The Breakdown - Supply Shock: The BPI's Plan To Make America A Bitcoin Nation | Grant McCarty

Episode Date: April 16, 2025

In this episode, Grant McCarty of the Bitcoin Policy Institute joins the show to discuss his early political engagements and origins of BPI, challenges and opportunities around implementing crypto legislation, and the Strategic Bitcoin Reserve. We also delve into advancing Bitcoin as a debt instrument, the evolving political landscape, and more. Sponsored by: Crypto Tax Calculator Accurate Crypto Taxes. No Guesswork. Say goodbye to tax season headaches with Crypto Tax Calculator: Generate accurate, CPA-endorsed tax reports fully compliant with IRS rules. Seamlessly integrate with 3000+ wallets, exchanges, and on-chain platforms. Import reports directly into TurboTax or H&R Block, or securely share them with your accountant. Exclusive Offer: Use the code BW2025 to enjoy 30% off all paid plans. Don’t miss out - offer expires 15 April 2025! Ledger Ledger, the world leader in digital asset security, proudly sponsors The Breakdown podcast. Celebrating 10 years of protecting over 20% of the world’s crypto, Ledger ensures the security of your assets. For the best self-custody solution in the space, buy a LEDGER™ device and secure your crypto today. Buy now on Ledger.com. Enjoying this content? SUBSCRIBE to the Podcast: https://pod.link/1438693620 Watch on YouTube: https://www.youtube.com/nathanielwhittemorecrypto Subscribe to the newsletter: https://breakdown.beehiiv.com/ Join the discussion: https://discord.gg/VrKRrfKCz8 Follow on Twitter: NLW: https://twitter.com/nlw Breakdown: https://twitter.com/BreakdownNLW

Welcome back to The Breakdown with me, NLW. It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world. What's going on, guys? It is Spring Break Week, and that means we are checking out a new Blockworks podcast. Before we get into that, however, if you are enjoying the breakdown, please go subscribe to it, give it a rating, give it a review, or if you want to dive deeper into the conversation, come join us on the Breakers Discord. You can find a link in the show notes or go to bit.ly slash breakdown pod. All right, friends, as you know, this is spring break week here. We are down in Florida. Bringing the kids to Disney for the first time. It's a grand old time, but it means that I am not

sitting at my computer changed to the tariff and crypto madness. And so what we're going to do instead this week is preview some other great Blockworks podcasts. Today, I am excited to share Supply Shock. Supply Shock is a relatively new podcast with Bitcoin historian Pete Rizzo. Pete has been watching this space for longer than just. just about anyone has a really in-depth longitudinal perspective and cares deeply about the Bitcoin space. Now, his view of things is much wider than Bitcoin, but Bitcoin is definitely at the core of this show. And I know for a lot of you break down listeners, Bitcoin is at the core of your interest in this space as well. Hugely bullish on Supply Shock, really excited to share

this episode. Let's give it a listen. And again, go subscribe to Supply Shock wherever you listen to podcasts. Hey, everybody. Welcome to the Supply and Shock podcast. I'm your host, Pete Rizzo, the Bitcoin Historian. Next today. We've got a great program for you.

We're broadcasting from Washington, at D.C., the Office of the Bitcoin Policy Institute, one of the leading policy advocacy groups for the Bitcoin community here with co-president Grant McCarthy. Grant, welcome the show. Thanks for having me. Grant, obviously a ton of stuff going on to Washington, really the hotbed for Bitcoin and Crypto Conversation.

Maybe let's just walk back and, you know, you found me the group that's now found itself at the center of American political discourse in a couple of years, kind of gone from something that was an idea from some passionate Bitcoin people that is now you're influencing actual policy in Washington. What's that been like? And how's that journey win? It's been a wild ride. We started the Bitcoin Policy Institute roughly four years ago, something like that. And to your point, we joke in the beginning of BPI, It was essentially a glorified blog. We got together a bunch of academics and a bunch of really smart people that we thought had interesting ideas about Bitcoin.

And we're coming at it from a perspective that not just people in the Bitcoin space or people already inclined to maybe understand Bitcoin in some ways. But I guess people in Washington, D.C., people in the general public could really resonate with. And in the beginning, we were just putting out really good content, right? reports we were responding to the digital asset executive order that came out you know the Biden administration but so much this was digital right and really you're just trying to build it's like any company or brand or anything you're trying to build credibility and you're trying to show hey we're not just another group that's saying buy Bitcoin because it's going to go to a million dollars right we're saying Bitcoin is good for America and here's why so in the early

days you're building credibility as an organization and eventually I guess there's an There's a tipping point where that credibility, people start asking, hey, what do you think about this bill that we're writing? What do you think about this policy? How should we be thinking about this? And you become more involved in those behind the scenes conversations. And we're now at the point where pretty much anything, you know, Bitcoin related in D.C., two things. We're either involved in those conversations about, you know, shaping that idea or what's been

very cool to see is the ideas that we've been pushing for the. the last few years are now shaping ultimately the policy that we're seeing, right? So things like the strategic Bitcoin Reserve, things like America being a Bitcoin superpower or Bitcoin being a strategic asset, right? These are, we've been saying the same thing for years now. And it's very cool to see some of those ideas really catch hold. Well, I remember we met. I don't know if you remember this at Bitcoin 2022, that conference. And the big narrative back then was about the midterm elections and you really started to see the kind of the first politicians emerge. You got Erica Rhodes out in California.

I believe you got a few different people out in Ohio. But, you know, a few different races in the Senate in the House that were people started to kind of brand themselves as pro-Bitcoin, but it was very early. What was it like getting involved at that time? Obviously, those races weren't hugely successful. But, you know, how did that set the tone for what we're seeing now? It was really important. In some ways, we were always early in Bitcoin.

right but in 2022 we were an election cycle too early essentially right and we recognized there's going to be a carrot and stick here there's a bunch of money in this industry in the space and eventually it will be mobilized politically and so we really tried to get that ball rolling by engaging with these politicians and saying there's a lot of benefit here to being on what we think is going to be the right side history essentially and if you do this now and you're one of the first movers the a lot of people who have made a lot of money over the last number of years who'll be very happy to see that and, you know, will likely support your efforts. So, yeah, in 2022, there were a number of politicians on either side of the aisle who started to look at crypto broadly and some of them

focused on Bitcoin specifically. And I think, like you said, unfortunately, not all of those races were super successful. But ultimately, millions of dollars worth of Bitcoin and crypto money did get mobilized that election. And it was the first time that people really saw, okay, there's something here. So even if it wasn't successful in getting, you know, 20 people elected, there were so many articles written about crypto spending during the midterms. I remember doing an interview with CNBC, like their primetime program, you know, in DC on national television, right, in 2022, talking about midterm spending. And so there was interest, right? What is this crypto industry how are they going to be involved, right?

And all of that set the groundwork for ultimately what we saw in 2024, which was over $200 million in election spending from the Bitcoin and crypto industry across the presidential Senate and House races. So let's talk about that spending because obviously it's been a big political focus down, just how the industry mobilized, how much capital was deployed. I mean, do you see this being, is this money that's going to be continually put to work? Does the industry stay actively involved in? DC, you know, going forward?

Or what's that like kind of maybe bridging that process? This is kind of the constant political challenge, right? And this is unfortunately why a lot of people don't really love DC, which is the incentives are set up in such a way where if you give the groups that give you money exactly what they want too quickly, then they don't have an incentive to give you any more money, right? So there's this like trickle effect essentially where you need to give droplets here and there of good things, right? And I think that's what the current

administration seems to be doing, right? They made these promises on the campaign trail, and they're coming through with these promises. But some of these things are going to, they're going to take time, right? So obviously we have the Bitcoin executive order that established a strategic Bitcoin reserve. But for the broader crypto industry, there's still this really big fight around market structure legislation and stable point legislation. which were included as priorities in the original digital asset executive order that the Trump administration that President Trump signed. So those fights are still ongoing, which means the crypto industry is heavily incentivized to continue spending, right? I think the Bitcoin industry, the strategic Bitcoin Reserve is a huge step in the right direction.

There are still a number of fights that the industry is in. incentivized to want to be in the game. Well, let's talk about the strategy Bitcoin Reserve. Obviously, it's the big thing that's kind of dominated the psyche of the culture. How involved were you in kind of shaping this as a concept? Because it seemed to come out of nowhere. Like a lot of Bitcoin ideas, they are memes for a long time, right? Bitcoin for payments, we're talking about for 10 years.

Strategic Bitcoin Reserve almost went from being an idea that a couple people were talking about online to implement it in policy in under a year, I would say. And that's really fast, right? So how were you involved in the shaping idea? Like, where did that idea start? And maybe you can kind of take us, like, through that journey. So there are a lot of, there are a lot of things that happen in policy that people don't see. And the inception of these ideas and how they're, you know, ultimately perpetuated throughout different circles.

So much of policymaking is having conversations with people. getting them from, to your point, I've never heard of this idea to that's a crazy idea to, okay, maybe that's not the craziest thing ever heard, right? So ultimately, the strategic Bitcoin reserve idea, a number of people have said throughout the years, the U.S. needs to have a meaningful Bitcoin position, right? Sure. But in terms of turning that in actual policy, this idea got seriously. It seems like it was the Nashville conference was the big in July of 2024. That was kind of like the big unveil.

And so in the months prior, without going to In the Weeds here, there are a combination of Bitcoiners who really said, hey, this can be one of the flagship policy priorities because so many things are downstream of basically if the U.S. government owns Bitcoin, buys and holds Bitcoin, a lot of these other problems that we've seen where the U.S. government is kind of maybe acting in an actively hostile manner to Bitcoin. our theory, our thesis, was that those would essentially wash away if the United States has a vested interest in the proliferation of this technology, right? So based on that thesis, we asked ourselves, well, what's a specific policy action that could result in the U.S. having a vested interest in the proliferation of Bitcoin beyond just, hey, there's a bunch of mining happening here or a bunch of U.S. citizens own Bitcoin already, right? What's the next step? So there's the strategic Bitcoin Reserve.

I credit Senator Lemus's office for really like taking this idea and turning it into actual policy language. There were a number of conversations that were had with both administrations actually, or potential administrations. You know, so the Democratic presidential campaign and the Republican presidential campaign about this idea. And ultimately what we saw is yet now President Trump, but when he spoke in Nashville, he and his team took the idea seriously. They said there's something here. They made this policy priority. And then our work from beyond that point, now it's an idea that's in the world and everybody's talking about it. Now you turn it in a real policy action. And so we spent so much time turning this from cool idea to a legitimate policy idea that can be taken seriously at the highest level. So we've

put out, to my knowledge, the only really substantive reports on a strategic win reserve, why it's valuable for the U.S., like real deep research, white papers on this topic. And you're bringing that to all these different stakeholders in D.C. You're talking people through this. Here's what this idea means. Here's how it works. And ultimately, it results in what we saw at the executive order. But the devil's in the details.

And that's really what a lot of Bitcoin Policy Institute is. Yeah, maybe we can talk a little bit of the details because I'm curious, you know, the Bitcoin Policy Institute has become so much larger, right? It was a couple people in the early days. Now it is much larger. You have this big network of fellows. So say you have like an idea like the Strategic Bankrupt Reserve. You know, you said you worked with Cynthia Lummis's office to kind of get that into policy that she would support.

Maybe you were doing that with the Democrats and the Republicans as well. It's like who does what, like in the making of the meal? And with the BPI is sort of everybody on staff. Do you guys have to align on sort of an idea to support it? Are you supporting it even? Or is it just you're raising awareness about an idea? Well, that's really your question. a couple things. BPI is now, we're the largest cryptocurrency think tank in the U.S.

So we've got around 15 people on our core team. We've got a couple dozen fellows. They're around 40 total people who are part of like BPI broadly. And to your point, you know, what I said earlier, we started out as a glorified blog. So we've really grown and matured as an organization. And there are a lot of conversations around when you're a think tank. Our fellows say plenty of things. And they're not necessarily the views of the institutions. broadly, right? So there's this conversation where, all right, a fellow can publish something and that's their idea and we're simply platforming that idea. That's what we do. We participate in the marketplace of ideas. We're a think tank, right? But there was this decision and a lot of

conversations about, okay, at the end of the day, we are a group that thinks Bitcoin is good for America. We believe that we should have good Bitcoin policy in America. What are some of the policy priorities that we think are really important? So we fight for self-custom. We fight for the right to mine, right to privacy, right? So there are a few kind of four core fundamental tenants that we really advocate for as part of BPI. And there was this decision that had to be made of, do we put this out there and it's something a couple of our fellows believe or do we ultimately say that this is BPI's endorsing this. And so we aligned as a team.

We went through the benefits and drawbacks and ultimately the impacts of this policy and our team was aligned. the strategic Bitcoin Reserve was the highest leverage policy priority and policy play at this point that we could advocate for and that we think a lot of our other policy priorities are downstream of this big one. Are you sort of, and again, I don't know how close you are to the administration and kind of people, obviously there's a lot of overlap in the cabinet is full of people who spoke at the conference, maybe had interactions with your institution as candidates in the market glaze, whether it's Vivek Ramaswami or, you know, RFK.

or those times. So when an executive order comes out, obviously with the strategic Bitcoin reserve, are you having interaction with the administration about this? I mean, obviously, that was a unique event. It came together in a, you know, it seemed like a real-time type of way where, you know, a Sunday afternoon, you know, Trump posts on true social, you know, we're going to do a strategic crypto reserve. By the end of the week, there was a Trudgeon Bank Reserve. Yep. How are you involved in a, you know, real-time historical incident like that? My general thought on politics is essentially, well, I'm sure you face this in the media,

right? If you burn your sources, then they don't come back to you. And so that's a lot of our work. But I can talk about this without maybe naming specific names. All of this work starts one, two, three years before, right? So the people who speak at the Bitcoin conference who want to speak about Bitcoin and want to speak about Bitcoin policy, they want to make sure that they don't sound stupid, right? So obviously they're looking for groups that will help them fact check their information, help give them talking points, that type of thing.

So we're heavily involved in a lot of the political messaging around Bitcoin that you see at a number of different events, right? So we're working with these people years before maybe they get some pretty significant positions when they're first kind of dipping their toes into Bitcoin. So you build that trust, you build those relationships. And then lo and behold, President Trump is now. in office and a number of these people that we've been speaking to. And again, we speak to people on both sides of the aisle. Like we're a nonpartisan group. So we're building these inroads and relationships with anybody and everybody who wants to talk Bitcoin. Those people assume office or get into power. And they look back and they go, okay, who are the people that I trust to

give me good information? What are their incentives? I think what you see in the crypto space, right, is, and this is fine. Everybody has their own bias and their own incentives. We try to make our bias incredibly clear. We think Bitcoin is good. Everybody at our organization owns some Bitcoin, right? Like, we're not pulling any punches, right? But we're also not selling you software as a service.

We're not selling you a token, right? We're not a company who, if you change the legislation in this way, it's going to skyrocket our market cap, right? So I think there's an element of trust that's built there because of the way that we've structured our organization. We're a public charity. We're a 511C3 organization. And we're very transparent with everything that we do.

So I guess to answer your question concretely, how does this work? How do we get to executive order? We're able to get. We put a draft executive order in front of the administration that allowed them to establish a strategic Bitcoin reserve. And that's something that we had a number of conversations with people in and around the administration on what could this look like. How could this be done?

What are the stakeholders that need to be bought in? What are the details? And so I won't, you know, I'm not going to say that we're the only cook in the kitchen there. As you mentioned, at one point, there was a conversation of a crypto strategic reserve and a number of other coins that were mentioned. So clearly there are other stakeholders involved in these conversations. I think our value has always been we're a nonpartisan group. We're not a company. And we're able to help you get into like the nuts and bolts of what this looks like policy-wise.

And I think we're at that point of this administration, they're already pro-crypto. They're already pro-Bitcoin. They've said that. Right. So now they want to know how they can be as specific as possible, action-oriented, detailed as possible, and that's where we've been able to come in kind of time and time again. So with the SBR now, obviously, there's a lot of people who we have a strategic Bitcoin Reserve.

We don't know how much Bitcoin is in the reserve. We know that there's an audit ongoing. And so now there's a lot of proposals about how to make this actionable. So it's how much, how often. And how do we actually start to secure any, right? We're at the how stage of these issues. So now that we're here, where you have people like Michael Saylor, kind of calling for the administration to buy, you know,

$5 million Bitcoin. You have Cynthia Lummus with her bill to put a million Bitcoin out there. So from a BPI perspective, now that we're at the how stage, you know, do you have a specific view on the how or how do you work with the marketplace of ideas that are now trying to come to a consensus on this? because it does seem like you have 12, you know, senators or 12 Congress people who are now endorsing this. That's a start, but obviously there's, you know, 100 senators and 200-something congressmen, right? So there's a lot of consensus that needs to be built.

So how are you interfacing with this? Now are the numbers? You know, do you come up with a number and you say, okay, here's what the BPI? Thanks or like, how does that work? The way that we've approached this is a lot of our work is private meetings, conversations, You put together reports, you educate people, that type of thing. Some of the biggest value that I think BPI offers is convening spaces for a number of these ideas. So on March 11th, we hosted Bitcoin for America, which was this private forum, pretty much to discuss exactly what you're talking about, the details of what is a pro-Bitcoin America truly look like.

And from a strategic Bitcoin Reserve perspective, what does custody look like? Are we going to be using qualified custodians? I think it's a good name of it from Congress. Casa and some other people in their company. Yeah, Nathan Colley from Anchorage, right? Mike Balshue from Bitgo, right? And they're discussing who should be holding these coins, right? What should the custody situation look like?

And again, different companies and different organizations have different interests, right? And we want those to be expressed. And so we gave people a platform. We had, I think, over a quarter million people watching the live stream. The live stream was sent to a number of different congressional offices. We had a number of people from the administration, both participate in the event, watch talks from the event. So there's conversations about how much Bitcoin should the U.S. government buy. The executive order calls for budget neutral ways to buy Bitcoin.

So we're exploring what are some budget neutral ways. We've really dug deep. And we recently published a report on the BitBarns idea. Right, yeah. And looking at, hey, what are some novel concepts that can allow us? the United States to add to its Bitcoin position. So you would maybe publish here are budget-intral ways you could buy Bitcoin. Is that something you're working on now?

Yeah. And this is not just stuff that we will publish publicly, but stuff that we've been interfacing with officials in the executive branch, right, both like the White House but also Treasury and Commerce, right, the organizations who are really involved in the implementation of the SBR. They're reaching out, you know, directly asking, hey, we, we want not just like broad ideas for the United States should buy Bitcoin. They know that. There's the executive order that says, you know, explore these ways.

Now it's like, what is tactical implementation? And so we're working directly with what can that look like? There are all these details about like behind the scenes, office, you know, like congressional budget office, right? and OBM, like, they score certain essentially, like, legislative or congressional actions in a certain way on how it affects the budget. And so you're working with those offices to understand from your interpretation, from your perspective, how do you think this affects the U.S. budget, right? Like, what are your thoughts on bit bonds? How does the math work out? Those types of things. So a lot of this is working on the details behind the scenes. And ultimately, yeah, I think we're,

we're going to continue to publish novel ideas about how the U.S. can add to its Bitcoin position in a budget-neutral way. And we want to put those out there because we have ideas, but other people do as well. And that's why we host these events. And so, shameless plug here, Bitcoin Policy Summit, June 25th, it's our third year. It's going to be another place where we convene a bunch of these ideas. And we're really looking at the United States is embracing Bitcoin. Now what? What does that look like from a tactical perspective? And we want to move beyond platitudes. Like, we're past the point of, we need to, you know, protect innovation, you know, without, you know, stifling, you know, private business. It's like, let's move beyond just these

things that everybody's right. I think the question I was sort of asking with the executive orders, where does it get complicated? Because it just seemed the administration has moved incredibly fast, right? Through a number of executive orders, kind of across the board. And the industry, the Bitcoin industry has received a lot, right, in terms of, you know, what was promised and was Ross has been freed, you know, there's been movement on the Stable Coin Act and the market structure bill for the crypto side of the industry. But with the SBR, I would have assumed that there would have been a long-drawn-out process of sort of debate about whether should it happen, how it should happen. I was pretty shocked to see that within the first 100 days, you know,

it was enacted. It exists at least theoretically right now. The official policy of the government is that we're not selling any of our Bitcoin. But when people like George Selden were coming out and entering the dialogue or maybe more part of the general economics framework and airing ideas. Nick Carter was publishing because of criticism. I expected that period to be longer. Is that what's going to happen now, you think, with some of these details? Or when does it become what we associate with the government, which is, you know, things take a long time? The executive orders are a sign that the public debate is more or less over, right?

Actually, I'll caveat that the Bitcoin Act, which is moving through Congress, right, that Senator Loemmiss is introduced in the Senate, there's a companion bill in the House from Representative Begage. There will be public debate and congressional debate on moving that legislation forward, sure. But the executive order is a sign that, hey, we've heard from the voices publicly, right, both for and against, and we've decided this is a strategic priority for this administration. And now what that means is the people whose opinions really, matter are the people implementing it and the people behind the scenes. So to your question of where

does this get complicated, where does this get a little hairy, you need buy-in, ultimately from the agencies that are going to be responsible for buying all this Bitcoin, right? So what that means is Department of Treasury, for example, right? Secretary Besson, yeah, said, needs to feel comfortable with whatever that mechanism is of buying and how it's going to to impact global markets. Obviously, right now we're in the midst of a tariff war, which has its own millions of, I guess, impacts and externalities, right? So it's balancing a Bitcoin buy in the midst of everything else that's going on in the world. And ultimately, like, we can be involved in those conversations. Other people can be involved in those conversations. But you're

really going to need buy-in from people at the highest levels of these agencies who say, I feel comfortable with the benefits and the risks associated with this amount of Bitcoin purchase. And now we're going to do it. Right. So we've won the public battle, right? Like that's saying the public debate, the debate of ideas from March of 2024 to now, right, a year to your point of like the SBR kind of being accepted to where we're at now. Like we've done that part.

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Ledger's newest devices, the Ledger Stacks and Ledger Flex, introduce the world's first secure touchscreens, making it easier and safer to manage your transactions and assets. Alongside Ledger Stacks and Ledger Flex, the company also launched the Ledger Security Key app, offering a safer alternative to traditional passwords and enhancing your digital security. If you are in this space, you owe it to yourself to at least check out Ledger and their ecosystem what they have available to you. So thanks once again to Ledger for sponsoring the show. So I'm curious with the maybe talking more about the general cryptocurrency acts that are in place, maybe specifically the stable coin, Bill, the Genius acts. So this is something that's kind of

on the peripheral Bitcoin, right? It doesn't involve Bitcoin as a technology per se, but it has huge impacts on the marketplace, right? Obviously, you know, if you think about the market for US dollar stablecoins, you know, this has implications for America's kind of, you know, battle with China on the global stage for dominance as implications for developing nations that are you know may be dollarized by kind of these exports. Is this something the BPI looks at or is this just viewed as kind of it's not a Bitcoin thing and so we don't take a policy view on it? Like how do you think through something like the JuniSax? I think the primary value of the Bitcoin Policy Institute and one of the reasons that we do get along with all of the crypto groups in DC is

we have only wanted to differentiate different types of cryptocurrency conversation. So creating the Bitcoin Policy Institute allows there to be debates about Bitcoin policy, which allows there to do debates about stablepoint policy, which allows there to be debates about Defy and meme coins and separating those. When we first started this organization, there was almost no differentiation between any of that. It was all crypto. Crypto was this monolith. And if you didn't like Shiba Inu coin, then people thought that was Bitcoin and it was all bad, right? So we want to differentiate those conversations. I think largely, you know, we've been successful in doing that. And the stable coin differentiation has also been successful, right? And from the beginning of BPI as well, we've said that a combination of Bitcoin and dollar-backed stable coins will ultimately, like, be good for the United States, right?

So we definitely are like tuned into those conversations. That said, there are, it's not a lot of. necessarily BPI's place to have a strong vocal, you know, public opinion on stablecoin legislation. We think stable coins are good and we think ultimately that like competition is good. And we also want consumers to be safe and be able to use these things in a safe, you know, transparent way. So we definitely like we have conversations with some of these offices. They'll reach out to us and ask our thoughts on the bills. Some of the offices involved in the stable coin legislation reached out to us, you know, in the process of writing these bills and asked,

hey, what do you think? What are your thoughts about these things? And at the end of the day, we do lawmaker education and all sorts of issues, including stable coins. But like, are we in the stable coin fight, if that's your question? Not really, right? I believe if you do one thing, and you do one thing really well, like that's a path to success. And that's really been our kind of hyper-focus of BPI. Well, maybe to ask this question another way. seem like it's obviously has impact for prioritization as well, right? Because I do get the sense from the crypto industry, right? When Brian Armstrong is on CNBC in Washington, D.C. with his suit, he's talking about market structure and staple coin bill, and you're maybe not hearing him

talk about the strategic Bitcoin Reserve, where that piece of legislation. So is there sort of an effort from the VPI to kind of make the SPR more of a priority? Do you see the crypto industry as maybe thinking that it's less of a priority than the stable coin in market structure bill? Like, How does that work? I think the latest Bitcoin executive order that established the reserve was a result of a number of people, not just us, making the case that the SBR was the easiest way to put points on the board, right?

Because it was the thing that the most people in the crypto industry could get behind. The reality of the market structure and stable coin legislation is as much as a number of people in crypto would like to say they're a unified front, there are a lot of players who are competing and trying to get legislation. Right, you've got the offshore providers of stable coins versus the hansshore providers

or stable coins. You've got the different token providers that want different classifications. Exactly. There's a lot of infighting. And there's a lot of money being spent and there's a lot of time and energy being spent determining, you know, those battles. So our case has always been the SBR is separate from that. Just about everybody agrees on this.

Do this. Do it well. And you can continue doing that well and not be at the expense of these other two things. These are going to be contentious no matter what market structure and stable coins. This thing doesn't have to be. So do this and focus on this. And so the White House is still in a position where they've said that the SBR is a priority. And, you know, Bohinds has come out and said publicly, he says, you know, how much Bitcoin do we want?

You know, it's like asking how much money we want, how much gold we want, right? They're looking actively about ways that they can add to the U.S. Bitcoin position. And I think that frankly, you know, to be very candid, I think the mistake that the crypto industry is making is like thinking that these are zero-sum games. And it's almost this self-perpetuating like prophecy, right? If you say that market structure is zero-sum with SBR and you tell a bunch of people that and then you make it contentious, well, now it feels that way. And in reality, you should, I think people should be looking at it as ever.

SBR and, right? Or even vice versa. I'll say market structure and SBR, Stablecoins and SBR. The last thing I'll say is I think there's just a lot of defensiveness in the crypto industry and a lot of frustration that is coming out in some not so great ways. And what I mean by that is when we started the Bitcoin Policy Institute, stable coin legislation and market structure legislation were being talked about, like all the back in 2021, right?

So these have been congressional conversations ever since we started this organization. And every single year, we're told, this is the year for stable coin legislation. We think we'll get it through. Mark structure has been for a while, yeah. Yeah. Like, so I get why people are frustrated and why they go, we just need to get this through because they're sick and tired of hearing that. Well, I listen to the, you know, the testimony and that the SEC had where they're talking

about securities and commodities, and they're still, I mean, these are obviously like lawyers with degrees who are giving their thesis on the nature of what's a commodity and what's the security. So it does feel like that conversation is going to continue to be from the first session that I watched, it didn't seem like there was anything resembling unity there. Yeah. No, you're spot on. Like, this is the thing. There's not consensus on what some of these terms mean. And I think that was the goal of Fit 21 from my perspective in the House.

You know, the market structure legislation was, honestly, I think a lot of members realized, hey, this is imperfect. but they felt like they just need to make a choice and stick with it and just move something, right? And so it attempts to define what a digital commodity is. And anytime you attempt to define something, like you're making choices and now you've made that real, right? I think when I look back at Gary Gensler's tenure in the SEC, one of the things that I noticed in real time is probably one of the reasons that. that he didn't come out and say, here's what a digital security is, right? He just left it up to the Howie Test or he didn't say that all these cryptos were securities or anything like that. It's because once you put that in writing, once you make it a rule, once you make it law, right?

Like, you are now the person who has drawn the shape that people know where to draw in. And if anything that's drawn in that shape ends up hurting people, like you're the one who made the rules, right? So it's almost better from an enforcement perspective if you're the person at the top to leave it amorphous because then you get to decide in real time, ah, this crossed the line. What line? Well, I didn't tell everybody exactly what the lines were, but it gives you almost carte blanche to like decide in real time this was bad. And as soon as you make it real, you're going to have billions of dollars worth of capital. Oh, what wants responsibility, right? Exactly.

So maybe let's apply this to another idea, which is the bid bonds. This is new. This is exciting. It came out and had this big debut at your last conference, you know, where I think Newmark Capital's CEO came and gave that presentation. This does seem like something where there's like a responsibility here. You're tying now the U.S. debt markets to Bitcoin. That's a big idea. Even for someone like myself who's been in the industry for a long time, you know, I saw that idea initially and I'm like, okay, this is this is a big and interesting idea.

And beyond my initial scope of comprehension, why this would be, you know, interesting. I've dug into it. You know, I think I understand now the market for treasuries, maybe how Bitcoin offsets that. But this is a big idea. Where do you start with something like, you know, with a Bitbond with congressional and senator signatures are just really trying to even wrap their head around Bitcoin or buying Bitcoin. Now you're already, okay, let's, you know, have a percentage over 30 years of the U.S. debt. And, you know, you're talking about how much this stuff pays out.

So, yeah, where are you at with Bitbonds? Some of this, I guess actually to the meta question of like, why do we, why do we, why? do we do this, right? Is because there are a number of people who go, all right, I get it. Bitcoin is good. We want Bitcoin. What now? Right. So you need to advance that policy conversation. Otherwise, it grows stale. Otherwise, people get bored. Right. We live in a world where like every week, there's a new issue to jour. Every day, there's a new issue de jour thing that that catches people's attention. Right. So how do you continue capturing people's attention? Well, you need new policy ideas that are more than just Bitcoin is good. Right. So that's important.

And then the second layer of that is when you continue advancing the policy conversation further and further down the line, you actually end up, in my opinion, you're owning the frame, right? Because the frame now is, yes, Bitcoin is good. Now what do the details look like, right? So people who aren't caught up on Bitcoin is good, right? They see that we're discussing bit bonds. They see that we're discussing budget neutral Bitcoin buys, all these different novel ways of getting Bitcoin. And they're so far behind, right? Forces people to catch up in that conversation. And I think we've seen that now in conversations with members of the House and the Senate, right? Is we're talking about things like the Bitcoin Act, you know, and a year ago, this is like a crazy idea, right? I'll be honest, with BitBonds, it's like even I think the idea is kind of crazy. Like I'm like, I'm looking at it and I'm watching this presentation. I'm like, this is really compelling and interesting. But like, there's got to be some downside here that nobody's talking about, right? Because I don't know.

I mean, we're, it seems like the debt markets have existed for a long time with. fee-out currency, we're going to add a little Bitcoin in there. And then, I don't know, to me, even it seems very foreign. It's like, even I have to catch up to that idea. For sure. So are you still debating, like, internally with a BPI about BitBonds or is it, is it, do you like, bit of Bonds? Definitely. I mean, I, you know, I personally am, like, very excited by the idea of BitBonds. We just put out a report, you know, about BitBonds and where we really go, like, deeper into this idea, what can it look like. We do a little bit of modeling, those kinds of things. But ultimately, no, this is, this is still a new, is.

still a new idea. The basic idea is just that the demand for U.S. debt is declines. And so the idea here is that taking micro strategy is done in the corporate debt market and applying Bitcoin, there's a chance to do a micro strategy type play for the U.S. government. Is that correct? More or less, yeah. And I think, again, if the administration says that buying Bitcoin is a priority, then you're aligning to strategic priorities here, right? So that's the part to me that makes it, it's not just this, like, crazy idea that we threw out of nowhere, right? This is, how do we add to the U.S. Bitcoin position? We already said, we have said now in legislation that Bitcoin is a strategic asset, right, and that there's first mover advantage in, like, buying Bitcoin now.

So if we accept that, then, you know, you're really lessening the risk that could maybe be associated with this if we were in a position where the United States didn't view Bitcoin. But on debt markets, ultimately you're saying, you know, buy our debt and we'll pay you back, or there's a trust, there's a very implicit trust relationship with other nations. Yes. where they're used to buying our debt, they're used to being paid on that debt, and this has gone on for centuries, right? This is like an age-old process, right? So now we're adding Bitcoin, and that's just, that's going to work.

Like, you know, I don't know. I don't know how to ask that question in another way, because to me, even, it seems so far. And I'm just getting an understanding acclimated to, like, how debt markets work. Yeah. So, no, this is, I mean, it's a great point. And it really comes down to what I said earlier, which is like, there's the public debate component of this. And there are going to be a lot of people who are like spooked and freaked out by this. But ultimately, like, what really matters here is there are a few people in the administration who are going to make this decision.

Right. And if it fits within their plan and their strategic priorities, then they're going to move forward with these ideas. And so the strategic priority is Bitcoin and buying Bitcoin. How do you test something like a bit bonds? So you make one of them? Like I don't even know how to... Maybe these are two or two questions. No, no, no, it's fine.

I mean, yeah, there are certainly like pilot opportunities, you know, for... Is this like what Alsacea were you did when they tried to kind of raise, you know, something with the bonds? To an extent. But like, there are a number of different ways that this could be structured as well. And so this is why, like, one of the challenges of talking about, even like BitBonds in this way is, I think about it kind of Kind of like the way that we talk about CBDCs sometimes, right? Central Bank digital currencies, it's like we talk about, again, I'll use this word. We talk about these things like they're a monolith.

And in reality, like there are thousands of different design choices that determine what the CBDC looks like. So in the same way, I think, you know, Bitbonds, it's like there are ways that it could, you know, have a significant component of risk tied to it. There are also ways where, you know, the percentage of Bitcoin that you're purchasing is like significantly smaller, where the initial rollout is significant. significantly smaller, right? So could you do this in a way where, you know, you test this out and there are a small number of buyers? And even if, you know, I think if something like this is going to be implemented, right, obviously you have to account for the worst case scenarios, or the scenarios where, you know, the Bitcoin component of this bond, you know, does not pay out. And so, yeah, you're finding buyers that are comfortable with that risk. You're making sure

that United States is in a financial position to, you know, assume that risk. So yeah, I don't think this is like an all or nothing, right? Like where we do bit bonds tomorrow and you have a hundred billion dollars worth of capital, you know, flown. You know, you have a hundred billion dollar sale on day one. But again, devil's in the details. And this is like, this is stuff we're actively like working on right now. This is the exciting part. We get to go back and forth with treasury and go, what do you think about this, right? And you're working on big problems, right? The treasury market has problems. The national dad, Cynthia Lemus, has been talking about this pretty actively. Getting people to think,

that it's a problem and that it's addressable is a new, even maybe a new concept, right? That's such a good point. Yeah, the idea that, like, the debt is the thing that we constantly talk about, but then it also just gets, the can gets kicked down the road. And so even the idea of, like, bringing up, like you said, this is a problem that can actually be solved, like, that is pretty novel to a lot of people. I mean, Social Security is a great example of this, right? We've known for 50 years or however many years that, you know, there's this impending doom

to Social Security, the math was not adding up, right? But the way our political system words, right, for two, four, six year election cycles, nobody's incentivized to be the one to, you know, raise taxes or lower benefits or whatever the solution, you know, solution to Social Security is. So they go, we'll deal with that later, right? Nobody wants to take the heat for short-term pain for long-term benefit. So we're in a similar situation. situation with the debt, right? And ultimately, like, the big thing that we're trying to help people realize is, hey, you have this tool in your tool belt or your toolbox, right, Bitcoin, that you haven't thought about as a tool before, that you haven't had as a tool before,

what are some novel ways that this can be utilized? And so the debt is like the big problem, you know, that we're thinking about. But yeah, I mean, Social Security is another example. There are people who have posed that idea, you know. It's just interesting to me that the Bitcoin conversation is now so deep in U.S. fiscal policy. Yeah. You know, it's just in a level that I could have never even imagined like three or four years ago. And also how quickly that's happened, right? You're really talking about like the national budget on a long-term scale, some of the largest problems in America, you know, ever, right?

Like, you know, as a nation, we're only like, you know, I think we're coming up on what, the vice, the $270, 250, you know, so social security. These are some of the biggest problems like America has ever faced. Now, you know, the Bitcoin Policy Institute, you know, is now tackling them. You're working on that. Like, you were trying to solve the national debt. Like, how does that, do you take about that at all? Or like, how's that? Yeah.

Yeah, yeah, yeah. At a certain point, right, like, go big or go home, right? Like, we really believe in Bitcoin wouldn't be doing this if we didn't. And then one of the exciting things about being an organization like this is we have the freedom and the opportunity to tackle really large problems. and yeah, when you see an opportunity, you know, go for it, essentially. So this political moment is is ripe for ideas, ultimately. And I think a lot of people are frustrated by the status quo.

They're frustrated by this like slow march toward death that a lot of people seem to be, you know, recognizing. The American decline, right? Yeah. So, so why not, right, explore huge ideas? Why not look at some Hail Mary opportunities, right? Because the alternative is slow decline, right? And there are going to be some people that that really freaks out. There are going to be some people who go, you know, I just don't want to think about that or deal with that.

We're going to force those conversations because to your earlier point, not enough people are even having those conversations. So even if even if some of our ideas never proliferated, right? It's like we have the strategic Bitcoin Reserve, but like even if that didn't happen, we forced Bitcoin to the forefront of the conversation as a strategic asset to the United States, which has all of these effects about the way that we're even talking about Bitcoin, right? We went from, it's a threat that we need to ban. Like, that's why we started BPI. It's because that was the prevailing narrative in Washington, that Bitcoin is scary, bad people were using it,

and there were lawmakers who were actively calling for a ban, right? That was not that long ago. So for the conversation to have shifted to this language of strategic asset, that is valuable in and of itself, regardless of, you know, if Bitcoin solves, you know, the national debt problem. Maybe it does, maybe it doesn't. But, you know, it's our perspective that, like, Bitcoin is valuable, frankly, regardless of that. And embracing it is going to lead to good, regardless of where on that spectrum, the United States embraces it. Well, I've got to hear your personal question before we wrap up. You've been in D.C. now for

a couple years. How is your perception of politics, you know, change since you've been here? You're obviously a Bitcoiner. You had, you know, you had big ideas. You know, you've now been, this is where it happens, right? You're in the rooms where it happens. You know, what, what are your take was, I guess, or, you know, how is that experience with Brigham? Oh, man. I tell people, like, depending on, depending on when you catch me, on what day, I'm either. How optimistic you are, yeah. Yeah. And some days, I'm really jaded. I think, unfortunately, some of the worst parts of politics and policy, like we face them all the time. And unfortunately, there are a lot of self-interested people.

There are a lot of just bad things that happen in politics and people who are, like I said, just looking out for themselves and not necessarily, you know, looking out for their constituents or doing what, you know, they actually think is best, right? They're following the money or whatever it is, right? And there's some days where I get very jaded by that. And then there are other days where I go, okay, we understand this game essentially, the way that the world is. We understand, and I think Bitcoin is a crash course in this, that if you understand people's incentives, then you can work with that, right? And you can at least find ways for people to work together.

And so recognizing that, right, it at the very least helps me feel and our organization feel, like we have, we have agency. You know, one of the things that we say at BPI all the time is like, you can just do things. And the way that our Democratic Republic is set up is that there are a number of levers you can poll and a number of people you can speak to and that if your ideas are good enough and you get enough money involved and you host enough events and do enough podcasts, right? That crucial part. The crucial part.

No, no. And like I say that as a half joke because the reality is like people want eyeballs. People want votes. People want to get reelected. People want their name to go down in the history book, right? So it's all part of this like thing. We're in a vacuum. You can eye roll about any, any individual one of them. But together, it's actually a system that more or less makes sense. And that allows you to have a pretty insane amount of impact for, again, what a few years ago was a glorified blog. Well, yeah, it's already been, you know, I would say for that you've been active for three or four years, like for you to have this success where, you know, you're, you're, you're. impacting policy that's actually happening, being enacted is just so impressive, right? What the organization has done, and even the environment,

because there were all these other crypto-type firms that were doing it. And as you said, like the inability for that, some of that stuff to come for fruition. So maybe we'll kind of tie it up here. You know, everybody's looking towards August. Bernie Moreno came out, said he wants to get things done by August.

Bill Hines is kind of echoed this. This is the administration. You know, drumbeat right now is, Market structure, Genius, Act, SBR by August. Your thoughts, is that issueable? Does that happen? We will see. You know, I, this is, and now you've caught me, you know, maybe I've turned a little more jaded.

I'm a little more jaded. I've been hearing since 2021. This is the year for stable coins. This is the year for market structure. So I'm personally at the point where I'll believe it when I see it. Luckily, we do have, you know, a lot of, like, really great people in Congress who are, who are pushing on this really hard. And they're spending a lot of time and energy. moving this thing forward. Obviously, there's a lot of other stuff happening in the world right now.

And that's the challenge of DC constantly. You were constantly at the whims of wherever the wind is blowing. And right now, the wind is blowing really hard. And it's not necessarily blowing in a crypto direction. But a week from now, that could change, right? So I don't know. We'll see. We're going to keep pushing on a number of things that we're going to keep pushing on. I think the thing to remember is like democracy, like democratic systems move slow, move slowly on purpose, right? This is the whole point of our system, checks and balances, things like that. The executive orders and some of the things that have happened, to your point, happened really fast. And that's awesome.

We've already got Trump today talking about replacing Jerome Powell. Yeah. I mean, things are moving incredibly fast. And that's a result of a number of different things, you know, second term. So many different things are leading to things moving this quickly. But I always zoom out and I remind myself Bitcoin is what, 16 years old? Right. Yeah, barely.

Yeah, barely. So the idea that our organization has been around for, you know, a quarter of the time that Bitcoin has been around and we're already here in these conversations. And even the rest of the crypto industry, it's like they're not 16 years old, right? they're what half that age right so so eight years into these coins and tokens and companies existence and they're having like senators and house reps at the highest levels of leadership trying to move forward their legislation um that should be viewed as an insane win rather than oh it's taken another few months you know like we we need to remind ourselves not everything is like TikTok or Twitter where, again, the issue changes every week, right?

Policy conversations and industries, frankly, like this, like, this is not, this is not common for industries to move this quickly and have legislation move this quickly. Grant, appreciate your time. Where do people find out more about the Bitcoin and the Policy Institute? BTC Policy.org. That's our website. Twitter at BTC Policyorg. We've got our Bitcoin Policy Summit, June 25th.

in Washington, D.C. Yeah, just go read our stuff. It's pretty dense, but it's a good time. All of our fellows, they're doing podcasts. You should do some podcasts for them. And you can contribute you right as a fellow? Like you're accepting fellow? If you're somebody who's got interesting ideas about Bitcoin and you're looking for a place

to platform those ideas and to go deep, like that's what we do. So please reach out. Come to our event in D.C. in June. We're going to be doing a bunch more stuff. but if you're interested in Bitcoin policy, it's in our name. Check it out. If you're still watching, smash that subscribe and hit that like button. If you're on X, feel free to give us a retweet or comment. This has been Grant McCarthy, co-president of the Bitcoin Policy Institute.

It's been Supply Shock, a Blockworks podcast.