"People Don't Know What's Coming" | Chainlink Founder on Trump GENIUS Act, CLARITY Act, & MORE!

0:00 Sergey, if this was the early internet era, what year would crypto be in? I would say 9798 something like that. Really? Yeah. Yeah. Let me explain. Today I sit down with leader in the crypto space and co-founder of Chain Link, Sergey Nazerov. And it's really just the beginning. who was in the room where it happened as President Trump signed the Genius Bill. This afternoon, we take a giant step to cement American dominance of global finance and crypto technology as we sign the landmark Genius Act into law. So,

0:47 congratulations to everybody. This is a big deal. A historic piece of crypto legislation that changes everything. This is the the clearest signal our industry has ever had. We talk about what's next for crypto. The amount in DeFi will grow from 100 250 billion to trillions and what this means for chain link. Chain link is stable coin infrastructure. Chain link is DeFi infrastructure. Chain link is watch today's whole video. Click subscribe so you never miss conversations like this and let's start. Great to see you. Um especially during, you know, a week like this week. Um, just to start off, you are obviously Is this Is that the pen?

1:32 That's one of the pens they give out. Yeah. Is that Is that the pen that uh Trump signed the bill with? I don't know. They give out like 10 of these and so if you get one, you get one. Sergey, you're a leader in this cryptocurrency space. Uh CEO of Chain Link, one of the top cryptocurrencies globally. Can you just walk us through for the average person what just happened in Washington this week and the significance the US legally approving the creation of stable coins means that cash and the US dollar as cash is going to go on chain. When cash goes on chain and you go from have

2:17 a 100 billion in cash to 200 billion to 500 billion to a trillion in cash that cash on chain which is what a stable coin is represents purchasing power. Purchasing power is is basically the market the the market that can buy something. And the larger that market is, the more people will issue assets to take advantage of that purchasing power. So what what has happened now is that the the largest economy has made it legal to tokenize their cash. I think that'll take the total amount of tokenized cash from about 200 billion to

3:05 two trillion relatively quickly, which will create a large market into which you can sell other tokenized things. So the the the the Bitcoin world is about digital gold as as a as a form of savings. A lot of the other tokens are viewed as highly volatile and speculative. And so issuing um an asset into the crypto market under the idea that someone will give you their you know digital gold in return for the asset or that they'll give you their highly speculative um other asset is is not normally how people think about issuing assets. What they usually think about is how much purchasing power

3:53 is there in a stable currency to buy my asset. And now the amount of stable per stable currency based purchasing power on chain will 10x in my opinion. And you will see a massive increase in the amount of firms that will be competing to generate stable coins because the stable coin legislation expressly allows and clarifies that you can have banks issue stable coins and non-banks and it sets different limits um that result in different levels of regulation oversight from different specific groups. It also makes requirements around proof of reserves and a few other things. But basically what it does is it it it

4:38 accelerates the amount of cash on chain which is what a stable coin is. Well, it's not exactly what a stable coin is. It's what a stable coin is in today's world. Really what a stable coin is is a stable form of purchasing power. And so I think the stable coins of the future will be actually baskets of multiple assets that create a stable form of purchasing power that can continue to purchase value over time the way that fiat currency is supposed to but will probably not be able to due to fiat currency uh inflation and debasement. But it's very significant because my my my view is that our industry will go from being about cryptocurrencies

5:23 to being about real world assets. So if if there's three and a half trillion 4 trillion in cryptocurrency, I believe there will be five six plus trillion in real world assets. And when our industry flips in the number in terms of the numbers of being about cryptocurrency versus real world assets, by definition, our industry will change what it what it what it is. It will be by definition be defined not as an industry of just cryptocurrency but if the majority of the industry's value is in stable coins, tokenized equity, tokenized funds, tokenized commodities, then our industry will fundamentally be about something else, which is fine and

6:10 which is actually a good thing for cryptocurrency because also the more stable coins there are and the more other assets that can be converted to buy cryptocurrency, the the better it is for cryptocurrency adoption. Cryptocurrency adoption and more stable coins creates an attractive market for real world asset issuance and tokenization of funds, equities, commodities, and basically the whole financial system. Sergey, if this was the early internet era, what year would crypto be in?

6:56 I would say 9798 something like that. Really? Yeah. Yeah. Let me explain. So, so cryptocurrency tokenization is like the early form of email where very few people had email but people knew what email was but they didn't use it yet. Real world asset tokenization is mass adoption of email where everyone is using email and DeFi is like e-commerce. DeFi is at the 200 billion 100 200 something billion level which is nothing which is like e-commerce when you were shipping checks by mail to buy books

7:44 that's where DeFi is so so where we are right now is people know what email is most of them don't use it and e-commerce doesn't have credit cards for you to interact with it efficiently and so you have to mail checks to Amazon in Seattle and And when they receive your mail check, then they will ship you the book that you discovered on their website and and you you you you wrote down what book you wanted. You put it in the envelope with a check and you mailed them the check. That that that's where um that's where we are right now. We're we're going to reach, you know, in this analogy, full email adoption with real world asset tokenization. That's the two trillion in stable coins. That's the trillions in tokenized funds, equities,

8:29 commodities. Then on the basis of all that purchasing power uh in stable coin form and all that asset uh kind of stuff on chain, you're going to have a lot of very fertile ground for financial products. And so the DeFi industry is very good at taking what's on chain and turning it into a high yield, transparent, secure financial product. And so the the amount in DeFi will grow from 100 250 billion to trillions because it's very natural for onchain collateral whether that's cash collateral whether that's tokenized

9:15 asset collateral to find its way into DeFi because DeFi can can generate the the the attractive yields on it and it can do it in actually more transparent and more de-risked way than central financial institutions. That that's the thing that that has been made um understood by the recent CFI centralized financial lending provider failures while the DeFi lending systems like a continue to operate successfully. Um and so I think we'll we'll reach a world with lots of onchain cash in the form of stable coins and other things like tokenized deposits and others. You'll have a lot of high-quality assets on chain and you'll have financial

10:02 products. When you have the financial products working against trillions of assets with really high quality forms of cash payment, that's when you're like, you know, in the boom times of e-commerce. That's when you have like in this internet analogy eBay, Amazon, you know, starting to boom, starting to starting to to show the value of e-commerce. Um, that I think we're on track for that in the next uh, you know, sometime this this year it's already happening with stable coins. This year and next year is the asset tokenization. The year after that, I think things accelerate in my opinion. assume assuming the macro economy stays positive and that there's

10:48 enough purchasing power out there to buy the tokenized stuff. Uh and that gives you a timeline of 1 to three years. Sergey, Altcoin Daily speaks to an audience of over 3.5 million across all social platforms. We have a lot of chain link fans in the audience. I understand how the genius bill helps Ethereum and Salana and Tron and all the the stable where the stable coins are built. But how does this help chain link? Chain link is stable coin infrastructure. Chain link is DeFi infrastructure. Chain link is the set of standards and the the infrastructure and services that allow you to build reliable stable coins that allow you to move those stable coins reliably across

11:35 chains. Chain link is the largest source of proof of reserves across stable coins, commodity coins and other types of coins. Proof of reserves is something that I think is going to be more and more required in the form of not only stable coins but other forms of tokenized cash and um onchain assets. So this is extremely positive for infrastructure related to tokenization and chain link is is very purposefully built to accelerate and enable let's say highquality secure reliable and compliant tokenization and compliant tokenization is going to be particularly important because of institutional adoption of tokenization.

12:22 So if if you wanna if you want to build a stable coin, if you want to prove what's backing it, if you want to get um that stable coin moving across chain to be used for payment purposes to buy the tokenized fund or a commodity or equity, if you want to do it in a way that complies with identity requirements, for all those things, you need chain link. Basically, you you you need an infrastructure that's going to do that for you. Now some of the people that built some of the early stable coins might have not used some of those things or they might have not or they might have built some of them themselves but that took years that was massively difficult. We are talking to some of the largest institutions, technology companies, about them generating stable coins, about them using crosschain systems to

13:07 go make their stable coin usable to buy things across chains, about all of these key requirements that make a reliable stable coin like proof of reserves. In fact, chain link, I think, will will greatly benefit in terms of its adoption from all tokenization. Stable coins are just the form of tokenization that's taking off now. And and there's there's two reasons for that. One reason is that the amount of US treasuries and stable coins reached a high enough level that the US government and and this administration, not just the the government but this administration specifically decided that it is actually a good form of distribution for the dollar globally

13:54 and that it is not a force of DD dollarization but it is a force of dollar um kind of reserve currency status growth and adoption. And then the second thing is that stable coins became uh a widely accepted form of payment for smart contract events, exchange events, and other events. And so this is just one form of tokenization. This is just tokenized cash. We're we're not even talking about true stable coins that are stable because they have multiple different assets inside of them. We're not talking about tokenized funds, which is the whole asset management industry, or tokenized equities or tokenized commodities,

14:40 or the or the lending markets or other market types that generate financial products and yield and collateral management of all those tokenized things. So we're we're kind of in a world right now where even if we go to two trillion that's in stable coin tokenization that is still singledigit percentages of everything that's going to become tokenized in all those other categories. And what chain link does is chain link provides the infrastructure and the technology to do that tokenization in a secure reliable proofof reservebacked crosschain enabled compliant way. So I I think chain link is I mean chain link right now you you

15:26 can look on multiple independent um review sites that look at GitHub activity, look at project activity. Chainlink is consistently the number one real world asset technology. So it is the one that is the most used in the most GitHubs um according to Santiment consistently by the way month after month for for a while now um and and other other independent uh firms detect the same information. So this is this is uh a huge huge boon for infrastructures like chain link that are involved in the process of tokenization crosschain proof of reserves compliant um identity for for token transfers

16:13 and it's really just the beginning uh because it's a very even if this 10x increase in the value of cash tokenized on chain happens that's still less than 10% far less than 10% of everything that's going to be tokenized. And all of that stuff will require data, crosschain connectivity, identity proofs, proofs of reserves, asset value calculation proofs, and a whole bunch of other stuff that fundamentally only oracles do and much of which chain link originated and is by far the largest provider of. Sergey, two final questions, then I'll let you go. I'm honored that you join us on Altcoin Daily right after the signing of this historic bill. Can you give us some inside baseball? Like, how was it

16:59 waiting with Brian Armstrong and the Winkls Twins? What were the conversations like? I think there was a real sense of um victory. I think there was a real sense of of closure because it's the final step in a very long process that included, you know, Congress, the Senate, years and years of of of basically our industry being persecuted and and artificially depressed in what it was able to do for the US economy, for the global economy as a result. Um, so I would say people are celebrating Uh people were celebrating before the signing. I know there were

17:44 some events yesterday. People are are celebrating right now as I'm speaking to you. There are events going on right now where you know the people who made the best stable coin systems, the people who built um like ourselves, the people who built the infrastructure for the stable coin systems that that spent a lot of time and energy talking to congressmen, senators for for many months, in some cases years now. Uh this is kind of it. This is a victory. this is a definitive victory uh because you went through the whole legal process and uh you you you got to the last step and you successfully concluded it and now you have legislation you have you know it was signed into law

18:32 so I I think it's just a lot of um very positive feelings and celebration one of the things that is a little bit how quickly things have changed So if we were talking 9 months ago or 12 months ago, this type of outcome would have you would have told people in the EC, you would have told people living in our industry, maybe you would have told me and you said this was going to be the outcome on July 18th. This is, you know, it's going to be signed into law. I'm a pretty optimistic person about our industry and its prospects. So I I probably would have said, yeah, you know, it's possible there's these factors that could go in in in a good direction, but most people would have would have would have said it's unrealistic. And so it's a kind it's it's not only a

19:17 a victory, but it's a kind of victory that is so seemingly unlikely that it's it's almost like something something special happened. Does that make sense? Because it's it's not just a victory like the type of thing that you you thought it was going to happen and it took its sweet time and it happened. It's the type of thing that you you didn't think was possible a year ago and now here you are experiencing it. And so it's kind of this a little bit like surreal positive thing where you're where you're very you're kind of ecstatic. There's a sense of elation and it's almost like an out-of- body experience where you're looking at it and you can't believe that that this is what you're experiencing because so so recently you were in a completely

20:03 different world. Um, so I I think that was the sentiment across multiple um multiple people that were actually involved like ourselves in in helping make this happen. It's crazy to think that this legislation isn't the finish line, it's the starting line. Now America's finally able to, you know, usher in this new digital age. Final question, genius bill, obviously important. Market structure bill coming up. What's bigger and what should we expect with market structure? I mean, if if this stable coin legislation results in the type of um increase in onchain stable coin value and the type of stable coin issuance um

20:48 output that I just described while the market structure bill takes another 6 n 12 months, then the stable coin bill could end up having a bigger impact uh because it it could it can show that our industry Indry is not just about speculative coins or utility tokens related to you know very niche infrastructures or bitcoin as as as a method of digital uh gold savings but that is that the technology has a use and a large use beyond those those things. The market structure bill in terms of the scope of what it covers could fundamentally be more impactful because it it defines what can be issued

21:34 as a token and who regulates it and how it's regulated and what the conditions of of creating that token are for tokens beyond stable coins and the amount of tokens that can be generated beyond tokenized cash and stable coins is fundamentally larger. So, so market structure will be the first step. I think you'll actually need more legislation and more guidance and more rulemaking, much more because there's so many different things that can be tokenized. Commodity, equities, different derivative events, all kinds of things, and they're all pretty different. So, I think it depends how long it takes for market structure to happen. If if market

22:20 structure takes a while, then the stable coin legislation has enough time to really make a big impact, then it can be seen as like this big watershed thing that unlocked the industry. If market structure happens relatively quickly and it kicks off a tokenization boom of you know tokenized funds, tokenized equity, tokenized commodity uh stuff, more meme coins, more NFTs, more cryptocurrency issuance under under a reliable framework, a legal framework, then it could be bigger. Uh but that that you know that's how I see it right now. Sergey, thank you so much for taking the time joining me. Uh, final thoughts for the Altcoin Daily audience. Today was a fantastic day for our

23:07 industry. There's there's there's never been a time that I've been more hopeful about our industry changing the global financial system. This is this is this is the the clearest signal our industry has ever had that it's going to be the way that the financial system and the world works. I love it. Thank you. Thank you.