China Detente & Stablecoins as SoftPower
Episode publishedPodcast: Lumida Wealth : Non-Consensus...Lumida Wealth : Non-Consensus Invest Beyond the Ordinary
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Welcome to nonconsensus investing. I'm Ram Alawalia, your host and CIO at Lumida Wealth, where we specialize in the craft of alternative investments. At Lumida, we help guide clients through the intricacies of managing wealth so they don't have to shoulder the burden alone. Through this podcast, we draw back the curtain to reveal the strategies employed by the best in the business for their clients so that you too can invest beyond the ordinary. And welcome to our next show of Lumida nonconsensus investing. I'm really pleased and thrilled to be joined by my friend Austin Campbell. Austin is a
Good to see you. I only have one complaint with your intro, which is I have technically defected from Columbia back to my alma mater, so I teach at NYU Stern now. Oh, that's right. Recent development. We
won't hold that against you. You're still in New York.
Still I I still am in New York, and, technically, I think you called me old by saying renaissance man. So I'll let that slide. The
term of, endearment. So let's just start with the stable coin market. Right? There's a stable coin bill that, I understand you can give us an update where we are with that. Very disappointing to see that it wasn't passed. And more broadly, we'd love to understand what impact might this have for American financial markets, and should someone like secretary Bessent be excited about the opportunity?
Yeah. So let's start with stable coins as they're defined in the genius act, which is the one that's in the senate, and the stable act, which is the one that's in the house, because these are relatively similar from a financial construction standpoint. So the theory behind stablecoins there because if you look at the crypto market, they've called all kinds of things stablecoins. All of them have been coins, but on the stable part, varying degrees of success. So this act attempts to codify a framework, and what it says is after 02/2008, there were a bunch of things that we called cash that blew
Look, like, kind of a brief update there, and then let's dig into the promise, the opportunity of stable coins and what that means for the markets.
Yeah. So on the legislation, there's then what's the best way to say this? A pretty confused debate that's emerged about stablecoins and what they can do and what they are. A lot of people on the Democratic side of things have gotten themselves tied up in thinking that stablecoins are somehow inherently risky and pointing at things like UST without having done the work to understand that, yes, that is specifically the point of this bill is acknowledging that those things are risky and telling people to stop doing that. Because the contra is in a traditionally democratic stronghold, which is Ne
So that enables non banks to get into the business of payments. Now non banks already aren't have been active in payments. Stripe is one of the leading payments processors. There are PayFAX, such as PayPal. So the banks do advantages, though, because they can access Fed master accounts. And this is the one of the issues that Caitlin Long from Custodia has been seeking to access. Could you help us just distinguish the advantages of the mode that a bank has versus, say, a non bank entity? And how state where do I change this setup?
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