Chris Giancarlo: "The Real Choice Will Be Freedom or Control"

The real differentiator in the 21st century is not going to be distributed ledger technology or analog, 'cause everything will be digital. The real choice will be freedom or control, the tower or the square.

Stable coins provide no better privacy protection than a Chinese-style or a European-style CBDC. And so that's a false choice. The real choice is between privacy and surveillance, regardless of who does the surveillance.

For the first time in human history, not only can people choose the currency they use, they've been able to do that for a long time, but they can choose the monetary system in which they will keep their things of value.

You do not have the option to either ignore this innovation or suppress this innovation. Last month, the Senate killed crypto's biggest bill by a single vote.

Now regulators are writing the rules without Congress. Few people know that rule book better than my guest today.

Chris Giancarlo chaired the CFTC from 2017 to 2019, led Bitcoin futures onto regulated US markets, is the co-founder and chairman of the Digital Dollar Project, and earned the name Crypto Dad.

His new book, The New Adventures of Crypto Dad: The Quest for Financial Freedom in the 21st Century, takes us inside his journey and comes out on 27th of October. Chris, it's a pleasure to have you on the show today.

Well, I'm delighted. I've been looking forward to it, Marc. Let's get into it. Yeah, likewise. In 2021, you subtitled your first book, The Fight for the Future of Money.

Five years later, crypto has a seat in the White House, yet the Senate just killed its biggest bill by one vote. So who's winning that fight right now? Well, I think actually innovation is winning the fight.

You know, in the United States, we usually don't do legislation early in the life cycle of innovation. It, it...

I found it somewhat amusing that a, a number of people have been anticipating this legislation as if it's somehow going to be some giant lock for innovation.

In fact, often legislation actually is not an unlock for innovation, as we've seen with the MiCA legislation in Europe that actually has stalled a lot of innovation in Europe.

And, and I think there was some concerns that a CLARITY Act would do the same thing in the United States. You know, there's still no authorizing legislation for the internet in the United States.

We still have no authorizing legislation for big data analysis, and, and those, and those innovations are going along just fine, thank you very much. I, I don't really think it's a great loss.

Now, let's remember, the primary purpose of the CLARITY Act in the United States was to assign what territory would be regulated by the SEC and what territory would be regulated by the CFTC.

It's almost to say, you know, "SEC, you have this lane, and CFTC, you have that lane." Well, the two agencies have worked that out themselves.

So perhaps the biggest driver, the biggest need for clarity is no longer needed because the two agencies have worked out what's in their various lanes and are working very cooperatively and not overlapping and acting, actually working v- very integrally with each other.

So that driver for the clarity is no longer there. And, and I would say that I've never seen as much capital flowing into the space, as much engineering talent flowing into the space as I'm seeing right now.

So I, I, I think we've, we've really lost nothing by not getting the CLARITY Act bill, although maybe some journalists who, who covered it breathlessly every day and some trade associations who see contributions from their members to drive the legislation, uh, maybe they're disappointed, but I'm not sure innovators right now are disappointed in the non-passage of the CLARITY Act.

Yeah. And we're gonna dive deeper into the CLARITY Act later in the show.

I wanna take a step back first and talk with you about something that you mention in your book where you frame that history is a contest between the tower, meaning the hierarchies, and the square, meaning the networks.

Can you explain what, what you mean by that and where we've seen this fight before crypto? Yeah.

So, so I borrowed that concept from a great historian by the name of Niall Ferguson, who writes often on the history of money.

He's a, a member of the Hoover Institute out in California, uh, and widely regarded historian.

He wrote a book called The Tower and the Square, and he uses the imagery of the medieval village where the hierarchies would own the towers by which they would observe activities in the, in, in the village or the town and be able to control things.

But he contrasts that with the village square, where networks, informal networks of family and, and guilds and trades would interact with one another.

And he, he uses that as analogy for human history, where mo- much of human history, society is governed by hierarchies of elites. But every so often, networks come together and topple those elites.

And I, I point to a specific example of that.

My, my book is coming out in October 2026, which is the 250th anniversary of the founding of the United States, and that War of Independence began when a decentralized network of yeoman farmers and tradesmen toppled the hierarchy in North America, the British Army,

in battles that took place in Massachusetts and Lexington and Concord.

And yet that battle for independence only ended seven years later when another hierarchy, a continental army and a French army, defeated, uh, the British Army.

But what resulted was a government founded on a blend between hierarchies and networks. We, we don't have... We have a central government in the United States, but we also have local and state governments.

We have a separation of powers. And so th- my point was, is that n- decentralized networks can topple power, but they can also resi- result in a blend of networks and centralized- Intermediaries.

I think that's what's playing out in finance right now, and I use that example, I use the tower and the square, I use the American Revolution as examples of these decentralized networks like Hyperliquid and like Bitcoin challenging, uh, what in America are the, are the, uh, the hierarchies of financial power on Wall Street and in Washington, and changing tho- challenging those power blocks.

And I end the book by expressing hopefulness that what's going to result is a financial system that is less centralized in the hands of big banks and, and power brokers in Washington, and more decentralized, giving common people much greater access to their financial wherewithal, to their financial activities,

much greater individual autonomy than ever before. And I, and that's the analogy of the square and the tower- Yeah... that I use in my new book. Yeah, and I actually have a follow-up question on that as well.

But before that, when you first came across the concept of Bitcoin, did you realize that a Bitcoin is a technology that would enable that, or did it take some time for you to understand this? Well, Marc, my, my...

Like everybody, my journey and my descent into the, the Bitcoin rabbit hole is a unique story, just as everybody's story. My background is on Wall Street.

After practicing law in New York and London, I helped build one of the world's leading trading platforms for a type of derivative product called a swap, and we were the leading trading platform for credit default swaps when the financial crisis happened in 2008.

When that crisis happened, the Federal Reserve added up all of the exposures that major banks had to a failure of Lehman Brothers as measured by the credit s- swap.

A credit default swap is sort of like an insurance product. It pays out if another party can't make good on their credit obligations.

Wall Street banks had written billions of dollars on protection in the event of a failure of Lehman Brothers. They added up all of those exposures, and they came to the figure of $400 billion.

That was what they calculated if Lehman fell, all the other banks would pay out.

And they became fearful that if those banks had to make good on those obligations, it would weaken their balance sheets, and therefore there could be a domino effect of failing banks as they tried to make good on all of these credit default swap obligations.

But I knew from the activity that we were doing that every time these banks would write protection, they would often turn around and re-hedge that protection.

So if the gross amount was $400 billion, I estimated that the net amount was about $200 billion. And that difference really mattered because the Federal Reserve using that $400 billion calculation

came up with a, the Troubled Asset Relief program, known as TARP.

In the same way that a fire brigade wets down houses surrounding the one that's on fire, the Federal Reserve decided to stuff the balance sheets of all these healthy banks with taxpayer money so that they wouldn't fail if they had to pay out on these obligations.

So the amount of those obligations really mattered. Now, I'm, I'm gonna get to the point about crypto in a second.

But the bottom line is, we now know that all those banks hedged their obligations, and if they had to pay out, the amount wouldn't have been $400 billion. It would not have been $200 billion.

But it would have been less than $9 billion. If we knew in 2008 that a failure of Lehman Brothers would've triggered less than $9 billion, we would've had policy choices that we didn't know we had.

We could've let it fail. It wouldn't have brought down Wall Street. We could've let it been sold. There would've been buyers lined up around the block. Or we could have simply bailed it out.

It would not have brought down the financial system. But we didn't know that, and we didn't know that, why? Because we didn't have a blockchain.

If all those obligations had been recorded on a blockchain, we would've known in real time. It was the opacity of those obligations in the traditional analog financial system that was at the heart of the crisis.

And so w- with that realization, I became a huge proponent of the, the, of distributed ledger technology as a new architecture for the financial system.

So in 2017, when I was approached as chairman of the CFTC by some of the world's biggest exchanges, the Chicago Mercantile Exchange and others, about allowing, uh, creating a fi- a, a regulatory framework for Bitcoin futures, I didn't step back, I stepped forward, and we created that framework, and it's been very successful.

But I did it because I believe that the, a financial system that's built on a distributed ledger technology will be a more resilient one, it'll be a more transparent one, it'll be a n- more durable one in the way that the old one was not during the financial crisis.

So that's my journey down the Bitcoin rabbit hole.

I really became attracted to it because of the things I saw during the last financial crisis and the things I realized would improve the financial system, and I truly believe that.

It's the basis for both my first book and my second book, that this is an architectural... I point out in my book that some people are fascinated by crypto as a speculative alternative asset.

I'm fascinated by it as a new architecture of the financial system and as, for reasons I explain in the book, not only will it make the financial system more durable, I think it'll actually make the, the financial system one of greater freedom for, for the, for those of us in, in free market economies

and in free democracies. Yeah, very fascinating, Chris. And For, for those of us who remember, Bitcoin started in '29. More cryptocurrencies came along in 2013, '14, and so on.

But Bitcoin really was started by a group of libertarians, and that is really the, the core idea of where Bitcoin was born and then how the cryptocurrency community grew bigger and bigger.

If you look at crypto today, and crypto's obviously come a long way in the last 10 years, is crypto still at its core a libertarian idea?

And couldn't you say that now, and you mention these big winners in your book, DTCC, BlackRock, Swift, and Canton, they're all adopting crypto, they're all adopting Bitcoin. Isn't the tower winning versus the square?

Well, that's a great question. The s- the tower, it, the empire is certainly striking back. There's no question about it. But I don't believe the future... I don't think... Well, the choice is in our hands as citizens.

It's very possible that this new technology allows for much greater centralization and control over our financial activities.

That would be a tremendous disappointment, and that would be a tremendous loss if we allow that to happen because the same technology also allows for much greater financial autonomy, much greater financial freedom,

still with appropriate law enforcement. I, I'm never one... And by the way, Satoshi Nakamoto's vision was for a decentralized world, not for a lawless world.

There's, it's often people that are opponents of crypto always talk about, well, he was trying to get out from regulation. No, regulation's not even mentioned i- in the Satoshi Nakamoto white paper.

It's about de- it's about getting away from intermediation by large controlling. It's, it b- it's about moving away from the tower, but it's not moving away from, it's not trying to move to anarchy.

I think, just as I use the analogy of the United States government in my book, I think what could emerge from this is a blend of centralization and decentralization, a blend of intermediation and direct financial access.

And that, to me, that's the vision that is most... Because, you know, I, I come from a, I come from Wall Street. Intermediation is not always a bad word. Intermediation often serves valuable purposes.

There have been intermediaries on this earth since the beginning of time. I, I once

was in a dentist office, and I picked up a, a, a, a magazine called Archaeology Today, and I read a story about the blocks that were used to build the pyramids.

And inscribed on some of the blocks are the name of the brokers up in the Nile, um, that were sel- uh, that were intermediating the quarries to deliver the brocks- blocks to the Pharaoh.

There have been intermediaries in markets for a long time, so intermediation is not necessarily a bad word. But we want, wanna make sure that we create a financial system that is much more inclusive,

much more efficient, with, there's less re- rent-seeking and, and, and free ridership than there is in our current system, and I think that's very possible.

Uh, Chris, I wanna turn back the wheel of time a little bit and go back to the Biden era where, where you were in the midst of what you call the darkness at noon, the tower trying to crush the square.

You were advising crypto companies at the time. Take us back. What's a moment from those years that you will never forget? Well, yeah.

So whenever there's a new technology, we've seen this in human history, there's often a gr- group of people that, that express fearfulness of that technology and try to stop it.

They, in, when, during the steam engine period in UK history, there was a group known as the Lu- the Luddites that tried to spike steam engines and tried to stop them.

They were afraid of society turning from an agrarian society to a mechanical society, and they tried to stop it. And I, and I think you see that in every new technology.

And I think the last two years of the Biden administration were the Luddite per- period in crypto. Uh, fortunately, it's over, and I don't think it's going to come back.

The same people that opposed crypto are now opposing data centers and AI, and five years from now, they'll oppose something new simply because they, they are opposed to technology, innovation, and change.

But during those last two years of the Biden administration, that, that Luddite

movement really seized hold of the Biden administration in the form of Elizabeth Warren and Gary Gensler at the SEC, and they tried through every means possible to stop this innovation, including debanking a lot of the CEOs of a lot of these companies and debanking the companies and every other means possible.

Now, the good news is they didn't succeed. They tried everything they could, and that didn't stop the innovation. Nothing stops innovation. Nothing. Uh, innovation is gonna happen.

It may move to other parts of the globe, but human innovation, human ingenuity always takes place, and it's always a fool's errand to try to stop it.

The, the better way is to channel it, which is what I tried to do when I was in government, to channel this innovation, to put proper regulation around it.

But those were indeed dark years, and I do in my book tell a few stories.

One of the stories is I found myself invited to a Biden White House strategy session in which the, uh, the language was very colorful, uh, by some well-known supporters of the Barden- Biden administration, inc- including Mark Cuban, a well-known US entrepreneur who's left of center and was trying to tell the Biden administration that, that its policy on crypto was a loser, uh, with a lot of young people, and he used very colorful language, all of which I recorded and, and tell that story in the book.

I think your readers might find that very interesting. But fortunately, that's over now. That, that's, that's well over. We've, we-- Th- I-- In fact, during those years,

I was telling regulators in Europe and, and, and, and the UAE, and Singapore, and elsewhere, I said, "Write your regulations now and take advantage or arbitrage the hostility in the US, and do it as quickly and as thoroughly as you can, because when the pendulum swings, it's going to swing hard in the United States, and people are gonna leave your shores and come back."

And that's exactly what's happening now. Yeah.

And, and Chris, during your tenure at the CFTC, what would you say is your biggest learning or takeaway that you have learned from that time that you would tell current today's regulators when dealing with new technology, whether it's crypto or whether it's AI?

Yeah. What I would tell them is, to regulators, you do not have the option to either ignore this innovation or suppress this innovation.

It's going to overwhelm you one way or the other, and therefore, what you'd better do

is learn everything you can, understand it as best you can, understand what your mandate is in serving public policy, and then channel this innovation, channel it, uh, develop regulatory frameworks that move this innovation to serve your public policy

mission. When I created a regulatory framework for Bitcoin futures in 2017 in the United States, I received calls from overseas and US regulators telling me not to move forward.

There were full-page articles in The Wall Street Journal from industry telling me not to move forward.

There were letters from trade associations telling me not to move forward, and their common theme was, "If you move forward, you are legitimizing Bitcoin." And my response was, "Nobody elected me to do anything.

I'm app- an, an appointed regulatory official with one mission and one mission only, and that is to put forward good regulation.

I don't have the, the luxury, I don't have the authority to ban something that is otherwise legal." Congress does. If Congress wants to outlaw Bitcoin, they're welcome to do so.

But up until the time when they do that, my duty is to put a regulatory framework in place, and that's actually what we did in 2017.

And here we are today in 2026, and that regulatory framework we adopted functions very, very well. That market, it's deep, it's liquid, it's transparent, and it's very well regulated by the CFTC.

And it's proof that regulators can deal with innovation if they have the courage and the willingness to do so. And that's what, I think that's the biggest takeaway from my service as chairman of the CFTC.

Regulators must engage with innovation. They must, they must not be afraid of it. They must learn about it.

They must move with the times, and they must develop regulatory frameworks that further the mission that their legislatures, their, their, their governments assign to them to do this.

And if they do that, everything will be okay. Do not be afraid. Mm-hmm. Cor- as we say in Italian, coraggio, coraggio, courage. Yeah. Very fascinating, Chris.

Another of many interesting stories that you have across your book is your encounter with David Sacks, and you mentioned that as well.

In December 2024, David Sacks called you to tell that he had taken the crypto czar job, uh, where actually you were in line for. Can you just walk us through that call? What, what happened there?

Well, first of all, enormous respect for David Sacks, even before he set foot into Washington, for his career as an entrepreneur, as a, as a, a financier, a, a funder of great innovation.

And right after the election, um, I had given a few public remarks on television saying that the Trump administration had a very ambitious agenda for crypto, but they didn't really have anybody to lead it.

And I was asked in an interview on, on broadcast television whether I would be willing to do so, and I said I, I would.

And not long after that, I, uh, was, uh, informed that the White House was considering what I had proposed, and I was then asked to be ready to come down to meet with the president-elect and discuss this new role. And,

uh, a few days later, I got a call from David Sacks, and he very kindly said that,

to use an American football analogy, that there was a pass coming my way, uh, but that he intercepted it, and that he was gonna be named the new crypto czar.

And then, uh, we decided to get together and meet, and he asked me if I would consider being his, his number two for crypto. While he was gonna be both crypto and AI, that would allow him to focus on AI.

And I, I very kindly told him that I r- that I really respected that offer, but I'm, I'm at a place in life where it's, I've long since been somebody's number two.

It's been a long time since I've been a number two, and, uh, it's not what I aspire to do.

But I also said that he was gonna make a very fine crypto czar, and I wished him the best, and I've, I've been supportive of him in many ways, some publicly, some, some privately since then.

He's gone on, I think, to be an excellent crypto czar.

And he also, as another story I tell in the book, one of the central stories in the book, he then invited me to be the guest of him and the president at the crypto ball that was scheduled for inaugural weekend in Washington.

And I explained to him that, uh, long, long before, long before I knew that would be Inauguration Day and that Trump would be there, I had, uh, r- made arrangements to be in a

A border town in southern Switzerland to meet with a jury to judge some paintings that had been in my family.

And as I explained in the book, that same day that I was there, the president announced, um, the launch of Trump Coin and Melania Coin, uh, two, I think, ill-advised, in my view, and I explain in the book, endeavors by the White House and for reasons I, I don't...

It's, I think it's one of the central stories in the book, and it explains my view. Let's, let's, let me just simply say that when I was a CFTC chair, there was no prohibition on my owning crypto

and no prohibition on my owning Bitcoin. And for reasons, you know, that are clear, I'm a big supporter of this innovation, and I believe that Bitcoin would become very valuable.

But I made a decision, a personal decision, not to own crypto as chairman of the CFTC 'cause I didn't want people to question my motivation for writing rules.

I didn't want anybody to think that somehow the rules I wrote I could benefit from. So I publicly said I won't own crypto during my term as chairman. I didn't. There was no prohibition on my doing so, but I did not.

And as a result, I probably left a lot of money on the table. But that was a decision I made. I, I, that's the basis for my disapproval of the administration's decision to launch Trump Coin and Melania Coin.

While there's no legal reason not to, I do believe that once one goes into public service, it's be, it, it's incumbent on them to refrain from doing certain things that may be perfectly legal but are, could question their impartiality.

And for reasons I explain in the book, I think it was, I was disappointed in the launch of Trump Coin and Melania Coin.

And I use a story about my trip to Switzerland and, uh, judging the value of certain old works of art as a way of understanding the notion of meme coins and what the administration did and didn't do.

So I'll leave that to, to readers to read that, and I'd love to hear what they think about it after the book is out. Chris, I also want to talk with you about freedom and privacy.

Uh, you write in your book that the real choice isn't stable coins versus a digital dollar, but financial freedom versus financial control.

Um, and you laid that out before, what it means to have a much more transparent financial system.

But my question to you is, if governments can track every payment, and Europe plans that with the digital euro, for example, where is the freedom? Well, absolutely.

So w- y-you know, I've, I've noticed over the years that my friends in Europe

are, are vehemently opposed to big technology companies monitoring their activities, and you have a, a very good law, the GDPR, that prevents commercial entities from using your personal data.

But GDPR exempts governments. Governments are free to, uh, monitor your data, and Europe seems to think, many Europeans seem to think that's a fair balance. Uh, in the United States, we have the opposite view.

We, we are hypersensitive to government monitoring our data, but we're, we have no GDPR. We allow commercial entities to monitor our data. The point I make in my book is both of those are an invasion of our privacy.

It doesn't matter who's doing the monitoring, government, the private sector, the public sector. If our activities are being monitored and surveilled, we're, we're, we don't have privacy.

In the United States, there's a false debate that says, uh, CBDC, central bank digital currency, bad because that means government surveillance. Stable coins, good because it means no government surveillance.

Well, that's a false choice because governments will surveil. In fact, the... will surveil stable coins. The new Genius Act imposes on stable coins a law called the Bank Secrecy Act, which has nothing to do with secrecy.

It's about government surveillance. Stable coins are no, they provide no better privacy protection than a Chinese-style or a European-style CBDC. And so that's a false choice. The real choice

is between privacy and surveillance, regardless of who does the surveillance.

I believe that the United States missed an opportunity in the Genius Act, which is the new gov- governing law for stable coins, to impose privacy.

There was an opportunity, a missed opportunity, whereas the United States should have said that the dollar is a very special instrument, and one of the characteristics of the dollar is that people should enjoy the right balance of financial privacy balanced against the needs of law enforcement.

We have, we, we have, throughout centuries in the democratic societies of the world, tried to always get that balance right. We have a notion that what you do within your home is your private business.

But if law enforcement has probable cause that there's law breaking going on, they can in fact break down your door with a subpoena issued by a judge. And so there's a balance between law enforcement and privacy.

But provided you are engaged in lawful activity and there's no reason to think otherwise, one enjoys privacy in their home.

Well, one should also enjoy privacy in their financial transactions, free of surveillance either by government or by big technology companies or banking institutions.

And I believe that if the United States were to adopt that policy That whether a dollar is provided by a bank, whether a dollar is provided by a stablecoin company, whether a dollar is provided by the central government, that in all cases, you're entitled to privacy unless there's probable cause of law-breaking.

That would enhance the dollar. That, that would be make the dollar, I think, the world's most superior instrument. China has developed a CBDC that is a control function.

If you criticize the regime, your digital yuan will be turned off, and you won't be able to get a bus out of your village.

Europe, as you just said, is developing a digital euro that is going to be a surveillance instrument. The United States has now authorized the private sector to develop private digital dollars.

Had the United States taken that opportunity to say, "And those digital dollars must be private," I think the United States would have the winning formula.

Not only a, a strong dollar, but a private dollar, and I think that was a missed opportunity.

I really truly believe that once this technology becomes ubiquitous, which it will be, the real differentiator in the 21st century is not going to be distributed ledger technology or analog, 'cause everything will be digital.

The real choice will be freedom or control, the tower or the square.

If Europe really develops a surveillance instrument, if China really develops a control instrument, if dollars are the world's freedom instrument, the world will flock to dollars.

The winning formula is freedom in the 21st century. If we en- if, if we encode freedom into the digital format of the dollar, that's the winning currency of the future. Mm-hmm.

Chris, and the US definitely has done the right step so far to make this a reality, um, by pushing US stablecoin dollars all around the world.

They still have about 99% market share, so they're, they're on good track here. Um- It's fascinating, right?

One of the really fascinating aspects of, uh, stablecoins is for the first time in human history, not, not only can people choose the currency they use, they've been able to do that for a long time, but they can choose the monetary system in which they will keep their things of value.

That's really what's fascinating. Anybody with a smartphone or a c- or a laptop computer can now say, "You know what? I'm gonna move my things of value

out of the peso, out of another currency, Zimbabwe, whatever the Zimbabwe currency is called, and move my things of value into a dollar, and therefore, into the US monetary system, with its policy on interest rates and, and, and, and debasement, et cetera."

That's really an amazing concept.

It, it, it allows people even where there's currency controls, even where there's borders, to actually choose their monetary system to, to house their v- their, their, their, their monetary value.

It's, it's really quite remarkable. Yeah.

A-a-absolutely agree, and on top of that, now the latest innovations in tokenization from firms like Robinhood, uh, also allow people not only to buy US dollar currencies, but also buy US dollar stocks, right?

Well, things of value, right? So one- once all things of value go onto a blockchain, people are gonna be able to put those into a dollar-based system if they so choose.

And if the US squanders the value of the dollar through debasement, they'll be able to choose another monetary system. This is that element I talked about earlier, the freedom element of this technology.

This, this, this, this new technology, if we, if it's developed right, can be an instrument of freedom.

Suddenly, you're freed from a terrible mon- you know, the, what may be terrible monetary policy of your sovereign who may, place like Zimbabwe or elsewhere, may be debasing the currency, may be doing other foolish things to ruin their monetary system.

Uh, people can say, "You know what? I'm fed up with this. I wanna choose freedom. I wanna go into a currency system of my own choice."

And it's not just where they keep their currency, but they keep all things of value into a digital environment. It's, it, it's, it's a tremendous breakthrough in human history in many ways. Mm-hmm.

Uh, Chris, one of the big topics you also mention in your book are prediction markets. And in chapter four, you describe a multi-hour long call in March 2021 with the 23-year-old Polymarket founder, uh, Shane Coplan.

Polymarket is by now one of, if not the biggest prediction market. They got an investment by ICE of 2 billion last year, and in 2021, they faced, uh, CFTC enforcement. Can you just take us back to that call,

and then also describe us, critics would say, um, prediction markets are casinos. And France just blocked a Polymarket joining 30 other jurisdictions. You call them markets.

What is the difference between those two things? Yeah, yeah.

So, you know, I, I met Shane Coplan, uh, we were introduced by a mutual friend when he was g- very early in starting Polymarket, and as I explain in the book, I immediately liked his, his vision.

And his vision was a world where anybody in the world using Polymarket software could create a market in an idea, an idea of,

you know, who, who will be the finalist in the World Cup and where will the final World Cup ga- match be played? And what, w-where will interest rates be in 2027? And, and where will gas prices be?

Uh, what will be the average amount of rainfall that will happen next winter? What will be average temperatures in Europe next summer?

And, and I, and I I find this very, very interesting because we as human beings, we like certainty.

Uh, we check the weather report in the morning even though we know it's probably about 10% wrong, but 90% is good enough for us to, to, to bring an umbrella or wear a raincoat if it says it's going to rain.

In fact, when there's a hurricane or other terrible weather event, the most popular channel on television is often the Weather Channel because people like to have certainty. Well, that weather, weather is important.

Uh, if it's gonna rain or not rain is important, but it's not nearly as important as many things are like interest rates, where they're going up or down, or, or, or gas prices, or, um, who might win a future election and what their policy changes might be.

Those are far more important, and yet up till now in human history, there's very little predictability. There's polling, but poll- the average poll is about 800 people.

It's not exactly the wisdom of the crowds, and all of those people are involuntary in terms of participating in a poll.

The genius of prediction markets is to use the notion of the wisdom of the crowds by sampling enough people, but not just ordinary people or involuntary people, well-informed people who are willing to wager that if they're wrong, they're going to lose money, but if they're right, they're going to make money.

Polymarket and Kelce and these other prediction platforms do is they create an environment where people can bring forward their beliefs, their understanding of future events, and where they'll be rewarded if they're right and penalized if they're wrong, and they're still willing to participate, and in many cases, attract tens of thousands, hundreds of thousands, sometimes even millions of people to bring that knowledge forward.

Prediction markets are not casinos. They are not sports books. A casino is not a two-way market. A casino is a retail shop that says, "These are our prices. You can come in and take our odds.

You can leave our odds, but you can't make the odds. We're gonna tell you what the odds are, and our odds are gonna guarantee that most of the time the casino wins."

Our odds are gonna guarantee that most of the time the sports book's gonna win, and when win, when, when the sports book or the casino wins, the customer loses. That's a different model. It's called a bookie model.

It's a different model than a prediction mar- in a prediction market, the prediction house doesn't set the odds. It says to its customers, "You set the odds. You can be a yes, you can be a no. If you win, we don't lose.

We, the house, 'cause we're not a s- we're not one party to the bet. All we are is a platform where you can set your own odds on these different outcomes."

I liken the arrival of prediction markets to the arrival of ride-sharing. When Uber created the ride-sharing concept, it competed with ride hailing,

and it competed with lots of local monopolies of taxi and limousine commissions all over the world.

But what happened was the public decided they liked ride-sharing, and once they decided they liked ride-sharing, those taxi and limousine commissions had to yield and give way. And what do we have today?

We have both ride-sharing and ride hailing, and they live side by side. I think that's the model for what's gonna happen with prediction markets. The public,

even if they don't participate in these markets, are going to decide they like the information that comes out of these markets.

In fact, you can't watch any political broadcast today where they don't give you the Polymarket odds or the Kelce odds of one side winning or the other.

The public has already decided they like the information, and yet they're still gonna like polling, and they're still gonna like sports books and casinos. In fact, casinos make 98% of their money on slot machines.

So prediction markets don't really compete with casinos. I think the future is gonna be both prediction markets, sports books, and casinos, uh, working side by side, and it's gonna be just fine.

That's, that's how I think this is gonna evolve. I think prediction markets as built by Shane Coplan and others are a really great social innovation that's here to stay.

Yeah, and I agree with you, Chris, and that's probably one of the best descriptions I've heard, uh, on prediction markets and why they matter.

And I actually think we're at the very beginning still of, uh, the potential they can have on financial markets and, like, literally truth-finding for the world, right? Well, if y- if you are a,

a restaurateur or, or a bar operator in, I don't know, downtown Los Angeles, and there's a chance that your local team might go on to compete in the championship round,

you could get a enormous benefit to your business if that happens. But if it, if they don't make the championship round, your, your, your business is gonna be much slower.

Up till now, there's no way of hedging that risk. There's no insurance you can buy or others.

But with prediction markets, you could actually hedge the economic risk of losing that business by betting that your team is going to go to the championship or not.

And so these prediction markets are gonna provide an economic source of risk hedging. And by the way, I know you're in Greece. The, uh, we know that hedging markets go back to ancient Greece.

There were Greek presses where there were futures markets on their production of olive, uh, oil- Back in ancient Greece.

I mean, the, you know, the notion of hedging risk, of production, of commercial operation is as old as mankind, and it's as useful to society as you could possibly imagine.

We should want to further the development of these markets. And to some people say, "Well, it's just gambling." People like to gamble.

Uh, um, um, there may be some people in governments elsewhere that say, "Well, we know what's best for other humans, and we're gonna stop them from gambling."

If you do that, they're just gonna go to bookies, barbershops and around the corner. You're not gonna stop human being from gambling. The better way is to put good, smart regulation around it, not to try to ban it.

I, I think if Europe is thinking they're going to ban these markets, they're, they're not gonna- you're not gonna stop them. They're gonna happen anyway.

The better thing to do is put a smart regulatory framework around it. Don't decide. I, I really am tired of politicians knowing what's better for the rest of us. No, don't tell me what's better for me.

I'll de- make my own decisions. If I wanna gamble, I'm gonna gamble. But create a regulatory framework so that it can be done so there's not market manipulation, so I'm not being ripped off.

That should be the right approach. Uh, Chris, we're almost at the end of the show. One last question be- be- before we do a quick lightning round, and that's a look into the future.

Uh, we have the CLARITY Act that didn't pass. We have the CFTC and the SEC that already, uh, uh, released the first rules. SEC, for example, innovation exemption.

They're starting to make their, the rule books themselves now. What do you think is most important in that next phase if the US wants to win in crypto?

Well, I, I think CFTC and the SEC are going to write rules very rapidly. They're gonna provide a framework. Uh, capital is flowing into this area very, very rapidly. We're actually in an expansionary period.

There's new companies developing every day. There's a new prediction market company popping up every week. I, I think the best thing right now is to leave it alone.

Let, let these, let a thousand flowers bloom and flourish, and then eventually there'll come a consolidation period, and we'll see where the value is.

But I predict, and I predict right now on your show, that within 12 to 15 years, the entire financial system is going to move onto digital networks. And, uh, there's no turning back now.

There's the efficiency, the speed, the cost reduction, the greater inclusiveness are, are very, very compelling. Uh, the analog system is gonna yield to a new digital network financial future. Yeah.

Fascinating, Chris, and we're definitely all looking forward to that future. Uh, before we end the show, a quick lightning round. Uh, short questions, short answers. The first one is, do you own Bitcoin today? No.

My children do. So when I left the CFTC, and I ex- uh, short answer. I, when I left the CFTC, I said, "You know what?

As long as I'm a public advocate for crypto, I'm not gonna have people question my, my, my a- altruism." I do not own, I do not speculate in crypto.

Now, some of the companies I've invested in have crypto in their treasury. Some of them compensate in crypto. But I still, to this day, do not speculate in crypto. Mm-hmm. Then next one.

A crypto market structure law signed before January 2029, yes or no? No. Bitcoin's next all-time high, before or after the end of 2027? Yes.

Uh, tokenized stocks, overrated or underrated? Underrated. And then last one. What's one book or idea that shaped how you see the world? Uh, Niall Ferguson's The Tower and the Square.

[upbeat music] Mm-hmm. Great. Chris Giancarlo, thank you so much for coming on the show. It was a pleasure to have you on. Very fascinating. And read that book.

I got a, uh, an early copy of that, and we'll link it in the show note as well. Thanks, Marc. Really fun. You obviously like this video enough that you got to the end. Listen, do me a favor.

Hit that like and subscribe button, because I think you'll like it.

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See you next time. You obviously like this video enough that you got to the end. Listen, do me a favor. Hit that like and subscribe button, because I think you'll like it.

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See you next time