Nathan McCauley, CEO of Anchorage Bank, sits down with tech reporter Melinda Lucy to discuss the GENIUS Act's enablement of digital asset innovation for banks and future opportunities surrounding the anticipated CLARITY Act.
Transcription:
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Melinda Lucy (00:11):
Hello, we are onsite at American Bankers Digital Banking Conference in Orlando, Florida. And I am here with the CEO of Anchorage Digital Bank, Nathan McCauley, who was honored as one of our most innovative people in finance for 2026. Thank you so much for being here, Nathan.
Nathan McCauley (00:27):
Great to be here. So thank you so much for having me.
Melinda Lucy (00:30):
I know that Anchorage Digital Bank has been involved in digital assets for a little while and that the launch of the Tether Stablecoin was pretty much immediately after the passing of the Genius Act. So can you tell me a little bit more about the groundwork that was laid ahead of the regulatory change last summer and how Anchorage Bank positioned itself to be ready for that moment?
Nathan McCauley (00:51):
Sure. So the way we looked at it was there's a tremendous amount of understanding that the Tether team brought to the table. What we were bringing to the table in that sense was compliance with what came through with the Genius Act. And that's about reserves management, smart contracts and kind of taking on the responsibility for some of the compliance aspects there. And so we spent a lot of time brainstorming with the Tether team on what exactly should that look like? How should these responsibilities come over? And they obviously had a wealth of experience in those areas that we then tailored specifically for the US market and the kinds of practices that we knew would be coming with the Genius Act's specification. And as the rulemaking process goes through now, we're getting even more specificity on how to do all of those things. And so we laid a lot of the groundwork ahead of the bill in order to just kind of understand the contours of what the relationship might look like so that we were ready on day one when the Genius Act passed.
(02:03):
This was incredible because it actually allowed Tether to become the first federally issued stablecoin here within the US that was built in anticipation of compliance with the Genius Act. And so really kind of continued their legacy of leadership in that space.
Melinda Lucy (02:24):
Got it. So you've mentioned the Genius Act already, but I want to dive into that a little bit more, especially since you mentioned that the launch was essentially a day one launch once the bill got signed into law. What in the Genius Act ended up being the go ahead for what you and Tether were building and how did that regulation either change or not change the strategy of Anchorage and Tether as they were getting this off the ground?
Nathan McCauley (02:51):
Great question. So one of the things that was very interesting about the Genius Act is it's regulated who and how stablecoins can be issued. So who's able to issue stable coins that are compliant with the act and how do they do that? One of the particular provisions that was I think probably one of the most important provisions was the fact that any stable coin that reaches significant enough scale, which is to see 10 billion or more, has to be overseen at the federal level by the OCC. And at the time when the Genius Act passed, we were actually the only crypto company that had a US OCC overseen trust. And so we were very well positioned when it passed to immediately start to get into the business of doing this kind of work with stablecoin issuers. And so that particular provision I think was very helpful to getting things started.
(03:49):
In addition to that, there's a whole host of things that come with issuing a stable coin out of a federally regulated institution, KYC and AML requirements around the primary market, season freeze capabilities around the secondary markets. So if you see anything suspicious going on in the stablecoin ecosystem, you cooperate with law enforcement to help either seize the assets or bring them back in. And then very careful and thoughtful reserves management about what is actually backing the stablecoin. Is it dollars in a bank account? Is it short dated treasuries? And some of the flexibility around that were all things that were kind of in flight as the Genius Act was being debated through Congress and then certainly then eventually passed. When it was passed, it was actually a very nice event. I was fortunate enough to get invited to the White House for the signing of the Genius Act, and it was just a beautiful ceremony.
(04:51):
And so I was very grateful to get to go to that one and look forward if there is another one with the Clarity Act to maybe even get to attend again.
Melinda Lucy (05:01):
Absolutely. And that actually leads very well into my next question, which is with the Clarity Act on the horizon as the next major piece of digital asset regulation, what is Anchorage anticipating and what are you looking at as far as the potential opportunity that the Clarity Act will open up for the next stage of digital assets?
Nathan McCauley (05:22):
Yeah. So I think the biggest thing is last year at the American Banker Conference, I gave a keynote where I talked a little bit about, hey, Anchorage Digital Bank is the first crypto bank, but I don't want to be the last. In fact, I want there to be 5,000. And I think the true catalyst for 5,000 banks becoming crypto banks and in a sense making the idea of crypto bank and oxymoron in the same way that there's no such thing as an internet company. All companies are internet companies. There should be no such thing as a crypto bank. Every bank should become crypto bank, whether it's looking at tokenized deposits, stable coins, tokenized capital markets, bringing Bitcoin, Ethereum and others in as investment assets or collateral assets. All of these use cases that I think banks are going to be exploring are going to be really unlocked by the Clarity Act.
(06:10):
And the reason for that is, no pun intended, you want the clarity if you're going to be building for the next several decades. The kinds of time horizons the banks need to invest in, in order to make sure that the offerings that they build have longevity and have a real staying power require a five, 10, 15 year time horizon. And that inherently requires regulatory clarity that you know goes beyond any particular administration. You don't want an executive order to undo things. What you want is a really solid foundation that can really only come from legislation passing. So I think that's going to be the biggest unlock here is that every bank will aggressively pursue a digital asset strategy once Clarity Act passes because there's going to be so much more opportunity, there's going to be so much more flexibility and there's going to be so much more frankly, clarity.
(07:05):
What that means for us at Anchorage is that we are going to be an enabler of that. We have wallet infrastructure that people can come and use. We have collateralization infrastructure people can use, tokenization, both of stable coins and tokenized deposits. Even looking at things like tokenized metals. There's I think just a whole host of different use cases that are going to come through. All of those are going to be unlocked by Clarity's passage.
Melinda Lucy (07:29):
Got it. My last question, and this is a bit of a bigger picture one, is when Bitcoin first came into the scene in 2014 or the early 2010s, it was by design non-institutional and outside of the traditional financial services system. That is changing. So what do you see the next 10, 20 years looking like for digital assets and for cryptocurrency as this shift from what we now call decentralized finance blurring the lines with the traditional financial ecosystem?
Nathan McCauley (08:02):
Yeah. So cutting all the way to the chase, there will be no such thing as TradFi and DeFi. There's just going to be finance in a sense. And so these things are going to merge very nicely. We already see the largest asset managers releasing ETFs where they are wrapping Bitcoin, Ethereum, Solana into a more traditional wrapper. We're going to increasingly see the opposite where we're going to see ETFs start to come on chain and trade on decentralized exchanges, be used as collateral for decentralized lending protocols. And the DeFi innovation that has happened for the last 10 years is really going to get fully integrated into the financial system. That is going to be a huge boon both for traditional finance as there are fundamentally safer rails that get built, more transparent rails that get built. But it's also going to be huge for the DeFi ecosystem as all this innovation that has gotten built gets utility to come in from the assets that are coming in on chain.
(09:13):
And you see this kind of across the board. Large asset managers are starting to put assets on chain. The DTCC is starting to experiment with putting some of the stocks, bonds and equities on chain. You see tokenized deposits, projects coming out of a whole host of different financial institutions. And so I think really what you're going to see is this evolution of the financial system that frankly has been going on for a really long time. If you look at the financial system, we've moved from bearer bonds to non-certificated securities to getting to T plus one settlements. Now we're going to likely be able to move to T zero settlement or T+ one might mean T+ one hour instead of one day. So all these things are kind of a nice evolution and moving forward of the industry. And so I see a real convergence here.
(10:05):
And it's not just with bringing those tokenized assets on chain. I think also the Bitcoin thesis will only get even stronger as we think of a non-sovereign asset like Bitcoin getting more adoption across the industry and then Ethereum and Solana coming in and being those world computer networks that allow so much of this tokenization to come on chain. And so it's going to be I think a boon both for Bitcoin and for the other chains as well.
Melinda Lucy (10:37):
Got it. Well, we look forward to seeing what Anchorage has in store. So thank you so much for taking the time to chat with me and I really appreciate your time.
Nathan McCauley (10:46):
Yeah. Thank you so much Melinda. Appreciate it.
Melinda Lucy (10:48):
Of course. And once again, congratulations.
Nathan McCauley (10:50):
Oh, thanks.