- Sam Bankman-Fried, also known as SBF, is the CEO and co-founder of crypto giant FTX.
- The executive says regulatory oversight of stablecoins is “crucial” to protecting crypto investors.
- In an interview on Wednesday, SBF broke down 3 major everyday use cases for crypto.
Crypto enthusiasts often tout the industry as more than just digital tokens that can pump or empty your bags. Blockchain technology – which underpins cryptocurrencies – can be used to solve everyday problems, proponents say.
Sam Bankman-Fried, CEO and co-founder of crypto giant FTX, broke down three blockchain use cases in an interview at the Bipartisan Policy Center on Wednesday.
In traditional stocks, according to Bankman-Fried, buying a stock in a company can take an exuberant amount of time. Investors may think a trade goes directly from a brokerage like Robinhood to your account.
But let’s say you buy a share of Amazon, he says. It may take two days to deliver this part. Indeed, it goes through several parties like exchanges and market makers before the trade takes place. However, the more you go through third parties, the more the risk is acquired. SBF, as Bankman-Fried is also known by its initials, says companies can run out of regulatory capital and freeze exchanges for user activity, citing the GameStop frenzy as a prime example.
“If I want to buy bitcoin from you, how do I know that I’m really going to get that bitcoin? It’s because you send it to me on the blockchain and five minutes later I have it,” he said. -he declares.
Bankman-Fried argues that bitcoin, or any on-chain service, is more transparent, faster, and eliminates middlemen.
“It’s on the ledger. It’s final. There’s no ambiguity about this middleman,” the former Jane Street trader said. “I don’t worry about a broker I’ve never heard of. You just send it to the blockchain. It’s clean.”
Crypto markets are not limited to the opening and closing bell of Wall Street either. (There are no holidays, maybe just sporadic outages and frequent hacks.)
Second, if someone does not have access to a bank account, cross-border remittances or transfers are a common alternative. Money service providers like Western Union can have fees of up to 30% per transfer depending on the amount sent, CNBC previously reported.
Countries like El Salvador declared bitcoin legal tender and gave citizens access to a digital wallet. President Nayib Bukele said this is one of the reasons he advocated for the adoption of bitcoin. The crypto wallet, dubbed Chivo, allows citizens to make free cross-border payments.
Third, SBF says they are excited about integrating blockchain into social media. Proponents idealize decentralized social media, also known as DeSo, as a way for users to own their own data, instead of big tech companies like Meta or Twitter doing it.
Crypto regulation is ‘necessary’ and ‘good’
The 30-year-old billionaire welcomes the regulations, citing in particular clear oversight of stablecoins.
“I think it’s, in principle, necessary and good. And in practice, I’m optimistic,” Bankman-Fried said. “Crypto is big enough and starting to hit enough things that it’s important to have regulatory oversight.”
The latest bill from the House Financial Services Committee could ban algorithmic stablecoins for two years, Bloomberg reported last month, an effort to protect investors from another collapse of a multi-billion dollar crypto ecosystem, namely the collapse of TerraUSD.
Elsewhere, Federal Reserve Chairman Jerome Powell stressed the need for “appropriate regulation” during a panel organized by the Banque de France last month.
“If you want to create private money across the country, there really has to be a federal role, Powell saidadding, “We think it really should be the Fed playing that role. That’s our main focus right now.”
Chuck Mounts, director of DeFi at S&P Global Ratings, said Wall Street won’t start allocating more until there’s a clear policy framework and streamlined risk assessment in the nascent space.
There has to be some “political clarity” in crypto. This will “allow large institutional players and asset allocators to be more confident and comfortable to jump in and start allocating funds into this space,” Mount said at the Messari Mainnet conference in September.