Bakkt CEO on the interconnection between crypto and the traditional financial system
In a cryptocurrency panel moderated by Jennifer Schonberger of Yahoo Finance, Bakkt CEO Gavin Michael discusses the future of cryptocurrencies and the traditional banking system.
– And Gavin, you rolled out those encrypted debit and credit cards. Certainly, crypto is increasingly linked to the traditional banking system, to the traditional financial system. How do you see this evolving? And what does it look like to you?
– I think, you know, one thing we need to take a step back is to determine where we complement the existing system, where we potentially replace assets, or methods, or approaches that we see as somewhat ineffective, and really start. to stay focused on bringing them to light.
Like I said earlier, I mean, Bitcoin has always been viewed as a form of payment rather than a store of value. We are now moving at this inflection point, moving from a store of value to a form of payment. And initiatives like the one we announced this morning really help us build that into the daily payments.
And, you know, we’re excited about the opportunity to continue to lead this holistic story around digital assets, so that we can offer consumers, businesses and institutions the ability to access these new markets at scale. But the other important point of this morning’s announcement is that we are working with a financial services player established with Mastercard as a partner to be able to offer them to existing issuers on the Mastercard network.
And in doing that, we are really marrying two approaches. And that’s where innovation will happen, that’s where we’re excited. You know, looking at the traditional reward propositions for credit cards and turning them into something that involves crypto is a huge amount of innovation that really shows that these two technologies, these two approaches aren’t necessarily in competition, they are in cooperation with each other. And the final beneficiary is the consumer.
– Gavin, SEC Chairman, Gensler, attended our all-market summit earlier this morning. He told our Brian Cheung that if we don’t put the right protections in place, things won’t end well. The Acting Comptroller of the Currency compared crypto to derivatives in the early 2000s. He told me in an interview last month that if we don’t regulate this now, we are heading for a financial crisis. Do you agree with all of this? And where do you see the potential regulatory loopholes here? Where do we need regulation, given that you are a crypto exchange that is effectively regulated?
GAVIN MICHAEL: So exactly, I mean, we’re coming out of – the legacy is off the ice like you mentioned. We have a very, very strong vision of regulations and controls. In fact, our platform is designed with all of these elements at its heart. You know, we built the platform to be natively digital. And we’re doing it in a way that really allows us to react quickly to the changing regulatory environment.
Having said that, you know, we are held to the same standards as any financial institution when it comes to BSA, AML and KYC. And we take these controls very, very seriously. They are integrated into the heart of our platform. And, you know, we take this approach of being privacy regulation first, because we agree that, you know, we have to see regulation evolve to accommodate the changing environment that we find ourselves in.
But that said, I think it’s also important that we look at the areas that we’re working in, you know, to identify which ones we’re complementary to, which we’re replacing and which we’re bringing in as new points of innovation and ensure that the regulations surround them in the same way.
You know, we already have. We did this with the advent of the internet when we brought digital banking to life. And I see many of the lessons we’ve learned from there and making sure that the regulations we use apply properly to the areas we work in as being beneficial when we think about our approach here.