1
00:00:00,000 --> 00:00:03,300
The final page of the report, which is recommendations related to the strategic Bitcoin reserve,

2
00:00:03,620 --> 00:00:08,520
they have a footnote talking about the United States government's incremental acquisition of Bitcoin

3
00:00:08,520 --> 00:00:10,420
with a footnote to stacking sats.

4
00:00:10,860 --> 00:00:16,680
I mean, that's about as good a bow as you can tie on the shift of the Overton window on Bitcoin as I can imagine.

5
00:00:16,680 --> 00:00:20,860
What happens if quantum computing moves a lot faster than we hope or anticipate?

6
00:00:21,200 --> 00:00:22,300
What does consensus look like?

7
00:00:22,400 --> 00:00:25,100
What role do, if any, do policymakers play?

8
00:00:25,220 --> 00:00:26,700
Do financial institutions play?

9
00:00:26,700 --> 00:00:31,520
if there's a contentious hard fork around this, what's going to happen, I think is a really

10
00:00:31,520 --> 00:00:36,880
important question. We're moving away to some extent from the U.S. government debt as the

11
00:00:36,880 --> 00:00:40,860
neutral reserve currency. I think the sort of clear signal at the end of that was in 2022

12
00:00:40,860 --> 00:00:46,520
when we froze Russia's treasury reserves when they invaded Ukraine. Whenever you think about

13
00:00:46,520 --> 00:00:50,780
that decision or that war, if we can freeze your neutral reserves, they're not all that neutral,

14
00:00:50,900 --> 00:00:54,140
right? We get to control the supply of it and we get to decide who can spend it or not.

15
00:00:54,140 --> 00:00:59,320
And since then, central banks around the world have been busy stacking gold, especially including China.

16
00:00:59,440 --> 00:01:05,640
I think what we will likely end up seeing is the world is moving towards digital fiat currency,

17
00:01:06,080 --> 00:01:12,160
and the world is moving towards more neutral reserve assets for central banks away from U.S. government debt.

18
00:01:12,360 --> 00:01:16,980
And the way that's going to play out in China is the CBC, the yuan, plus gold.

19
00:01:17,120 --> 00:01:21,380
And I think our answer to that from a policy perspective is private stablecoins and Bitcoin.

20
00:01:21,380 --> 00:01:26,060
A much larger percentage of the total Bitcoin supply is inside the United States than of the gold supply.

21
00:01:26,340 --> 00:01:42,500
If the U.S. government were to go in and fully monetize Bitcoin, that enriches our citizens, our companies, our country, if we can stack enough Bitcoin in time, specifically at the expense of our geopolitical adversaries that are holding the competing asset, which is gold.

22
00:01:42,500 --> 00:01:46,620
If you really want immutable freedom money, well, that's Bitcoin, right?

23
00:01:46,680 --> 00:01:51,580
You're not going to get basically anything other than Bitcoin that is going to be like pure immutable freedom money.

24
00:01:51,860 --> 00:01:54,040
Stable coins are stable to fiat.

25
00:01:54,460 --> 00:01:57,840
Fiat, literally in the name, you know, it's by government fiat.

26
00:01:57,960 --> 00:01:58,700
The government's creating it.

27
00:01:59,000 --> 00:02:01,500
I kind of think it's a little bit of a render unto Caesar's situation.

28
00:02:02,540 --> 00:02:04,700
This is not about is Bitcoin or crypto good or bad.

29
00:02:04,960 --> 00:02:07,000
This is really about, you know, speech.

30
00:02:07,100 --> 00:02:09,420
Are you holding people responsible for writing and publishing code?

31
00:02:09,420 --> 00:02:13,600
We just need a recognition, as you said, that technology moves fast in the law.

32
00:02:14,180 --> 00:02:20,100
There is now a such thing as peer-to-peer disintermediated transfers of value.

33
00:02:20,380 --> 00:02:26,280
And when all of these laws were written, if you were doing an electronic transfer money, there necessarily was a regulated intermediary.

34
00:02:26,280 --> 00:02:33,320
And so this is just a patch to recognize that we can't treat infrastructure like code the way we would treat a bank.

35
00:02:33,420 --> 00:02:34,600
They're just not the same thing.

36
00:02:34,600 --> 00:02:39,720
The infrastructure is more like a USB cable and the exchange is more like a bank.

37
00:02:39,920 --> 00:02:42,340
And those things need to be differentiated from each other.

38
00:02:49,100 --> 00:02:56,120
Honestly, so it was crazy to see the White House yesterday with the tweeting out with – or maybe it was last night, right?

39
00:02:56,220 --> 00:02:56,900
Last night, yeah.

40
00:02:57,240 --> 00:02:58,680
Tweeting out Matt Pines by name.

41
00:02:58,700 --> 00:02:59,300
That was awesome.

42
00:02:59,720 --> 00:03:00,460
Yeah, that was amazing.

43
00:03:00,460 --> 00:03:00,860
Really cool.

44
00:03:01,920 --> 00:03:03,720
I mean, you guys are crushing it.

45
00:03:03,720 --> 00:03:04,260
What can I say?

46
00:03:04,260 --> 00:03:10,740
I mean, for a bunch of spooks, you know, which I'm hearing is the very fashionable thing to call you guys now.

47
00:03:11,200 --> 00:03:12,560
Yeah, that's the theory.

48
00:03:13,400 --> 00:03:13,640
Yeah.

49
00:03:14,500 --> 00:03:15,960
No good deed goes unpunished, right?

50
00:03:16,360 --> 00:03:16,640
For sure.

51
00:03:16,700 --> 00:03:20,460
Well, look, I actually have some sympathy for this.

52
00:03:20,900 --> 00:03:25,420
There is a history of people wrongly speaking for the Bitcoin community.

53
00:03:25,420 --> 00:03:33,220
And I think that the New York agreement really left some scars on the community and some sort of bad memories there in the original Bitcoin Foundation.

54
00:03:34,260 --> 00:03:43,720
And when you do what we do, which is to sort of do policy work on behalf of Bitcoin, it's important not to confuse that with doing work on behalf of the Bitcoin community.

55
00:03:44,060 --> 00:03:50,420
And I think people rightfully get upset when they think you're speaking for them, especially when you're working with the federal government.

56
00:03:50,920 --> 00:03:54,580
And we believe very much in what we do and happy to get into all of that.

57
00:03:54,920 --> 00:04:00,640
But I think there is a somewhat understandable immune system in the Bitcoin community.

58
00:04:00,640 --> 00:04:06,860
but very much the the our ideas is the influence is is meant to run the other way it's we are

59
00:04:06,860 --> 00:04:10,780
supposed to talk to the government including the intelligence community about you know here's what

60
00:04:10,780 --> 00:04:15,740
bitcoin is here's how it really works and here's how we think um this all makes sense in terms of

61
00:04:15,740 --> 00:04:20,980
uh policy goals rather than uh sort of our directives to the bitcoin community coming from

62
00:04:20,980 --> 00:04:28,180
from the government yeah and i mean it's also one of these situations where like uh this immune

63
00:04:28,180 --> 00:04:32,900
system is a good thing and it is good that bitcoiners are wary and don't trust and verify

64
00:04:32,900 --> 00:04:38,840
like that we want that to be the case like we want bitcoiners to be super kind of concerned about

65
00:04:38,840 --> 00:04:44,680
anything they view as potential co-option of of bitcoin uh by that same token it's like it's also

66
00:04:44,680 --> 00:04:50,480
important to then recognize where there is really good work being done and like the stuff with like

67
00:04:50,480 --> 00:04:54,840
like they've got a former cia guy working for him and it's like well yeah that wasn't like a

68
00:04:54,840 --> 00:04:57,820
a hidden thing. In fact, that was kind of like listed on the resume, you know?

69
00:04:58,600 --> 00:05:03,440
Yeah. I mean, like as Bitcoiners, we know a little bit about OPSEC and the fact that it's,

70
00:05:03,480 --> 00:05:07,440
it's just out there on our website, right. That our, our, you know, head of government affairs

71
00:05:07,440 --> 00:05:12,200
used to work for the government. It's not, not a, something we're trying to pull over on anybody.

72
00:05:12,760 --> 00:05:17,660
Yeah. Yeah. Well, yeah. All, all of this, I appreciate the work that you guys do very much

73
00:05:17,660 --> 00:05:22,200
and appreciate the Bitcoin community for remaining ever vigilant as well, of course, but Zach,

74
00:05:22,200 --> 00:05:29,400
uh welcome to the show it was dc feels like a long time ago for me already um it's been kind of a

75
00:05:29,400 --> 00:05:33,980
whirlwind since then for you guys in like a a positive way there's just there's a lot going

76
00:05:33,980 --> 00:05:38,940
on right now there's a lot we wanted to cover today um from the uh the recent report that was

77
00:05:38,940 --> 00:05:45,760
just dropped yesterday we're recording this on thursday july 31st and then also the tornado cash

78
00:05:45,760 --> 00:05:50,840
that may be reaching a verdict as we are talking right now so let's see on the samurai wallet case

79
00:05:50,840 --> 00:05:56,020
a lot of other stuff going, going on as well. But yeah, how are you? How are you holding up

80
00:05:56,020 --> 00:06:00,120
amidst all of this? It's a busy times for you guys. Yeah, it's, it's crazy. But the truth is,

81
00:06:00,120 --> 00:06:04,200
it's really been, I mean, this week is exceptional, but it's been busy times for the last seven

82
00:06:04,200 --> 00:06:09,720
months. Really, ever since the election, things have been moving so, so fast and changing so,

83
00:06:09,840 --> 00:06:14,940
so much, mostly in a positive direction. And then in some ways, there have been really

84
00:06:14,940 --> 00:06:22,040
disappointing developments, especially around these two criminal cases. But, you know, I do this

85
00:06:22,040 --> 00:06:28,080
because I love it. I feel like if I had a real job, I wouldn't do very well at it because I'd

86
00:06:28,080 --> 00:06:34,560
be focused on all these things anyway. And so it's great to be able to focus full time on what's

87
00:06:34,560 --> 00:06:40,540
going on with Bitcoin in the world. Well, let's start out with maybe you just let me know you were

88
00:06:40,540 --> 00:06:48,500
in the room for the Samurai wallet. Can we start there? What's going on there? What was the end

89
00:06:48,500 --> 00:06:51,600
results? Because this has been going on for a while. Obviously, it's been super high profile.

90
00:06:51,700 --> 00:06:55,800
It has a ton of implications. What happened? Where do we go from here?

91
00:06:56,660 --> 00:07:04,460
Yeah. So the important development, I think, that started all of this was that the judge in the case

92
00:07:04,460 --> 00:07:12,460
switched. So the original judge was Judge Berman, older guy, didn't seem super receptive to

93
00:07:12,460 --> 00:07:17,720
understanding what this technology is and the sort of motion dismiss arguments that the defense was

94
00:07:17,720 --> 00:07:25,400
making. But, you know, and for example, he disallowed the several amicus briefs that myself

95
00:07:25,400 --> 00:07:29,940
and others were going to file in support of the motion dismiss, the motion dismiss being a legal

96
00:07:29,940 --> 00:07:34,860
argument that the defendants could not have been guilty of unlicensed money transmission because

97
00:07:34,860 --> 00:07:41,620
they didn't actually transmit any funds. You'd think that sort of a 78-year-old judge might want

98
00:07:41,620 --> 00:07:45,820
to hear from industry experts about that. He said, okay, maybe we'll have oral argument about it when

99
00:07:45,820 --> 00:07:50,620
we decide the motion, but we're not going to take written briefs. Defense counsel wrote what I

100
00:07:50,620 --> 00:07:53,840
thought was an excellent brief making this argument, like a really good job, and that's

101
00:07:53,840 --> 00:07:59,400
worth reading. I think we have it on the BPI website somewhere. But we were heading towards

102
00:07:59,400 --> 00:08:04,880
a oral argument and then a decision in this motion dismissed. Before that could happen,

103
00:08:05,240 --> 00:08:12,120
the case got switched out to a different judge, Judge Coat, who is just a notoriously pro-government,

104
00:08:12,200 --> 00:08:17,720
pro-prosecutor, heavy-handed, when it comes to criminal cases, judge. And more or less,

105
00:08:17,780 --> 00:08:23,060
the first thing she did after inheriting the case was to, without allowing any oral argument,

106
00:08:23,060 --> 00:08:28,960
let alone with the benefit of Amici, just dismiss all of the defense's motions,

107
00:08:28,960 --> 00:08:35,020
including that substantive motion dismissed. So the legal argument that the money transmission

108
00:08:35,020 --> 00:08:38,860
charge was inappropriate because there was no transmission, that didn't get any hearing in

109
00:08:38,860 --> 00:08:44,980
front of her, and that was just gone. And so at that point, the case is just necessarily going to

110
00:08:44,980 --> 00:08:50,000
trial with a judge that we have every reason to believe would be very sympathetic to the way the

111
00:08:50,000 --> 00:08:56,360
government sees things, pretty unsympathetic to the defense's arguments. And if the defendants

112
00:08:56,360 --> 00:09:03,180
lost at trial, they were looking at, you know, like 11 to 20 years in prison. So that's a really

113
00:09:03,180 --> 00:09:11,460
difficult situation. At the same time, the Tornado Cash trial was ongoing. So similarly,

114
00:09:11,600 --> 00:09:17,400
the defendants in Tornado Cash lost at the motion dismiss stage in a really disappointing ruling last

115
00:09:17,400 --> 00:09:24,120
year. And they are having essentially the same charges as in the samurai wallet case tried in

116
00:09:24,120 --> 00:09:30,280
front of a jury. And, you know, that case has been going, it depends sort of how you look at it,

117
00:09:30,280 --> 00:09:33,740
but it definitely has not been cleanly going well for the government. And there's some really

118
00:09:33,740 --> 00:09:39,460
uncertainty about how the verdict is going to turn out in that case. And if there was an acquittal,

119
00:09:39,800 --> 00:09:45,680
that would really undermine any sort of bargaining power that the samurai wallet prosecutors would

120
00:09:45,680 --> 00:09:50,840
have in terms of seeking sort of a settlement before trial, which is pretty common after the

121
00:09:50,840 --> 00:09:56,840
verdict. And so I think that precipitated the prosecutors and Samurai Wallet bringing a plea

122
00:09:56,840 --> 00:10:03,300
deal to the defendants. We now know that that plea deal was, we will drop the sort of scarier

123
00:10:03,300 --> 00:10:07,880
conspiracy to commit money laundering charge, which is different than my transmission charge.

124
00:10:07,960 --> 00:10:13,880
The money laundering charge essentially says that Keone and Bill created Samurai Wallet for the

125
00:10:13,880 --> 00:10:20,500
purpose of helping criminals launder funds, right, which is about intent. It's important to

126
00:10:20,500 --> 00:10:23,600
understand sort of the difference in knowledge and intent here. So if you're a Uber driver,

127
00:10:24,000 --> 00:10:27,220
and you have someone in the back of your car, and you say, all right, where are you headed? And the

128
00:10:27,220 --> 00:10:32,020
person is like, oh, I'm going to rob a bank. You, the Uber driver, are not legally responsible for

129
00:10:32,020 --> 00:10:35,320
robbing the bank, even though you knew that the guy in the back of the car was going to do that.

130
00:10:35,780 --> 00:10:39,080
Conversely, if you're the getaway driver, right, if someone calls you and says, hey, I just robbed

131
00:10:39,080 --> 00:10:44,140
a bank, I need to evade the cops, come get me, and then you get them for the purpose or with the

132
00:10:44,140 --> 00:10:47,600
intent to help them get away, then you are responsible for what they did for aiding and

133
00:10:47,600 --> 00:10:53,140
batting. So this money laundering charge, it carries this up to 20-year sentence,

134
00:10:53,940 --> 00:10:57,800
but the government has to prove the defense mental state, not just they knew that criminals

135
00:10:57,800 --> 00:11:04,180
were using samurai wall, but they intended that. On the other hand, the version of the

136
00:11:04,180 --> 00:11:09,480
money transmission charge that was left, this is a pretty Orwellian thing. Technically,

137
00:11:09,480 --> 00:11:14,580
the charge is conspiracy to operate an unlicensed money service business or money transmission

138
00:11:14,580 --> 00:11:21,600
business. But the version of this charge that was left after the sort of hoopla around the Blanche

139
00:11:21,600 --> 00:11:26,580
memo and around the sort of Brady, what looked like a Brady violation a couple months back,

140
00:11:26,880 --> 00:11:33,080
actually didn't require there to be any license. So there are like three versions of this charge.

141
00:11:33,200 --> 00:11:36,740
The government had initially charged two of them. One is basically you needed a license under the

142
00:11:36,740 --> 00:11:41,540
Bank Secrecy Act and money transmitter law, and you didn't have it. That was already gone. But

143
00:11:41,540 --> 00:11:45,520
then there's this other version, which is whether or not you needed a license, if you transmitted

144
00:11:45,520 --> 00:11:51,440
money with the knowledge, not the intent, but the knowledge that some of that money was being used

145
00:11:51,440 --> 00:11:56,920
or was the proceeds of crimes, then you can be guilty of an unlicensed money transmission business,

146
00:11:56,960 --> 00:12:00,820
even if you never needed a license. That's not actually an element of the offense. And so

147
00:12:00,820 --> 00:12:06,420
the deal was they got rid of the money laundering charge and the defendants pled guilty to the

148
00:12:06,420 --> 00:12:12,060
money transmission charge, which has a maximum sentence of five years. So they don't get a trial

149
00:12:12,060 --> 00:12:16,760
now, they don't get to appeal, and they don't get to appeal their sentence as long as it's under

150
00:12:16,760 --> 00:12:23,740
that five-year maximum. And so that's what happened yesterday in court. Now, interestingly,

151
00:12:24,100 --> 00:12:28,440
when you plead guilty to a federal offense like this, you have to what's called allocute before

152
00:12:28,440 --> 00:12:32,480
the judge, you have to say in your own words, the conduct you did and why it was against the law.

153
00:12:32,480 --> 00:12:37,100
and I only got to hear all of Keone's allocation,

154
00:12:37,380 --> 00:12:39,280
I didn't get to hear all the bills,

155
00:12:39,600 --> 00:12:42,340
but Keone was very careful to say in his allocution,

156
00:12:42,760 --> 00:12:45,860
yes, I knew that there might've been criminals using this,

157
00:12:45,960 --> 00:12:46,820
right, that's the knowledge it's in,

158
00:12:47,120 --> 00:12:49,660
and that there was money that was transmitted.

159
00:12:49,840 --> 00:12:53,300
Criminals may have used Samurai Wallet to transmit funds,

160
00:12:53,300 --> 00:12:56,280
but did not, did not say anything that sounds like

161
00:12:56,280 --> 00:12:59,160
I transmitted funds, the software transmitted funds,

162
00:12:59,580 --> 00:13:00,380
anything like that.

163
00:13:00,380 --> 00:13:05,200
And so there is this weird sort of like, you know, are they actually guilty of this thing?

164
00:13:05,800 --> 00:13:10,540
Are the things that they said to have the guilty plea entered, like the things they said are true?

165
00:13:10,700 --> 00:13:12,660
Are those actually the elements of the offense?

166
00:13:13,960 --> 00:13:16,240
It's sort of like a weird legal question.

167
00:13:16,420 --> 00:13:26,120
But I think if you put yourself in their shoes, you know, you're going to this trial with really unfavorable circumstances and you could spend 20 years in prison.

168
00:13:26,740 --> 00:13:28,060
You know, Keone's married.

169
00:13:28,240 --> 00:13:29,880
He's 36, right?

170
00:13:29,880 --> 00:13:43,900
You come out when you're 56. Bill is in his 60s. He would be in his 80s if he ever got out. And the difference between five and 20 years is really meaningful. And so I think this is much more a human decision than it is about the sort of substance of the legal case.

171
00:13:43,900 --> 00:13:58,600
I mean, it's just all kind of insane, though, because it's a great example of like, the legal system being a lot slower to catch up than the you know, than techno technological progress, like technology advances really, really fast and does not wait for the legal system.

172
00:13:58,600 --> 00:14:18,620
The legal system then tries to kind of keep up with it as best it can. But in these sorts of cases, it's like there isn't precedent for these. I mean, these are really setting precedent, are they not? And I mean, is that at all dangerous too, that this is kind of precedent setting? And like what precedent does that set as we move forward? Does this endanger more software developers?

173
00:14:18,620 --> 00:14:26,760
Yeah, I mean, hugely dangerous. That's how I got involved in the first place. I think privacy is really important, but I wouldn't say that I'm independently like a privacy activist.

174
00:14:26,760 --> 00:14:36,460
The danger that I saw in these cases in April of 2024, which two things happened in basically in the span of a week.

175
00:14:36,760 --> 00:14:50,920
One was the arrest of the Samurai Wild developers, but also in that week was the government's reply brief in the Tornado Cash motion to dismiss briefing, where for the first time the government really laid out their theory of how they thought Tornado Cash violated money transmission laws.

176
00:14:50,920 --> 00:14:57,460
And that argument really had no logical conclusion, right?

177
00:14:57,500 --> 00:15:00,920
It was they facilitated the movement of funds.

178
00:15:01,400 --> 00:15:06,140
And if you just think about that for like eight seconds, you're like, OK, nodes facilitate

179
00:15:06,140 --> 00:15:06,820
the movement of funds.

180
00:15:06,920 --> 00:15:08,520
Miners facilitate the movement of funds.

181
00:15:09,000 --> 00:15:11,420
Hardware and software wallets facilitate the movement of funds.

182
00:15:11,920 --> 00:15:16,460
The plastic that goes into my cold card, I suppose, facilitates the movement of funds.

183
00:15:17,700 --> 00:15:20,560
This is precedent that will go much, much beyond privacy.

184
00:15:20,560 --> 00:15:29,520
This is like a ban on any tools that help people engage in peer-to-peer transactions, right, if this is taken to its logical conclusion.

185
00:15:31,200 --> 00:15:38,980
And, you know, we need to get involved with the court to make sure that the government isn't able to get away with these specific legal theories that have no limiting principle.

186
00:15:40,900 --> 00:15:47,220
Now, the specific sort of precedent that's set here, the most dangerous thing that's outstanding is Judge Fela in the tornado caches.

187
00:15:47,220 --> 00:15:53,640
She actually did a oral, not written ruling saying that the Bank Secrecy Act doesn't require custody or control.

188
00:15:54,220 --> 00:15:59,840
That's not the position of the current administration, but that is a federal court ruling that's out there.

189
00:16:00,160 --> 00:16:01,600
We'll probably get to this.

190
00:16:01,800 --> 00:16:09,600
Like the remedy to this, the long-term remedy is passing the Clarity Act, which would just make it clear that that ruling doesn't stand anymore, right?

191
00:16:09,620 --> 00:16:13,120
The law, whatever it was before, is different now, and you need custody or control.

192
00:16:13,400 --> 00:16:15,520
In fact, you need unilateral custody or control.

193
00:16:15,520 --> 00:16:23,100
It's not enough that you're a sort of member of a federation like Liquid or a single sort of guardian in a federated e-cashman.

194
00:16:23,220 --> 00:16:24,500
That's not going to cut it either.

195
00:16:25,340 --> 00:16:27,300
But that ruling is still outstanding.

196
00:16:27,660 --> 00:16:30,580
We did not get any kind of substantive ruling like that.

197
00:16:30,680 --> 00:16:34,700
I guess the one silver lining of what happened in Samurai Wallet is now that there's guilty plea,

198
00:16:35,040 --> 00:16:43,580
Judge Code is not going to come up with some argument as to why specifically it was possible for Samurai Wallet to transmit funds,

199
00:16:43,580 --> 00:16:46,980
even though that is the implication of the guilty plea here.

200
00:16:48,140 --> 00:16:51,080
But even though there's not formal precedent in the Samurai Wallet case,

201
00:16:51,660 --> 00:16:56,420
if you get another more hostile administration in the future where prosecutors want to bring cases like this,

202
00:16:56,660 --> 00:16:59,980
which currently goes against the Blanche memo,

203
00:17:00,080 --> 00:17:03,420
which is the Trump administration's statement of how they want to use the DOJ to do criminal cases.

204
00:17:03,420 --> 00:17:06,400
But if we were to get, God forbid, like a President Elizabeth Warren,

205
00:17:06,880 --> 00:17:10,640
definitely prosecutors would point to, hey, these guys knew what they were doing.

206
00:17:10,640 --> 00:17:15,220
they're the software developers and they pled guilty to transmitting funds, even though everyone

207
00:17:15,220 --> 00:17:18,580
agrees this tool was non-custodial and they didn't have custody or control of user funds.

208
00:17:21,640 --> 00:17:26,860
It's all, first of all, President Elizabeth Warren is terrifying to just to even conceptualize.

209
00:17:27,500 --> 00:17:32,040
Yeah. Like, wow, don't ever want to hear those together. Can you, can you talk about the clarity

210
00:17:32,040 --> 00:17:35,940
act a little bit and, and just kind of what that entails, why that's important?

211
00:17:35,940 --> 00:17:43,140
Yeah, so the Clarity Act is a really sweeping piece of crypto legislation.

212
00:17:43,300 --> 00:17:44,740
It's called a market structure bill.

213
00:17:45,200 --> 00:17:50,740
And the main thing that the Clarity Act is about, the thing that is meant to give clarity over, actually has basically nothing to do with Bitcoin.

214
00:17:50,920 --> 00:17:56,800
It is this question of when they are sold to retail, are crypto tokens commodities or securities?

215
00:17:56,800 --> 00:18:05,640
This really matters because there's not a way to effectively sell crypto tokens to U.S. retail and not violate the securities laws.

216
00:18:05,940 --> 00:18:10,540
This is what the sort of Coinbase and Binance and, you know, Ripple lawsuits were all about.

217
00:18:11,000 --> 00:18:20,960
And it is very important to the large crypto exchanges and the large crypto VCs that there be some sort of safe harbor or legal path for them to sell tokens because that's their business model.

218
00:18:21,300 --> 00:18:24,300
So the bulk of the Clarity Act is actually about that.

219
00:18:24,560 --> 00:18:29,780
But then there are some other really interesting and really important provisions that were added to the Clarity Act.

220
00:18:30,600 --> 00:18:40,500
Some of them are interesting about like sort of parallel to the questions we talked about in Samurai Wallet and Trinidad Cash, which are about like DeFi protocols, right?

221
00:18:40,500 --> 00:18:46,000
What is the difference between like a centralized exchange and a smart contract, which operates on a peer-to-peer basis?

222
00:18:46,520 --> 00:18:54,060
There is good language in the Clarity Act that – and I think it's important that it's phrased this way – that recognizes a right to self-custody.

223
00:18:54,060 --> 00:18:59,580
I think it's actually really important that no legislation purports to create a right to self-custody.

224
00:18:59,580 --> 00:19:01,400
I think that right is in the US Constitution.

225
00:19:01,940 --> 00:19:04,240
I think you can find it in the First Amendment.

226
00:19:04,380 --> 00:19:05,420
You can find it in the Fourth Amendment.

227
00:19:05,560 --> 00:19:07,560
You can find it in the Fifth Amendment, in the Ninth and Tenth.

228
00:19:08,000 --> 00:19:12,380
I just think that, like, it would be unconstitutional to just straight out ban self-custody.

229
00:19:12,460 --> 00:19:15,720
But recognizing a right, I think, is useful and good.

230
00:19:17,160 --> 00:19:22,880
And then there is Section 109 of the Clarity Act, which is importing language with some

231
00:19:22,880 --> 00:19:26,560
small edits from another really important bill called the BRCA, the Blockchain Regulatory

232
00:19:26,560 --> 00:19:32,680
Certainty Act, which is really meant to squarely address the issue from Samurai Wallet and Tornado

233
00:19:32,680 --> 00:19:39,820
Cash, which is when does the Bank Secrecy Act apply? When are you considered a money transmitter

234
00:19:39,820 --> 00:19:44,740
and therefore subject to the Bank Secrecy Act by virtue of offering Bitcoin or crypto-related

235
00:19:44,740 --> 00:19:52,720
services? And it codifies some version of guidance that has been in place since 2019 from FinCEN,

236
00:19:52,720 --> 00:20:00,300
which is the part of the U.S. Treasury Department that deals with illicit finance, where essentially the line is custodial versus non-custodial.

237
00:20:00,380 --> 00:20:02,640
Do you have custody or control of user funds?

238
00:20:03,020 --> 00:20:11,240
The language in the Bank Secrecy Act and related regulations says in order to be a money transmitter, you need to accept and then transmit funds on behalf of the public.

239
00:20:11,840 --> 00:20:15,880
You'd think that between accepting and transmitting, you'd have to have the funds.

240
00:20:16,300 --> 00:20:20,040
But somehow the prosecutors in these cases didn't get the memo on that.

241
00:20:20,040 --> 00:20:31,480
And so this is like, you know, for the AOSAs in the back, this is literally writing it into the law that you're not going to be treated as a money transmitter if you don't accept and then transmit funds.

242
00:20:32,380 --> 00:20:37,880
Now, there was some language – there are some ways in which the clarity language which borrows from the BRCA is better than the BRCA.

243
00:20:37,880 --> 00:20:44,480
The primary way, I think, is this concept of unilateral control, which is not in the BRCA.

244
00:20:44,760 --> 00:20:52,000
And I think there are important questions of like, I think, specifically federated systems where this becomes an important protection.

245
00:20:52,520 --> 00:20:54,720
And then there's one way in which it's worse.

246
00:20:54,820 --> 00:20:55,900
There's sort of these qualifying.

247
00:20:56,280 --> 00:21:02,940
You are only exempt from being a money transmitter if you're a non-custodial developer or service provider.

248
00:21:02,940 --> 00:21:09,280
if you're providing infrastructure, if you're a node, if you're facilitating a blockchain system.

249
00:21:09,280 --> 00:21:13,940
But I think if you read the language carefully, and I have a sort of long back and forth with

250
00:21:13,940 --> 00:21:17,760
Lola Leitz on this on Twitter for people who want to really get into the details,

251
00:21:18,180 --> 00:21:22,900
sort of analyzing the text of the Clarity Act, my read, and I feel pretty good about this,

252
00:21:23,060 --> 00:21:28,600
is that the language in the Clarity Act would have fully protected the developers in both

253
00:21:28,600 --> 00:21:32,600
TornadoCache and Samurai Wallet. And they're pretty good protections overall.

254
00:21:32,600 --> 00:21:40,800
So passing this legislation, I think, solves the biggest legal and regulatory problem that we have in Bitcoin.

255
00:21:41,780 --> 00:21:47,120
And on the one hand, there's a lot of politics behind this.

256
00:21:48,200 --> 00:21:58,980
On the other hand, this really should be something that everyone in the industry, whether you're a Bitcoin or a crypto person or whatever, none of this technology is useful or really all that valuable unless you can use it on a peer-to-peer basis.

257
00:21:58,980 --> 00:22:01,680
That's what makes Bitcoin valuable in the first place.

258
00:22:01,780 --> 00:22:07,700
To the extent that there is sort of value or valid use cases for like Web3, that's also

259
00:22:07,700 --> 00:22:21,422
the reason why that differentiated from TradFi And so everyone really should be on the same team here If you want we can talk about a bit of the politics of the Clarity Act but that going to play out over the rest of this year

260
00:22:22,543 --> 00:22:23,023
Yeah, let's.

261
00:22:23,602 --> 00:22:37,463
OK, so the Clarity Act, in order to be signed into law, if you remember Schoolhouse Rock, you first got to be passed as a bill through both chambers of the legislative branch, and then you have to be signed into law by the president.

262
00:22:38,082 --> 00:22:41,223
The White House has definitely signaled that Trump will sign this bill if it passes.

263
00:22:42,162 --> 00:22:45,662
And the bill has already passed through the House a couple weeks back.

264
00:22:46,002 --> 00:22:51,723
So the remaining thing that needs to happen that is going to be challenging is getting the bill through the Senate.

265
00:22:53,342 --> 00:23:01,502
There are a couple of groups of people that – so I guess the two things that we as Bitcoiners should really care about, one is that it passes.

266
00:23:01,502 --> 00:23:07,283
And second, that it passes with the Section 109 protections for noncustodial developers intact.

267
00:23:07,463 --> 00:23:14,342
Um, the challenge to it remaining intact, uh, is going to be specifically from the Elizabeth

268
00:23:14,342 --> 00:23:16,703
Warren wing of the democratic party.

269
00:23:16,703 --> 00:23:18,922
We need to win over some moderate Democrats.

270
00:23:19,203 --> 00:23:23,682
Uh, and there's reason to think that this really jives with civil liberties that Democrats

271
00:23:23,682 --> 00:23:24,123
believe in.

272
00:23:24,182 --> 00:23:26,983
Like this really should be something that, for example, Ron Wyden, who is a champion

273
00:23:26,983 --> 00:23:31,523
of section 230 protections should understand about, this is not about is Bitcoin or crypto

274
00:23:31,523 --> 00:23:32,243
good or bad.

275
00:23:32,243 --> 00:23:38,662
This is really about speech and are you holding people responsible for writing and publishing code?

276
00:23:39,142 --> 00:23:44,063
But there's going to be a lot of this is a loophole that treats crypto differently than banks.

277
00:23:44,283 --> 00:23:48,082
And this is a welcome mat for North Korea.

278
00:23:48,443 --> 00:23:51,322
And all that stuff is wrong, right?

279
00:23:51,422 --> 00:23:54,763
No one's asking for crypto to be treated differently than the banks.

280
00:23:55,623 --> 00:23:56,303
Banks are custodial.

281
00:23:57,002 --> 00:24:01,602
There are entities in crypto, right, like centralized exchanges that are also custodial.

282
00:24:02,203 --> 00:24:07,362
No one at this point is really arguing that those should not be subject to the same rules as traditional financial institutions.

283
00:24:07,362 --> 00:24:11,963
We just need a recognition, as you said, that technology moves faster than the law.

284
00:24:12,623 --> 00:24:18,463
There is now a such thing as peer-to-peer disintermediated transfers of value.

285
00:24:18,783 --> 00:24:24,642
And when all of these laws were written, if you were doing an electronic transfer money, there necessarily was a regulated intermediary.

286
00:24:24,642 --> 00:24:31,703
And so this is just a patch to recognize that we can't treat infrastructure like code the way we would treat a bank.

287
00:24:31,783 --> 00:24:32,963
They're just not the same thing.

288
00:24:33,142 --> 00:24:40,682
The infrastructure is more like a USB cable, and the exchange is more like a bank, and those things need to be differentiated from each other.

289
00:24:40,943 --> 00:24:43,623
But there's going to be significant national security FUD.

290
00:24:43,983 --> 00:24:49,543
And then the overall bill passing, there are sort of two other constituencies that are going to be a challenge here.

291
00:24:49,543 --> 00:24:57,723
One is moderate Republicans, specifically not on the Senate Banking Committee, who feel burned by the big, beautiful budget bill.

292
00:24:58,623 --> 00:25:01,502
You'd think that would have nothing to do with it, and substantively it doesn't.

293
00:25:01,862 --> 00:25:08,742
But there are people who feel like we, you know, deficit spent too much and they don't want to be dragged along on stuff they don't really understand.

294
00:25:09,803 --> 00:25:13,102
I'm confident we can probably win a good number of those over.

295
00:25:13,102 --> 00:25:31,963
And then, to be honest, the biggest political challenge is going to be a lot of Democrats that are going to push, including people that are otherwise supportive of Bitcoin and crypto, that are going to add an amendment to the Senate version of the Clarity Act, basically requiring the president's family to divest from anything crypto related.

296
00:25:32,342 --> 00:25:34,463
That's going to be very hard for Republicans to sign.

297
00:25:36,162 --> 00:25:39,203
And, you know, that's going to be politically hard.

298
00:25:39,203 --> 00:25:45,203
And I think the answer there, you know, when we're speaking to those Democrats, it's going to be we understand your concerns.

299
00:25:46,142 --> 00:25:48,322
This might be appropriate for an anti-corruption bill.

300
00:25:48,322 --> 00:25:52,422
And maybe let's bundle that with not having people in Congress be allowed to insider trade.

301
00:25:53,523 --> 00:26:02,443
But like the Trump family also develops real estate and we would never dream of making impossible to build houses in America just because you're worried about the Trump family profiting from their real estate.

302
00:26:02,543 --> 00:26:05,723
Like we don't make bad policy to punish our our political rivals.

303
00:26:05,723 --> 00:26:16,383
But the timeline for this is they're going to try and have the bill voted on in the Senate by late September, likely at least before the end of the year.

304
00:26:17,082 --> 00:26:20,342
And so it's really going to be the rest of the summer and then into the fall.

305
00:26:21,623 --> 00:26:23,142
We need to whip some votes.

306
00:26:25,223 --> 00:26:28,263
It's a great analogy with the real estate too.

307
00:26:28,263 --> 00:26:38,443
And when I was in D.C. for the Bitcoin policy, some of you guys hosted, which was an excellent event and quite eye opening my first time going on the Hill and talking to folks there.

308
00:26:38,523 --> 00:26:42,223
But like that was one of the first things that I live in Illinois.

309
00:26:42,463 --> 00:26:47,822
And so all of our all of our representatives and senators there, they are all Democrats.

310
00:26:48,322 --> 00:26:56,342
And what they all brought up as like one of the first things was, well, what about the Trump, you know, the Trump coin and the Melania coin and all these things?

311
00:26:56,342 --> 00:26:58,822
and how that's related to Bitcoin, right?

312
00:26:58,883 --> 00:27:00,483
And trying to separate those two

313
00:27:00,483 --> 00:27:01,563
is a really difficult thing.

314
00:27:02,342 --> 00:27:04,463
And trying to get people to approach policy,

315
00:27:04,543 --> 00:27:05,902
I mean, which, as you said,

316
00:27:06,023 --> 00:27:07,682
we shouldn't be making policy,

317
00:27:07,803 --> 00:27:10,063
just bad policy to punish political opponents.

318
00:27:10,223 --> 00:27:12,023
But unfortunately, it feels like

319
00:27:12,023 --> 00:27:14,623
in our Coca-Cola, Pepsi-Cola democracy,

320
00:27:14,623 --> 00:27:16,362
that often becomes the case

321
00:27:16,362 --> 00:27:17,502
with whoever's in power

322
00:27:17,502 --> 00:27:19,123
and is able to get stuff shoved through.

323
00:27:19,943 --> 00:27:21,682
The legislative process

324
00:27:21,682 --> 00:27:23,283
ends up making some bad policy

325
00:27:23,283 --> 00:27:24,383
that's very short-sighted

326
00:27:24,383 --> 00:27:26,063
and the pendulum swings back

327
00:27:26,063 --> 00:27:31,443
eventually and we do it all over again. And it's frustrating to see because you would hope that

328
00:27:31,443 --> 00:27:37,142
common sense would prevail. But often I think it does not in emotions prevail. And that's a shame.

329
00:27:37,223 --> 00:27:40,402
I don't know if that's probably just human nature and maybe there's no fix for that.

330
00:27:40,862 --> 00:27:43,763
But one would hope that we could rise above that a little bit.

331
00:27:44,123 --> 00:27:48,502
Yeah, I hope so. I think the biggest part of it is education. I mean, I was recently having a

332
00:27:48,502 --> 00:27:53,623
conversation with like a, you know, I know we don't really love credentials in Bitcoin world,

333
00:27:53,623 --> 00:27:58,002
bit, at least by this person's credentials, very smart, very educated, sort of respected person

334
00:27:58,002 --> 00:28:04,623
who's like, all right, what's your favorite of Bitcoin and stablecoin? And just really just not

335
00:28:04,623 --> 00:28:09,182
understanding the difference between these things, right? Even in 2025. And it's easy to get sort of

336
00:28:09,182 --> 00:28:15,203
lost in your own echo chamber. But the level of sort of basic understanding is so low. And just my

337
00:28:15,203 --> 00:28:18,602
explaining that like, well, you don't really bet on stablecoins going up and down. This is just a

338
00:28:18,602 --> 00:28:23,723
way to move dollars, like, oh, I understand this much better now, right? It really is. Some of it

339
00:28:23,723 --> 00:28:28,223
is as simple as that. And you just need to explain what's going on. And that gets you, I don't know,

340
00:28:28,263 --> 00:28:35,803
maybe 60% of the way. And, you know, aside from what's going on, why is it important?

341
00:28:36,723 --> 00:28:40,523
I don't know if you saw the Coinbase ad that came out today.

342
00:28:41,303 --> 00:28:42,082
The UK one?

343
00:28:42,102 --> 00:28:43,563
The UK one. I thought that was-

344
00:28:43,563 --> 00:28:44,002
Really well done.

345
00:28:44,002 --> 00:28:55,543
Really well done and really sort of politically interesting because if you didn't see the name Coinbase at the end, that absolutely could have been like a fairly leftist political ad.

346
00:28:56,422 --> 00:29:06,963
And I think connecting sort of why Bitcoin matters to people who – whether or not they're connecting the dots, they're feeling the problems that Bitcoin is here to solve.

347
00:29:07,822 --> 00:29:08,342
Right?

348
00:29:08,422 --> 00:29:12,502
At this point in 2025, the problems that Bitcoin is – are not subtle problems.

349
00:29:12,502 --> 00:29:15,383
There are problems that are front and center in our politics.

350
00:29:15,523 --> 00:29:17,963
They're front and center in ordinary people's lives.

351
00:29:19,002 --> 00:29:24,303
And, you know, after you get to the what, the why is also really important, that like

352
00:29:24,303 --> 00:29:27,422
this is not something we should jeopardize for political squabbling.

353
00:29:28,502 --> 00:29:35,263
When I sort of gave my opening speech at our summit, I put these two things right next

354
00:29:35,263 --> 00:29:35,883
to each other, right?

355
00:29:35,922 --> 00:29:39,723
Like here's what the Bitcoin network is, and here's why this is deserving of serious policy

356
00:29:39,723 --> 00:29:40,322
consideration.

357
00:29:40,322 --> 00:29:42,763
before we get to what we think the good policies should be.

358
00:29:42,842 --> 00:29:45,943
But I think that's also, right, when you hear about meme coins,

359
00:29:46,362 --> 00:29:48,883
it sounds silly and meme coins are silly.

360
00:29:49,362 --> 00:29:51,303
But then like when you really dig into the substance,

361
00:29:51,303 --> 00:29:55,402
why is it that we got Trump coin to be such a ridiculous market cap?

362
00:29:56,142 --> 00:29:59,922
That's actually directly a result of policy choices in the previous administration

363
00:29:59,922 --> 00:30:02,783
where they wouldn't let anyone release anything useful

364
00:30:02,783 --> 00:30:04,543
because they were using the securities laws as a weapon.

365
00:30:04,963 --> 00:30:09,703
And I have some sympathy for Gensler in that I think if you sort of strictly apply

366
00:30:09,703 --> 00:30:14,642
the Howey test. Yeah, most of these tokens technically were securities. Fair enough.

367
00:30:15,322 --> 00:30:21,322
But if you're not giving any guidance in how to do this in a legal way, and there's going to be

368
00:30:21,322 --> 00:30:25,383
money speculating on this, and you say, listen, the way to not violate the law is to release

369
00:30:25,383 --> 00:30:30,342
something that has no fundamental value, and it's purely a gambling vehicle, that's what people are

370
00:30:30,342 --> 00:30:37,082
going to do. And it is sort of weird that meme coins were the only thing that the prior administration

371
00:30:37,082 --> 00:30:40,543
really left alone. And then that is the thing that makes the industry looked at.

372
00:30:42,643 --> 00:30:47,563
So honestly, a really excellent point that just like, yeah, they were kind of the

373
00:30:47,563 --> 00:30:51,482
untouched things. It's like, oh, this is just a, this is just a joke. Like, okay,

374
00:30:51,482 --> 00:30:54,463
we don't need to pay attention to it. It's like, no, it's like a joke that, yeah,

375
00:30:54,463 --> 00:30:58,982
it makes like a couple of people very, very wealthy, but ends up just wrecking most average

376
00:30:58,982 --> 00:31:01,862
people who are already wrecked. And the only reason they're speculating on these things in

377
00:31:01,862 --> 00:31:05,443
the first place is because they are being wrecked by this broken system. And it's like,

378
00:31:05,443 --> 00:31:09,002
God, it's just a brutally vicious cycle, honestly.

379
00:31:09,783 --> 00:31:09,822
Yeah.

380
00:31:09,922 --> 00:31:19,623
But I'm hopeful right now because it seems that the Overton window has been sort of blown wide open since the election.

381
00:31:19,862 --> 00:31:28,623
It's impossible for folks, whether they're individuals or policymakers, to ignore Bitcoin and, quote, crypto and stablecoins.

382
00:31:28,703 --> 00:31:31,523
Stablecoins seem to be getting more limelight than just about anything.

383
00:31:32,123 --> 00:31:34,903
We can maybe touch on that a little bit as well.

384
00:31:34,903 --> 00:31:39,963
but at least it's, it is part of the national conversation on a level that it never has been

385
00:31:39,963 --> 00:31:44,303
before. And so like that, I think is a good thing because that's an opportunity for, as you said,

386
00:31:44,383 --> 00:31:48,203
education, like that's, and to differentiate these things, like, you know, as you guys say all the

387
00:31:48,203 --> 00:31:51,303
time, like we're the Bitcoin policy Institute, you know, we're not the crypto policy Institute.

388
00:31:51,342 --> 00:31:55,602
We're not the stable coin policy Institute. Like it's the Bitcoin policy Institute and, and kind of

389
00:31:55,602 --> 00:32:00,143
taking this and getting into another topic that I really wanted to dive into with you

390
00:32:00,143 --> 00:32:08,563
is this new, the new report that the White House just released. And it's a pretty fairly large,

391
00:32:08,682 --> 00:32:14,283
I think like 166 pages, but this digital assets report, can we dive into that a little bit? I've

392
00:32:14,283 --> 00:32:19,763
reviewed it a bit myself, not on the level or with the ability to dive deep that you have with

393
00:32:19,763 --> 00:32:25,383
your background, but maybe we can start. Was there anything in here that really jumped out

394
00:32:25,383 --> 00:32:29,842
at you like you were not expecting it or you were kind of shocked to see either in a positive or a

395
00:32:29,842 --> 00:32:33,463
negative way. And then maybe we can get into some of the individual parts and the recommendations

396
00:32:33,463 --> 00:32:39,342
specifically. I don't know how much there was in there that I was shocked to see. I think there

397
00:32:39,342 --> 00:32:43,123
are a lot of things that I had sort of strong reactions to. So to start where you just left

398
00:32:43,123 --> 00:32:48,722
off with the shift of the Overton window, I've seen in my personal life, I live in New York City,

399
00:32:48,982 --> 00:32:53,763
a lot of my friends are sort of like the yuppie elite types. And I've seen in my personal life,

400
00:32:53,803 --> 00:32:59,362
the like, career risk, or whatever perception of talking around Bitcoin shift dramatically. I

401
00:32:59,362 --> 00:33:06,903
I think really since the ETFs launched, that to me was a moment where like a lot of this became more OK and mainstream.

402
00:33:07,203 --> 00:33:12,463
And my friends that like laughed at me for owning Bitcoin for a long time now, they all have at least some Ibit or something.

403
00:33:14,143 --> 00:33:24,123
And when we're talking about like this is the statement of the executive branch of the United States government, when you begin with the history of Bitcoin and how much of an innovation it was.

404
00:33:24,123 --> 00:33:29,783
And even in like the sections of the report about stable coins, they're quoting Satoshi about, you know, peer to peer cash.

405
00:33:30,143 --> 00:33:41,783
And then the final page of the report, which is recommendations related to the strategic Bitcoin reserve, they have a footnote talking about the United States government's incremental acquisition of Bitcoin with a footnote to stacking sats.

406
00:33:42,222 --> 00:33:48,043
I mean, that is that's about as good a bow as you can tie on the shift of the Overton window on Bitcoin as I can imagine.

407
00:33:48,043 --> 00:33:54,422
So that's something that sort of immediately, immediately stood out, even if it's not like a substantive policy shift.

408
00:33:55,162 --> 00:34:05,143
What this document is, is mostly it's a series of recommendations for what both Congress and the agencies of the executive branch should do with regard to crypto policy.

409
00:34:05,502 --> 00:34:11,582
So this document doesn't itself make any rules, but it points in the direction of how the administration is thinking.

410
00:34:11,582 --> 00:34:22,383
One of the parts I was really gratified to see that's not going to get a lot of attention, it's on either page 83 or 86, is the discussion of digital assets and Bitcoin and insurance.

411
00:34:23,422 --> 00:34:28,582
And some of the language in there came out of direct conversations.

412
00:34:28,582 --> 00:34:33,302
You know, my friends and full disclosure, I'm an investor and I'm their lawyer.

413
00:34:33,403 --> 00:34:47,082
But the folks at Anchor Watch who are building cold storage Bitcoin insurance, one of the big problems that they have with offering, for example, Bitcoin denominated insurance is that Bitcoin is not an admitted asset under state insurance regulators.

414
00:34:47,523 --> 00:34:49,922
Right. You can't hold it in reserve because it's too volatile.

415
00:34:50,163 --> 00:34:53,482
But it's not too volatile if the thing you're insuring is Bitcoin denominated.

416
00:34:53,482 --> 00:35:10,302
If you're insuring Bitcoin in cold storage or if you're insuring Bitcoin mining operations where your lost profits are going to be denominated in Bitcoin, it's not good enough to be holding T-bills because the price of Bitcoin can go parabolic and you need to have assets that match the liabilities that you're underwriting.

417
00:35:10,302 --> 00:35:18,663
And so in this report, there's like a couple pages of we need to go to the state level regulators and change these rules about admitted assets.

418
00:35:18,843 --> 00:35:24,442
And like that is directly from like Rob Hamilton to the Treasury Department to United States government policy.

419
00:35:24,543 --> 00:35:27,262
And so that I was not necessarily expecting that to make it all the way in.

420
00:35:27,282 --> 00:35:31,383
But that's like one example of something that was very cool to see in the report.

421
00:35:31,383 --> 00:35:39,802
Um, you know, I think the report is mostly pretty good on the, um, sort of peer to peer,

422
00:35:39,802 --> 00:35:45,802
uh, non-custodial developer protections that we spoke about before it directly endorses

423
00:35:45,802 --> 00:35:49,023
the language from the BRCA and the clarity act, which I was glad to see.

424
00:35:49,302 --> 00:35:53,502
Now there are some other spots where it's, uh, you know, a little more mixed.

425
00:35:53,802 --> 00:36:00,442
Um, the worst part of the report for me is the equivocation on a rule that was proposed,

426
00:36:00,442 --> 00:36:06,302
I think in the beginning of 2023, that would change the definition of what a mixer is.

427
00:36:07,043 --> 00:36:13,502
And for the purpose of FinCEN and OFAC, it would treat as anything risky that was designed

428
00:36:13,502 --> 00:36:18,663
to obscure a flow of funds on the blockchain, which would not just include what I would

429
00:36:18,663 --> 00:36:22,123
call a mixer, which is a custodial service that takes in some Bitcoin and sends out other

430
00:36:22,123 --> 00:36:22,363
Bitcoin.

431
00:36:22,663 --> 00:36:26,023
It would include coin joins like Samurai Wallet and Wasabi.

432
00:36:26,523 --> 00:36:30,343
But then, like, at least if you read the language of it, right, they talk about the

433
00:36:30,343 --> 00:36:33,962
different ways people use to obscure flow of funds includes using a different address every time

434
00:36:33,962 --> 00:36:38,242
you send or receive funds, which is just the best practice if you're using any wallet.

435
00:36:39,242 --> 00:36:44,002
Which is insane. Yeah. So I would have liked to see the report condemn that instead of saying,

436
00:36:44,123 --> 00:36:49,663
we need to look into this more. So I would say that was the worst part of the report for me.

437
00:36:50,023 --> 00:36:55,282
And then, by the way, on each of these topics here, Peter Van Valkenburgh from CoinCenter has

438
00:36:55,282 --> 00:36:58,962
a great thread on this, talking about these different sections that deal with developer

439
00:36:58,962 --> 00:37:04,383
protections. The other thing that Peter rightly points out is there's also some language which,

440
00:37:04,623 --> 00:37:11,082
you know, is mixed about we should think about amending the Bank Secrecy Act to deal with

441
00:37:11,082 --> 00:37:17,982
the existence of non-custodial technology, which, OK, I mean, there are good ways to do that. Like,

442
00:37:18,002 --> 00:37:21,663
there is some version of that that I could get behind, but I get a little bit nervous when it's

443
00:37:21,663 --> 00:37:26,762
like, all right, amend how? And I would have liked to see a statement that, like, we're treating

444
00:37:26,762 --> 00:37:30,762
infrastructure as infrastructure and we're treating, you know, custodians as custodians

445
00:37:30,762 --> 00:37:32,163
and we're not going to get confused between the two.

446
00:37:32,742 --> 00:37:37,742
But, you know, the one real substantive recommendation is to pass the Clarity Act language.

447
00:37:38,363 --> 00:37:41,922
And, you know, broadly speaking, that's pretty good.

448
00:37:43,163 --> 00:37:46,802
I think there's less about the SBR than folks were hoping.

449
00:37:48,383 --> 00:37:53,762
I don't know how much of that I can really get into other than to say there was a lot

450
00:37:53,762 --> 00:37:56,323
of discussion back and forth about that, I think, on the back end.

451
00:37:56,323 --> 00:38:14,183
And I think specifically the sort of political appointees in the administration and the sort of lifer bureaucrats don't necessarily see eye to eye, specifically on the question of the ways that the executive branch could unilaterally acquire Bitcoin for the SBR.

452
00:38:14,183 --> 00:38:20,982
at BPI would put out our theories on this. I personally am on the record saying I think the

453
00:38:20,982 --> 00:38:27,023
Treasury's exchange stabilization fund would be a powerful mechanism that without a new law being

454
00:38:27,023 --> 00:38:31,203
passed, the United States government could acquire more Bitcoin. I don't know that everybody in the

455
00:38:31,203 --> 00:38:37,602
Treasury Department feels that way. So that was sort of relegated to like the last page, but it

456
00:38:37,602 --> 00:38:44,043
was broadly supportive. It mostly just restated what the SBR executive order says, which is,

457
00:38:44,183 --> 00:38:45,843
We're going to have a Bitcoin reserve.

458
00:38:46,082 --> 00:38:47,703
We're going to have a digital asset stockpile.

459
00:38:47,962 --> 00:38:50,222
The digital asset stockpile can fund all sorts of stuff.

460
00:38:50,523 --> 00:38:55,942
The strategic Bitcoin reserve will not be sold, and Bitcoin will be held as a strategic

461
00:38:55,942 --> 00:38:59,883
reserve asset, which great to have that coming from the federal government.

462
00:39:00,002 --> 00:39:02,323
And that's where you have the stacking sats footnote.

463
00:39:03,143 --> 00:39:05,643
But they didn't announce new buys.

464
00:39:05,643 --> 00:39:08,582
They didn't endorse any specific strategies for acquisition.

465
00:39:08,782 --> 00:39:13,563
It just restates that the Treasury Department and the Commerce Department will find ways

466
00:39:13,563 --> 00:39:15,582
to acquire incremental Bitcoin.

467
00:39:16,243 --> 00:39:21,102
And then there's a lot of sort of non-Bitcoin stuff in there.

468
00:39:21,203 --> 00:39:22,203
There are sections on DeFi.

469
00:39:22,363 --> 00:39:23,462
There are sections on stablecoins.

470
00:39:23,643 --> 00:39:27,643
There are sections on sort of like security versus commodity market structure.

471
00:39:28,102 --> 00:39:31,723
And that's really the meat of most of the 168 pages.

472
00:39:33,743 --> 00:39:39,203
And I think they also just, with regard to the SBR, they have not clarified yet what the

473
00:39:39,203 --> 00:39:42,782
total amount of Bitcoin that the government actually has in its possession is.

474
00:39:42,782 --> 00:39:51,363
Like they're using that same like whatever 210,000 number that but that's just like the generic number kind of that's not the result of all these agencies reporting down.

475
00:39:51,743 --> 00:39:52,843
Hey, here's how much we actually have.

476
00:39:52,902 --> 00:39:57,282
And I think Bohine's addressed this saying we're not going to say this yet or we're still preparing it.

477
00:39:57,563 --> 00:39:58,343
It's something like that.

478
00:39:58,442 --> 00:39:58,582
Right.

479
00:39:58,723 --> 00:39:59,982
And there's reason to think it's not 210.

480
00:40:00,663 --> 00:40:01,023
Right.

481
00:40:01,143 --> 00:40:09,563
I think there's good reporting from well, it's on this question of like it looks like a bunch of this stuff might have been sold since the sort of late days of the Biden administration.

482
00:40:10,382 --> 00:40:12,082
Yeah, they've not said that publicly.

483
00:40:12,082 --> 00:40:15,863
Now, the executive order doesn't require them to come out with that number publicly.

484
00:40:16,323 --> 00:40:18,482
And so the question is, why haven't they?

485
00:40:19,462 --> 00:40:21,802
I think there are two reasonable theories on this.

486
00:40:22,243 --> 00:40:23,563
And they're not mutually exclusive.

487
00:40:23,663 --> 00:40:24,223
They could both be true.

488
00:40:25,102 --> 00:40:31,683
One is, especially if you're inclined in the tinfoil hat direction, but not implausible,

489
00:40:32,063 --> 00:40:36,183
there's a bunch of Bitcoin that the United States government holds that it can't or won't

490
00:40:36,183 --> 00:40:38,282
talk about how it got that Bitcoin.

491
00:40:38,282 --> 00:40:44,223
You know, Bitcoin in the early days was used a lot on dark web markets.

492
00:40:44,802 --> 00:40:46,262
Maybe it was used by international criminals.

493
00:40:46,422 --> 00:40:52,962
And it makes sense that the FBI might have wanted to mine some Bitcoin to be able to pay confidential informants in a way that wasn't traceable.

494
00:40:53,462 --> 00:40:58,922
And if you were mining in the early days, you might have a lot of Bitcoin and we might not want to dox.

495
00:40:59,123 --> 00:41:06,703
The FBI has exactly this amount of Bitcoin because our foreign adversaries or criminals or whatever might be able to do chain analysis and trace that back.

496
00:41:06,703 --> 00:41:09,563
and that could blow a bunch of our sources and methods, right?

497
00:41:09,643 --> 00:41:11,902
Ditto the CIA or other intelligence agencies.

498
00:41:12,143 --> 00:41:18,942
So there could be sort of dark classified coins that they could probably just not talk about that

499
00:41:18,942 --> 00:41:22,302
if they wanted to get that under sort of a classified exception.

500
00:41:22,703 --> 00:41:24,882
But that could be one reason to not talk about it.

501
00:41:25,663 --> 00:41:28,462
The other sort of more mundane reason is that maybe they don't know.

502
00:41:29,823 --> 00:41:32,942
It's possible that there's like a lot of Bitcoin that was confiscated

503
00:41:32,942 --> 00:41:36,602
and then just kept in a sloppy manner, again, especially in the early days.

504
00:41:36,703 --> 00:41:39,663
and they lost the seed phrase.

505
00:41:39,743 --> 00:41:40,743
They lost the wallet, right?

506
00:41:40,782 --> 00:41:42,082
This was before best practices

507
00:41:42,082 --> 00:41:44,802
where they were keeping things at Anchorage or Coinbase,

508
00:41:44,802 --> 00:41:48,703
and it could just be an embarrassing answer of, like,

509
00:41:48,743 --> 00:41:50,422
this audit is really hard to do.

510
00:41:51,243 --> 00:41:56,902
It's slow, and they might be sort of, you know,

511
00:41:56,962 --> 00:41:59,902
mum about it because the answer just doesn't look good

512
00:41:59,902 --> 00:42:01,802
in terms of their, you know, good government.

513
00:42:03,942 --> 00:42:05,703
It'll be interesting to see for sure,

514
00:42:05,703 --> 00:42:10,882
But I would have to guess that maybe they do not have – based on like Lola's reporting, this has been great.

515
00:42:11,063 --> 00:42:13,782
They do not have as much as they initially thought that they did.

516
00:42:14,363 --> 00:42:26,623
One other item that I wanted to just kind of circle back on as it relates to like Bank Secrecy Act is there was something about the Patriot Act in here as well and applying a specific provision of it to digital assets.

517
00:42:26,982 --> 00:42:28,282
Did you dig into that part at all?

518
00:42:28,382 --> 00:42:30,243
Can you speak to that in any way?

519
00:42:30,243 --> 00:42:36,843
No, I mean not specifically, but the Patriot Act significantly amended the Bank Secrecy Act.

520
00:42:37,163 --> 00:42:40,582
So when we talk about the Bank Secrecy Act, the Bank Secrecy Act was passed in 1970.

521
00:42:41,243 --> 00:42:44,302
The original intent of the Bank Secrecy Act was to go after organized crime.

522
00:42:44,962 --> 00:42:48,243
At the time, organized crime was much bigger in the United States than it was now.

523
00:42:48,703 --> 00:42:51,782
And a lot of times they would hide their funds in Swiss bank accounts.

524
00:42:52,243 --> 00:42:54,302
And so the FBI would be going after some mob boss.

525
00:42:55,102 --> 00:42:57,023
They would think that funds were sent to Switzerland.

526
00:42:57,023 --> 00:43:04,243
They would go to like the U.S. bank that they thought that that crime family used and the U.S. bank would say, sorry, we don't keep any records of this.

527
00:43:04,302 --> 00:43:05,882
And so we don't know if money was sent abroad.

528
00:43:06,223 --> 00:43:10,262
And so the Bank Secrecy Act requires you to do these to keep these records, KYC, right?

529
00:43:10,343 --> 00:43:18,323
That's you need to know who you're doing business with and then file suspicious activity reports if the facts of someone's banking are suspicious.

530
00:43:19,543 --> 00:43:24,203
It was amended a whole number of times, but there are two significant amendments.

531
00:43:24,203 --> 00:43:28,602
One was by the Patriot Act in the aftermath of 9-11.

532
00:43:29,223 --> 00:43:33,922
That's where actually a lot of these money transmitter rules initially came from.

533
00:43:34,002 --> 00:43:42,743
The concept of money transmission was originally in large part meant to go after the Hawala system, which is prominent in the Middle East.

534
00:43:43,002 --> 00:43:47,402
And a lot of this was meant to go after terrorist financing in the aftermath of 9-11.

535
00:43:47,402 --> 00:43:56,743
And then the Bank Secrets Act was again heavily modified in 2020 to deal with the existence of – to some extent, right?

536
00:43:56,762 --> 00:44:05,502
They didn't modernize the money transmission concept to deal with crypto, but modernize in some ways to deal with the existence of crypto and the sort of more modern internet.

537
00:44:06,502 --> 00:44:13,123
And so I don't know the exact reference to the Patriot Act, but that is to some extent baked into the BSA.

538
00:44:13,123 --> 00:44:36,925
Okay I think from what I remember reading it was basically saying something about it giving the Treasury additional guidance to be able to freeze funds that are digital assets that may be associated with some of these bad actors or whatever Yeah So there is a big part of the report which is different than sort of the money transmission FinCEN question

539
00:44:37,005 --> 00:44:40,005
There's a different part of the Treasury that deals with sanctions called OFAC.

540
00:44:40,005 --> 00:44:46,725
And there's a lot of controversy and legal questions about the scope of OFAC sanctions

541
00:44:46,725 --> 00:44:47,505
authority.

542
00:44:48,985 --> 00:44:55,865
Pretty uncontroversially, OFAC is able to sanction Bitcoin and crypto addresses.

543
00:44:56,125 --> 00:45:01,565
And OFAC violations are what are called strict liability offenses.

544
00:45:01,765 --> 00:45:02,545
They apply to everyone.

545
00:45:02,745 --> 00:45:07,485
And you can technically be guilty even if you didn't mean to do business with a sanctioned entity.

546
00:45:08,545 --> 00:45:19,265
And so in my day job, when I work with Bitcoin startups, when we talk about compliance, whether or not you're a money transmitter, which is often the sort of meaty question, you generally always have to comply with OFAC.

547
00:45:19,345 --> 00:45:22,745
And there are all sorts of free tools out there that companies can use to screen for OFAC.

548
00:45:22,745 --> 00:45:24,865
It's actually not all that operationally complex.

549
00:45:24,865 --> 00:45:30,505
and it shouldn't really make a difference on your operations because the chances that you're doing

550
00:45:30,505 --> 00:45:35,325
business with like Hamas or the North Koreans in any given instance, it's pretty low because they

551
00:45:35,325 --> 00:45:40,085
know that they're sanctioned and they're not out there, you know, doing sort of ARK transactions

552
00:45:40,085 --> 00:45:45,665
yet. And by the way, there's no such thing as a sanctioned address on Lightning. So a lot of the

553
00:45:45,665 --> 00:45:51,585
sort of modern Bitcoin startups, this just isn't even like a thing. You know, this might be

554
00:45:51,585 --> 00:45:56,925
controversial in some parts of the community. I don't think that the way that until we get to

555
00:45:56,925 --> 00:46:02,885
talking about tornado cash, historical OFAC sanctions on Bitcoin are such a problem. If we

556
00:46:02,885 --> 00:46:07,725
know that there's like a pile of Bitcoin in an address that belongs to some bad actor to like a

557
00:46:07,725 --> 00:46:13,025
terrorist group, making it illegal to do business with that terrorist group, you know, that matches

558
00:46:13,025 --> 00:46:17,225
all the other laws we have. Like that seems like a fairly reasonable thing for the United States

559
00:46:17,225 --> 00:46:21,965
government to want. And I think the important distinction is, are you sanctioning an address

560
00:46:21,965 --> 00:46:26,445
versus sanctioning coins? I think it's very important just as a logical matter and for

561
00:46:26,445 --> 00:46:35,665
Bitcoin's fungibility that we not have such thing as a dirty UTXO. And Bitcoin is actually better

562
00:46:35,665 --> 00:46:41,585
situated than account-based systems like Ethereum, where let's say you were to get Bitcoin from a

563
00:46:41,585 --> 00:46:46,405
sanctioned entity, there's a specific UTXO that lands in your address, and you can sort of

564
00:46:46,405 --> 00:46:50,505
segregate that and say, okay, this is off to the side. It hasn't poisoned all your other Bitcoin

565
00:46:50,505 --> 00:46:55,925
the way that if sanctioned Ethereum lands in your Ethereum account, you're in much more trouble

566
00:46:55,925 --> 00:47:02,105
because there's not the same UTXO model. But that's sort of vanilla sanctions. Now, what happened

567
00:47:02,105 --> 00:47:08,345
with Tornado Cash, I don't know how much your listeners know about why Tornado Cash became

568
00:47:08,345 --> 00:47:12,765
famous in the first place. It's an Ethereum privacy tool that uses a smart contract, a

569
00:47:12,765 --> 00:47:19,865
non-custodial immutable smart contract. But it came to prominence because of a hack of a crypto

570
00:47:19,865 --> 00:47:25,505
video game called Axie Infinity. This was in like the 2021 hype cycle. One of the things people were

571
00:47:25,505 --> 00:47:30,085
really excited about was NFTs, and NFTs could be video game characters. And there was a company

572
00:47:30,085 --> 00:47:34,565
that came up with this Pokemon-like video game where the characters were these Axies, Pokemon-like

573
00:47:34,565 --> 00:47:39,885
figures that were NFTs. You buy them on OpenSea. The in-game currency was a shitcoin called Smooth

574
00:47:39,885 --> 00:47:46,025
love potion or SLP. But the problem with Ethereum is that it's too slow and expensive to actually

575
00:47:46,025 --> 00:47:50,665
run a video game. So they had to build a special purpose blockchain called Ronin. And then they

576
00:47:50,665 --> 00:47:56,585
bridged Ethereum, right? You'd buy your NFTs on OpenSea, you'd lock them up in the Ronin bridge

577
00:47:56,585 --> 00:48:01,085
that connect Ethereum to Ronin, you'd play the game. And then after you earned your SLP tokens,

578
00:48:01,325 --> 00:48:06,225
you'd unlock them and then go sell them, you know, on an exchange. And this got like really,

579
00:48:06,225 --> 00:48:10,345
really big, tens of billions of market cap, some ridiculous, I think, like double digit percent of

580
00:48:10,345 --> 00:48:15,045
the GDP of the Philippines was people being paid to play Axie Infinity just to like farm these

581
00:48:15,045 --> 00:48:21,025
tokens, like it got really wild. And then unfortunately, the North Koreans infiltrated

582
00:48:21,025 --> 00:48:26,385
this startup that created Axie Infinity, and were able to hack the Ronin Bridge and did what at the

583
00:48:26,385 --> 00:48:32,085
time was the largest heist in human history, they stole something like $650 million worth of assets

584
00:48:32,085 --> 00:48:35,345
in like 90 seconds or whatever it takes for an Ethereum block to close.

585
00:48:35,765 --> 00:48:40,485
And then they put a significant portion of those assets at least through Tornado Cash.

586
00:48:40,645 --> 00:48:44,345
So understandably, to some extent, the United States government freaked out.

587
00:48:44,605 --> 00:48:49,265
No one wants North Korea to get a bunch of untraceable crypto to fund their missile program

588
00:48:49,265 --> 00:48:49,785
or whatever.

589
00:48:50,405 --> 00:48:51,785
Now, they handled it very badly.

590
00:48:51,785 --> 00:48:56,205
They arrested the developers, which, as we spoke about, was wrong.

591
00:48:56,365 --> 00:48:58,105
They shut down the front end.

592
00:48:58,605 --> 00:49:01,525
But the thing about Tornado Cash is it's an immutable smart contract.

593
00:49:01,525 --> 00:49:04,425
you can't shut it down by throwing someone in prison.

594
00:49:04,485 --> 00:49:04,985
It keeps working.

595
00:49:05,465 --> 00:49:08,025
And so the crypto community being the crypto community,

596
00:49:08,025 --> 00:49:13,645
the next thing that happened is a bunch of people found celebrity Ethereum addresses, right?

597
00:49:13,745 --> 00:49:16,385
You know, Jimmy Kimmel buying Bored Apes at the time, right?

598
00:49:16,405 --> 00:49:19,965
And so you could find all of these Ethereum addresses associated with prominent people.

599
00:49:19,965 --> 00:49:23,865
And they dusted those addresses with like small amounts of Ether USDC

600
00:49:23,865 --> 00:49:27,105
that went through the Tornado Cash protocol,

601
00:49:27,105 --> 00:49:32,505
which, by the way, the government, after they realized that they couldn't shut it down,

602
00:49:33,025 --> 00:49:36,905
they tried to use their OFAC sanctions authority to say, if you do any business with this smart

603
00:49:36,905 --> 00:49:42,405
contract, not just this ETH, but this smart contract is foreign property that we're going

604
00:49:42,405 --> 00:49:47,185
to sanction. And so now, technically, you've got Jimmy Kimmel and Eminem and whatever violating

605
00:49:47,185 --> 00:49:50,745
OFAC sanctions, which is a strict liability offense, and this was like a whole mess.

606
00:49:51,265 --> 00:49:56,605
And so then this became the subject of several federal lawsuits about,

607
00:49:56,605 --> 00:50:00,365
Does the government have the authority to sanction smart contracts?

608
00:50:00,765 --> 00:50:05,205
What does it mean to make it illegal to interact with open source code on the Internet?

609
00:50:05,645 --> 00:50:09,045
And where this all ended was the plaintiffs.

610
00:50:09,405 --> 00:50:10,505
There were these two cases.

611
00:50:10,585 --> 00:50:11,665
One of them was brought by Coin Center.

612
00:50:11,825 --> 00:50:17,065
One, I forget the other plaintiffs were, but the other plaintiffs, not Coin Center, ended up winning their lawsuit.

613
00:50:17,065 --> 00:50:23,025
on the interesting legal theory that the immutable smart contract could not have been property

614
00:50:23,025 --> 00:50:29,245
because immutable code doesn't have the properties of property.

615
00:50:29,585 --> 00:50:33,765
So when people talk about smart contracts in crypto, a lot of people use the analogy

616
00:50:33,765 --> 00:50:34,745
of a vending machine.

617
00:50:35,185 --> 00:50:37,925
It's code, but you put in a dollar and you get out a candy bar.

618
00:50:38,705 --> 00:50:42,085
An immutable smart contract doesn't really work that way, though, because you don't get

619
00:50:42,085 --> 00:50:44,005
to decide what's in the vending machine.

620
00:50:44,145 --> 00:50:45,405
You don't get to change the price.

621
00:50:45,405 --> 00:50:48,945
You don't get to withdraw money from it in the same way.

622
00:50:49,425 --> 00:50:53,845
And so the Fifth Circuit Court of Appeals, which is like a federal appellate court in

623
00:50:53,845 --> 00:50:59,825
the South, found that there was no OFAC sanctions authority because the government claimed it

624
00:50:59,825 --> 00:51:01,525
was foreign property and it just wasn't property.

625
00:51:01,885 --> 00:51:06,845
That leaves open the possibility that you could sanction non-immutable smart contracts

626
00:51:06,845 --> 00:51:12,205
or other, you know, what would it mean to sanction a side chain or a roll-up or any

627
00:51:12,205 --> 00:51:17,605
of these sort of like, you know, primitives, an e-cash mint, right, and Bitcoin, an ARC.

628
00:51:18,325 --> 00:51:24,265
And so, again, all this super-duper long-winded way of saying, I don't know the specific reference

629
00:51:24,265 --> 00:51:29,065
to the Patriot Act, but there are lots of questions about what specific authority the

630
00:51:29,065 --> 00:51:33,525
government has to put sanctions on different types of entities, including, interestingly,

631
00:51:33,725 --> 00:51:36,285
code in the digital asset space.

632
00:51:36,285 --> 00:51:42,585
again it's one of those things where it just it's pretty wild because after my very limited time

633
00:51:42,585 --> 00:51:48,505
again spending on uh on on capitol hill and talking to some of these folks you realize wow

634
00:51:48,505 --> 00:51:54,885
i mean a lot of our representatives are really really old um and have like i mean like you know

635
00:51:54,885 --> 00:52:00,125
don't know how to open a pdf uh you know that's what they have their 23 year old staffers for

636
00:52:00,125 --> 00:52:06,045
but like these are the people who are ultimately like yes we have people of all ages but they're

637
00:52:06,045 --> 00:52:09,825
They skew old like in the Senate and in the House, like undeniably so.

638
00:52:10,605 --> 00:52:14,965
I think skewing slightly younger in the House than the Senate, but like still we're talking pretty darn old.

639
00:52:15,685 --> 00:52:32,625
And that just kind of gets a little bit terrifying when you realize that these are the people who clearly like there is no way they're going to like grok it at the level that you or I or even like or even the average, you know, 25 year old is going to be able to just from a cursory glance at this.

640
00:52:32,625 --> 00:52:38,865
and yet they're the ones who ultimately have the power to write policy about this and like that's

641
00:52:38,865 --> 00:52:43,685
why again like i think the work that you guys do like trying to educate people is so important

642
00:52:43,685 --> 00:52:48,645
because like yes you you know nobody bitcoin doesn't need anyone's permission to run right

643
00:52:48,645 --> 00:52:52,045
that's the whole point yes like bitcoin doesn't care bitcoin doesn't care about the politicians

644
00:52:52,045 --> 00:52:58,285
but like the politicians care about bitcoin and about bitcoiners and to your point earlier like

645
00:52:58,285 --> 00:53:03,785
you know you you don't want an elizabeth warren type president like you'd rather have a lot of

646
00:53:03,785 --> 00:53:09,105
cynthia lummases than you would a lot of elizabeth warrens like just to to weigh that scale you know

647
00:53:09,105 --> 00:53:14,705
so it's it's just a little bit terrifying because it's like my god these these people are very very

648
00:53:14,705 --> 00:53:20,445
very old in a lot of cases and you know just really are not in a place to be able to understand

649
00:53:20,445 --> 00:53:23,825
and that's okay it's not like their fault they grew up in a completely different generation they

650
00:53:23,825 --> 00:53:29,505
are not like they're not uh digital natives in any way of course they're not going to understand

651
00:53:29,505 --> 00:53:33,385
it like this stuff is hard for people who have been studying it for years to understand so i

652
00:53:33,385 --> 00:53:38,685
sympathize like of course that's actually genuinely very complicated yeah yeah it's it's really

653
00:53:38,685 --> 00:53:43,125
complicated but yeah well i'm moral of the story i'm glad that you guys are doing what you're doing

654
00:53:43,125 --> 00:53:48,445
because if not like we need as much uh we need presence in washington because again you'd rather

655
00:53:48,445 --> 00:53:52,745
have good laws that protect the rights that you have the government doesn't give you rights right

656
00:53:52,745 --> 00:53:53,985
Like you have the rights.

657
00:53:54,125 --> 00:53:57,265
The government just protects those rights or it should.

658
00:53:57,465 --> 00:53:58,245
That's the goal, right?

659
00:53:58,725 --> 00:53:59,985
And so, yeah.

660
00:54:00,225 --> 00:54:04,785
Well, and here's where like I quote my friend American HODL, Bitcoin might be anti-fragile,

661
00:54:04,885 --> 00:54:06,385
but you're not, right?

662
00:54:06,445 --> 00:54:08,525
Like they can get to you, right?

663
00:54:08,665 --> 00:54:13,125
And so, sure, it may be that no matter what the government throws at Bitcoin, it will

664
00:54:13,125 --> 00:54:15,565
come out the other end and it will win and fine.

665
00:54:15,765 --> 00:54:20,045
But you don't want to live through the bad version of that timeline or you the human.

666
00:54:20,045 --> 00:54:26,685
no not at all like again you would rather live in a place because like i i love the united states

667
00:54:26,685 --> 00:54:33,705
of america yes our our government has throughout many decades done super messed up stuff um but i'm

668
00:54:33,705 --> 00:54:37,725
very proud to be an american i think the american people and the american idea are really really

669
00:54:37,725 --> 00:54:41,085
powerful and really strong and i want that to continue and i want this to be a place where

670
00:54:41,085 --> 00:54:45,385
that is a bastion of freedom for the rest of the world and like that actually is leading the charge

671
00:54:45,385 --> 00:54:52,425
and not falling back into really strange and absurd Orwellian states like the United Kingdom

672
00:54:52,425 --> 00:54:56,345
appears to be doing right now. I have hope for them too. I think Peter McCormack is going to lead

673
00:54:56,345 --> 00:55:02,285
a massive revolution in the UK and it hasn't seen its best days yet, but I digress.

674
00:55:03,305 --> 00:55:09,285
Another thing I wanted to talk about the report specifically is just on the stablecoin side of

675
00:55:09,285 --> 00:55:14,405
things. So maybe there's a lot of language that I think is really good about CBDCs and

676
00:55:14,405 --> 00:55:19,645
basically saying, no, we're not going to have this in America. Like, yes, this is being tried

677
00:55:19,645 --> 00:55:23,005
all over the world, but this is, you know, it's reinforcing some of the language that has been

678
00:55:23,005 --> 00:55:27,645
put out there previously. I was really happy to see that. Can we talk a little bit about like how

679
00:55:27,645 --> 00:55:32,385
you saw the interplay between the language around CBDCs and then the language around stable coins?

680
00:55:32,385 --> 00:55:36,405
Because I think there's a lot of folks that rightly so are maybe a little bit concerned that,

681
00:55:36,405 --> 00:55:43,405
okay, are private stable coins just kind of CBDCs in disguise? If they're basically fulfilling a lot

682
00:55:43,405 --> 00:55:48,285
of the same functions, if their goal is explicitly stated to increase US dollar dominance, that's

683
00:55:48,285 --> 00:55:52,245
how the US government views this. How are you looking at this? How are you assessing this

684
00:55:52,245 --> 00:55:56,945
landscape? Yeah, I agree. That's a big narrative out there, both in Bitcoin and crypto circles

685
00:55:56,945 --> 00:56:01,385
and libertarian circles and other sort of like farther right circles. This is something that

686
00:56:01,385 --> 00:56:07,245
like Marjorie Taylor Greene's objection to this almost killed the Genius Act. I fundamentally

687
00:56:07,245 --> 00:56:13,005
disagree. And I think to understand that, like, let's start with, you know, how do we feel about

688
00:56:13,005 --> 00:56:18,365
CBDCs. So I don't think that CBDCs are an immediate threat in the United States. I don't

689
00:56:18,365 --> 00:56:24,045
think there's any political will to create a CBDC here. I don't think that really jives with American

690
00:56:24,045 --> 00:56:28,865
values. I was sort of surprised to see the amount of Democrats standing up for the idea of a CBDC,

691
00:56:29,045 --> 00:56:32,425
but I think that's really not a substantive position. I think that's a reaction to the

692
00:56:32,425 --> 00:56:37,725
Republicans using CBDCs as a boogeyman. I don't think there's any serious or credible attempt in

693
00:56:37,725 --> 00:56:43,825
America to create a CBC. But CBCs are definitely bad and dangerous. Why are they bad and dangerous?

694
00:56:43,825 --> 00:56:48,405
It's because of the level of control it gives to the government. It gives the government a lot of

695
00:56:48,405 --> 00:56:54,265
ability to very granularly surveil the movement of money. Yes, the incumbent system, there is a

696
00:56:54,265 --> 00:56:58,365
huge amount of surveillance, both from the government and even more from private companies,

697
00:56:58,465 --> 00:57:03,465
right? Credit bureaus know such scary stuff about you. Before I got involved in Bitcoin, I did some

698
00:57:03,465 --> 00:57:09,005
work in the intersection of law and e-commerce space. And I would take meetings from time to time

699
00:57:09,005 --> 00:57:14,225
with data brokers. And they would show you the data sets they have on individual consumers that

700
00:57:14,225 --> 00:57:19,885
they are out to sell. And it's truly, really, really creepy. So the status quo is bad. CBDCs

701
00:57:19,885 --> 00:57:23,725
would be worse in terms of surveillance. I would say even worse than the surveillance, though,

702
00:57:23,985 --> 00:57:31,005
is the granular level of policy control that CBDCs give the government over money. And if you take

703
00:57:31,005 --> 00:57:37,805
this out to its logical extreme, it's stuff like personalized inflation rates. We want people in

704
00:57:37,805 --> 00:57:41,805
this town to spend more, right? And so their money is going to debase a little bit faster. They're

705
00:57:41,805 --> 00:57:47,425
not going to get as much of the yield that's coded into our money. This person has expended their

706
00:57:47,425 --> 00:57:52,605
carbon credits for the month. And so they can only, you know, buy the bugs at the, you know,

707
00:57:52,605 --> 00:57:59,045
the WEF store, you know, or any number of things, right? You know, pick whatever side of the

708
00:57:59,045 --> 00:58:02,905
political ally you're on, think about the other side being control and the way that they could,

709
00:58:03,325 --> 00:58:08,385
if there is like programmable dollars that is controlled by the government, how they could

710
00:58:08,385 --> 00:58:12,505
enforce their policy priorities against you, literally written into your cash. Like that's

711
00:58:12,505 --> 00:58:21,645
really bad. Okay. Private stable coins, on the other hand, they're issued by private companies.

712
00:58:22,305 --> 00:58:27,725
Sort of right now, the crypto native incumbents are Tether, which is mostly outside of the United

713
00:58:27,725 --> 00:58:32,585
States and mostly used as a dollar store of value. And then Circle, which is more common

714
00:58:32,585 --> 00:58:38,365
domestically with USDC, and that's more payments. There will probably be other non-crypto-native

715
00:58:38,365 --> 00:58:41,765
incumbents now that Genius Act has passed coming into the space, right? Asset managers, banks,

716
00:58:41,865 --> 00:58:48,825
stuff like that. The Genius Act sort of does two things. One is it provides consumer protections

717
00:58:48,825 --> 00:58:53,345
for American users of stablecoins. It says that stablecoins have to be essentially backed one-to-one,

718
00:58:53,345 --> 00:58:58,345
which, by the way, is not what we require of banks, which are fractionally reserved to shit.

719
00:58:58,885 --> 00:58:59,845
But OK, fine.

720
00:59:00,365 --> 00:59:11,665
And then the other is it gives sort of longer term regulatory clarity to bring those sort of non-crypto native financial institutions that want to get involved in stable coins, but they're worried about changing administrations.

721
00:59:12,085 --> 00:59:16,305
They now have this sort of longer term clarity that they need to come into the space.

722
00:59:16,585 --> 00:59:23,265
And there are parts of the Genius Act that there are different rules for U.S. issuers of stable coins and foreign issuers.

723
00:59:23,345 --> 00:59:43,805
But the one sort of consistent requirement is if you're going to offer stable coins to Americans, regardless of whether you are a foreign or domestic issuer of stable coins, the stable coins need to have the technology that they can be frozen or confiscated by the private company but pursuant to a lawful government court order.

724
00:59:43,805 --> 00:59:51,565
that was something that you know in response to terrorists using stable coins criminals using

725
00:59:51,565 --> 00:59:56,305
stable coins pig butchering schemes where people convince you that you're making a lot of money on

726
00:59:56,305 --> 00:59:59,625
bitcoin trading once you've given them tether but really they're stealing all your tether

727
00:59:59,625 --> 01:00:04,085
social engineering schemes that that you know probably folks who are listening to this have

728
01:00:04,085 --> 01:00:08,765
been victim to the government is concerned about that that's where that comes from could that be

729
01:00:08,765 --> 01:00:16,285
abused. Yes, that is a danger of that part of the Genius Act. But I think there is something

730
01:00:16,285 --> 01:00:23,785
fundamentally really, really different between sort of reactive government ability to, you know,

731
01:00:23,945 --> 01:00:29,745
law enforcement goes to a judge, shows them evidence about a specific case with a specific

732
01:00:29,745 --> 01:00:36,225
person, gets a court order from a judge to freeze assets. And then, you know, the judge gives the

733
01:00:36,225 --> 01:00:40,285
the order to the law enforcement who then goes to, you know, circle or tether and says, freeze

734
01:00:40,285 --> 01:00:45,025
these coins and they freeze these coins. That is very different than we just have this policy

735
01:00:45,025 --> 01:00:50,565
and it's our coin, the government. And so now we're just going to mess with it right away.

736
01:00:50,865 --> 01:00:54,305
Right. That's sort of the difference between ex post authority and ex anti authority.

737
01:00:54,925 --> 01:01:00,565
And if you really want immutable freedom money, well, that's Bitcoin, right? You're not going to

738
01:01:00,565 --> 01:01:04,985
get basically anything other than Bitcoin that is going to be like pure immutable freedom money.

739
01:01:04,985 --> 01:01:12,425
stable coins are stable to fiat fiat literally in the name you know it's by government fiat the

740
01:01:12,425 --> 01:01:15,925
government's creating it it's i kind of think it's a little bit of a render unto caesar's

741
01:01:15,925 --> 01:01:23,305
situation and when i look at you know the prospect of uh privately issued stable coins moving on

742
01:01:23,305 --> 01:01:29,005
open public permissionless blockchains i think that that is you know if you if like the status

743
01:01:29,005 --> 01:01:35,065
quo is here and CBDCs are here, I actually think it is a direction away from CBDCs that is

744
01:01:35,065 --> 01:01:41,225
marginally more free and less susceptible of surveillance than our current sort of like

745
01:01:41,225 --> 01:01:47,565
Swift and FedNow system. And so actually, I think this is a move. I get how in some ways,

746
01:01:47,625 --> 01:01:50,765
private stable coins can on the surface look like CBDCs. I think in terms of like

747
01:01:50,765 --> 01:01:55,565
individual liberty and freedom and stuff like that, it's actually a move away from CBDCs from

748
01:01:55,565 --> 01:02:02,245
the status quo. I think that that's a fair characterization. I'm curious too. I hate to ask

749
01:02:02,245 --> 01:02:05,985
for speculation, but do you think there's a chance? I mean, Tether obviously has moved their

750
01:02:05,985 --> 01:02:12,145
headquarters to El Salvador. It seems that now that the winds are shifting a little bit in the

751
01:02:12,145 --> 01:02:18,685
U.S., I don't know. Do you think they may move some operations onshore here in America just

752
01:02:18,685 --> 01:02:24,725
because there is some more openness to this kind of thing in the U.S. now versus like the previous

753
01:02:24,725 --> 01:02:29,665
administration? Maybe, but I don't think they're going to move the bulk of their operations no

754
01:02:29,665 --> 01:02:36,405
matter what. Tether is very popular abroad. It's specifically a popular abroad for people who want

755
01:02:36,405 --> 01:02:41,685
to use the dollar as a store of value and otherwise cannot get access to a US bank account, or it's

756
01:02:41,685 --> 01:02:46,565
difficult or dangerous to get access to physical US currency, which is true in authoritarian

757
01:02:46,565 --> 01:02:51,085
countries all over the world that have hyperinflation. It's also very popular for capital

758
01:02:51,085 --> 01:02:55,765
flight. Tether is very popular in China, because China doesn't want you to take your money out of

759
01:02:55,765 --> 01:02:59,845
China, right? Which, you know, I live in New York City, all of Hudson Yards, right? A big part of

760
01:02:59,845 --> 01:03:04,905
the city is basically just expatriated Chinese money to park it in a store of value here. Tether

761
01:03:04,905 --> 01:03:10,985
is much more convenient for that purpose than, you know, overpriced Manhattan real estate. And so I

762
01:03:10,985 --> 01:03:15,005
think Tether understands where their bread is buttered. I don't think the US is the most important

763
01:03:15,005 --> 01:03:20,325
market for them. They might create a US subsidiary to sort of serve as a payments vehicle inside the

764
01:03:20,325 --> 01:03:25,425
United States. But I think their eye is really broad. And from talking to people who've talked

765
01:03:25,425 --> 01:03:29,945
to their leadership team there, I think they see themselves as like a pretty sort of important

766
01:03:29,945 --> 01:03:37,905
buffer between the sort of like tech elite West and the communist East. And they are sort of more

767
01:03:37,905 --> 01:03:44,725
aligned with like Bitcoiner, libertarian, sovereign individual type thesis. So I think their focus is

768
01:03:44,725 --> 01:03:50,605
going to remain more abroad. Now, I actually do want to go back to a point you made earlier

769
01:03:50,605 --> 01:03:58,085
in the CBDC question about how stablecoins play into US policy, right? What is the US government's

770
01:03:58,085 --> 01:04:03,565
interest in private stablecoins? Because that is a big part of the report. I think that's twofold.

771
01:04:04,385 --> 01:04:09,085
One is sort of dollar dominance, right? The United States wants to keep the dollars,

772
01:04:09,185 --> 01:04:12,745
the world reserve currency. They're just clearly, right? You look at Tether's market guide,

773
01:04:12,745 --> 01:04:16,365
There's clearly a bid for dollars abroad, right?

774
01:04:16,405 --> 01:04:18,085
This is similar to like the euro dollar system.

775
01:04:18,585 --> 01:04:23,445
And legitimizing stable coins and having them proliferate is a way of having dollar strength.

776
01:04:23,525 --> 01:04:25,465
It creates demand for U.S. currency.

777
01:04:25,465 --> 01:04:34,105
And then the other problem we face is no one trusts us not to debase the currency because we're just definitely going to continue debasing the currency.

778
01:04:34,845 --> 01:04:37,825
And so that's a problem for like the yield on U.S. government debt.

779
01:04:37,905 --> 01:04:39,505
It makes it much more expensive to borrow.

780
01:04:39,505 --> 01:04:50,145
And when you pass a law that says you're only allowed to do a stablecoin if it's fully reserved by dollar equivalents, which means U.S. government debt, that's a big source of demand for U.S. government debt.

781
01:04:50,265 --> 01:04:55,925
And so the other sort of government play here is that this is a bid for T-bills.

782
01:04:56,285 --> 01:05:00,965
And you hear Scott Pissent openly talking about we think it's going to create the proliferation of stablecoins.

783
01:05:01,045 --> 01:05:04,565
It's going to create $2 to $3 trillion worth of demand for treasuries.

784
01:05:04,665 --> 01:05:06,165
And so that's sort of a big deal.

785
01:05:06,165 --> 01:05:22,365
And then when you zoom out, this is something that Matt Pines and I talk about a lot. He's very interested in sort of the geopolitical angle here. There seems to be like a – we're moving away to some extent from the US government debt as the neutral reserve currency.

786
01:05:22,365 --> 01:05:29,785
I think the sort of clear signal at the end of that was in 2022 when we froze Russia's treasury reserves when they invaded Ukraine.

787
01:05:31,065 --> 01:05:36,885
Whatever you think about that decision or that war, if we can freeze your neutral reserves, they're not all that neutral.

788
01:05:37,105 --> 01:05:40,265
We get to control the supply of it and we get to decide who can spend it or not.

789
01:05:40,785 --> 01:05:47,265
And since then, central banks around the world have been busy stacking gold, especially including China.

790
01:05:47,345 --> 01:05:51,365
It's been stacking a lot of gold and that probably has something to do with the increase in the gold price.

791
01:05:52,205 --> 01:05:56,625
And meanwhile, while I don't think there's a credible US effort to create a CBDC, they

792
01:05:56,625 --> 01:05:58,525
sure should are doing that in China with the EU on.

793
01:05:58,745 --> 01:06:02,945
And theirs is going to be, domestically, it's going to be a surveillance and control tool.

794
01:06:03,105 --> 01:06:05,905
And then abroad, it's going to be a surveillance and control tool in Africa and the Middle

795
01:06:05,905 --> 01:06:08,865
East and their ambitions to build empire.

796
01:06:09,765 --> 01:06:16,385
And I think what we will likely end up seeing is the world is moving towards digital fiat

797
01:06:16,385 --> 01:06:22,145
currency. And the world is moving towards more neutral reserve assets for central banks away from

798
01:06:22,145 --> 01:06:28,705
U.S. government debt. And the way that's going to play out in China is the CBC, the yuan, plus gold.

799
01:06:29,245 --> 01:06:33,765
And I think our answer to that from policy perspective is private stable coins and Bitcoin.

800
01:06:35,045 --> 01:06:40,385
If, you know, River has this really good report about who owns the Bitcoin, a much larger percentage

801
01:06:40,385 --> 01:06:57,727
of the total Bitcoin supply is inside the United States than of the gold supply And so in this the point Michael Saylor makes from time to time too If the US government were to go in and fully you know monetize Bitcoin that enriches our citizens our companies our country if we can stack enough Bitcoin in time

802
01:06:58,047 --> 01:07:03,647
specifically at the expense of our geopolitical adversaries that are holding the competing asset,

803
01:07:03,647 --> 01:07:11,007
which is gold. And so I think that like, you know, even sort of looking at the chessboard from a

804
01:07:11,007 --> 01:07:15,787
really Bitcoin centric perspective, I think private stable coins are going to be an important

805
01:07:15,787 --> 01:07:20,647
part of that story of how Bitcoin plays out at the sort of geopolitical nation state level.

806
01:07:22,567 --> 01:07:25,947
I totally agree. And I mean, it's, it's one of those things where it's like,

807
01:07:25,947 --> 01:07:30,287
boy, this, this really makes a lot of sense. Like it would seem foolish at this point,

808
01:07:30,287 --> 01:07:34,347
not to do it if we're trying to, you know, if our, if our goal is ultimately to do things that

809
01:07:34,347 --> 01:07:40,887
are good for, you know, United States of America and for American citizens, like then Bitcoin is a

810
01:07:40,887 --> 01:07:46,827
much more uh obvious answer than than gold uh and i think we're still waiting to hear how much gold

811
01:07:46,827 --> 01:07:50,947
is still left in fort knox though to get an official audit so let's see maybe we have much

812
01:07:50,947 --> 01:07:55,567
more than we think yeah i somehow doubt i somehow doubt probably not as well probably not really not

813
01:07:55,567 --> 01:07:59,447
talk to me a little bit about the uh the tax treatment because i think there were some

814
01:07:59,447 --> 01:08:05,987
some proposals about uh like uh de minimis uh some de minimis transactions and stuff like that i mean

815
01:08:05,987 --> 01:08:11,287
And obviously, I would like to see Bitcoin not be given the capital gains tax treatment.

816
01:08:11,747 --> 01:08:14,947
I don't think we're not there yet, but a guy can dream, right?

817
01:08:15,307 --> 01:08:18,947
But did you view this as at least, was it a positive step in the right direction?

818
01:08:19,107 --> 01:08:19,967
I mean, is it kind of just a-

819
01:08:19,967 --> 01:08:20,587
It's a statement of support.

820
01:08:20,987 --> 01:08:23,067
A lot of the stuff will take congressional approval.

821
01:08:23,607 --> 01:08:28,547
There was an attempt to get some Bitcoin-related tax provisions into the Big Beautiful Bill.

822
01:08:29,188 --> 01:08:31,547
Those were sort of cut loose at the last minute.

823
01:08:31,547 --> 01:08:32,947
The deal that was on the table.

824
01:08:33,287 --> 01:08:34,947
So the Big Beautiful Bill is a reconciliation bill.

825
01:08:34,947 --> 01:08:38,127
It needs to ultimately be budget neutral over a certain time horizon.

826
01:08:38,587 --> 01:08:40,567
And so anything that you include there needs to have a pay for.

827
01:08:41,287 --> 01:08:45,688
And so Cynthia Lummis was trying to add crypto related tax provisions.

828
01:08:46,387 --> 01:08:51,727
And I'm oversimplifying a little bit, but there were sort of two gets and a give.

829
01:08:52,207 --> 01:08:59,188
The give would have been ending the watch trading loophole for Bitcoin and crypto.

830
01:08:59,188 --> 01:09:07,107
So right now, if you buy and sell, if you sell and then buy security within 30 days, you're not treated as resetting your cost basis.

831
01:09:07,247 --> 01:09:08,747
That doesn't apply to Bitcoin.

832
01:09:08,847 --> 01:09:14,287
If you have unrealized losses in Bitcoin, right now that's almost nobody, but in 2022, this was great.

833
01:09:14,887 --> 01:09:22,347
You can sell and then immediately rebuy your Bitcoin, not take risk that Bitcoin will appreciate and you'll have less Bitcoin.

834
01:09:22,347 --> 01:09:27,707
And you can write off your Bitcoin losses against whatever else you might have made money on.

835
01:09:27,707 --> 01:09:49,047
Ending that loophole theoretically saves the government a bunch of money that you can then use to have the two gets here, one of which was a $600 de minimis exemption for spending Bitcoin, which is, I think, very important for the adoption, at least in the United States, of Bitcoin as a medium of exchange.

836
01:09:49,387 --> 01:09:57,447
Because if you're buying a T-shirt, you don't want to have to keep a spreadsheet of what you're saying to the IRS at the end of the year.

837
01:09:57,707 --> 01:10:00,627
I suspect some people are doing this and not reporting really small things.

838
01:10:00,987 --> 01:10:02,727
I don't know how much the IRS is going to go into that.

839
01:10:02,727 --> 01:10:14,887
But if we're moving to a super AI-enabled world where the IRS has Palantir LLM bot that tracks the Lightning Network, these things might end up mattering.

840
01:10:16,327 --> 01:10:18,907
And then also, how much do people really want to spend their Bitcoin?

841
01:10:19,087 --> 01:10:19,688
I don't know.

842
01:10:19,947 --> 01:10:24,027
But yeah, the report is supportive of this de minimis threshold.

843
01:10:24,207 --> 01:10:27,107
If we want to create a Bitcoin circular economy, that's definitely helpful there.

844
01:10:27,107 --> 01:10:28,747
So I think that's good.

845
01:10:29,167 --> 01:10:36,327
The other thing that was going to be in the Big Beautiful Bill that would be a get for the industry is to end double taxation on Bitcoin miners.

846
01:10:37,648 --> 01:10:48,107
There is a really interesting legal question about how to think about specifically block rewards or Coinbase rewards, which is different than fees that are paid to miners.

847
01:10:49,447 --> 01:10:51,507
Specifically, the question is, are they income or not?

848
01:10:52,247 --> 01:10:54,927
Usually, income is something that someone pays you.

849
01:10:54,927 --> 01:11:00,447
And I think when you pay a fee to a Bitcoin miner to include your transaction in a block, they are providing a service.

850
01:11:00,667 --> 01:11:04,007
They are appending your transaction to the blockchain, and you're paying them for that.

851
01:11:04,188 --> 01:11:07,287
And that's income, and it makes sense that they be taxed on that as income.

852
01:11:08,367 --> 01:11:11,507
When they get a block reward, who's paying them?

853
01:11:12,107 --> 01:11:12,867
There's no company.

854
01:11:13,027 --> 01:11:13,727
There's no person.

855
01:11:14,247 --> 01:11:16,287
And so, okay, so if it's not income, what is it?

856
01:11:16,367 --> 01:11:21,227
And the logical answer, I think, is taxpayer-created property, right?

857
01:11:21,227 --> 01:11:30,907
If you're a baker and you have flour and water and yeast and you create a loaf of bread, you don't get taxed when you have this loaf of bread that's worth more than the constituent parts.

858
01:11:31,387 --> 01:11:37,907
If you're a novelist and you have electricity and a laptop and your brain and you write a novel, you don't get taxed on the creation of the novel.

859
01:11:38,007 --> 01:11:39,707
You get taxed when you sell it, right?

860
01:11:39,807 --> 01:11:42,907
And I think that is the right way to think about mining.

861
01:11:42,907 --> 01:11:55,847
And when miners get taxed on the block rewards they get, that creates, first of all, a worse tax liability for them because they don't get to necessarily choose when to sell, right?

862
01:11:55,987 --> 01:11:58,427
There might be times where it's advantageous to sell or not.

863
01:11:58,827 --> 01:12:00,107
You get this constant tax bill.

864
01:12:00,207 --> 01:12:02,927
And that just creates sell pressure in the Bitcoin community.

865
01:12:03,027 --> 01:12:09,867
So it's worth a lot, I think, to the mining world and good for Bitcoin overall to have that rule change.

866
01:12:09,867 --> 01:12:19,407
Now, there's some efforts to litigate this in court and say actually just – it is wrong conceptually to treat this as income for the reason I just mentioned and courts should change this.

867
01:12:19,727 --> 01:12:23,987
But having this written into law would be a sort of more robust way of doing it.

868
01:12:26,287 --> 01:12:27,907
It's so funny with the wash sale rule.

869
01:12:27,987 --> 01:12:33,267
I remember I was talking with one of my buddies from college about this like maybe a couple of years ago.

870
01:12:33,267 --> 01:12:38,447
and i was trying to explain him like no like you there that the wash sale rule doesn't apply he's

871
01:12:38,447 --> 01:12:43,327
like of course it applies walker and he was you know like you know uh finance he works in finance

872
01:12:43,327 --> 01:12:47,607
so he is obviously much smarter than i am he's a great guy i love him but you know he's he's a

873
01:12:47,607 --> 01:12:52,407
finance guy so you know he knows everything uh he did not know this and then when he looked it up he

874
01:12:52,407 --> 01:12:57,027
was like truly shocked and i think went and bought a bunch more bitcoin because he no longer had to

875
01:12:57,027 --> 01:13:01,587
care what the price was yeah it caps the downside risk yeah yeah it's it's like okay like great can

876
01:13:01,587 --> 01:13:07,707
can write that off. Honestly, I think too, I have a very mixed feelings about getting rid of that,

877
01:13:07,707 --> 01:13:12,227
uh, exemption there because it's like, on the one hand, if you got rid of that, you would lose

878
01:13:12,227 --> 01:13:16,767
a ton of the doubt, like the sell side pressure that exists right now. Cause people wouldn't be

879
01:13:16,767 --> 01:13:23,267
tax loss harvesting anymore. Uh, on the other side, I like doing that. So, you know, yeah,

880
01:13:23,347 --> 01:13:28,887
yeah, it's a double-edged sword there. Uh, were there, were there other parts of the report that,

881
01:13:28,887 --> 01:13:34,067
that you really thought it was important to, to emphasize anything just in terms of like the,

882
01:13:34,067 --> 01:13:37,547
the tone shift or, or anything else that was addressed. I know there was a lot,

883
01:13:37,787 --> 01:13:42,688
I think there was some language specifically about acknowledging Bitcoin, like the Bitcoin's use or

884
01:13:42,688 --> 01:13:49,067
Bitcoin and crypto's use in illicit finance was like really low, like it's low volume in terms of,

885
01:13:49,188 --> 01:13:50,867
which I think it's like nice to see that acknowledgement.

886
01:13:50,867 --> 01:13:55,347
Because that's lower per capita than fiat, which it was important for the government to

887
01:13:55,347 --> 01:14:02,027
acknowledge given the amount of FUD out there. I think the sort of the overall tone, right,

888
01:14:02,047 --> 01:14:07,127
the biggest takeaway of all of this is this is something that would have been really hard to

889
01:14:07,127 --> 01:14:11,907
imagine a year ago, which is the United States government taking Bitcoin and crypto like very

890
01:14:11,907 --> 01:14:17,287
seriously and on its own terms. And that's, you know, everything from the Stoshi quotes to the

891
01:14:17,287 --> 01:14:21,287
stacking stats footnote to the, you know, in the illicit finance section, there's a really thoughtful,

892
01:14:21,287 --> 01:14:28,127
thorough treatment of DeFi, which like that is a hard, complicated topic. Even if you start with

893
01:14:28,127 --> 01:14:33,667
the principle of like this custodial non-custodial distinction for Bank Secrecy Act purposes,

894
01:14:34,207 --> 01:14:38,287
figuring out what does custodial mean in the context of different DeFi tools?

895
01:14:39,767 --> 01:14:43,627
You know, the sort of questions around the infrastructure for stable coins, it's really

896
01:14:43,627 --> 01:14:48,667
nuanced and it's really in the weeds. And there were just clearly lots of dedicated government

897
01:14:48,667 --> 01:14:53,327
officials who understood this stuff, understood this stuff because these were previous Bitcoin

898
01:14:53,327 --> 01:14:58,627
and crypto people who got hired into the government to do this job that were like cranking out good

899
01:14:58,627 --> 01:15:03,547
work product that is the result of smart and knowledgeable people thinking about these

900
01:15:03,547 --> 01:15:09,587
problems and not the result of what we saw before, which is, oh, I read some, you know, Cornell

901
01:15:09,587 --> 01:15:15,467
professor's academic thesis on, you know, how Bitcoin is unequal in its carbon emissions to

902
01:15:15,467 --> 01:15:19,807
the whatever community, right? Like, uh, this is a, you know, this is written by people who know

903
01:15:19,807 --> 01:15:25,787
what they're talking about. And, and that, that's the biggest shift. It's, it's, it's great to see

904
01:15:25,787 --> 01:15:29,407
that shift. I did see that the Bitcoin club at Cornell just put out, I haven't gotten a chance

905
01:15:29,407 --> 01:15:32,767
to dig into it. Uh, but to give Cornell a shout out, they did just put out like a really nice

906
01:15:32,767 --> 01:15:36,787
report on global, uh, global Bitcoin adoption. Yeah. Really great. No, Cornell is the good and

907
01:15:36,787 --> 01:15:40,107
the bad. They are terrific. I think the reason I gave Cornell, there's also like a professional

908
01:15:40,107 --> 01:15:46,027
old FUD professor there who's like his whole thing is. Yeah. It's, it's, it's wild. I'm sure

909
01:15:46,027 --> 01:15:51,207
he loves the, as a regular attending at the Bitcoin club there. I'd hope so anyway. Zach,

910
01:15:51,367 --> 01:15:55,907
you know, before we wrap up, just want to ask like for BPI specifically, and thank you for going

911
01:15:55,907 --> 01:16:00,807
through so many aspects of this report. I think it's super helpful for people just to, because

912
01:16:00,807 --> 01:16:05,067
let's be honest, most people aren't going to read 168 pages. So thank you for breaking some of this

913
01:16:05,067 --> 01:16:12,207
down in language people can understand. For BPI right now, what is your kind of main focus? I mean,

914
01:16:12,367 --> 01:16:16,167
I know you have your hands in a lot of different things, but what are you guys really targeting

915
01:16:16,167 --> 01:16:20,287
right now? What's top of mind for you? What's kind of the next push that you guys are looking at?

916
01:16:20,827 --> 01:16:26,087
Yeah, so that's a great question. So first of all, our main two issues are what we mostly discussed

917
01:16:26,087 --> 01:16:31,127
today. Our main two sort of issues that are ongoing. One is public investment in Bitcoin.

918
01:16:31,627 --> 01:16:33,407
We think that Bitcoin is important geopolitically.

919
01:16:33,627 --> 01:16:34,747
It's an important policy tool.

920
01:16:35,247 --> 01:16:38,267
And we have our eye on the ball with the SBR and we'll continue to.

921
01:16:38,707 --> 01:16:46,327
The other is protection for the ability to use peer-to-peer finance and the protection of non-custodial developers and service providers.

922
01:16:46,587 --> 01:16:48,467
And we're going to run that one to the finish line.

923
01:16:49,587 --> 01:16:54,087
There are really interesting questions, though, about the next chapter of Bitcoin on the world stage.

924
01:16:54,087 --> 01:17:06,367
And to be honest with you, we're at a point with BPI where we're having a lot of that conversation, sort of looking into 2026 and beyond and thinking about what are the areas we need to focus on.

925
01:17:07,188 --> 01:17:16,547
One of them, part of the story, I think, is going to be the intersection of Bitcoin and other emerging technologies, specifically AI and quantum computing.

926
01:17:16,547 --> 01:17:23,247
and bringing together folks in government, folks in industry, folks on Wall Street.

927
01:17:24,527 --> 01:17:29,627
To some extent, we've done a pretty good job making sure that there are people in the executive branch

928
01:17:29,627 --> 01:17:31,787
and on Capitol Hill who get it.

929
01:17:32,307 --> 01:17:35,947
I'm a little bit more worried about Wall Street right now and who they're listening to.

930
01:17:36,307 --> 01:17:43,027
They get that Bitcoin and crypto are important, but not a lot of Bitcoiners who are speaking directly to them.

931
01:17:43,167 --> 01:17:46,188
And so what are the financial service products that come out?

932
01:17:46,188 --> 01:17:51,267
What is the regulation going to be around sort of autonomous AI agents that have access to the lightning network?

933
01:17:51,607 --> 01:17:53,447
How is that all going to happen?

934
01:17:54,667 --> 01:18:05,827
One of the initiatives we're working on, I'm not sure when we'll eventually do this, but we're working on a series of war games or tabletop exercises to figure out what would happen in various extreme scenarios.

935
01:18:05,967 --> 01:18:11,387
So, for example, there is some sort of big illicit finance that, you know, Iran comes out as being on a Bitcoin standard.

936
01:18:12,047 --> 01:18:13,787
Are our policymakers going to freak out?

937
01:18:14,607 --> 01:18:21,447
We want folks from the military, from the intelligence community, from the big ETF issuers to play out different scenarios.

938
01:18:21,607 --> 01:18:22,887
What if there's this executive order?

939
01:18:22,887 --> 01:18:26,467
And try and come up with a playbook for that type of stuff.

940
01:18:27,487 --> 01:18:34,267
This is not everyone's favorite topic, but what happens if quantum computing moves a lot faster than we hope or anticipate?

941
01:18:35,087 --> 01:18:36,547
What does consensus look like?

942
01:18:36,627 --> 01:18:39,887
What role do, if any, do policymakers play?

943
01:18:39,987 --> 01:18:43,347
Do financial institutions play if there's a contentious hard fork around this?

944
01:18:43,787 --> 01:18:47,627
What's going to happen, I think, is a really important question.

945
01:18:48,787 --> 01:18:54,767
And so, you know, Bitcoin is now fully, fully like on the world stage, right?

946
01:18:54,827 --> 01:18:58,107
It is an important technology that's here to stay.

947
01:18:58,167 --> 01:18:59,327
And people really realize that.

948
01:18:59,467 --> 01:19:00,607
But it's not the only one.

949
01:19:00,867 --> 01:19:04,127
And we live in a world where lots of other stuff is happening.

950
01:19:04,587 --> 01:19:06,188
There's big geopolitical shifts.

951
01:19:06,307 --> 01:19:07,887
There's other big technological shifts.

952
01:19:08,707 --> 01:19:10,167
There's big cultural shifts.

953
01:19:10,167 --> 01:19:15,007
and sort of figuring out how does Bitcoin look

954
01:19:15,007 --> 01:19:16,227
and how does Bitcoin policy look,

955
01:19:16,487 --> 01:19:18,587
sort of going through all of those other,

956
01:19:18,587 --> 01:19:21,007
you know, tectonic plates moving in different directions,

957
01:19:21,007 --> 01:19:23,827
I think is going to be, you know, a part of the story.

958
01:19:26,587 --> 01:19:30,307
And also you guys did just, may as well show it,

959
01:19:30,387 --> 01:19:33,707
you guys did just open up like a role, right?

960
01:19:33,987 --> 01:19:35,387
Do you want to talk about that?

961
01:19:35,387 --> 01:19:36,407
Not just a role.

962
01:19:36,807 --> 01:19:37,527
Let's do it.

963
01:19:37,907 --> 01:19:38,087
Yeah.

964
01:19:38,087 --> 01:19:44,407
Now, we may open up actual rules in BPI before the end of the year.

965
01:19:44,507 --> 01:19:48,807
But specifically, what we just announced, in some ways, is actually cooler than that.

966
01:19:49,387 --> 01:19:50,907
I had no idea you were allowed to do this.

967
01:19:50,947 --> 01:20:00,907
But it turns out that non-governmental agencies are allowed to fund people to work in the government on Capitol Hill for congressmen and senators.

968
01:20:01,607 --> 01:20:04,607
And so we just announced the Bitcoin Fellowship Program.

969
01:20:04,607 --> 01:20:10,727
Um, there are certain congressmen and senators who are open to having a full-time Bitcoin-focused

970
01:20:10,727 --> 01:20:11,207
staffer.

971
01:20:11,648 --> 01:20:15,807
And so, you know, we've raised money and are in the process of raising more money to pay

972
01:20:15,807 --> 01:20:22,247
pretty good salaries to people whose job would be to be the Bitcoin expert for lawmakers

973
01:20:22,247 --> 01:20:23,107
in DC.

974
01:20:24,227 --> 01:20:28,207
And these are really important, impactful roles, right?

975
01:20:28,207 --> 01:20:33,667
For anyone who wants to move the ball forward on Bitcoin policy, I can't think of that many

976
01:20:33,667 --> 01:20:39,127
things you could do that are higher impact than when bills come up, when federal lawmakers are

977
01:20:39,127 --> 01:20:43,707
trying to figure out what their stance should be. You are the person they always turn to when it

978
01:20:43,707 --> 01:20:47,367
relates to Bitcoin, and your job is just to be sort of knowledgeable on that and help them,

979
01:20:47,667 --> 01:20:53,648
right? When crypto lobbyists come and they want to put, you know, Fartcoin in the strategic reserve,

980
01:20:54,007 --> 01:20:57,987
you know, you're the one to explain why maybe that's not the best idea, right? And everything

981
01:20:57,987 --> 01:21:03,827
in between. And so, you know, we're funding these fellowships, and we're setting them up,

982
01:21:03,847 --> 01:21:07,627
and we're placing folks in congressional offices, but then they work for that congressional office,

983
01:21:07,627 --> 01:21:14,787
they don't work for BPI. And so I think this is like a super cool role for people that want to be

984
01:21:14,787 --> 01:21:19,707
involved in DC and or Bitcoin. And I think specifically for folks, you know, if you're at

985
01:21:19,707 --> 01:21:23,027
the beginning of your career, and you're interested in Bitcoin, and maybe you're interested in policy

986
01:21:23,027 --> 01:21:27,767
and politics, this makes a lot of sense. Or maybe even if you're later in your career, right, you've

987
01:21:27,767 --> 01:21:32,987
done stuff, maybe you've made some money and you want to have work that really more aligns with

988
01:21:32,987 --> 01:21:39,787
your values. And sort of looking at this conversation we had, I think it's very clear

989
01:21:39,787 --> 01:21:45,547
this is a really important moment in the history of Bitcoin, right? It is in the process of really

990
01:21:45,547 --> 01:21:50,688
maturing into this, you know, call it mainstream, call it geopolitically important, whatever.

991
01:21:50,688 --> 01:21:54,727
and this can go well or it can go poorly.

992
01:21:54,867 --> 01:21:58,447
But like this is the decade where like real shit happens.

993
01:21:58,967 --> 01:22:03,787
And so, you know, I think the opportunity to have a bunch of people get these fellowships

994
01:22:03,787 --> 01:22:08,148
and shape policy at the highest levels of government in this moment,

995
01:22:08,387 --> 01:22:10,688
like I just think this is such a cool thing.

996
01:22:12,267 --> 01:22:12,887
That's awesome.

997
01:22:12,947 --> 01:22:15,267
I had no idea that you could do that either.

998
01:22:15,648 --> 01:22:19,707
Is that like is that a pretty commonplace thing that NGOs will do?

999
01:22:19,707 --> 01:22:25,047
or is it? You know, I don't know that it is. I think this is just like a thing that exists. And,

1000
01:22:25,047 --> 01:22:29,907
and, you know, there's one, I don't know, I don't want to like necessarily dox, but you probably

1001
01:22:29,907 --> 01:22:34,667
there's one very Bitcoin focused staffer in one of the Senate offices who's like been one of the

1002
01:22:34,667 --> 01:22:41,487
most impactful Bitcoiners just in DC. And like the idea that we could have a bunch of those,

1003
01:22:41,907 --> 01:22:46,867
right, people just giving good information and guidance to lawmakers, pretty exciting.

1004
01:22:46,867 --> 01:22:51,907
honestly that's that's that's awesome like we need more bitcoiners everywhere we need you know

1005
01:22:51,907 --> 01:22:57,067
we've got bitcoin as the the digital trojan horse but we need uh we need to physically also get

1006
01:22:57,067 --> 01:23:01,327
inside these uh these buildings um absolutely and the perk is you get to ride that secret

1007
01:23:01,327 --> 01:23:07,927
underground uh subway between the the houses um wow i i did not get to ride a secret underground

1008
01:23:07,927 --> 01:23:12,327
subway while i was there i did get you have to work for a congressman or senator okay those

1009
01:23:12,327 --> 01:23:17,307
buildings are a maze, by the way. Like it is really, I got, I got lost a lot of times down

1010
01:23:17,307 --> 01:23:23,327
there. Well, sweet. BTC policy.org. If they want to apply to that position, I think it, and there's

1011
01:23:23,327 --> 01:23:28,087
also maybe I'm pretty sure it's right, but BTC fellowship.org, especially for this program. But

1012
01:23:28,087 --> 01:23:32,688
if you go to the BPI's website, you'll be able to find a link. That's awesome. Well, I encourage

1013
01:23:32,688 --> 01:23:36,447
people to check that out because again, we, we need, we need more Bitcoiners infiltrating

1014
01:23:36,447 --> 01:23:41,287
everywhere. Zach, we've covered a lot today. Anything else that we did not get a chance to

1015
01:23:41,287 --> 01:23:46,767
cover? Or did we round it out pretty well? No, I think we did pretty well here. Yeah,

1016
01:23:46,767 --> 01:23:53,427
look, this is a big moment. There's good and there's bad. But, you know, certainly, I feel

1017
01:23:53,427 --> 01:23:58,467
very grateful to be able to have a front row seat to this. This particular moment in history is

1018
01:23:58,467 --> 01:24:05,247
really cool. I don't know that I could focus on anything else if I tried. And I think I have like

1019
01:24:05,247 --> 01:24:10,307
the coolest job ever with BPI where I get to think deeply about these policy questions. And I imagine

1020
01:24:10,307 --> 01:24:13,907
most people listening to this sort of feel that way, regardless of what your role is in Bitcoin.

1021
01:24:14,447 --> 01:24:20,887
Like, it's pretty fucking interesting how things are going now. And find a way to be involved. I

1022
01:24:20,887 --> 01:24:24,767
guess the last thing I'd say, and this is a comment I try and make as often as I can,

1023
01:24:25,987 --> 01:24:30,467
especially to people that are skeptical of the like, legal and regulatory side of things.

1024
01:24:31,107 --> 01:24:38,267
The reason why Bitcoin succeeded, where other attempts failed, is because it was a cypherpunk

1025
01:24:38,267 --> 01:24:43,188
breakthrough, right? We invented through proof of work, a consensus mechanism that allowed for

1026
01:24:43,188 --> 01:24:48,627
peer-to-peer transfers that couldn't be stopped. And so there was no throat to choke and Satoshi

1027
01:24:48,627 --> 01:24:54,167
didn't fail in the way that, you know, Digicash, Eagle, Liberty Reserve, that type of stuff failed.

1028
01:24:55,487 --> 01:25:02,487
That's not an accident. This is at its base, it's a cypherpunk revolution. And I really think it

1029
01:25:02,487 --> 01:25:08,787
will continue to be. And while this is an important moment in time where legal and regulatory and

1030
01:25:08,787 --> 01:25:15,007
policy concerns, I think in some ways are at the forefront, the final boss of Bitcoin, the only way

1031
01:25:15,007 --> 01:25:19,887
in which Bitcoin is not really a neutral tool is that in some sense, it takes power away from the

1032
01:25:19,887 --> 01:25:26,007
state. It takes the ability to control the monetary supply to some extent away from the state, the

1033
01:25:26,007 --> 01:25:31,387
ability to censor transactions away from the state. And what we are doing in the legal and policy

1034
01:25:31,387 --> 01:25:38,367
space in some ways is a rearguard action. We are buying time for the cypherpunks out there,

1035
01:25:38,447 --> 01:25:44,027
the builders out there to create the tools and deliver the education to allow Bitcoin to scale

1036
01:25:44,027 --> 01:25:49,027
to people around the world who really need it and to make sure it's at a place where,

1037
01:25:49,607 --> 01:25:53,307
you know, look, when they're, it's not the United States, there will be powerful governments around

1038
01:25:53,307 --> 01:25:56,627
the world that will see Bitcoin as a threat and usurp power from them. And they will come at it

1039
01:25:56,627 --> 01:26:01,567
much harder than they're coming at it right now. And we need it's the tech that that's going to win

1040
01:26:01,567 --> 01:26:07,847
this at the end of the day. And so I see a lot of my job is as buying time for the people who are

1041
01:26:07,847 --> 01:26:12,767
building stuff. So definitely encourage anyone who wants to be involved in Bitcoin policy to do that,

1042
01:26:13,188 --> 01:26:17,267
reach out to us at BPI, apply for the fellowship, do all that stuff, call your congressman center,

1043
01:26:17,267 --> 01:26:21,967
that's all super important. But if that's not you, the other thing that people can do really to move

1044
01:26:21,967 --> 01:26:27,287
this mission forward is start building. And I think we need more Bitcoin startups. I think we

1045
01:26:27,287 --> 01:26:32,407
need more Bitcoin tools. There is funding out there. There are great programs like OpenSats.

1046
01:26:33,547 --> 01:26:39,507
But see if there's something you can do to sort of put your shoulder to the wheel and move things

1047
01:26:39,507 --> 01:26:45,787
forward a little bit. Because again, not just in the legal regulatory space, it may be that Bitcoin

1048
01:26:45,787 --> 01:26:50,907
is inevitable, but it's only inevitable if it is inevitable because it creates the game theory

1049
01:26:50,907 --> 01:26:54,767
that's going to get over the line and you get to be an instrument of that, right?

1050
01:26:54,767 --> 01:26:56,188
That's the time you were born into.

1051
01:26:56,188 --> 01:27:00,688
So being involved in policy is not the only way to do this.

1052
01:27:00,987 --> 01:27:04,127
And I want to encourage anyone who might be a builder out there, an entrepreneur to do

1053
01:27:04,127 --> 01:27:04,607
that as well.

1054
01:27:06,027 --> 01:27:07,507
I say amen to that.

1055
01:27:07,967 --> 01:27:12,747
Well, Zach, thanks so much and appreciate the work that you and BPI do very much.

1056
01:27:13,007 --> 01:27:14,127
Keep up the great work.

1057
01:27:14,627 --> 01:27:18,067
And yeah, and if you don't want to get into policy and you don't want to, you don't have

1058
01:27:18,067 --> 01:27:21,847
the tools to become a developer, even though you can vibe code a lot of stuff now, you can still

1059
01:27:21,847 --> 01:27:26,847
start a Bitcoin podcast. So, you know, that's the third door that you can go through. And we need

1060
01:27:26,847 --> 01:27:30,847
more of those as well to help, you know, propagandize the world. Well, I mean, the brain

1061
01:27:30,847 --> 01:27:37,767
drain from Bitcoin podcaster to officer of a public company is, it's alarming. It really is.

1062
01:27:37,827 --> 01:27:42,127
We've got to do something about that. There's a big gap that needs to be filled now. So many

1063
01:27:42,127 --> 01:27:47,847
podcasters now just becoming full on suits. So there's doors opening up for new entrants, I'd say.

1064
01:27:48,067 --> 01:27:49,667
But Zach, thank you for your time, man.

1065
01:27:49,827 --> 01:27:50,807
Great talking to you.

1066
01:27:50,807 --> 01:27:52,648
And yeah, keep up the great work.

1067
01:28:18,067 --> 01:28:22,127
And this podcast at primal.net slash titcoin.

1068
01:28:22,567 --> 01:28:25,987
On X, YouTube, and Rumble, just search at Walker America.

1069
01:28:26,447 --> 01:28:30,847
And find this podcast on X and Instagram at titcoinpodcast.

1070
01:28:31,307 --> 01:28:33,547
Head to the show notes to grab sponsor links.

1071
01:28:33,648 --> 01:28:38,347
Head to substack.com slash at Walker America to get episodes emailed to you.

1072
01:28:38,727 --> 01:28:42,148
And head to bitcoinpodcast.net for everything else.

1073
01:28:42,567 --> 01:28:46,227
Bitcoin is scarce, but podcasts are abundant.

1074
01:28:46,227 --> 01:28:51,587
So thank you for spending your scarce time listening to The Bitcoin Podcast.

1075
01:28:52,487 --> 01:28:54,907
Until next time, stay free.