Hey, I'm Whitney Webb, and welcome to Unlimited Hangout.
Over the past two episodes of this podcast, we've explored
various aspects of the influence of the so called Paypal Mafia on
the second presidential administration of Donald Trump.
While we've already examined this big tech clicks ambitions
for American governance and healthcare, we have yet to
interrogate their ambitions for finance and currency. This for
anyone familiar with PayPal history and their founding
attention to create a quote, unquote, new world currency is
arguably the longest standing and most important driving
factor behind the Paypal Mafia's activities over the past several
years. This is particularly true now as they have gained
unprecedented influence over US fiscal policy during a time when
the radical transformation of finance in both the public and
private sectors has been openly admitted by top officials in
government and top bankers on Wall Street, figures like former
PayPal COO David Sacks are now leading the development of the
government's new policies With respect to AI and
cryptocurrencies. In doing so, Sacks played an outsized role in
the development of the GENIUS Act, which passed Congress and
was signed into law by the President last week. Sacks
notably claimed in 2017 that crypto, and Bitcoin in
particular, were fulfilling PayPal's original New World
Currency ambitions, though, allegedly in a quote unquote
decentralized way, as opposed to PayPal's originally intended
goal of centralization. However, as we'll explore today, the
system that has been developed largely by the Paypal Mafia in
their ilk over the past two decades plus cleverly cast this
new world currency system that unites Bitcoin with dollar
stablecoins as quote, unquote decentralized and is less
Orwellian than a central bank digital currency or cbdc, this
posturing is incredibly misleading as centralization,
and thus the fulfillment of PayPal founding intention, as
well as Orwellian control over citizen finance would still
occur in such a system, making the claims of decentralization
and greater freedom merely buzzwords meant to manufacture
the public's consent and acquiescence, given that other
Paypal Mafia figures with ties to the government, like Elon
Musk are seeking to turn their AI algorithms into the new
financial operating system of the world, it has never been
more important to understand the game plan, and not just that,
but how far back the game plan goes and what it is intended to
produce, Once implemented, joining me to discuss this and
more is Mark Goodwin, the journalist who, more than anyone
else, has detailed the PayPal mafia's long term and troubling
ambitions for currency, cryptocurrency and financial
surveillance. Mark is the former editor in chief of Bitcoin
magazine, and since last year, has been writing for unlimited
hangout. He is the author of the book The Bitcoin Dollar, as well
as the lead author of The Chain, an Unlimited Hangout series that
examines the incoming digital currency system and its
architects, with a major focus on the Paypal Mafia. Thanks for
joining me today, Mark, and welcome back to Unlimited
Hangout. Thanks for having me, Whitney, and absolutely don't
absolute honor. Well, it's great to have you back, Mark. So as I
mentioned earlier in introducing you, you were the lead author on
The Chain, which we co wrote last year, which discusses in
great detail the ties of the Paypal Mafia to the incoming
digital currency landscape. So maybe we should start off giving
people a brief overview of The Chain and what it was about and
it and the new significance it's taken on ever since the
inauguration of Donald Trump in January of this year.
Yeah, absolutely so, as you mentioned, been sort of on this
beat for a minute here the first article I wrote, kind of about
this incoming new financial system, perhaps being, you know,
a direct product of the US government, whether through, you
know, private cutouts, or, you know, intelligence, you know,
interrelationships. It was in 2021 called The Bitcoin Dollar.
Then I made a book about it, and I started the research for The
Chain, kind of just, you know, the idea of it was just to be a
one article, you know, investigation into Tether, which
is the largest stablecoin issuer. By far, they have about
160 billion US dollar stable coins. But while kind of
researching it, I realized I. Um, you know, how, how intimate
the Paypal Mafia was to the foundation of Tether. And so it,
then it sort of spiraled out a little bit, looking into, okay,
PayPal has this, you know, pretty intense connection to the
foundation of Tether, which we'll talk about in a little
bit. And then even further into that, the Thiel-verse sort of
revealed itself in further readings into this system. And,
you know, obviously it turned out to be this, you know, nearly
100,000 word eBook about the new financial system. So, yeah, I
mean, it's, it's been a journey, for sure. There's so much,
there's so many elements to this that I'm very excited to get
into with you today. But I would say, you know the why it's such
good timing we're doing this now despite, you know this, this
being written, you know, fall last year is that we're actually
seeing a lot of the seeds that were sown over the last, you
know, 10 years that this piece, you know, illustrates, we're
really seeing them kind of come to fruition now with the GENIUS
Act, as you just stated. And so whether or not you want to go as
far as I did, into reading about the formalization of this, of
this new economy, whether or not you're interested in that it's
happening, and it's going to affect, really, the majority of
the people on the planet, honestly, and that is the if
they are successful in in dollarizing the world with
stablecoins. So that was the kind of the idea of The Chain
was to give people the knowledge to sort of prepare themselves
for what's coming, and now that what's coming is here, so I'll
Well, you brought up the GENIUS Act, and that's probably
leave it there.
one of the most current things that has recently happened in
the space since it passed last week, and it's the start of the
regulation of stablecoins, and I guess the full the beginning of
the fulfillment of some campaign promises of the Trump campaign
with respect to the cryptocurrency space. So the
GENIUS Act is probably most succinctly described as the US
Bill regulating stablecoins. So it may be a good idea, even
though I believe we've done this before, when you've been on
previously, to give a an explanation of stablecoins in
the Trump administration's apparent plans for stablecoins.
Yeah, totally so stablecoin is a very clever naming trick.
Right the stable the stability in the stablecoin is this idea
that there's a digital representation on a blockchain
that's this tokenized dollar that is the stablecoin, and that
it is representing one to one, a direct peg to a real world
asset. In the vast majority of cases, it's going to be a US
dollar. So the stable element is that it is not a volatile, you
know, price action like we see in more of a speculative asset
like Bitcoin or the extended cryptocurrency space, where you
see these wild fluctuations of valuation. The stability comes
from the fact that one Tether is equal to $1 held in a bank
account right by these private issuers. The issue, of course,
and the trick of this naming mechanism is that, you know,
obviously the dollar has been anything but stable itself and
has been hemorrhaging purchasing power. You know, it's on pace
for the worst year in almost a century, this year, which is
arguably by design to help with debt service. Right? The cheaper
$1 the easier it is to pay dollar denominated debt, right?
But of course, over the last 100 years, you know, we've seen the
purchasing power of the dollar, you know, just be completely
debased, you know, plus 90% so the stability aspect, the
stablecoin name is quite a clever trick to, you know,
basically sell this idea that the stablecoins are stable,
when, in fact, we know they're hemorrhaging value. And then, of
course, there's the other aspect of well, just because it's
pegged one to one, to something in a to some real world asset,
to some dollar reserve held by some bank, doesn't mean that the
bank itself is stable, right? I mean, banks go under. We saw
that quite a bit over the last few years in the in the post
COVID economy, you know, we saw, you know, banks like Silvergate,
Silicon Valley Bank, First Republic, you know, these, these
California banks that were really crucial to banking the
cryptocurrency industry at its at its onset, we saw those three
go under. So. The very notion of the stability of a stablecoin
is, you know, should be scrutinized. And we've seen, you
know, when Silicon Valley Bank went under Circle, which is the
second biggest stablecoin, that there's USDC, they held $3.3
billion of reserves at Silicon Valley Bank. And when Silicon
Valley Bank went under, the stablecoin de pegged, and
instead of being a one to one, it actually went to one to 86
cents. So we saw a pretty significant deep peg, because of
real world asset implications, where the bank went under,
therefore the reserves were in question, and therefore the
stability of the dollar stablecoin also became into
question. That's something we'll probably pick up a little bit
later with the Silicon Valley Bank aspect, because there was a
direct correlation to Founders Fund and Peter Thiel, the day
before SVB collapsed, advising their clients to pull their
deposits, as well as founders funds, you know, pulling their
deposits, which left, you know, I think 10 customers alone had
13 billion in deposits. 42 billion left the bank in six
hours. So it was this very acute liquidity crisis that was
spawned by a very small amount of people that was detailed by
John Titus of Solari report, and Best Evidence, who really, you
know, broke down this, this killer where whale crisis, which
I highly recommend going to check out, which is where I
learned that information from. So we can see that the idea of
the stablecoin is really anything but. And then just one
last, I think, point here of what a stablecoin is. And then
we'll get into the GENIUS Act. It doesn't necessarily have to
be $1 that's just the most common one by far. There's about
$200 billion worth of US dollar stablecoins. But there, of
course, can be other currencies, you know, Yuan, Euro
stablecoins. There also could be, you know, commodities. There
could be an oil stablecoin. There's actually some pretty
popular gold backed stablecoins, where the token is actually
representing a portion of gold, an ounce of gold, or a portion
of an ounce of gold. So it doesn't have to be dollars, it's
just the vast majority of them are dollars. And you can pretty
much assume for the rest of this conversation, and generally,
when you hear someone say stablecoins, they're referring
to US dollar stablecoins. So as it relates to the GENIUS Act,
the GENIUS Act, as as you said, is the, you know, the US
basically putting guard rails for this, you know, absolutely
booming industry. And I say that in 2020, when, you know, we saw
the lockdowns, there was $10 billion of stablecoins. You
know, almost all of them were Tethers. There was, there was a
very small amount of stablecoins. That was a pretty
small industry. Now we're, again, we're over $200 billion
of stablecoins. And as our, you know, the head of the Treasury
is saying, Scott Besant, you know, overnight, essentially,
now that the state the GENIUS Act has passed, this regulation
will unlock almost $4 trillion I believe he said, $3.7 trillion
of demand overnight, with the passing of the GENIUS Act for
the reserves that back these stablecoins, these this, this
US debt, the securities that the Fed and the Treasury issue to
create capital, generally done by a private bank. In this case,
it's a private stablecoin issuer. So the GENIUS Act is the
idea of it is to create guardrails for what is allowed
to back these stablecoins. So, rather than just kind of being,
you know, a technological, free for all, where you have, you
know, free floating, algorithmic pegs, or, you know, some
combination of a basket of currencies or commodities that
back a stablecoin, the genius act, you know, the most
important thing it does is set the guardrails for what can back
these stablecoins. And specifically it says that it
needs to be US Treasuries, which is how the US pays for its
budget. It's how IT services its debt. It sells treasuries, these
bonds that banks buy and then they make dollars in your bank
account. So the GENIUS Act is, is very clever, very clever
name. But the idea that basically is to, you know,
redomicile, these stablecoin issuers, that some of them are
not US companies, bring them all back within the regulatory
regime of the United States and force them to, you know,
basically buy Uncle Sam's bags. And, you know, we will get into
The Chain a little bit here, as to, you know, the precursor to
this bill, the GENIUS Act, was really the Gillibrand Lummis
stablecoin bill, which was kind of the first iteration of this
attempt of legislation which was extremely influenced. Influenced
by a lot of the shenanigans we saw in 2022 with the FTX
collapse, with the Terra Luna collapse, which was this
algorithmic stablecoin. And then, of course, the banking
collapses in 2022 and 2023 so you know, we can get into a
little bit about the precursor to the GENIUS Act, and how many
of the players behind the formation of Tether and PayPal
were directly involved in the events that led to the wording
of the Gillibrand Lummis stablecoin Bill, which in effect
banned algorithmic stablecoins And you know, some of the FTX
shenanigans, so that, you know, the US government would have
better oversight over their you know, these, these capital
creators, right? These are, these are US dollar printing
machines, and they want to have control over them. So there's an
extreme argument to be made, which, of course, we did, that
the gill and brand Lummis stable coin Bill was directly
influenced by these events that were directly caused by the same
very players that have, you know, a huge role to play in the
stablecoin system. So I'll leave it there for a moment.
But, you know, we can certainly start to get into the foundation
of Tether and and how it led to, you know, the stablecoin wars,
as we are certainly now in,
yeah, well, you brought up FTX, and the first time you and
I ever collaborated was in writing about, essentially, how
a lot of the things going on at FTX around the time of its
collapse related to what you just referenced, the stablecoin
wars, as Sam bankman Fried himself put it. So there's a
couple directions we could go. Then we could go into this
history that you just mentioned, and how the stable how this how
the stablecoin wars have manifested in the past, or and,
or maybe Subsequently, we could talk about how the stablecoin
wars are likely to continue being waged in the wake of the
GENIUS Act, and who you see the key winners of that war being
and how in their path to mass adoption by American citizens.
So do you have a preference about where we go next?
Well, frankly, I think it's kind of the same. You know, the
winners are going to be the people that set up the industry,
right? I mean, that's, you know, legislation, when we're in this
sort of pay to play, you know, government, donor class sort of
environment, you know, the people that set up this industry
also set up the people that wrote the legislation, as we get
into in The Chain here. So I think it actually probably makes
sense to start at the history of the founding of the stablecoin
industry, because, believe it or not, the winners of the genius
Act are very likely going to be the very same people that kicked
off this industry. So I'd say, let's start at the beginning.
And I think the beginning, you know, of the stablecoin
industry, is really the founding of PayPal, which, of course, you
know is they're a very controversial company. Most
people seem to sort of, you know, look at, really, the
extended Paypal Mafia and all the things they sort of did
after PayPal. And most people seem to kind of ignore PayPal
itself, which I think is a huge mistake as we, you know, as
we'll see as we get into here. So you mentioned already that
PayPal is, you know, founding motto was this idea of a new
world currency. And as you said, the current crypto AI czar David
Sacks, who was one of the early PayPal members. He was a former
McKinsey analyst who joined Max Levchin and Peter Thiel, pretty
early on in the formation, alongside Reid Hoffman of
PayPal. Those were kind of the four main guys. And Peter Thiel,
of course, you know you've talked about extensively, and
are one of the leading researchers on Peter Thiel and
the extended Thiel-verse, which I believe is a phrase that you
coined. Peter Thiel was a, is a was, and arguably, probably is
still a currency speculator. But certainly back in the day, you
know, Thiel Capital, the first iterations of of Thiel's money,
and the first, you know, non institutional investor of
PayPal, was Peter Thiel himself, using money that he made from
doing these foreign currency trades. So, you know, he, he
really understood the market very, very well that there was a
lot of money to be made in the arbitrage of, you know, between
currencies. So between, you know, the US and and the yen or
the US dollar and the lira or the euro or what have. View. And
there's a lot of money to be made during the fluctuations of
these currencies relative to each other. Now that all of the
currencies, you know, since 71 with with the gold window
closing, are these fully free floating pegs. So kind of a new
industry was born at these this, this currency speculator Cabal,
if you will, that, you know, sort of infamously, I would say
Soros. George Soros is probably the most famous one, but there
were a lot of other people that did this, and Thiel was one of
them, and he was running a currency speculation fund when
he met Max Levchin, who came out of Illinois, who ran over to
Palo Alto to go meet Peter Thiel, and pitched him with some
ideas of starting a company. And Levchin had spent his time
studying computer science and was a cryptographer who spent
the majority of his time in college working on distributed
networks and distributed systems, very ripe for the type
of work that you know we're now seeing in the blockchain space,
although no one ever really seems to talk about him and his
importance to, you know, the digitizing the economy. So So
Thiel took, you know, some money that he had made from trading
currency and gave money to Max Levchin. And Max asked Thiel to
be the CEO of this company. And there was a couple other names
at first, coinfinity and some other things. But, you know,
eventually they settled on PayPal. Eventually David Sacks
comes in and Reid Hoffman comes in, and what started as this
initial idea of beaming, you know, currency US dollars,
between Palm Pilots, which was, you know, very hip at the time,
in the late 90s, early 2000s in, specifically in the Bay Area and
in in Silicon Valley, you know, Sacks and Hoffman came in and
basically took these, this, this kind of nerdy idea, and went,
Hey, instead of pay using palm pilots, why don't we use email
addresses? And let's make this an internet based mechanism,
rather than an infrared mechanism, you know, using palm
pilots offline. So that idea, obviously, is has a much bigger
user base than simply a PalmPilot, you know, the closed
circuit infrastructure. And they were correct. And so while
everybody talks about PayPal Mafia, nobody ever talks about
the fact that PayPal really was the first dollarizer of the
internet, and they really made the native currency of the
internet the dollar. And of course, you know, when you look
at what Max Levchin was talking about and Peter Thiel at the time
of founding PayPal, you know they were heavily influenced and
working very closely with, I believe, Levchin says every
alphabet letter three and four letter agency that would talk to
them, and you know, they worked very closely with the NSA. In
fact, Levchin had applied for the NSA, and they said, No,
buddy, don't come here. You won't make a dime. Go to the
private sector. And you know, you'll, you'll have good success
there using cryptography for the betterment of the country. So
that was when he ran into Thiel and started PayPal, very
conveniently, right after being denied by the NSA, he gets
connected with Peter Thiel. And so PayPal, you know, took this
idea of, how do we dollarize the internet, and they use
cryptography and a lot of these kind of ideas that we see
everywhere on the internet, like capture, you know, was actually
the first commercial use of it was, was on PayPal, you know,
dollarizing, digitizing. The dollar has a lot of technical
handshakes and very specific things that you know, need to be
done. And they were really the first people to solve it. So a
very illuminating book that I suggest people check out. It's
called the PayPal wars, and it was written by an early
marketing advisor there at PayPal, one of the first 20
employees. And he talks about a meeting very early on that Thiel
gave as sort of a board meeting that he, you know, he talked to
everybody there in their small, little office at the time, and
kind of explained, you know, what the overall vision of
PayPal was. And he wasn't quite using the new world currency
angle yet, but he had this idea of understanding that, you know,
using technology, they can really circumnavigate the
controls of political power and capital controls that central
banks around the world, the 180 or so central banks around the
world, have over their local citizens, and Thiel very
specifically said, if we can give people access to dollars
using PayPal, we can free the world from Central Bank tyranny,
and we can free these, you know, these users that are stuck in,
you know, Argentine pesos, or whatever, they can now have
access to the dollars through this technological innovation.
And we can really defang central banks across the world and get.
People out from the enslavement of central banks. Of course,
that is, you know, it sounds great, right? Central banks, not
good. No one is championing the central banks here. But of
course, you know that, does it actually get us out of control
over the central banks, or does it centralize control to the
United States central bank to the Federal Reserve, yeah, and
so, of course, it does, putting everybody onto the dollar
system, you know, really empowers the Fed. So you could
argue that, you know, maybe these guys who were working with
intelligence, who understood technology was where things were
going, and understood the, you know, the currency speculation
game, you know, maybe these guys that are telling us they want to
create a new world currency, maybe they actually did. And you
could argue that they were involved in the creation of
blockchain and a Bitcoin, but that can't be proven, but you
certainly can make their connections to the stablecoin
industry and the creation of Tether specifically, which was
the first stablecoin that really came up with this idea.
And when you look at the founding of Tether, Brock
Pierce, who was the founder of Tether, has numerous connections
to early PayPal people, including Goldman Sachs, which
was one of the first investors of PayPal, and IDEA Lab, which
is this incubator that came out of California, run by Bill
Gross, which, you know, they were the first institutional
investors in Paypal, after Thiel gave the million dollars from
his hedge fund to start PayPal with Levchin, their first
investor was Idealab, this incubator, and Goldman followed
really closely and Brock Pierce, who has a very controversial
figure and has some connections to some really unfortunate
things. He was a the biggest PayPal merchant for three years.
He basically invented the
credit card industry for PayPal. He was, he was the number one
person there, yeah, as I said, he was their biggest customer
for three years. He was on their advisory board, and then he
ended up starting a fund with IDEA Lab, spin off clear stone
ventures, about a digital gaming fund, because they were the
people that were really starting the virtual securities industry,
the digital goods industry, using gold and items from, you
know, these massively multiplayer online RPGs, you
know, like World of Warcraft, these guys were selling gold and
creating understanding. There was a market for digital
commodities. And Brock Pierce was the guy that that really
started that. And he was given a lot of funding and a lot of
support from the very people that started PayPal. And very
interestingly, as it connects to sort of the the Epstein network,
Bill elkus, who, you know, was the head investor of PayPal for
IDEA labs who ran clearstone When it spun off. He was one of
the trustees of the Jay Epstein Foundation. And you know, the
Brock Pierce himself has connections to Epstein through
the mind conference. And you know, you can kind of start to
see how this speculative currency cabal and technologists
were kind of coming together to build a system as Brock Pierce
claims, you know, I'm not here to fight the system. I'm here to
build a new system for when it collapses. I am the plan B, you
know, that was, that was a quote that he said that we found while
doing The Chain. So you begin to kind of look at, oh, wow. The
Digital Goods space is directly connected with the people that
started PayPal and and, you know this, the this whole kind of
Tether idea is really sold in the exact same way that Thiel was
selling PayPal in the early 2000s as this altruistic way to
get people out from the tyranny of central banking, by banking
the unbanked, giving them dollar access. That's exactly what
Tether is selling itself as today and in 2025 so perhaps,
maybe these things aren't an accident and just, you know, fun
market forces coming together, perhaps this is a really clever
way to build the new economy and create this plan B, knowing that
the economy was going to have serious issues, as we've noted
before, Bitcoin comes out of the OA crash, which you could
directly connect to some of the players in the Epstein Network,
and with Goldman and Bear Stearns and some of these people
that were doing these crazy debt obligation plays. And then, of
course, we have 2020, which occurs under Trump, which was a
controlled demolition of the economy that really led into the
boom of stablecoins, in the boom of. Bitcoin that Trump
really set up on his final days of office, on his way out, you
know, really let the banking industry have the first
iterations of clear legislation that allowed them to play in
this market. So I've been ranting for a little bit here,
and I'll let you I'll let you pop in here. But I think one
more really interesting connection between these groups
is the fact that Brock Pierce, when he was starting IgE, this
the the gaming company, the digital goods company that he
started, it ended up being taken over by Goldman. And in fact,
Steve Bannon became the CEO of the company when Brock Pierce
left. And interestingly, of course, Bannon becomes, you
know, a very large political advisor to Trump who also has
extreme connections to Epstein, who, you know, he's spent about
15 hours interviewing Epstein as an attempt to rehabilitate his
image. But Goldman and and Bannon and Pierce, you know, all
had a ton of connections in the first Trump administration, via
Steve Mnuchin, who ran, you know, the Treasury at the time,
and they really set up the whole stablecoin industry as it's
coming to fruition today.
Well, thanks for that. Definitely a lot of information,
of course, if you want even more detail than the detailed
explanation mark just gave, you can revisit The Chain series.
But I think is since we had mentioned earlier, FTX, now
might be a good time to sort of get into the relationship of
Tether and FTX in that phase of the stablecoin war, in part,
because when FTX collapsed, you know, all the blame was really
placed on Sam bankman, fried Caroline, Ellison and some of
these other top executives at FTX. But somehow Tether emerged
from that scandal pretty much unscathed, despite the fact that
a lot they had a lot of dubious connections to some of the
criminal activity, or alleged criminal activity, that was
going on at FTX at the time of its collapse. And also, you know
FTX as Mark, and I have previous or you and I have previously
reported, was in its own efforts to develop a competing dollar
stablecoin to Tether, presumably with this company
called fluent finance shortly before it imploded. So some of
that might be interesting to explore. And of course, not that
long after FTX, we have the scandal you alluded to earlier,
of silicon the scandalous collapse, rather of Silicon
Valley Bank, even though a lot of people don't view it as a
scandalous collapse. When you consider what you mentioned
earlier, citing John Titus work and also Peter thiel's role in
creating that liquidity crisis, it certainly looks like another
iteration of this broader war, covert war, going on behind the
scenes. It does just sort of King make who will rule over
the, you know, incoming digital currency era?
Yeah, totally. So I think the FTX itself is really the
perfect example of how private interests can create. I don't
want to say false flag, because it, of course, it did happen. I
mean, this was a real event, and a lot of people did get very
hurt in the bankruptcy of FTX. It was a very large exchange,
but it's a really good example of how private entities can
create, you know, events in the markets that directly influence
legislation and basically have people, you know running to
their local representatives demanding, you know, certain
legislations get put in that are really actually for the
betterment of the private sector interests that actually caused
the event in the first place. So Sam bankman, fried is a very
curious character, which we get into quite a bit here, in the
third piece of The Chain, the chain of consensus. And we kind
of go over the stablecoin war, but, yeah, you really can't
separate the wording in the legislation that exists today,
in the GENIUS Act, from the events that occurred, you know,
in this, you know, I guess the second stablecoin war. We're
about to see the third, as the, you know, the players post the
GENIUS Act fight for market share. But the second one really
is this, FTX, Terra Luna, Tether, USDC, fight that
occurred in 2022 and 2023 so but specifically, I think, as you
mentioned, you know, FTX had this in house hedge fund, this
trading desk, well, I guess, technically outhouse, but they
were, they were intimately connected, and ultimately their
intimacy led to the collapse of FTX. But this. Trading Desk
known as Alameda research, which was actually Tethers, second
largest customer, which had, you know, over $30 billion of
Tethers issued directly to Alameda research, which, at the
time was was, was nearly the lion's share of usdt that had
been issued by the company. So once again, to go back to stable
coins, to have $30 billion of Tether sloshing back and forth
between Alameda and and Heather, the issuer, the company that
issues usdt, you know, you have to also have the $30 billion of
treasuries or of dollars moving in the traditional industry. And
there's, it's really hard to kind of see that paper trail why
they were issuing so much Tethers and why they were going
to FTX. But what ended up happening that actually took out
FTX, excuse me, it was directly connected to the collapse of an
algorithmic stablecoin called Terra Luna, which was set up by
do Quan, who had previously set up an algorithmic stablecoin
that had also collapsed years before. But Terra Luna was
really, was really, really a big deal. It was, it was extremely
popular. It was really globalized. It was very big in
South America, mostly because it gave dollar access, right? It
gave you access to dollars, but more so it gave you access to a
yield bearing dollar. So people threw tons and tons and tons of
money. I mean, it blew up into, you know, an extremely large
market, and majority because people saw that they could earn
using this protocol that was native to Terra Luna, you know,
almost 20% at times of yield in a year by keeping their funds In
Terra Luna, which is extremely significant. I mean, 20% is an
absurd amount of yield for just keeping your money parked
somewhere. Of course, anytime you see there's no such thing as
free lunch in markets, and naturally, that yield blew up
because it was completely unsustainable. But Terra Luna
blew up because there was a program that was built on its
protocol, called the anchor protocol, that was designed by a
South Korean named Ryan Park, who was actually awarded a Thiel
fellowship to build out this product that was a 20% yield
bearing dollar instrument on Terra Luna, which caused this
humongous bubble to occur within the protocol of Terra Luna, and
ended up leading to a capital flight. Once the yield could no
longer be held. It was a completely unsustainable thing
to pay everybody 20% to keep their money in this, locked up,
in this, in this algorithm. So once everybody realized that
they couldn't pay. Everybody started to pull their money out.
And it ran. It basically created what is, you know, in the
traditional finance world, known as a bank run. But in this case,
it was an algorithmic de pegging. And, you know, 33,000
Bitcoin were liquidated from Terra Luna onto binance, which
was which is run by cz who was given his first job in the
crypto industry by Brock Pierce, interestingly enough, but Terra
Luna was directly competing with the other stablecoin providers,
and they were doing a unique thing, where instead of backing
their stablecoin with treasuries or Uncle Sam's debt,
they were actually backing it with Bitcoin. And so Thiel gives
money to this guy, Ryan park, to create this protocol on Terra
Luna, which pops the whole industry. And unfortunately for
FTX and its customers, the liquidity issues that came from
FTX and Alameda holding a bunch of this, the protocols token,
they ended up having huge balance sheet issues because of
the collapse of Terra Luna, which was the Controlled
Demolition done at the behest of, you know, you could argue,
of Peter Thiel, who has, You know, outsized interest in US
debt back stablecoins winning, rather than algorithmic stable
coins winning. And so FTX ended up having a huge hole in their
balance sheet, and they tried to fill it with FTT, which was
their token that they issued for FTX. And then, of course,
CoinDesk, Ian Allison ended up publishing the balance sheet of
Alameda research and FTX, and noticed that, you know, they
were holding this outsized portion of all of FTX funds on
basically, you know, it's essentially the same company,
just divided. It's a shell company, essentially. And they
realized that, you know, there was a completely unsustainable
thing, and that this FTX was essentially installed.
Investment, and they held the majority of their capital within
their own token that they printed. And once that came out,
there was a huge bank run at FTX, and the whole thing
collapsed overnight. Very interestingly, I think it was
two days before FTX collapsed. Sam bankman Fried went on a
podcast and talked about how he was going to create a stable
coin, which, of course, you and I investigated in the fluid
finance piece, but he's coming out saying he's going to start
his own stablecoin. There. They were intimately invested in
terra Luna, and had a lot of you know, interest in that
algorithmic back stablecoin working for whatever reason.
Again, I think it's very, very possible it's very related to
Thiel and the Tether and the stablecoin folks that held
government backed stablecoins, government debt backed stable
coins, and this industry of algorithmic stablecoins
implodes very publicly and leads to direct language in the first
iteration of the stablecoin bill, the gillenbrand Lummis
bill that says we are banning algorithmic alter alternatives
versus US debt backed stable coins. And gillenbrand said
herself, the senator out of New York, that, you know, we're
banning algorithmic alternatives backing stablecoins with things
like Bitcoin to preserve the dual banking system, which is,
you know, obviously under the interest of, you know, the big
players in the dollar system, the private banks who run the
who are the donor class that run the government in Many ways. You
know, gillenbrand is coming out proposing legislation saying we
can't have this happen again. This was such a bad collapse. It
hurt so many people. It was so terrible. FTX was so
irresponsible, and Terra Luna was was just such a terrible
idea technologically, that we need to make sure that this
never happens again. And therefore we're going to put
these rules in place in our stablecoin legislation that
says you need to have regular audits, and they need to be
backed by US Treasuries and nothing else, which, of course,
is a bummer in a lot of ways, because there are ways you could
create stablecoins that don't touch us debt at all. And that
would be kind of interesting to create the idea of $1 without
perpetuating US Empire by buying Uncle Sam's bags. But of course,
via this controlled demolition of Terra Luna and FTX, we get
legislation that is now also in the GENIUS Act, that says, you
know, algorithmic stablecoins are a no no. So you could argue
very much so that, you know, Tethers intimate connection to
FTX collapsing in Alameda. You know, $30 billion going back and
forth between these companies,
perhaps seals intimate connection to the start of the
of the stablecoin industry and Tether, which is the stablecoin
that is backed by US debt. You know, perhaps these players
were, you know, actually, actually, you know, set this up
to be a demolition, a very public demolition to then, you
know, dialectically lead everybody into the GENIUS Act,
which obviously benefits the, you know, the stablecoin
issuers that back themselves with government debt, which
happened to be, you know, these players, very interestingly. You
know, I think it was six months after the banking crisis that
SVB and silver gate, you know, collapsed, and two weeks right
after the US House Financial Services Committee advanced the
first iteration of the stablecoin bill, which was this,
Gillibrand Lummis stablecoin bill. PayPal themselves,
alongside their partner Paxos, which is founded by a former
Goldman guy, Charles cascarilla, they launched their own
stablecoin py USD, which is, of course, backed by short term US
debt as well. And arguably, P Y U S D is the most set up to take
advantage of the legislation that is the GENIUS Act, mostly
because they're domiciled in the US whereas Tether is not so
while Tether is really set up to take advantage of, you know,
come back into market. You know, the CEO Paulo Arduino, was
standing behind Trump when he signed the GENIUS Act. You know,
they have every intention to start a US based stablecoin and
come back to the US, but p, y, u, s, d is very likely to take a
pretty big share of the market, you know, because of the public
sector legislation that was driven directly by these private
sector shenanigans. So we'll take a little break there. I'll
stop, but I think that you can kind of begin to see that while,
yes, it's very cool that you know, private sector. Doing
things, and the free market is doing things. In reality,
there's cartels that run free in these free markets that have,
you know, huge power, and are able to cause, you know, huge
demolitions and breakdowns of other people's systems, breaking
algorithmic pegs, you know, because they have so much more
liquidity and power than other people, whether or not Terra
Luna was set up to to break down or was a well intended idea that
went wrong, regardless, is this is the outcome, and
unfortunately, it bans, you know, technological innovation
that really could create a whole other economy that completely
circumnavigates government debt. But unfortunately, that won't be
the case now here with the GENIUS Act, well,
I think it's very compelling, honestly, when
looking at the chronology you just laid out, that there's
something else going on here than what's been publicly
telegraphed, obviously, in the role of Thiel, and people tied to
him and PayPal in general, I think is difficult to ignore,
and that's especially true when we look at what followed FTX,
that we brought up a few times in passing, the collapse of
Silicon Valley Bank. In the aftermath of the collapse of
Silicon Valley Bank, we have a direct result of that from the
horse's own mouth. Palmer lucky and Joe Lonsdale. Joe Lonsdale
being a co founder of Palantir with Peter Thiel and Palmer
lucky being a a Thiel fellow whose businesses since then have
been largely financed by Thiel creating this new stablecoin
bank that's essentially framing itself as a replacement to SVB,
catering specifically the Silicon Valley startups, but
it's a stablecoin bank called erevor, literally named for the
the mountain of all the dwarfs, gold that was stolen from the
dwarvens by the dragon slog. I mean, I don't know it's like
kind of an outrageous, uh, Tolkien universe name, even, you
know, I mean, so many Thiel-verse companies are named after
Tolkien stuff, but this one is probably the most telling of
all, except, except maybe Palantir itself, I don't know.
But when you look at all of all of what you explained and then
that together, it seems like you know with what's coming to
fruition, with the GENIUS Act, largely designed by former
PayPal CEO David Sacks, that we are basically witnessing the big
reveal of longer term plans that if you don't dig into the weeds
as you did, and you know, I did as well, but not as much as you
in the case of this investigation, it's very clear
that there's a lot of connective tissue between all of the
seemingly separate major economic events in the finance
and later the cryptocurrency space, that suggests that a lot
of this is Tethered together. And,
yeah, absolutely. And I think even more so, I mean, it's
very disturbing this this era bore idea, especially when you
consider, you know, what were the things that caused the
collapse of Silicon Valley Bank, as I already talked about, ThielS
Founders Fund, you know, basically putting out this
bulletin being like, hey, we pull out our funds. You know, we
advise you to do the same boom. The bank collapsed basically
overnight. But what happened? You know, years before, under
the Trump administration, was really what set up, you know,
everything that we're seeing now. And so there's so much to
talk about with the first you know, Trump 1.0 you know, very
infamously, you know, tweeted out about how he doesn't like
Bitcoin, and it's hot air, and the dollar is the only thing
that matters, and yada yada. But again, he's kind of a you people
really underestimate him and he and he loves to talk, you know,
out of one side of his mouth, while, you know, using the other
side of his mouth to create a whole industry and regulation
that directly goes against what he's saying. I think people are
starting to realize that now that is Trump's method. But in
2018 the Trump administration did. It did a pretty severe
deregulation of the banking industry that specifically
loosened capital and reporting requirements, that said that
banks under a certain apron were able to have you know, less
deposits you know, versus the amount of credits that they had,
which allowed banks to be further insolvent, further
fractionalized, and have less reserves. So when an issue came
up, like we saw, the banking crisis was really spurned, you
know, directly by, you know, the Trump administration, if you
factor in, you know, the Treasury and the Fed into that,
into that model. You know, we saw interest rates go to zero at
the onset of the pandemic in 2020, but then we saw the
fastest increase in interest rates at. Ever in history, not
to the highest point which Volcker did in the 80s, but we
saw the fastest, you know, furthest increase which we went
from zero to, you know, four and a half percent interest on this
debt, you know, really, really quickly. And what happened was a
lot of these banks had bought really low yield bonds, long
duration bonds, when interest rates were at zero due to the
government locking down the country and bringing interest
rates to zero. So a lot of these banks bought these long duration
bonds that only gave a couple points, that were very you know,
you had to hold them for 30 years to make a couple percent.
But then, you know, Powell comes in and raises interest rates up
to four and a half percent in like 18 months, and it basically
what happened was it broke the yield curve, and so it was
actually more profitable to hold short term debt. So all of these
people came and wanted to take their money and put it into
short term bonds and take their capital out of these banks that
had just bought a bunch of long duration bonds that were
illiquid and asked for cash to go buy, you know, short duration
bonds to make four and a half percent in a year versus, you
know, one and a half percent over 30 years. So it's an
obvious arbitrage. And so what happened was it was a dual
cutting edge to these banks that they had to sell their long
duration bonds that they bought during the pandemic, to sell to
get cash to pay their depositors who were fleeing. So they were
selling their bonds at a loss as a bunch of people were pulling
their money out that was caused, you know, they didn't have as
much reserves because Trump deregulated the banking industry
in 2018 so directly, we're seeing the Trump administration
was really a huge part of why the banks weren't solvent and
why they went under and and we saw, you know, people that were
very intimate to the Trump administration, like Peter
Thiel, calling for people to pull their money out. So you
begin to kind of see, oh, there's kind of a coalition
forming here of players that are using the public sector to
create great opportunity to make tons of money. I'm not even
going to talk about going direct, which was obviously this
plan that was done in 2019 before there was really an
inner, a whiff, a whisper of a virus that was done between
Trump's former money manager Larry Fink of Blackrock to
create, you know, a program to basically inject trillions of
dollars of funding directly To BlackRock, into Wall Street in
general, and circumnavigate Main Street the next time there was
the need of a bailout. But even ignoring that, which is
obviously a huge part of why COVID even happened, you know,
you can begin to look at the Trump administration's
regulation or deregulation that led directly to the banking
crisis that we saw, that, you know, SCB was, was probably the
most prominent. But even before that, right in 2019 before going
direct, you know, right after this, this banking deregulation,
Jared Kushner, the son in law of Trump, sent an email to head of
Treasury, Steve Mnuchin about a blog post that was written by a
Thiel acolyte, Sam Altman of OpenAI, who wrote a blog post
about stablecoins called us digital currency. This was long
before USDC was created. But this idea of, hey, maybe we
should look into stablecoins as a way to sort of extend dollar
hedge fund and find a new, you know, buyer of debt. So what?
Let's, let's find some new demand. So Minuchin and Kushner
were talking about, you know, Thiel-verse bros, talking about
stablecoins in 2019 when it was a very small industry. And we
actually saw that in March 2020, which is literally when the
government shut down the world, you know, Mnuchin Treasury held
a meeting which included Peter Thiel and Wences Casares, who
was the head of zap, who was a former PayPal guy who, you know,
was considered the Patient Zero of Silicon Valley for Bitcoin,
who introduced everybody to Bitcoin, so he says. But he held
a meeting at the Treasury in March 2020, and at the same
time, his OCC the Office of the Comptroller the currency, which
is like the head, you know, regulator for banks at the time
was Brian Brooks, who used to work with Minuchin at one West,
which was their bank that went under in oh eight that made tons
of money profiting off of the bailouts. Essentially, he was
also the found, one of the founding legal head regulators
of Coinbase, which is the you. US based crypto exchange that
holds the US government's Bitcoin. He put out a bulletin
at the, you know, around the same time that allowed banks to
hold crypto assets, and specifically to use stable
coins. And then on his like, I think it was this last third to
last day in office before Brian Brooks turned over the OCC to
the incoming Biden administration, he actually gave
a crypto charter, a bank charter, to the first crypto
Bank, which is anchorage digital, which is advised by Max
Levchin. And they actually run the rewards for p, y, u, s, d,
the stablecoin rewards for that market. So in the first
administration, all of the setup was there for everything we saw
in 2022 in 2023 the banking crisis, the stablecoin boom,
Bitcoin going from three and a half $1,000 to almost $70,000 in
about 18 months after the COVID collapse, everything that we,
kind of everyone is sort of aware of, was really started
during Trump administration, one, specifically with Minuchin
and and this deregulation and regulation while Trump is
tweeting out how much he hates Bitcoin. He really set it up,
you know, the groundwork for this industry to thrive. And it
sure did. I mean, in 2020 Tether was 10 billion, and now they're,
you know, I'm sure there'll be over 200 billion, probably by
the end of the year, if not before. So, you know, there's a
lot of things to say about the first Trump administration and
the people around him setting up everything that we're seeing,
you know, now coming to fruition with the GENIUS Act and Trump
2.0 and I think a lot of people sort of miss that, you know, the
first time around, because Trump is so loud, people are looking
at what he's actually saying and not what he's doing. Now they're
starting to see what he's doing. He has no need for re election.
He obviously doesn't really seem to care what his base says, as
he's kind of throwing them aside and just moving forward at the
behest of the technocrats that that put them in power in the
first place. And of course, how do you dictate human behavior?
It's incentives, and financial incentives, specifically
conveniences, that come downstream of them. And I think
stablecoins are going to be the greatest lever that this
technocratic administration has to lever control over the US and
frankly, the world.
Well, let's talk about that for a second, because you
recently authored a piece for the Solari report, sort of about
this idea about incentives and stablecoins directly, sort of
talking about your analogy was the carrot and the stick, and
this idea of how that serves as an analogy for how people in the
US will likely be on boarded to stablecoins, whether they
really want to or not. So can you elaborate on that a little
bit? Yeah, sure. Well, I think the idea of the carrot
versus the stick is this idea that you know the best way to
sell something like stable coins, or AI, or whatever this
sort of, you know, technological advancement du jour is, is
through conveniences and through sort of expressing, you know,
this is an altruistic good. It's very good for you to use stable
coins. And that's sort of the carrot, right? The sort of ism
of carrot, and the stick is that you see the carrot, and they
lead you with the carrots, like a like a farm animal. And then
one day, it's not a carrot, and it's a stick. And then the stick
beats your your face, and in the same place that you would go for
the convenience, now it's a stick. And so the idea, I think
of stablecoins being the carrot right now, but will later turn
into the stick, is that's sort of the warning that that that
piece is sort of presenting, and of course, that The Chain really
outlines in detail the players of who built this carrot, and
who built this stick, but the conveniences of stablecoins?
You know, as Thiel said, you know, oh, you're enslaved by
your central bank, living in South America, living in Africa,
living in Southeast Asia. Come to the to the US dollar. It's so
stable. It's so great. You'll be able to make rewards keeping
your money in p, y, u, s, d, at anchorage digital. Here's, you
know, three and a half percent on your money. You can't get
that anywhere else risk free, unless you are directly in the
US regulatory regime, and you are buying, you know, short
term. Term treasuries, you can't find that risk which many people
don't have access to, brokers that they can buy government
bonds from, so they buy these bond proxies. And stablecoins
are really just tokenized bonds, government bonds. So here's
access to yield, you know, three and a half percent or what, or
what have you. So why wouldn't you store your money in stable
coins when you can't really get that yield risk free anywhere
else. Sure you can hold Bitcoin or Ethereum or whatever, what
have you, and try to speculate, hold gold, try to speculate, but
a risk free asset, you know, three and a half percent you
put, put all of your money in, in p, y, U, S, D, and get, and
get a free three and a half percent. But unfortunately, as
that piece, and as a lot of my work, has sort of attempted to
explain, is that there's a lot of downsides to stablecoins as
it relates to programmability, Seiz ability and surveillance. I
think those are all words, but if not, I hope you know what I
mean. And and so the carrot being dangled over us is dollar
access to the majority of the world and then to people in the
US. You get access to an interest bearing checking
account, which then you can also spend, you know, eventually, you
know, at Amazon or via your PayPal account or Venmo. So why
wouldn't you hold your money, which you get nothing holding it
in a traditional bank, you get three and a half percent. Great.
So that's sort of the carrot the people around the world that are
in, you know, deflating, or rather inflating. You know,
local currencies now get access to, you know, the biggest brand
in the world, which is the US dollar. It's very convenient.
Come on in. All you need is a smartphone and you get access to
the US banking regime. That's awesome. But unfortunately,
stablecoins are just as programmable as CBDCs. They're
just as sizable as CBDCs, and in many ways, they're arguably more
survivable than CBDCs, because rather than having a closed box
system that you know you are, of course, 100% revealing your
transactional data to the government and their law
enforcement. When you use a cbdc, not everybody in the world
has access to that ledger. It's only a it's a closed box. Now,
again, I don't trust the government, and I don't
necessarily think CBDCs are good. In fact, I think they're
extremely bad and dystopian. But this dialectic replacement of
CBDCs is stablecoins, which we've seen via the rhetoric of
the Trump administration, you know, banning the development of
CBDCs. I think in crypto week, there were three acts. One was
the clarity act that sort of just broke down. Which
blockchain is, is, you know, decentralized or not? And then
there were the other two, which was the GENIUS Act, which
empowers stablecoins, and then the anti cbdc Act. So we're
seeing it at the same time, you know, as the government is
saying, Oh man, how bad are CBDCs. They really suck. But
check out these fancy new stable coins which are going to save
the dollar and extend dollar hedge fund and all this stuff?
Um, well, perhaps this victory of private market, private bank
stablecoins is really not a win, because, rather than it
being a closed box circuit of who gets to see your
transactions when you are publishing your data on a public
blockchain, anybody that has access to the Internet into the
blockchain can download the entirety of your transactional
data, and unfortunately, pretty much everything you do on the
internet, as we have you know, you know, seen very clearly with
the Snowden leaks with prism that they are gleaning
information very directly from the fiber optic cables that the
internet is run on. They don't even need warrants. They can
just pull the data directly from the service providers of the
internet. When you combine that with a public blockchain that is
a public ledger, all of a sudden, anybody that has even
remotely an intelligence you know, size. You know,
computation and analysis is able to, you know, heuristically
analyze any transaction you make. So instead of it just
being revealed to your government, which, again, is not
good, you're revealing it to everybody in the world, which is
obviously extremely dangerous. And over time, more and more
people will be able to have access to data caches that you
know will allow that sort of analysis, and not to mention the
computation. As computation gets cheaper and cheaper, so we're
going to see that eventually, every transaction you make on a
public blockchain will be survivable by anybody in the
world, which is obviously extremely concerning. So the
carrot is being led to us of these amazing conveniences,
financial conveniences. You're saving money instead of spending
3% to your credit card provider every time you make a
transaction. As a retailer, i. You're just, you know, you're
paying cents for a transaction. You're getting all the rewards.
You're getting, interest bearing stablecoins you're getting out
of your local currency, all of these conveniences fed to us,
you know, as carrots. All of a sudden, that can turn very
quickly, and these stablecoin providers will start on BART
boarding, law enforcement, start seizing funds and started doing
things at the behest of the government, because it is a
public, private relationship, and if you want to hold $150
billion of treasuries, you damn well better do whatever the
government tells you to do. Otherwise, they will seize the
issuers treasuries. So we've seen that already with Tether.
We're going to see that with other stablecoins, that the
compliance with the public sector by these private sector
entities will actually create a scenario that is probably the
worst of both worlds, where it is a private company that can
deny your service at a whim. There's no need for
constitutional protections, but they are also still at the
behest of the public sector anyway, and the law enforcement
of the public sector and their arms, whether it's the FBI, the
Secret Service, which are on Tethers platform, or even
private institutions like chain analysis, which is a private
blockchain analyst company that was funded by the CIA's venture
firm in Q tel. All of those are already on Tethers platform, and
we've seen hundreds of millions, if not a billion dollars, of
Tether seized and frozen by Tether at the behest of local
law enforcement. I assume that number will also go up quite a
bit as the number of Tethers goes up quite a bit, and the
users go up quite a bit. So unfortunately, this, this win of
the private market over the central bank digital currency
is, is, is arguably, in many ways, unfortunately, worse.
Well, it's a public private partnership. So with those who
tend to get the worst of the public sector and the worst of
the private sector all in one neat little system. And as you
pointed out with Tether, I mean, Tethers essentially become that
by fusing their platform with us, law enforcement seizing
people's money without recourse. The US government says this
person bad, Tether banned them, and then it's, you know, their
money's taken by Tether. And they can't be like, I'm not
really a terrorist. The US government got it wrong. There's
no way to, sort of, you know, there's no do overs there. And
you know, as you pointed out elsewhere, there's no
constitutional protections, really, because Tether isn't
even located in the US, so the First Amendment doesn't really
apply to anything they do. And in the case of pyusd, which you,
you know, sort of frame, more or less, as one of the winners of
this multi year waged stable coin war. You know, PayPal,
arguably, you know, the Snowden leaks were privatized by the
Pierre, by Pierre Omidyar, through His creation of the
intercept. He was the owner of PayPal at the time, and
allegedly, you know, as I reported for mint press at the
time, privatized those leaks, because a lot of the leaks there
showed PayPal direct collaboration with US
intelligence as it related to the US surveillance system. And
of course, when Pierre Omidyar was running eBay in the late
90s, he had onboarded law enforcement and all of that. So,
I mean, PayPal, even though it's has different ownership now I
believe, or slightly different ownership, you know, has a long
trajectory of doing that kind of stuff. And then, of course, you
know, during COVID, PayPal de banks people constantly, and
they did it before too, but, you know, there was not really any
recourse for people that were, you know, just booted off the
PayPal platforms. Why would their stablecoin be any
different? And you know, have JP Morgan, for example, and all
these other banks talking about making their own stablecoins
and getting in the stablecoin play. And of course, JP Morgan,
rather notoriously deep banked. Dr Mark executives during the
COVID era, and there was no recourse to them. So you know,
even for some of these private banks and companies in the US,
First Amendment protections don't apply either. So you know,
and they can be public, you know, pressured by the public
sector, even though they're private company companies, to de
bank people. And you know this happened with social media. It
happens with social media, and it happens banking. And now that
social media and banking are due to fuse, it's probably not going
to be any any different, unfortunately, from the
seizability perspective or the surveillance perspective. And
programmability, of course, is another one of the concerns
about CBDCs, but also with stablecoins, because you can
make stablecoins not work for any sort of purpose, just like
the government could theoretically program CBDCs to
not work if they want you to prevent you from buying.
Something or using your money in a particular way, stablecoins,
you know, can be made to serve that purpose as well. So not
great. And I do want to bring up a Tether quote, because it's
very relevant here. I believe it was Howard Lutnick, who's now
Secretary of Commerce under Trump, but he was talking about
how great Tether is, because if you want to freeze someone's
funds with Tether, you just called Joe Lubin, who is one of
the co founders of Tether, if I'm not mistaken, co founders of
Ethereum. Yeah. Sorry, Ethereum, that was to freeze Ethereum.
Yep, exactly. And Ethereum,
right? Was founded by Vitalik Buterin, who also was
awarded a Thiel fellowship in 2014 to work on Ethereum. And
Ethereum, of course, is the blockchain of choice for these
stablecoins. There's more stablecoins value on Ethereum
than there are on any other chain, which is, you know,
decently concerning. We're also seeing developments now where
Thiel was putting, you know, he now owns an almost 10% stake in
an Ethereum Treasury company that is buying up, you know,
billions of dollars of Ethereum, which has kind of come out in
the last few days. And so, you know, Ethereum is a proof of
stake model, so the owners of the Ethereum, the people that
hold more Ethereum have a greater say over the validation
of the network, which is very important. So to exemplify that
point made by lutnik, whose fund, Cantor Fitzgerald holds
all of the bonds for Tether. Interestingly enough, he, of
course, is no longer the CEO, as he is a public official, and his
son, Brandon has taken over. But yeah, that quote of you know, if
you want to seize Tethers, you just call Tether and if you want
to stop Ethereum, you just call Joe Lubin. It's pretty
disturbing when you begin to kind of put it all together. Joe
Lubin, I believe, was the the college roommate of Michael
Novogratz, who is former Goldman trader as well, who was also the
biggest public proponent of Terra Luna, and even got it
tattooed to his arm, this very cringe wolf howling on his arm,
you know, right Before everything collapsed, obviously.
And they were college roommates, interestingly. And Novogratz was
also a big investor of Eos, which was a group done by Peter
Thiel and Brock Pierce. They made a blockchain with William
Quigley, who was also one of the initial founders of PayPal and
one of the co founders of Tether, who worked at clearstone
with them, alongside them at Eos, was Christian anger Meyer,
who was, you know, involved in the wire card scandal. He's most
known for being a psych, psychedelic investor, but he
helped Tether manage a whole bunch of investments, including,
you know, buying a whole bunch of Bitcoin miners and even
Tethers. Investment in SATA logic, which is a company that a
satellite surveillance company that is chaired, or rather the
board features Minuchin and lutnik, as well as some other
goals. And then also Louis bacon, who's right up there with
George Soros, is one of the biggest players in the 90s
currency speculator gang, who was, conveniently enough, the
main funder of IDEA Lab, which was the main first funder of
PayPal. So interestingly, a lot of these people are all coming
back together. And you brought up a point here about the social
media networks kind of becoming banks. And one of the, one of
the main focuses on the last piece, The Chain of command in
this series is, is sort of the setup of Facebook's Libra
project, which was, which was the first kind of idea of, you
know, a stablecoin being on a social network, because now that
data has become, you know, the the platform of money. Money has
become data. All you need is communication networks and human
networks to be able to create a pretty big user base. Facebook
has the largest active monthly user base of any platform in the
world. And David Marcus, who was the former president of PayPal,
came in to start this project, this stablecoin project, with
with Facebook, very interestingly, ended up getting
closed down. And, you know, was had present in front of
Congress, and there was a whole bunch of issues, you know, kind
of right, right off the bat, but, but very interestingly, you
know, I think a lot of the dialectics that were set up that
are now present in the. The GENIUS Act via the Gillibrand
Lummi stablecoin Bill was was was sewn during the the Libra
experiment, even though Libra themselves, you know, stated
that maybe regulatory pressure and uncertainty would mean that
this doesn't actually succeed. Interestingly enough, when it
was shut down by regulators, Libra sold off its assets to
Silvergate Bank, which ended up obviously going out, also going
under. And Silvergate was heavily involved with
MicroStrategy, which is the largest Bitcoin holder in the
world, domiciled in the US. They're based out of McLean,
Virginia, which is right by 15 minutes away from Langley, the
CIA's head office, and they were even partly owned by block one,
which was the parent company of Eos. Of all the people that I
just mentioned, kind of interesting. They operated the
silver gate exchange network Sen, which was, you know, the
biggest way that stablecoin providers were able to pass
around the bonds that back the stablecoins between each other.
So it was a crucial part of the stablecoin industry, very
interestingly. And so, you know, there's a lot to sort of pick at
there, but yeah, I think, you know, we're going to see stable
coins, you know, become issued by basically any company that
wants to, whether it's an AI company, whether it's Amazon,
whether it's Walmart, whether it's Twitter or X, whatever it
is. Now, you know, anybody that has a network of users is going
to issue a stablecoin, because now that we've allowed
regulation that as long as you buy government debt, you can
create your own money, you know, why wouldn't you? So we're going
to start to see that proliferate, I think, quite a
bit. And when you start to look at all the players here, you
know, these guys aren't, aren't necessarily always having their
customers in mind. And in fact, have built a lot of, you know,
really sketchy surveillance devices, you know, you really
look at what Tether, you know, has invested in, and it's
Blackrock neurotech, it's brain chips. It's, you know, that
surveillance company, cytologic that I discussed, a lot of these
things have pretty dangerous implications for the freedom of
humanity at scale, and we give them a money printer where they
can create, you know, trillions of dollars of capital. You know,
you can begin to see sort of an asymmetric advantage to these
private companies over behaviors and financial incentives of its
users. Which is, which is very scary. And one more point on
that, I think Paxos, which is the issuer of PayPal,
stablecoin, PY USD. It features two advisory members, Bill
Bradley, former senator, and Jim Manzi, who founded lotus, an
early software company. Both of them were investors and advisors
to cargo metrics, which was sort of the proto Satellogic, which
was a shipping and ocean analytics company that was
founded by Scott Borgeson, who was Ghislaine Maxwell's husband.
So you're beginning to see a bunch of connections with this.
You know, transnational, transgenerational, trans
fraternal intelligence organization, blackmail
organization, that, of course, you wrote the book on they have
their tentacles all over this thing. When you really start to
dig deep, whether it's Brock Pierce, whether it's Paxos or
just PayPal itself, you begin to see, kind of, hey, maybe there
isn't just this altruistic angle to all of this. Maybe this isn't
just carrot, and maybe there's a really dark, dirty panopticon
stick that is awaiting behind that final carrot to beat your
face in. So unfortunately, you have to sort of look at all of
this in conjunction to start to see, you know, why is a guy like
Bill Gross, who's the founder of IDEA Lab, you know? Why does he
run the largest data broker on human movement data in the world
with zero you know? You begin to see a lot of these data brokers
are all all over stablecoins. But if stablecoins are supposed
to be better than CBDCs, you know, why are they seemingly all
created by people that have, you know, a large investment in the
Panopticon surveillance state. So, yeah, I don't know. It's a
little scary when looking at it, you know, really zoomed in and
then really zoomed out, which, of course, is why we wrote this,
so that you can be informed, yeah.
And I mean, what you laid out is very important. And I
think when you consider on top of that, that Palantir, which
obviously is a, you know, Thiel link company, and thus linked to
this, you know, network we've been talking about today, quite
extensive. Lee. They've become very involved in the US
government under the second Trump term. They've become
involved with the IRS through the doge agency. They sort of
got access and hoover up data from most of the government.
They also there's a lot of Palantir Palantir alumni in the
government with major access to important data, particularly in
HHS, but Palantir manages US healthcare data anyway, so we
have that as well, in addition to your financial data. And
then, since we've brought it up a few times, Twitter or x I
guess, is now owned by Xai and is aiming to, of course, be per
mosque, capture the financial system. And they've also teamed
up with Palantir relatively recently. So, you know,
Palantir, of course, was always meant to be, you know, it's
really the private sector iteration is, you know, I've
talked about many times of this total information awareness
thing. It originally, though, of course, started off as the anti
fraud algorithm at PayPal before being turned into a privatized
version of that surveillance program. But the goal of Tia was
always not it's not just about finding crime that's happening
or has happened. It's about predicting crime that will
happen in the future. So if they think you might misspend Your
stablecoins, you know Palantir might flag your transaction. So
you don't even have to, necessarily, given the players
involved here do anything naughty to have your stable
coins potentially seized or have your wallet more surveilled than
another wallet, perhaps just the assumption that you may or be
flagged by palantir's algorithm, or an algorithm like it, that
you may participate in body activity could be enough to
trigger those things. And what a nightmare that would be. So
yeah, and I think you know, in the US, if a cbdc was
implemented, of course, Palantir would have also been involved.
But I think to think that it wouldn't be in this, you know,
new stablecoin, you know, world that we're being ushered into.
You know, it would be naive to not think that those things are
also at play here when you know it's Palantir is basically, you
know, become the government now in a lot of ways, which is
pretty, pretty unsettling. So yeah, I think people really need
to be aware of what's going on. The Chain is a great way to get
up to speed on that. But we also need to think about what we can
do and what we want to do with our data, what red lines we want
to have with how, with what type of things we interact with in
the digital digital world. Will stablecoins be a red line for
you? Will digital Id be a red line for you? Etc, etc, um. You
know, my concern, of course, is the deeper anyone allows
themselves to go into this, you know, this world that is being
built for us by the technocrats. The harder it will be. You know,
it's a slippery slope. The farther you go down the slippery
slope, the harder it is to get back up. So, you know, we should
be pretty careful about what we allow ourselves to become
entangled with, and that includes financially. So as we
wrap up, wrap up here, Mark, I don't know if you want to add
anything on that point, or if you have any other potential
solutions you'd like to field for the audience.
Well, before you get into solutions, you know, it's really
just informing yourself, as I kind of said at the top, you
know, this is going to be something that affects everybody
on the planet, whether or not you use the stablecoin,
specifically yourself, this new financial system that is, that
is an inevitability is going to affect in mass, everybody. And,
you know, you begin to learn about, you know, how we got
here, the history of the dollar system, and then the history of
of, you know, sort of information, banking, you know,
really, I think the first piece, which, you know, again, we're
wrapping up, we didn't really talk that much about, about
Zappo, and sort of, they are the people that really built the,
the first iteration of the Bitcoin dollar, you know, you
look at the people that were on its founding board. And you see,
you know, Larry Summers, which, of course, you know, is a goal
with Epstein connections and Treasury connections and and
what have you. But then you also see these guys that really
played a very early role in, you know, the creation of
information banking, with D Hawk of visa and John Reed of Citi,
which were really the first big institutions that really
digitized money, before PayPal, and the fact that they are all
on this board of Zappo, which is, you know, Wences gas and
another PayPal board member, all really talking heavily about
Bitcoin and about stablecoins. You can come. Kind of begin to
kind of zoom out and see that this is a really a decades long
play by the intelligence and banking communities to create a
new financial system to deal with the effects of being in a
fiat system. And so, you know, these guys don't really lose
very often, if ever, and they are very clever at creating the
bubbles and then creating the pin that pops the bubbles and
creating the vacuum that sucks in the air that was inside that
balloon into the next balloon, into the next system. And I
think it's very clear that that system is being built. I you
know, obviously propose that it is this Bitcoin, dollar system
with stablecoins and Bitcoin and so if you look at the
history of these players, they've really done everything
they needed to do to have the dollar survive and move on to
the next iteration, the next evolution of the dollar. We've
seen digital dollars for a long time. Now. We're seeing these
tokenized dollars on blockchains. I don't think this
evolution is just going to stop. It has never stopped in the
history of you know, these, these, these private sector
companies building things out at the behest of the public sector.
That will continue. So this is going to happen historically.
All the evidence points to them being very successful at this.
So the key is, sort of, you know, the solution here, which
was your question is like, Well, how do I handle this pin
popping, this controlled demolition? How do I best
navigate that? And when it comes to finances, it's very personal,
and I don't, I'm not a, I'm not a financial advisor. And I
don't, I don't, I hope you don't take anything, I say, as
financial advice. Really take it as information to figure out
what it is that you want to do, because I'm not going to poo poo
anybody doing what they need to do to take care of themselves
and their family, if they need to use some of these instruments
to survive in the short term, or to speculate on them to survive
in this wealth transfer, I think that you have to do what you
need to do, but just be very careful and be very aware of
what you're signing yourself up for when you use these products
and use these systems, and make sure you know that the
conveniences that you Accept are very often going to be shortly
followed with some form of a stick in your face. And so, from
a solution standpoint, all solutions come downstream of
information and being informed. So obviously, that was the point
of this pod. That was the point of The Chain. That was the point
of, you know, a lot of our work, you know, spanning quite a bit
of time here now. So take a look at it. See what you see, what
you what you glean from it, and then make a decision where your
line is, as as Whitney said earlier, you know, as you said
earlier, where is your line. And draw that very carefully and and
stick to it, because they're going to feed you a lot of
conveniences that are going to be really double edged swords.
So make sure that you remember, you know, humans are more
important than machines, and we're very powerful beings, and
we can do a lot of really cool stuff if we lean into our local
communities, lean into our families, and, you know, let's
not let AI take over everything. Let's create art, do fun things,
go in the forest, throw your phone in the river, and get out
there and touch grass every once in a while, and get to know your
neighbors. So that you can find ways to circumnavigate this
panopticon financial system, via barter, via via trust. You know
you cannot replace trust with a with a digital system. Trust
comes between two people, and so go out and find other people
that you can trust and create alternatives to something that
is inevitably going to globalize and take over a giant part of
the world. So the solution comes downstream from information, and
then the ability to create alternative structures comes
from you going out there and building them yourself, whether
they're technology based or not, you have to build the solutions
that are necessary for you and your people and your family. So
get yourself informed and get out there and build the tools
that you need to live the life that you want.
Wow, that was beautifully stated. Thanks a lot, Mark, and
thanks a lot for being here today and sharing all of this
information with everybody. So anything you'd like, as we wrap
up here, anything you'd like to let people know about what's
coming up for you, how they can support your work and how they
can
follow you. Well, thankfully, it's very easy.
You're probably already on the page right now, but, you know,
I'm writing now for unlimited hangout. Very happy to be here.
Thank you so much. It's an honor. A lot of fun. We'll be
continuing to write for Unlimited Hangout. We're going
to be doing some fun things here. In the future, perhaps
this chain turned into a book, perhaps a print magazine is
going to be in the work. So a lot of fun things going to be
coming out of, you know, me working with Unlimited Hangout.
And, you know, again, just thank you so much for following. I'm
on Twitter, but trying not to be on there as much these days,
trying to really go to publish only. So check out the author
page on Unlimited Hangout and check out The Chain. You can
access an Unlimited Hangout, and I made a nice little URL that's
The Chain dot wiki that brings you right to the investigative
series page, so you can check it out there. It's a long read, but
break it up over time and and get in there and inform
yourself.
Awesome. Well, thanks Mark and thanks everybody for
listening. We'll catch you all in the next episode.