Happy Friday, readers — for this week’s questionnaire we’re featuring Marco Santori, chief legal officer for the crypto exchange Kraken. Santori is a crypto legal veteran, having worked (among other things) as Blockchain.com’s chief legal officer, a law firm partner focused on digital currency 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 bank digital currencies, and a little bit of Ursula K. Le Guin. Answers have been edited and condensed for clarity: What’s one underrated big idea? The power of exit. In the world of fiat currencies and legacy finance, there's really no power of exit. You have to use centralized intermediaries. The only real power of exit left is exiting from the world of banks, and money transmitters, and check cashers, to cash — from electronic to paper and metal. That is not the case in the world of cryptocurrencies and blockchains. People can exit centralized intermediaries like Kraken, they can self-custody. They can use private wallets. They can use DeFi, where there is no central intermediary. That power of exit is not our power of exit as a company, it’s our users’. If our users don’t like what they get from us, they can go do everything that we do somewhere else. What’s a technology you think is overhyped? Central bank digital currencies. I think that they are the straightest and shortest path for authoritarians to determine what you can and cannot spend your money on. I don't think FedNow is a central bank digital currency. It strikes me as a reasonable and, frankly, needed upgrade to the existing federal wire service, and a competitor to a central bank digital currency. In fact, the better commercial banks can operate, the less of a use case there is for CBDCs. What book most shaped your conception of the future? Ursula K. Le Guin’s “The Dispossessed.” It's a fantastic book, not because it paints some picture of future technologies 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 DEI, or the culture wars, there's only the accretion of power, which transcends politics and left versus right. In the book, there's an anarcho-communist society that holds its values dear, and in sharp contrast with the other worlds you can travel to in this book that are capitalist, or feudalist, or any other political or economic structure. The message that the book delivered to me was that none of those distinctions really matter. At the end of the day, the main character faces the same challenges, and the people around him face the same challenges, the same struggles and the same successes, due solely to the accretion of power in governments, individuals, and groups. It’s a hyper-realistic view of what the future is likely to bring because it’s precisely what the present is. What could government be doing regarding tech that it isn’t? Enacting safe and sane frameworks for the crypto ecosystem. The administration's approach to crypto today is at best disorganized, and at worst has let regulators not just run amok, but fight against each other for territory and jurisdiction. Nobody has won. Not even the regulators have won from that. But the people who have lost the most of all are those who are building, innovating and using blockchains. What has surprised you most this year? China reopening to crypto. As it's solidifying power over Hong Kong, it's permitted the Hong Kong Monetary Authority to license crypto companies, and the HKMA has in turn begun to broker relationships between crypto participants and banks in Hong Kong. This is just one example of the U.S. having ceded control over 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.
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