Biden's Student Loan Forgiveness Is A MISTAKE! | Sen. Lummis Crypto Policy Interview

[Applause] [Music] The Biden administration is leaning towards ten thousand dollars in student loan forgiveness. For more on this issue and a look at the best path forward, let's bring in O'Leary Ventures chairman Kevin O'Leary. He's also a CNBC contributor.

Kevin O'Leary: "Becky, I'm trying to find merit in this proposed policy and I can't. This is policy born in hell, and I'll tell you why: nobody wins. What do you say to people for generations now? I've realized, like everybody does, that education is not a right, it's a privilege. You make a decision as a young adult to pursue an education for a wide range of reasons, including advancing yourself and your career and your salary, etc. And that's proven to work. But you take on responsibilities, including student debt.

So what do you tell people generations past that have actually paid back their debt? How about the people that are working so hard to get scholarships to excel? What do you tell them? Don't bother? It's free? How about the people that never had the opportunity to go to college? About 12 percent of the population has student debt; the other 88 have to pay for them.

And then think about the politics of this, and this is what I find so extraordinary. Average salary in America is $58,000, depending on regions. You're telling these people this is a big problem. Meanwhile, you can't fill up your car, chicken costs 48% more, and this is at the top of the agenda for the president. Can you imagine? This is manna from heaven for the Republican Party in all these tight races coming into the midterms. This is going to be the issue that they get to campaign on.

Why? Why would you do this? This is a really, really bad idea and brings into question who is advising Biden. Who are his closest advisors? What planet are they on? It's not planet Earth. We just printed four and a half trillion dollars over the last two and a half years. We have helped everybody. This has nothing to do with gender or race; it has to do with equity. It's simply not fair. This idea is un-American by any measure. Everybody's uncomfortable with this. I can't find anybody that likes this idea.

And I know, and I get, I'm guessing right now within the White House, as they discuss this going into the midterms, somebody's going to say, 'Mr. President, let's punt this. This is a horrible idea. Let's deal with it on the other side.' Imagine the membership of the Democratic Party fighting these races. They're razor close, and you're giving their competitor this manna from heaven. This is crazy; it's just politically insane; it's a kamikaze idea.

Now is the wrong time for this, and by the way, there's never going to be a good time for this. This is un-American. There's no free money; that doesn't work this way. It's unfair to people that didn't go to college. You're asking people that never went to college to pay for this. It comes off their income tax; it's just wrong.

Hey, Mr. Wonderful here, the newspaper. What's the news? Senators propose cryptocurrency bill. Okay, now why do you care about policy? Let me tell you why you care about policy: you want the big money to come into crypto; that's the institutional and sovereign money, and they're not going to come into it until this happens.

It's a policy right here. This is good news, proposed policy. Now, why I like this is basically they're laying out the framework for how this could work. This is a proposed bill by Senator Cynthia Lummis. What's great about this is it's bipartisan; you actually have a Democrat in here, Kirsten Gillibrand. The two of them are working on it together.

Now, what's terrific about this is they're listening. They'll actually take a meeting. These are good senators. That's exactly what I did: I flew down to Washington, I sat down with her, I asked her about this bill because I care. I want there to be policy. I'm not a crypto cowboy; I'm compliant. I want to bring sovereign wealth and pension plans into this so prices will appreciate and stabilize.

You know, for all the excitement about crypto, we're only $1.2 trillion, and that's a nothing burger. Nothing. $800 billion, who cares? That may sound like a lot of money; it's nothing in the context of what it could be if we can get this worked out. So I like this.

Now let's listen to the interview from... you know, I just did this, so why don't you listen to what she says here? This is really interesting stuff; she's got something going on here.

Mr. Wonderful: "Hey everybody, Mr. Wonderful here. This is an episode of Mr. Wonderful goes to Washington and I'll tell you why I'm here. I'm here with Senator Lewis. This is very important. We're talking about the policy for crypto. Now this is getting exciting because we're finally getting some policy, and this is bipartisan. You've got a Democratic senator with you now, right?"

Senator Gillibrand: "Senator Kirsten Gillibrand from New York is my lead co-sponsor."

Mr. Wonderful: "How often do you see both sides of the table anymore here in Washington?"

Senator Gillibrand: "Pretty well never anymore, right? Not that I want to be negative; I'm hoping that it'll become more common, but it's been pretty rare for the last 15 months or so. It's just been wonderful to work with Senator Gillibrand. She's been a securities lawyer; she's in, you know, the largest capital market in the world in New York. I come from a state that really was the leader, the pioneer in legislation to deal with digital assets, so it's really been a great combination."

Mr. Wonderful: "So let's go back to your motivation to get into this storm because crypto has been very controversial even in the last few weeks around stable coins. But let's talk about this very broad base bill, this bipartisan bill. What's the motivation?"

Senator Gillibrand: "Well, the motivation is to find the sweet spot between allowing innovation but having a regulatory framework that everyone understands, the rules of the road, and can work with. It's been called, as you know, the wild wild west; it's an untamed territory where no one knows what the regulatory environment is going to look like. We want to provide some structure to the regulatory framework, so we're going to lay digital asset regulation on top of our existing regulatory structure for traditional assets."

Mr. Wonderful: "So let's talk about the different asset classes and just give us the 30,000 foot view. Let's talk about the granddaddy, Bitcoin. You're pro-Bitcoin, I'm going to assume?"

Senator Gillibrand: "Yeah, very much so. Bitcoin will be a commodity, so it will be."

Mr. Wonderful: "Thank you for saying that! Oh my goodness, take a moment of silence on that! That is fantastic, that's fantastic! So it will be under the Commodity Futures Trading Commission. So that will be the place where the spot market, the futures market, and other commodity-type digital assets will be regulated."

Mr. Wonderful: "What about new innovations like Polygon or Solana or other chains that are not Ethereum? How do you treat those in this bill?"

Senator Gillibrand: "We use the Howey test, which is a traditional court decision that's been used for years to determine what is a security. And we've looked at every circuit court case that has commented on the Howey test, updated the Howey definition to incorporate every single court case that has interpreted the Howey test, and now that will be codified or turned into law in this bill. So anything that would have been a security under the Howey test will continue to be a security, and the others will be commodities."

Mr. Wonderful: "Okay, so if the idea is that there's policy in place to do the test and then give some certainty in the market, let's go to an area that's been very, very controversial in the last six weeks: stable coins."

Senator Gillibrand: "Yes, you spoke recently here in Washington at the commerce digital commerce. You were there; there were a lot of people asking questions about stable coins because Luna went to zero. It was an algorithmic stable coin not backed by the U.S. dollar, correct?"

Mr. Wonderful: "There are stable coins backed by the U.S. Do you contemplate that in the bill?"

Senator Gillibrand: "Yes, our bill would provide that it would have to be backed by one of two things: either 100% asset-backed by hard assets or by FDIC insurance. So a financial institution that is FDIC insured could issue stable coins, as could a non-FDIC entity as long as it's backed by more than 100% assets."

Mr. Wonderful: "Now I'll tell you why this is so important of all the attributes of this bill. To me, as an investor, this is what I care about the most: If the U.S. dollar is going to remain as a default currency globally, we need a U.S. backed stablecoin because as a payment system, it's so far more efficient than what we're doing, transferring between different geographies, different jurisdictions, different countries, trying to figure out FX currency and the ACH, the days it takes to move money."

Senator Gillibrand: "Exactly, and all of this works with total transparency. This bill contemplates giving us finally something because I'm not using the Chinese stablecoin, right? Nor is anybody else I know. But if we got this, then I could really do transactions just in real estate in different countries—all the things we could do with this. So I applaud you for that. I think now the challenge is selling this monster. This is a big bill, right?"

Mr. Wonderful: "Big bill. What's the name? What happens next?"

Senator Gillibrand: "Well, there are four committees in the Senate that have jurisdiction over this bill. Ag, because they oversee the CFTC; banking, because that's SEC; very huge. The tax components would go to finance, right? The cybersecurity components would go to the intelligence committee, and when you walk the halls working that file, what kind of bond are you getting?"

Mr. Wonderful: "I'm getting good reception from the Senate membership, and it's because they know that Senator Gillibrand and I have been working on this bill. They know it's comprehensive; they know what elements we're covering. So this is going to be the base bill. Will it look like it does today? It could look very different in a few months after all the committees have finished their work. The important thing is, they're all going to be working from this draft. This will be the base bill. Some want to chop it up into three pieces; are you cool with that?"

Senator Gillibrand: "I am, because of the jurisdictional. Because I'm walking these halls too, and I'm listening to everybody. They're excited, finally we've got something coming, right?"

Mr. Wonderful: "The buzz is that we'll deal with this after the midterms in the new year. Is that realistic?"

Senator Gillibrand: "Well, I think that we want to. I think that is realistic, but I also think that we'll try to have some committees that wish to move forward with hearings to do so. For example, that might be true in Ag because of the CFTC importance in this bill. We'll probably be working somewhat with the SEC as well."

Mr. Wonderful: "Well, I'm sure you'll be hearing from them. And is there a bit of a jurisdictional tension between these different parties? Who controls this stuff?"

Senator Gillibrand: "There may be, but the good news is in my communications with the leadership at both the CFTC and the SEC, they're very open to working with us on this bill. We have open-door policies; we've been anxious to get their feedback. And it's going to be divided; there are a lot. As you know, there are tens of thousands of cryptocurrencies, and some of them need full disclosure, and the SEC is actually really good at disclosure, so there will be a light-touch disclosure provision in this bill that gives the SEC direction that will help consumers make informed choices."

Mr. Wonderful: "Now let me give you some good news. I know we have to wrap, but I travel the world because I service sovereign pension plans; they love what you're doing, they want policy, and they really want it around Bitcoin, which they're very interested in putting an allocation to. I mean, it is the granddaddy. If you could focus on the big market cap coins first, but we would love you even more!"

Senator Gillibrand: "But anyways, that's the update from Washington. Isn't this fantastic? Really, from the senators making it happen, this is terrific! Now where can they find out more?"

Mr. Wonderful: "Well, they can find out more on my website and the Senate and Senator Gillibrand's website in the Senate. If they have comments through those same avenues, we will direct people who want to provide us input to the place to send it. Don't be bashful; we'll be back soon. Thank you so much!"

Senator Gillibrand: "Thank you! This is wonderful policy."

Mr. Wonderful: "If you like that video, wait, did you see my next one? Don't forget to click right over here and subscribe."