William Quigley, Co-Founder of Tether and WAX, on Founding Companies, Crypto Investing, and The Future of Crypto Regulation | Ep. 218
TL;DR William Quigley is a cryptocurrency and blockchain investor who has incubated and invested in more than 30 bitcoin, blockchain, and cryptocurrency-related investments. He co-founded Tether, the first fiat-backed stablecoin and most traded cryptocurrency to date, GoCoin, a pioneering crypto payments processor, and WAX, a leading NFT blockchain platform. In this exclusive interview with cryptonews.
William Quigley, Co-Founder of Tether and WAX, on Founding Companies, Crypto Investing, and The Future of Crypto Regulation | Ep. 218
In an exclusive interview with cryptonews.com, William Quigley, Co-Founder of Tether and WAX, talks about the future of crypto regulation and the SEC involvement, and the current landscape of the cryptocurrency market.
About William E. Quigley
William E. Quigley is a cryptocurrency and blockchain investor. He has incubated and invested in more than 30 bitcoin, blockchain, and cryptocurrency-related investments and co-developed the first crypto derivative used to trade pre-release Ethereum. He co-founded Tether, the first fiat-backed stablecoin and most traded cryptocurrency to date, GoCoin, a pioneering crypto payments processor, and co-founded WAX, a leading NFT blockchain platform. In 2013, William co-founded Crypto Currency Partners, a blockchain equity investment fund with early notable investments in Coinbase, Kraken, Bitfury, Authy, ChangeTip, and Circle.
Before his involvement in blockchain, William was a venture capitalist, co-founding Clearstone Venture Partners, a $700M early-stage focused venture capital firm where he concentrated on communications and consumer technology companies. Before Clearstone, he was a managing director at idealab! Capital Partners (ICP), the world’s first consumer Internet venture capital firm. ICP was an early investor in some of the leading Web 1.0 era companies, including Paypal, Netzero, MP3.com, and Goto.com, one of the first companies to rank search results based on a bidding process.
William Quigley gave a wide-ranging exclusive interview which you can see below, and we are happy for you to use it for publication provided there is a credit to www.cryptonews.com.
Highlights Of The Interview
Companies launching a new start path to cryptocurrency and blockchain programs
The future of crypto regulation and the SEC involvement
The current landscape of the cryptocurrency market
The future of Stablecoin's impact on global commerce and financial developments
The spread and use of blockchain technology across other industries, such as Visa’s backing of the first-ever bitcoin rewards card, and why we’ll see similar moves in retail, telecommunications, healthcare, and more
How NFTs are influencing modern businesses
Full Transcript Of The Interview
Ladies and gentlemen, welcome back to the Cryptonews Podcast. We are buzzing as always, and I'm super pumped to have today's guest on the show. A true Crypto pioneer been in the space for a hot minute. A chiseled veteran, we have William E. Quigley, a Cryptocurrency and Blockchain investor who's incubated and invested in more than 30 Bitcoin Blockchain and Crypto related investments and Co-Developed the first Crypto derivative used trade pre release Ethereum. He Co-Founded Tether. Ever heard of him? The first FIAT backed Stablecoin and most traded Cryptocurrency ever. He also Co Founded GoCoin, a pioneering Crypto payments processor, and Co-Founded WAX. We all know WAX as well a leading NFT Blockchain platform. In 2013, William Co-Founded Cryptocurrency Partners, a Blockchain equity investment fund with early notable investments in Coinbase, Kraken, Bitfury, Authy, ChangeTip, and Circle. Wowza. Prior to Blockchain, William was a VC, a venture capitalist. Co founding Clearstone Venture Partners, a 700 million dollar early stage focused venture capital firm where he concentrated on comms and consumer tech. Craziness. This man has done it all. Pumped to have you on, William welcome to the show.
Thank you.
We got to go way back. How did you get into Crypto? I love asking my guests their Crypto inception story. You ran a massive VC firm back in the day. Do you remember that first AHA moment, that first person or where you read about it? And how did that make you feel? Give me all the emotions. I can't wait to hear the first story of how you discovered Crypto.
Well, I was trading digital assets many years before the invention of Bitcoin video game virtual item trading really started by my partner in 1998 with a video game called Ultima Online. That was the first large game, at least in the west, where there were virtual items that could be traded between customer accounts. And my partner created the first marketplace to allow for the safe buying and selling of those video game virtual items. That business grew. That industry grew. The secondary market for video game virtual items got to about 10 billion or so, and then it sort of plateaued. But many of the early people in Bitcoin initially and then Crypto overall were from that industry, were from the video game virtual item trading business. So I was in there. I sat on the board of that company that my partner had founded and learned a lot about the space. There were things we didn't like about it. One was of the thousands of video game companies out there, almost all of them didn't like customers trading the items for FIAT, and they would do things to make that difficult. We would typically find workarounds, but it was tough. And we had lawsuits and whatnot had to deal with a lot of things to try to allow people to do this. So you would think that something like Bitcoin initially, I would have been very responsive to, but I wasn't initially. And the reason is because of something all venture capitalists have to deal with, which is the scar tissue of prior deals. And concept Internet money was really. Started in the 1990s after the consumer Internet took off, and there were companies like Beans and Flus. Those names would probably mean nothing to most people under the age of 50, but these were the early attempts to allow for Internet money, digital money, to work. I didn't fully understand why they didn't work, but they didn't, and I kind of soured on the idea at that point. I said, you know what? Probably FIAT is the best way to go. But the reason we all wanted to do this in the late 90s was because to become an authorized credit card merchant as an e-commerce company was very hard and ridiculously expensive. You might get charged 10 to 14% of the transaction as the merchant in order to use a Visa or Mastercard. So prohibitively expensive. And this is why my partner and I were the first institutional investors in PayPal, because we're like, look, maybe emailing money back and forth using ACH systems, which were very cheap, to give you a sense of how cheap, because the ACH network is a cooperative. The membership financial institutions just pay for basically the operating costs of that. It was a penny to less than a penny to conduct a transaction.
Wow.
So even though people were reticent back then, believe it or not, to use their credit cards online, the cost was so attractive that people started to use PayPal. And even to this day, I have to say the adoption rates in the early two thousands of twenty thousand, twenty five thousand new subscribers a day, even 20 plus years later, that's very good. I mean, that's what PayPal was doing because there was no other way to do it. But you always had this issue of chargebacks with PayPal and fraud because it was using a traditional banking system. So to accelerate this, how did I ultimately then, even though I was reticent about magic internet money deals, why was I attracted to Bitcoin? My partner, after he sold his video game virtual item marketplace, he started kicking around things. And right around that time, the Satoshi white paper came out. He was very interested in it. He started to mine early and was probably a decent sized miner by 2010. And we always worked together on stuff, but I didn't want to do anything with Bitcoin because I kept thinking, it's going to fall apart like the other early attempts did. And then a gal who was a friend of ours was in Singapore starting another video game virtual item marketplace, and she said, would you come over and kind of help me out? So I flew to Singapore, and it was actually on the way back to the airport, after some period of time when I was there, she asked me, hey, so what do you think of Bitcoin? And I thought on the flying home, I thought, these are two people I respect now who are telling me about this. And that registered with me. Consumer focused venture capitalist. When things start to percolate among a smart group, maybe this is a phenomenon you should pay attention to. So I got back and I said to my partner, I'm going to give you 2 hours, because he kept bugging me every few months. I'll listen, and it's either thumbs up or thumbs down. And we really focused on the Blockchain at that point. And you got to understand kind of, nobody was talking about Blockchains back then. And I really wasn't aware of one magic principle of the Bitcoin Blockchain, which was to pair it with a token. Blockchains, by the way, in some form have been around for, I think, hundreds of years, but certainly we didn't call them Blockchains, but we used this hash totaling, to verify that nothing in a database had changed. We were doing that in the mid 80s when I was a bank auditor. So the concept of what the Bitcoin Blockchain did was familiar with me once I got educated about it. But it was marrying it with a token that was really the magic, because that allowed for a distributed workforce to maintain this thing, which is what allows for decentralization the ability to compensate a group of distributed, even anonymous workers through this creation of a token. Then the only thing that would be needed is, of course, ascribing value to it. And I think I probably speak to most people when you ask about the emotional side, because after my partner got done, I gave him 3 hours. I just changed everything from that day. I got off my non Bitcoin boards within a couple of weeks and I said, okay, this is what I'm going to be focused on for, I thought three or four years. It's been, whatever, twelve years now. We created a roadmap. That roadmap went through really very solidly through 2021. I thought it was a three year roadmap, but it took longer to do things. All the learnings we had from the first days of the internet, we simply applied to how Crypto would likely roll out. It did roll out in a similar fashion. It just took many times longer. We can talk later if we want about the reasons. And the biggest emotional element I can remember going back more than a decade was the first time I got paid FIAT for it was either I think it was Litecoin that somebody paid me FIAT for it. That really kind of fired off some synapses in my mind, even though, of course, we're all doing this, thinking this has value. There's something about that first transaction for my partner, because I asked him at the time, like, when did this really feel so emotionally strong to you? And he said when he started buying computer components using Bitcoin. And when he started to do that, he realized, wow, there is a community out there that will accept this as value. And I don't think anybody who has used Bitcoin and Tether and other things since to conduct a real world transaction. I think all of those people get hooked. If it's just on an exchange and you're trading it, it's very different than when you actually use it to do something like a purchase or a transaction. That's when I think it really hits you that this is novel and there's elements to it that don't exist in any other sort of payment system.
That was a world class spiel. Thank you for that. And so true. I'll never forget the first time I had to pay someone or receive payment in Tether Bitcoin. And you're like, holy shit, this is real. This isn't just sitting in my account. I'm not just watching the number hopefully go up or go down. This has some oomph to it. It's almost tangible. Like, obviously you can't feel it, but you sort of can feel it. It's pretty darn cool. I'd love to get into Tether. Obviously I'm rocking the Tether hat. I'm a big Tether guy. And funny story, when I'll wear this in Toronto, or heck, why wear this in Playa del Carmen here in Mexico, people will stop me and be like, Where did you get that? I've never seen a Tether hat. Shout out Paolo. I've had him on the pod twice. He sent me this hat. I love this hat. It's incredible. But it is a conversation starter. I'd love to get, like, a Tether golf shirt or actual shirt. Yeah, but story for another day. But walk me through the inception story of Tether, and I know you have released a bunch of pieces recently and have been very vocal about the future of Stablecoins and how it will impact global commerce and financial development, so on and so forth. I'd love for you to go on a nice little rip about Tether and Stablecoins.
The concept of Tether really originated after we had used Bitcoin for a few years. This is like mid 2013 and Litecoin and some of the other coins that were forks of Bitcoin. But we really understood that the issue was it took roughly ten minutes to settle a transaction and it could move during that time. And as a vendor, if you wanted to accept Bitcoin, on the one hand you'd say, well, it's no different than taking a multitude of different currencies. You might accept the euro, the pound and the dollar if you're a European merchant. But the amount by which those currencies move vis a vis, whatever anchor currency you have, maybe you do everything in euros, the dollar versus the euro or the pound within ten minutes, it barely changes.
It's negligible. Yeah.
You know, so it's pretty much the same as taking the native currency. But this was not true of Crypto, Bitcoin or anything else, and so a lot of merchants were reluctant to take it. So, our thinking was, wouldn't it be nice if we could stabilize it? Part of what we did GoCoin with GoCoin is a payment processor that allows merchants to accept Crypto. But what we would do is we would take the Crypto and we would give the merchant the FIAT, right. So we would take that risk, but clearly that was going to be an issue for people. This is why one of the many reasons why Bitcoin really failed to deliver on its initial promise. I think it does wonderful things in other areas, but it was initially designed to be a payment system, and it really, by any measure it has failed. It's not a great payment system. Merchants like to know what their fees are going to be. They negotiate these in advance and multi year contracts. When they deal with payment providers, the fees are whatever no one knows, minute by minute. So we knew that it wasn't great, but maybe there would be something else that would be useful, or we could do a way to the original idea was, how could we have a token that didn't move? And ultimately, like most people, we would arrive at, well, it would have to be anchored to something, and it seemed logical that it should be anchored to the US dollar, because all currencies are tied to the US dollar globally, and the US dollar is the most common cross border method for settling transactions. So we said, all right, that'll be how we'll do it. Now, just going from there to actually implementing it, there not enough time to do that. But banking was the core issue. It was the core issue ten years ago. It remains the core issue. Banks at the time, they weren't necessarily anti Crypto. They were just unaware of Crypto. And so when we went around to the banks and said, here's an idea, we will give you a quantity of deposits and we will likely never reduce those deposits. In the banking vernacular, this would be core deposits, you can keep those, we're just going to have a digital asset that's linked to those, so that we don't have to be burdened with the whole swift network and moving currency back and forth. And the vast majority of banks just had no interest in supporting it. So it's very hard to get that done. The other reason we were so wanting to have a token that wouldn't move vis a vis the dollar was because we were doing a lot of trading at the time. Now, there weren't many places to trade the exchanges, just a few of them, but it was a very complicated process. So briefly, I'll explain it to those who weren't. Like around ten years ago, there were a few, maybe three exchanges globally where you could deposit FIAT and buy Crypto, and generally you could buy Bitcoin and maybe Litecoin, Namecoin, but very few others. Right? So the action really wasn't in buying Bitcoin, though, it was in getting into these, what we called at the time, Altcoins, I don't even know if that term is used anymore, but basically non Bitcoin, that's what most people wanted to get into. But these FIAT based exchanges didn't really trade those. So what you would do is you'd wire money to an exchange, then you would use that cash once it hit to buy Bitcoin. Then you would take your Bitcoin, leave that exchange, and go to what we called Alt exchanges, where the places where most of the interesting tokens, new tokens, are being traded, but no matter what, every couple of weeks. You'd get nervous and you'd realize, you know what? I'd like to either maybe get back into something like Bitcoin or heck, even FIAT. But how do I do that? Well, you'd have to take all of your Altcoins, sell them for Bitcoin on that alt exchange, then transfer that Bitcoin back to the FIAT exchange, sell that Bitcoin for FIAT, wait a few days to get that money into your bank account, and by that time, you wanted to get back into Crypto again. So you would reverse that process in order to find a safe harbor where you didn't have exposure to the volatility of Bitcoin and the Alts, you had to get in the FIAT. And it was very painful to do it.
That's absurd. That's absolutely absurd.
It was tough. And so our thinking was, well, what if there was a token that the Alt exchanges could actually hold and allow you to trade against? That didn't move. And I think it's worthwhile I've been a VC now for 30 plus years, and I think it's worthwhile telling your listeners that things that seem obvious to us often are not obvious prior to the invention of those things. So no one had ever thought of a Stablecoin. If anything, they were shunning the idea of FIAT. So linking something to a FIAT would have seemed very strange to them. But that's because a lot of the people who were developing and this still exists, by the way, a lot of the developers of Blockchains and Cryptos are not traders. So all great businesses come from Insight, and Insight is the rarest element in the universe. Deep insight is so hard to come by, but it only comes to people who are deeply into a thing, and then they notice something from the outside seas. So we were trading a lot, and we felt this pain and thought, well, if this is a pain for us, it's probably a pain for others. Let's figure out how we can get this out there. The part that might surprise some of your listeners, particularly those who arrived into Crypto after Tether was invented, and then other Stablecoins were around most of what the reaction we got from Crypto people forget regular people, but Crypto people was just a blank stare or just scratching their head. They literally didn't understand it. And just like you and I can say, how could people not have understood the concept of a wheel before the wheel, right? That's just how things are. So it took over a year to explain this to people, they just didn't get it. And I've been in this position many times, so I kind of understood it was going to take a while, but I would tell people just whenever you're feeling a little nervous, there were a few exchanges that were using Tether at the time. Just trade your Crypto for Tether and see how it works. Now, once they used it, just like once you spend money with your Crypto and buy something, initially, the volumes were tiny, tens of thousands of dollars of Tether trading a day. So you actually couldn't if you had a large position in, let's say, Bitcoin, you couldn't very easily get into Tether and be there safely. It would take several days to get in, and it would take several days to get out, but it was still better than nothing. And probably 2017 when the ICO boom happened. I'd say that was probably when I started to see people really start to grasp the value of Tether. It took several years. But as you said earlier, Tether is now the most traded Cryptocurrency on earth, somewhere between 30 trillion and higher of Tether trades per year. Tether settles against, I would say roughly 60% of all trading pairs settle. One of those trading pairs is Tether. So more than half of all Crypto trading is against Tether.
Did you ever think it would be this big? Did you ever think that it would be the trading pair that accounts for 60% of all trades, 30 trillion? You knew it was going to be this big.
I guess I didn't think of percentages, to be fair, but what I thought was this will be an indispensable tool for anybody who's trading and this might also for your audience, that might not be obvious, but the vast majority of trading of Crypto trading globally is arbitrage and arbitrage is riskless profits. I think that term is misused many times because it's not so riskless. But the vast majority of trading are bots trading against different Cryptos to try to book what they see as a profit potential. The only way to know whether or not you actually made a profit is for one side of the trading pair to be stable. Because if you're trading two floating, you saw a little vig, you went to try to capture that vig in a trade. But both things are moving, so and that anchor today is Tether. Privately issued Stablecoins, which are the only issued Stablecoins today, are just an indispensable part of all Crypto. And of all the things that I would say worry me. It would be if regulation down the road were to restrict the issuance of privately issued Stablecoins. Because if tomorrow Tether disappeared, USDC disappeared.
Crypto is done.
A 75% drop in Crypto trading and maybe an equal decline in the value of all Crypto. So this is a badly needed thing, particularly when if you're a US person, you've already lost access to the three most important banks that were comfortable banking Cryptocurrency businesses Silvergate, SVB and Signature. So more and more, if you want to hold some portion of your Crypto in a stable way, Tether is necessary. So I don't know if I would have thought the vast majority of trading pairs are against Tether, but I certainly thought it would be very important Crypto, once people became educated about it and started to use it.
That's just absolute bananas. William, again, it's just something that all of us use every single day. It's incredible. Got to take a quick break. You just brought up regulation. We're going to get into that rate when we come back, but we got to give a huge shout out to our sponsor, the show PrimeXBT. Our team at Cryptonews loves PrimeXBT as they offer a robust trading system for both beginners and professional traders. Doesn't matter if you're a rookie or a vet, you can easily design and customize your layouts and widgets to best fit your trading style and even rip some trades with good old Tether. The company William created and the hat that I am currently wearing, if you want to get 50% of your deposit credited to your trading account. We have a sweet promo code. It is CRYPTONEWS50. That is CRYPTONEWS50. All one word to receive 50% of your deposit credited to your trading account. And now back to the show with William. William, let's get into Crypto regulation and the SEC involvement. We are recording towards the end of March. This episode will also air towards the end of March, early April. We are in an absolute shit show right now. We have SVB, which has gone cahoots. We have Coinbase getting sued. I believe it's some type of suing from the SEC. No bueno all around. If you're a Crypto friendly bank, they're coming after you. You've been in the space for a while. You know what's going on better than most of us. What is going on with Crypto regulation and the SEC involvement present day?
For several years now, the Trump administration really started scrutinizing Crypto Minuchin, the US Treasury Secretary was not really a friend of it. He didn't like it. Not surprising, he's a part of the Wall Street establishment. He was a partner at Goldman Sachs. The incumbent financial institutions have never really embraced it, and this trend has continued under the Biden administration. I would say there's probably three areas in which the various federal agencies the CFTC, that's the Commodities Futures Trading Commission, the SEC and US Treasury overall have been looking at it's around exchanges, lending and Stablecoins and other tokens. So in the case of exchanges, this regulatory scrutiny accelerated after FTX collapsed due to fraud. But it was already an area where they were looking closely. There's a turf battle going on that a lot of your listeners are probably aware of, and it is, I've been around a long time. I started as a bank auditor in the 80's. I've watched the US. Regulatory apparatus become greater and greater, expanding into every aspect of our lives. But regulatory scrutiny is no greater than a financial system. And a big part of that was boosted after 911 when the US Congress passed this abominable piece of legislation called the Patriot Act, which basically gave US Government all kinds of reasons to just eliminate things they don't like. So I really am not a fan of that. Then you had Dodd Frank legislation after the financial crisis and 2400 pages of regulatory guidance, which has expanded into tens of thousands of regulations that the various federal agencies now follow. But we have this crazy situation that I don't think has precedent in the United States when it comes to an industry where there's four different federal agencies that have been trying to claim dominance from a jurisdiction standpoint. You have the IRS, who already deemed all Crypto property. And if you're a US. Citizen, you're taxed as though it's property. You then have the Commodities Futures Trading Commission, who say, you're wrong, IRS. It's not property, it's a commodity and that comes under our jurisdiction. The SEC says no, it's not. Commodity. It's not property. It's a security. And therefore we're responsible. The US Treasury says, all three of you guys are wrong. It's clearly a currency. And then that comes under our purview. The way these turf battles have historically been adjudicated is the US Congress actually creates a set of rules and designates one body to oversee and police a sector. But for reasons that I'll never understand, they just ignored it. They ignored it for a decade plus. And then we had some awful things happening in 2022 where a cascade of a very poorly designed Stablecoin Terra Luna that went down and that pulled down really principally all of the irresponsible Crypto lending platforms Voyager and Celsius and Genesis and then all of that the capstone of that was the exchange that so many people were celebrating. And the person they were celebrating, Sam Bankman freed and FTX went down as a result of massive fraud. So I think that really sharpened Congress's disposition at the end of 2022 to do something soon. And the treasury was already working for several years on a central bank digital currency that's got really sidelined for some unexpected reasons. But I wondered always whether this would be trying to push out privately issued Stablecoins, which I think would be a bad idea, or whether they would play nice. And mostly a central bank digital currency would pretty much just replace the Swift system and maybe be invisible to most of us. That's still a question mark, but. No question. After the events of 2022, the fraud and the mismanagement that we saw in the centralized Cryptocurrency businesses, congress really decided they were going to do something. And anytime Congress works, from a reactionary standpoint, it generally isn't good. And so I have my concerns about what legislation we might see, but it appears they're going to more tightly regulate the exchanges. Part of that will be what things they can trade. The SEC has already notified Coinbase and others that a lot of the tokens that Coinbase trades are, in their opinion, securities. The lending companies, most of them are gone. BlockFi, a bunch of others Celsius, Genesis, they went down, they lost people money. So they kind of opened themselves up to be policed by some federal agency, whichever one is going to ultimately be designated by Congress. And then you're even getting the SEC now to look at staking and whereas the IRS, the taxing agency in the United States has said it's basically a work product and it's not a security, the SEC wants to turn that into a security, which I have a lot of problems with. You mentioned Coinbase getting sued. Unless something's changed this morning. They haven't been sued, but they were issued a Wells Notice by the SEC, and a Wells Notice is a regulatory process where a company gets notified that the staff members of the SEC who have been investigating it are going to recommend that the enforcement division of the SEC file a lawsuit against it. And the General Counsel of Coinbase has responded to this and has said, look, we did 60 meetings with the SEC over nine months. That's like one and a quarter meetings or so a week. What the hell? We gave them everything they wanted to give. We were cooperative. This is a very typical pattern. And the SEC still says, hey, we're going to recommend we sue you.
Hammer is coming down.
I'm glad that the CEO of Coinbase, Brian Armstrong, has said he's going to fight this, because in the absence of congressional guidance and black and white regulation, the only thing you can do is basically regulate or figure out how to operate as a company via lawsuits from federal agencies, which is a terrible way to create policy. But it's policy by enforcement actions of these different regulatory bodies, which is not fair and very inefficient. And frankly, in a divided Congress, with the Republicans controlling the House, the Democrats, the Senate, I don't know if there's going to be much movement from Congress this year. But I think we're all on notice that as a result of all of these big failures in centralized businesses, they really have nothing to do with Crypto. We're going to see the agencies flex their muscles. And so I think that's a bad thing for US based Crypto companies and it will just push more of the development of this worldwide open source software movement that we call Crypto into other jurisdictions that are more friendly. That's ultimately, I think, the negative consequences to the United States under the current approach that the government has towards these businesses.
Huge massive squandered opportunity from the guys and gals up top and the legislators. It's truly a shame. And same with my country, Canada. We're usually in the same yacht together when it comes to anything policy related, and we usually just follow what you guys do, and it's just as bad, if not worse, up where we are. So it is what it is.
So with Stablecoins , which there is I think I did a video about this at one point when Mark Zuckerberg was presenting his Stablecoins project Lieber, to Congress. I was so annoyed because you potentially had the worst spokesperson for a Stablecoins in history talking to Congress about it. And Congress, the members of Congress on that committee, were not aware or were not informed about what it really meant to be a Stablecoins. So they were thinking this was a way for this company, with two and a half billion users, to replace the dollar, when in fact, the real point was to make the dollar stronger by wrapping it in this tokenized envelope that would allow the dollar to move much more efficiently at much lower costs. And most importantly, the greatest benefit that Tether brings is the cost none of us really account for, which is currency conversion costs. There are roughly we're roughly in an $80 trillion global economy annually, and of that, about $1 trillion annually is consumed or paid for by businesses and consumers in currency conversion costs. These are invisible when you pay for an item in the United States in dollars and you're buying from a German ecommerce company, and that German ecommerce company really wants things denominated in euros. There is a conversion of those things. And during that conversion, there are FX foreign exchange traders who are making a profit from that. It's a huge tax globally on really all things that move cross border. And Tether and other Stablecoins allow you to literally never have that expense. So that would mean the businesses and the consumers always. They keep that trillion. That was a message completely lost on Congress when Zuckerberg was talking about his project. But when it comes to central bank digital currencies, something that I was not expecting, it started really percolating last year, was the social media conversations that started to percolate up about the evils of a central bank digital currency. So there are elements within the social media ecosystem that believe digital currencies, central bank digital currencies are something about like a global conspiracy to have a global government that controls everybody. And once they have a central bank digital currency, they'll be able to do bad things to you. Now, it's true that there'll be more visibility into transactions because every token will have its history of where it was. But for those of us in the business of payment processing and moving things cross border, we know that the international regime for money movement is so restrictive anyway.
They can shut it off at any time.
This was the whole point of the Patriot Act to strangle the ability of bad guys to pay for things in order to do bad things. And I don't think central bank digital currencies do that much more than what. Governments can already do. But it's been so pronounced, this reaction, that it was unexpected by me and, by the way, not expected by the US Federal Reserve. I know this because Chairman Powell mentioned it last year, and he said, I forget the exact phrasing he used, but it didn't sound great. It was something like, we're going to take some time aim to educate the US public about the benefits of central bank digital currencies. That was in direct reaction to what they were seeing as this upswell of concern that somehow the central bank digital currency was going to be part of a surveillance state. And I don't deny that you can. Obviously, if all movements are recorded on a Blockchain, you've got a lot more visibility than you would if it's all distributed among thousands of banks. But it's just an incremental increase in the surveillance that can be done, because banks are already required to file SARS suspicious activity reports, of which they file tens of millions for any transaction over 10,000 and sometimes below 10,000. So the US government already gets access to this information anyway. And what we need to do is we need someone. I try, but I don't have a big enough loudspeaker to educate the public about how phenomenal digital currencies are, how excellent they are for managing your costs, for merchants to be able to avoid chargebacks and such lower transaction costs, faster settlements. All these consumers want.
William, who do you think is doing the best job right now with that? Who do you think is our best spokesperson at the moment?
I would say there's some very smart people out there. Okay. But I don’t think any person has that soapbox that's broadcast like an Elon Musk style microphone. I have to remind myself all the time that the whole point of Blockchain is to decentralize centralized authority control. So it's not surprising we don't have these aggregation points where there's a body that speaks on our behalf. You've got different not for profits that are sort of like trade associations, which is typically the way the industry communicates to policymakers in the US. You form trade associations, you educate the staff members of the congress, and then they process it and go, okay and then they come out with policies that are more sensible. At least that's the goal. There's not a unified voice, and it's really hurt the Blockchain industry. It's hurt it a lot. We saw this when the infrastructure bill, which was like 2021, was getting debated. Congress decided to plug a hole in the infrastructure bill. There was like $30 billion they needed to plug, and they just said they'll do that through greater enforcement by the IRS for tax compliance. And I don't believe there's much non compliance with Crypto by most people. The whales all have who own most of the tokens and do most of the trading. They all have public accounting firms they work with, and then the individual consumers, they're going through exchanges that report. So I always thought it was wrong to think there was a lot of underreported income, but we weren't able to really put that argument forward because the industry. Didn't have a central platform to communicate from, and it remains the problem. There's a lot of smart people in Crypto, but they're not necessarily speaking to policymakers.
Well said, William. We're getting tight for time now, and this has been an absolute treat. Last topic I'd love to go over is the spread and use of Blockchain sort of as a widespread tool across a multi suit of industries. We've seen Visa backing the first ever Bitcoin rewards card. You've been on the record saying that we will see similar moves in retail, telecoms, healthcare, and more. And we also have NFTs that are really moving and grooving and influencing a multitude of different modern businesses. Don't have a lot of time left, but I'd love you to go for a rip and give us some alpha on these topics.
All right, a few high level thoughts. So Blockchains are the worst possible way to do virtually anything. That's just a fact. They're a highly specialized type of database, but it's a database that has these very magical elements to it that make them better than anything in a very narrow set of functions. And so I think there's been a lot of hype about how prolific Blockchain would be that leads us into Web3 kind of nonsense, frankly, Metaverse nonsense that, if anything, I think we do ourselves a disservice by trying to say Blockchain solve all these problems that exist in technology or Internet, when in fact, the problem they do solve are enormous and there's no equal to what a Blockchain can do in those areas let's just focus on that. So with that as a caveat, we can take one area, NFTs, I think NFTs, obviously, they. Were introduced to the public in the mass market way in 2020. I remember when we Wax, we did an NFT of Garbage Pail Kids, which was this 1980s trading card thing that the tops trading card company did. Those sold out like in a day and they were just standalone cards in a pack. And up until that point, everybody thought NFTs had to be part of a video video game. And we knew at Wax, we never thought that. We thought these things would trade the way virtual items and games trade outside of the game itself and like skins do. So as a technology, I think there's a great misunderstanding of what NFTs can do. NFTs are literally virtual machines that can be transmitted back and forth, where they have this amazing property of the ability to inspect all the underlying code in that thing. That makes them super powerful. Which is why I think the majority of industries globally will incorporate NFTs in their business in some way over the next five years or so. There will be some industries like augmented reality, if you want to call that an industry. The augmented reality industry, as it grows, that will I think its principal revenue model will probably be around NFTs, not just the device sales. So industry also has not yet tapped into the fantastic benefits of a Blockchain for transparency into supply chains. And I think the COVID Pandemic, and then all the worries about are we going to get the supplies? We have really put a spotlight on the problems with extended supply chains. And so all the information that are in all these dozens of partners that work together to create a product, I think that should be and it can be a private Blockchain, but one where everybody can inspect who's part of that consortium. That's a huge value. Clearly, things like identity. When I was a kid, our driver's licenses in California were paper, so if you were good with an X-Acto knife and a pen, you could change your date so you could buy booze. Lots of people did that. You can still kind of make fake identifications you can't ever edit an NFT. So it's a great thing for identity. There are a lot more than pretty pictures or snips of video or music, but it's going to take time. That's one of the things about Blockchain things. It takes a lot of time for businesses to integrate it, because it's a very foreign concept what Blockchains allow you to do. So I have great confidence. We'll see a lot more Blockchain technology integrated across industry, but it'll be over some period of time. It's not going to be as fast as the Internet. The consumer internet was adopted.
It's going to take a little bit. William, you absolutely brought the heat this episode. This was incredible. Really appreciate you coming on. Before we let you go, can you please let our listeners know where they can find you, Cryptocurrency partners, you have so much stuff going on, WAX, Tether, everything plug a couple. But where can everyone find you and your endeavors online and on socials?
Well, at wax.io, that's the place where a lot of stuff gets published around that Blockchain, which is focused the first Blockchain focused on Blockchain based gaming and NFTs. My Twitter handle, @WilliamEQuigley I have to tell you, I don't publish a lot. I speak a lot to people like you. I'm in a lot of WhatsApp channels and Telegram channels, but I probably don't do as much communication on social media, on YouTube. During the Doldrums 2018 2019, when after the ICO boom and bust, I did a lot of videos. I probably did 50 videos about different areas of Blockchain. There were very short videos, which by the way, much harder to do a short video than this long video. But you can find that at wax.io or Wax on YouTube or you look for my name. There's a lot of those videos where you can kind of you'll basically get a sense of my points of view on things. And I talked to a lot of media and press, so Financial Times, CNBC, Bloomberg, CoinDesk, Cointelegraph. So I share my opinions pretty regularly in all of those types of publications.
Letting a ride. I love that. William, thanks again man. Really appreciate it. Would love to have you on for round two. We barely scratched the surface. Heck, we could have done a 24 we could have done a 24 hours pod. Next time we'll schedule a good one, we'll do a proper Joe Rogan three hour banger and we'll have the waters and coffees rolling for a full 3 hours.
Sounds good. Thank you.
Folks, what an episode with William Quigley. He absolutely dropped the noise. Tons of crazy stories from back in the day, founding companies that we all know and love like Wax and Tether. If you guys enjoyed this one, I hope you did, please do subscribe. It would mean the world to my team and I. Speaking to the team love you guys. Justas, my amazing sound editor, appreciate you as always. And to the listeners, love you guys keep on growing those bags and keep on staying healthy, wealthy and happy. Bye for now and we'll talk soon.