Transcript:
Penny Crosman (00:03):
Welcome to the American Banker Podcast. I’m Penny Crosman. As the federal regulatory environment continues to make banks’ involvement in decentralized finance more feasible, one thing bankers need to think about is which DeFi technologies and networks might be a fit for them. One choice is Solana, an open source distributed ledger. SoFi plans to support direct Solana deposits and custody this year. SoFi users will be able to manage crypto balances alongside their checking, their savings, and other financial products in a single place. JPMorganChase in December announced that it arranged a commercial paper issuance for Galaxy Digital Holdings on Solana that was purchased by Coinbase and Franklin Templeton. Here with us today is Miller Whitehouse-Levine, CEO of the Solana Policy Institute, a nonprofit organization founded last year to educate U.S. policymakers on the benefits of decentralized networks like Solana. Welcome, Miller.
Miller Whitehouse-Levine (01:01):
Thank you for having me. Good to be here.
Penny Crosman (01:03):
Thanks for coming. So what brought you here? Why do you care about decentralized networks and Solana specifically?
Miller Whitehouse-Levine (01:11):
It is an excellent question. And to answer it, we have to rewind the clock back to 2013, 2014. At the time, I was a young man living in China, in Beijing, going to school there. And it was quite interesting to me the extent to which the Chinese political system was different than the U.S. political system and the importance of using technology to empower individuals versus sovereign nation states became very attractive to me. At the same time, the weird expat community in Beijing was into this thing called Bitcoin. And so those two kind of trends in my life came together at the right time. And Bitcoin as a technology that can empower individuals versus centralized actors became very attractive to me, and I wanted to work on that. So Bitcoin is a blockchain that is essentially a shared record book, a database that nobody owns, but everyone can read.
(02:18):
And the entries of which once written can’t be erased or altered. So Bitcoin, the ledger, proves you could create one of these databases to send one Bitcoin from here to there. Ethereum proved you could do that for software programs. So not just send Bitcoin from here to there, but use this ledger to create software programs where if input X happens, automatically Y happens. And that is the core innovation of Ethereum. And I thought that was extremely exciting and wanted to work on it because it expanded the applications of these decentralized networks beyond just moving value from point A to point B. Ethereum opened the door to things like smart contracts, automated lending, decentralized finance, programmable money, token issuance like stablecoins, et cetera. So Ethereum was a major innovation and I became very interested in decentralized finance, applying the same principles that Bitcoin applies to peer-to-peer payments, but to other activities beyond that.
(03:29):
Really anything one could dream up like dollar stablecoins or smart contract-based decentralized finance. That brings me to Solana. And I think it also answers the question as to what problem does Solana solve, which I imagine is of interest to your listeners here. The issue with Ethereum, and I don’t want to say it was an issue, but the trade-off that Ethereum makes is it can be slow and costly. Ethereum processes 15 to 30 transactions a second, and fees, depending on whether network usage is high, can reach over $100 per transaction. Compare that to something like Visa, 15 to 30 transactions per second on Ethereum versus 24,000 plus transactions per second on Visa. And so the origin of Solana was to solve that problem. A blockchain that wants to run global financial infrastructure can’t be rate limited in the way that Ethereum is. And so the folks that built Solana were looking at this problem and used insights from the telecommunications industry to try to make a high-throughput blockchain that eventually became Solana.
(04:51):
As an Ethereum DeFi user, I got priced out from using it because transaction fees got too high. And over time, I found myself using Solana more and more over the last five years and decided I want to focus my work on it.
Penny Crosman (05:06):
Interesting. Can you sort of describe the Solana network, how it works and what it looks like and where it’s different from Bitcoin blockchain and the Ethereum ledger?
Miller Whitehouse-Levine (05:20):
Yes. I think that the easiest way to think about it is Solana operates like a multi-lane highway versus a single lane road. So on blockchains like Bitcoin and Ethereum, everyone queues up and goes through the same doorway or down the same road in order. Importantly, on blockchains like Bitcoin and Ethereum, they have to go in order through one lane because everyone participating in the network’s consensus process has to argue about when transactions occurred and in what order. So that necessitates a single-lane highway because everyone participating in the network has to decide in which order transactions have occurred before processing them. Solana says, “Let’s bake the clock, the order of operations, into the base of the transaction, into the network itself, so we don’t have to argue about ordering and when things happened because we all have a shared cryptographic clock and know what time it is when a specific transaction occurred.
(06:33):
That is an innovation from telecommunications. It’s used in GPS because there’s discrepancies, for example, between when satellites send data down to earth and when earth receives it. So that was the core and insight was applying this cryptographic clock to blockchains to increase their bandwidth. One way to think about it that I think the best analogy, that was kind of an aha moment for me, was if you think about a sports replay and say a touchdown occurred while the buzzer was going off as far as the viewer was concerned, the question is, did the ball cross the line before the buzzer happened? And if there were no clock on the field, we would go around to every player and every player would have to vote on whether they thought the ball crossed the line before the buzzer happened and it would take a long time and be a huge mess.
(07:32):
That’s how Bitcoin and Ethereum work, you have to argue about the order of when things happened before making a decision. What Solana said was, “Let’s burn a clock into the replay camera such that there is no argument. We have a shared timestamp to compare the ball crossing the line and there’ll be no debate about which occurred first. Did the buzzer happen first? Did the ball cross the line first? There’s a clock right there that everyone agrees to before the replay needs to happen and there’s no room for debate.” So that is what Solana did and just kind of again, the best analogy that gave me a light bulb moment. And what that means is multiple transactions can go down a multi-lane highway at the same time because everyone knows what the order of operations was. We don’t have to argue about them and create a bottleneck through which everyone has to first argue about what happened when, and then go through the same door.
(08:40):
So that was the key innovation of Solana. It was looking at something like Ethereum, this is an incredible network with amazing potential and innovation, but we need to increase the bandwidth and scale at which these networks can operate if we hope to run global finance and commerce on them. And that is how Solana was born and how Solana works.
Penny Crosman (09:02):
That’s a good analogy. Does Solana still have the immutability that’s such a key characteristic of Bitcoin and Ethereum?
Miller Whitehouse-Levine (09:12):
Yes. And it’s one of the trade-offs that Solana makes. Ethereum processing 15 to 30 transactions per second is relatively easy. Processing more than 25,000 per second demands more computer processing power. So for example, to run a Solana validator, you need a relatively powerful computer, one with 128 gigabytes of memory, for example. And that kind of processing power can be more difficult to come by, but it’s necessary to run the throughput. So for the most part, unlike Ethereum where I could run a validator using my personal computer, you need a more powerful, not Netbook Pro, but a more powerful computer to run a Solana validator, which can left alone tend toward centralization. The reality is though I think there are currently 1,200 validators on every continent running Solana. So I think the trade-off in my mind was worth it for the throughput, but it’s how one sees the world.
Penny Crosman (10:30):
So I want to return to that tech stack discussion in a little bit, but what are some of the biggest financial projects that are currently either running on Solana or plan to run on Solana at this point?
Miller Whitehouse-Levine (10:44):
There are a ton. So I think the simplest and perhaps a little bit of a cute answer is stablecoins. USDC, all of these Genius Act or soon to be compliant stablecoins are running on Solana, but there’s all sorts of different things running on them. So for example, PayPal has a stablecoin launched on Solana. Visa launched USDC settlement for U.S. banks on Solana in December. There’s a ton of real world assets heading on Solana. For example, Franklin Templeton has a U.S. government money market fund called SOEZ is the ticker. JP Morgan, Galaxy Digital of commercial paper on Solana. So I think BlackRock has bidded on Solana. There’s a ton of folks tokenizing assets on Solana using Solana-based assets for settlement. So there’s a wide range of traditional financial players experimenting with Solana and using it already. And that’s not to mention all the more quote-unquote crypto native applications around DeFi and how I started using it a few years ago.
(11:57):
So I think really, I think one of the stories of the last 14 months since the beginning of 2025 has been the insane explosion of experimentation across every corner of the traditional financial sector experimenting with these blockchains and Solana is one of them.
Penny Crosman (12:20):
And maybe you sort of described this before, but what makes Solana good for stablecoins? Is it the speed advantage that you were talking about before?
Miller Whitehouse-Levine (12:31):
Exactly. So if I am thinking about sending you $10 or 10 USDC on a blockchain, I’m going, in my personal life, going to choose a blockchain that’s fast and cheap because $10 isn’t a huge amount of money. Solana, usually the transaction fees are between a thousandth of a cent or 10 thousandths of a cent. So it’s quite inconsequential the processing fees because of the high throughput that the network allows. So my vision of the future of the ecosystem is a global network that allows for one massive pool of liquidity, one global capital market. And in my mind, that requires a high throughput blockchain that’s fast and cheap to use. And that’s why I think Solana is really cool.
Penny Crosman (13:30):
So I see banks and financial services coalitions thinking about and working with Solana, thinking about working with Ethereum, and to some extent, Canton Networks, the DTCC is building their ledger on that. Is there a rivalry between these networks?
Miller Whitehouse-Levine (13:55):
I think it depends on who you ask. Some people would definitely say yes. I think about it more as they take a different philosophical approach to solving the scalability problem that I was describing there. What Ethereum says is let’s keep the underlying layer one as simple as possible. 15 to 30 transactions per second is fine because we’re going to take a modular approach to scaling. What I mean by that is Ethereum has these things called Layer 2 networks, Canton being one of them, that are kind of side chains that roll up to Ethereum and allow for more scalability using these modular side chains versus the underlying network architecture. Solana says the opposite. Solana’s approach is, we want one network where everything happens, one global pool of capital liquidity and commerce all on one shared ledger. So we need to scale the L1 as fast and quick as possible.
(15:05):
The motto of Solana developers is increased bandwidth and reduce latency, and that is the guiding line. So the vision, I think, of the two chains is similar, just the way that they’re trying to accomplish them is different. Canton is, I think, even more of a different situation because it’s a permissioned chain. So it’s, in my mind, not a blockchain like Ethereum or Solana per se, because it isn’t neutral global infrastructure. There is a centralized actor there that is permissioning access to it, which is, in my mind, not a blockchain.
Penny Crosman (15:45):
And do you think that these chains will ever be interoperable or will ever have a neutral ubiquitous chain that everyone can use?
Miller Whitehouse-Levine (15:58):
Yes. Well, I think that I obviously am a believer in the thesis that one single global chain is the way to go, but I think that no matter what, there is already interoperability across various blockchains. One of the ways I think about it is in the ’70s and ’80s, various universities had their own intranets and eventually someone was like, “Let’s plug these internets together and create the internet across the country.” And that is already happening today and has been happening across blockchains for several years. Those interoperability tools are called bridges and they do exist.
Penny Crosman (16:44):
So let’s go back to what you mentioned before, how Solana does require more computing resources than, say, Ethereum. What might be some of the technology prerequisites for, say. a traditional bank that wants to run a stablecoin or some other kind of decentralized finance project on Solana, what would they have to do to their tech stack to make this work?
Miller Whitehouse-Levine (17:15):
It’s an interesting question and it depends on how they want to participate in the network. So everything that I’ve talked about in the last 15 minutes has been around participating in the validation of the network. So participating in supporting the underlying infrastructure on which all of these amazing things run and all of these transactions can occur. So if one wants to participate in the validation process itself, then you need a powerful computer and that’s it. Any permission from anyone, you can participate in the consensus validation mechanism of the network. That’s not particularly interesting to your listeners, I imagine, to launch something like a smart contract on Solana or to launch an asset on Solana, you pretty much just need a computer and a developer that knows how to code something on Solana. So it’s really using the network for either asset issuance or creating software on the network, there’s almost no barrier to entry.
(18:25):
I’ve launched, for example, MillerCoin on this network and it took me two minutes and less than a cent to do so. So it depends on what wants. I think if I’m a traditional financial institution, I think the gating prerequisite will not be technical capability, but human capital, how these networks are programmed is different than traditional software in a pre-blockchain world. And so I think the human talent will be the bottleneck versus technical capability because compared to what even minor financial institutions are capable of on the tech side, these things are not particularly demanding.
Penny Crosman (19:16):
And obviously U.S. banks are heavily regulated, so they have a lot of requirements in terms of auditability of transactions. And they’re going to, I think, have to make sure that everything that’s on a ledger like Solana is also reflected in their own core system. They have to run a very, very tight ship. Would you say that Solana lends itself to the banking regulations that our audience have to follow?
Miller Whitehouse-Levine (19:52):
Well, we certainly need a lot of innovation on the regulatory front before I think banks are going to feel comfortable leaning into any blockchain-based financial services. And I think that is a fact that is reflected in market structure legislation that Congress is working on now. There’s a whole title in there about making it permissible for banks to touch these ledgers. And I think that it’s going to be difficult for banks to find comfort using them for offering financial services before they have explicit statutory sign off to do so. So I think that there’s a ton of work to be done there, and I think it’s going to be a multi-year journey because of, to your point, banks run the tightest ships around. I think from the finality and transaction auditability of various chains, or at least the major networks, there aren’t substantive differences. I think one should have just as much faith in the auditability of the Ethereum blockchain.
(21:00):
You can literally go back to the first transaction that was ever made on it today, just using something called the Block Explorer. And the same is true for Solana. You could look at every transaction that has ever occurred on that network since it launched in 2020 on a website like soulscan.org with Solana finality occurs in less than a second and forevermore, that ledger of transactions won’t be altered. So I think as far as auditability and finality issues are concerned, those are the two areas that I think blockchain still the problem far better than the traditional multi-ledger based system across the financial system, but that is all going to be … I don’t think banks will be able to take advantage of that prior to regulatory comfort with them doing some.
Penny Crosman (21:58):
So you mentioned before that having the right human expertise is really the key prerequisite for working with Solana. Do you have any advice about that? Where could a bank find the right people with the right knowledge and skills for this?
Miller Whitehouse-Levine (22:18):
Yeah. So I think one of the interesting things about blockchain is that they use custom or bespoke coding languages. So for example, on Solana, the language is called Rust. And one of the major difficulties in starting a new layer one blockchain is convincing developers to learn a new language to develop smart contracts on that platform. So there are, I would say probably 10,000- ish developers around the world that are confident using Rust today. That number is increasing rapidly, but they’re certainly out there. And I think beyond the scope of this conversation, but layman’s ability to program software applications is dramatically increasing using things like LLMs and AI. So I think that for reasons totally unrelated to us, that situation’s changing rapidly and software developers might be easy to come by because everybody’s going to be using AI to code things, but who knows?
Penny Crosman (23:29):
Miller, thank you so much for that interesting conversation. And to all of you, thank you for listening to the American Banker Podcast. I produced this episode with audio production by Adnan Khan, WenWyst Jeanmary, and Anna Mints. Special thanks this week to Miller Whitehouse-Levine at SPI. Rate us, review us and subscribe to our content at www.americanbanker.com/subscribe. For American Banker, I’m Penny Crosman, and thanks for listening.