto legislation that gets passed to be written in a way that we can look back at it decades from now and for it to still be relevant, like the Digital Millennium Copyright Act or the NSFA or many of these other things that founded the internet in the United States and thus for the world.
That’s going to take a lot of work; it’s going to take a lot of people, a lot of bright minds like them, and it’s going to require a lot of frank conversations about what doesn’t work, especially with those who are ahead of the United States, like the Europeans with MiCA or what the Middle East has done, for better or for worse. It takes a little bit of humility to admit what we don’t know, and it takes a bipartisan appeal for laws to be permanent, durable, and to exist long-term. You really need to have people from many political persuasions involved in the process; that’s an absolute. When I say things like that, it doesn’t make me Mr. Popular right now. People want to be of a certain blend, but maybe, just maybe, people from different political persuasions need to be invited to the table because those political persuasions represent tens of millions of Americans and collectively philosophies of billions of people worldwide.
Cryptocurrencies can absolutely be used for things that the left cares about—good things—and they absolutely can be used for things that the right cares about—good things. We can never allow our policy to get captured in a way that views this technology as an extension of a political party or political philosophy. Cryptocurrencies belong to everyone in the world, every single human. They are the bulwark of protecting human rights, the bulwark of protecting your freedom of association, commerce, and expression, an extension of your God-given rights, not your government-given ones. Don’t believe for a moment that any political party deserves the right to be the custodian of such policy. They have to work together to ensure that things are built in a way that the law respects the place and purpose of blockchain technology and cryptocurrency technology.
I had travel plans to go to Japan. I was supposed to get on a plane here in a little bit, and I will be in Japan on Friday the 7th. I’m going to operate under the assumption that I’m not going to this event, especially after this video, and that’s okay. I’m always available for a phone call and an email. I have very strong opinions about where things should go, what they should do, and how they should do things, and I’ll express those opinions to those who ask
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