Month: August 2025

Deep Dive Topic – Crypto

In the past, I have written about some esoteric topics that I have found to be interesting and to help our clients gain perspective of how the world is changing to further our knowledge base. Todays topic is Crypto and I do hope you enjoy this and as always, any questions or comments please reach out.

The Internet or World Wide Web as we all know it today was born in 1989, although there were earlier versions in the years prior. One way to think about the internet is as a digital pipe of access to information. This pipe, however, did not have any payment or authentication system built into it from one person to another. Today, you might consider Crypto in general and Ethereum as a digital payment system being built into the internet or a layer within the internet.

What is Bitcoin? It’s a technology that is limited to 21 million Bitcoins and was developed in 2008, started being used in 2009 and the “inventor” was someone by the name/pseudonym of Satoshi Nakamoto. This vison was based on a free market, peer to peer payment system free from government or other ownership entities. Many consider Bitcoin as digital gold due to the limits on how many Bitcoin Tokens can be developed.

What is Ethereum or Ether? Developed 2015, it’s a decentralized payment system built with contracts and applications that never shut down. It runs 24 hours per day, 7 days a week. Ether is like a toll both collecting fees from its network of contracts or applications.

There are many, many, many Alt Coins or other forms of cryptocurrency, but we will not address these in this article. However, it’s important to note that as of August 2025, Bitcoin has a market cap of about 2.3 trillion and Ethereum has a Market Cap of about 550 billion. According to Tom Lee of Fundstrat, there has never been an asset in our History with a Market cap of 2 trillion and failed or went away, so this technology should be around for a long while.

With this, lets look at some recent legislation from the US Government, and more recently a speech given by Paul Atkins, Chairman of the United State Security and Exchange Commission (SEC). This speech was given on July 31, 2025, at the America First Policy Institute in Washington, DC with a title given of American Leadership in the Digital Finance Revolution.

The full transcript is here

Evolution of Capital Markets: From Buttonwood to Blockchain

The winds of innovation have always swept through our capital markets, often at gale force. In 1792, they rustled the leaves of a buttonwood tree, beneath which two dozen stockbrokers assembled to establish the forerunner to the New York Stock Exchange. That modest agreement—fewer than a hundred words handwritten on a slip of parchment—set in motion an elegant design that would govern the flow of capital for generations.[2]

In the centuries since, our markets have never stood still. They have expanded, evolved, and reinvented themselves in step with the ideas and technologies of their time. Markets are dynamic because of the people who participate in them. Markets channel human ingenuity toward society’s most intractable problems by rewarding those who develop the most innovative solutions that others value enough to buy. They are the mechanism by which Adam Smith’s invisible hand elevates those who act in the common good—even when pursuing their own.

Adam Smith was a Scottish philosopher and economist from the 1700’s and his book The Wealth of Nations has been considered highly influential in the study of economics since.

The SEC’s role is to safeguard markets that allow the spark of human creativity and skill to benefit society. Over the arc of its history, the agency has both enabled innovation and, regrettably at times, stifled it. Fortunately, progress has a way of prevailing. And when our regulatory posture is calibrated to meet innovation with thoughtfulness rather than fear, America’s leadership position has only grown stronger.

In the 1960s, Wall Street was riding a bull market. But behind the scenes, our market machinery was straining to keep up. Most clearing and settlement transactions involved a costly and cumbersome process. Rising stacks of paper stock certificates had to be physically delivered by clerks wheeling carts up and down Wall Street and in other financial districts all across America.[3] It was a scene from another century struggling to meet the demands of the modern securities markets.

Indeed, the paper-based clearance and settlement systems, built for a gentler era, began to buckle under the weight of soaring volumes. Delays at one firm held up the work of another. Securities were lost or stolen. Fails ballooned. And many thinly capitalized broker-dealers were caught by the whiplash of scuttled transactions. In desperation, trading hours were reduced and exchanges eventually closed on Wednesdays to allow firms to process the mountains of certificates.

The breakdown over an antiquated system was described by the SEC chairman at the time as “the most prolonged and severe crisis in the securities industry in 40 years… Firms failed. Investor confidence plummeted.” And very much to its credit, the SEC was proactive in remedying the so-called “Paperwork Crisis.” The agency helped market participants to develop the Depository Trust and Clearing Corporation, which would transform how securities were held and traded.[4] Instead of shuffling paper certificates from customer to broker, broker to broker, and broker to customer, title to shares could now be transferred through computerized ledger entries.[5] The certificates themselves were immobilized, stored securely in vaults, as ownership moved electronically, laying the foundation for the modern clearing and settlement system that has continued to this day.

I have underlined a couple of sentences above noting its significance towards evolving technology, the removal of friction from transactions and in the process lowering of costs for the clients.

So, this brings me to today. To a moment that demands American ambition. To a project that can unleash it.

Our regulatory framework need not be anchored to an analog past—unkind to new frontiers. After all, the future is arriving at full speed—and the world is not waiting. America must do more than just keep pace with the digital asset revolution. We must drive it.

So today, I would like the world to go on notice that under my leadership, the SEC will not stand idly by and watch innovations develop overseas while our capital markets remain stagnant. To achieve President Trump’s vision of making America the crypto capital of the world, the SEC must holistically consider the potential benefits and risks of moving our markets from an off-chain environment to an on-chain one.

We are at the threshold of a new era in the history of our markets. As I mentioned earlier, today I am announcing the launch of “Project Crypto”—a Commission-wide initiative to modernize the securities rules and regulations to enable America’s financial markets to move on-chain.

There are a couple of very bold statements above, statements that are fully anchored in Digital Block Chain/Crypto within our financial system.

In addition to the SEC’s action and their Commission Wide Initiative Project Crypto, United States Congress recently passed the GENIUS Act (Guiding and Establishing National Innovation for US Stable coins) and The CLARITY Act (Digital Asset market Clarity Act)

GENIUS Act: This bill establishes a regulatory framework for stable coins, which are cryptocurrencies designed to maintain a stable value by being backed by US Treasury Bonds. With this, Treasury Secretary Scott Bessent believes that these Stable Coins could potentially be backed by about 3 trillion in Treasury Bonds as this market develops. It might be helpful to think of these assets as a lower cost way of making transactions anywhere in the world, 24 hours per day, 7 days per week- a little easier for Government or corporations to move money around the world.

CLARITY Act: This bill focuses on providing Regulation Clarity to the entities who will oversee Digital Assets like the SEC or Commodity Futures Trading Commission.

Both Acts were signed into law July 2025.

Since these Act’s passed, a recent article on CNBC outlines plans by Goldman Sachs and BNY Mellon to move over 7 Trillion of Money Market Funds onto this Blockchain technology,

This is the first of many changes to come, over the years we should start to see Stocks, Bonds, Real Estate, Titles to Cars, Boats etc. all move to blockchain for transactions and authentication.

With all of this, it seems we are back at a place like the 1960’s where there was transformation of stock trading from paper to digital stock holding, know we are on to the next transformation change that will drive innovation and have a natural deflationary force to drive down costs and increase efficiency. 

Thank you for reading.