On The Brink with Castle Island - Weekly Roundup 08/08/25 (Debanking EO, Storm Verdict, RMB stables) (EP.653)

Episode Date: August 8, 2025

Matt and Nic are back for another week of news and deals. In this episode: What's wrong with NYC? China bans Bitcoin for the 15th time Is China really lauching an RMB stablecoin? We dissect the Trump debanking EO OpenAI releases GPT5 SEC: Liquid staking tokens are not securities Roman Storm is found guilty on one of three counts Hester Peirce's speech on financial privacy How should we solve debanking? Will stablecoins replace bank wires? Is AI going to reveal the identity of Satoshi Further reading: Hester Peirce, Peanut Butter & Watermelon: Financial Privacy in the Digital Age Nic on Substack, The Last Word on Stablecoins and Free Banking

Matt Walsh and Nick Carter are partners at Castle Island Ventures. All of these expressed by them or the guests on this podcast are solely their opinions and do not reflect the opinions of Castle Island Ventures. Guests and host may maintain positions in the assets discussed in this podcast. You should not treat any opinion expressed by anyone on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of their personal opinion. This podcast is for informational purposes only. Brought down by bad mortgage investments, Lehman, which has 25,000 employees, will be liquidated.

The Federal Government Loans American International Group, A.I. $85 billion. This is a different kind of market, and the Fed is asleep. The federal government is stepping it to stabilize Fannie Mae and Freddie Mac, the two mortgage giants that have been threatened by the housing crisis. The Bank of England has pumped 75 billion pounds more into Britain's ailing economy with a new round of quantitative easing. You print a couple trillion dollars, and all of a sudden, people start to worry.

So out of this worry, we have something called a Bitcoin. Welcome to On the Brink. I'm Matt Walsh. And I'm Nick Carter. It's good to see yesterday in New York. I do have a criticism of New York. Okay, I'm here for any criticism of New York. I just think that the volume of human feces on the sidewalks goes up every single time I go to New York. When I lived in New York, I don't remember that being a problem.

I'm down there twice a month at least right now. Every time I go, there's more and more human feces on the sidewalks. My issue is related, which is that there are gigantic bags and mountains of trash everywhere. and I don't know if it's just on trash day. It seems to be a kind of a perennial thing. What is that? Yeah, they don't have the alley system. I'm told that Chicago is much better for trash pickup.

I just, I mean, we don't have this problem in Miami at all. Like we've solved a problem of trash. It should be a problem that was solved centuries ago. Yeah, Boston doesn't really have that issue either. You know, just take your trash out on trash day and they pick it up in the morning. Yeah, it's a New York thing. and I don't know why they do it. Yeah.

We're getting a lot of requests from the listeners for updates on various things. One is just a general take on probably one of the bigger items of the week, actually, which is Drake May just making Jaden Daniels look silly at this joint practice between the Washington football team and the Patriots. Well, first of all, I think we're going to rename back to the old name, unmentionable old name. Oh, is that right? Yeah, I guess you guys are the commanders now.

It's hard to keep track of it. Trump wants to rename us all the way back to the Redskins. I think he's making that a condition of the stadium move. I must have missed that. But what I will say is Jane Daniels is just a very clutch player, and so it's all about fourth and long on that last game-winning drive in the fourth corner. So you don't necessarily see his skills on paper. It's a much more mental and more subjective.

quality that he has. Okay. All right. Well, it looks like he was, you know, it's hard to get too excited about a joint practice, but you go with what you can in August. Drake May, three passing TDs, 67% completion rate. Jaden Daniels, zero touchdowns, 63% completion rate. Also, our head coach hopped into the fray and got bloodied. Did you see that? No, really? Was there a brawl? There was some sort of skirmish he hopped in and he came out just covered in blood. That's what you're looking for. Like, if you're at the point when you're looking to dribs and drabs in the preseason for inspiration, I think things are looking pretty bleak. But the proof is in the pudding. Yeah, the Red Sox are on like a nine-game winning streak right now. Things are looking good

for Boston sports. It's about time we started getting some wins. China has banned Bitcoin again. Did you see this? Oh, they banned it again. How many times can you ban it? They never unbanned it. Yeah, I don't fully understand. It's every year they just reiterate that it's banned and they did that again this week. I was having a conversation earlier today with Nathan McCauley from Anchorage. And that'll be a podcast that comes out next week. And he told me that there's a document. I made to find it.

But it's one of these like think tanks in China that wrote US dollars on chain, stable coins, have the potential to really threatened the Belt and Road initiative in the fact that just all these nations are going to have digital dollars and China just has their CBDC version. They might want to lean into the stable coins, but I don't think they will. Yeah, so we have a

news item on that which I don't understand. I guess we can just cover it now. So the FT reported that China is trying to launch Renminbi stable coin out of Hong Kong. I don't believe this. I don't know. It seems incredibly far-fetched.

I don't believe it either. The FTs actually had some pretty shoddy reporting in the crypto space lately, but we're talking about a country with deep capital controls. I don't think that they would do this. Yeah, but I do actually understand the fear. All right, so let's see. China tests out of stable coins amid fears of capital outflows. Policymakers say dollar-backed tokens meant U.S. dominance.

They want to institutionalize their own MNB, compete against the dollar, but concerns about capital flight are slowing the trade. technology's growth. I mean, that's the thing. China doesn't have an open capital account, so how can they embrace liquid market for stable coins? I don't get it. Yeah, I mean, they can embrace it if they want. They can try to issue this, but I don't know what the appetite's going to be to put park capital on the closed capital account. Yeah, I mean, also China historically doesn't do things without embedded surveillance. So why would they go for a stable coin under

our Western conception of what a stable coin is? Yeah. You know, I, I do think that some of these countries are going to need to adopt stable coins to suit to suite, because you know, you have two choices here. You can do nothing and just watch your currency, just get eaten alive by the dollar, or you can try to compete. And coming out with these proclamations, have you seen the European bankers just coming out and saying, hey, this looks like the Wildcat era? They're just using the same arguments that you'd see from Liz Warren or better markets. Oh, I have seen that. I certainly have seen that. Yeah, I wrote a 7,000 word screed on that, which will refer you to in the show notes.

I mean, we've covered it already, but what's weird is, here's the weird thing. Central bankers in the 80s and 90s very accurately described the free banking era. They understood it. And now they seem to have amnesia. They have lost their marbles as far as the free banking era is concerned. What happened? Did they forget? I don't get it.

I don't get it either. I don't get it either. Well, maybe we should have some more podcasts talking about just the future of money on this. I saw Paul Vigna has a new book. So I want to briefly touch base on AI before we dive in. So Open AI released GPD5 today, which looks quite impressive, I would say. Here's my question, my contention. I think we already have AGI. I think it's here, actually, already. Does it have a definition? I guess is my first question to that. Yeah. So that's inherent in the claim. My definition for AI is simply artificial general intelligence, performing intelligence tasks at a level that's human equivalent or better, right?

Wouldn't you say that the best models do that already? Yeah, 03, if you ask it to do something complicated, it will stun you in terms of how thorough it is and accurate. So the problem is people have weird definitions for AGI. Some definitions are like it can do knowledge work at a level comparable to a human or better. Any knowledge work, which obviously can't do some stuff. Like, I don't know. What's an example?

Something that AI can't do that a human laborer could do. I can't even think of something. but I mean like lift a box like stuff like that's not knowledge work that's physical work well can't negotiate a contract for you yeah so I would say AGI is here under the more conservative definition of AGI I'm declaring it that's a decree we're actually in post AGI right now okay all right Right. So as of the 7th of August, we were in AGI, according to this podcast. Yeah. And I think that's where people go for those proclamations. But yeah, I don't know. I feel like I find it very strange that people are, it's like if you showed an AI model to someone from the 90s, wouldn't they say that's AGI?

They would say that. They would. Well, remember how we used to talk about the Turing test all the time? And then once that became conquered, was there ever a big party there? we've obliterated the Turing test. We're so far beyond the Turing test. And that wasn't that long ago. Every test. Yeah. I mean, now the tests are like really hard.

AI models are beating the Math Olympiad. You know, we're having to make up new tests. In my opinion, we're there. Like, yeah, the models will get better and they'll become more agentic and they'll become like an employee and you'll be able to set them tasks. They'll do them for a couple weeks. You'll check in with you, whatever. I think they're there. I think it's crazy to be able to say we're not an AGI.

You know the other thing is crazy? You talk to your friends at work at big companies and they have these things blocked. It's like, well, how do you do your job? Well, probably we should be more careful in terms of what we put in there. It is kind of a challenge though with like you've proprietary information. How to use AI without leaking that? Yeah, you can't put in sensitive information. Obviously, you have to be smart about that. And that's why you have a compliance policy and all that, but to just not have any access to it at all, or to use one of these internal AI tools, which are generally not very good.

Yeah, I mean, it's not like, so this is what people say. You're not going to lose your job to AI. You're going to lose your job to someone that uses AI. For sure. I mean, it's so true. For sure. How would you hire someone out of college that doesn't know how to use these things, not really good at prompting them?

If you don't use AI, you are irrelevant on the job market, in my opinion. That's what I tell the youths of today when they asked me for advice. All right. So let's kick it off. We had some good Castle Island content. Wyatt sat down with Sid Powell of Maple. They talked about the DeFi credit markets. What's been going on at Maple.

Sid's been on the podcast a bunch. Always good episodes. Yeah, Maple chewed glass for a couple of years. Real comeback story. There's three big comeback stories in Defi. Maple, Pendle, and Oiler, in my opinion. Protocols, it basically went to zero and then came all the way back. So amazing resilience.

from that team. Yeah, and I think a lot of it just comes down to the founders and the teams that they've assembled. Totally. Would have been easy to give up, that's for sure. On the deal front, our first deal is Castle Island deal. This is Bob, build on Bitcoin. They're an EVM compatible Bitcoin layer two.

There is 9.5 million from us, Rockaway X, Cathay-Lager Fund, and some others. Second one is an acquisition. Rail, which is a stable coin payments company. required by Ripple for $200 million. It's starting to get into the era of just rapid M&A. And as we talk about it on this podcast, there's a bunch of them brewing too right now. So expect to see more. Yeah, golden age of M&A and crypto, golden age of liquidity. So many IPOs coming up, we're going to see more SPACs, direct listings. People who complain about DPI, I think that is going to be

in the past now. There's just so many ways to get liquid these days. Next one up is sub-zero labs. These are the developers of a new layer one blockchain. They raised $20 million from Pantera, Coinbase, and Fabric. Then we have Leverbet. They're decentralized leverage sports betting app. They raise $3 million from blockchain capital, Maven 11, and others.

This is a bona fide category. This is probably one of these categories where you could have a dedicated fund just doing gambling, don't you think? Yeah, although I think some LPAs would prohibit you from doing that. there are so many of these gambling companies that secretly have 100 million error and no one knows about them. Yeah, it's really interesting. I mean, it'll be interesting also to see how the CFTC navigates this because there's an intersection with the prediction markets.

There's a lot of politics behind the scenes there from the gaming associations and the tribes and things like that. So I think this will be a point of contention, this whole category. So the tribes presumably don't want to open up. the gambling market. I think they would rather people come in person versus just being able to do all this on your phone. Yeah, in the state of Florida, there is one sports betting app,

which is the Hard Rock app, which is owned by the Seminole tribe. That's it. Huh. I listen to some of the Barstool podcasts, and they have this ad for some company that sells, like, lottery tickets online. I didn't even know that was a thing.

You can get, like, scratch tickets on your phone. I don't know if that's a good thing. No, it is part of the continued degradation of society, I think. Yeah, I mean, it sounds like the pot calling the kettle black to be in the crypto industry, maybe, saying like some of this stuff is not good for the world on the betting side, but it's very different. Be buying scratch tickets on your phone. I mean, people are just going to get addicted to that.

Next up, we have open mind. They're a decentralized network for robotic communication. There is 20 million from Pantera, Ribot, and Coinbase ventures. Then it's Doppler Finance. This is a defy yield protocol built on the XRP ledger. They raised $3 million from Reforge, Maven 11, and DCG. Next up we have another Dat.

This is Mill City, a Siouxey Treasury Company. There is $450 million from the Suey Foundation, Big Brain Holdings, Galaxy, and others. And the last one is Soul Sniper. This is a meme coin trading terminal. They're required by Phantom. So busy deal week, some M&A. Where do you want to start this week?

A bunch of SEC news. I guess we can start there. The SEC issued a statement on liquid staking, explicitly saying they don't view liquid staking tokens as securities, which to be honest, I was a little surprised by. I think this, I mean, first of all, this is great. I think you could imagine a world where liquid staking becomes a much bigger category as a result of the ETFs.

You know how we've talked about how the ETFs are going to work from a staking perspective where, okay, if some of this is staked, like how much of the fund is staked? And what if someone wants liquidity sooner? And the general concept with liquid staking is that you effectively batch them. So I wouldn't be surprised if you start to see some of these financial intermediaries come out with their own versions of liquid staking tokens, especially if they're not securities. Yeah, this is kind of best case. for the Ethereum and Staking ecosystems, this interpretation.

Also in SEC news, Hester Peres gave a speech this week, supporting individuals' right to privacy, juxtaposed, I guess, against the Roman Storm case. In her speech, she said, we should take concrete steps to protect people's ability not to, not only to communicate privately, but to transfer value privately, as they could have done with physical coins

in the days in which the Fourth Amendment was crafted. The American people and their government should guard zealously people's right to live private lives and to use technologies and enable them to do so, I guess that stands in kind of direct opposition to what happened in the storm case this week. Yeah, it does. And I want to talk about the storm case, but I think people should go read this. This is a really courageous, I think might be a good word for it, speech to put out there by someone that's in the government. It's not something you would hear from a lot of mainline Democrats, or Republicans, I think.

It's called peanut butter and watermelon financial privacy in the digital age points out some of the deficiencies really in the Bank Secrecy Act. I think that's where the big issue is here in my mind is that the Bank Secrecy Act to me seems unconstitutional. I think there are parts of the Bank Secrecy Act

that we should try to keep, but a lot of it is just an overreach that is getting worse and worse every year as more commerce moves online. And so cash is becoming, less of a part of the system. They also haven't adjusted the levels. So it's $10,000 is one of the increments. And if you factor in inflation, back when the BSA was put into place 55 years ago, $10,000 was a lot more than it is today. Yeah, it's equivalent of $70,000 today. That's the threshold

for a number of things, including the cash transaction report threshold. So it's very annoying that they did that. It's a trick. It's a dirty trick. There's other issues that interlocked with the BSA. That's, I think, the main one. Obviously, it came out, I think, in 71. In 76, I think it it is Supreme Court decision, US v. Miller. I'm not misremembering. That imposed the third party doctrine, which means that when

the banks, your data in a bank is not your data necessarily. The bank can freely share that without a subpoena. That's an insane really. of the law, in my opinion. I think that should be reconsidered. Patriot Act added some teeth to the surveillance regime. The fundamental problem here is that as transactions move online, they're inherently surveillable, and it's very hard for the government to resist using that,

you know? So technologically, we've been put in a place for surveillance is so much cheaper, and so then we ended up with this regime where financial transactions are deputies. ties constantly for law enforcement. It's not a good state of affairs. No, it's really not. And I think the only thing that would change it is probably a Supreme Court ruling around the BSA. I just don't see this being the type of thing that any administration would willingly step in front of. I think it's just a thorny issue. I don't think you could get 60 votes to repeal the BSA. No. I wouldn't rule it out from this current Supreme Court, but you know, how many governments have willingly surrendered power of surveillance?

No, it doesn't happen. Yeah. No, and it's not an issue that is necessarily partisan either. I think it would be really hard to get both sides to agree to anything here. But in any event, go read that speech. And yeah, you brought up the tornado cash thing. So let's talk about that next. So tornado cash co-founder Roman Storm,

he was found guilty on one of the three charges this week. It's kind of a wild fiasco of a verdict process. But maybe we can talk about that too. But he was convicted on conspiracy to run an unlicensed money transmitter. They were deadlocked on two other charges related to money laundering and one related to sanctions. So I have a take here, but curious, your view on just what happened. Yeah. I mean, I don't know.

I'm actually maybe a little less sympathetic to, the tornado cash founders than others in the crypto industry not to be called a Fed or anything. I do think developers should be allowed to build open source software, but there is also a line that can be crossed when you are sort of knowingly facilitating illicit activities. So it's a little more blurry than I think people give it credit for. as also if you're profiting from knowingly facilitating illicit, you know, money laundering, things like that. Yeah. And I think we've talked about this in the past on this podcast.

But the interesting thing here is if you look at the two charges where they did not come to a verdict, that was around the money laundering and that was around the sanctions, like the North Korea related stuff. So he's not convicted of those. But the one thing that he is convicted of is a conspiracy to run an unlicensed money transmitter, which he was running a smart, he started a smart contract. He didn't start like a FinCEN overseen centralized institution. And FinCEN also has guidance that open source code is not in violation of the money transmitter, or doesn't need to fall under the money transmitter process. So I look at this and just say, this case is going to be one.

on appeal. I think it's kind of a slam dunk. You have one part of the government saying that this is fine. You have another that just helped convict this guy. Yeah, I think that on the facts, the court's interpretation is wrong. Finson's made it clear that they don't consider this on licensed money transmission. So I think the court is operating on an outdated view of what FinCen thinks. So I think it actually should be overturned on appeal. Yes, I think he's facing five years, but again, he'll probably win this on appeal. I also wonder if maybe there would be a pardon involved. I don't know.

If he wins it on appeal, that's actually a pretty good precedent to have in the industry is that just developing code, you can't be a money transmitter. That is the interpretation. So we'll see. We'll keep tracking this. I'm sure a lot to come on the case. By the way, Brian Klein from just looks like a great lawyer, huh? Yeah.

Wasn't he one of our very? first podcast guest. Am I remembering that? He's been on the podcast. Yeah, he's been on the podcast before. He said some really high profile cases. So at the presidential level, Trump is expected to sign two crypto-related executive orders. I thought these were actually going to go out today. I don't know what happened. Maybe they did sign them and we didn't see anything about it. The first was aimed at bringing into debanking. And the second was about allowing individuals to put crypto, private equity interests and other assets inside their 401ks. Pretty interesting stuff. So I think the debanking stuff we've probably beaten to death, but this is great. And, you know, Trump was on CNBC talking

about JPMorgan and Bank of America debanking him personally. So we just need a better framework there. And we can't have, I think ultimately a lot of this debanking comes from, you know, people inside the executive branch of the government leaning on some of the banking regulations. regulators who then lean on the banks. And so I have a lot of disdain for some of the banks that debanked a lot of our companies, but I kind of get it. I mean, they were getting leaned on by the highest of the high echelon in the government. The second order around just alts in the 401k channel, I think this is a real interesting development. I think this is actually going to have a seismic shift on private equity, venture capital, private credit, especially.

I almost feel like the crypto side of this is the smallest impact. I think you're just going to see way more products in that 401k channel. Yeah, so I've read the EO on debanking. It might change. I've read a draft. And I have actually some cautious words to share regarding that EO specifically. The debanking EO mainly targets and focuses on the bank. which you might think makes sense because they are the instruments of debanking.

But as you say, it's not necessarily the bank's fault. You can't really contradict your regulator. You just can't do it. If the regulator asks you something either formally through a letter or informally, you kind of have to do it. So it's going to be difficult to compel the banks to bank clients that they don't want a bank. Banks have a lot of reasons for debanking. There's operational reasons, and then there's the more insidious political reasons. Operationally, a bank should be allowed to fire someone as a client or choose

to not onboard them if that client's too costly to maintain, or it's just a bad client, right? They're private businesses. They're kind of part of the government, but they're also not. So I think anything that compels a bank to bank anyone in their service area, for instance, there was a draft piece of legislation around this. I think that's going to be really hard to enforce. I think the banks won't like it. I think it would be hard to codify that legislatively. How should you actually address debanking?

I think you have to focus on the regulators. I have a few proposed fixes here. It's not just me that's proposed. It's other people like. Nick Anthony at Cato, Austin Campbell, in his congressional testimony. These aren't necessarily original to me. But I think a smart way to do it would be eliminate reputational arrest from bank supervision, which is basically already done, which also, to its credit, the order does do that.

So that's great. The second thing is to allow more banks to exist through just opening up the bank charter process. That's also underway. That's great. That creates a market mechanism whereby banks that don't serve a specific industry, let's say crypto, there are new banks that emerge, that are boutiques that focus on that. So it's a better mechanism than forcing banks to take on clients they don't want to take. You just allow, you know, let's, okay, so Alex Jones gets debanked from all the major banks.

What should be the solution? So you go to Chase and say, you have to bank Alex Jones? I don't think so. You let the Patriots Bank of Arkansas or whatever be formed, and that's what they do. They serve disfavored individuals, right? So I think that is a better way to do it. And then there are transparency mechanisms. You could insist that communications between regulators and the banks become public,

maybe not immediately, maybe with some latency. And you could also ask the regulators hand down their communications in writing, as opposed to informally over the phone. I think if you did all those things, the regulators aren't going to risk these political campaigns to debank certain industries or individuals because it would be exposed. Yeah. So I think that is a much more elegant way to solve this as opposed to just demanding that

the bank's platform all clients. Yeah. I think that's spot on. I mean, the biggest thing in my mind is the transparency and the fact that this shouldn't just be a phone call. And so every bank executive that we've talked to that's been involved in this, has told us that it was communicated on the phone. It is really hard to prove that it happened.

You can prove that you had the phone call, but it's his word against his word. Yeah, and that's why the reporting on Operation Chokepoint 2 put it was so challenging because we talked to a lot of bankers that told us, we were told to do this by our regulators, but there was no paper trail. And it was like pulling teeth, getting the information out of the FTIC,

Coinbase had to sue them. FGIC eventually released some documents. The Fed has done nothing. No one subpoenaed them. They're a total black box. We don't know what the Fed did. It's impossible to get information out of these agencies, especially the quote-to-quote independent ones. It's just not a good state of affairs. And I understand why these communications are confidential. The regulators don't want to spook the market by telling everybody, hey, this bank is impaired. I think they don't want to trigger a bank run with their communications, there are ways to do it. You could say, if the issue is resolved, then you release communications. If a year passes or two years past, you release communications. Anything would be better than the status quo, which is total secrecy. It's meant to protect the

banks. It protects the regulators. So we'll see what comes out of those EOs. Maybe we'll get them today. Maybe it'll be a Friday thing. In other news, CFTC acting chair, Caroline Pham, she announced that the agency is working to enable spot crypto trading infrastructure. So basically, it looks like, you know, the market structure bill, CFTC regulated exchanges would be a thing. And the CFTC would have oversight of the crypto commodity spot market. So it looks like work is underway, which is good. Next up we have the SBI holdings in Japan. They're launching two ETFs. The first offering dual exposure to golden Bitcoin. And the second offering dual exposure to Bitcoin and XRP.

SBI has been like big in XRP for a long time. I think they were one of the early investors in Ripple. We've seen these dual things. They're actually pretty popular, I think. Like Bitcoin and Eith or Bitcoin and gold. You know how certain bands are big in Japan? Yes. Peter Frampton infamously was really big in Japan.

Do you know that about him? No, I didn't know that. It's kind of funny, right? It's like, why would he be big in Japan? Like, I like Peter Frampton. But what is it in his music that appeals to the Japanese sensibility? I couldn't tell you. No idea.

But when he went to Japan, huge sold-out stadiums. There's like a bunch of bands that are big in Japan. XRP, big in Japan. It is. Yeah. There's other stuff like that, too. Cardano is really big in some random countries, right? Africa, I think.

right yeah I don't know how that happens I guess it's just marketing next up in news J.B Morgan has appointed Kara Kennedy to be the co-head of their blockchain division Kinexas which so overseeing asset tokenization other blockchain related projects for the company I think we're going to see a lot more of these like head of blockchain division roles announced in the next couple of months if you're in the inside of one of these big banks and you don't have a plan right now. Now's not a good time to get one, but you kind of have to get one. That three years ago would have been a probably a better time.

Yeah, you know, it was reported recently. I think that JPM would allow some of its clients to, was it, borrow against the Bitcoin holdings? Yes. Yeah. So I called JPM and asked them. And I don't know if that's been fully communicated internally, I'll tell you that much. Well, they have announced.

that they plan to, I suppose. Yeah. You know, people bash on JPM a lot for all of Jamie Diamond's stuff. And I think he's just said some. You were one of the primary bashers of JPM, to be clear. Yeah, I think he's just said some ludicrous things over the years about Bitcoin. And he count out to Elizabeth Warren during that hearing. So he's had some really bad stuff.

But the thing that J.P. Morgan has to its advantage is that they actually had a team building things for like the past 10 years. So all of these other banks that are starting to wake up, JP Morgan actually is in a way better position. You know, they have hundreds of people that are building US dollar on blockchain use cases for long, long time. Yeah, I'm just praying, praying that they eventually allow stable coins to be used with your Chase account or whatever. I don't think the tokenized deposit thing's going to work. I would love to use a stable. Tablecoin as an alternative to a bank wire. I had bank wires this week many that were lost within deep within the depths of my bank. And it took hours of calls to get them out. Bankwires are not going to be

a thing. And what do you think? I was going to say 10 years. But I think there's a world where bank wires don't exist in three to five years. I mean, there's nothing inherently wrong with them. As a payment type, they're actually quite good because they are final. They're a push payment. right? But the compliance architecture around them is so bad. Why do we need to do? And what is it when you call your bank and they do the voice verification where they rely on your voice to know it's you? We live in the age of AI. How are they still doing that? Anybody can clone your voice. That's crazy. That was state of the art like 12 months ago and all of a sudden it's a relevant. It's obsolete. So I do actually have another AI take, which is,

On AGI, let's say you don't accept my claim that we have AGI. What would be the real test of AGI as if AI can do something and no humans ever done, right? What is that thing? There's a number of things. What is a good example of that? Something no human has ever done in the digital context? Yeah, a piece of knowledge work that could be done that no human's done. Solve for, you know, breaking ECDSA?

That's one. That's one example. For me, it would be if they can figure out who Satoshi is. Oh, interesting. I think people know. I think humans have done that. They just, you know, like if the AI can do it, then I think at that point, we can safely say it's super intelligent.

It's more intelligent than any human. Yeah. I don't want this to happen, but I think that if you just used AI as a human being and you did handwriting, or I guess handwriting. is the wrong word, but like the syntax of the type, I think you'd probably come to a pretty good view of it, even with like using O3. This is a hypothesis of mine.

I think within the next three years, someone's going to use AI to figure out who Satoshi was. You know how there's all these, it's actually one guy, I forget his name, who's on Twitter constantly saying that Jack Dorsey is Satoshi. Have you seen this? Yeah, I mean, James and Law thoroughly debunked that. as far as I'm concerned.

Yeah, and I was pretty convinced by James and Lop's analysis around the timestamps of when the emails were sent and Dorsey being in meetings or on TV or something. So I'd buy that, but I actually think the best case to be made that Dorsey is Satoshi is what other explanation is there that Square has missed stable coins by so much? Like Square is one of the biggest payment companies in the world and they're zero percent in stable coins right now. It makes no sense. Yeah, you're absolutely right. And it's not like there have been no efforts to do stable coins at Square. They've just been overruled. Yeah, the people there have just left that really wanted to do stable coins because they couldn't do them. And so,

I can't tell you how many entrepreneurs have come to us and said we left block because they wouldn't do stable coins now. We want to build the stable coin thing. If the answer to that is, well, hey, our founder, our CEO is Satoshi so we don't do stable coins. That's a great answer. That's the best answer as opposed to the founder is irrational and for some reason does not like stable coins. Yeah, it's just, it's very, very puzzling to me. It's puzzling on par with State Street being nowhere on custody for these things or State Street Global Advisors not having a Cryptoetf. It's like, who is running that place? There will be very big businesses built. that are just cash up with stable coins already underway, frankly.

They already exist. A bunch of them are super valuable. Yeah. Yeah. There'll be a lot of these case studies, classic innovators dilemma type of stuff. Yeah. It's not like we weren't telling people at cash up or block to do stable coins.

I had many conversations with, you know, important product leaders there telling them years ago, do stable coins. You need, like, this is happening. You need to be honest. it. Yeah, it's sort of, it's like getting married to the technology in a way. You know, there was big debates around TCP versus OSI. And you had the same thing. You had technologists that were just saying OSI is just a better protocol. That's we're going to do everything there. But the market went in the TCP IP direction and the rest of history. But we just have so much

data now that, and I don't want to be mean, but Bitcoin has not won as the medium of exchange. In fact, it has lost as the medium. Stablecoins have clearly, clearly won as the medium exchange on blockchains. Bitcoin has other qualities for sure, but it's not going to be the native exchange. It's been 15 years, guys. We have plenty of empirical data, okay? Look at the data. You don't even need to have a view on the technology.

The data is so clear. Yeah, and I think the framing a few years ago was, okay, lightning payments on Bitcoin are going to be the thing. I think even if stable coins were natively issued out of the gate on lightning, that would not have worked. Lightning just didn't work. Lightning was too complex and cumbersome. Also, transaction speed alone is not sufficient to make a single L1 or L2 win. So I thought that was a fallacy from the gut with lightning. Yeah.

Remember that lightning torch thing? Yeah. That should have been the real warning sign. That was impossible to use. Yeah, we had two lightning-related portcos, and they both pivoted out of lightning wisely. And they're actually both doing well in their new sectors. So glad we didn't drink the Kool-Aid.

Okay, so I think that's it for the week. We went the entire episode without talking about dats, which felt good. There was one dat. There's the say dad or suey dad, I guess. We didn't really, we didn't take the bait. If you look at the blockworks dashboard's dashboard, which is going to, The Dats are just, they're not really doing great. Look at the NABs.

Look at the multiples to MNAV. Well, I will say that the sole and ETH MNAV multiple in the DATs on aggregate have perked up in the last two days. But generally, it's all converging to one. All right, well, glad we didn't really waste too many cycles on that one. All right, I think that is it for the week. We'll be back on Monday with an exciting podcast. everybody have a safe and healthy weekend