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Ep 46: Chairman Glenn Thompson
80 Plays18 days ago
US House Agriculture Chairman GT Thompson breaks down what blockchain has to do with wheat futures, GPS networks, and bipartisan cooperation. He shares how Congress is handling blockchain’s regulatory gray zones through committee cooperation and public input. It’s a grounded discussion of what’s being built, what’s still unclear, and why it matters.
👓 Read "A Blueprint for Digital Assets in America" co-written by Representatives French Hill and Glenn Thompson.
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Transcript
Introduction and Speaker Introduction
00:00:06
Speaker
Hello and welcome to this Owl Explains Hootenanny, our podcast series where you can wise up on blockchain and Web3 as we talk to the people seeking to build a better internet.
00:00:17
Speaker
Owl Explains is powered by Avalabs, a blockchain software company and participant in the Avalanche ecosystem. My name is Silvia Sanchez, project manager of Owl Explains, and with that, I'll hand it over to today's amazing speakers.
00:00:34
Speaker
Welcome everyone to another edition of the Avalabs podcast.
Blockchain Regulation Discussion
00:00:40
Speaker
We're talking today with Chairman House Agriculture Chairman GT Thompson, who is going to spend some time with us to talk about the incredibly important issues that the House Agriculture Committee has been focused on.
00:00:51
Speaker
We are going to focus on critical topics like blockchain, digital assets, and how the work of the Congress and the chairman is helping to bring regulatory certainty to the United States to keep innovation here where we want it the most.
00:01:06
Speaker
Mr. Chairman, welcome. And I'll start with you to see if any thoughts you'd like to share with us before we dive in. Well, Norma, thank you very much. Just an honor and a blessing to be able to be with you. Certainly on such an important topic as digital commodities yeah we yeah and blockchain. we You know, it's...
00:01:25
Speaker
yeah it's It's very exciting oh on what the world of possibilities with blockchain technology it and in digital assets. It's interesting that that this is an industry, you know a lot of industries I like to avoid any additional regulations or certainly over-regulation. But the fact that we really have we have no basis for no regulatory regime for this industry provides all kinds of uncertainty. And it results and ah in many of these companies that are...
00:01:59
Speaker
vastly growing and expanding around the globe, you know, to be located in other places other than the United States. and And so it's been great to be able to work with these organizations, to bring them to the bring them to the table, and and to hear from them there their needs for need for a regulatory basis that's really consistent with the priorities that that I had setting out on this. Number one, you know ah do no harm, that's protecting consumers.
00:02:29
Speaker
um That's pretty easy for me given my background coming out of healthcare. care ah But number two, that's let's make sure that we don't overdo things so that we can foster innovation. Because the world of possibilities for what's over the horizon in this space is very, very exciting. So very very glad to be with you to to to talk about this initiative today.
00:02:51
Speaker
Well, this is so exciting. And for our listeners, you know, just a little bit about the chairman's background. um Glenn G.T. Thompson is a lifelong resident of Howard Township in Pennsylvania and represents the state's 15th district in the U.S. House of Representatives.
00:03:06
Speaker
Now have family in Pennsylvania, Mr. Chairman, so I am pleased that you are representing them in such an amazing and wonderful way. ah ah He has been a proud member of the House Committee in Agriculture for over a decade, having served in a wide array of leadership
Agriculture Committee's Role in Digital Assets
00:03:22
Speaker
roles.
00:03:22
Speaker
And as our listeners, what's really important for me to tee up, because this is part of our conversation today, as the chairman, the House Agriculture Committee actually has wide responsibilities over the Department of Agriculture and the Commodity Futures Training Commission.
00:03:38
Speaker
And when we talk about the world of the CFTC and agriculture, think most of our listeners may not understand the critical role that the House Agriculture actually plays on things like commodities and derivatives when we talk about digital assets.
00:03:53
Speaker
So Mr. Chairman, tell us a little bit about the jurisdiction and the role your committee plays on these issues so our listeners can better understand the critical work that you're doing. Well, I'd be glad to. Norma, you're a sponsor. A lot of people are very surprised to hear that the Agriculture Committee would have a role now with digital commodities. But we do. it It's a historical basis. we ah The House Committee on Agriculture has jurisdiction over the Commodity Futures Trading Commission, or what we affectionately refer to as ah CFTC.
00:04:25
Speaker
And the CFTC is a market regulator. regulator Like its better known sibling, the SEC or Securities Exchange Commission. Now as the name implies, CFTC regulates markets.
00:04:39
Speaker
And in this case, the markets for buying and selling of ah but a financial product called ah commodity derivatives. um mean, there's a long history even. The CFTC was originally within the Department of Agriculture itself before it was...
00:04:54
Speaker
ah you know, set loose as kind of ah an independent commission. and And prior to that, i mean, we had been, our history has a long history, ah long history but long before we were a nation of of of of really futures and trading.
00:05:11
Speaker
I mean, just think about, ah you know, pre-colonial days when when the local wheat farmer would meet with the local baker, maybe under a tree at the edge of town. and And they would trade. they would you know The wheat farmer would need to make sure that they would have certainty on where their market is. And, of course, the the the bread man the bread baker, he he he couldn't really break back bake the bread without without the wheat. And so that was really the birth of ah of kind of futures, making sure that you had what you needed and doing everything.
00:05:45
Speaker
yeah in this space. And so, you know, many yeah many did, and and so it was corn and wheat and soybeans, and then sometime later much later, it included gold, things things like gold and oil.
00:05:58
Speaker
And then, of course, today in that space are digital assets. And many digital assets, ah which are native to a blockchain, are commodities. So as Congress is seeking to bring order um and really a foundational regulatory regime, not an overreach, but something that a company can have confidence of coming here so they don't get caught up of ah regulation by punishment, which is what we've seen the past couple years under the SEC in the last administration.
00:06:27
Speaker
um you know, that it quite frankly, the CFTC is the natural home to regulate intermediaries, which which really do facilitate transactions and and digital commodities.
Legislative Collaboration and FIT21
00:06:40
Speaker
And that foundation, I think, is so important for our listeners to understand. and and And then that example that you shared with us, it does really help level set when we talk about really the origination of some of these types of trades.
00:06:56
Speaker
And when we think about it in that way, right, very foundational, right? it is important to to have this distinction. And I think, as you mentioned, industry very much applauds your approach to just having rules of the road, right? That is important.
00:07:12
Speaker
um They should be outcome focused. And you've talked a little bit about how you think about those, and that's key. Now, last Congress, your committee and the House Financial Services Committee moved forward on a one-of-its-kind piece of legislation.
00:07:28
Speaker
And while we affectionately call it FIT21 an acronym for our listeners, that stands for the Financial Innovation and Technology for the 21st Century Act. That legislation really represented sea change in the joint approach between your committee, the House Agriculture Committee, and the House Financial Services Committee.
00:07:50
Speaker
There were tough issues you had to work through last year. And the fact that the House passed that bill on a bipartisan basis is amazing. But tell us a little bit about how you and the House Financial Services Committee work together to achieve a goal like this on a massive piece of legislation ah to introduce the same bill, to mark it up, and actually get it over the finish line.
00:08:14
Speaker
Well, we certainly broke new ground, ah developing a close working relationship with the Financial Services Committee. I mean, there is challenges and not, yeah people would be surprised of sometimes, you know, you get into turf wars of who's responsible for what, who has jurisdiction over what. So there are some some some things out there that we had to overcome, but but we did that in it and and we worked so incredibly well with the Financial Services Committee.
00:08:46
Speaker
And that started with personal relationships. And I do find that, you know, the secret to success maybe in any position you might hold, but certainly as an elected official in Congress, it's it's about relationships and networking. and And so, you know, first with Patrick McHenry, who was the previous chairman for House Financial Services, and now with French Hill, a fellow Eagle Scout and a good friend of mine, and Brian Stale, who was actually a chairman of his own right of the Administrative Committee, but he
00:09:18
Speaker
he He leads the the subcommittee in this space for financial services. I mean, their leadership on these issues really has been great and they've been great partners. I ah somewhat ingest, but somewhat truthfully, i I describe it as the we first thing we did was put together ah kind of a document, some things we could agree upon. i I called it the Geneva Peace Accords for committees that our two committees be able to work together.
00:09:48
Speaker
and and And it was incredible what we were able to achieve. And these are hard issues, right? This this is not the easiest topic to work on. And so but several years ago, I introduced a bill to expand CFTC's authority over institutions serving customers in the spot digital asset markets.
00:10:08
Speaker
But it was incomplete because it was household ag alone and really couldn't. you could only answer part of the question or solve part of the issue. Um, and so, uh, uh, you how SAG could create a framework at CFTC, but financial services had to tackle how to address the SEC's posture, you know, looking at assets basically as, uh, more as an investment, um, digital assets, um, assets as an investment.
00:10:38
Speaker
And, and, you know, and, you know, what, um, you know you know, tackle how to address SEC's posture, what limits SEC's jurisdiction would be. That was incredibly important.
00:10:49
Speaker
And so those were incredibly important questions and without answers to them, a market structure legislation was not going to work. So it really does take both our committees to really answer those questions.
00:11:00
Speaker
And both our committees were able to recognize that we needed each other to be effective and So in 2023, we started the process with that agreement, that Geneva Peace Accords with between the two committees, as I affectionately called it anyways, with principles on what we were going to accomplish.
00:11:17
Speaker
And it was important to put us all on the same page. And so today, we've really have built from those principles into a trusted, collaborative relationship between members and staff, on on both the House Agriculture Committee and the House Financial Services Committee.
00:11:32
Speaker
And for people who don't follow Congress closely, but just want to reemphasize how novel the level of cooperation between our committees is. but This should happen more often than than it does, but but it doesn't, unfortunately, because it typically is, you know, it's so hard to do.
00:11:48
Speaker
Well, I love that. The Geneva Peace Accords, I agree with you. You you achieved that last year. i know you're going to do it again this year.
Bipartisan Legislative Efforts
00:11:58
Speaker
And i end to your point, both for purposes of when Congress has to deal with really hard issues, having that working relationship that you talked about is is critical. It's critical to success. It's critical to outcomes.
00:12:11
Speaker
But it's also critical, I think, for industry and stakeholders to see that relationship working well. And it always gives us great comfort when we can see that there are synergies between committees and members and really to be able to make this as bipartisan and ah an effort as we can.
00:12:30
Speaker
Now, the piece that we very much would like to applaud you on, too, is that as both committees move forward, It was important to respect the jurisdiction of each, right? And we did that.
00:12:42
Speaker
And as we go forward for this year, we have a whole new approach in the Congress because we have a whole new administration, which in many respects might might help on some of these tough issues we had in the last administration.
00:12:55
Speaker
But in this new approach... you know, tell us a little bit about your vision for how, you know, this year, this month, you and the the House Financial Services Committee will work together, but also a little bit about how you're working with the Senate, right? Because the ultimate goal is we can get this through the House and the Senate and get it signed into law this year.
00:13:17
Speaker
No, absolutely. um You know, I best portrayed is the fact that from the from the beginning in the House Agriculture Committee, even before financial services got involved, we approached this in a tripartisan way.
00:13:31
Speaker
So that's Republicans, Democrats, and and quite frankly, that the industry, you know, the key stakeholders, the people who want to do business in the United States, because it's still the greatest place in the world in order to do business ah with traditional industries and emergency emerging industries such as those centered around digital commodities. And so we brought everyone to the table. We we put out a discussion draft that we left open for for months, for better maybe better part of a year, because we wanted everybody to come to the table.
00:14:07
Speaker
and um And we worked with the Senate, although it's really exciting in the hundred and nineteenth Congress, ah the doors that have opened up for the for working on the Senate. i I was immensely proud of the work that we did with FIT 21, but it was a project designed to address the failings of the previous minist administration.
00:14:25
Speaker
So as we developed FIT 2.0, We're working to simplify the legislation, to to make the legislation clearer and more precise. And so we're working with key parts of the Trump administration, ah in addition to the Senate, who are fully at the table. We're working with you know the acting chairman of CFTC, Carolyn Pham, we're we're the SEC commissioner, Hester Pierce.
00:14:52
Speaker
Or purse, I'm sorry. David Sachs, the White House AI and Crypto Czar. um And our process will be the same this year as it was last year, last Congress. You know, the Agriculture and the Financial Services Committee are going to continue to work together collaboratively and will continue to seek robust solutions.
00:15:11
Speaker
public input because that's how we make sure that we get this right by bringing the people who are ah who are most involved key stakeholders most impacted um you know including consumers right ah those who trade those who may invest to the table.
00:15:28
Speaker
um and And what is also new this year is really have now have a strong partners in the form of Senate Banking Chairman Tim Scott and Senate Agriculture Chairman John. That's exactly right.
00:15:40
Speaker
Mr. Chairman, you just ran through a so a number of really important points about the collaboration, not just between the House and the Senate, Dems and Republicans, but you talked about the integration of the executive branch and the SEC and the CFTC and certainly the White House working together.
00:15:59
Speaker
and And I do think that that's a critical point that's important as we go forward, right? Being able to have that collaborative approach with the executive branch and the Congress, which was a lot more difficult in last year, the last administration, i think will help you to achieve that great success you just talked about.
00:16:19
Speaker
And since Congress is off to a quick start, I love when that happens.
Innovative Blockchain Applications
00:16:22
Speaker
ah We know that you have a hearing coming up where you're really going to focus on some baseline education of members about these issues and topics.
00:16:31
Speaker
So maybe talk a little bit about the hearing that you have and what it is that you'd like to achieve. Well, our our our hearing is ah is next week is going to be great.
00:16:44
Speaker
Dusty Johnson, I was proud to appoint Dusty the chair of the subcommittee in this jurisdiction. he And he'll be holding the ah holding the gavel in this hearing. He's a fantastic member of our committee and has been such a leader for us on these issues.
00:17:00
Speaker
And the hearing is going to focus on digital assets and blockchains as tools that we can that can be used by entrepreneurs and developers really to solve real world non-crypto problems and ah to you know to bring a sense of reality of the utilization of of ah of these digital commodities and blockchain.
00:17:23
Speaker
You know, we've we've invited witnesses to share with the subcommittee about services that they're they're building, which blockchains and digital assets are helping to enable. And to me, this is an important part of the discussion.
00:17:35
Speaker
I see digital assets and blockchains as as tools and like any good tools they can be used to take actions but the action itself is not the purpose of the tool know and a simple example is a hammer pounds a nail but the purpose of the hammer isn't really to pound nails it's to fasten together pieces of wood and so similarly blockchains and digital assets allow people to transfer value between one another, but the purpose cannot simply be to transfer value. The value transfer should be in the service of some broader purpose.
00:18:09
Speaker
And so we're inviting people who are building new projects which resolve real-world issues for for real people. we We have two witnesses that I'd like to just talk about specifically, CattleProof and GeoNet.
00:18:25
Speaker
ah CattleProof is is putting the provenance and health records on the blockchain. And their ultimate plan is to enable ranchers to transfer the ownership of cattle through a digital record and use the digital record in a stablecoin for financing, sales, lending, and and quite frankly, other activities with their cattle.
00:18:47
Speaker
GeoNet is creating a community-owned enhanced GPS service powered by a network of antennas and sensors and connected it through a blockchain. So their witnesses will discuss how important the blockchain is to the operation of their network.
00:19:03
Speaker
Now, these are two projects of many where innovators are trying to utilize digital assets and public blockchains to solve real-world problems. And so um that is my goal with this particular hearing ah that we that we bring to life um yeah so that you know people can really understand the true meaning and utilization of the blockchain.
00:19:26
Speaker
That is so exciting. and And the piece that's so wonderful, too, is we know... There's a companion hearing with House Financial Services the same day. So that partnership you talked about between the two committees, you know, being able to move forward on the same day to talk about these issues, but but in a very bespoke way to your committee is just which is wonderful.
00:19:47
Speaker
And you touched on one issue that I just love to talk about. And you talked about blockchain really is that underlying technology that supports these different use cases.
00:19:58
Speaker
And as you said, we can use blockchain for a wide variety of issues. It is not always for ah a commodity or a security or a financial instrument. um We can use it for supply chain tracking or food safety or provenance on art and I know Avalabs and Avalanche actually uses it with a partner for crop insurance.
00:20:22
Speaker
And so I do think when we talk about blockchain as ah the next generation even of the internet or web 3.0, we have been spending a tremendous amount of time working with you and other members in Congress to try and explain just how blockchain works.
00:20:42
Speaker
And we'd love to hear your thoughts on how, maybe how better that we can do that. Obviously, your hearing is a big start. But sometimes when you talk about the technology, even trying to explain that blockchains can exist um without Bitcoin, right? Without a particular um financial instrument has been a little hard sometimes for some members in the House
Education and Public Engagement
00:21:07
Speaker
and the Senate. So how can we how can we do a better job in helping them understand this?
00:21:11
Speaker
Well, there are three specifically critical critical things that that need to happen, um and that would be education, education, and education.
00:21:23
Speaker
now Because, I mean, this this is this can be challenging. ah We've worked hard with our committee to our committee members and in the last couple conferences, Congress is to bring them up to speed. I know that Chairman McHenry and and now Chairman Hill is certainly doing the same thing within his committee.
00:21:44
Speaker
We've held briefings and we've held roundtables for members so they have the opportunity to meet and discuss the technology with experts in this space. And those have been very, very helpful.
00:21:56
Speaker
ah we yeah yeah The hearings like the one that we'll be holding, um are important because they explore issues and they build a record so that the public can also see what Congress sees. I mean, that's kind of exciting because when we when we do the hearings, we do it in such a public way. There's, you know, the people are able to either watch live or, but quite frankly, come back and and so through C-SPAN to be able to find that. So it's a it really is an educational toll for the general public as well.
00:22:29
Speaker
um and And by the way, after we do these hearings ah separately on the same day, where our plan is to do something joint with with the House Financial Service Committee. We've done that once before in the past. And that's my goal anyways. I hope that we can make that work.
00:22:45
Speaker
um yeah That was very beneficial in the 118th Congress when we did that. um And so, you know, there's... ah yeah Quite frankly, yeah there's there's nothing which replaces talking directly with members of Congress and their staff. And so I'd recommend that for all of your listeners to you know spend the time to meet their representatives and their staff members on this on these issues, which are important, and quite frankly, on all the issues which are important to them.
00:23:14
Speaker
And that doesn't mean necessarily coming to Washington. I mean, as constituents, you can meet with your representative in their districts as well, whether it's in community events or or just calling, making an appointment, come to the district one of the district offices to be able to sit down and to talk, but but to to put the weigh in.
00:23:33
Speaker
But it is important for your listeners to share their voices with members of Congress. and And that's wonderful. I like the the three things we need to do, education, education, education, and And we will continue doing that and we will continue to encourage others.
00:23:49
Speaker
But your point too, about ah making sure that people know they can talk to the members in the district is really important. And the piece I would recommend just to our listeners in general is the goal of working with Congress is to help them on the point that the chairman just made, right? Which is educate them.
00:24:07
Speaker
And we can't presume that that everyone understands the intricacies of new technology but that's the point because we need to talk about it in a way that everyone can understand.
00:24:18
Speaker
Well, one of the things that you have done such an amazing job in this discussion today, but every day, Mr. Chairman, is your focus on just having a clear, focused approach to fixing problems.
00:24:33
Speaker
And i will say, i i talked about my family in Pennsylvania I'm from Connecticut. We believe in pragmatism. And as you you think ahead as to how we can solve some of these problems, ah working with Congress, working with the administration and the executive branch, how is it, in your view, that that everyone can better work together to promote these policies that we need to encourage really what we're really focused on domestic investment in these technologies, keeping companies in the United States?
U.S. Leadership in Digital Assets
00:25:06
Speaker
Well, Norma, I think the biggest single thing that we can do really is is to provide clarity for how individual Americans can interact with digital assets of, you know, what can this tool achieve and how this tool can be utilized and to be able to have confidence ah in, you know, in, in, in,
00:25:28
Speaker
and and being engaging with this. Knowing the rules of the road, it really is essential for anyone trying to build a customer-facing service. And right now, there's just ah there was just so much uncertainty. And when you think about in the digital assets space alone, there's just, what, $3 trillion dollars or more ah around the world of of value.
00:25:50
Speaker
Um, we, we would like that to be based in the United States. Like you made reference to, the fact that, uh, web 3.0, I mean, America led on web, web 1.0, the internet of knowledge, web 2.0, which we we're at today, largely the internet of things and web 3.0, which is the internet of value.
00:26:10
Speaker
And we don't, um, there are a lot of countries competing for the space, uh, in Europe, in Asia, uh, China and specifically, um you know, some Caribbean nations that would love to love to sort of lead in this space.
00:26:25
Speaker
um But I think the world would be a better place and this industry would be more on solid ground if we make sure that that it's the United States of America that remains it at the epicenter of this. And that's going to take the work that we're doing ah right now. i also think that the work that federal regulators do, are doing to clarify existing law is critical.
00:26:45
Speaker
And Congress doesn't need to solve every issue. um A smart regulator with a good grasp of the law and its purpose really can make decisions about how best to apply the law to technologies.
00:27:00
Speaker
and And that's what I love about CFTC. They are a principle-based regulator agency. They're the commissioners. um And I recognize that they're political appointments, but I don't find these commissioners are really political ah no matter what what you know what party they maybe were appointed by or were what party they were part that they're a part of, they're practical and they're dedicated to principle-based leadership, principle-based decision making.
00:27:30
Speaker
um That's why I just really believe in the role of CFTC in this space.
Conclusion and Resources
00:27:37
Speaker
Well, Mr. Chairman, thank you so much for making the time to talk with me today to help educate our listeners on um really the amazing role and the critical role that you play, the Agriculture Committee plays, but to actually show that we can have committees and Congress work together with industry.
00:27:53
Speaker
And I know we have an active agenda coming up in the next few months, but I am excited for what we see happening together. So thank you for your time. And on behalf of Allo Explains and our listeners, thank you for all that you do.
00:28:10
Speaker
We hope you enjoyed our Hootenanny. Thank you for listening. For more hootful and hype-free resources, visit owlexplains.com. There, you will find articles, quizzes, practical explainers, suggested reading materials, and lots more.
00:28:25
Speaker
Also, follow us on Twitter and LinkedIn to continue wising up on blockchain and Web3. That's all for now on Owl Explains. Until next time.