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Bloomberg's Ed Ludlow and Caroline Hyde sit down for a conversation with SEC Chair, Gary Gensler on his outlook for AI and Crypto regulation. Plus, Meta rolls out facial recognition tech to combat fake celebrity scams, and the future of crypto in America as the US heads into a neck and neck election.
From Mahart where Innovation, Money and power Collie in Silicon Vallet NBN. This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Live from London and San Francisco. This is Bloomberg Technology coming up ASML's CEO on how the US China relationship could shape the chip industry.
The future of sec Oversight will be joined live by chair Gary Gensler.
And SAP shares saw to a new record thanks to AI driving cloud revenue. We have that and many more earnings for you. But first, let's just check on these markets. We shine a light on the Nasdaq, which is currently off by about a tenth per percent. The S and P five founded off for two straight days. That's the first back to back losses we've seen in six weeks. There's some caution about where the Federal Reserve goes from here. Does it continue to cut rates in the face of resilient US economy even as the IMF warns of a global slow down ed? But we see tech just off a little bit. What's risk sentiment like for some of.
The names you're watching?
Yeah, interesting, I'm probably top story is ASML, the Dutch producer of chip making equipment. We're about to get right to a critical interview with the CEO. But the shares are worth looking at because at the high of the session in Europe they are up more than three percent. They've paired that gain to one percent, but it's worth noting we're down still more than fifteen percent since that kind of fateful early release of earnings that we covered so deeply last week. Intense focus on this name in the context of AI and what's happening with chip investment around the world.
Bring us the details, Carra.
Yeah, let's get to the ASML CEO Christal Fouquet, who spoke this morning at the Bloomberg Tech Summit with our own Tom Giles. It was right here in London. He discussed the future of the chip industry more broadly in China, in particular the future revenues and the impact of US regulation.
Just take a lessen.
The focus of China is on mainstream semiconductor. The demand for that has boomed in twenty twenty one twenty two.
As a resource, the demand we.
Had in China in twenty twenty one twenty two has boomed as well, and twenty one twenty two was the time if you recall where the demand was extremely high and SMR was struggling to deliver tools to everyone. Therefore we couldn't deliver a large part of the demand in China. Backlog in China grew twenty twenty three the rest of markets, so offten we got tools we could ship to China, same in twenty twenty four. So the level of business we had with Chine twenty three twenty four was more of a resource of the non delivered capacity in twenty two twenty one than anything else. And we've always explained that, you know, our fifty percent of the business in China, or most fifty percent, this was not normal. This was a peak resulting from basically.
A lack of a bittervery before.
The normal business in China is around twenty twenty five percent, and that's the normal demand related to mainstreams to be conductor, and I think we're going to go back to those number over time.
But there is something artificial about the way we think about China as a as a purchaser of equipment like asmls, in the sense that many countries around the world US principally have have have been exerting export controls on the country. Are those controls going to become even more stringent? For example, China is not able to buy your most advanced machines. Is it possible that those restrictions could extend to the DUV level, which is used for more mainstream products.
Yeah.
So if you go back to the root cause of the say, the prime motivation of export ConTroll it to us to prevent China to have access to advanced technology.
EWE is not in China.
By not having you in China, we pretty much stop the ability of China to go beyond the five maybe three nonometer note may be able to do a few chips.
You may see some of that in.
The press because of of course everyone is watching very carefully. But fundamentally, by not having EUV, we have placed China. The regulation have placed China I would say ten to fifteen years behind when it comes to advanced technology. We always talk about China. We usually forget to mention the fact that while those restrictions have applied on China and UV, a lot of work has been done with other player and industry Intel, TSMC, Samsung on the most advanced EUV technology as we know it today, et.
Cetera, et cetera.
So there's been a lot of work down every single day to continue to widen if you want this technology gap.
Based on your interaction with the Prime Minister of the Netherlands with the Foreign Ministry, is it your expectation that the restrictions will become even more limiting on China's ability to purchase machinery like asmls.
Well, if you look at the geopolitic landscape, I think it's clear that the United States will continue to apply pressure on their life for more restriction. Now, the question the discussion we have with the Dutch Prime minister, I would say the European political leader, because at the end of the day, we are technology champion company, right, So these other people we have this discussion with, and the question is what is right for the Netherlands, what is right for Europe and as a results, what is right for SML.
So what restriction makes sense when.
It comes to national security, which has been the prime argument, and where does it stop right because, like I said, a lot of the focus in China today is on mainstream semiconductor and this is very different from you know AI. So that's the discussion we have is if the pressure will continue to be there because you know, if you look at the landscape, that's what it is. But I think that the discussion will get more sophisticated over time, the stake will become higher.
That was asmlco Crystal fuqu earlier today at the Bloomberg Summer in London. Let's discuss this a bit more. Ioko Yoshioka is portfolio consulting director a wealth Enhancement group. I took a quick glance down at my Bloomberg terminal.
I think you.
Guys have a small exposure to the ADRs of ASML. But listening to that intense conversation, the themes are clear, right.
Will there be.
More export controls from the US to China when it relates to the lead edge of chips? Will there be increased tensions in the supply chain? When you listen to that interview, how do you think about a name like ASML?
Good morning, Good morning ED.
So you know, when we think about just the overall semiconductor chip equipment industry, you know, I think one of the key things that the CEO of ASML focus on is the mainstream versus AI. You know, we are seeing that growth on the AI side. We like names like LAM Research as well, which has you know, some etching tools for DRAM, which is used a little bit more on the AI side, So you know, one area is growing a lot more. I think the mainstream side is trying to normalize a little bit, especially with everything that's going on in China, and you just have to find a balance between the two as we look at what the chip industry is going to look like going forward.
Looking at it going forward, do you have any view that it'll change post November the fifth, sixth, when we have a different outcome from an election and post January when we have a different administration in the US.
You know, it's definitely something that we and our clients talk about a lot in terms of what are the potential regulatory issues as well as what are the policies that might get put in place, whether it's tariffs and whatnot. And it can change things going forward, but we have to wait and see what the actual details will be once we know who's in office and what types of policies they're going to be able to get past, just also depending on the composition of Congress.
What has been so abundantly clear is that there is the AI perspective of chips, and then there's everything else, And from your perspective, is it investable in the everything else at the moment when we are still seeing inventory weigh so heavily, whether it's the auto exposure, whether it's consumer exposure.
So in the near term, I think it's a little bit tougher. You know, in the near term we are seeing an oversupply of autos and some of the industrials are still sort of struggling. So in market wise, you know, it's not as great as it was back in twenty twenty year, twenty twenty one. But you know, I think going forward, as rates come down and as we see the economy continue to stay strong, I think you can see a lot of that continuing to grow over the long term. You know, these cyclical industries go through these ebbs and flows and you just have to kind of play through that.
So that's why Caroline's question is so interesting, The conversation is so interesting. They are historically cyclical industries, and forget sort of the equity market portion of this. You know, the impact of the Chips Act, what's happening in Europe, all the money in capex commitment, is there a risk that it's overdone, over invested.
So I think the big risk is that some of these hyperscalers do pause and take a little bit of their foot off the pedal when it comes to overall capax investing on the AI side, because then you have the cyclical low on the mainstream side and a pause potentially on the AI side. So that would be the biggest concern. But I think when you look at it in a three to five year outlook, it will all sort of equal out and provide growth on both sides.
You know what we don't talk as much about sometimes oko is the technology bit. I'm pretty sure that Monsieur Fouquet would say that ASML is at the absolute cutting edge of extreme ultra violet lithography. And I bring that up because he'd probably also say that there is no company in China that could do what they do. So in all of this, all the risk and the chaos and the politics, is that not something worth considering if you're an investor in the technology sector.
Absolutely, And you know, these chip equipment makers are down substantially from their highs, and so I believe that they are providing at least the stocks are providing an opportunity to get in for investors, and the near term might not, you know, be as rewarding as you might think right away, but I think over the long term you can see that benefit of these chip makers. There are not a lot of them out there. There's only a few of them that can do what they do from a technological standpoint.
And there in lies the heart of ultimately competition, which is what Ed's getting at. And what's so interesting is not just competition coming from chip makers against chip makers, but eventually these hyperscalers, whether we see them remain committed to purchasing in vidio chips at the rate that they are, what about making their own chips? What that means to the ecosystem?
How are you.
Trying to see that out over the next three to five years as well?
Okay, sure, I think you have to, you know, keep your pulse on all of it, because you know, from the hyper scalers perspective, I don't think anybody wants to be solely reliant on in Nvidia, and especially given some of the supply issues that they've had as well, So you know, it's it's something that we continue to monitor on a quarter by quarter basis and do our research on.
On your research.
The invitations the CES have started going out this week and heading into the U. I just wondered if you suspect we'll be talking about exactly the same stuff in January, or if we might have moved on to something new that you've found through your research.
I think we're going to continue to be talking a lot about AI for quite some time. I think there's still a lot of areas to, you know, unfold. There could be a killer app that potentially surprises us at CES. You know, we never know, and I think that's why you have to keep your finger.
On the pulse.
Oh, We're only gonna be talking about quantum them, I'm sure. I Oka, yes, Ka, We thank you so much. Portfolio Consulting director over at Wealthy Enhancement Group.
We need to have.
Coming up we're going to be hearing from the essay PCFO. That's Dominique Assam. What's now Europe's biggest software company with some stellar numbers.
This is bluem Meg Technology.
SAP shares jumping to a record after the company announced a twenty five percent increase in cloud revenue over the year. The company's CFO Dominique Assam spoke with Bloomberg earlier.
Take a listen.
We had actually, if you adjust for currency fluctuation, constant currency cloud revenue growth of twenty seven percent, and by now have actually more cloud revenues in our total revenue base than any other source of revenue. So we can say after four years of heavy transformation towards the cloud, our strategy is paying off handsomely. If you look at the composition where that comes from, eighty four percent of that cloud revenue is generated but by what we call Cloud year Peace feed, which is the core cloud offering of SAP, that has actually growing thirty six percent in constant currency terms, and that's the eleventh quarter where that growth has exceeded the thirty percent growth mark. So that's really the core engine powering our growth. And what is even better, our so called CCB current cloud backlog, which is the twelve months ahead committed subscription revenue is roaring at twenty nine percent, so there's also good visibility on the growth lying ahead.
When it comes to the market, to the market cap, the stock is up about fifty percent a little over fifty percent year today, so you can you can take something of a victory lap on that front. The market cap is up about one hundred billion US or one hundred billion euros since this time last year. It means that on your listing you're bumping up against that fifteen percent cap. Is Germany still a good place to be listed? That is a bit of a challenge for at this point, is it not?
Well, you're right, we.
Would like to see that kind of fifteen percent cap disappear because it constrains a little bit the demand in Germany. But we are really focusing on the large pools of capital available in the United States. There are still a lot of runway, a lot of room for us to grow and attract new investors. We would like not to exit Germany, but to the country attract capital into Germany, and on that front, I have to agree the fifteen percent cap in the decks is not very helpful. There's other regulation in Europe, for instance, on so called use its funds which are actively managed. Many of them are actively managed, which are also a little bit constraining, and we are currently trying to convince those who run these indecs, those in charge of legislation, to reconsider that cap.
There was sap CFO Dominique Assam earlier on Bloomberg also speaking say m CEO Rene Haas, who says he's open to a secondary listener listing listen to this.
We listed in New York over a year ago, and at that time are comments where we would look at a secondary listening. We're still open to it. It's not something that's top of mind right now quite candidly, but will continue to have discussions with both stakeholders and the government and in the local change.
Another conversation we had was with tech investment Giant Process, the CEO Fabricio Bluisi. We talked about the current roadblocks facing adopting generative AI and where he will continue to invest in the technology.
He's just part of our conversation the leaders.
The leaders have to stop being the guy that say or the woman that's say I'm going to invest a billion dollars or one hundred million dollars and be the person that leads using spend time understanding what is the technology, spend time understanding that we are just starting that is so much development ahead.
They should lead.
They should show how they use AI to be more productive, to distribute more in the company.
Will follow. Actually, the younger people, they.
Even at the state why we're having this discussion, They use share, GPT or other things every day or week to study. More So leaders lead showing what is a good usage of AI instead of just writing mayuse about how much you are investing on that.
You're going to invest in anymore General to AI companies, we.
Are going to invest a lot.
Process has a very big investment capacity, and we want to help the own emerging market and growth markets to lead this new revolution happening right now.
We can't afford to be out of that.
Process. And aspecy of Abricia Luisi there of course biggest holder of Tencent as a stockholder, but have so many investments said across the emerging market. So really a conversation about how in Africa, South Africa, how also in Poland they're adopting general to AI. In fact they say, look they're cutting costs by some thirty percent thanks to the implementation.
YEP also exposure in not just ten Cent but other parts in year Southeast Asia. And he's a CEO to watch why moonshot package worth tracking his progress.
Another story that.
We're watching here on Bloomberg Technology, Chipotle rolling out an artificial intelligence assistant aimed at improving efficiency. It's called Avocado and will cover many administrative tasks in the recruiting process. The chain hopes will cut the time it takes to hire workers by as much as seventy five percent. It will be powered by conversational AI from tech firm Paradox. Meta is fighting back against fake celebrity scams, deploying facial recognition technology to weed out the imposters bloombers Kirkwagner joins us with the details, and I guess what is the kind of malicious activity that Meta is trying to counter here in terms of celebrity image.
Yeah, so sometimes scammers will run that links to like a scammy website right where they'll try to steal your data, they'll try to get you to, you know, send money, and they will use as part of the ad pictures of real celebrities to try and make it seem more authentic or more legitimate.
Right.
Oftentimes people will see an image of a celebrity and therefore think, oh, it's an endorsement by them, or it's someone they're familiar with, and they're more likely to click. And so in this case, Meta saying, hey, we notice these ads are happening. We know these scams are happening, and so they're now going to use facial recognition software to try and match is there a celebrity in this ad doesn't match up with the celebrity on the service, and if Stowe, you know, maybe that's a scam. We should try to take that ad down.
And then for anyone who's ever been locked out of their accounts many of us have, you're no longer going to have to suddenly get your passport ready. They might use the technology for that as well.
That's right, So they're going to start testing this idea of sending in a video sell fie right, So it's pretty much exactly what it sounds like. You hold up your phone, take a short video of your face, send it into Meta. They will then match that video two photos associated with the account. If there's a match, they'll say, okay, this is indeed you know Kurt's account.
And you can get back in.
They said the whole thing could take about a minute, and they'll delete the video and any data associated with it immediately after. This is something that they're trying to do to expedite this process because as you mentioned, Caroline, right now, they have other ways to verify identity, but it's a lot more cumbersome. You might have to send in a picture of your ID or a passport or something like that. And so they're thinking that this could be a faster way of getting people back into their accounts automatically if they do get locked out.
Kurt, why does Meta do this? What's the motivation for them?
Well, I think think of the scale that met operates on, right, there's almost, I believe three point three billion users across Instagram, Facebook, WhatsApp, all of their different services, and so people are getting locked out every single day. They can't keep up with this from a human standpoint, right, they need to automate these things, and I think as AI has gotten better as their technology has gotten better, they're seen, hey, here's a way to do this much quicker. Presumably in the future you've been much cheaper, you don't need humans involved, and so, you know, I think it's just part of their overall push toward AI and these advancements and technology to help people out.
In just thirty seconds.
Though, Kat, there is a complex relationship with facial recognition technology and META.
In the past well, MET has been sued several times in the past for using this technology to profit without really giving users appropriate recognition, appropriate way to opt in, right, and so this is a type of technology they've sort of been hammered on in the past. They've walked away from it for a couple of years, and now it feels like they're sort of dipping their toe back into it. So it'll be interesting to see if there's a more lawsuits that ultimately come of them trying to kind of give back into the facial recognition space.
Looking at you, Illinois and Texas, Kerle Wagner, great reporting, We thank you.
We want to welcome our Bloomberg Radio and television audience right now to a special conversation with us SEC Chair Gary Glentzler and mister Gensler. The SEC clearly looking closer at the use of AI tools in finance. We know that from the agency's latest exam priorities. But in parallel a year ago, you embarked on this rule making process, and I want to start by asking what sort of additional authority or power you feel you need through a rule that you wouldn't be able to regulate through through examinations so.
Let me say this.
I think that the use of artificial intelligence, which has been around for at least ten years, has taken on and it's an important transformative part of our economy.
Every bit is transformative.
Is the Internet, probably more every bit is transformative as one hundred years ago when we electrified so many things in our markets. Our factory is the automobile, the refrigerator. That transformative. In finance, it's being used today by many brokerage apps and investment advisors when they're selling to the public, just as.
When we're looking at.
Movie apps that have figured out long ago that I'm a rom com type of guy and I want to watch those movies, and so it's it's to ensure that in the algorithm, in the actual math of the algorithm, that they ensure that they put the public's interest, their customers interest, ahead of the investment advisor and broker dealer.
That's it in a nutshell.
In a nutshell, do you think that there's financial systemic risk still looming large because of adoption of AI and AI models ultimately being too similar from one brokerage to the next.
I do think.
So.
I said I liked rom coms, so I'll just go with that wonderful movie her when Scarlett Johansson, you know, played this virtual assistant when she went offline late in the movie eight three hundred and six teen, folks were broken hearted. We could see that in finance there's right now two or three large cloud providers that are backing some of the biggest investments in what's called generative AI.
As the financial sector more and more.
Relies on those big base models, it is not only possible but likely that some financial crisis in the future is that everybody's relying on it. And whether it's like Scarlett Johansson going offline or if Scarlett Johanson of the future I'm talking about the AA model is hurting and taking the capital markets off of some various cliff and I think that's a hard project to solve because of the dominance of a few base models likely in the future.
Do therefore more clear rules need.
To be envisaged.
Here is examination the tool of choice.
So I'm separating out there's important.
Investor protection issues directly about the conflicts, and I think we can do that and proceed for I've asked staff for recommendations on a reproposal of that role. I think a secondary we didn't talk about is fraud.
Fraud is fraud.
If you use the algorithm and the AI model to defraud the public, it's still fraud. But I think that that's going to play out not only for US, but in other agencies around the country, the Federal Trade Commission and elsewhere, but on these systemic issues. On these systemic issues, I think it's a tough challenge that global regulators need to come together and how do we protect against what is likely to be a very concentrated, interconnected system that's relying you know, like I say, three hundred and sixteen, relying on Scarlet Johansson for their love was one thing in a fictional movie.
But what do we do here?
If you're just joining us on Bloomberg Television and radio, we're speaking with the SEC chair, Gary Gensler and mister Ginsley. You're also busy in parallel with the crypto industry. I think there's consensus on the eve of an election that all of those parties involved in responsible want to hammer out some sort of new jurisdictional framework for crypto regulators to make some progress on settling oversight of that industry. Can you talk to us about the work you're doing there and if you're making any progress in that field.
Look, there's nothing incompatible about the ledger technology. You know, it's just this Halloween, it will be sixteen years since Toshinakamaldo wrote that white paper, So happy sweet sixteen in a week. There's nothing incompatible about a ledger technology, decentralized ledger technology, and the securities laws. And it's important that in the securities market that investors get to decide on their investments, but they get the proper disclosure that we goard against conflicts of interest.
And the like.
And we're going to continue to do that at the Securities and Exchange Commission. If a market's ever going to have trust, it also needs to come into compliance. And a lot of this field, and we've seen the challenges in this field where a lot of people have lost money. Regular investors have lost money in a field that's not providing the fundamental disclosure about their projects, about these these investment contracts and these schemes, and that a field that has a lot of conflicts in the middle of it.
Something interesting has been happening over the last year where you've been focusing on policy and regulation in the Fifth Circuit Court of Appeals, there have been many suits file in what is a kind of business friendly courts? How do you have to respond to that and adjust the policy side in response to the litigation side.
Misticenza No, No, I think ed it's a really good question. We do everything we do within the law and how.
The courts interpret the law.
If the courts interpret it differently, we adjust.
That's what we do.
It's part of our great democracy. But I do think that we're focused every day on how we drive lower cost in the system. That's why we did equity market reform, I would note unanimously through our five member commission.
That's why we've.
Worked so hard on the treasury markets, this twenty eight trillion dollar market at the base of our capital markets, and driving lower cost which is called efficiency, and lower risk which is called resiliency in these really consequential, significant markets.
Just for a moment reminding our TV and radio audience were in a conversation with SEC Chair Gary Gensler, and just to stick with the crypto aspect for a moment more. There is, though this ongoing narrative that you haven't changed that much. You haven't adjusted much in terms of it is regulation via enforcement. Will that change?
Ultimately?
Do you see laws coming to bear from Congress rather than you having to enforce via enforced and regulate Caroline.
We have benefited for nine decades from robust laws from Congress and rules from various agencies, not just the SEC, but the Commodity Future's Trading Commission, another significant and great agency that I was honored a chair, to help promote the markets, to protect investors, to promote capital formation, and the markets in the middle.
And that's what will continue to do.
Whether it's related to the stock markets fifty sixty trillion dollars stock markets, whether it's related to the treasury markets as I said, nearly thirty trillion dollars, whether it's related to the bonds and fixed income markets, and yes, even related to this newer market, where as I said, all too many people have been hurt, All too many people have lost money and lined up in bankruptcy court to deal with their claims. And fundamentally, what President Roosevelt laid out and has been looked at over the years, Congress could adjust, but at the fundamentally it's about disclosure to the public. So the public can decide, and then guarding the public against the conflicts and the fraud and things that happen in the capital markets that are unregulated. We saw that happen in the nineteen twenties. None of us were alive, but you can read about it, and we don't want that to happen to the investing public and undermine the trust in the overall it's hapital mark markets as we know them.
Talking of disclosures, one disclosure from former President Trump is that he would fire you ultimately unsurprising to you, I'm sure. But also he's got some plans purported plans, of course, to introduce his own crypto platform and has been working on it.
What do you make of that.
I'm not going to comment on any one project. I think your viewing audience can appreciate that. It's just not well we do and so our Caroline, I'll let you go to your next question.
Well missed against I'll jump in.
You talked about the investing public that you serve, right, and there is something happening where private credit firms are taking private market assets where you could debate the real valuation, and they're wrapping them in products like ETFs that are somewhat sort of more retail friendly. It's a newer area, it's something interesting happening, and I know it's an intense interest our audience. How do you regulate that and how much are you personally thinking about that right now?
Let me put it in context our dollar credit markets, where you can your commercial credit and you're borrowing probably worldwide in excess of thirty trillion dollars, and banks and non banks alike play important roles in that. And so what we've private credit existed when I started at Goldman Sachs forty some years ago.
I mean, there were direct.
Loans that could be made outside of the banking system. But today you've seen a growing share involved in that. I think that competition is good for borrowers, investors, savers and the like. That's competition in our capital markets, but it still has to sort of comply with the basic tenants of risk management, disclosure, transparency and the like. Our role in it is a capital markets oversight is an important one. But I think the competition is actually benefiting a lot of borrowers. I would note this, it hasn't at this size, it hasn't lived through a downturn, so it hasn't been tested in you know, the inevitable at some point downturns that would come. There's also some intersections between this private credit merging system and the insurance sector and the banking sector. But particularly it's intersection with the insurance sector. That's you know, bears look and ratings as well the use of private letter.
Ratings on some of this.
So we're looking at some of this, but I think overall it's capital markets benefiting and the public benefiting from competition.
Apollo and State Street have such a private market ETF pending before the SEC. My colleagues tell me it's controversial. What can you tell me about that specific case study.
I guess I could tell you the same thing I told Caroline earlier that you know, in a role like mine, i'm a very asked to be disciplined. I try to state this one. I don't comment on specific prod ducts or projects that may be in front of the staff or in front of our five member commission.
So I'm going to demure on that.
But I hope you're listening public understands why.
Do you worry about that ill liquidity mismatch? Though a potential one.
Look there's an illiquidity mismatch in banks. So our twenty six trillion dollar banking system in the US has twenty trillion dollars in deposits runnable deposits.
Of course, a lot of.
Them are insured, but a lot of them are uninsured. And so banks themselves transform liquidity, transform what's called maturity or duration.
And then you think about it.
In the non bank sector, you have, frankly, a better match of maturity of the the liability side of a private fund and the assets they hold.
So it may it's not without risk, but it might be in.
A part of the market that they can better bear that illiquidity risk.
It's really interesting how you've got this is a line of sight, but also everything we've just articulated AI crypto private markets a lot to get on with. And your term is what until June twenty twenty six? But will it run until then? Many feel that perhaps not. What do you want to get done in the remaining months or so?
Look, I think it's the greatest privilege of my life, other than having these three wonderful daughters that I have. But I'm talking about professional privilege. And so every day I come into work and think with my colleagues and fellow commissioners, how do we get things done for the investing public and the issuing public that the markets in the middle work for them, not that the issue and the investors are working for the intermediaries and the markets in the middle, but the markets work for them. So that's like lowering cost through competition, transparency and the like, and access to the markets, and then resiliency trying to use like central clearing and so forth, the backside and the plumbing. So we've gotten We laid out an agenda of fifty or fifty five projects three and a half years ago.
We've actually gotten.
Across the line, proposed and adopted forty three of those.
You can do the math. The other projects, a number of them.
I've asked staff to we consider possible reproposals.
But we're still.
Working on some rules around market structure of the treasury markets, some rules around central clearing and segregation of funds and the like. But we're going to continue to move forward, you know, And elections have consequences. That's a great thing of our democracy.
They do.
SEC Chair Gary Gensler, I'll let you return to some rom coms. Thank you so much for us. Coming up, we're going to talk a little bit more about though we were just were crypto. At least Colleen founder and managing partner is still Mark joins us.
Next. That's a good big technology.
Let's check in on crypto for you. Bitcoin at one point was almost at seventy thousand yesterday. We're now training about sixty seven thousand dollars level right now. We're looking at ETF inflows. Of course resurgence there more than two billion dollars in recent week or so. But what does the election mean for crypto deed regulation? At least Colleen found a managing partner at Stillmont. You are listening into that conversation with Gary Gensler, and I'm interested as to what you think the election means for your space.
The election means that we are going to be attending to the disposition of a new administration towards innovation, and that includes bitcoin innovation.
So what we're hoping to see, regardless of the.
Administration INSIDU, is that they take a thoughtful approach, that they take a studied approach, and that they are discerning and how they apply regulation within the bitcoin ecosystem and industry to make sure that we are updating rules of the past so that they fit well with the current innovation, that they are not just protecting investors and participants in the ecosystem, but that they are also fostering innovation so that America can continue to lead here.
Does it continued to lead from your perspective with the regulatory environment and suddenly, the potential next President, Donald Trump, he's certainly saying he wants us to be the crypto capital. If regulation stays as it is, var enforcement, will it remain so.
Well?
So the US has an advantage now and that many of the top founders, the most innovative companies in the space, including those advancing bitcoins payment technology, for example, are based in the United States. They can continue to innovate from here with a regulator that sees the advantages of having that activity in the US, and we are hopeful that, regardless of the administration, that those involved will be looking to foster such innovation. I also want to note that, of course, the coin innovation is not happening in the silo. It's relevant to other industries that are of national relevance, such as the transition to renewable energy the explosion of interest and opportunity and generative AI and l A.
Lambs.
Bitcoin's relevance to that brings more attention to bitcoin.
Technologies itself, and regulators will.
Hopefully respond to take themselves a studied approach to the bitcoin space.
What we could have asked SEC chair Against there a few moments ago, at least so I suspect he would have declined to answer, was his understanding of the relative policy platforms of Vice President Harris and former President Trump when it comes to crypto and the fundamental differences between them. We won't get that answer, but do you have that kind of clear understanding of what either outcome might mean from a policy perspective.
I'm quite happy that both candidates are paying attention to participants in the ecosystem. They both have advanced policy agendas and let us.
Know that they're paying attention to the space now.
Instead of evaluating policies during a campaign, what we're really looking to see and to participate in and then to evaluate is the inaction of policy itself and action rather than campaign promises. And it looks to us as though both campaigns have an intention to partner with the industry to study and to apply a thoughtful approach. And now we'll have to look at the rest of the candidates in their administrations, the potential administration's behavior, so that we can decide whether optimism is deserved. But I think there's a reason to be optimistic regardless of the outcome of this election.
That conversation was about, I guess regulatory in the context of the risks crypto poses to the financial system, rather than how we use the underlying technology against the called it the ledger right in the financial system, modernizing global finance.
Do you think we.
Should kind of go back to talking about that a little bit?
I think so again.
Gary Gensler also spoke about his concerns about the stability of core technologies like LLM models, and as he's thinking about that, or as perhaps the next to take his seat is thinking the same, they should be looking to how bitcoin can support the robustness of a generative AI and LLM ecosystem. So, for example, here energy stabilities, so the stability of the grid, the demands that LMS and applications running on top of them will have for energy will require robustness of the supply, and bitcoin can help facilitate that. Of course, we know that bitcoin is an off taker of energy in the same way that AI is as well.
But the difference here is that bitcoin.
Is price responsive, and what that means is that bitcoin can off take energy at low prices when there's low demand that can shut off and peak times. So bitcoin will not contribute to peak times in the grid, which means that it will not destabilize the grid and can allow for instead healthy growth of renewable generation in a way that contributes also to the LM ecosystem's.
Own stability, a place where Gensler express concern.
It's interesting that, of course a proof of work, proof of stake, that's something in other parts of the crypto ecosystem that have to deal with their energy impact. But more broadly, everyone is waiting when the killer app is really going to be here. From your perspective, does it remain as an asset class as an area to invest in if you're worried about inflation and that's why you get into gold and crypto, or does at some point what you're investing in, the projects you invest in end up being of service to society.
This is a great question. So there's two things happening here. In terms of advancement of the ecosystem. We've seen, of course, the bitcoin is a store of value has matured. At the Bitcoin ETF has reached over twenty billion in aggregate assets in less than the year's time, which exceeds what goal dts did on their launch. And of course the Bitcoin spot ETF launch was one of the most successful in history. So Bitcoin as a store of value has secured its place in history. But what's also happening, of course, is that we've seen stable coins find product market fit both internationally and.
Within the US. At the same time the.
Stable coins have achieved this product market fit, they're coming to the bitcoin payment system, which is Likening Network. In July, Likening Network launched payment channels that can hand other assets, including stable coins, which brings the market that Lightning Network has been able to achieve. For example, their Lightning Network processes over two hundred thousand transactions a day, over eighty million dollars in value a month. And now stable coins are coming to the Lightning Network. And so when we're looking about what the killer app is for Bitcoin, and we're thinking about bitcoin asystore of value and Bitcoin technologies for stable coins.
Ane Colleen founder and managing partner of Stillmock, inter Twining stable Coins and Clote. We thank you very much. Indeed, now that does it for this edition of Bloomberg Technology.
Ed jam packed with the interviews. Check out the pod you know exactly where to find it. From London in San Francisco, this is Bloomberg Technology