Transcript 0:00 [funky music] Yeah, well, Edward, for the last four years, the Biden administration has basically prosecuted and persecuted crypto companies, really driving them offshore. 0:24 I've heard so many outrageous stories by founders, by entrepreneurs. 0:28 The Biden administration would not tell them what the rules of the road were, and they would then get prosecuted, and what the industry wants more than anything else is regulatory clarity. 0:36 They're saying, "Just tell us what the rules are. We will abide by them." 0:40 And the Biden administration would never do that, and because of that, all the innovation was basically moving offshore, and America was about to lose this, uh, technology of the future, and we want that innovation happening here in the United States, and I think it now will happen in the United States because President Trump has declared that the US must be the crypto capital of the world. 0:58 So it creates this working- Do you get tired of winning, Colin? I, I don't get tired of winning. I don't get tired of winning, but I would like to clarify something that Mr. 1:08 Sachs said, uh, that, that we want regulatory clarity. I, I disagree. I, I want the regulators gone, and I want the regulations destroyed. I want unfettered, Wild West, raw, naked, free market anarcho-capitalism. 1:24 Bro, get it. That's what I personally want, and I don't want any of this highfalutin regulatory nonsense. It feels a little bit like we are about to get that. We will play some clips- [laughs]... 1:34 at the end of this episode where it seems like the railroads have been torn up, and the wi- the West is getting more wild. 1:42 All of your infrastructure and your law, it's really just sheriffs now gunning down people in the street, um, as the- [laughs]... at least as the, the rule of law, your chaotic anarcho-capitalism. 1:54 There really does seem to be a kind of spirit of that in the air, like with Trump's meme coin, but then there's this other element to it where it's like the deregulation is also masking this effort to bolster the stablecoin aspect of the crypto industry, which is incredibly helpful for dollar hegemony, right? 2:17 So to kind of set the stage here, we're going to be picking apart some pieces from this Fox News interview that David Sachs, Trump's crypto and AI czar, had this week, um, or czar, excuse me. 2:31 I actually think this was a week or so ago. 2:33 And then we're gonna dive into some of the news that came out this week, like with the, uh, the idea of Trump signing the executive order for a sovereign wealth fund, and also some of Sachs' comments on what he would like to see with regards to regulations on stablecoins. 2:49 Does that set the stage well, Charlie? That does set the stage, but if you, if you, uh, yeah, but just speaking of stages, there will be a stage at Tysons, Virginia, at the now Strategy HQ. 3:01 We have OpNext coming at you this April. Let's play the ad reel. 3:06 Hey, this is Will with Blockspace Media, and I don't know if you heard, but we just announced the second edition of our conference series, OpNext, now to be held at the MicroStrategy HQ in Tysons, Virginia. That's right. 3:19 After the success of our first scaling conference at Fidelity last fall, we're doing it again this spring, April 11th and 12th, at the MicroStrategy HQ. I'm really excited for the programming. 3:29 We have various stakeholders, industry, developers, and Bitcoin miners present. 3:33 So join us in April for open, neutral, and honest conversation about the leading proposals and technical solutions that will scale Bitcoin to the next billion users. 3:43 No booths, no tokens, no shills, just Bitcoin and honest conversation. You can find tickets and more information at opnext.dev or click below in the show notes. That's right. 3:59 OpNext, April, Tysons, Virginia, at the Strategy building. Actually, you wanna kick off with the innocuous news about, uh, MicroStrategy? Yeah, the fact that it's no longer MicroStrategy, it's just Strategy. 4:14 It's like that scene- Yeah... from The Social Network. Drop the Micro, just Strategy. [laughs] And it comes with a visual rebrand, too. Yeah. They have, have moved away from the stop sign red. 4:26 They have put in the burnt orange and also the Bitcoin currency logo, the B, is appended to the end of Strategy now. Yeah, and as you know, um, according to the press release- [laughs] This is-... 4:39 um, orange signifies energy, intelligence, and Bitcoin. Sick. My favorite, though, is Michael Saylor's quote. Right. "Strategy is one of the most powerful and positive words in the human language." 4:51 I personally didn't know this, but now I'm ready- [laughs]... to run through a wall. But now you do. But now I do. Um- Uh. So yeah, that happened. 5:00 Um- Well, remember, remember, perfection is not achieved, or per- perfection is achieved, not when there is something more to add, but when there's nothing left to take away. Um, so [laughs] 5:09 uh, look- I, I just wanna say here, file this under aesthetic marketing and things that you do to shake it up. 5:18 Also, pour one out for all the content creators who just lost years' worth of SEO on the MicroStrategy name and now have to start from scratch with Strategy. We- Yeah. 5:29 Our, our heart goes out to you as, as, as independent media. I mean, we are, we are con- reconfiguring the OpNext website as we speak. 5:37 We have our gremlins out there deleting all the M-I-C-R-Os on the website just so it says Strategy. So, um, but that was the smallest news of the week. Um, really just been a bunch of winning right now, Colin. 5:50 A bunch of winning. I mean, do you wanna start out with... 5:53 Um, so we had, we did a whole Ross episode two weeks ago, so if you don't know the story of Ross Ulbricht, go check out the story of Ross Ulbricht and the Silk Road. 6:01 Ross is now full pardoned, but it doesn't stop there because just today-Yeah, we should start with this and then we'll get back into the boring regulatory David Sacks stuff. Yeah. 6:11 So, Alexey Pertsev, I don't know if I'm pronouncing that correctly- Exactly... um, Tornado Cash co-founder is released from prison. Now, for those of you who don't know about this case, 6:24 um, Alexey, and I believe someone else from Tornado Cash was also... Or is he the only one who ended up actually getting, um, jailed? There were two of them. 6:32 He- Yeah, one of them, uh, was, like, on pa- parole or something- Okay... or whatever and, uh- But he was the only one who actually was imprisoned. 6:40 But basically, the developers of Tornado Cash, which was a, an Ethereum smart contract for, um, uh, paym- or, you know, a fund, a blockchain, blockchain obfuscation. 6:52 It was kind of like a CoinJoin, uh, protocol for Ethereum. It was a mixer, as they call it, so that people could anonymize their funds. They were arrested, I believe, in 2023. Was it even earlier than that? Was it 2022? 7:06 I think it was '22, yeah. Yeah. And, um, basically saying that they were involved in money laundering. Uh, and, um, and because they built this, this protocol. 7:20 Now obviously this was a huge deal and kind of a... I would say the entire industry, Bitcoin maximalist or not, rallied around this saying, like, "You can't prosecute someone for writing code." 7:34 Uh, as Charlie said, similarities between the Silk Road stuff with Ross, I think, in terms of, um... But with this it was even more insidious- Yeah, it was-... 7:44 because it was basically implicating developers and- Yeah, this, this was-... saying, "You are money transmitters because of the code you write." Yeah. 7:50 Like, we don't wanna get too deep into the ethics of how anarcho-capitalist free market we are, but, like, this would be eq- this would be more in line with, like, what the cypherpunks of the '90s, what the free speech, like, code, uh, code punks of the '90s would, would, like, put a line in the sand on, which is you're writing code and you're putting out open source software and, um, not operating an exchange, you're not operating anything. 8:20 This is, like, software, uh, which is running autonomously outside of you, which lands you in prison. So, um, 8:31 you saw s- you saw, again, another, another similar story, the Samurai Wallet developers, who we interviewed on the Mining Pot, I think in, um, uh, December of '23, who got or now, um, imprisoned, I think, in France. 8:48 And, um, again, that's a delicate story. On- But again, it's another, like, rallying cry for privacy and, um, free speech people. Again, not all of these situations are made the same. 9:01 They're, they are different and unique, but it is a similar trend going on. And whenever one of them gets out, the boys love to see it. The boys love to see it, yeah. Just a few things to cap this off. 9:12 It's obviously a war against privacy in a way, but there are worries that this spills over into other aspects of the Bitcoin ecosystem. Like, for instance, I believe, 9:22 I, I think at the behest of E- Elizabeth Warren, I could be wrong about that, but Congress presented a bill a few years ago basically making the argument that, um... 9:34 Or, or the law could've been interpreted in such a way where node operators and miners would be considered money ser- money transmitters. And that's what a lot of people are worried about with these, right? 9:44 These are the first shots in a war potentially against self-custody and against the very backbone of a lot of these cryptocurrency and blockchain networks, and specifically Bitcoin, right? 9:56 Like, if you're gonna say that people operating a node because they're r- relaying transactions, or miners because they are ordering transactions into blocks are considered money transmitter businesses, you, you basically cripple the entire industry. 10:08 Um, then nothing came of that, but with the privacy guys, like, they very clearly went after them, uh, partly because these, these protocols and these smart contracts are used to obfuscate funds, right? 10:19 And they don't like that because then they don't know what they're being used for, they don't know who is using what, and it, it makes the blockchain, um, all the more private. 10:28 One last thing to say about the Samurai case. Um, after the Samurai devs got arrested, Wasabi Wallet completely shut down. Like, they were just like, "We're done." That was the other big CoinJoin wallet for Bitcoin. 10:41 It w- Yeah. And so- Yeah, and the crazy thing is it didn't- it wasn't just there, it was, like, that two-month period every, like, all the lightning wallets began to just, uh- Yeah... cease operations and- Yeah... 10:52 and that was the crazy thing 'cause there was no direct pressure. There wasn't even, like, really much regulatory scrutiny on them that we know of. 10:59 It was, it, it was, it's really surreal that, um, all you need is just, I don't wanna call it a snake, but it's like you ki- like, the most famous, uh, people in this category, and then pretty much everyone voluntarily ceases operations. 11:14 Now- Yeah, you don't even have to fire a shot for the other ones. They just- Yeah, and it-... are putting down their weapons. 11:20 Yeah, and that's, like, the thing is, like, I, I was ki- I was, like, taken aback by how we as an industry pride ourselves in our resilience and commitment towards, uh, freedom and all that, but then here we are and it, this is not even the, "Then they fight you" really. 11:36 It doesn't feel like it. But anyway, that's over 'cause they're not, they're not fighting us anymore, Colin. In fact, I think they're, they're cheering us on and whipping us onwards. And they're co-opting us. 11:47 They're literally co-opting us. [laughs] One last thing before we get to that. 11:51 Um, if you wanna learn more about the creeping noose of the compliance apparatus in the US, I recommend you keep an eye on Blockspace next week because we've got a great op-ed from a former engineer at Swan Bitcoin, Harsha Goali. 12:08 Um-Keep an eye on it. We're gonna put it on the website, throw it up on the newsletter probably on Tuesday. Great read, really good insights, and well-written. Anyway- Yeah... 12:18 we are not tired of winning yet, but we don't- No... know if we're actually winning, and that's kind of the focus of, of this- Well, we're not losing. I'll say that. We're not losing. We're not losing. 12:27 We're doing a lot better than we were. But I would love... Can you throw the Sachs interview back up? Yeah, yeah, yeah. 'Cause there's a specific clip from that 12:35 that we were gonna start with because it's really funny, and then we'll get into some of the more serious stuff. Uh, which, which clip was it? 'Cause I- It's that one, uh, the one on the right there at the bottom. 12:47 Yeah, this one. So this, this is the one we started with? Yes. Yeah, here it goes. Which the Biden administration has basically prosecuted and persecuted crypto companies, really driving them offshore. 12:58 I've heard so many outrageous stories by founders, by entrepreneurs. The Biden administration would not tell them what the rules of the road were, and they would then get prosecuted. 13:06 And what the industry wants more than anything else is regulatory clarity. They're saying, "Just tell us what the rules are, and we will-" Again, don't want clarity. I want the regulators to call and be 13:16 like, "Hey, Lee, I'm calling to be clear. I want Mad Max anarcho- And the Biden administration never did that. 13:18 And because of that, all the innovation was basically moved offshore, and America was about to lose this, uh, technology of the future. 13:22 And we want that innovation happening here in the United States, and I think it now will happen in the United States because President Trump has declared that the US must be the crypto capital of the world. Oh, wait, no. 13:35 Can you keep... Sorry, I wanted you to keep playing it because there's the- So it creates this working group that you will chair. What will you be looking for, and what type of guidelines are you looking to put out? 13:45 Yeah, so a few, a few areas. So number one, market structure. We need to define what is a security, what's a commodity, what's a digital asset or collectible. Um, you know, so there's a few different categories here. 13:55 So defining the market structure is important. Second area is stable coins. I think stable coins are a really interesting area. It gives us the opportunity to extend the dollar's, uh, dominance internationally. 14:06 We can basically create a, a digital dollar that people all over the world will use. And then the third area that we're gonna look at is we're evaluating this, uh, national, uh, stockpile for digital assets. 14:16 Uh, we haven't created it yet, but we're gonna study that issue. Okay, that's, that's great. That's what I wanted. Quiet part out loud, um, about the extending the dollar dominance. 14:29 That's gonna be a big part of this show. We're gonna do a segment on that here in a second. The other thing, though, I wanted to just... Sorry, can I- No, no. Go, go. I, I mean, this is- Um- We, we've talked about this. 14:38 We, we call it the Mark Goodwin, uh, argument. Yeah, right. And the... But the first thing, though, the Mark, the clarity and the actual guidelines, I will say this is a benefit. 14:47 This is a net positive because that was why so many people at Bitcoin 2024 e- erupted in applause and approbation when Trump said he was gonna fire Gary Gensler. Didn't get a chance to. Gary resigned. 15:01 He saw the writing on the wall. But for years, since the ICO boom, the SEC's mandate for 15:11 cryptocurrencies has been guidance by enforcement, where they kind of equivocate, and they don't tell you what they think is or isn't a security. 15:19 They said consult the Howey Test, and then they would just, like, piecemeal throw out suits or investigations into different projects. 15:29 And this not only caused problems for some of the ICOs, which I'm not really gonna defend. A lot of those were naked cash grabs. But a lot of the exchanges were like, 15:39 "Well, we don't wanna be listing unregistered securities, then we get in trouble." You can see a lot of diatribes from Jesse Powell from Kraken on this. Brian Armstrong has talked about it at length. 15:50 But it created this, this, this completely muddy, unclear picture about what was actually considered permissible and not. 15:58 And so having clear guidelines over what is considered a security and what isn't is going to be very healthy the, for the entire digital asset ecosystem. In that interview, I believe, 16:09 David Sachs also says, and I think this is a funny part that we wanna, that we wanted to pull, that meme coins and NFTs should be considered collectibles and not securities. I'm inclined to agree with that. 16:20 Um- Well- But it's really funny. This is, this is hilarious because it's not just collectibles. Like, you... I actually pulled up the IRS tax code here, 'cause what he's specifically referring to [chuckles]... 16:34 I did not prepare this, but I've got it right here actually. Um, definition of a collectible [chuckles] Okay. Any work of art- [laughs]... rug or antique. [laughs] There's a meme. New rug. 16:46 Metal or gem, sampler coin, alcoholic beverage, um, tangible personal property. What is not considered a collectible? Gold, silver, or platinum coins, coins issued under any laws of state, or bullion. Um, 17:02 and it's really interesting because, like, I do not think a single... I don't think we have a single person who goes, "I'm gonna buy Octua meme coin as a collectible." As a collectible. [laughs] Yeah. 17:18 Those are unbridled speculation on- Yeah... kinetic energy and popularity. Those are definitely not collectibles. And it's- Are collectibles fungible? [laughs] Yeah, and you know what's funny? It spits in the face to... 17:31 That's a really good point. Are they- Yeah... they're not fungible typically. And so, like, for the NFTs, I could see the argument. For the meme coins, maybe not so much. NFTs, NFTs, you gotta call them collectibles. 17:44 I don't know what it is. But in both cases, though, the funny thing is, is they actually spit in the face of the Howey Test, which was a, a test that the SEC references. 17:52 It, it dates back to, I think, like, a 1940s, uh, Supreme Court case, um, that basically set the-Uh, rough guidelines for what could be considered a security versus n- and just, you know, for those that are like, "Uh, why do you keep saying security, securities?" 18:07 Are things like equities and stocks and things like that. But it's just, you know- Where you, usually you buy them, like, it... 18:13 There's a solicitation, some, to buy them under the Howey Test, and also there is a reasonable expectation of gain. And I think that's what's funny about the NFT and meme coin thing. 18:22 No one buys those not expecting them to go up. It- That is the entire reason you are playing on the casino, the online casino, you're riding the carousel. 18:32 I think- And- I think maybe you're skipping to the [laughs] we're skipping to the actual [laughs] The coup de gras... which is Dave Portnoy today being very clear. 18:44 Or I, I want to find the, the soundbite, but I'm just gonna play it. Here we go. That I'm telling you I bought, and you know what I'm doing. I'm trying to make money. It pops, I sell it when I feel like it. 18:55 It's like the rocket game. It's the yodeler on The Price Is Right. [yodels] [laughs] And how high it goes, one, it's a risk. And every one of you motherfuckers buying these coins know the risks. 19:07 So when you cry, "Oh, Dave, don't, Dave sold his coins," you're just mad you didn't dump them on fucking me, you little bitches. [laughs] So stop crying. Every one... 19:18 This isn't like Joe Sixpack or, or, or your grandmother who's losing their life savings. This is everybody playing the same game, which is legal now. They're, they're collectibles, they're hobbies. 19:28 They're going up and down. Sax said it. We're all know the score. So don't cry when you... I've lost tons of money on shit coins. Don't cry because you're too late. It's the yodely game. So, like, also your camera's off. 19:43 But, um, uh, yeah, this is... It's, uh, pretty hilarious that, like, Dave calls it what it is. Uh, he's like, "They're collectibles now. You can do... You... This means literally anything. You can-" [laughs] 20:00 It's hilarious. I love the, like, dumping on me thing as well. It's like... 'Cause Dave has just always had shit luck within crypto or Bitcoin. 20:08 But, um, yeah, the other obviously funny thing about this too is Sax is saying this, 20:16 you know, a- on the heels of Trump not only launching meme coin for himself and his wife, but also all of the NFTs that he's launched over the last couple of years. 20:28 It's almost kind of like the preemptive pardon thing, you know? Yeah. Where it's like, oh, giving him cover a little bit. Uh, but that being said, I do think that there's like... I don't know. 20:41 You almost have to create a new thing entirely. It's like, look at the- You do... handling. I've been... This has been my opinion for a long time. Howey Test, these are ancient constructs. Yeah. Nothing fits in. 20:49 We have to figure out an entirely new regu- regulatory landscape. There's really no good analogs. These are a new type of asset. 20:56 They may be fleeting, they may be frivolous, but it's a new type of asset, and it's a lot of money. And we have to figure out something that is not a security, nor a collectible. Where does it go? Yeah. 21:09 And I don't think we're gonna have any good answers. That being said, I do think that there's maybe... Like, people are launching these anyway, but I don't think we need any more signals for new meme coins. 21:17 What was, like, I saw a figure the other day where it was like a million of these are getting launched, like, within a certain timeframe. Yeah. It's- Yeah... thousands a day or maybe a million a day. It's, it's crazy. 21:26 Yeah. It's crazy. But- Yeah... on, you know, moving over to, like, more buttoned-up things. Yeah. 21:34 Let's, I think we should focus for the rest of the show on the sovereign wealth fund executive order, and then, um, the quiet part out loud that stable coins are good for dollar dominance. Yeah. 21:46 So I'm gonna share my screen here. Um, I'm taking this from, um, the Coin Stories newsletter written by my friend Sam Callahan. And, uh, you know, the Coin Stories is, uh, by Nat Brunell. 22:03 It's a podcast and also media, um, company. Anyway, Sam writes a really good weekly roundup of, like, a lot of the more, like, kind of buttoned-up financial news that goes on with Bitcoin. 22:17 And for this one, he spent a lot of time talking about President Trump's order to create a sovereign wealth fund. Now, um, I think this is interesting. I didn't know the US didn't have a sovereign wealth fund. 22:27 I guess that makes sense if you have the strongest currency in the world, you don't necessarily need one. 22:33 But sovereign wealth funds are pretty common, as Sam points out here, and Nat Brunell, I think she, uh, co-wrote this with him. You know, Norway's got one that's worth more than $1.5 trillion. 22:45 Abu Dhabi- Famous for the wealth of the Black Sea in the- Yeah... Nathan's coppers. Yeah, exactly. 22:50 And then Abu Dhabi alone, not just the UAE, but, like, the, the, s- uh, precinct of Abu Dhabi in the UAE has a $1 trillion- Yeah, but-... sovereign wealth fund... 22:59 man, I'm, I'm recognizing a trend here on how these giant wealth funds get created. [laughs] Is it, uh, what is it, oil? Hmm. Proper oil? Black gold- Underground? Yeah... potentially. 23:09 But typically these things are funds that have, like, super long investment horizons, and they invest in things like gold, oil, equities, uh, real estate, hard assets. 23:23 And obviously with the Trump one, there's been speculation amongst Bitcoiners that Bitcoin is going to be put into this. 23:29 Some people have started to say that potentially the Bitcoin strategic reserve will actually be, uh, you know, maybe, uh, subsumed by the sovereign wealth fund, and that's how we can hold Bitcoin. 23:42 Um, and the reason why they're saying that, or Nat and Sam 23:46 argue here that there's maybe a good chance that Bitcoin will be put into this, is because Howard Lutnick of Cantor Fitzgerald, who is the newly appointed commerce secretary, and the Treasury Secretary Scott Be- uh, Bessent, um, are-Pretty favorable towards Bitcoin and they'll be spearheading this effort. 24:04 Um, so there's speculation there that if we do end up getting a sovereign wealth fund, which we probably will, Bitcoin will be a portion of this. Thoughts, Charlie? Does that seem outlandish? 24:17 Are we just-- do we just have our heads up our asses and we like sniffing our own farts? Like [clears throat] 24:24 Um, I'm spitballing here because my mind, as I've been really clear, I don't, I don't sit here and think about like how we get to the nation-state game theory. I'm just like, "Well, it's gonna happen." 24:35 Um, but as the world becomes more multipolar and as the US dollar, uh- Hey, sorry about that y'all. Looks like there's been some technical difficulties on Charlie's side. I just dropped just to make sure it wasn't me. 24:52 Oh, and I just got something from Charlie that his wife turned the internet off. So I will be filibustering here for a second. Just gonna go back to some comments here about this sovereign wealth fund. Um, 25:08 uh, the crypto tsar David Sacks was asked on CNBC whether or not the strategic Bitcoin reserve would be implemented through the sovereign wealth fund. 25:19 Um, kind of per what I was talking about earlier, there is speculation that that is what will end up being the s- the strategic Bitcoin reserve. Obviously, that's been a huge talking point. 25:30 Trump made that promise during his talk at Bitcoin 2024, and the only ways for that to really happen are either through an executive order not to sell Bitcoin that are already held by the government, which is a roughly like two hundred thousand, a lot of which were seized from the Silk Road. 25:48 The other ways that it-- that could happen would be through Congress, an act of Congress. 25:53 We've seen Cynthia Lummis, senator from Wyoming, introduce a bill, um, called the Bitcoin Act, which would basically establish a strategic Bitcoin reserve and mandate that the United States government purchase a mil- up to a million dollars worth of Bitcoin. 26:09 That is m- probably not gonna happen. Very, very unlikely that that happens, um, but that would be the most concrete way to do it because any executive order signed obviously can be re, uh, can be- I'm back. He's back. 26:25 I was filibustering. Oh, okay. Okay. So- Sorry. We're worried. Cut me in hot. 26:30 Um, I was basically just asking you like this idea of the strategic reserve being implemented through the sovereign wealth fund, like, um, pie in the sky in your opinion? Legitimate? 26:41 Um, again, are we like just sniffing our own farts over here? Yeah, I think I was going down some roll, like hol- like rabbit hole about like mult- the world becoming more multipolar and, um, 26:53 and if the wo- if the US is gonna have this like dominant dollar reserve anymore, it would make sense that maybe we start to mimic other wealthy countries around the world in having a reserve which is made out of, out of assets which go beyond simply just dollar dominance. 27:10 You know- Right... this might be a, a naive view, but also, uh, I'll, I'll, I'll eat any slop shoveled to me that makes Bitcoin go up in my mind, so. 27:21 Well, and this is an argument that some people have actually made as to why the US will not end up buying Bitcoin or establishing a reserve is because it signals weakness, and it signals 27:35 that the US is bearish on its own currency, right? I don't know how much I buy that because we own more gold than any other country as well. 27:44 Um- Yeah, and at the same time, we just heard that the US is going to, uh, really push stable coins, focus on extending the dollar dominance through stable coins- So I'm-... 27:53 which is like l- the literal opposite of all of, it's the inverse of what I think almost- I'm glad- Yeah... 28:00 that you mention that because you were talking about they're preparing for a multipolar world, and in fact, David Sacks at least is signaling, and I would assume Trump would also would not want this either, um, 28:12 or, uh, or agrees with Sacks. They're signaling the exact opposite actually with some of this, um, with, with some of their talking points on stable coins. 28:22 So, uh, we're gonna go, go, you're not gonna talk about Czech Republic eliminating capital gains tax in Bitcoin. Amazing. I would love to have that. 28:28 Great for the people of the Czech Republic, but I don't live in Czechia, so- [laughs]... sorry. Um, 28:36 but this talking point to what you were saying about multipolar world trying to shore up dollar dominance, crypto tsar David Sacks, quote, "Stable coins could lower long-term rates." End quote. 28:47 Um, earlier this week, David Sacks made some waves with his first press conference on digital assets. Many expected a big Bitcoin reserve announcement. Psych. Ah, gotcha. 28:54 [laughs] But Sacks only said that he is still studying the feasibility of one. Of course, um, the jury's gonna be out on that for a long time. Before Charlie jumped in, we were talking about the paths to that. 29:06 Um, the one thing that we didn't talk about was the exchange stabilization fund that was established during, um, the foreign, I think it's called the foreign exchange, uh, or foreign currency stabilization fund, um, that was established during the New Deal. 29:19 Maybe they can make an argument for allocating some of that towards Bitcoin. 29:23 But anyway, he's still looking at the feasibility, but what he's pretty sure about is that he said that the administration is focused on providing more regulatory clarity for stable coins 29:33 and pointed to Tennessee Senator Bill Hagerty's Genius Act, which lays out framework for payment rails for stable coins. It's really interesting. I actually haven't looked into that. 29:45 Um, I, I sh- I should have before this, but maybe we can touch on that in a future episode. One last highlight for this before we kinda go back and forth on digesting all this, Charlie, I think is just wild. 29:57 Obviously, this sparked some debate on Twitter as Sam says here, "It's no secret that stable coins are a huge source of Treasury bills today. A lot of Tethers," um-... 30:07 collateral for their USDT is actually not dollars, it's bills and treasuries, right? And, um, he says, like money market funds, stablecoin issuers like Tether must hold liquid reserves for redemptions. 30:18 Its latest report shows that it holds 94 billion in T-bills, making it the sixth-largest foreign holder behind the UK. Yeah. That is an insane statistic. That is wild. Yeah, and- The fact that a stablecoin- Yeah... 30:33 that for, uh, up, for, for, um, you know years now, people, you know, amateur gumshoes on Twitter have been saying [laughs] is pumping up the price of Bitcoin, which is really funny. 30:44 But s- but Tether being the sixth-largest holder of Treasury bills in the world, I mean, is that winning? Like, that's a crazy... Some people would applaud that. That's a crazy stat, though. Yeah. 30:57 I mean, I, uh, I [laughs] how do I, how do I have a nuanced opinion about this? I feel like I do have a nuanced opinion. It's like, um, I don't really have an issue with stablecoins. I think it's a, they're a great tool. 31:09 They're really pragmatic, and they help, uh, tons of people out in the real world. Um, so in that dimension, they're great. Um, is that why I'm in this industry? Is that why I care about Bitcoin? No. 31:25 That's kind of, that, I would almost separate that into more of a, I like technology that allows, uh, people to, uh, transact more freely. Um, 31:36 but I would not consider that, uh, really at its core freedom technology, which is more what I, uh, care about. Um, at the risk of, you know, not- losing that sweet, sweet Tether sponsorship someday, uh, [laughs] 31:52 I, uh- [laughs]... am not, not, uh, I- Paulo, our DMs are open. [laughs] Yeah, but, yeah, Paulo, if you're watching, we have a price, and it's about 116 billion dollars. We, we've already disappointed, uh- [laughs] 32:05 Yeah... we've already disappointed Mark Goodwin by throwing out next at, at strategies HQ. [laughs] So now we're gonna disappoint him even more- [laughs]... taking some of that sweet, sweet deep state money from Paulo. 32:14 Um, going back to what you said, I do think this requires a nuanced take because in a perfect world, and I keep coming back to this theme, this is, I feel like the theme of me, you know, graduating into my 30th year soon and entering my 30s, is where, like, idealism meets pragmatism and where to, to make compromises. 32:35 Because in an ideal world, people would be using Bitcoin and other, you know, cryptocurrencies, maybe like Monero, uh-oh, um, or other things, right, for commerce and for remittances. 32:47 But the fact of the matter is, is that stablecoins in places that have dog shit currencies like Venezuela, um, like Argentina, you know, all of these places and, or, or Nigeria, and these places in the Global South, for example, like they don't, a lot of them don't want Bitcoin. 33:06 They want stablecoins because they can, they, it ha- there's certainty. They know how much it's gonna be worth. It's not gonna fluctuate in value, and these people already have currencies that get absolutely destroyed. 33:17 Sure, Bitcoin appreciates to the upside, and that's good when it's ripping. 33:20 But, like, imagine holding your wealth in a country where you're used to your currency hyperinflating by, like, 100% or more each year, and you hold your wealth in Bitcoin, and then 2022 happens and it draws down 70%. 33:33 Like, people can't stomach that. And I think of our former colleague at Luxur, Alessandro, who went to go join El Dorado as a chief marketing officer. 33:41 You know, he, uh, talking with him about this has always been super enlightening for me because he really shined some light on just who's using these stablecoins and why they're using them, and the majority of these people are just trying to make ends meet. 33:55 And I think it's really easy for a lot of people in the West, um, or in developed countries in the West to say, it's like, "Well, don't they know they're, you know, extending dollar hegemony because they're using a stablecoin?" 34:07 It's like, dude, they don't care. They're trying to buy food for their children. Like, they're- Yeah... trying to make sure that their wages do not erode the second that they receive them. 34:16 Um- Yeah, and, and this is why I like to think, I like to distinguish, like I feel that that is like, um, a liberating technology, but it is at, at a, it is at a, at its core not a freedom technology- Hmm... 34:28 which I think of Bitcoin. So I- Yeah... um, maybe I would adjust that, that exact language, but you kinda know what I mean here, which is like- Yeah... um, 34:38 it's like, you know, you have Windows machines installed everywhere, and also you can't change the kernel because Microsoft wants to give all your data to the NSA. But also you can do some- [laughs]... 34:48 you know, the, the, the computer is a powerful tool which lifts people out of poverty. So, like, these are... You know, the world's not black and white, unfortunately- Yeah... listener. Unfortunately, it is not. 34:59 It is not this binary thing. Um, and, uh, sometimes we have nuanced hot takes. Okay, moving on from this column. This is- Wait, sorry. Okay. There's one last thing I wanna say about this. One last thing. 35:10 Just to, just to clarify something, 'cause Sam does a good job, um, talking about this in the piece. So Sax says that stablecoins would be good for lowering long-term rates. 35:24 That would require demand for long-term Treasury bonds, like the 10-year, and Tether specifically holds Treasury bills, which are short-term bonds, 35:35 and the reason that they do that is because they wanna make sure that they can meet liquidity requirements immediately, right? As Sam says here, I mean, think about it. 35:43 Why would stablecoin issuers want to hold more illiquid 10 or 20-year bonds when they can just hold short duration T-bills? 35:49 The only way this could happen is if the government mandated them to do so through some piece of legislation. 35:54 So the claim that Tre- stablecoins can actually influence long-term rates is dubious, um, because they want shorter term, um, bo- you know, they want T-bills. 36:05 They want shorter term bonds for their, uh, liquidity for something like this. But that's all I wanted to say. 36:11 Um, at the very least, very interesting, and there's signal there that the cryptos are and this administration is looking at stablecoins as a way to extend dollar dominance, because that's fu- functionally what they do. 36:24 Yeah. Um, so, uh, you know, there's a bunch of different ways we could go with this, but, uh, we kinda wanna keep, I think we probably wanna keep the writers room tight this Friday. Um, 36:36 you, listener, if you've made it to the end, uh, you are witnessing a big transition for Bitcoin Season Two, 'cause the next time you hear us, uh, you can, you can catch us on CoinDesk. 36:49 Yes, the news platform CoinDesk, we'll be syndicating on there as of next week. 36:55 You'll also see a, uh, you may see some, uh, new sponsorship names and, uh, maybe a little more ti- a little tighter produced, um, segment and content. So 37:08 without further ado, Colin, do you think we hit up for the last news item of the day? Yeah, I think so. Yeah. This is a big one. This is probably the big one. Glad we saved it for last. 37:18 Um, but anyway, uh, LeBron- [upbeat music]
