How can businesses effectively manage compliance and risk as digital asset adoption accelerates?

Adrian Wall of Digital Sovereignty Alliance joins Block & Order hosts Kyle Lawrence and Moish Peltz to provide a comprehensive overview of the regulatory landscape and its implications for organizations operating in crypto. With a focus on scalability and long-term resilience, Adrian explains how companies can implement structured compliance programs and proactive risk management strategies.

The episode highlights regulatory trends, operational considerations, and the importance of aligning internal processes with external requirements. The discussion also covers common challenges companies face when entering the crypto space, as well as practical strategies for maintaining transparency, safeguarding assets, and ensuring long-term sustainability in a rapidly evolving regulatory environment.

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Chapters:

00:00 – Welcome to Block & Order
02:48 – Introducing Adrian Wall & Background
05:12 – The Current State of Crypto Compliance
08:05 – Why Risk Management Matters More Than Ever
11:20 – Key Pillars of a Strong Compliance Framework
15:45 – Governance, Internal Controls & Best Practices
20:30 – Common Mistakes Businesses Make in Crypto
24:10 – Navigating Regulatory Uncertainty & Global Trends
29:05 – Building Scalable & Resilient Systems
33:40 – The Role of Compliance in Driving Trust & Growth
37:15 – Future Outlook for Crypto Regulation
40:10 – Closing Thoughts

Watch or listen to the podcast here:

   

Transcript:

**This transcript has been prepared automatically by AI and may contain inaccuracies**

Kyle Lawrence [00:00:00]:
One of the main perks that we have in hosting the show is that we get to meet regularly luminaries in the space, in crypto, in AI, people who are really at the forefront. And before I get to your CV, which I need to carve out a couple of minutes to do it because you have quite the impressive resume here and varied as I’ll get to. But there’s one thing in particular that I didn’t know a person could claim on their CV, which is pizza Enthusiastic. Tell me about this famous Joe’s pizza place and why. What makes you the pizza guy?

Adrian Wall [00:00:31]:
Oh, I’d love to lead with that. So I, I am a pizza enthusiast. It’s, it’s my favorite food. So let me see how to. I’ve, I think it goes with my personality. I’m, I love when I so I love to cook, I love to host and I love to create things to see and see other people enjoy them. So in a former life, I got heavily into restaurants. I think everyone, if, you know, especially if you’re in finance, you spend a lot of time in restaurants whining and dining.

Adrian Wall [00:01:09]:
And then so at one point, probably after your second bottle of wine, you think to yourself, well, I’m spending enough time and money at these places. Wouldn’t it be smart to open my own place so I can, you know, just be paying cost and not paying, you know, all the markups. One of the dumbest things a financial, you know, somebody who claims to be a financial expert could say, but nevertheless, I kind of went down that path. I opened a restaurant, it was a steakhouse with a bunch of my buddies, had a blast, lost all the money and yeah, a couple things, learned that despite the losses, I really enjoyed the business. I, I, for the reasons I said above, I really enjoyed watching people come in and enjoy the, the design, the menu, the food, all that. Because we, we nailed all that. The issue, I think there was a mismatch of just the economics. I mean, we were at a too high price, not the right demographic, things like that.

Adrian Wall [00:02:05]:
But it wasn’t an issue with the food quality. And then looking at the numbers, you’re like, the steak is like 50 food costs. So then the next smart thing I said is let’s get rid of that. Let’s just open a bar and sell booze because those food costs are small and nothing, nothing gets thrown away, nothing gets wasted. Fast forward. I ended up getting into fast casual restaurants because that was the combination of low margin but high volume and the business was a proven model that Actually made good money. The brand. Famous Joe’s, very famous brand in New York City.

Adrian Wall [00:02:41]:
An incredible family that runs it. Still family owned and operated. Never sold to a big company. They only bring in family members or very close friends of the family to help them run expansion stores. And so if you walk into any Joe’s, I think there’s five in New York. Now they’re opening their second in Boss, two in Boston, Cambridge, one in Ann Arbor, Michigan. And then I think I have two in Miami. But every single one is helmed by family member or really close friend of the family.

Kyle Lawrence [00:03:13]:
So that’s a good way to do it. Kind of like almost like In-N-Out burger. I feel like I should be eating a slice while you talk about it.

Adrian Wall [00:03:19]:
Like now you’re making me think about it.

Moish Peltz [00:03:21]:
I actually want to go to Joe’s.

Kyle Lawrence [00:03:22]:
Yeah. Seriously.

Moish Peltz [00:03:24]:
Yeah. We could have done this down on Bleecker street, so.

Adrian Wall [00:03:26]:
Exactly. Exactly. The pizza here in D.C. is all right. Not Joe’s.

Kyle Lawrence [00:03:30]:
All right.

Adrian Wall [00:03:31]:
All right.

Kyle Lawrence [00:03:31]:
Sorry. Better up here in New York. I’m just. Just gonna say right on. Well, that was a great introduction to what is going to be a fantastic guest here in Block and Order. Let’s give a B and O welcome to Adrian Wall. Adrian is the CEO and CIO of Digital Sovereignty Alliance. We’ll get to them in a minute.

Kyle Lawrence [00:03:51]:
In addition to being a partner in Famous Joe’s Pizza, you were formerly the CEO and CIO of Wall Capital Partners, and you are also with or still are the PI Group. And the reason I bring that up is because it says here that the PI Group is spelled. Its company name has the symbol PI. And I’m dying to know because I don’t think Secretaries of state actually approved symbols like that. So I. I have to look this up independently and see how guys are registered. I’m glad you’re hitting me in the field.

Adrian Wall [00:04:19]:
Our. Our. Our email is the314group.com so perfect.

Kyle Lawrence [00:04:25]:
That’s amazing. You have the right audience here for. For that kind of stuff. Warren, being a. Welcome to Adrian Wall.

Kyle Lawrence [00:04:34]:
We welcome you to the show and we love to hear about the stuff you’re doing in the space.

Adrian Wall [00:04:39]:
It’s really great to be here. One correction is I’m actually. So. I’m the Managing Director of Digital Sovereignty Alliance and currently still the CEO and CIO of Wall Capital Partners Digital Siren. I’m sure we’ll get into it. That’s the nonprofit organization that focuses on the education and advocacy for digital assets. Wall Capital Partners is our. My family Office which has a huge digital asset strategy baked into it.

Adrian Wall [00:05:06]:
It’s not the only thing we do, but it’s, it’s a big part of what we do. Okay.

Kyle Lawrence [00:05:09]:
Yeah. It’s fascinating stuff to talk to. I work with a lot of family offices and they are expanding their, their understanding of crypto space. I just met with one on Friday and you know, half the, it’s funny, the guys that were under 40 were like, yeah, I own Bitcoin. And everybody else was like, I’m not touching this at all. So it’s always fun to see that definitive line. But why don’t you walk us through some of the work that Digital Sovereignty alliance does? You know, because we, I understand you’re a not for profit and it’s, there’s a lot of advocacy work. So if you can walk us through what you do, that would be really great.

Adrian Wall [00:05:40]:
Sure, sure. So I think about Digital Sovereignty Alliance in sort of two buckets. The first bucket is, you know, we’re here in D.C. it’s a policy forward education and advocacy group for the digital asset space. And obviously we were formed in 2004. So obviously the, the beginning of our work was really focused on GENIUS Act and, and you know, making sure that legislators on the Hill were informed about what the implications, not just the implications, but, but what the vocabulary meant. Right? I mean, what was a stable coin? What is a blockchain? You know, what are these the terminology that we take for granted in the space that we have to remember that they don’t always, you know, because it’s not part of their daily linguistic vocabulary. So making those sometimes complex concepts easier to understand and then going a step further and saying, okay.

Adrian Wall [00:06:39]:
And this was happened more on the Senate side. Once it was in the Senate, you have people because just, you know, the senators are there for terms of six years. They can take a longer view of things than House reps can because they’re up for reelection. They’re much shorter time frame, two years. When you’re in the Senate, the economic aides and legislative aides tend to have a bit more time to grasp the topics. You can get a bit more into the details then we do a lot of technical assistance. We help write report or legislative language, we help review their report or legislative language. And I’m really proud to say that Genius or sorry, that Digital Sovereignty alliance wrote some of the legislative language that made it into the final version of Senius through one of the senators offices that we were working very closely with then.

Adrian Wall [00:07:31]:
It was specifically about some of the KYC And AML stuff. We wrote some things about prohibiting retailers of a certain size from issuing their own stable coin. It was originally written for the Metas and Amazons, but also the Home Depots of the world, making sure that they weren’t issuing their own stable coins. So we had a hand in that. And then now we’re really looking at Clarity act. So. And we can talk about that in a bit. So that.

Adrian Wall [00:07:57]:
But that’s the policy bucket. And that’s, you know, we have a great team. We work very closely with the other trade associations here. Shout out to Digital chamber, shout out to Blockchain association, a lot of them here in D.C. doing great work. And so we’re all working together, sort of get to that same destination is passing this ethical and responsible policy. Then the other bucket is financial literacy. I say it all the time that financial inclusion without financial literacy is a bridge to nowhere.

Adrian Wall [00:08:28]:
It’s access without empowerment. And so we hear all this talk around financial inclusion and how digital assets can be a tool for digital inclusivity. That’s true, and I’m a huge supporter of that. However, without the digital literacy piece, the financial literacy piece, and not just for digital assets, but just in general, if you don’t have that, I don’t want to call it a skill set, but if you haven’t had the teaching in financial literacy, you are at a huge disadvantage. You’re much more susceptible to scams. You’re much more susceptible to making poorer financial decisions as opposed to better financial decisions. And we see digital assets as a tool for making better financial decisions with the right training. So those are the kind of two buckets that we focus on.

Kyle Lawrence [00:09:19]:
That’s. That’s just a fantastic stuff. One of the missions of Block and Order is education as well. Moish and I, as we co chair the Digital Assets Practice Group, education, informing the masses and just trying to get mass adoption is a very important and substantial part of our work. I noticed that you had met with Senator Andy Kim recently, and it’s interesting to note that him being a Democratic senator, it was well reported and well known that in the last election cycle, one party was on one side and the other party was more or less on the other side. In your discussions and in your work, without getting political, are you seeing a more bipartisan push on the Clarity act specifically? And the reason I bring that up is because Moish and I kind of have a friendly gentleman’s bet about when this is actually going to pass. I don’t think there’s any chance in Hell, it’s happening in this year. It’s midterm year.

Kyle Lawrence [00:10:11]:
Things are a little wonky right now. I don’t think that’s necessarily the main legislative push. But what are your thoughts on that and what are your thoughts, what have you seen in recent years in terms of Capitol Hill growing in their understanding of the space? And this is a long winded question, but when Moish and I first formed the Digital Assets Group, we were meeting with prospective congressional members whose sole like purpose it was to go to Capitol Hill and just explain what these things are. And you didn’t. You had people on the Hill that had no idea what was going on. Has that improved? I mean, I hope the answer is yes. But has that improved in the last five years?

Adrian Wall [00:10:47]:
The answer is yes. It depends on what side of the House you’re in or Sorry. It depends on which side of the Capitol Hill you’re on. If it’s the House, it really depends on the individual legislator because again, you know, they have constituents they have to answer to. This is, I’m not denigrating any of them. It may not be top of mind, just may not be a thing. Right. But then you do have some members of the House of Representatives that are like super well versed in it.

Adrian Wall [00:11:12]:
On the Senate side it’s similar. You just tend to have more people who are deeper into it because they have that benefit of time that I mentioned earlier. They have the benefit of taking a longer horizon on these things. So I think you’ll find that today, yes, the situation is vastly improved. You go in there and you start dropping terms like stablecoin, blockchain, digital ledger, immutable, all the, you know, it’s fine. Like people, people in general, you’re going to spend a little less time explaining and a little more time on substance. Substance, which is good. Can I, can I ask Moish, what is your, what is your prediction on the timing of passing clarity?

Moish Peltz [00:11:53]:
I don’t know that I have a prediction more than or that’d be better informed than what’s like on the prediction markets effectively. You know I’m looking, I just pulled it up now as Kyle was saying it, see how my bet’s doing. But you know there’s a 72% chance according to one of the markets that it’ll be signed into law this, this calendar year at least. And, but I, you know I, my whole concern, and I’m curious to your take on this has been I think a watered down kind of compromise bill that doesn’t make Anyone happy? Like, is that good for the industry? Is that good for us? Is that good for anyone? I think is kind of my concern. And I’m curious your take on where the political parties are, where industry is in terms of the kinds of compromises that are going to need to be made to make everyone happy to find a path to passing this bill and just, I mean, you’re just more involved day to day in the kinds of conversations and on the Hill and the horse trading that I assume is going on. Like, what’s, what’s the, what’s the tenor of those conversations?

Adrian Wall [00:13:11]:
I can break it all down. I can give you my prediction real, real quick. I’m curious. Did it give a, is there smart money on a month by any chance?

Moish Peltz [00:13:21]:
Yeah, so, so Poly Market has just the calendar year market and then Kalshi has before April has now dropped to 4%.

Kyle Lawrence [00:13:32]:
Wow.

Adrian Wall [00:13:32]:
Okay.

Moish Peltz [00:13:32]:
Before May is 13 and before June is 43.

Adrian Wall [00:13:36]:
Oh, damn. So I thought my, I thought my prediction was going to be this. I hadn’t, if you talk to the people in the industry, everybody, you know, almost everyone I talk to says it’s going to get passed in April, it’s got to be signed into law because that window closes too fast after that. I’m, I’m in the June, July camp. I, my prediction is that this gets signed into law June, July, and it follows a very similar trajectory to genius. So, and if you want, I can break it down into kind of very specifics and bring it back to Andy Kim when I met with him a couple days ago, because I had this conversation with him and, and what he told me and I genuinely believe it. Members of the Senate Banking Committee on both sides are genuinely working hard on bipartisan negotiations. The, the will is there on both sides to get, to get responsible and reasonable policy passed.

Adrian Wall [00:14:29]:
Having said that, I don’t think, and this is my hot take, I actually don’t think that any kind of markup gets passed through the bank, the Senate Banking Committee in any way other than along party lines. I think what you’re going to see is you, you’ll see a markup come down. It’s going to play out kind of like the Senator Senate Ag Committee. You’re going to see a markup come down, you’re going to be, you’re going to see some negotiation. At the end of the day, they’re going to force it through and you know, people will be in the industry, oh, this is a bad sign. And this is, you know, demoralizing, etc, but I would argue that it’s not. This is actually, this is not a bug, it’s a future. And if it goes this way, where does it go next? It goes to the floor.

Adrian Wall [00:15:08]:
And the floor, the road to 60 has to go through those same tactical 10 or so Democrats that we needed to get genius passed. So now to get clarity through, you have no choice but to really address on a bipartisan issue way those issues. Right? So let’s say we’ve, let’s assume we put that stablecoin yield issue to bed. Now we’re looking at illicit finance, we’re looking at the software developer protections, we’re looking at clean slate, which is the new one that I’ve been, I’ve been hearing a lot of people talking about. Clean slate refers to the stable or sorry, network token transactions on secondary markets and how, you know, there’s, there’s a lot of existing civil litigation from, you know, just p. Over the years, in the past couple years, there’s existing civil litigation that if clarity is going to set the rules of the road for the future, well, that’s great. But if you don’t address the issues of the past, you’re just leaving the door open for 10 years of litigation. And I hear a lot of people using the comparison to the Libor act of 2022.

Adrian Wall [00:16:13]:
I like this because I came from a tradition, I came from a private equity and I lived that. So I know exactly, when they say that, I know exactly that pain they’re talking about.

Kyle Lawrence [00:16:19]:
Nice.

Adrian Wall [00:16:20]:
You know, you enter in these, right? You know, so the LIBOR act, if you remember right, it’s like we, we all made credit, we all signed credit contracts in, in the PE world or in the VC world where it was Libor plus a credit spend, a credit spread. That was your, that was your determining factor. We just all implicitly trusted Libor. And even though I think a fair number of us were figuring, well, if you really think about would make sense that the banks are manipulating these rates in their favor, why wouldn’t you? Right? But you know, we just kind of, it didn’t, we are all playing with the same Libor, so it didn’t really matter. But now when, when problems came up, everybody started getting sued by everybody, right? The bankers, the, the buyers, the sellers, the credit, everybody. So then Congress did the right thing. They came in and they said, all right, the rules of the road are we’re getting rid of Libor. The rules of the road for tomorrow are clear.

Adrian Wall [00:17:13]:
But we got to clean up everything that happened in the past we got to basically the equivalent of a clean slate. So now that same conversation is coming back and I’m happy to see it because I think that needs to get addressed for sure. There needs to be a resolution of the past if we can move forward. And we’re not talking about fraud, Fraud is fraud, right? Fraud needs to be prosecuted to the full extent of the law. We’re just talking about some of those civil litigations that, that needs to be, that need to be cleaned up. So that kind of stuff, clean slate. The software protection those carve outs around that will get done on the Senate floor in the road to 60 because everybody wants to see it. And then the last thing I’ll say about it is I think that resolves moisture your concerns about, you know, I agree with you.

Adrian Wall [00:18:00]:
It’d be what, it’d be worse to pass a sort of a half assed bill that makes nobody happy. But philosophically everybody wants to see consumer protection, everybody wants to see security around the technology. Everybody wants to see responsible policy that allows for innovation while making sure that we’re protecting our downside risk. And anyone who takes innovation to and uses it mis miss or repurposes it for, you know, bad intent or malicious intent, everybody wants to see those guys go down. So the good news is I think we get there on that road to 60, gets to the House, maybe in the House, it’s there for like, you know, May, June, let’s say it passes the Senate in like April, April, May, May, June, it’s in the House and then it gets to the President’s desk June, July. So that’s, that’s my prediction.

Moish Peltz [00:18:51]:
Okay, we need to figure out, talk me through. I mean it’s interesting to hear you kind of itemize some of the points that are, that are at issue. And, and I think one of, not just mine, but a lot of frustration in the industry, you know, in the, in the prior administration was about there’s, there’s different points of view about what should or should not be the right way to have certain, you know, policies or laws that are passed, whatever it may be. And some of them it was just like, well, why is that your view? What’s the rationale behind some of the. So it’s one of the ones you mentioned which is the software developers liability issue, which is as I understand it, whether or not software developers should be liable for software code they write and deploy on a blockchain versus there’s some other mechanism for accountability. And so I’m curious if you could articulate I know it’s not your position, the different positions that are being addressed here and why this hasn’t just been resolved as well. It seems pretty reasonable that if you, if you have well intentioned software that doesn’t commit fraud. So maybe you can help walk us through like the issues at play and why this is still being debated.

Adrian Wall [00:20:06]:
Sure, sure. It’s a great one to choose because I think doesn’t matter how well versed you are in digital assets, you can understand just philosophically why this is tricky. So you know, take, let’s use another, let’s use an analogy, let’s say, I mean one that played out in the real world was you know, a Twitter for example, right. I mean Twitter now X that was created as a, as a communications tool allowing people to share thoughts, share news and all that stuff on instantly and for a while that’s exactly what it did and it was wildly successful. And you write stories in the news. I remember like whatever, 10, 10, 15 years ago when it first came out, how it was saving people’s lives because they were able to use it to, to get help or to let people know that there were problems in certain areas. It was used for rapid rescue and rapid response in, you know, in times of devastation and a natural disaster and things like that actually. So those are ancillary use cases that probably the original developers didn’t even think about.

Adrian Wall [00:21:05]:
So there’s that other side. These are good things that people take a technology and take it to the next level. On the flip side, you’re going to have bad actors. You’re just always going to have people who are taking it and repurposing it to use for negative or, or illicit or illegal purposes. And you can see now that the discourse on X has changed dramatically. Right. People call it, you know, I don’t know, cesspool and right. It’s this, all sorts of terrible things.

Adrian Wall [00:21:38]:
I, I suspect it’s still being used for a lot of the positive benefits that you know, was, but that focus has now shifted and so that’s just kind of one simple example about the software developer issue. So for digital assets the concern is yeah, you could create something and ostensibly you could say I have created it for this reason, call it financial inclusion or financial, you know, to call it, call it financial inclusion. But then it can get repurposed in a way that it just becomes a scam. And so are you as the original developer liable? You know, I, I’ll tell you my opinion. My, I, I, I’m on the point that that no, you shouldn’t be. Because when you are coming, because I’m assuming people have good intentions, I’m giving people the benefit for the doubt that when you are creating, you’re doing it with the best intentions of the public. And whether that’s because my moral compass kind of goes in that direction or if I just say, you know, I believe in capitalism in the US if you create something that no one’s going to want to use and it doesn’t work, you’re unable to get mass adoption, it’ll fail. And then, you know, then it doesn’t get, it doesn’t get the traction.

Adrian Wall [00:22:50]:
So from that frame of reference, I’m intent, I’m inclined to say there should be carve outs for software developers. And that that’s kind of the word that. And I believe that’s the middle of the, the road for this. And then at the same time, and here’s an interesting, here’s an interesting take, you can go a step further and you can take those, those people who have helped innovate new ideas, those software developers, and ask them once they’ve come up with it, now let’s start thinking about if you were a bad guy, now you, because no one knows your technology more than you, if you’re a bad actor, how would you take this? What would you be thinking? And, and you can actually help law enforcement agencies get ahead and, and try to like combat this. It’s like in casinos when you take card counters or former countdown counters and you put them at the top and the eye in the sky, right? And you say help us spot these, these card counters. And that’s a great way to do it, right? These guys are at the forefront of technology. They’re going to be better placed than, than typical law enforcement at doing that. So the, the, the solution for something like this is going to be in the middle.

Adrian Wall [00:23:57]:
You’re going to have the ultra kind of the right wing or the super libertarian side, which is, you know, it’s a free for all. You do what you want to do and let’s leave it at that. And then you’ve got kind of the other side, the, the far left that everybody is accountable for. Every little thing you do, everything you say can come back and get you. The reality will be somewhere in the middle. And the cool thing is again, when you go in terms of clarity, it’ll go to the Senate floor, those cooler heads will prevail. Those moderate Democrats are the ones that are going to help us get to 60. And so those moderate Democrats are going to ask for ethical, responsible policy.

Moish Peltz [00:24:38]:
So a relatively optimistic view of the functioning of the halls of Congress.

Adrian Wall [00:24:43]:
If it’ll make you feel better, I still subscribe very much to the alien versus predator theory of politics where it doesn’t matter who wins, we lose, if you’ve heard of that, that term. So, yeah, I mean, I, I, I’m also, I have, I have a fair amount of, let’s not call it jaded, but I have, you know, I have a fair amount of skepticism in the system as well.

Kyle Lawrence [00:25:04]:
Yeah, I, I tend to be a little too cynical for, for my own good and certainly for the show. So I apologize. Very highly publicized actor within the Clarity act discussions is Coinbase. And Coinbase very publicly withdrew their support after it came out that the bank said, no stablecoin yield, no yield on these things. And I believe there was an executive order or some facsimile of an executive order, such as they are. Last week it said, get this done now. Without coinbase’s support, where does that leave us? Are we kind of in the woods, or can this get through without them?

Adrian Wall [00:25:38]:
It can get through without them. And my take, I’ve been asked this question before. And so my take on this is the policy is really debated and the policy is confirmed based on bipartisan negotiation. It has to meet the requirements for many stakeholders. There’s no one industry stakeholder, no matter how big they are, that, yes, they can have influence, but they can’t unilaterally say that this is going to get passed or it’s not going to get passed. That, that’s an oversimplification. Moreover, I can give you some inside information on that whole situation, because I was in, in the Senate when we were going through the mar. I was one of the people that was there going through the markup with representatives of the Senate Banking Committee.

Adrian Wall [00:26:29]:
And these were people from both, both sides of specific senators offices that were presenting the latest negotiation. And right there, I mean, it was a, it was a square table of maybe 20 or 30 industry, you know, industry insiders, financial institutions there. I could tell you it was never going to get passed. There’s no way that there were too many glaring errors even on the latest. We were like, good effort, guys, but you’re gonna have to go back and, and continue working on it. And then Brian Armstrong said what he said, I think a day or two after the fact. So did it, Was it intentional? I don’t know. I’m not saying that, but I can tell you that, that he was pointing at something that had already collapsed and said that, you know, it was because they withdrew their support, but in fact it never had a chance of, of making was it was going back to

Moish Peltz [00:27:25]:
negotiations, segueing from the Clarity act to the GENIUS Act. I guess we can pick up with the yield issue because I do want to talk about stablecoins and I know you and your advocacy was instrumental. As you mentioned, some of your language even made it into the act. So talk us through the yield issue now and, and kind of where it stands and what the different participants are driving at in this negotiation. And I mean it, it, it sounds like the banks don’t want to be left at the, you know, on, on just out of the conversation. And, and they, they don’t, they want to say we don’t want all our yield to be dry, our deposits to be dried up. But I think there’s also a compelling argument that this is a new technology and it’s providing really this consumer surplus in a more efficient way. If there’s a way to provide a better product for consumers through new technology, are we really going to kneecap that? So how are the different industry participants pushing this and how is the political apparatus recepting receiving this, knowing that they, these are also their constituents and, and on both, on both the banking and the crypto side now, large funding constituencies.

Adrian Wall [00:28:56]:
So the financial institutions, as you mentioned, are very concerned about deposit flight. They see stablecoins, whether it’s right or not. They see stablecoin as a compelling alternative to deposits in a traditional, you know, checkings or savings account, which I think as I, if you check your, your bank account recently, it’s what, 1%, you know, 1.5% or something like that. Last year, I remember if that right. Last, last year I was talking to some, a room of bankers at a Payments Innovation alliance meeting in Charlotte and I, I momentary brain fart and I basically said guys, get your together. Like if you’re really worried about,

Adrian Wall [00:29:44]:
you’re worried about deposit flight and you’re worried about, you know, if you’re worried about stable coins and you’re worried about the digital asset industry get together, God forbid you actually improve your customer service or you offer slightly higher yields to be, you know, maybe the thing isn’t to just go out there and try to block the little guy who’s coming up and offering a better alternative. It, you know, it makes you the heel if we go to a wrestling terminology. I used to watch a lot of wrestling as a kid. So, you know, you don’t want to Be the heel, right? You want to be, you want to be Hulk Hogan before he turns heel. You want to be, you know, the ultimate warrior. So now I’m really dating myself, but so bring it back. And the funny thing is the bankers I was talking to, they, they didn’t say boo. They got it immediately.

Adrian Wall [00:30:31]:
Even the people who work on the banks, like, yeah, you know, you’re right, we wish we could do something about it, but I’ve changed my tune a little bit having after, after that. And the reason I’ve done that, I wrote an op ed last year saying that I believe the industry needs to extend this olive branch to the financial institutions. When I say industry, I mean the digital assets industry really ought to extend this olive branch to the banks and the FIs. The reason being stablecoins were not invented for yield generation. Right? They were invented as a hedge against crypto trading volatility and you know, their, their role in cross border payments and a lot of the things that have kind of developed that make them a wonderful payment, rail programmability for example, that was one of the other main drivers. And we’re just kind of starting to scratch the surface. That’s what the industry should be focusing on by extending this olive branch of the FIs. If it gets them on our side.

Adrian Wall [00:31:31]:
I think sacrificing stablecoin yield is a very small price to pay for having their support the FIs. I’ve also said this a lot to the industry recently. The FIs, you know, as much of a pain in the butt as they are, they have been around for centuries. They have been playing this lobby game on Capitol Hill for centuries and they are really good at it. Right. You’ll notice. When was the last time you heard any bankers, you know, go nuts, either happy or unhappy on X, saying we won or we lost? Never. They keep that to themselves.

Adrian Wall [00:32:05]:
They keep it, you know, they keep it quiet. But, but the, but the digital assets community, every time we’re on Capitol Hill en masse, you’re going to read about it in Twitter, you’re going to read about it in social media, it’s going to blame plastered all over the place. So I said, look, a little more discretion, if discretion is the better part of valor, a little more discretion on our side might go a long way. So we have a lot to learn from the, the financial industry, the banking industry, and not just that, I mean just on a lot of the way they’ve, you know, just kind of the way they’ve carved out the financial system in the US and you know, really fortified themselves in it. They will embrace digital assets. We need to make it easier for them. And it’s better for the industry long run. If it means, if Clarity’s passing means we need their support, let’s go get their support long term.

Adrian Wall [00:32:56]:
We need to bridge traditional finance and decentralized finance. And that’s a lot of the work that DSA does that I do is really trying to build those bridges. So on the heels of now that we’re trying to get the support of the fiscal. So let’s give up the stablecoin yield, let’s bring them onto our side and then we can take that one step further. We satisfy their issues about deposit flight by saying, okay, idle stablecoins. And this is the compromise that has come out most recently from the Senate Banking Committee from what we’ve heard. And actually it was coming out of the White House. It’s not the Senate Banking Committee.

Adrian Wall [00:33:30]:
Excuse me. The White House had a meeting with FIs and with industry folks last week and they said, here’s, here’s the compromise on the table. And the assumption was that the FIs had already gone through it and have kind of bought into it. I can’t confirm that. But idle stable coins that sit in your wallet don’t earn yield. Fine, we’re all good with that. That satisfies the bank’s deposit flight issue. However, stablecoin can still earn.

Adrian Wall [00:33:59]:
They can still generate yield or rewards or whatever you want to call them if they’re transactional. Right. And in the traditional sense of defy if you’re staking your stable coins, if you are lending or borrowing, there is still a yield protocol that is attached to that. So no one is taking that away. To me that sounds like a very good compromise. And if the financial institutions are good with it, the industry ought to, ought to take it and then move on to the other parts of Clarity to get this thing passed. And the last thing I have said before, the last thing I’ll say about this is the financial institutions will get a couple years if we, if we do this, the FIs will get some time to fake stablecoin into their system. Whether it’s the small banks, white labeling or borrowing of the big banks, you know, tech, tech, stack or infrastructure.

Adrian Wall [00:34:49]:
However it plays out, the banks will have stablecoin payment, Rails and their own stablecoin on offer as a financial product to their customers. I guarantee you when that happens, who do you think is going to be back in Congress telling congressmen, say, you know what, you know what would be a good idea? Yield on stable coins. Yield on ible stablecoins would be a great idea. What do you think about. I guarantee the banks will come back and do that. So just take a few years, you know, to the coinbase. To the coinbases of the world, there’s only one but to coinbase. Look, if your business model is really so dependent on that and it really gets you bent out of shape about giving up the stablecoin yield, figure out a way to just buy yourself some time, buy yourself a year or so because the banks will come back and then you’ll be fine.

Adrian Wall [00:35:32]:
So you know whether that’s a grandpa.

Moish Peltz [00:35:36]:
Yeah. My one comment about, about that compromise and I’m curious, your, your reaction is to me, if, if you’re a long term crypto holder and you’re, you’re kind of just buying and let your assets sit and that’s kind of your strategy which I, I would argue is more responsible than just, you know, like smashing all your assets through defi constantly and trading. And it’s the same thing as you buy and hold the VOO. And that’s. So if you’re, if your strategy is okay, I want to hold stable coins or I want to hold Bitcoin and that’s my way of just, you know, staying safe and cozy, this seems to then incentivize like, like ordinary users who may not be very sophisticated. Okay, well I need to go out and pledge my stable coins to some third party in order to generate yield. And my concerns that that just creates an additional layer of risk and security concerns that may not be present if there is just, you know, passive yield that was enabled. And I’m curious if that’s an argument that’s been considered in these negotiations and, and, or if this is just, this is the compromise that needs to happen to get everyone on the same page.

Adrian Wall [00:36:47]:
So I mean the answer, you’re not wrong in that, that thought process because I would and I sometimes argue against myself on this point because from a financial literacy or sorry, financial inclusion perspective, having yield on idle stablecoin would have been a great boon, especially because you’re, you used to look at somewhere between 4 and 6%. Right. So it’s way more competitive than a traditional bank account. Having said that, I think again, stablecoins, they’re a utility mechanism, right? They are payment rail. They’re a utility mechanism. They were not invented to generate yield for its users. The yield is really meant to come from the crypto currencies that you can buy, sell, trade and then stablecoin was just a way of holding your trades in a stable asset while you were contemplating other trades. So the innovation that has come out of it and turned it into a yield bearing product, I thought that was, that was very cool.

Adrian Wall [00:37:50]:
I’d like to see it come back. As I just said, I will come back. I’m sure it’ll come back eventually. This is just an opportunity for the banks to get their stuff together, as it were. So I think the opportunity will come back, it’ll be there and then it’ll be another opportunity for that financial inclusion talk to happen. It’s also important to note that, you know, even though stable coins were generating 5% yield and according to the letter of the law, that, you know, they need to be backed up by good quality treasury assets, one to one or cash, one to one US dollar or payment stable coins, that is, you know, they’re still not, for now. Most of the issuers are still not FDIC insured. Right.

Adrian Wall [00:38:36]:
So you are not talking about you don’t have that security net that, that would be given to you through a traditional bank. And so banks can argue, well, yes, we’re offering you a lower percentage on that, but we’re offering you that security. So there are compromises to think about. And this is all part of the financial literacy piece that we need to get out there because people aren’t thinking about it in three dimensions.

Kyle Lawrence [00:38:57]:
I guess the cynic in me, you know, just to bring it back full circle. When you talk about. By the way, I completely agree with you when you say we need the support of the banks and the institutions. They’re significant players in this country. You know, they’re not in government, but they, they have an outsized say in what goes on. I don’t think anybody would deny that. Do we run into that circular trap though, of saying, all right, we need their support, we need what they want embedded in this. The whole point of a lot of this tech is to get around some of the myopic, slow, outdated, you know, mechanics that banks currently have in financial institutions.

Kyle Lawrence [00:39:33]:
It’s an outdated system. Thus, here we are. Is that, where is that danger line though, of we need their support but up to a certain point, we can’t just give them the reins. You know, how do you see that playing out? You’re going to be much more optimistic about this than I am.

Adrian Wall [00:39:47]:
I can tell. I, I am more optimistic about it. Part of it is just having watched the banks be so slow to catch up and, and have been fighting this thing tooth and nail from the Beginning as opposed to getting in front of it and innovating alongside. They tend to do the bare minimum, but they have been really. They’ve been an impediment more than they’ve been a help until recently. And so blockchain technology with stablecoins as a payment rail. This is the first. This is the first payment rail that is not created by the banking industry.

Adrian Wall [00:40:30]:
So we’re. That in and of itself gives me a lot of optimism that things have changed enough and the. The reins are not going to be in the bank’s hands for this, for, you know, for this protocol, for defy and for. For the payment rails. Having said that, yes, we call it decentralized, but I’m sure you both are aware every part of this still involves a centralized.

Moish Peltz [00:40:58]:
There we go.

Adrian Wall [00:40:59]:
Sorry about that. I. No idea why my computer. The Internet is completely shut off. This has never happened. And I couldn’t. I couldn’t even connect with my iPhone. What a first time for everything.

Kyle Lawrence [00:41:11]:
The entire episode. So I, I apologize, but. No, please, it’s. It’s all good. Yeah, I was gonna say we can pick it up from. From right here. We only have about a, you know, a minute or so left. Adrian, really appreciate you coming by and we value your time.

Kyle Lawrence [00:41:27]:
Any final thoughts you want to share with our viewers and listeners out there?

Adrian Wall [00:41:30]:
Well, as you can tell from this call, I’m optimistic, but I also think I’m very realistic. Things are going to come, they’re going to happen fast in the Senate over the next couple months. Don’t get discouraged. Keep the faith. Clarity definitely gets passed because all the stakeholders that we need are getting aligned. The framework is there and innovation is coming back to the shores of America. I honestly believe that the Cal. She believes it.

Adrian Wall [00:42:00]:
Polymarket believes it. I believe it. Moish believes it. Kyle, you’re going to be a believer soon, I hope.

Kyle Lawrence [00:42:07]:
One of us has to take the. It has to be somebody okay with that.

Adrian Wall [00:42:12]:
Exactly. But this has been really great. It’s been a lot of fun. I really want to thank both of you for having me on and. And hopefully I’ve shared something interesting and insightful.

Kyle Lawrence [00:42:22]:
You certainly have. We really appreciate all your insights. We’re definitely going to check out Famous Joe’s Pizza. And when Clarity act gets passed, you will be our first phone call and our first guest back on the show.

Adrian Wall [00:42:32]:
Amazing. Amazing. I love it.

Kyle Lawrence [00:42:34]:
Adrian Wall. Thanks for coming by, my friend.

Moish Peltz [00:42:37]:
Thank you.

Adrian Wall [00:42:37]:
Thank you very much.

Kyle Lawrence [00:42:40]:
Managing Director of Digital Sovereignty Alliance. Really appreciate him coming by and for just sharing his. His expertise. And thoughts and some war stories from Capitol Hill, which I, as a, as you know, we can’t, we don’t always talk about politics here for obvious reasons, but I consider myself a bit of a political junkie and I always love hearing the machinations and the inner workings of how these things get done because the reality is it’s so far beyond what we see in the news and depicted in news articles and all these kinds of things. So hats off. Thank you, Adrian, for doing us a mitzvah.

Moish Peltz [00:43:13]:
Yeah, I think Adrian. And as you’re saying, Kyle, you know, one of my favorite books is the Power Broker, which is about the inner machinations of. Yeah, right there. Yeah, I think it’s up here, actually

Kyle Lawrence [00:43:29]:
my bookcase over there.

Moish Peltz [00:43:32]:
But of Robert Moses and the inner political workings that happened in the, you know, 1920s New York City underbelly. And as, as you were saying that comment, I’m like, oh, I can’t wait for the, the eventual book that’s going to be published by somebody in about 30 years that’s going to give you the, all the, all the smoke filled room conversations that took place to get us a GENIUS Act. And then eventually, you know, whether we get it in 2026 or not, some, some version of the, of the Clarity Act, we’ll see.

Kyle Lawrence [00:44:05]:
I bet Adrian will be the one to write that book.

Moish Peltz [00:44:09]:
I’ll be reading it pre order on Amazon right now.

Kyle Lawrence [00:44:12]:
I’ll be reading it as well. Well, that wraps it up for this edition of Block in order. A very special thank you to Adrian Wall for sacrificing an hour of his time and joining us on the show and sharing his insights from Capitol Hill. Please don’t forget to like and subscribe. Smash that like button and follow us on all our socials. The links are down below in the show notes. If there’s a particular topic you would like us to cover on the show, please leave us a comment down below. We do in fact read them.

Kyle Lawrence [00:44:35]:
We just don’t respond to the ones with the private keys. Sorry, going to keep saying it. I’ll keep doing it. I’m going to keep saying it. Nothing unblocking order is meant to be construed as legal or financial advice. Please consult your own representatives if you’re going to take the plunge. Any discussions of any particular assets on the show is, is not intended in any way to be an endorsement of said assets. Again, please, please do your own research.

Kyle Lawrence [00:44:58]:
A very special thank you to OG producer Abby. Without her, there would be no blocking order, so hats off to her. She is. She is our queen, and she keeps us out of trouble. So on behalf of Moish Peltz, I’m Kyle Lawrence. Keep fighting the good fight, everybody.

Moish Peltz [00:45:11]:
See you next time.