Brief Summary
This video features an interview with Sergey Nazarov, co-founder of Chainlink, discussing the implications of the recent GENIUS Act and the future of cryptocurrency. The key takeaways include:
- The GENIUS Act legalizes stablecoins, paving the way for a significant increase in tokenized cash and real-world asset tokenization.
- Nazarov compares the current state of crypto to the early days of the internet (1997-98), with real-world asset tokenization representing mass email adoption and DeFi as early e-commerce.
- Chainlink is positioned to benefit from the growth of tokenization, providing essential infrastructure for secure, reliable, and compliant tokenized assets.
- The passage of the GENIUS Act is viewed as a major victory for the crypto industry, signaling a shift towards mainstream adoption and integration with the global financial system.
Intro
The video introduces an interview with Sergey Nazarov, co-founder of Chainlink, to discuss the implications of the GENIUS Act and the future of cryptocurrency. Nazarov compares the current state of crypto to the early days of the internet. The discussion covers the potential growth of DeFi, the role of Chainlink in the evolving crypto landscape, and the significance of recent legislative developments.
The GENIUS Act Changes EVERYTHING
The US legally approving the creation of stablecoins means that cash and the US dollar as cash is going to go on chain. This move by the US government to legalize stablecoins is expected to increase the amount of tokenized cash from $200 billion to $2 trillion, creating a larger market for other tokenized assets. The legislation allows both banks and non-banks to issue stablecoins, subject to different levels of regulatory oversight, and includes requirements for proof of reserves. This accelerates the amount of cash on chain, which is what a stable coin is. The industry will shift from focusing on cryptocurrencies to real-world assets, with tokenized equity, funds, and commodities becoming more prevalent.
Crypto Just Entered 1997 Early Internet Era
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 that's where DeFi is. Full email adoption will be reached with real world asset tokenization. Then on the basis of all that purchasing power in stable coin form and all that asset kind of stuff on chain, you're going to have a lot of very fertile ground for financial products. 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 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.
Chainlink Will HEAVILY Benefit?
Chainlink is stable coin infrastructure. Chainlink is DeFi infrastructure. Chainlink is the set of standards and the infrastructure and services that allow you to build reliable stable coins that allow you to move those stable coins reliably across chains. Chainlink is the largest source of proof of reserves across stable coins, commodity coins and other types of coins. 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. Chainlink provides the infrastructure and technology to do tokenization in a secure, reliable, proof-of-reserve-backed, cross-chain-enabled, and compliant manner. Chainlink is consistently the number one real-world asset technology.
"People Are Celebrating"
There was a real sense of victory and closure because it's the final step in a very long process that included Congress, the Senate, years and years 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. People are celebrating Uh people were celebrating before the signing. 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. It's a kind of victory that is so seemingly unlikely that it's it's almost like something special happened.
CLARITY Act May Be Even Bigger
If this stable coin legislation results in the type of increase in onchain stable coin value and the type of stable coin issuance 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 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.
"This is the clearest signal we have ever had"
Today was a fantastic day for our 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.
