romaine: from bloomberg world headquarters in new york, i am romaine bostick. taylor: i am taylor riggs. sonali: i am sonali basak. romaine: china banning all cryptocurrency transactions, making them illegal. the toughest blow we have heard out of china for the industry. kind of expanding some of the language we have heard before but a lot tougher.

the move is to wipe out as much as billions in the market with digital assets out there, and, today we are going to focus on the crackdown that shook up certain assets. it may not have been a massive deviation, but it raises questions about what china's role is going to be in the crypto space. taylor: i think this is a really good graphic that breaks down everything that we learned. we have china banning the crypto related transactions. they cannot circulate on the market, and then offshore exchanges will be banned from some crypto services, so you also saw this in the price action stalling this with bitcoin, ethereum, the galaxy index, you name it. what was interesting, we have been talking about volatility. it was less than a 1% standard deviation move. the volatility is the name of the game. when it comes to cryptocurrency. but what was also interesting

was we spoke earlier and heard comments that struck out that will have a negative impact on bitcoin prices, but how much of this is also volatility is a good thing. sonali: since we have had selloffs the last weeks, traders have already delivered. there is only a little over 100,000 traders who are liquidated in the past 24 hours. that sounds like a lot on the base but it isn't that much of the scope of the crypto universe. romaine: china has already done the crackdown before. we know they drove out some of the minors, they putting restrictions on bank and non-bank companies and financials. there have been restrictions in place. this has been telegraphed a while. i guess if you are still domestically operating there, you have the ability to get out in front of this and move on to wherever you're going to move

onto. taylor: let's bring in someone who knows more, jesse, we are curious about how you are thinking of cryptocurrencies on days like today and what the news overnight means for you. >> not much change for us. we don't have a big footprint and china. it is not a market retargeted. this is about the 15th time that china has "banned bitcoin," and they have become exceedingly efficient at it. do not think this is going to be the last time they banned bitcoin, but the story is what this means for the chinese people. taylor: what about for the u.s.? does it create an opportunity for folks in the west to step in when so many folks have no idea what to make of new regulators? jesse: china keeps opening the

door for the united states to take a leading cryptocurrency, and i think this is another massive opportunity handed to us. we are still in the early days of crypto. i think we should look at it like we did the internet. it is an opportunity to develop massive homegrown global leaders in this space if permitted to do so by the regulators and legislature. taylor: we have not seen u.s. crackdowns yet. you look at competitors, and what do you think of a move like that? jesse: i think a lot of companies are expanding their footprints around the world and diversifying away from the united states because of the uncertainty in the country. it is not really clear where the united states is going to go. we have seen a lot of regulation by way of enforcement or by way of trying to set precedent through enforcement actions rather than clarification at the legislative level. what we really need is absolute

clarity and evolution of these financial regulations that are 80 plus years old in some cases that predate the internet, that presume there are some potentially evil middleman or the lack of transparency in the data. these problems are solved by bitcoin, and we need to stop trying to apply 80-year-old regulations to this technology. romaine: i think the crypto faithful have done a good job as to making their case publicly. they have not necessarily made a great case of making their case to congress itself and the regulators in washington. there is an apparatus down there that can be hard to crack, and while we have seen lobby firms make the case on behalf of some companies, i'm wondering how worried you are that some regulations and legislation that is being worked on now is not really being done at all in concert with any legitimate players in the industry. jesse: we are seeing a lot of that happen. the infrastructure built is a

great example. some language that was snack in at the last minute under the pretense it was to capture more tax dollars. there was no consultation with the industry on that. it was from people who clearly did not understand the space, giving the benefit of the doubt. that is best case scenario. worst case scenario was a surreptitious attempt at attacking bitcoin. this has massive national security issues. this is massive national economic issues. we need to have this discussion and worry about protecting industry and freedom of choice of currency, and protecting the consumer. we really need for separation of money and state. taylor: dare i ask this question, but i am, a lot of people within the crypto market say sometimes this can be a positive. as we talk about the price pullback, the volatility, the long-term trajectory of the market has been higher. how do you see impact from today

affecting out the short-term price but long-term? where do you see it? jesse: long-term, every time china banned bitcoin, bitcoin bounce back stronger than before. this can only a positive thing. if you look at history. i will keep on buying more bitcoin every time it dips. taylor: we do see a dip not a lot of people have walked into yet. at what point do people c back? jesse: i think people need to be looking at this as a five-year, 10 year investment, not day-to-day. the markets are volatile, but if you look over time, they are outpacing everything in the market but you have to be willing to ride the roller coaster. romaine: it is a volatile asset. that volatility has come down compared to what we saw a couple of years ago and earlier this year and back in 2017 and prior. as bitcoin and other

cryptocurrencies gain more legitimacy, for lack of a better phrase, the lack of volatility that typically comes with that, does that worry u.s. an investor? jesse: absolutely not. the more volatility means that there is a greater investment opportunity here for day traders. as volatility comes down, i believe it will be more useful as a currency and more useful to ordinary people and becomes more reliable as a sort of value, especially when you compare it to the dollar, which is losing value guaranteed the last 18 months. i think as volatility comes down, that reduces the barriers and reduces psychological fear. you will see more people come into it. taylor: you mentioned the infrastructure bill, and we saw that exchange between brian armstrong in regards to the fcc. you worry that the tone between the crypto community and washington is getting hostile? jesse: not so much.

we have a lot of conversations going on. we have been engaged with washington the last 10 years. one issue is there is a constant turnover in government, and you might have explained something to somebody three years or four years ago, and i have someone new trying to get up to speed all over again. i can see some of the players in the industry i may be getting worn out and tired of not having clarity, and they are trying to understand why these 80-year-old laws are trying to be applied to cryptocurrency, especially in cases where it seems it is hurting consumers, offering them 5% yields in a market where their banks are maybe talking about negative interest rates. why would that be bad for the consumer? who stands to benefit from a policy for having that? -- policy for having dashiell and i don't think that is why those

laws were created it is time to get the legislature back to the table and get laws changed. taylor: interesting comments. on that note, you have said, and a lot of guests have said that china's crackdown is a free gift to the u.s. this could be our time to increase value when it comes to the market. is there a risk that other countries follow trying to lead, and is that a risk that we are not pricing into the market? jesse: i think that is always the case. china has a lot of influence and they seem i'm really concerned with their own country at the moment in the monetary control in place. china has a firewall around their internet. we have not seen much of that in the rest of the world. i am not too worried about it. if anything, i am worried about the u.s. right now. i am excited to see el salvador has adopted bitcoin as another national currency alongside the u.s. dollar we are more likely to see that

more than we are for china to restrict -- then for china to restrict bitcoin for the use of people. romaine: we hope to catch up with you soon, jesse powell, ceo of kraken. coming up, we will look at it more from the regulatory angle and the idea of self policing and what the industry can do to create a little more guardrails and keep some of the regulators at bay. the ceo for the association for diddle -- digital assets will be joining the program. this is bloomberg. ♪

taylor: you know, as we have

been pretty much all day long been focused on the crackdown in cryptocurrencies and president biden moving forward with the nomination of a crypto critic to be the next comptroller of the currency, really interesting appointments as we are thinking and discussing the latest crackdown. romaine: we are talking about her being pretty public about her concerns of crypto and the broader financials of institutions. it raises the question of how do industries police themselves, not only to make their own industries better but to keep regulators at bay? when you have that void, sometimes washington can step into it with mixed results depending on what side of the fence you sit on. joining us to talk more about that, we want to bring in the association for digital market asset ceo. michelle, i do want to start off on the broader issue of

self-regulation and whether the crypto industry right now understands the importance of that. >> thanks for having me on, and i do think the broader crypto industry understands the role that an sro can play is the role that the industry gets to play, and i think largely right now the industry is being shut out of the conversation where, unfortunately, revelatory discussions are happening and accelerating all around the united states right now, and given the fact that digital assets are the future of finance, we need to ensure the u.s. is competitive and innovative, so it is important the industry has been multiplied. there is a definite need for connective tissue against the u.s. for financial regulators in general, and i think legislative

steps should be taken to more informed regulatory self organization and market disciplines in digital asset that we connect the industry to financial regulators. taylor: you called for the sec to think about crypto and a more cohesive way. the financial industry asked for the same thing for a long time. what are the chances that happens now that gary gensler, who has been in both places really attacks that problem? michelle: i think there are a few things, and i worked at an sro, and i am also familiar with the sec, so i am familiar with the process on traditional finance sides, but there is precedent that that was the national future association, sub revelatory organizations, and it would make sense to have one for

digital asset markets, as well, and i think it would help the fcc -- sec and foc in a lot of ways to engage with industry. there would be resources that would be provided, there would be a lot of monitoring that the sec might not be able to do. there are ways where certain assets can be created, so like lists, for example, that can provide industry on the digital asset commodity. there are advantages that i think should be seized. sonali: we just came off of a conversation with jesse powell talking about the regulators are in place to protect the consumers. not traditional financial institutions that are rooting for dollars. how do you see regulations and regulators protecting the consumer in this case?

can there be a case to be made that they should be helping the consumers with traditional finance? michelle: absolutely. i think that is one of the main focused areas. a self-regulatory organization would have a code of conduct or roll book by which all members of the sro would have to comply. in fact, adam has a code of conduct that governs all sorts of principles for market integrity. honestly, that is the thrust of this about the consumer and investor, and there are all kinds of principles to prohibit manipulation and other things that are good practices for business continuity, these are things the industry is already doing. certainly at adam we have our code of conduct that all members agree to, and this would formalize it, and would get this

association special revelatory powers, as well. i think that provides the sec and fcc without. romaine: you have an industry that i think to a certain extent can be loosely defined as an industry. a lot of people look at the crypto space and the decentralized nature of it is the attraction. how do you centralize things in a way to get everyone on board for something when maybe that is not what they want or how they make money? michelle: we have a broad-based membership firm that honestly, they are the best firms in the industry that have opted in, and that is how it was formed, with the securities exchange act, so there is a clear precedent for doing something like this, and the industry can offset, and for those who do not want to opt in, that would be their prerogative,

but we do have a broad-based history representation right now that they do comply with the code of conduct. sonali: taylor touched on jesse's comment on the consumer, but the part of protecting the financial industry, you are deep in washington i know what is going on, there is a sense that wall street will not go down without a fight rate what is that lobbying look like for traditional finance to protect the rules as they are right now? michelle: i think it is important to note that there are industry groups that are working really hard to protect everyone's interest, so, certainly, if you are going to have -- for example, adam, it is all market participants that are advocating for market protection, so they are protecting the markets in that way. but then in traditional finance,

there is the future industries association and the policy institute, all predicting what they would consider to be in their jurisdiction, as well. i think your are all the special interest groups, and they have their own perspective. i would really like to see digital assets be more, at least the industry anymore comparable. sonali: what is the single biggest issue that the crypto community may face in washington? the biggest hurdle they will have in the months ahead? michelle: i think we are going to see a major policy because we will continue to see major policy shifts in the united states where there will be more regulation coming, and we are seeing that in terms of nominees and with the messaging out of the federal agencies, and i think it is a real risk for the industry not to have any say and any voice and that, and i think

the creation of a self-regulatory organization would go a long way in providing the industry with that. romaine: a lot of work ahead. it will be interesting to see whether the fallout from china has any sort of opportunities here, presented here for the u.s. and the way it steps up. really great to get your insights on a day like today. michelle bond, we have to have her back, and as she said, she was a lawyer, she knows her stuff, and she knows the importance of self-regulation. taylor: you hit it there when you asked about the establishment, and not to take a side to discuss good or bad, but establishment says ab does not and if it from changing the rules and the lobbying going on behind the scenes. sonali: i do not even know what that lobbying looks like right now, but i know that it exists. the big banks do worry that there is a lot of is the state

will lose a company start to raise the capital through an fts and other sources of capital raising in crypto. romaine: a great conversation and something we will talk a lot about next week and in the weeks to come. this is bloomberg. ♪ -- you are watching bloomberg. ♪

romaine: we would like to take a moment to pay tribute to someone very special to us here at bloomberg. >> this past week we lost a colleague and long term member of the bloomberg television family, rob. he was one of the first to help make bloomberg what it is today, and expanded the footprint globally and was part of the team that launched the tv and france, italy and japan. if you wanted to achieve something that was impossible, he just needed to tell rob it cannot be done, and the next thing you knew, it was

happening. throughout it all, rob always put people first, never turning away anyone asking for help. those of us who knew him the past two decades, he was someone you could always count on to make work and life quite interesting. we will miss you, rob. ♪

♪ >> from the heart of where innovation, money, and power collide in silicon valley and beyond, this is bloomberg technology with emily chang. ♪ emily: i am emily chang in san francisco. this is bloomberg technology. a crypto cracked temp unit china bands all crypto transactions. crypto trading and mining in

china now illegal. will other countries follo