5 questions for Kraken’s Marco Santori

Happy Friday, readers — for this week’s questionnaire we feature Marco Santori, head of legal for crypto exchange Kraken. Santori is a crypto legal veteran, having worked (among other things) as Blockchain.com’s Chief Legal Officer, a digital currency law firm partner at Cooley and Pillsbury Winthrop Shaw Pittman, and an advisor to the International Monetary Fund. Here he discusses his view of crypto as freeing people from traditional financial institutions, his distrust of central banks’ digital currencies and a bit of Ursula K. Le Guin.

The answers have been edited and condensed for clarity:

What is an underrated big idea?

The power of exit. In a world of fiat currencies and legacy finance, there really is no output power. You must use centralized intermediaries. The only real exit force left is to leave the world of banks and money transmitters, and check boxes, for cash – from electronic to paper and metal.

That is not the case in the world of cryptocurrencies and blockchains. People can go out of centralized intermediaries like Kraken, they can take care of themselves. They can use private wallets. They can use DeFi, where there is no central intermediary. That output power is not our output power as a company, it is our users’. If our users don’t like what they get from us, they can go and do everything we do somewhere else.

What is one technology that you think is overhyped?

Central bank digital currencies. I believe that they are the straightest and shortest way for authoritarians to decide what you can and cannot spend your money on. I do not think FedNow is a central bank’s digital currency. It strikes me as a reasonable and, frankly, necessary upgrade to the existing federal service, and a competitor to a central bank digital currency. In fact, the better commercial banks can operate, the less use there is for CBDCs.

Which book shaped your perception of the future the most?

Ursula K. Le Guin’s “The Dispossessed.”

It’s a wonderful book, not because it paints a picture of future technology or future politics, but because it describes a constant in the formula of human interaction, which is that there is no such thing as communism, or capitalism, or inclusivity, or THEY . , or the culture wars, it is only the accretion of power, which transcends politics and left versus right.

In the book, it is an anarcho-communist society that holds its values ​​high, and in stark contrast to the other worlds you can travel to in this book, which are capitalist or feudal, or any other political or economic structure. The message that the book gave me was that none of these differences really matter. At the end of the day, the protagonist faces the same challenges, and the people around him face the same challenges, the same struggles, and the same successes, solely because of the rise of power in governments, individuals, and groups.

It’s a hyper-realistic view of what the future is likely to bring because that’s exactly what the present is.

What can the government do about technology that it isn’t doing?

Adopt safe and sensible framework for the crypto ecosystem. The administration’s approach to crypto today is disorganized at best, and at worst has left regulators not only running amok, but fighting each other for territory and jurisdiction. No one has won. Not even the regulators have won from it. But those who have lost the most are those who build, innovate and use blockchains.

What has surprised you the most this year?

China reopens to crypto. As it consolidates power over Hong Kong, it has allowed the Hong Kong Monetary Authority to license crypto companies, and the HKMA has in turn begun mediating relationships between crypto participants and banks in Hong Kong.

This is just one example of the US ceding control of cryptocurrency innovation to its global competitors. The next Silicon Valley at this rate will not be south of San Francisco, it will be south of Beijing.

If you couldn’t get enough of Miami’s crypto-loving Mayor Francis Suarez in yesterday’s DFDPOLITICO’s Sam Sutton chatted with him for today’s morning allowance newsletter about his pro-business blitz aimed at helping the city compete with NYC, Chicago and San Francisco.

“I’m very into signals,” he told Sam. “When New York won [Amazon’s] HQ2 award and said, ‘No thanks,’ it wasn’t necessarily about the 50,000 jobs they lost, right? It was about the signal.”

In a extended interview for Pro subscribersSuarez went even deeper into the city’s “signals” as a crypto hub, saying that despite the chill surrounding the industry right now, he wouldn’t have it any other way.

“The whole world is migrating towards an increasingly digital economy … We’re looking at the trend of where the world is going, and we’re trying to position our ecosystem to take advantage of that trend so that our citizens have the best chance for prosperity,” Suarez said. “It is why it includes things like quantum, things like AI, things like crypto, because there are new technologies. Some companies will succeed, some companies will fail, but by and large I believe technology will revolutionize not only the country, but the world.”

One of technology’s biggest thinkers has weighed in on the AI ​​boom, say that humanity needs to get over the dream it inspires and think about how it affects us now.

Writing in the New Yorkercomputer scientist, Microsoft “Prime Unifying Scientist” and all-around guru of all things futuristic Jaron Lanier writes, as the headline provocatively states: “There Is No AI” – just another computing tool that can be just as powerful in the world. , or harmful and irresponsible, like those that came before it.

“The most pragmatic position is to think of AI as a tool, not a creature. My position does not eliminate the possibility of danger: No matter how we think about it, we can still design and operate our new technology poorly, in ways that can harm us or even lead to our extinction,” writes Lanier. “Mythologizing technology only makes it more likely that we will fail to serve it well—and this kind of thinking limits our imaginations, tying them to yesterday’s dreams.”

He goes on to argue for a concept he calls “data dignity,” where “digital things will typically be associated with the people who want to be known for having done it,” even possibly with financial compensation—a particularly relevant and provocative idea for a world populated by powerful AI systems that rely on oceanic volumes of human-generated content.