The Pomp Podcast - #482: Senator Lummis on Bitcoin and Government

Episode Date: February 1, 2021

Cynthia Lummis is a United States Senator from Wyoming. She is the first Senator in history to own Bitcoin and has become a strong advocate for the digital currency.  In this conversation, we discuss her passion for Bitcoin, how to educate Congressmen and Senators, the geopolitical landscape, government sentiment on Bitcoin and CBDCs, and what people at home can do to help. ======================= Choice is a new self-directed IRA product that I'm really excited about. If you are listening to this, you are likely part of the 7.1 million bitcoin owners who have retirement accounts with dollars in them, but not bitcoin. I was in that situation too. Now you can actually buy real Bitcoin in your retirement account. I'm talking about owning your private keys and using tax-advantaged dollars to do it too. Absolute game changer. https://www.retirewithchoice.com/pomp ======================= The Rodman Law Group is dedicated to helping entrepreneurs realize their vision by helping them operate defensibly in sectors where laws and regulations haven’t caught up to the realities of the industry. The Rodman Law Group’s legal expertise combined with its understanding of blockchain technology makes it the ideal legal service provider for the industry. http://www.therodmanlawgroup.com/pomp

What's up, everyone? This is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Let's kick this thing off. Cynthia Lummis is a United States Senator from Wyoming. She's the first Senator in history to own Bitcoin and has become a strong advocate for the digital currency. In this conversation, we discuss her passion for Bitcoin, how to educate congressmen and senators, the geopolitical landscape, the government sentiment on Bitcoin and CBDCs, and what people at home can do to help. I really enjoyed this conversation with the Senator, and I hope you do as well. Before we get into this episode, though, I want to quickly talk about our sponsors.

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understanding of blockchain technology that makes them the ideal legal service provider for the industry if you go to the rodman law group.com slash pomp you'll get a discount on their services Again, therodmanlawgroup.com. If you need help in the blockchain, crypto, or Bitcoin space, head on over to therodmanlawgroup.com. All right, let's get into this episode with Senator. I hope you guys enjoyed this one. Anthony Pompliano is a partner at Morgan Creek Digital. All opinions expressed by Pomp or his guests on this podcast are solely their opinions and do not reflect the opinions of Morgan Creek Digital or Morgan Creek Capital Management. You should not treat any opinion expressed by Pomp as a specific inducement to make a particular investment or follow a

particular strategy, but only as an expression of his opinion. This podcast is for informational purposes only. All right, guys. Bang, bang. I have Senator Lummis here with us. Thank you so much for doing this, ma'am. My pleasure, Anthony. It's great to be with you today. For sure. For those that don't know you, maybe let's just start with your background before you became a senator, kind of where did you grow up and what did you do? Well, I'm a ranch girl from Wyoming. I was born near Cheyenne and ranch there to this day with my brother and my sister. I also have a farm over on the western side of the state. We have hay and cattle. And then in the fall, we take in a lot of horses that are coming in off

the pack strings that are on the Bridger-Teton National Forest in the summer. So my background is primarily ranching, but I also have a law degree. I practiced law for nine years and have spent a lot of time in and out of politics. I was in our state legislature, worked for our governor in Wyoming, was state treasurer in the U.S. House, and now I'm in the U.S. Senate. Doing a fantastic job. You've got a passion for Bitcoin. Where did that come from? When did you first come across Bitcoin and where does that passion really kind of come from? I was state treasurer in Wyoming during the first part of the 21st century. So I was always looking for a store of value. we have in Wyoming permanent funds that are based on extracting minerals and oil and gas from the ground we take a severance tax it's called from minerals and invest it in a permanent fund and

the concept of that permanent mineral trust fund is that when the minerals are gone we will still have revenue left over because we invested the proceeds and continue to invest them in a diversified asset allocation. So while we're taking something valuable from the ground and converting it to cash, I wanted to convert the cash into things that produced income for the short term, but also produced long-term value, just like those minerals did when they were in the ground. So I was always looking for things that were a good store of value. The more I learned about Bitcoin, the more the nomenclature of Bitcoin reminded me of our permanent mineral trust fund. Bitcoin is essentially mined. There will only be 21 million Bitcoin mined. And because

it is a finite resource, I see it as a very good store of value. So I bought a few Bitcoin in 2013 and 2014 and have continued to pay attention to it ever since. And of course, we've seen it, of course, be volatile going up and down, but I still think it is an excellent store of value and that it should be part of every individual person's investment portfolio. Now, if you look at your average blue-collar worker, the guy or gal that's out there laying bricks or building the apartment across the street from these Senate office buildings, if they invest just in the U.S. dollar,

The dollar is designed to be worth less every year. And so if they're saving now, let's say they're in their 20s or 30s now, when they get my age, that money that they have worked so hard all their lives to save, if it's denominated in U.S. dollars, is not going to buy as much as it does now. So trying to help people find things that will capture the value, capture the value of their hard work now, and make it available to them in the future when they're my age, when people start to retire. That's something that makes me excited about being back in the U.S. Senate. I was always a fiscal hawk when I was here before. And I am watching us rack up debt to the tune of now $27 trillion. We're talking about another $2 trillion here with the new administration. the money is going to buy less and less over time. So looking at things that everyday Americans, the person who works at Walmart, the rancher across the fence from me, those people, the teachers, the firefighters, the Capitol policemen around here who did such a good job here this

month. I want to help them find things that will store value so when they get my age and they start retiring, it's actually worth something. Yeah. Do you think that we're headed towards a situation where eventually every state, whether it's the permanent fund in Wyoming or other funds that they have, will have to look at this as well? I know that we've got kind of individuals, we've got some financial institutions now, a couple of corporations, but we haven't seen lots of movement either at the state, local, or federal level in government. Do you think that'll change over time? Or do you think it's more so this asset will be something for individuals and corporations, but not necessarily government entities? I hope it will be for all of the above

as part of a fully diversified asset allocation. So, for example, if you are a postal worker, I believe that the postal workers' retirement funds should have the opportunity to invest in Bitcoin. Not Bitcoin exclusively, but Bitcoin as a wide variety and array of assets. I think that should be true of permanent mineral trust funds like Wyoming has, New Mexico has, Alaska has, and other government funds that are trying to find a slice of their investments to store value. Now, if you want assets that are throwing off income, you know, maybe you want to go to the S&P 500, some spiders, some large cap growth strategies.

But if you if you want to store value for the long term, sort of as to protect yourself from inflation, that's where I think that Bitcoin plays an important role now. And someday its role may expand. But for this day and age, I really see it as a great store of value for individuals, for corporations and for government. Yeah, that's great. About a year and a half ago, I went and I met with a number of offices in the House. And at the time, I think my takeaway really was just there hadn't been a lot of education of elected officials when it came to Bitcoin, the pros and the cons, the technology, kind of the impact that something like this could have across society and kind of the American economy. With you kind of sitting now within a elected role, how do you think about educating your

colleagues and kind of spending time talking to them and getting them up to speed without just being, you know, oh, she's the one who's always kind of talking about Bitcoin and therefore they kind of tune you out. Like, how do you just think about the education that you can do now that you're actually in the room as a colleague rather than somebody on the outside? Well, that's a great question, Anthony. And I want to reach out to the people who are listening to your podcast to help with this. We're forming a financial innovations caucus in the Senate. We hope to use it as a springboard to educate members of the U.S. Senate and their staff about Bitcoin specifically, but about other opportunities for cryptocurrencies and

financial innovation and blockchain, uses of blockchain. And so I'm interested in knowing how the people who are listening to your podcast would expose members of the U.S. Senate to that kind of information. What is pithy? What worked with them? What resonates with your listeners that I can use to help educate and inform the people that I work with about financial innovation? So to the extent that anybody's interested, I'm at SEN Lummis. Senator Lummis, maybe let's talk a little bit about kind of the sentiment among your colleagues when it comes to Bitcoin and or central bank digital currencies, right? There's a lot of talk about Bitcoin usually tied to kind of price.

And I think sentiment falls price a little bit. But there's also a lot of talk about central bank digital currencies and even potentially digitizing the dollar. How have you seen the sentiment and kind of what are people talking about within Congress and the Senate when it comes to these two types of kind of financial innovations? Well, I think one of the first things that we're going to be working on is fighting a narrative about digital assets and crypto being used for money laundering, because that is, you know, GameStopper right from the beginning. So now what we know is, according to chain analysis, cryptocurrency related crime is smaller than criminal activity with cash and crypto regulations need to leave room for innovation. So among the things we're going to want to do while we're informing people is to make sure that we have the opportunity to innovate. And that includes in the area of things like stable coin.

For example, Facebook, I think, has stable coin in a pilot in Switzerland or something. And the Federal Reserve is looking to create its own digital currency. So we'll want to be visiting with the Federal Reserve about what their plans are, how they want to roll it out, what we can do to help them innovate. And the innovation in this area could help companies through faster transactions than typical wire transfers. For example, it takes a long time to clear a wire transfer when you're sending money internationally. And so we want to have the opportunity to use advanced financial technologies to make those kinds of opportunities more available so commerce can be more robust than it is today. I visited with Janet Yellen,

the new Treasury Secretary, on the phone the other day before her confirmation hearing. and she um this is an area where i think that she has an open mind she's she has some of the same concerns that most do in financial technology there are concerned about criminal or nefarious use of of cryptocurrency so it's going to take a lot of work to get to where we can have an open dialogue that is free from the clutter of seeing this knee-jerk reaction to the concern that all crypto is subject to criminal activity to a very large degree. Now, there's some areas where we've been working with, we were working prior to the transition to the Biden administration with Secretary Mnuchin about the Bank Secrecy Act and about the digital

asset rule. And I was happy that they were willing to extend the comment period for that. And now that the Biden administration is in place, rulemaking has been frozen indefinitely. So that should give us more time to comment and help them understand how to make it more consistent with existing law, how to make sure that we're not talking about knowing your customer's customer and pushing them too far out on the spectrum to make it reasonable. This is a complex rule. I don't even understand at all. That's why I have great advisors around me. And I'm looking forward to working with Treasury and with state and federal financial regulators and with industry to ensure the rules recognize the critical role of innovation, including digital assets and

America's financial future is going to be very much tied to this. We're seeing China get way ahead of us in this area and lots of other areas, Anthony, that we need to make sure that we can dominate and be effective in the way that we innovate, but at the same time guard against financial innovation being used by the Chinese Communist Party. So I think it's really important that the United States not take too long on the education piece, that we get it, we learn it, and then we move forward. Because this is an area where some of our competing countries around the world in the financial arena are going to struggle. So I think what's really interesting about what you're talking about here is like, one, I think most people who don't understand this,

oh, cryptocurrencies, it has this kind of, you know, place psychologically in people's minds that nefarious people use it, right? As we know, with other technologies, whether it was beepers, cell phones, internet, etc. People who are doing bad things or nefarious things always adopt these technologies first, that doesn't make the technology bad, that just means that we should tell the bad people not to do bad things with it. So I think you're right there. The other thing that seems to be coming up more and more, and you alluded to this a little bit, is there's this balance between global competition, right? If all of a sudden another country was to adopt some of these financial innovations and able to harness them in a way that would give them a significant

advantage on that global stage, that wouldn't be great for the United States. But the balance to that or kind of the counter is that, oh, well, the United States may see some of these technologies as a threat to themselves. And therefore, there are people calling for banning, whether it's cryptocurrencies or other technologies. It sounds like you're kind of in the camp of, look, if the technology is going to be out there, we need to be embracing it rather than fighting it. First, is that kind of an accurate depiction of your position? And two, just how do you think about that geopolitical landscape and kind of how it's playing out, given many of these other countries are making a big push to adopt some of these technologies?

Now, that is an accurate depiction of my position. I want to be very robust in this area. I want the United States to be a leader. In my home state of Wyoming, we have the most innovative laws in the country on blockchain and cryptocurrency technology. We even put in place a chancery court through which litigation involving the new laws could be handled. And I think that just like Delaware did in the case of corporate formations, there's a court that has great expertise and that is readily available. And we wanted to make that the case in Wyoming too. So we could be the innovators in American law at the state level, that we be the innovators and let the incubators of good ideas go ahead and incubate those good ideas. And states are among those in government.

In the private sector, it tends to be actual business incubators and business startups and formations. in government, it tends to be the states. So we wanted to make sure that Wyoming was a leader in that regard. And we want to continue to be a leader in that regard. So part of the reason that I got into this is because I was state treasurer. Part of the reason I got into this is because my son-in-law and his friends are very knowledgeable about Bitcoin. And then the final reason was watching Wyoming become a great innovator at the state level in Bitcoin law. The nation can be that. We're a little bit behind right now, behind other countries, but we need to be part of that. You know, Anthony, I did a little bit of consulting for the World

Bank on sovereign wealth funds after I was state treasurer. And we have seen other countries create sovereign wealth funds, like Vietnam. They have a fabulous textile industry. Countries that would surprise you have savings accounts or sovereign wealth funds. Those would be great places to capture and innovate in the area of financial technology. The Abu Dhabi investment authority. Norges Bank in Norway. Norway has a tremendous offshore oil and gas resource that they invest for the benefit of Norwegians. They would be a logical country to innovate in this area. So some very unlikely bedfellows may be able to innovate in this area all for the good of the people that they serve. Yeah, it's fantastic. You mentioned earlier

kind of every institution having exposure, not necessarily converting all of their portfolio or their currency to Bitcoin, but having it as a piece. One of the institutions that I think people are very interested in is central banks, right? It looks like already, obviously, the individuals, the corporations, the financial institutions are starting to get exposure, but we haven't really seen anywhere in the world a central bank make that decision. Maybe not so much like which one do you think is first in a timeline, but more so what do you think is the actual steps to doing that, right? Is that something where that decision, let's say in the United States, would get made by the chairman of the Federal Reserve and the Treasury Secretary? Do you think that's

more of a democratic process? Just what's the path to that happening here in the United States? Well, that's a great question. And we want to meet with the Federal Reserve about that specifically, because we do think that the Federal Reserve will want to innovate in this area. And we want to work with them hand in hand on that innovation. I also want Congress to be the driver of that innovation. So we are the actual policymaker and they are the actual implementer. Yeah, that's fantastic. What can people do at home to help you? I feel like you are educated. You're very passionate about Bitcoin. You have this very unique but important view of financial innovation and the role that the United States and the United States government can play on a global stage in terms of embracing this and continuing to remain kind of that lighthouse on the hill for the rest of the world. Is there something that people at home can do to either, one, make your job easier or two, to kind of help further your mission as you kind of continue to to operate inside the Senate with with this viewpoint? Absolutely. There are a lot of people around this country who know more about the nuts and bolts of blockchain and Bitcoin and other cryptocurrencies than I know. I have a rudimentary understanding of it, and I'm trying to use that rudimentary understanding to educate people who even don't have that much of an understanding.

So part of it is communications, and I've already mentioned that that would be helpful. The other thing is, in the case of people who have very sophisticated expertise on this, we would love to have them contact our office and give us ideas. And finally, for people who want to see this kind of innovation move forward, contact your U.S. Senator and say, hey, we understand that there's a new Financial Innovations Caucus in the U.S. Senate. We encourage you to join it. We want it to be bipartisan. One of the fun things for me about this topic is it's bipartisan. It crosses all kinds of party lines. And so we need to have the involvement of Democrats, Republicans, independents, libertarians, and everything in between, so we can innovate in this area. The gridlock in Washington is so intense right now that if you can find any little crack to break through the gridlock, we should take advantage of it.

And if we can innovate in one area like this that is not partisan, it doesn't wear a partisan hat, a Democrat hat or a Republican hat. And if we can innovate in an area like this, it might help us break the dam and innovate in other areas too. And in this day and age in Washington, find anything that you can innovate on is exciting because we're so set in the concrete that we can't even lift our feet anymore around here. But this is an area where that's not true. So that's another reason that I'm excited about being new to the Senate. But having old friends that I serve within the U.S. House in the Senate, we can talk about a topic that crosses party lines and it gives us a chance to innovate. And that's really exciting to me. And I think other people will embrace the idea that, wow, here's an avenue that we can just be Americans. We don't have to be Democrats or Republicans. We can just be Americans and use the ingenuity and innovation that America was always known for and was the world leader in. we can use that in this area. So yet another reason that I'm really excited about financial innovation. Yeah, you're just doing a fantastic job. So from everyone else, thank you. I think

that as you continue to kind of spread this message, and frankly, it's just a refreshing perspective on the importance of not only your job, but also your colleagues. And so I think that the more folks we can get to have your perspective, the better off we'll be, regardless with people's political views. So I really appreciate that. We're going to send people to your Twitter account, which is at S-E-N Loomis. Is there anywhere else that you would like for us to send people? Is there anywhere else we'd like? Here again, I have to turn to my colleagues. Our website is loomis.senate.gov. Okay. Our website is loomis.senate.gov. All right. We will send a bunch of people over there. Hopefully we'll break your website because there's so much traffic of everyone trying to learn about everything that you're doing. Senator, listen, thank you so much for your time today. As I mentioned, I think that you're doing a great job. So I appreciate all the hard work and we'll have to do it again in the future.

Well, it's going to be a heavy lift, Anthony. So I need you and all of the people that follow you to help out. But thank you kindly. And I look forward to visiting with you again as well.