Hello, hello.
What's up?
Welcome to another episode.
Happy Wednesday.
On Wednesday instead of Tuesday.
Live stream number 21, one day late.
I was a little out of it yesterday, but we're back on.
So I can't wait to get into this.
Brought to you by Byte Federal.
Go bank yourself.
Point of sale.
ATMs.
You can get that stuff into self-custody.
But yeah, it's been another week.
How you been?
I've been good.
It's been a little, you know, September, man.
It's just September.
I don't know what to say.
I like the glasses and the buttoned-up shirt look.
I like this little zipper thing here.
Zipper thing.
Oh, okay.
That's kind of unique.
Yeah, that's good.
And Cedric, I like your new shirt, too, there, big guy.
Yeah.
That's live in Cedric's store.
This is my creation.
Yeah, it's on the Bitcoin Matrix store.
That's right.
Yeah, the Bitcoin Matrix store.com.
Store.
The Bitcoin Matrix.
Let's get going, man.
Let's do it.
All right, Bitcoin Center, episode number 21, brought to you by Byte Federal.
Go bank yourself.
Next big thing.
What do you think?
I think it's rat poison.
Bitcoin.
You never heard them a few weeks ago?
Now everybody's talking about them.
But is it a currency?
I don't know.
Or is it more like a stock?
Or is it a tulip bowl?
Or is it just stupid?
To me, it smells like Ponzi scheme in the greater pool theory right now.
You do like five minutes of freaking research.
It was me.
Oh, man.
I didn't get that wrong.
All right.
Bitcoin's recent rally.
Do you agree? Is crypto finally dead?
Go to the next one.
Matter of fact, they're kind of in the Ethernet.
What are they?
Some rumors that it's a Japanese guy,
but they know that he's a fake name.
It was a pseudonym.
I mean, you're literally putting real money onto a system
that we don't even know who created it.
Look, I'm Bill Bad, Henry.
Is this the most exciting bull run ever?
Not for me.
No, it's not.
welcome to bitcoin center the fast-paced show where the debate is the story
all right topic one the flush uh the fed cut triggers a btc leverage flush with bitcoin's
exchange supply ratio plunging and futures leverage wiped out post-fed cut is spot demand
quietly taking over the driver's seat this was uh strange we know i don't think spot demand is
quietly taking over the driver's seat i think it's not maybe in the driver's seat but what i
found out but this was confounding why did bitcoin's exchange supply ratio fall uh showing fewer
coins available for trading on binance when the fed cut rate wouldn't i mean uh or why would uh the
perpetual open interest drop 395 000 btc to 378 000 btc after the feds rate decision i'm not a
trader i'm not into the data i thought this that would be somewhat bullish maybe it wasn't bullish
enough uh and then you know you hear this in analyst track 116k and 113k is key levels as
bitcoin consolidates and we're here we are at what 113 000 or 12 below this so this is kind of
i don't feel like that means we're crashing so this didn't there wasn't a lot of signal here no
No. I mean, this is, the market seems to be driven right now by options traders.
Yeah.
And anyone playing the derivatives markets.
And until we get to a consolidation point where a breakout one way or the other creates an extensive amount of volatility,
we're going to be kind of directionless.
do you you know if there's going to be sort of a big uh q4 that everyone sort of planned on or you
know thought or you know prognosticated for do you think there's going to need a spark for something
like that to happen would it need like you know an amazon to say we're going to uh accept payments
in in bitcoin i think there's so much of what's happening right now in the markets and the reason
why bitcoin goes on these sideway channels for so long is because people accumulating bitcoin
are using options and derivatives to generate more Bitcoin
that they're able to acquire at a better rate.
So you get these put call placements all around the edges of this market
in order to extract yield, acquire more Bitcoin at a better price, etc., etc.
And until that gets to an inflection point,
then it'll break out and move violently in one way or the other.
But I don't think that, you know, like I don't think we see like Fat Finger buying anymore, right?
People are tactically and strategically buying.
So they're going to use these processes.
So you don't get that retail craziness like we got in the early days.
Yeah, maybe not.
We'll see.
Let's get on to this next one.
Jack Mauler.
See the price of Bitcoin heady.
Higher.
How much higher?
A lot higher.
My general framework from the highest level is human beings collectively, we own about $900 trillion worth of stuff.
That's equities, the things behind us, real estate, precious metals, fine art, all of the things that we own.
Half of that we're using as a savings account.
We're owning the portfolio of companies or the art or the house to actually try and persist wealth into the future.
I think Bitcoin's going after that market.
It's going after a market of $400 to $500 trillion worth, and right now it's $2.5 trillion.
so i think in purchasing power terms bitcoin can go up 100 to 200 times more from here all right so
we know bitcoin obviously is the well that's more the moon math i mean what kind of time frame you
think yeah i think that's the only thing that's missing from that right that and also the i think
the other thing that's missing from that analysis is the uh the kegger of bitcoin as that drives
into becoming a more of a low volatility lower return asset into the future then people are
going to start to compare investing in bitcoin to other assets right right now as a top performing
global asset it's hard to beat bitcoin in the future if the kegger is 20 there may be a handful
of stocks out there that do a lot better than bitcoin and therefore i think there's only one
this year you know the stock that's out doing bitcoin right now build a bear is up 120 this year
uh the sales are only up 12 percent we should get a builder bear etf uh talk about sort of like the
reincarnation of tulip mania. Let's go on to the next one here. All right. How would you advise me
to address that question bang on so that it's a no-brainer? Yeah, I think the answer is the
treasury company is sitting on a mountain of hard assets. In a rational market, it'll just sell the
equity to pay the dividend. In an irrational market where the equity decouples from the Bitcoin
fundamentals, you're going to sell the Bitcoin volatility or you're going to engage in derivatives
trading in order to extract the yield directly from the Bitcoin. If necessary, you're probably
going to sell a future, right? You're going to sell an out-of-the-money call option against the
Bitcoin or you're going to enter into a basis trade. And in the worst case, you're just going
to sell the underlying Bitcoin itself. Because as long as Bitcoin is growing at a multiple of
the underlying dividend, you always have that as a final option. Well, that really kind of closes
the loop on our conversation with Dan and Darkseid. So the question becomes, and this is, by the way,
at the Bitcoin Unconference, Saylor floated this as a worst case scenario to sell calls,
warrants or even some btc to fund obligations uh is he responding to the pressure on twitter that
dan and dark side were suggesting i mean i think what he's responding to probably the pressure on
the price uh and and mnav and uh i guess yeah he's definitely in tune with what's happened i think
he somewhere said like he'll be digging into these comments on x and he'll find you know an account
with 300 followers and he'll be like this is a bot like i'm here trying to figure out why a bot is
saying this negative commentary
about my company. He thinks there's
sort of bot armies that are
maybe...
I think there's validity. There are definitely bot armies
on X, swaying opinion
on lots of matters.
It's interesting.
Why has he not ever said anything like that before?
It's the timing of this comment.
I think it's really about selling the Bitcoin, maybe.
The last thing he said.
But also like selling
derivatives or
generating a trading arm they need a separate trading entity that operates before either right
that's that's that's that's the thread that has to be pulled there yeah and he they need a trading
company more like where a lot of us have imagined that they become like the goldman sachs of bitcoin
right they manage the flows in the market right and they they uh benefit from that as the largest
holder and yeah it's the first time i've ever heard him talk about that kind of stuff but that
really what that boils down to is they're gonna have to sell some bitcoin to carry the tree yeah
I think that's how I see that.
If they go there, I think they become really...
But he's also saying if the market's acting irrational.
So we'll see what the definition of irrational is in this MNAP battle.
Let's get on to the next one here.
Bitcoin mining hits new difficulty peak.
Are record difficulty in surging hash rate signs of unstoppable network security?
Yes.
Okay.
Cash wars are good.
the thing that I think people are worried about with the centralization of mining,
bigger entities, but at the same time, yes, there might be bigger entities coming into mining,
but we're getting decentralization through nation state participation, right? We're starting to see
not only big corporate miners, but nation state miners that are not necessarily friends
and united globally. So this is the hash war that we had talked about for many, many years.
and this is kind of what Jason Lowery had predicted,
what Max Keiser's been predicting for many, many years.
As hash rate increases and it drives to entities
that have the resources and the free energy
or cheap energy to mine efficiently,
we're going to get diversification
into bigger and bigger mining.
If someone had free or cheap energy
to mine a substantial amount of the newly issued Bitcoin per day,
would that be like that wouldn't be enough though to move markets if they sold that i guess that's
a good point because i didn't i probably should have said this but a lot of the hash wars are
securing your ability to transact on the network right black space right if you're xyz country and
you're worried about being sanctioned by the u.s you might want to have a significant position of
mining and control of resources on the bitcoin network so that you could transact with bitcoin
globally where no one could censor you right right yeah all right all right eric
are you there let's bring him on there he is this is the man of the hour and this is such an exciting
topic um tether onshore versus offshore tether this is uh you know what do you think about this
splitting tether into a u.s compliant and offshore version what do you think this means for bitcoin
I think he's on mute.
Oh, you're muted, buddy.
My bad.
Can you hear me now?
Gotcha.
Yeah, so for context, earlier this year, my venture firm, we put out this report on when
everybody was talking about, okay, so banks are coming to Bitcoin.
The Trump administration repealed this key regulation, SAV-121, and that makes it much
easier for banks to now adopt digital assets in general.
And we're like, what does that mean? How do we still man that? We did a whole deep dive with the CTO of Silvergate going into here's what bank adoption for Bitcoin looks like.
And a huge part of that question has been stablecoins. So we spent a lot of time kind of thinking really prospectively about what it means when stablecoins are coming into the banking system and how Bitcoin is ultimately going to be tied in to that form of adoption.
So Tether being far and away the most dominant, the decisions that they're making today are
setting the precedent for what's going to be happening over the next five to 10 years,
whether other stablecoin issuers do, et cetera.
And yeah so I think one of the key ideas that we came to is that when the Genius Act was passed in August this summer that set a pretty hard line in the sand for in the US if you are issuing a stable coin
or if you're a financial institution participating with stable coins, then you need to be dealing
with stable coins that are following the Genius Act's compliance. And the two primary things that
it did was it said stable coins can only use short duration government and government agency
liabilities. So treasuries and other agency debt. Those are the only things that they can use as
reserves. And they're not allowed to use anything else. And then the other key regulation that was
put in place is that stable coins are not allowed to pay interest on the stable coin unless they
have a US bank charter. And that was just like regulatory ring fencing to effectively allow banks
to still remain competitive within the market. There was this letter that was produced by
the Community Banking Association that was sent to the agency passing the Genius Act and saying,
look, you guys can't allow stable coins to be paying interest. Otherwise, we're not going to
be able to compete. And the reason for that is there's so much intermediation that goes into the
banking system from the point at which treasuries are created, the point at which prime brokers buy
them. And then the Federal Reserve recapitalizes the debt into reserves within the system. And then
ultimately the commercial banks are leveraging those reserves at the Fed through master accounts
to lend within the system and create more money. And then banks who don't have master accounts
have to link up to a bank that does have a master account. So there's all these steps
in that path to the creation of money, and it's highly inefficient. All Bitcoiners know all the
problems with this. What stable coins did is they took debt from the government and immediately
issued it into a form of money. And it just like disintermediated all these different steps within
our banking system. And that's what's really scaring banks right now. So with that context,
next, Tether had to create a US compliant stablecoin, the USAF. And that was one of the key
ideas that we were speculating on the report saying what Tether does is going to be a big
decision here. Are they going to bring international Tether fully into compliance? Are they going to
create something domestically? Or are they just going to move completely offshore? And it looks
like they're kind of splitting between two different products. So that's kind of created
and delineated this line in the sand of there's probably going to be an onshore US denominated
that stablecoin market. And then there's going to be the rest of the world and whatever
regulations exist within the rest of the world. So this offshore market's really interesting.
And what we find, how this all relates to Bitcoin is that Tether today, 5% of the reserves that are
backing Tether are in Bitcoin. And that's something that's going to exist in the offshore market.
And now when we think about that, we think, well, how are stable coins going to be competing over time when we have a much more like open and free market for competition of these?
They're going to start competing and have been slightly competing on paying some degree of interest.
It's not like an industry standard yet, but sooner or later, you know, Tether is one of the most profitable companies in the world.
And sooner or later, they're going to have to pass along that margin to the consumers that are using it.
And when we start to see like this international market of competition amongst stable coins where they're paying out interest, the question becomes what reserves are going to be the most competitive reserves for allowing you to pay interest in the safest manner and maintaining stability of the asset over time.
And so we already have precedent where Tether has been doing this at a 5% reserve ratio in Bitcoin.
And then you can tie this in with what Saylor has recently done with the stretch micro strategy, preferred equity.
And, you know, having a fully collateralized effectively, not like within, you know, the terms of banking, but nonetheless having, you know, taking the economics of Bitcoin and using that to pay a fixed interest rate on short duration, a short duration product that's effectively acting like, you know, a form of liability.
that those economics are kind of like the proto version that we see that will eventually emerge
within the stablecoin market for reserves, where those that have an asset that is producing a
greater amount of capital return over time are going to be in a more competitive position to pay
more competitive rates of interest against those that do not have that in reserves. And that was
one of our predictions in this report. We're just like, there's going to be a market of adoption of
Bitcoin into the reserves of stable coins over time. And I think, you know, it depends on the
time horizon and, you know, a ton of other variables, but we think that that reserve
ratio is going to start to expand gradually. That's going to bring the price of Bitcoin up.
Bitcoin is going to become more stable and we'll start to see it become easier and easier to have
Bitcoin as a reserve as it becomes less volatile with scale. So I was kind of like the big idea
that we were pulling out of a lot of this. So like this whole idea of
offshore tether and offshore tether reserving better purchasing power than onshore tether
over time how would that impact
the global economy that that to me seems like
like the euro dollar system on steroids yeah yeah that's kind of an interesting way of putting it
And it's like, you know, it's comparable, right?
You'd expect to see capital flight.
People are going to want to find more productive forms of capital.
They're going to want to offshore assets as they have.
And they're going to want to find the best means of accessing that capital.
And I think, you know, you can make a strong argument that U.S. denominated stablecoin market's not going to be very competitive at an international level when they're forcing collateral to be these things.
I think probably an interesting point of historical precedent for it would be when we think about the wildcat banking system within the U.S.
And a lot of people will refer to that system as like the 19th century banking system in between the central bank that occurred and ended subsequent to the Federal Reserve being created.
There was this period of, I think, like 80-ish years when we had effectively this wildcat banking system.
And it was allowing banks to issue money off their own reserves.
The definition of free banking is kind of that.
Systems that were based on gold reserves where banks would issue their own notes and people would use these notes as money.
And banks would compete in the market to have the best notes that people demand.
The wildcat system wasn't very free, though.
And it's not a good example of free banking because the ability to do so was done on a state by state basis. And each state was issuing all these different laws that were constraining the free market of the system.
And then like in order for a free banking system to actually work, in order for banks to properly regulate the market and to respond to free market incentives, you can't have a ton of various statewide influence over the reserves you'd be using.
So they had things like bond collateral laws where states were forcing these wildcat banks to not use gold and to use their state debt in some way, shape or form as a form of reserve in this system.
And that fucked up the incentives of the system.
And like that was kind of like the main takeaway at the wildcat is that like when you intervene,
like a free banking system, what's challenging with them is that they kind of have to exist in
a vacuum. The second you start having these competitive dynamics where you are starting
to influence the market incentives and control the reserves in the system, that's when things,
you know, banks go bankrupt for reasons that they shouldn't and you start to get problems.
So what I would expect is that if stable coins become like, you know, today they're kind of this
narrow banking technology, but conceptually the idea of taking a cryptographic signature,
a token and having it represent value backed by some form of reserve, then that conceptually can
emerge as like in an offshore, more like free banking type market. It depends on what, you know,
there's a million variables of how other governments are going to respond to a lot.
Right. But nonetheless, the US is not going to be in a competitive position when they're going
to be putting you know forcing us debt as the only reserve asset and then um banks are going to be
able to pay interest and they're going to have these things called in the us they they're going
to like the new term for um cbcs is going to be tokenized reserve deposits that's going to be like
the new wholesale cbdc and then tokenized deposit that's going to be like the new um uh retail cbdc
and we already see that right like jp morgan launched a tokenized deposit the tokenized
deposit in like a beta program on the base blockchain uh through coinbase and you know
it's like a stable coin that's paying interest effectively yeah so you'll take your usat send it
to uh wells fargo and it'll go into an account that'll pay you interest right right yeah and like
you know i don't you can buy these things on basis tokens and they're like actually paying out a
degree of interest i'm not sure what the mechanics are on the back end for how it's getting paid out
i'm assuming directly through some form of uh their stablecoin um but yeah i think the the idea
is that what that kind of means is that like tether's probably going to get a bank license in
the us and then they'll probably be paying on the usaf token some form of interest or they're going
to issue like a new one that's effectively going to be like a money market again yeah i think a
tokenized money market the second order effect of this play is uh they they want to run usat on
tethers hadron or hadron technology platform to bring real world real real world assets to the
tether network treasuries bonds things of this nature on top and then so i think there's but i
want to know do you think that this is uh they have you know they have brought in bohines so
they have sort of kind of you know uh regulatory capture this is you know going to be more compliant
with the u.s regulation so they have a nice moat around compliance and they have anchorage uh who
is an anchorage who's going to be the issuer so i wonder who the issuer is in the international
tether and do you think that the usat is gonna you know out compete circle and become the number one
you know stable coin in the us that's an interesting question yeah um i i don't have
have a strong opinion on it. I think that with all these things, these markets are very infant.
So I think although they're still large, the market sizes are very large. And because they're
still in their infancy, what people might perceive to be like an entrenchment or a network effect
around some of the assets, we might be surprised that because we're so early that that wasn't that
significant of a network effect. For all the points that you just described, I could definitely
see Tether overtaking Circle at some point. What about in terms of social credit scores? Do you
think one of these coins is more likely to have more draconian measures?
Yeah. I mean, if it's all USAT versus USTT versus USAT?
I think if we look at the behavior of some of them and the alignment of the organizations,
you'd probably expect Circle to be pushing more for that angle of compliance. But at the end of
day i'd assume that they start to become pretty commoditized amongst each other about how they're
all you know structured in a similar manner i'm wondering i'm curious did you see or have you
heard luke grohman talk about um the potential of in the next big recession that in order for
uh the euro dollar uh entities to start to receive fx swaps that they get forced into
dollar stable coins oh that's interesting no i didn't yeah it was a really interesting take
in regards to how it might force adoption in the next recession and that yeah go ahead
no no i mean it just it just hit me like a ton of bricks when he said that i was like holy smokes
because um this you could then start to view these stable coins as a run around from the fed
Right Is that like you just going directly to companies and countries in need of an FX swap and you going directly straight from the treasury through a stablecoin right to them
And I'm wondering if you think that's just to put more pressure on the Fed,
to get more political control of the Fed,
or do you think there's a real strategy there to try and eliminate the Fed long term?
I don't know about a strategy to eliminate the Fed long term, but I view it certainly as a new form of distribution that's circumventing it.
So then the question kind of becomes if we do start to see stable coins providing dollar liquidity outside of the banking system towards these international financial institutions, then that's something where you would probably see pressure come down on the stable coin providers.
Because the thing about like treasury auctions is that you have to meet all these requirements if you want to acquire treasuries at scale.
like there's like treasury direct that retail users with you know small amounts of money can
go buy treasuries directly on but if you want to do this in mass then you need to be licensed
uh within the u.s so you know they are arm's length from being able to distribute
um that dollar liquidity because they can choke off their access to treasuries if they don't like
what they're doing and they want to force it back to the system interesting this has been awesome
Thank you so much for coming on the show and breaking this down for us.
By the way, if any of our listeners have not read Eric's most recent piece, go to X and download it.
It's fire.
Eric, tell them where to get it, buddy.
Yeah, yeah.
Go to our website.
It's epochvc.io.
And if you go into our writings, you'll see it.
It's kind of like the one at the top.
It's the most recent.
but it's a whole deep dive on everything you would possibly want to know about how banks are going
to specifically be adopting bitcoin and then we get into a lot of discussion around stable coins
we were just talking about i never miss anything you write it's so well written and so well
researched i love it so i recommend everybody take a peek you can be a canadian bitcoin conference
they didn't invite me tell them to invite me all right i'll let them know okay
go canada thanks for coming on bro thanks thanks later bye bye this is bitcoin center episode 21
brought to you by bite federal go bank yourself hit like and subscribe go bank go bank yourself
use uh by federal's atm and point of sale and crypto wallet you got it let's head to the lightning
round let's do it all right all i'm going to say is kevin durant what the hell happened here
his agent said oh he found his keys so he found found his bitcoin that he bought like at 650
a coin and uh but lost his keys and now he's recovered them he's got access to his wallet
after all these years i think this is probably i think this is probably his agent going you did
what you bought bitcoin can you just call the toll free number you can't call you can't tell
people you own bitcoin right but like now it's not a bitcoin issue or even a crypto now it's okay
i think it's now i think this means now it's okay for you kevin to be able to tell the world that
you own bitcoin it's cool now right okay i think this whole i lost my keys in a basketball accident
is but that's my this is not news but good for you for finding your keys kevin open invite oh yeah
cz so uh shang shang penzow cz otherwise known as cz boost his stake in athena lab
labs issuer of the usde stable coin which is uh an algorithmic stable coin not backed by treasuries
is this a sign of defy's rise or is he just hedging as stratify warms up to regulated stable coins
i mean to be honest i think this is a sign of defy's rise i mean i think all the regulatory
environments getting paid for stable coins and they want to put a lot of things on stable coin
protocols or platforms or d you know these databases uh and and move assets around so
So CZ has always been a really interesting guy.
He's not in jail.
That's the, you know, he, you know, look, the, the, the stable coin market, you know,
U S treasuries estimated in April that the $295 billion market would boom to 2 trillion by 2028.
And everyone wants, you know, so he, he's going where, where the puck is going.
And it's also interesting.
if you think about this from the terms of like what russia just said about the genius act and
what the united states is planning to do with stable coins here's this offshore entity that's
one of the largest crypto slash d5 players in the world saying hey you know what there's a stable
coin that's not there's like the number three treasuries you can't get rugged you can't get
shut off they are backed by short-term treasuries i thought it was completely algorithmic no there's
There's short-term treasuries involved in the algorithm of probably buying, selling, supporting the thing.
I'll find that exact quote in a second.
I just saw it.
But, you know, his company, YZI, manages $10 billion worth of assets spread across the crypto AI and healthcare.
You know, he's kind of like this perpetual, I don't know if you want to call him grifter or like sort of entrepreneur in the space.
I haven't, he's probably a pawn of China with how far this has gone.
It seemed like he brought down FTX in a tweet.
Yeah, that's true.
He can move markets.
He's still, the investors in this,
Athena has also won investment support from trillion dollar asset manager
firms Fidelity and Franklin Templeton.
You know, so everyone's trying to get in on this stable coin market.
This coin that is already algorithmically, whatever that means,
is already prominent in the market space, whatever.
Yeah.
Let's move on.
enough talking about cz all right uh let's see here it's your turn yeah sec opens crypto etf
floodgates so no that's not it kraken co-ceos 400 million dollar whoops my whoopsie whoops uh
is this bitcoin pizza competition i guess i mean bitcoin pizza was spending coins but that was a
very expensive pizza this this guy just lost his coins he had a ton of coins on a laptop and then
throw it away the ccocio of kraken yeah lost his coins well somebody was mining them back in the
day like in 2009 and said hey bro here's my old laptop there's a bunch of bitcoin on it bitcoin
didn't have a price back at the time and he he tossed it wow and i guess this is reminiscent of
That other guy who's got the $1,000,000 laptop in England, I think.
Yeah, the guy in England that his wife threw the laptop in the trash.
Oh, that's a nightmare.
Yeah.
I kind of feel bad for the guy in a weird way.
I think he's probably doing fine.
Yeah.
I hate, I hate, yeah.
Okay.
Larry, thank you.
You brought up cryptocurrency and your personal belief around this or comments on this have certainly evolved over the years.
It did.
So tell me, tell our audience what you thought in the beginning, what you think today, what's BlackRock doing?
I didn't believe in it. Actually, in the early years, it was a domain of money launders and thieves. Obviously, if you're in a corporation, you were held ransom with some type of code, you paid in Bitcoin.
I can tell you this still happens today. Every six months, one of our clients' business, someone hacks it and wants Bitcoin as a ransom.
So I said that. I said in 2017 on a panel sitting next to Jamie Dimon, who Jamie still today is against it.
Very much so.
But right around 2000, 2021, around COVID, when I had a little more time on my hand, I started talking to a person who is a huge believer in it.
So it was me. You know, the one thing I was throughout my 49 year career, I'm still a student.
And there are times I'm wrong.
and so during this period of time i i brought in a bunch of different people talk to them
learn more about it and i remember one time i met this one woman who is providing illegal jobs
for afghani women women could not work you know with the taliban with the uh taliban in control
of afghanistan women are prohibited to work and this woman was trying to find a way to empower
and employ women in Afghanistan. The Taliban controls the banking system, so there's not a
chance that she could pay them. But she started having them code. They were all coders. They were
able to code for different companies out of Afghanistan, and they were being paid in Bitcoin.
And so I started this journey of learning of different applications, and I studied why
are people buying it. And much of it has to do with, and it gets back to our deficits,
many people own bitcoin because they're frightened of the debasement of their
of their financial system of their currency many people own bitcoin because they're frightened of
their security 20 of all bitcoin holders are chinese okay then i don't you know the so you
own it to me bitcoin is digital gold you own gold for the same reason but it's even even more
transportable because it's all you have authenticated id and then you have all this stuff
and you could move it around.
And so around 2023, 2024, I became a real believer in it.
And then we took a very active role.
And we used to bring in all these different people
who were big believers in it,
like Michael Saylor from MicroStrategies.
I mean, Michael came to our office when the stock was in the teens,
but he was a huge believer in it, transformed his company.
I mean, I could just say all these different people came in and talked.
And then we became a leader in working with the SEC and trying to move forward in this.
And fast forward now a little more than 18 months when we first started creating a Bitcoin ETF.
Today, I bid is $86 billion.
Wow, that's remarkable.
Translation.
I don't think...
cat is out of the bag that was him giving sailor a lot of credit no it's not but i mean like and so
i don't think that sailor from the inside moving you know or reshaping wall street but uh i thought
that was remarkably sort of humble really at least on the learning part i thought that was all
uh i think it's all bs i think the i think the reality is the cat's out of the bag retail fit
is figuring out we said look to know people are interested in this thing they want to buy it
chinese people are buying it china's buying it but he what he's saying is like he came in here
when his stock was 15 bucks and now it's three grand i'm like what the is that about no no no
that's some sort of like what he's getting is like oh i really learned that you know people
were buying this because it's a basement and like i had to figure this thing out and like give me a
break yeah no i'm not you're the head of blackrock you know that you're taking advantage of that
system and you were happy 100 retail didn't understand the game i think was more to like
he's like oh i don't understand this thing but there's lots of other people who want it for
different reasons that's going up in price that's not it at all okay maybe not what it is is him
saying you know what uh cat's out of the bag we we better get on this program and start selling
this stuff because if not we're going to miss out yeah that was interesting i mean he's a really
really good salesman then he's taking a different pitch than jamie it's interesting he says jamie
dime is against him and that's jamie's public persona but they're authorized participants in
the etf jamie's more authentic jamie's saying look at this disrupts the banking system this is a threat
but jamie still makes money off of like the flows sure uh the picks and shovels but the long-term
view and agenda of bitcoin is to take banks like that out of the way sure and so i think jamie's
very honest that he doesn like the threat uh he like jamie gonna lie to your face I I I gonna give you a story yeah exactly exactly that great that cool okay all right uh SEC
opens crypto ETF floodgates uh does does approving generic listing standards herald the US spot ETF
yes and uh i'm gonna give everybody a warning on this one so this to me is wall street finally
getting into the ico boom right like we all went through this in 2017 and you say ico yeah we see
it end badly in 2019 uh everybody was it's not bitcoin it's blockchain and we're gonna have all
these different coins and all these different opportunities and i'm not saying that nothing
ever good is going to come out of crypto some good shit will come out of this in the long run
but in the meantime this is wall street having missed their opportunity to legally participate
in scraping profits out of retail so now they're going to get all these etfs approved you're going
to have fart coin etf terrible dogecoin etf and all this garbage is coming to an etf near you so
you can participate in speculative bs yeah that has no value the wall street will pump to you and
sell to you it's just it's a terrible predatory we gotta move on that's horrible uh you can't have
an etf on a non-hard asset that's it's kind of ridiculous all right let's move on bolivia uh
unbans crypto and usdt surged bolivia's u-turn to embrace stable coins is this a pragmatic response
to dollar shortages or a slippery slope for an economic an economy seeking stability sorry
uh i think they're just trying to take advantage of uh all the activity in crypto and uh they're
seeing that they're you know their population wants it yeah i mean look at these are these
are the stats so after officially lifting its crypto ban on june of this year bolivia saw
crypto payments jumped 630 in the first half of 2025 to 294 million now major automakers like
toyota byd and yamaha are accepting usdt in bolivia yep mexico remains the region's crypto
hub with bitcoin and usdt dominating cross-border remittances amid a 23 peso decline argentina facing
uh inflation above 100 has also turned to stable coins as a hedge against financial
about so so why do you if you have usdt yeah and your people are downloading the dollar on their
apps and now they're starting to use this currency your currency is useless your central bank becomes
useless you have economic activity you either come become an authoritarian regime and try and
lock everybody down or you're going to become the general manager of the us dollar bank account for
your little region is there even a third rail though like i mean so is it are those the two
choices and and neither get your act i think if there's so then otherwise you have to be like
financially responsible and run your country conservatively and have a strong currency
that hasn't been like the agenda of most authoritarian rulers so we'll see it's it's
going to be interesting i think that those are two good choices for the ruling class usually so
All right.
Ripple.
Yeah.
Which one are we doing here?
Ripple?
Ripple.
Ripple and Franklin.
Tokenize a money fund?
No, you skipped over.
All right.
TradFi.
Dig deep, deeper into crypto.
Yes, sorry.
With IG Group acquiring a crypto exchange,
is traditional finance finally FOMOing in
by sticking to the familiar terrain of exchanges?
Yeah, I think this is going to be a big trend
over the next few years.
We saw NASDAQ invested in Gemini.
We're seeing the SEC approved now.
The NASDAQ and other U.S. exchanges get into offering spot Bitcoin.
I know JP Morgan and E-Trade, I think, just did a deal with Zero Hash to help facilitate spot trading on the exchange.
So this is all starting to flesh itself out to become a bunch of M&A activity in the future.
NASDAQ reported recently they're going to go to 24-5 trading, which means they're going to be trading 24 hours a day, which means they're going to be using stable coins and T0 settlement on these trades.
so i think a lot of the big exchanges in the united states are going to look a lot more like
gemini and coinbase in the future and gemini and coinbase are going to start having tokenized
securities and it's going to become one one big conglomerate as they start to merge and acquire
and i think some of the offshore markets are going to uh offshore exchanges are going to get
sucked into this as well yeah even morgan stanley i think invested in zero hash they're all looking
together probably begins at 24 5 trading let's move on to the next one at least stricter our
central bank wants stricter rules for multi-issue stable coins is this prudent risk management or
start of the eu turf war over crypto oversight i i think it's both i i think they are very concerned
about uh coins emanating from one domain and entering multiple domains and not adhering to
local regulatory environments compliance and i think they're worried about uh value being
transferred and maybe not returned when when warranted so a consumer pays for something they
send 20 units of x and that's worth y and when they want their return they say i don't like this
good or i didn't get it i want to return my money you know is that issue we're gonna send them back
20 pesos yeah you know that's their concern i i think and then i think it's turf too yeah i think
the big the big issue underlying all this especially for like the central bank of italy
is that when you buy a euro stable coin what is it backed by because there is no federal debt in
the european union there's the debt of all the different countries and so is it backed by just
german debt because that's the cleanest dirty shirt or is it a balanced ratio of debt but this
would be on like new coins right like tether they can they use tether in europe i mean wouldn't they
be using this would be for i'm saying for a euro stable right right okay oh like a local like the
tether euro sure yeah right so you know in the united states it's just oh well we just buy the
treasury and that covers all 50 states it's all it's all federal debt they don't have that in europe
the euro is set up uh where every country still runs their own debt and this currency floats on
top of all this so what do you back it with right who's debt what ratios and i think that's where
these central banks are like kind of going like whoa well they want to compete for the business
too yeah i'm sure i'm sure the italy central bank would be like yeah it should be all our debt
right just buy our debt right don't buy germany's back by italy right so this maybe this actually i
think actually right if you start to play this out long term europe breaks apart the euro dissolves
and you're going to have stable coin lira and stable coin deutschmark the stable all the
currencies come back as stable going fractual is yeah it will fracture we'll see all right let's
move on to the next one ripple and franklin tokenize a money fund our tokenized money market
funds the start of real trad fi and crypto convergence it is we're going to see this uh
this is kind of like what we talked about with eric you're going to see stable coins penetrate
every part of the market so um ripple is doing this with franklin franklin's tokenized a bunch
of other assets on blockchains but they've done this so that their ripple stable coin
can be embedded into this tokenized money market fund that is run by frankel tepleton and you can
earn yield so you can go back and forth between this money microphone with your stable coin
uh that doesn't pay yield and then getting yield in the fund and you're going to start to see this
all over you're also going to see stable coins going into the traditional exchanges right this
is this is any way possible to implement the stable coin usage bypass the fed the treasury
gets to sell those uh or the yeah treasury department gets to sell um treasury bills
directly to the stable coin issuers uh and i think they're going to be looking for opportunities to
embed this wherever possible yeah seems like it yep all right moving on okay the uk regulator
floats crypto rule exemption the uk fca has proposed exempting registered crypto asset firms
from certain principles for business advocates say it could make the uk more crypto friendly
post brexit while critics warn against creating a two-tier regulatory regime that might weaken
consumer protections what do you think this reminds me of the red flag laws when i think
britain was kind of the forefront of pioneer of the automobile and i don't know if you heard this
but the red flag laws come from they wanted people to walk in front of the cars with red flags to
make sure that the car didn't hit pedestrians and it was all about like how to get used to this new
technology was to protect the old sort of way of transit which was the people walking so cars never
really got off the ground if you had to hire someone to walk in front of the car and i think
someone in the car had to wave a flag it was something you know asinine like this and i think
think that's how they've been with sort of uh bitcoin and wider crypto adoption if you will
uh we won't hear but uh so uh but it's funny what they're now doing to play catch up so
crypto firms and crypto firms in britain could be exempted from some some rules what kind of rules
rules that would that ensure financial service companies act with integrity
and in the interest of customers under new proposals so uh you know it's it's
so in other words we're forked because the u.s is going hard on on crypto we're behind and we're
screwed if we don't catch up rules are out yeah rules are out go for we gotta catch up we gotta
catch up yeah so it's weird though it's like because you you put up all this stuff to kind
of help like do all this thing that you think you're gonna do and then you're like scratch that
to zero so really what this means is we're trying to protect our traditional banking models
and our proprietary interests within central banking of all this financial system and now
that we're losing the game all rules are off let's go get the biggest crypto players we can
prohibit those companies we just we're protecting and say it you're losing right let's go
go go go catch up yeah good luck good luck uh we won't we won't bite you uh all right let's move
on to the next one india number one in adoption stuck on sidelines india leads the world in crypto
adoption but keeps policy in a gray zone how long before pressure forces a decisive move one way or
the other i i don't i don't know if india is feeling pressure to go one way or the other i
I think India is trying to remain agnostic and neutral on many fronts.
Stuck there in between Russia and China and the United States and everything that's going on.
I think they'll stay in the gray area for some time.
But as long as they're not ruling through enforcement like Gensler did in the United States, that adoption will continue.
Right.
And, you know, this is the programming and development center of the world.
they have many as Balaji says
many gods many currencies many
beliefs it's the melting pot
of cultures there so I think
it will continue didn't they miss out though
when like society chose gold
over silver
or the world did and you know
they kind of sat there I think I mean gold's a big part
of India's culture too
I mean it's just everything
I think India's very open
to
duplicity
see how it plays out
all right well this is bitcoin center number 21 live stream brought to you by by federal go bank
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francis we have any q a any chats uh any comments no nothing this week well if you're enjoying the
show hit like and subscribe and we'll roll out here thank you all for watching my name is cedric
This is Eric Youngleman.
This is Paul Tarantino.
See you next week, Tuesdays at 8 p.m.