The Wolf Of All Streets - How To Save Crypto In The USA | Balaji Srinivasan, Caitlin Long, Anthony Scaramucci & Meltem Demirors

Episode Date: April 4, 2023

Twitter Spaces with Balaji Srinivasan, Caitlin Long, Anthony Scaramucci, Meltem Demirors, Brett Harrison, Simon Dixon, and Greg Foss. Every Tuesday at 11 am EST. : How To Save Crypto In The USA ►���THE DAILY CLOSE BRAND NEW NEWSLETTER! INSTITUTIONAL GRADE INDICATORS AND DATA DELIVERED DIRECTLY TO YOUR INBOX, EVERY DAY AT THE DAILY CLOSE. TRADE LIKE THE BIG BOYS. 👉 https://www.thedailyclose.io/   ►►BITGET GET UP TO A $8,000 BONUS IN USDT AND GET MASSIVE DISCOUNTS ON TRADING FEES! 👉 https://thewolfofallstreets.info/bitget    ►►NORD VPN  GET EXCLUSIVE NORDVPN DEAL - 40% DISCOUNT! IT’S RISK-FREE WITH NORD’S 30-DAY MONEY-BACK GUARANTEE. PROTECT YOUR PRIVACY! 👉 https://nordvpn.com/WolfOfAllStreets   ►►COINROUTES TRADE SPOT & DERIVATIVES ACROSS CEFI AND DEFI USING YOUR OWN ACCOUNTS WITH THIS ADVANCED ALGORITHMIC PLATFORM. SAVE TONS OF MONEY ON TRADING FEES LIKE THE PROS! 👉 http://bit.ly/3ZXeYKd  ►► JOIN THE FREE WOLF DEN NEWSLETTER, DELIVERED EVERY WEEK DAY! 👉https://thewolfden.substack.com/   Follow Scott Melker: Twitter: https://twitter.com/scottmelker   Web: https://www.thewolfofallstreets.io   Spotify: https://spoti.fi/30N5FDe   Apple podcast: https://apple.co/3FASB2c   #Bitcoin #Crypto #Trading The views and opinions expressed here are solely my own and should in no way be interpreted as financial advice. This video was created for entertainment. Every investment and trading move involves risk. You should conduct your own research when making a decision. I am not a financial advisor. Nothing contained in this video constitutes or shall be construed as an offering of financial instruments or as investment advice or recommendations of an investment strategy or whether or not to "Buy," "Sell," or "Hold" an investment.

Hey everyone, we're just gathering up the guests, making sure we got everybody straight. Give me a thumbs up if you can hear me since last week. I was talking apparently to nobody for the first 30 seconds, as tends to be the case, getting some mentions. Yeah. So we'll be back in one second as we get this going. Getting Meltem in here. Hope everybody's having a good day.

Been an absolute roller coaster here in the crypto space. Obviously, we're adding guests as we speak. Looks like we've got Brett and Anthony here, Simon as well. We're just waiting for Meltem. Hey, Anthony, this is quite a day considering your political past. Well, I mean, nothing would surprise me in the political world, but this is going to be a three ring circus. You know, my office is two blocks from Trump Tower. So we're watching all the revelry. You know, probably most of these protesters on the Trump side are probably paid, you know, probably paid on the other side, too. You know,

I mean, it's just it's just a total theater and circus. Yeah. Speaking of theater and circus, I guess we'll we're going to once we get everyone in here, we're going to start talking about the sort of attack on crypto in the United States at the moment and everything that's going on there, which seems to have increased massively over the past two months, all likely on the backs of our friend Sam, of course, who I know everybody here to some degree was stung by. I mean, I guess we can go ahead and start as people file in and they'll be able to listen back. So, I mean, Anthony, since I got you, I mean, what do you make of just everything we've seen in the last two months, all of this regulation by enforcement, the Elizabeth Warren anti-crypto army? I mean, it's just insanity. So, I mean, I'll say a couple of things. Some of them are obvious and some of

them I've learned over the course of talking to people in Washington. But I think the most telling thing is what we all agree with. They were embarrassed by Sam. They were embarrassed by the largesse of money that he put into Washington. And so they now need this sort of distraction field and the pendulum swinging way hard on the anti-crypto side. For whatever reason, Elizabeth Warren thinks that this is helping her base, even though her progressive base is supposedly the underbanked and those that are underprivileged, which obviously everybody that looks at crypto understands the blockchain knows that this is a place where the unbanked have a home. This is a place where the economic minister from El Salvador, who sat in this office I'm in right now with me during the UN General

Assembly meetings last year, said if they can just get wallet-to-wallet transfers up between expats that live in the United States and their parents or relatives in El Salvador, they'll save $400 million a year bypassing Western Union or things like money grants. So Elizabeth Warren, for some reason, doesn't understand this or chooses not to understand this. You guys know this. Follow the money in Washington. Tons of money is getting poured into Washington by the, what I would call the money center or central banking community to sort of keep the status quo where it is. But here's the two things I would share with you, then I'll let obviously somebody else talk. There will not be a positive change until Gensler is gone. I think you have to accept that. He is locked in the

cockpit. The president for financial services is effectively Elizabeth Warren. So we literally have like George Washington's grandmother deciding the future of finance and innovation in the United States. And I think it's like a terrible thing that we're allowing for that. So the second thing I will say to you is because you've got to get Gensler out of there, it doesn't necessarily mean that you need a Republican administration. Remember, Donald Trump is decidedly anti-crypto. Every time he talks about it, he's viciously anti-crypto. I can't speak for DeSantis or others, but we're going to need to form almost like a decentralized lobbying organization. Seventy seven million wallets in the U.S. We've got to get these people.

I'm not saying it's a one issue vote, but it's got to be part of the resume of a well-qualified candidate. Do they see the future of finance and innovation? And do they want the United States to be a center of it? If they don't, they probably have to drop a little lower on the list as a potential candidate. Yeah. First, I want to jump back in and say to all the guests, jump in whenever you see fit. You do not need to wait to be moderated or called on. To everybody in the audience, please hit that little arrow up top. Share this space. Make sure that we get more people in here for sure. Anthony, the interesting idea, and anyone can jump in on this, of the one issue voter, that's something that I've seen repeatedly being mentioned now at this point.

I know that I feel that way, but I think that there's literally millions of people in the crypto community who have sort of opted out of the party system and now are literally just going to vote based on what they see from their candidates in crypto. I don't know if that'll move the needle. I mean, Meltem, what do you think? I loved your April Fool's post. You said we don't need to post anything for April Fool's because we already live in a clown world. And it was a picture of the solar system with Earth as a clown. I mean, what do you make of that? Well, it's good to be here. Thanks for organizing this, Scott. Look, I think before we even delve into like the inner workings of the American political system and just the utter dysfunction that is present there, let's just kind of go a step back and kind of evaluate where we are at in human history, because I think we're at a really interesting turning point. And that interesting turning point

is this. We have for so long trusted institutions, whether those institutions are governments, whether they are educational organizations, higher learning, whether they are the mainstream media, right? We have historically placed our trust in institutions. And one of the things that's been happening for a very long time now, and crypto is simply a continuation of this, is technology has really started to radically alter some of the distribution mechanisms and some of the control mechanisms for how thought is shaped in society. And one of the things we've seen really accelerated, but this is a trend that I think has been going on for many decades. But one thing that was really accelerated during COVID,

because these institutions think we are stupid, right? And these institutions thought they could get away with certain things, but they can't because we have all of these these tools whether it's crypto which gives you for the first time a choice in how to store and manage your capital whether it's you know social media which enables citizen journalism there's a number of different tools that have enabled us to sort of peel back the curtain and recognize that the trust we've placed in institutions has been misplaced and really when we look at the data when we look at the statistics even the placed in institutions has been misplaced. And really, when we look at the data, when we look at the statistics, even the efficacy of institutions, their ability to fulfill the functions which they are supposed to fulfill in our society is highly questionable, right? And I think no place is that more evident than looking at financial

regulation in the United States of America, the utter failure for people like Gensler to implement any sort of rulemaking after the GFC, the great financial crisis, the absolute lack of efficacy of things like Dodd-Frank that took banks, financial institutions, millions of dollars to implement in terms of compliance that really have had very little impact. So I think one of the big things that is happening right now, pardon, that I cannot understate is we are seeing in real time the absolute disintegration and evisceration of the credibility of institutions of all types. Now, how does that extend to the current environment we're in and what we're discussing here? Look, at the end of the day, I think governments are becoming increasingly authoritarian.

We're seeing this with the restrict bill, which is in Congress right now. Highly recommend if you're not following what's happening there. It's like earn it 10,000 times worse. Like the Internet is under attack. Free speech is under attack today. There was a news report, a woman who insulted President Macron on Facebook over the pension reforms in France is being fined and is going to trial for insulting the president of France on social media. Like these things that are happening in our world, they're not a coincidence. This is part of a broader systemic problem. But at the end of the day, we have to remember, right, the way the machine functions, what feeds the machine is the populace. And throughout history, I think we've seen revolutions of various types, as well as

evolutions of various types. At the end of the day, I think the American political sort of climate, the institutions that have sort of shaped thought and political discourse in America for a very long time, are under a lot of pressure. There are a lot of cracks. And so what I'm really interested in, and maybe this is, you know, we can discuss the past, we can discuss the present. What I think we need to do as an industry is focus on the future. What can we make the future look like? Look, over the last, I see a lot of people in this space who I've known for almost a decade now. We've been together in the trenches working on this thing called Bitcoin for over a decade now. And what's really crazy is we're able to meme a global reserve currency into existence. Bitcoin has become a political,

social, economic tour de force through this group of crazy people that has grown and grown and grown in this crazy community we've formed on the internet that now is expressing its power in the economy, through political means, through social channels, through its influence. So what I think is more interesting for me personally is how do we shape the future of what the system looks like with the tools available at our disposal, whether that's money, whether that's capital, or whether that's drafting us off of this broader sort of erosion of trust in institutions? How do we build new institutions? And I think the biggest issue we have, and I'm just going to speak very plainly,

crypto is a fucking shit show. It really truly is. if we look at what happened with ftx if we look at what's going on with like even the arbitrum governance vote this weekend like it is just it is very difficult to look at crypto it is very difficult to defend some of the things happening in our industry because they are chaotic there is a lot of grift there is a lot of grift. There is a lot of just really poor decision making, poor optics, poor communication. And not to call out any one of those things, or, you know, to assign intention to some of these things. Although I think with FTX, I certainly am happy to do that. But look, we look not great. I think we kind of as an industry need to get our shit together a little bit and ask ourselves, what role do we want to play? Yeah, we can vote for politicians, but like that is not going to change the inner workings of D.C.

It's not going to change the fact that most of the people who have the power and ability to influence what happens are appointed it's not going to change you know the fact that we have geriatric turtles in Congress who are deciding the future of America who are deciding future of technology or financial system Etc I think we really need to ask ourselves less about like hey how do we want to vote it's like how do we actually create new institutions that have credibility because right now I don't think crypto has a whole lot of credibility outside of maybe things like bitcoin that have some legacy that have been around for a while that have demonstrated their ability to withstand you know some of these external forces um that attempt to thwart and sort of misdirect these efforts so I do think there is a big um sort of onus on the industry right now to shift the narrative and to really think about how do we build credible institutions? How do we build credible narratives that create goodwill?

And how do we become a part of the discourse and the dialogue? So I'll stop there. I could go on on this point. But I do think the systemic credibility that institutions lack and continue to sort of lack, we also have in crypto. Crypto right now doesn't have a whole lot of credibility. And so in my view, that's a big issue we have to fix. And if we're going to talk about institutions and the lack of credibility of our political institutions, we also need to take a deep, hard look at our own institutions and crypto and the way we're doing things. There are a lot of issues there that need to be addressed as well. So I don't think crypto is a panacea.

I don't think the current institutions are panacea, but we got to do better because what we're doing right now, it's not compelling. It's not attractive. Go ahead, Brent. Hey, Nelson. Hey, Anthony. Hey, Scott. How's it going?

Yeah, I mean, obviously, so much wisdom here. Thinking also about the last couple of months, one thing we're also seeing is an unbelievable inflection point in the state of regulation of crypto assets in the US and just the continuance of the uncertainty around how is one supposed to actually facilitate the trading and storage of cryptocurrency in the US. A couple of the most interesting things we've seen recently. One is seeing that the CFTC and the SEC are basically fighting this proxy war through their own complaints where they're establishing jurisdiction. SEC is saying,

you know, ETH is a security, whereas in the, you know, in the complaint against Binance, CFTC is coming out and saying ETH is a commodity and having that be the form in which they're deciding this instead of actually coming out and writing direct rules or coming out with actual direct proposals that people can actually comment on and talk through in order to understand, you know, they are not a government agency, but they are coming up with their own rules for how, you know, existing sort of commodity brokers are supposed to be able to regulate crypto in fairly reasonable ways that seem like if other organizations, other agencies could follow similar playbooks, and then we could actually have like a much better state where we can have consumer protection and have the ability to trade and broker these assets in the US as well.

It feels like we're going to see a three-pronged development in crypto over the next, let's call it like six to 12 months, when it comes to how the trading of crypto assets is facilitated. Either we're going to end up in a heavy, heavily regulated securities world where you'll see exchanges like, you know, the Nasdaqs of the world be the only ones who can really participate in, you know, the exchange trading of crypto assets, because they're the only ones who have the ability to cooperate with someone like Gensler and have the actual, required to operate National Securities Exchange, which, while I think having NASDAQ in the space is a good thing,

I think it's going to make it much more difficult for your average other player who doesn't have that kind of relationship with the SEC to be able to operate a viable crypto exchange. You separately have sort of this status quo where, you know, exchanges like Coinbase will continue to fight the good fight. And, you know, whether they have to mount legal challenges or, you know, defend against legal challenges themselves, they'll continue to try to operate and perhaps try to get certain kinds of licenses, whether that's with the CFTC or the SEC, but try to keep as much of the existing exchange infrastructure and market structure the way it is. And then the last will be, you know, perhaps all of this attempt to regulate crypto in the U.S. in a way that doesn't really match with the way the rest of the world is trying to come up with reasonable regulatory frameworks for crypto just pushes more people into DeFi, which is also a good thing.

And part of that's going to require institutions being able to become more comfortable with the aspect of trading on DeFi, where you might not know exactly who your counterparty is and need to deal with understanding the risks and AML concerns with having to interact that way through a decentralized exchange. But I think it's only going to grow. I mean, we just saw, you know, Uniswap's volumes topping Coinbase's volume now. And that's also a trend that's probably going to continue. A lot of DEXs are getting launched every other week now. And it's going to be interesting to see now, given such a clampdown on the ability for people to register with various agencies and create licensed either brokers or exchanges in the U.S. to facilitate crypto,

whether this is going to push everything into DeFi or whether it's going to effectively shut it down in the U.S. And that would be the most concerning to me. So much done, Pac here. Simon, go ahead. I see you have your hand up. Yeah. So going from macro to micro, which I think that was a great overview of the greater macro of're talking about an unwinding of the most entrenched power plays in the world, which is the financial markets, the existing empire, the US, the power of the dollar. These are really, really major critical decisions at a time when we're experiencing the decentralization of power in social media, financial transactions with Bitcoin, and then this whole disruption that's happening with crypto. But it reminds me of what I experienced a decade ago in the UK.

And I had to leave my country for this very reason, because Bitcoin meant so much to me that in order to support the companies that later went on to try to create this industry, I realized that when you have an entrenched power, obviously a previous empire like Britain, which gets even worse when you're in an existing empire like United States. There's only really two ways that I know of, of making effective change and adjusting to the rapid pace of change that the world is experiencing right now. You've either got to be really small and nimble, or you've got to be a dictatorship with complete control where a few people can make really big decisions for a lot of people. And so the challenge that America finds itself in right now, taking a step back, is that it is neither a dictatorship

nor a small, nimble player. And so that is causing a lot of friction and a lot of tension. And then you've got to couple that with the trends that are happening right now as we speak. America seems to be making the decision to move more towards the unconstitutional America towards the end of its domination cycle of the dollar and so what what you're experiencing right now is a reaction that can only strengthen what they what america fears the most which is the domination the dominance of china because the reality is is if you look at these different bills um that are being implemented right now you've've got the first time in history that a social network, TikTok,

is being seen as a national security risk, and therefore they have to make the decision of censoring their citizens, just like China had to make that decision against Google, Twitter, and various other big tech companies. You're also experiencing a global purge on the dollar because America made the decision for the Ukrainian war to delete Russia's dollars and the whole world understood that dollars are deletable and so therefore you have that going on at the same time. Now you've also got Elon Musk and various other players that are lobbying to

slow down artificial intelligence, because it's clear that artificial intelligence is going to be the technology that powers central bank digital currencies in probably a decade or so. And those are going to be decision making that's done at a completely different way to the current way. So at the same time, China is leaning into all of those trends. They're investing at a faster rate into AI. They are state regional capitalism that is controlled by the China Communist Party so they can make centralized decision making at a faster pace. Their central bank digital currency is deep into, I mean, they've already had decades of digital payments and leading in financial technology. So the slowing down that you're experiencing and the irony of this whole situation

is the one thing that can protect the constitutional rights of American people is actually the freedom to transact and the technology of blockchain, because it's, you know, if you look at the difference between, I spent a lot of time in El Salvador and the average age, and I don't want this to be an age thing, but people that were born in the last, you know, in the last few decades, they're used to change because we experienced so much rapid change. And the average, I think, age of your average leader within the United States of America is significantly older. And so if you look at El Salvador, it's able to adjust. It's smaller, obviously. It's able to embrace and lean in. It's able to say, let's put Bitcoin on our balance sheet and buy the dip. Let's make Bitcoin legal tender.

Let's make it a tax-free environment for technology companies. And these different ways of adjusting to what every government has to adjust now, that we are in a completely different world. And the decisions that America's making to really, you know, crack down on the crypto markets, potentially implement laws that would make, you know, Bitcoin for its citizens, something where you could just make decisions willy-nilly, like the Patriot Act and the AML laws and everything that's happening. And every single day, America is looking more like China

and China is looking more like America. And this is a... Sorry? I was about to say that. I was waiting for you to finish, but since you said it... That's Simon's favorite quote. It's Simon's favorite quote, that China and the US are going to meet in the middle of the central bank digital currency.

It's my favorite thing Simon says. But I mean, I must say to you guys, sorry to interject, Simon, but I was going to wait for you to finish, but you hit the nail on the head. I moved to the U.S. because I thought it was the land of the free and the land of opportunity. I was sold the dream of democracy and freedom and stuff like that. And to be honest when i arrived in the u.s i pretty much felt like i was under surveillance hold on hold on one second um i are under surveillance she's everything everything in the u.s is about surveillance the rules everything is about taxes everything is about surveillance i felt to be honest i felt like i

was walking around in a prison and i don't think that people who haven't left the U.S. will understand it. But when I left the U.S., I kind of said, it feels to me like the U.S. is just China, but with a much better marketing department. That's all it is. You know, you got this one U.S., which is Hollywood, which is the great marketing department for the U.S. But when you live in the U. US, you realize that everything you do, you need a permit.

You need to get this license and that license. And then there's this tax and that tax and that permit fee and whatever else. And to be honest, eventually the reason why I left is because I felt like I was living in a big prison. And I actually wanted to live in a country where I felt like I was free.

Now, when I tell the story to Americans, Americans don't get it because they've only grown up and that's really all they know. But I think for people to come from outside the U.S. or from people looking outside the U.S. and looking into the U.S., you realize that the U.S. is anything but the land of the free. Everything is around surveillance. They use their currency. The fact that their currency has been the reserve currency of the world, they use that as a weapon.

I tweeted something about the other day where I said that they had weaponized the US dollar to give them the ability to place sanctions really on any country in the world, to prosecute criminals in any country in the world because they used it. And I just think that what's going on here now with crypto is it's very similar to dictatorship. I mean, if you look at what Gary Gensler is doing, prosecution by enforcement, uh, that happens in dictatorships, um,

uh, declining the Bitcoin ETF with absolutely no valid reason that happens in dictatorships. And the fact that, you know, the fact that the U S has to go to court every time that they want something overruled, yes, I know that it's a bug as well as it is a feature, but I think the whole mindset of the US has got to change.

Otherwise, I believe that Ray Dalio's scenario is playing out with this de-dollarization. And I'm not a big alarmist in terms of, oh, we're going to be de-dollarized and we're going to be de-dollarized and we're going to be de-dollarized tomorrow but if you follow the i think it's 11 or 12 stages of of the fall of an empire you kind of realize that where the u.s now is now it's it's really in the last four four spaces of it and you know in the last four spaces you get um uh money printing you get a spiral in debt, you get the highest, I don't know what the word is amongst the people, not animosity, but fighting amongst the people. So, I mean, just watching this from the outside and watching it, I kind of, to be honest, I feel sorry for my US friends because they think they live in the land of the free, but

the truth is that I feel like they're living more in China just with a better marketing department. Anyway, Simon, back to you, brother. Yeah, Foss, I know you've had your hand up, so we'll go there, and then I want to dig back in with Anthony and melt him on a few topics. Go ahead, Greg. Yeah, well, thanks for having me, Scott. Hey, guys, I'm Greg Foss from Canada.

So I've lived in the U.S., gone to school there, and I remain enormously hopeful that the United States will be able to figure this out. Because if they don't, then, in my opinion, the free world has lost its leader and lost a true source of... I'll take the other side, Rand. You know, respectfully, I've been to El Salvador. I love the country. But its GDP is $28 billion. Yeah, they can be nimble, but Simon, their

28 billion is not even the GDP of the greater Miami area, right? So we have to understand the difference in terms of nimbleness and as well as being able to change the world. So Meltem, I was an investor in 3iq like you were, as as uh steve mcclurg who's on stage that's a canadian closed-end bitcoin fund that eventually became an etf in canada and the way we did that is we took the ontario securities commission to court and thanks to a gentleman named by the name of sean cumbie the cio at 3iq uh we won and canada now has a spot uh et Bitcoin ETF. So I'm a Bitcoin maxi, guys. I'm not going to hold any punches. Yes, crypto is a shit show because crypto is largely centralized.

And you have to understand the difference between centralization and decentralization. And I don't want to go there because I have lots of friends in crypto. But remember, centralization includes abstract power. And what is abstract power? That's power that is awarded by either rank, let's say you're a general in the army, or you're awarded as a administrator. And this abstract power is the source of a lot of problems in the USA, versus physical power, and proof of work, which is Bitcoin. So I am just going to get up here and give my two seconds pitch. Everybody, please go out there and read Jason Lowry's thesis on Bitcoin and the title Soft War. OK, Bitcoin is not just a payment system.

It's not just a coin. It is actually power. It is actually bit energy. It is actually bit energy. It is actually bit information. secure transfer of information, decentralized protocol that the USA can again rule the world from both an economic basis as well as a freedom basis. So that's my pitch from Canada. Read Softwar by Jason Lowry. And by the way, I don't agree with everything in it. I do know the man. I believe he's brilliant, but it's my opinion. Please read it. And if you disagree with the thesis, at least you read it so you can be informed. It's making its round in Washington. It's mooch. I hope you read it, sir, because at

the end of the day, there's a lot of people in Washington that are embracing this and they certainly should understand how the USA can reclaim its global dominance. And as a Canadian, we don't fucking matter. OK, we live in your attic rent free. Okay. Canada, most of you clowns can't even find Canada on a map. I get it. But at the end of the day, we are a G7 nation that requires the leadership of a truly powerful country in all respects. And that's the USA. I maintain my love for the freedom of the USA and Bitcoin is that freedom over and out. You can send your hate mail to Scott Melker. Love you guys. Thanks. Thank you. Yeah, my DMs are open.

Perfect. Anthony, go ahead. Well, listen, I've read it and I've been in touch with Jason and I'm going to invite him on my open book podcast when he's ready. I just sort of want to address the Simon issue.

You know, and also, I guess it's Foss. I guess it's Greg, right? And I apologize. I'm looking at your thing. I just followed you, Greg, on Twitter. Thank you. I'm worried about the U.S. and I understand the reaction. I understand Nan's reaction to the United States. And, you know, I had a failed stint in the Trump White House, but I've been to at least suggest what people in the Bitcoin or the cryptocurrency community or concerned people around the world could actually do. We have broken the system now, and two things have happened that have really broken the system. Number one is the gerrymandering has gotten completely and totally out of control, to the point where these political leaders are now picking their voters. So I submit to everybody on this call, are we in a real democracy if the political leaders themselves can pick the voters, screen out their adversaries from their districts?

Obvious answer to that is no. Number two, the election finance laws that changed about 10 years ago with the Citizens United case, some of the constitutional historians will remember Plessy versus Ferguson. It was a very famous case that led to an even deeper racial divide in the United States. In the Plessy versus Ferguson case, the court ruled that we could have separate but equal facilities for blacks and whites, a result of which we had massive segregation throughout our society. It wasn't until 80 years later that the Brown versus Board of Education case broke that. We need a Brown versus Board of Education case to break what is going on in election finance, because right now the elites have decided they're going to funnel money into these people. They're going to do the whims of these people, and they are no longer thinking about the body politic and no longer thinking about really serving what's in the best interest of the nation. So we're in a tribal situation where it's left-leaning or right-leaning

policies based on those political narratives, as opposed to what is right or wrong for America. And we have to find post-partisan transformational candidates that actually understand what's going on, can explain it to the American people in a way that the American people can understand it, and then put together a series of policies. Last point, then I will shut up. The United States should be embracing Bitcoin, cryptocurrencies, and all the innovation that is there

so that the United States can maintain its mantle of leadership. More innovation, more economic growth, more job opportunity, more personal freedom has been the calling card for the United States for the last 200 plus years. To go against that philosophically is going to lead to a disaster. Some people believe in America first. I don't. I believe in a we strategy. We have to engage with the rest of the world. Franklin Roosevelt said that in the 1940s. It's as true then as it is today. But if we don't push people into politics that really care and are not just interested in just preserving their personal power, we're basically going to have a very hard time in this country.

Yeah, I agree 100% with everything you said. And then bridging that to crypto, it gives me even more fear, of course, that all innovation has been pushed off. I know I'm prone to hyperbole, but I've said quite a few times of late that it feels to me like not only is this an inflection point, but it already might be too late because everyone I speak to who's building anything significant in this country is avoiding the United States at all costs. And by the time we actually come up with any sort of regulation or legislation sensible or otherwise, it feels like the innovation that's going to explode in the next five to 10 years will have already been built elsewhere. I want to ask Meltem, your feeling on that, and then also Brett, because I

know you're actually in the United States building something. So Meltem first, and then Brett preferably. Yeah, look, I think a lot of specifics we can delve into, and I think Brett offered a really cogent sort of synopsis of what's happening. I think Anthony, obviously, you know, he's been inside the beast, if you will. I've only been peripherally around it and very quickly realized the beast is not really for me. But look, I just, again, at the end of the day, what I keep going back to is we keep talking about, well, the U.S. should do this and we should and should like fuck should. I think the time for should is beyond us. Again, I just want to encourage us all to sort of think about the future and what we are doing now to shape the future. When I sort of look at what's been done to date

in the space to sort of create a unifying umbrella, a unifying message there, the big challenge is there really hasn't been one. If you go to DC and you sit down with folks, they ask you, okay, well, what does the crypto industry want? Everyone wants something different, right? And there's a couple of trade associations, there's a couple of think tanks, there are now a couple of PACs that are forming. But I think one of the things we have struggled with is like, what is the big umbrella that we're all going to get under? And I think the umbrella in order for it to be politically appealing, not just in DC, but, you know, in the upcoming election cycle, the umbrella needs to sort of be big enough that it can cover wide swaths of

sort of the respective constituencies that make up the voting public, but also sort of how public opinion and public discourse is shaped. But the umbrella also needs to be specific enough that it can lead to policy outcomes. And I think one of the things we struggle with as an industry is like there isn't really a tangible, credible, clear ask that is unified. And again, this is one of, I think, you know, what was being pointed out, this is one of the challenges with decentralization versus centralization. You know, I remember in the early days of Bitcoin, I just want to tell a little anecdote and then I'll take a cue from Anthony and also shut up.

It's in 2015, one of the big challenges we had with Bitcoin is, you know, there was Bitcoin Core. There are a lot of people passionate about Bitcoin. There are people building businesses on Bitcoin. There's all these sort of different constituencies. And there was really just Coin Center and the Blockchain Association, pardon, at the time in the US. But the challenge is we weren't all talking to one another.

There wasn't really a lot of clarity on what the direction was. And I remember at the time, I was sort of working with folks in Bitcoin Core. And we're talking about how do we get better at communication messaging? How do we build? And this is probably a terrible example, but like the NRA, right, is incredibly powerful as a political interest group. And how do they do that? Well, they shape discourse and opinion and they sort of help unify a number of different interests under one umbrella. Not saying it's a great example. World Gold Council is another example. Even if we look at like the Milk Council, right, and how effective we got milk was as a campaign, if we could get the corn lobby. I think there are examples of industries or even like the tobacco industry did in the 60s and 70s.

And a lot of that was informed by the work of Bernays. And if you haven't, like just Wikipedia Bernays and how, you know, propaganda is shaped. And I think propaganda is perceived negatively, but it can be just a tool to advance different causes and narratives. I think that the big challenge we had, even in 2015, was a bunch of people were like, fuck you, nobody should communicate on behalf of Bitcoin. Bitcoin doesn't have any leaders. And I'm like, okay, that's well and good. But if we don't kind of get unified on like, how we communicate outward, we're going to have some challenges trying to work in a world where things happen through these centralized aggregations of power. And that dynamic, I think, has only continued and gotten more and more chaotic with the introduction of more and more protocols and projects and companies that are economically powerful in their own right.

So there is this fundamental tension. But I do think, again, it's very important to sort of think about, like, what is the message? What are we actually asking for? Who is us positioned to go and deliver that message? I think, you know, we just need to be a little bit more political in how we do that. I think Ryan Selkis from Masari just a couple of days ago shared his perspective in an open letter to Congress on how he plans to do that. I know there are other folks who are working on that. But I do think as an industry, again, it's, you know, as we look at the future, we operate in this world and yes, it's decentralized. And yes, we have no leaders, no rulers. But at the same time, we're trying to operate in a world where we do.

So how are you going to create those institutions? Where is that power going to come from? And then what is that larger message, that bigger umbrella that we can sort of get behind that will actually help us push some of these more abstract ideas that we're all talking about. So again, this is my like little strategy hat on what I do for a living. But that seems and feels really important to me. Meltem, I hear that New Hampshire needs a female pro crypto senator. What do you think? I mean, I don't think it's a gender specific thing i just want to like scrub the gender politics from these conversations sorry i mean a non-female non-biden i don't know

go ahead yeah no no no it's just like it's completely fucking irrelevant like the fact that i have a vagina like very respectfully speaking the fact that i have a vagina anatomically has nothing to do with my qualifications my credibility or what i can do so i just want to strike that from the conversation absolutely credibility or what I can do. So I just want to strike that from the conversation. Absolutely fucking relevant. What I think is relevant is the vision, the narrative and how that narrative is communicated. And again, I think as we look at our industry, it's not really clear what we're asking for what we want. There's a lot of shouting, there's a lot of people with megaphones, Some megaphones are bigger than others. And money is obviously a very great amplifier to that megaphone, as we saw with FTX.

But I do think there's this broader question as an industry. And there's this like growing up, we need to it's like, we need a rallying cry, we need an umbrella, the umbrella isn't like, hey, fuck off, everyone. And we're just going to do what we want to do is this not really going to work. So the question is, what's a big enough narrative? You know, decentralization, yes, is exciting. But if we look at what we've done as an industry today, you know, kind of questionable how well we've done with the whole decentralization thing. So just again, I'll stop there. So you're not going to run for Senate. Got it. Okay. I'm going to run for Senate at some point, but not on the platform of having a vagina

and not on the platform of being pro crypto. I think the question is like, what are the institutions we want to build? And again, like, we need an optimistic vision for the future. What is that optimistic vision? I don't think crypto has really been so effective at painting an optimistic vision that is inclusive of a very broad group of people, in particular people who are a bit older, who are showing up at the polls. And so we really need to think about how we speak to those people. Well, I'm taking my name out of the ring for your campaign manager because I've already blown my interview for the job. Brett, I wanted to ask you specifically because, of course, you are building the United States. Then I'm going to go

to Steve as well, because I know also operating Valkyrie in the United States has its unique challenges. So go ahead, Brett, then Steve, please. Yeah, I think, you know, following up on some things Meltem said, it is important that in spite of the decentralized aspect of crypto, that there are real entities that can kind of band together and form some sort of unified voice or umbrella to be able to make an impact in the places where it matters for the future of crypto, specifically, for example, in Washington. You know, I think one thing, of course, we are talking about a lot is how the state of regulation in the US is moving a lot of, it's causing a lot of companies to want to move or incorporate overseas. And I think, for example, when starting my own company,

you know, the choice was, of course, you know, should we incorporate in someplace outside the U.S.? And we chose to, you know, make a Delaware C Corp because we want to actually help, you know, be a part of the story that is, that there can be mature, responsible companies with people with real, you know, be a part of the story that is that there are can be mature, responsible companies with people with real financial experience that can help, you know, push the industry forward in a way that doesn't, you know, result in a

further analogizing to the clown world that we are certainly in with regards to crypto, obviously, with my former boss notwithstanding. And so I think that if people here are going to be building in crypto and you are American, I think it is important to try to do as much as possible as you can in America, because that is going to be the most convincing thing for the people in charge of policy and decision making. I think it's very difficult if you show up to meetings with senators and Congress people and House of Representatives, and you say, hey, we have this great company, but we're incorporated in Seychelles or in the Cayman Islands. And please listen to me, because I have a lot to say. I think it's not really going

to work. It needs to be people who are in the US, building in the US, who are trying to adapt to whatever the regulatory frameworks are, but are also pushing the envelope forward and not accepting the status quo. That's why I think it's, you know, really important. And so, you know, for us, you know, we're starting, you know, without licenses of any kind, we're building software at the same time, we're trying to figure out, you know, are there, you know, licenses that would make sense for us to get in order for us to be ready for however the crypto landscape evolves, you know, maybe that's, you know, working with the NFA on introducing broker license, who knows. But trying to figure out to the extent that we're going to be trying to provide services to people in this industry, you know, we have to play by the rules as much as possible, even if they're unclear.

And that's the only way that we're going to end up forming a cohesive voice for pushing regulation forward. Yeah, hard to play by the rules when they aren't clear, but that point is absolutely perfect. Steve, go ahead. And then Simon. Hey, Scott. Thanks for having me on. Well, you know, I've listened to a lot of what people said, and there is a lot of frustration in this industry. And a lot of that frustration recently has been around, you know, a bad, the bad light that FPX has put on several folks in the industry, whether there's an association or not. Even the folks that were somewhat associated with it, you know, don't don't don't deserve that bad light either, you know. Secondly, with, you know, the recent banking issues and FDIC movement, it's also hurt a lot of companies that are trying to do legitimate business in the US.

All that being said, you have to kind of go back and look at what the reasoning is behind this. And, you know, I also, like, you know, like Scaramucci talked to quite a few people in politics, whether they're, you know, sitting senators or congressmen and women, or some of their aides that are focused on this issue. And there's actually quite a bit of support in U.S. politics behind the Bitcoin or the blockchain or the crypto industry. And same with a lot of regulators. So I think there's a lot of misunderstanding.

There's a lot of regulators. So I think there's a lot of misunderstanding. There's a lot of confusion. And I think really the way forward is to continue to educate and continue to educate on all the right reasons why we want this industry in the U.S. And I think that really starts particularly with Bitcoin. So I think if regulators and politicians understood the fact that, look, Bitcoin's not going away. It's a global phenomenon. And it's been predominantly in several different countries at different times. If you look at mining, for instance, when Bitcoin was banned in China, about 5% of all hash rate went through US-based pools. Today, it's almost 70%. So what would the US rather do? Would the US rather let some other country influence Bitcoin, whether it's through core developers and supporting core developers, whether it's through mining, whether it's through mining pools.

Or would the U.S. want to influence, you know, Bitcoin itself through supporting those those those companies that are that are that have moved here in the wake of that. So we already have a lot of mining companies that have come here, particularly to Texas, and are very supportive of the energy grid there. We have mining pools that are taking over in the U.S., and we also have core developers that are being supported by local foundations in the U.S. and influencing the code. So really on the educational piece, it's helping people to understand

that this is why Bitcoin should be supported in the U.S. and supported in specifically states are jumping into and states are supporting this, particularly places like Texas and Tennessee and others. So really support garners influence. And if our politicians and regulators understood that better, and some of them do, by the way, we just need more to understand that. I feel like some of the other organizations, the lobbyist groups, have somewhat failed,

and you can see the results of their actions based on where we are right now, but at the same time, I feel like the pendulum has swung, and it's up to us as a community to make it swing the other way. And that's through positive feedback. That's through positive education and positive meetings. Go ahead, Simon.

Yeah, I was just going to say, all these conversations were were taking me back so if i were patriotic to my country when when we were trying to build bank to the future in the early days um we we would have no business and we would have been eaten alive and so in in a fast-changing environment remaining patriotic to your country, I believe that you have to, you know, I had to make the decision to be patriotic to Bitcoin. And, you know, I remember the Bitcoin Foundation days when we were just a bunch of broke activists that believed the future of banking could change and we were trying to figure out how to raise the money in order to pay core developers because we were all broke and no one really had any money and there was no money in this industry um and and all of the the arguments around oh you know it's a decentralized movement it will figure itself

out and it did figure itself out so what what America, from my perspective, humbly needs to understand is this technology, the genie's out of the box. The only way, you know, to kind of control or remain relevant in an AI driven environment is to have proof of work. And so America made some amazing moves. You know, they took advantage of the fact that China made some bad moves with mining. And they ended up with a bunch of the hash power connecting to pools in America. And they ended up with a bunch of the hardware and infrastructure in America. But now to try and, you know, disincentivize that, tax that, and ESG the narrative so that you can push for changing the code to proof of stake is only going to drive what is the most innovative part of this whole industry, which is proof of work, over to the other countries. And if you can embrace that and you can accept that, it takes a bit of humbleness and it takes a bit of, you've got to take a bit of ego out of

your mindset to kind of accept that proof of work is going to be no matter who the existing empire is. Once you can get your head around that you have to embrace it and if I remain patriotic to my country in that time we would never have got where we wanted to get in the end and and and you know that's it's an important part so the whole world already you know what can America do right now? Well, it's not as complicated as all of these different three-letter and four-letter organizations. I think it is. If they weren't in a power play in order to try and get the tax, the money, the fines, the enforcement actions, if they weren't all fighting each other to try and bring it within

their own jurisdiction, look around the world. The world has already adjusted. You know, Trump implemented the fair access banking rules that didn't allow you to discriminate against, you know, some of the choke point types of politics that we experienced in choke point 1.0. And yet that was reversed. And so now banks can discriminate based upon these classifying businesses as high risk or low risk. And that turned out that that created concentration risk and that concentration risk actually almost took down the US banking system, or at least has led to it having to increase its debt ceiling to 50 trillion or something insane just to backstop the system. And these are the unintended consequences of fighting inevitable technology

in an environment of rapid change. And so if you look at the rest of the world, the rest of the world already has security laws, but their securities regulators are not fighting for jurisdiction over these assets. They're following the guidance of the Financial Action Task Force. And the Financial Action Task Force painstakingly already wrote everything that America just needs to do that the rest of the world is already doing. They stated that you put these virtual assets in their own regulatory regime

and you've got an adjustment period to put together your virtual asset service provider licensing regime and regulations and registrations. Already 18 of the exchanges that were in the US are now have or applying for licenses in Hong Kong. And so all it needs to do is put together its virtual asset service provider regime. It's already written and immediately it's focusing on the AML concerns. So then you get your data and your tax and then adjust it for market manipulation and everything you've learned around the securities law side. But the only reason that's not happening is simply because there's a power play within the different organizations within the US that are fighting for

jurisdiction because they've moved to a, you know, commit the crime, pay the fine model, which has really done a massive disservice for investor protections. You know, Bitcoin's already a commodity. The world has already decided on that. Proof of work is sufficiently decentralized. And the rest, you can either shoehorn it into securities laws, or you can just put together your virtual asset service provider regime. And the Financial Action Task Force has already written it to you.

So all you needed to do was go along with the executive order and then don't allow banks to discriminate against crypto businesses. You'll have the whole industry. You know, you've got some of the best developers, the best cultures for innovating technology in the world. Just allow those businesses to have access to banking by reversing some of those draconian measures. Implement a virtual asset service provider regime and then get ready, embrace, lean in, get ready, because if you're not, China is. Hey, guys, it's Foss again. Look, I got to drop down. I wanted to say thank you, Scott, for inviting me. And Simon, interesting. You know, I just want to leave you with a thought.

And it's again, if you don't define Bitcoin as being a financial asset, but you actually define it as being either energy or information, then why is the SEC the administrative branch that is ruling on the future of Bitcoin? What if it's ruled upon by a higher authority because it's not just a coin, not just a peer-to-peer transfer, a store of value and transfer network. It's actually bit information. I'll leave you guys with that thought. Again, I love that learning. Thanks for all your input. I learned a lot and I look forward to future healthy discussions. Thanks again, Scott. See you guys. Always a pleasure, Foss. Thank you guys. To all the guests, I know that if any of you need to go, you can always, of course, just drop off and thank you for being here. Dave, I see you have your hand up. Go ahead. Yeah, look, everyone, basically, this is one of those great, you know,

violent arguments where everyone agrees with each other. But, you know, there are a couple of interesting points here. I mean, probably the most important one, the mooch made early, which is his, you know, Elizabeth Warren is president of financial services. I mean, you know, I made a comment the other day that she's not even pretending anymore. And between that and when Mr. Gensler put out an investment advisory, basically warning people not to invest in crypto, you know, they pretty much declared sides. And, you know, basically, you know, they've pretty much declared sides. And, you know, basically, you know, it's the opposite of Henry Ford, right? You know, where he said, you know, any color you want, as long as it's black, they're basically saying, well, you know, this digital assets are really

interesting. We want it to die. And we're not interested. And I find that the most important question really is, is when you start at the basics. So, you know, Mr. Gensler constantly makes the claim that we already have securities rules. And I look at this in a very simple way. It is, yes, we have rules. And yes, they literally are completely irrelevant to digital assets. Somebody, you know, in Washington, in front of Congress should ask the simple question, which is, okay, great. We have this DAO. We have this token. If I go on to Edgar and actually sat there and showed it to them, you cannot possibly fill out those forms because those forms in Edgar, in the SEC forms for an issuer, require a corporate structure. They require corporate financials. They require all sorts of things that don't exist. And it may sound like a simple, obvious thing, but the rules don't allow that.

On the trading side, Coinbase, for example, if you want to trade, name the token they trade, they can trade against dollars. It could trade against stable coins. It could trade against Bitcoin. There's no allowance in SEC rules for multi-currency trading. And there are many, many, many of these things. So the simple reality is there aren't rules. And there are principles that we sort of care about, but they're not all that interested in those principles. And that's really the issue. The issue is there should be some rules, there should be some principles that make sense. And we just can't get away from that. I mean, the FTX set us back a lot in many ways. I mean, the DCCPA that they were promulgating, which frankly, had they not collapsed, we probably would have gotten that. which would be a crime because the reality is DeFi should be for what I would call financial market competition, i.e. breaking the oligopolies that exist throughout much of financial services. What DeFi is today is mostly regulatory arbitrage, people who want to avoid things.

And eventually, that's not going to be able to stay that way, right? There's going to be a couple of the speakers said it, there's going to need to be a way to do some level of anti money laundering for any of the fiat on ramps for D5, that's absolutely necessary. Governments are not going to allow it without that. And frankly, the IRS and their their compatriots over overseas are not going to allow people to be able to hide income and revenue all that easily. So these things are, once you buy that, and our industry does not want to buy that, once the industry accepts that, then you can actually build something. Then you can actually get an agreement on a regulatory process. So my point is that people like, it's too bad that Greg Voss left, because one of the things that I find incredibly disturbing about Bitcoin maxis is they ignore the financial aspects of it.

The fact that it costs a lot of money and there are huge frictional costs for many, many platforms for buying and selling Bitcoin. And there is wide dispersion between those. You know, even if you just had basic financial regulation, people would want to understand that. And we don't. And so, yeah, I mean, I think Meltem's point about crypto being a shit show. I mean, look, it's a lot better now than it was five years ago. We have the data. We look at it all the time. But the truth is there are some basic principles that a lot of people in the industry agree on, but it's not all there. I mean, things are simple, like fiduciary responsibilities. I take an order, I do the best I can for it. Disclosures, what are the risks? What are the economics in whether it's

an issuer or an operator? Fair markets, manipulation is a bad thing. And I think most people would agree manipulation is a bad thing, but we don't really have a good way of doing anything in a disconnected market. And last and certainly not least, and Simon can talk about this, laws that allow companies to protect client assets, right? You know, the idea that right now the SEC is higher in priority for BlockFi investors than individual investors who sent the money is insane. And we have a lot of insane rules. So, I mean, I kind of think that you need to agree on basic principles. And I agree with Melton.

We need to have the industry kind of promulgate those principles and get some sanity back. I think everyone agrees with all that. I think generally, though, what I'm hearing every conversation I have like this is a whole lot of fear and negativity about what's going to happen in the United States and beyond. Let's lobby very few answers, which I don't blame anyone. I'm in that boat with everybody else. I just wish that there was a direct path here to deliver our message. I mean, Meltem eloquently said that the crypto industry itself is a shit show, so it's hard to deliver a message in that context. But for people to understand the importance of this asset class and that it's important to so many people. Not ironically, Meltem, we said that you should run for Senate in New Hampshire.

We have someone on stage now who ran for Senate New Hampshire. What's up, Bruce? Hey, what's happening? Yeah, you know, I actually, I think I tried to get Meltem to run for this seat. She'd be great at it. She's far too smart. But there's another chance in three years. Yeah, Meltem and I are neighbors in New Hampshire. And yeah, I ran over the summer.

It was a very interesting experience. I mean, you know, one of the things that, there was a few things that I learned, you know, I kind of got a PhD in politics by running. And one of the sort of sad things that's a real reality that I think anybody who's really experienced in politics will tell you is that it really, really is just about the money. You know, I had the idea that, like, people would care about my ideas and that I could, you know, just speak and talk from the heart and, you know, people would agree with me, which is true, but that doesn't get you votes. You know, I, like, in the debates, I absolutely crushed it by any measure, all the polls, you know, completely crushed it. But that's, that doesn't win you votes. Unfortunately, in the United States, what wins you votes is money. So, you know, there was another candidate in the race, you know, and I saw all the candidates, you know, the congressional candidates, the Senate candidates. I got to meet them all many, many, many times because I, you know, I spent the whole summer going to like all these town committees and

everything all over New Hampshire. And so I would see the other people running for Senate and Congress and governor. And, you know, one of them, he went to every single town in New Hampshire like twice and he was working like-hour days. And the congressional candidates, same kind of thing, you know, Caroline Leavitt, very, very, very hardworking. The incumbent, Maggie Hassan, who has a 98% similar voting record to Elizabeth Warren, she's basically Elizabeth Warren light, she didn't go to any town in New Hampshire. As far as I know, the only appearance that she did was the one mandatory kind of televised debate that you just sort of have to go to. And as far as I know, other than that, she really didn't do anything. She just kind of sat at home. She doesn't even live here in Washington, D.C. and just collects money.

The money is what decides these races. And she raised $40 million. There was publicity when I first jumped in and speculation that I would raise a bunch of money from the crypto space. But even at the most ambitious to even raise a fraction of that is just really, really, really tough. And the money isn't quite there, like people think. So that was one thing that was kind of a, you know, sort of a sad lesson, you know, that it really, like, it doesn't really matter what your ideas are. It's just, if you can raise a bunch of money, then you've got, you know, you've got a really, really, really good chance. And if you don't have a ton of money, then you don't. So I don't know how we fix that. But, you know, getting people more active. And now you have these, of money, then you don't. So I don't know how we fix that, but getting people more active. And now you have these, a lot of these machines have been around for a long, long,

long, long time. So it's kind of easier for them to get that money. They have things like bundling, they go out and send emails to hundreds of thousands of people and they can get thousands of checks from that. So there's a lot of problems in the current system. And I hope other people will try. I would be great if not. It didn't work for me, but I hope other people try. We get some Bitcoiners and crypto people in the office that would help a little bit. Will you try again? It's not, you know, it's not probably not anytime soon. You know, it's not something I'm, you know, to be honest, like I wasn't really psyched about the job. You know, it's not something I'm, you know, to be honest, like, I wasn't really psyched about the job.

You know, I was kind of like, I viewed it honestly as a step down from my current lifestyle. I don't understand why billionaires and, you know, some prominent people run. To me, I was kind of dreading it. I'm like, oh, man, if I win, I actually have to go down there and work with these clowns and, you know, be there. You know, I went down and visited a few times during the campaign. I met Rand Paul and some other senators and things like that. It's maybe a tiny cool factor, but my goodness, my cool factor is right now in my library in my home full of comic books. I mean, that's way cooler to me than having a senator

office. The whole job and the whole idea of going down there just seems like not that fun. So I was willing to do it. I viewed it kind of like being deployed or something. It's like serving. Somebody's got to do this. And the other sad thing is, it's kind of funny, even if I won, there isn't much I could have done differently. It's not like I could say, hey, if you guys would have helped me and I would have gotten more votes, I would have fixed all this. No, I wouldn't. As a junior senator, you don't have really any power.

It's not like you can stop Elizabeth Warren or set the SEC straight or cancel the TSA or something. You don't really have much power at all. You're just one of a hundred. Um, and if you're in the Congress or you're one of 435, so, um, yeah. Bruce, can you talk about, um, some of your, so obviously Gary Ginza came out and said, um, you know, just file the forms. Um, you and me both know that broker-dealer, you now have to apply to be a special virtual asset or a special purpose broker-dealer. I'm still not aware of anyone that's passed that process. Are you aware of anyone that's actually managed to get through being a broker-dealer that can work with security tokens and virtual assets?

Yeah, that's a great question. I know, I think that Gensler is disingenuous when he says that. It's just not true. You know, the idea that Gensler has put out there, and just for those who don't know what Simon's talking about, you know, many, many times he said things to the effect of like, hey, just file. If you want to sell securities in the US, just file with us and file the forms and come on in. And that's very, very disingenuous. There's no way that he doesn't know that he's lying. That's a lie. It's just not true at all. You know, the Genslers and the Warrens of the world want to give this impression that our industry is a bunch of foolish cowboys out there like,

YOLO, we don't care about the regulations, let's just do it. And that's not the case at all. Some of these are billion-dollar companies, and we probably spend more money on lawyers than any other industry. There's very sophisticated people who've been in business for decades. They have lawyers who've been in business for decades. They hire some of the biggest, most expensive law firms, and in many cases pay millions or even decamillions of dollars. So the idea that these lawyers are just off there yoloing out into the sunset and not filing the form because they're too lazy or too stupid is just absurd. If there was a way for the lawyers to comply, believe me, the lawyers would do it. And I can list a hundred companies off the top of my head

that if they had clarity would gladly file whatever form there is. But there isn't some form that you can just do. You can become a broker-dealer. We did that. But that doesn't really do much use. You just mentioned the special purpose broker-dealer. Even that rule has conflict within it. For one thing, nobody's been awarded it.

For another thing, it says that you can only do custody, but you can't deal with retail. So what use is that then? You still would need a retail broker-dealer to face the public. And then what? They have to plug into a special purpose broker-dealer. And well, how do you do that? These things are just not doable. So the idea that, I mean, Jesse Powell made a joke about it when Gensler said that one time. He said, oh, thanks, Gary. You know, that's all I needed to do was just file a form. Yeah, but he puts it in perspective. You know, a company like that with the millions and, you know, deca millions that they spend on legal fees, you know, clearly if there was a way, it's not just like people are lazy.

You know, I mean, we even went through the work of becoming a broker dealer,aler, or acquiring a broker-dealer and getting permission to operate. It's a tremendous amount of work. I have to take a personal license, get my fingerprints taken, my email is monitored, public communications, all of these things. And you're still not really able to do what we'd like to do. I mean, I can't just go and start issuing things as tokens and trading them. So it's really disingenuous and unfortunate that Gensler says that. It's just simply not true.

Well, one of the more critical and honest people about what's happening in the United States obviously has been Balaji, who is joining us now. I'm glad we were finally able to make this happen after a few weeks of attempts. So I'm going to go ahead and give you the stage, Balaji. Have at it. Thanks for joining.

All right. Scott, can you hear me? I can. You sound great. Okay, great. And Bruce, really great commentary. I agree with a lot of that. I have a maybe three-part strategy for not just the US, but the world, internal, external, vertical. And here is what I mean by that. So right now, a lot of attention is focused on DC and the federal government and various attacks on Coinbase and all the crypto banking and so on and so forth, and rightfully so. In many ways, if you think about Maslow's hierarchy of needs,

anybody who's building crypto apps or stuff that's at the top of the stack, well, at the very bottom, you're getting asphyxiated. You're losing air. You need air first and then water and then food. And then you go up to the top, you're doing some crypto things. So you need crypto banking first. And more generally, what you need is really political support. And I think at best, you can defense in D.C. because it's just fundamentally, you know, nowadays disaligned. I'm not saying there aren't some, you know, good people there, aren't some smart people, positive people. But here's an alternative strategy. So the internal strategy within the U.S. is at the state and local level. As we know, Texas has, Texas GOP has a line in

their platform, which is the right to buy, sell, send, receive digital currency shall not be infringed. We have Montana and Mississippi, as I recall, have Bitcoin mining protection acts. We have Wyoming and Tennessee have Dow laws. We have, you know, Miami's mayor accepts Bitcoin, as does New York's. We have Colorado accepting crypto for taxes, and New Hampshire is very crypto-friendly. And we have now DeSantis and other governors being anti-CBDC, right, the Fed's CBDC. So you put all that together, and that's essentially something where red and purple states are basically pro-Bitcoin and, you know, some pro-crypto. And if you take that and you add that to the last 20-something years of sanctuary cities on immigration and states diverging from the feds on gun laws, on drug laws, on abortion, on education nowadays with, you know, homeschooling and so on,

there is a wider and wider divergence, both left and right, from the federal government, and states are basically going their own way. You know, make America states again. That is happening, right? And it's relatively undercovered because it's 50 different stories in 50 different states, but just go and take a look at the divergence of various kinds of laws, map them, look at them over the last 20 years, even the last five, you'll see what I'm talking about. You're probably aware once you have that frame on things. So what that means is the internal strategy is, the other day, Kathy Wood mentioned that DeSantis was thinking about allowing the state banks to bank crypto companies.

And if you game that out, that's actually really, really interesting. Even if it's just something where you think it through as a sci-fi exercise. So let's say crypto companies do get banking at the state level. Well, now the Fed would have to actually turn off Fedwire, ACH, or get, you know, Swift or the clearinghouse, turn off Swift, chips, RTP. Basically, he'd be daring the Fed to show its hand the financial totalitarianism that is inherent in the potential of a CBDC. He'd be sort of daring them to do that. And other, you know, red or purple states could also essentially dare the Fed to do that by banking crypto companies at the state

level and essentially extending the same line of sort of state level, you know, we call it defiance, whether you call it decentralization, whether you call it federalism, a federal law that's been extant on everything from sanctuary cities to drug and gun laws. And the thing about that is, if you take that a little bit further, you could imagine that Florida and Texas and others could reopen the gold window, just call it the digital gold window. You have bitcoin.florida.gov and bitcoin.texas.gov and bitcoin.mississippi.gov and bitcoin.colorado.gov and so on. You can just buy, sell, send and receive Bitcoin. It's like a very simple, you know, 2013 exchange level thing.

And that order book could have limit orders that are replicated across states, both within and outside the US as well as across corporate exchanges. And then the state in return for kind of playing the political sport, they get a cut. So they start accumulating BTC for the state. And what this also does, it solves one of the big problems that's happening right now, which is hundreds of billions of dollars are fleeing state and local and community banks for money market funds and big banks, because the Federal Reserve is basically bankrupt and de facto a bunch of banks. And people are fleeing the small local banks. They don't know if they're going to be solvent for these money market funds and big banks that are basically banking with the Fed either directly or indirectly.

And so if you have state-chartered banks that are ordered or told or whatever to bank crypto, you reverse a bunch of that because crypto does make money. You have all these companies that lost banking now return to banking. You have the state level actually reopening the digital gold window. They can actually make some share of money in BTC. And also, they have a roadmap that is not simply anti CBDC, you can't just be against something, you have to be for something. It's for freedom, right? It's against serfdom. So you know, for digital freedom, and you're against digital serfdom. And that's something which I think is very powerful. And then that can be copied outside the U.S. because there's all kinds of, so first internal and then also external.

So many countries around the world, you know, from the UAE to Palau to actually a fair number of countries in Europe. Obviously, there's El Salvador. Lots of countries around the world, especially some on the smaller end, would potentially copy something like this. And they could also have essentially a gold window, a digital gold window open. So that's internal, that's external. So you're basically kind of going to both, you know, small states, red states, purple states, and then foreign states. Okay. And you're basically saying, look, DC is recalcitrant, but 96% of the world is not American and probably 50% plus, actually more like 80% plus of Americans, if you look at the recent Pew poll, don't actually buy into the federal government. So so that's something where you kind of work around it internally and externally.

And then, you know, it's kind of like the marijuana companies. You just sort of you know, there will be lawsuits and stuff like that. But you've got 50, you know, different different states backing you in the states actually now have an incentive because their banks are getting destroyed otherwise. Right. So, you know, they kind of need to do something. Otherwise, hundreds of billions of dollars is flying out the door. So that's internal, that's external. And the third strategy is vertical. And the thing about this is, you know, Bruce was talking about how elections are all about money. It might be true to a greater extent than even he might think. And this is actually something I only put together recently, which is, the other day, Larry Summers tweeted an observation I'd also actually had independently,

which was that the life expectancy decline within the USA recently, the sharp decline, is similar to what happened in the USSR before it fell. And in fact, there's other similarities as well. For example, within the USSR in the 80s, you had a lot of internal rumblings. You had Eastern Europe and within the USSR, there were people who wanted change. The USSR lost, obviously, a war in Afghanistan and pulled its troops back. And it also had something called glasnost and perestroika, where it had greater levels of free speech and free markets that sort of, you know, rumbled the whole thing. And at the very end, for the first time since the early 1910s, the people in the former Soviet Union had a vote, a true vote, for not just, you know, a communist, but something else. And they voted against central planning.

And that ended the Soviet Union. It was the first true vote, the first true say that people had had in 80 years. Okay, so now apply that here. Well, there is the life expectancy decline that we know. There's the loss in Afghanistan that we know. There's the internal rumblings, you know, where enormous political polarization within the U.S. as well as within, you know, let's say allies of the U.S. And there is also actually the aspect of like a true vote. Oh, there's actually Glasnost and Perestroika because American Glasnost is, you know, social media in the sense of the lawn and free speech. And American Perestroika is truly free markets in the sense of what Satoshi gave us. So you put all that together. And what's the true vote? Well, the true vote, you know, people have said Bill Clinton actually said the Fed share is more powerful than the president, but you've never voted for the Fed share. So the true vote is actually Bitcoin versus dollar. Again, you have a vote that is possible against central planning, where, you know, when the full scope of what kind of comes out over the next few, you know, weeks and months and maybe years, it'll be clear that it's not just about whether interest rates are high or low. It's that juicing them up and down and so on like this basically crashed the plan. And so voting for Bitcoin and voting for that with your wallet is making it go vertical. And so it's the internal, external, vertical strategy to essentially have genuine change, which is a change in monetary policy from the juicing up and down of the Fed to the algorithmic monetary policy of Bitcoin. All right.

So that was the Inter-Electional Vertical. Let me pause there and take any questions. I see Gabor and Simon and Scott. Yeah, I'll let them ask you directly. I think that was incredible. And there's quite a bit to unpack. And they obviously have insight to contribute. So go ahead, Gabor.

Hey, Balaji. Thanks for all your work. And hey, everyone. My question is sort of a note on the question is, can the US really be safe? And I'm just, you know, I spent the past 10 years lobbying, trying to get Bitcoin and Tematic and all kinds of innovative teams approved and wrapped into products that are regulated and mostly unsuccessfully and made some progress. And I found throughout my work that every time I want to get something done in the United States, I have to leave to another country, get it done, make it big or get it approved and bring it back and spend a few years socializing.

And so one of the examples was indexing the crypto space, European benchmark regulation was put in place as a result of some of our work. And the U.S. now have no problems with indexing and price discovering related to ETPs. And there's a bunch of other examples. So my note is that, in my opinion, the U.S. cannot be saved there. We need to create a half a trillion to a trillion dollar industry, or starting at least like around 100 billion to make a noise around the topic and then bring it back and from, you know, outside in, because regulators just don't do anything. So I guess my question to you, Valerius, do you think think that the US can be safe from the inside or does it have to be

external pressure? And I'm just noting that throughout my experience was mostly outside pressure. And you look at, for instance, I believe that stable coins are going to be useful in the US and that's primarily because actually the Tether model is playing out as a big success story in emerging markets. So, yeah, the question is, can the U.S. be saved from the inside or is outside pressure necessary? It's a long and complicated question, but let me offer just a couple of different vantage points and then get to it directly. The first is, over the course of the 20th century, you know, as most people don't usually think about, but it's really important, why did so many immigrants come to the U.S.? It's because their countries couldn't be saved, at least within their lifetimes, at least by those people on their own. Why do people come from China to America?

Because it went communist. Why do people come from Korea to America? Because the North Koreans invaded and, you know, they were communist. Why do people come from China to America? Because it went communist. Why do people come from Korea to America? Because the North Koreans invaded and, you know, they were communist. Why do people come from India to America? Because it went socialist. Why do people come from Eastern Europe and Russia? Because it went socialist. Why do people come from Nazi Germany? It went fascist. Why do people come from Iran? It went, you know, fundamentalist. Why do people come from South America? Well, it went kleptocratic and often socialist or sometimes fascist. And so many of these countries, unfortunately, the world did end for them. There were asset seizures. There were tin pot dictators.

There were speech controls. And it did happen to people just like you or to your parents or to your friends' parents. And it's simply not talked about as to why did they have to pick up stakes and leave home in search of a better life? Because their home countries were infected with a mind virus of either, you know, the far right or far left or, you know, fundamentalist varieties that essentially made, you know, previously peaceful, normal country into something that was absolutely not. And, you know, many Middle Eastern refugees today are living that, right? And so the thing is that there's, I think, this impression that it can't happen here, that, you know, that one is

simply exempt from history. But that's not necessarily true. That's not a law of physics. In fact, the majority of Americans had, you know, ancestors that were unfortunately subject to, quote, history in that sense, right? And Tyler Cohn actually has a post on this where he's like, you know, we sort of take for granted that we aren't living through living history where walls are moving and things are shifting. Ray Dalio also in his recent thing on principles of the changing world order, he points out that there's a lot of stuff that surprised him because it never happened in his lifetime, but it happened many times in history before, like transition of empires and things like that. And some of these things follow a generational pattern or

multi-generational where it's like, if it's a 75 year arc or let alone a 200 year arc, no one human is going to have the game film on that, right? You know, you, you just, you just have to read history to, to look at, you know, such curves over such a long time. So, um, so that, that's a, is, you know, many of those countries in the 20th century, in theory, they couldn't be saved, but then they could because, you know, for example, India, which I'm familiar with was a socialist basket case for many, many years. But a combination of both internal and external reform, people going abroad and bringing back software, proving that Indians weren't losers and could succeed on the world stage and proving themselves as CEOs and so on. And that's a, you know, like a reductive way to phrase it, but you know what I'm saying.

And then bringing some of that back to India. And now it's actually amazingly, shockingly on the rise. If you've been to India, and if you've looked at like the past and present, it's just like, at least to me, from what it was in the 80s and 90s, it's absolutely a jaw-dropping transformation. And so it could be saved from the inside, but it needed something from the outside and had to go through its time of troubles as well. And, you know, then you ask, you know, let's take it to the USSR. Could the USSR be saved? Well, not in its political form, but the majority of people, you know, yes, obviously there's this huge, you know, Ukraine war right now. But if you think of Estonia or Poland or Czechoslovakia, or, you know, now it's, you know, Czech Republic and Slovakia, like many countries are overall doing better off after an adaptation period, post Soviet Union. And, you know, they're

they're freer, and they're, they're better off, or what have you. And so yeah, it could be it could be fixed in that sense, just not that particular political unit. But the state and the nation are different. That's why nation state is actually a portmanteau. It's two different things. The nation and the state are like, nation comes from natality. The state is the administrative layer. They're as different as, let's say, labor and management in a factory. Okay.

And, you know, a lot of people try to identify the two, but, you know, just like what Russia was or the Russian was to the Soviet Union, the American is to the U.S. Like the Russian is to the USSR as the American is to the US. The Russian is to the USSR as the American is to the USA. There's an administrative unit, a state above the people. And do I think the people have potentially a good future or many of them? I do think so. Do I think the state does? Well, it's been spending a lot of money. And people have kind of known Pete Peterson as that debt clock in New York City, and there's Pete Peterson or others. And someday that abstraction may actually come due. And I actually think we're actually at the beginning of the fiat crisis. And whether it takes 90 days, I think it might take 90 days, I think it might take 900 days.

You know, I actually do think now the debts are coming due. And so the question I think one has to distinguish between the people and the political unit, because the people hopefully will be fortunate and, you know, will do very well over time. But political units have had problems over time. And it's not assured that they're immortal. And Dalio doesn't think they're immortal. And Arthur Hayes doesn't think it's immortal. And Jack Dorsey thinks hyperinflation is coming and so on. And so, you know, we can see, but basically, you have to kind of decouple the question of what can be saved and, you know, and so on. So this is how I think about it. Go ahead, Simon, jump in. Yeah, what an awesome load of content there, Balaji. And yeah, just want to reiterate,

the thing that I believe would give US hope is competition. Because, you know, I've always said that Bitcoin is a regulator of the regulator and who regulates the regulator. The only thing that regulates regulators is competition. And so by allowing Bitcoin to exist, you will get a better user experience and a better, more competitive dollar into the future. And so just by allowing people to opt out is how you get the best product and the best experience. And only the best product and the best experience can compete moving forward.

I'd like to share a bit of experience of what worked in the UK, and it's actually really simple, can work in the US as well. And I'm not sure if you've come across this, but there were a couple of subtle changes in the UK that did a lot for fixing the issue that has been experienced in the US at the moment. The first was they privatized, sorry, they nationalized the central bank. So Bank of England went from being a private company to integrated into England. But one of the first things they did is they added a third strategic objective to the Bank of England, which was increasing competition in banking. And once they added that objective,

every policy and every move had to be analysed with that additional three tier. Is this going to increase or decrease competition in banking? So if the Fed had an additional strategic objective, that's a proven model. And what that ended up doing is it ended up creating, you know, when the UK was actually ready to embrace crypto, I tried to give it to Boris Johnson in 2012. But I ended up having to leave my country just to support the industry. But many years later, it came back, and they introduced what I was talking about earlier.

The whole virtual asset service provider regime has already been written, and FATF has already said to every country, adjust to it and implement a virtual asset service provider regime. But when they implemented it, it actually led to some of the fraudulent companies in the UK having to leave the UK and go to the US. One of those was Celsius. Celsius couldn't get its virtual asset service provider regime registration

and was classified a collective investment scheme and was given a notice to leave the UK because of what they detected and ended up in the US. And so that simple manifest of adding that one strategic objective to the central bank, actually, it can counter many of the things that the U.S. is experiencing right now with the concentration of banking. And so I don't know what it's like to get such a change happen in the U.S., but that's one of the things I think the U.S. should look at, adding increasing competition in banking to the strategic objection of the Fed. Yes, Simon, I want to jump in and ask

Bology along those lines. I mean, Bology, earlier you mentioned, obviously, it becomes a competition between Bitcoin and the dollar. Obviously, everybody, I think, knows that you've put your money where your mouth is on that one. We're sitting here watching poetic a bit about what can be fixed in the United States. But if hyperinflation is actually coming and coming in the near future, whether it be 90 or 900 days, as you said, is any of this particularly relevant or is it going to sort itself out in that situation? Yeah. So let me talk about that for a second. So, you know, the way I think about it is I burned a million to get people to understand they're printing trillions.

So that's to say, if you look at the bet economically, actually a few days before the bet, I had set out, I basically said I was trying to get a million in Bitcoin tasks. And I had some takers, but not enough. And I was like, how can I bring attention to the fact that, you know, while the White House is meeting with Ted Lasso, we have had multiple emergency meetings by the Fed. We have had essentially like I put this list together of all of these different, you know, like basically catastrophes that were happening in the banking system and the market more generally that were simply not being covered as like a totality.

Just to give you, you know, lists like this post from the other day, let's level set. Emergency Sunday Fed print for domestic banks. Initially, it was an estimate of $2 trillion to be printed, potentially $18 trillion to backstop all deposits. 186 banks reported as insolvent as Silicon Valley Bank by a Stanford study. $500 billion wired out from banks like a record number seeking safe havens, like, you know, $150 billion in the discount window, already more than 2008, $400 billion printed in days reversing most of the quantity of tightening, a second emergency Sunday Fed print on March 19th for foreign banks, a joint Sunday statement that U.S. banks are resilient, five dead banks, including ostensibly too big to fail, Credit Suisse, Rumbles Round, Deutsche Bank, and Charles Schwab, another emergency Friday meeting of Yellen and FSOC another statement that U.S. banks are resilient and a statement that further

actions may be necessary and all that comes against a backdrop of articles in charge from the Fed and FDIC talking in coded language about how many U.S. banks are insolvent due to 620 billion dollars in unrealized losses caused by the Feds I think it is fair to say quote surprise rate hikes because as late as November 3rd 2021 you know, Bloomberg quoted him as saying he's going to be patient on rate hikes. Then after he gets re-nominated November 22nd, then suddenly rates get hiked to the moon fastest rate, you know, hike in years. And everybody who is positioned for at least expecting either low rates and zero rates indefinitely, or at least a gradual ramp, suddenly all got destroyed in the same way at the same time, because they bought the same asset from the same vendor. And so despite all of that, this basically has sort of been hushed up and hidden.

It's been underplayed. It's been reported piece by piece, but not as an overall story. And part of what's interesting, part of the narrative around this was, A, you're stupid. And if you don't look at your bank's balance sheet, you're stupid. And if you do and you talk about it, you're evil. What are you trying to do? Cause a problem here, right? So it's basically this catch-22. You're damned if you do and damned if you don't, right?

If you don't look at this stuff, well, you're stupid and you deserve to lose all your money, tech bro, right? And if you do look at it and you say something, oh my God, I can't believe you're saying something, right? So of the two, you'd prefer the second, you know, to look and to be yelled at for that. And so the thing is that when you talk about the speed at which events can develop, it was, you know, two days for SVB, you know, to basically collapse. It was like 10 days for five banks to collapse. It was about 42 days, by the way, for the US to go into lockdown in 2020, when it was totally denied to then it happening. It is just a few days for these, the spate of deals overseas where, you know, China's announcing all these

deals in Yuan, actually India's announcing a bunch of deals in Rupees. It was, you know, about six months between, you know, Bear Stearns and Lehman. It was about two years for the collapse of the Soviet Union. And moreover, in about 90 days, we have at least two, you know, major things that are happening. One is the debt ceiling vote. If you look credit default swaps, you know, for US sovereign debt, I think this guy, Adam Cochran posted a graph of that. Those have been spiking. USCDS, I think one year sovereign default, if I remember it right. And we also have the launch of this FedNow thing, which is not a CBDC, but it is, it's technically different from a CBDC, but it's not really different from a civil liberty standpoint, because it makes it much easier to do freezes and seizures and impose

capital controls and so on. And, you know, you combine that with the fact that they're obviously attacking crypto banks and closing the exits, and that the printer has started again. Now, it may not be by the way, a traditional, you know, some people say, what are you talking about? All these if banks are actually having problems, you're going to have an economic contraction, you're not going to be deflations won't be inflation. And like, well, think about all these emerging market scenarios, especially like, you know, Argentina, which I posted about, which combined an economic contraction with capital flight, right, the price of dollar tripled as people wanted to get the heck in their local currencies, people wanted to get the heck out, right? And so that, you know, whether,

by the way, you know, you can distinguish my diagnosis from proposed remediation. I wouldn't call it solution, but remediation, mitigation. You don't have to believe Bitcoin is the answer to believe, hmm, you know, maybe, you know, like Indians, lots of Indians, I know, I couldn't believe this the first time in my life, all these guys who were just like H1Bs, or, you know, immigrant founders getting blamed for their bank going to zero at SVB. They're like, okay, I'm gonna wire the money back to India. This is some insane country where, you know, I can lose all of the money at a bank that I was told was safe. And I'm being blamed for it when, you know, I'm just like heads down coding. They're telling me I should have looked at, you know, this, this hidden footnote on page 70 of the financials.

So guys, so one answer is people are wiring to foreign banks. Okay. That's, that's something that's happening. A second is people are buying gold, gold, you know, at the central bank level and individual level, that's spiking. If you look at that a third, some people will buy commodities. I mean, though, of course there's counterparty that. A third, some people will buy commodities. I mean, though, of course, there's counterparty risk. You know, are you going to have the barrel of oil in your front yard? Maybe, maybe not. Fourth, some people buy other cryptocurrencies.

Fifth, people might buy real estate. But of course, you know, that's also something where, you know, depending on where you buy it, you know, you have to make sure in a true crash. They froze the truckers. They froze Russian assets. You don't know exactly what's going to be honored in that situation. As I mentioned, in much of the 20th century, you know, if you were a landlord in China, if you were a kulak in Russia, if you had glasses in Cambodia, your property rights weren't exactly honored in the crunch. So you don't have to agree with the, you know, the solution or remediation, you might have, you know, something else, but at least the problem statement of this thing is creaking more than creaking. It is, uh, it's in its, you know, it's, I don't think it's a financial crisis. I think it's a fiat crisis. Um, and how fast could it

come apart? I can't say it's a hundred percent probability of 90 days, you know, like a million bucks is just something where I wanted to burn it to get people to understand how serious the situation was because the establishment is not telling you that. The establishment is telling you it's Ted Lasso time. And part of the reason for that is, you know, this guy Jean-Claude Juncker has the saying, you know, central banker type guy in Europe. He's like, when it gets really serious, you have to lie. And if you think about the bail-called haircut hits, right? And so, you know, if it's like, you know, sneaking up on someone to then go and just drop the cage on them, right? And of course, they'll deny this. They'll say this is not true, not true. Just like they said,

inflation didn't exist and it was transitory. And then we have always been fighting inflation. Just like they said, the lab leak was a stupid conspiracy theory. And now, well, we always had suspicions about the lab leak, just like, you know, Iraq, WMD, it existed, and then it suddenly didn't. I mean, there's 500 examples of this, right. And so, you know, there's going to be, of course, some people are like, well, the establishment says X, so therefore, I believe X and fine, if that's your case, you know, go ahead, do treasuries, you know, obviously not financial advice, do whatever you want to do. But that is kind of, you know, my perspective on the bet. It's not really like, no matter what, I'm burning a million bucks. Why am I doing it? I'm doing it to send a message that there's something is wrong in the system. Now, I'm gratified, by the way, that there's essentially three opinions, right? People disagree. A lot of people disagree, of course. People agree. Some people agree. But the third is actually the most important. You know what it is, Scott? Go ahead.

I agree, but I don't agree on the timeline. Wonderful. I'm so happy. I'm so happy about that. Why? Because then it's like, you know, look, if you're prepared for, you know, 90 days or you're prepared for 180 days, you're prepared for 360, you're prepared for 720 you have now entertained an x-risk scenario that is not talked about look it's great great that people are talking about and that i lost you first yeah i could

it's actually important it's important sorry did you hear what i said missed you for a second it cut out i wasn't sure if that was on my end or yours. But yeah, just repeat the last one. I think it was on Balaji's end. Yeah. Yeah, Balaji, we seem to have lost you here. At least we have on my end. Is that true for everybody else? Yeah. Go ahead.

Okay. Can you hear me now yes no yep okay yes okay so uh this concept of x-risk right um basically uh you know we we've we talked about x-risk x-risk is like the risk of a pandemic or x-risk is the risk of hostile ai and people talk about these things and think about these things so that they can hopefully mitigate against these things or at least be aware of these things. So now you have potentially a new X risk that people are thinking about, which is, wait a second, could de-dollarization actually happen? And could actually this be something where you can't just inflate and tax the world to pay for the debts again

because by the way 2008 you know people are people sometimes tell me well boss you nothing happened in 2008 it was fine not a big deal we'll just do that again like you know look it's a completely different world in 2008 you know um people don't line up at a bank anymore physically they can send wires online you actually have you, in 2023, USD is no longer too big to fail. You have both RMB and BTC as like scale competitors. And God help us. I hope it's, you know, not RMB. You have lots of countries with legit national currencies that are now inking these bilateral deals, as people can see. And that's not, by the way, from their standpoint, it's not an attack on the dollar. It's a defense against the dollar because they don't want to have, even if they like

the U.S., they don't like the idea that the U.S. can just cut them off remotely. The dollar is not just a currency. It's not just a piece of paper. It's a network. And the more intertwined you are with that network, the kill switch is in Washington, D.C., and they've shown they'll use it even on Western people. Obviously, it's the Bank of Canada or whatever, but they'll use it on truckers.

They'll use it on folks they don't like. And you're not a sovereign country if you can be like remote switched off like that. So that's why you're seeing the ASEAN countries like Malaysia and others. You're seeing obviously Russia, China, Iran. But you're also seeing like India doing deals with the UK and with Germany and with Israel and New Zealand

and 18 other countries to do deals for rupees. Those aren't like anti-US, they're just basically pro themselves. You know, they're basically like, you know, I like them, but I just don't want to give them total control over everything. That doesn't mean I hate them. It just means I'd like to have some sovereignty of my own. Thank you very much. Right. So that's a context is basically, you know, in 2008, the inflation was essentially, you know, I had this post, did Republicans pay for 2008? And it's essentially this this graph that shows that in 2008, Republicans and Democrat congressional districts were roughly equally matched in terms of their GDP. But by 2018, Democrat congressional districts had pulled way, way, way, way ahead. And here, let me actually, Scott, I'm going to send you this tweet, see if you can. Yeah, I can pin it. Sure. Yeah, here we go. You can just send it in the DM and I'll put it up.

Yeah. Okay. Hold on. Let me see that one second. Okay. Pinned that tweet because it's a fascinating, tell me you got that up. There's a really incredible graph that people should at least,

at least you should be aware of this hypothesis. Okay. And tell me if you got that pinned. Once you got that. it's DMD. Okay. It's pinned now. There we go. Okay.

So if anybody looks at this graph just for a second, all right, it's in the pinned tweet, all right? So basically, looking at the graph, you see first the outline. Okay. What's the outline? The outline is where Democrat and Republican districts were by GDP in 2008. And you can see that there, that outline is roughly equally matched. Okay. The blue and the red are roughly equally matched. By 2018, however, the blue dots have moved way up relative to the red. And the link over here is to like this Wall Street Journal study where you can, if you have a subscription, you can actually watch that happening. And all of the richest districts are suddenly Democrat. Okay, like by a lot. And you're like, whoa, that's really interesting. Because 2008 to 2018,

what happened then? Well, that was the bailouts. And all the printed money, the Cantillon effect, essentially, the concept of the person who gets the printed money first gets the purchasing power, and then second and third and fourth, it drops off. Well, who got the printed money first? It was people on the coast. It was banks, and it was the folks that they invested in and so on. And who got it last? Well, probably some like

meatpacker in Nebraska or something like that. And so this, what happened was it wasn't like, oh, the Fed saved the world in 2009. It just so happened that over the course of 2008 to 2018, Republicans suddenly became poor. And it, you know, whether this is all set up, by the way, to be very hard to prove, it's, you know, it's invisible, it's deniable, but it just so happens that maybe the cost of the print was imposed on the political opposition, unconscious even to those doing the imposing, okay? And then the second thing is, there's another group that may have paid for 2008, and those are the non-americans and so here is um you know the second tweet here where if you remember the arab spring was started arguably

by this guy setting himself on fire because food prices were so high so inflation was exported and it's it's like it's an annoyance or is annoyance in you know some places but it was like a deadly thing in other places because you know know, they just, you know, they, they like, they just didn't have enough to eat and that caused wars and revolutions. I mean, Libya is still in chaos. It's, you know, they're, they're not free. They're it's anarchy, right? So the world did end for them. And so my point is that 2008, uh, wasn't costless. It actually had massive, massive costs. It's just that the system is optimized for optics. It is optimized to shunt costs to where they're least visible.

If you think about the US healthcare system, it's also like that. The whole point is this maze of prices where you cannot tell what the actual true cost of something is. And it's meant to be this chase. Because if it was visible, you could see it, you could hit it. And it's almost like a fly. If you've got two flies and one's a slow fly

and you swat it, it dies. But the fast fly lives. So the system has been evolved and optimized to be intentionally opaque and hard to understand because if it was easy to understand, that's a fly that gets swatted. And so this is a way of basically taking lots and lots and lots and is a way of basically taking lots

and lots and lots and lots and lots of money from enormous numbers of people without them understanding what's happening or even putting up resistance um so the reason i just say that is that's like call that a lemma you know in math you establish like a lemma you know before you go to like a main main kind of thing so call that a you know like like an initial premise or a lemma or whatever uh where 2008 wasn't costless actually had massive costs what happened though after 2008 so with me so far scott yes no yeah i'm with you and i think everybody's uh well engaged in listening so continue okay okay so so once you realize 2008 had real costs one of the things that happened after 2008 is it wasn't just like red and blue tribe anymore. You know, Scott Alexander, the bloggers talked about the origin of gray tribe, like the tech libertarian ish kind of types. And they weren't really like

their own kind of group in 2008. But they did receive a fair amount of that printed money. That was actually like, I don't know, some percent of some percent went into VC, it's actually a tiny fraction relative to the amount of the bailouts. but it's actually the amount that I think was used perhaps most efficiently. And that's actually like in a, it's not an elite, it's a counter elite. It's Elan, it's Jack Dorsey, it's Mark, it's essentially all of the tech founders and VCs and CEOs that the establishment hates so much. And most importantly, you know, of course, while, you know, we have no idea who Satoshi was, that culture of, let's call it tech libertarianism, produced Bitcoin. And certainly a lot of venture capital went into Bitcoin and more generally cryptocurrencies and building it up. And so now you have at least, you know, you can add three, four or five tribes, but at least you have a blue, gray and red tribe. And then, of course, abroad over the last 15 years, you've had China and India and other countries rising.

I mean, they were already rising then, but they've really risen over the last 15 years. And so just simply assuming that it's going to be exactly like 2008 where you print again, it's not a big deal, may not be actually what happens, because now there's actually alternatives. Within, you know, the West, there is the entire crypto movement, which was born out of the bailouts, literally, like Satoshi, you know, put that in the Bitcoin block header, right? The first one, Genesis block. And outside the US, you have a bunch of countries that don't want to be sanctioned and are aware that they don't want to shoulder the cost of inflation. And so it just, you know, set up for just a completely different thing than 2008, where, you know, in 2008, a bunch of people thought, okay, the best thing to do is just all buy treasuries, and that's going to have the backstop and so on. And that was actually the right move. And all the people who predicted inflation,

or high gold prices, and so on were wrong then. But now we are seeing gold moaning, right? And maybe the next bad thing doesn't look quite like the last. I think that simply thinking the world is static and the same thing that worked before is going to work again, it's going to work out the same way, is actually part of what got us here, because these rate hikes are just trying to copy what Paul Volcker did in the 80s, where the initial state is completely different, right? You'd had this ultra low rates for such a long time, you'd had so much bought in bonds on the books of all these banks, you just had a completely different country 40 years ago, but people are pulling one kind of page out from history. And it's like telling a pilot okay you

know when we flew up this time you flew down then it worked but all the other variables the altitude are totally different and you you crash right and um so the point is that basically um a bet is to raise you know like the burning of a million was to wait raise the price of the printing trillion and b to simply say oh it's going to turn out the same as last time, don't worry about it, I don't think you can immediately get there. It is possible, of course, that it's all fine. And in a few years, five years, ten years, sun is shining, birds are tweeting, and it's not a big deal, right?

I don't think so. But I hope I'm wrong. And during the Volcker years, debt to GDP was, I believe, you know, 31%, 32%. It's currently 125% or 130%. So it's complete nonsense to repeat that playbook. Yeah. Yeah. As you said, just a completely and utterly different scenario.

Brett, I see you've had your hand up there for quite a while. I'm sure you have comments and questions for Bology. Yeah, I wanted to thank you very much. Good to meet you. I bring it back to the kind of the state of crypto in the U.S. and ask the question, we're talking about dollar or Bitcoin, and that's sort of the choice that's being made. And how, you know, US, America isn't necessarily, you know, immune from the way that many nations have gone through history, where they have their rises and their falls, and, and some things are, you know, potentially

inevitable. And there might be this particular establishment that is trying to gain control over fiat and prevent crypto sort of, from ever being really an established presence, at least here. But one thought is, is there a future where there's really dollar and Bitcoin? And maybe the story there is a lot of the kind of this presentation of a choice of one versus the other and the mutual exclusivity is actually the work of only a few very powerful individuals within our, you know, top echelons of governments or different agencies. And they're the ones who are really kind of pushing this all the way down the system, whether that's through the banks or to, you know, different other aspects of the economy, and that there's a different world in a couple years,

maybe where an administration turns over, I'm not even sure which political direction I would bet on this being more favorable for crypto for. But there's a complete turnover of the administration. You know, different people in charge of regulatory agencies are replaced. And there is a world where, you know, imagine if like, you know, the sort of younger generations, if, you know, people in this particular space all of a sudden were like in charge of government, like there might be a world of, you know, dollar and Bitcoin together. Is that do you see that as like a possibility that sort of changes the story and the narrative over the next couple years? Totally. And one thing, actually, by the way, I want to make totally clear, I'm always on the

side of the average American and the pioneer, the frontier, you know, like, on both right and left for many, many years, generations, there's been, you know, like on the right, it's like if the government may. And on the left, it's like, you know, the suspicion of COINTELPRO and so on. Like that's a deep seated thing to be critical of the state and to have suspicion of the federal government. It's like, you know, on both left and right, that's been this huge thing from the very, very beginning. And it goes all the way through even to the present day. Right. That's that's how you have your civil liberties. That's how you have your free markets. It's fundamentally, you know, a deep, you know, like, what are you called suspicion, concern, apprehension,

constraint, whatever of, you know, the centralized state, right? And so, so with that as proviso, like, what is like the positive route forward? Alana Newhouse has this phenomenal essay on brokenism. And I actually think that, you know, like, that kind of pulls it down to a single point, which is, you know, do you believe that what is needed is simply reform? Or do you believe it's more like refounding okay reform is for example like what what simon mentioned is actually a great concept for reform a system that's capable of reform you could just add a third thing to it and it'd be fine right you make a process change and now you have competition between banks and so on i think it's a great concept right um but a system that

needs refounding i mean one way of thinking about it think about it as like a venture capitalist or an angel investor there's a bunch of teams that come to you and they've got the same words you know they're going to build a social network but one of them is zuck right zuck's team okay he's actually going to execute right it's the same words but a different group of people leads to a totally totally different outcome and uh you know of course you know both of them matter, both the business plan, both the process and the people. But if you have, if you don't have the right people,

the process, whatever words you add, reforms you add doesn't matter. And so to your point, you know, Brett, I think in many ways, you know, I wrote this other article called, you know, founding versus inheriting. And, you know, the thing is that the early 20th century guys who built the US were just of a completely different character to the people who are running the state right now. You know, all the founding DNA, all the pioneering DNA, all the zero to one DNA,

all the from scratch DNA, all the people who are able to, frankly, you know, balance, you know, like make money and do calculations and get things right technically, those folks are very disproportionately outside the state. The people within the state are those who are verbal and politically optimized. You know, when you hear the term millionaires and billionaires, right, like millionaires and billionaires, that's like saying meters and kilometers. Okay. It's like a thousand X off. Okay. And that's not unique. You know, you saw the NYT editorial board head and, and, and Brian will, editorial board member and Brian Williams saying that Bloomberg could give

everybody a million dollars. You saw this California state legislature, uh, you know, person saying that Mike Solano was a billionaire. A lot of the people in government literally think billion just means big number. They're like, uh, like people from, you know, a tribe that doesn't have words for numbers bigger than 10. So that's like a group where you can't simply reform. They're simply enumerate. They're verbal optimized, but they can't run logic. Actually, kind of like some of the chat GPT stuff where it can give back words, but it

seems plausible, but then you push it on the logic and it's not necessarily there. You have to actually push it to use tools or code. So what does refounding look like? I mean, there's a zillion ways of thinking about this. But you ask, how could Bitcoin and the dollar coexist? Well, what I just mentioned, where you have states and states are essentially having the digital gold window open. You have Bitcoin.Texas.gov and bitcoin.florida.gov and so on. And they're essentially taking the same kind of thing that they've been doing on sanctuary cities and gun

laws and drug laws and abortion laws and education and 50 other different things, and they're diverging. They apply it to banking. And then what they could do, I mean, actually, Illinois, about a decade ago, as I recall, they issued IOUs because they couldn't pay their bills or something like that. Let me see if I can find that link. You might be able to Google Illinois issues IOUs. And the thing about that is it wasn't just a lottery winners. It's something where, you know, they basically states could. a stable currency, and you can actually see that it's not fractional reserve, it's full reserve, and then people flood into that. And that is how the states reform the feds, right? Now, obviously, what I'm describing there will involve a lot of

yelling and so on back and forth, but in theory could be done in a way that's a refounding. And in many ways, by the way, a macro frame on this to say why that might be plausible. One of my top five mental models is 1950 was like peak centralization. So you had one telephone company, AT&T, and you had two superpowers, the US and USSR, and you had three TV stations, ABC, CBS, NBC. But if you go forward and backward in time, that gigantic centralization into just a few entities actually relaxes and you go backward and forward in time and it decentralizes. And a lot of events that happened, happen in reverse. For example, 1890, the US frontier, it closes.

But 1991, the internet frontier reopens. You go backwards in time, you've got the robber barons. You go forwards in time, you have the tech billionaires. Go backwards in time, you have Spanish flu. You go forwards in time, you have COVID-19. You go backwards in time, you have the Soviets are the senior partner in the Russia-China relationship. Forwards in time, the Chinese are the senior partner. Backwards in time, you have the UK as a senior partner in the UK-India relationship. Forwards in time, it's now India that's a senior partner. And you can have so many examples like this. And one of the things I think a lot about, one of the reasons, another one is, you know, go backwards in time, and the New York Times is allying with Soviet Russia to choke out Ukraine.

Walter Durant is a New York Times, you know, columnist that basically covered up the Ukrainian Haldimor of the 1930s. You go forwards in time. Now, New York Times is, you know, reinvented itself. It's pro-Ukraine and it's versus Russia. Right. And so there's so many flips like this. There's like I've got this in this book I wrote, The Network State, where there's like dozens and dozens and dozens of flips like this, there's like, I've got this in this, this book, I wrote the network state where there's like dozens and dozens and dozens of flips like this. It's actually something where I can't pretend to understand the entire pattern, but I've got so many examples of it that it's

actually something where I'm like, okay, I think there's something here. It's almost like an origami, you know, you do origami and the thing kind of flexes up in one way and you unfold it and it flexes back. And it's almost like the world is sort of unflexing back to what it was in the 1800s in some ways, where power gets decentralized. And so that means as many of the same conflicts that happened on the way up happen on the way down, but with opposite outcomes. And for example, like FDR did the successful gold seizure, executive order 6102 on the way up, and that like sort of defeated gold and began, you know, in some ways, the modern era of fiat. But on the way down, there may be an attempt to seize Bitcoin, but I don't think it'll work necessarily, or at least it hasn't been proven yet.

And so because of this, all the centralization, just to again, to your point, all the stuff where you have this gigantic centralized state was not how the U.S. was organized in the 1700s, 1800s. It was much more decentralized. It was really arguably FDR that truly repealed the Tenth Amendment. You can trace it back to Lincoln and Teddy Roosevelt and so on. There's an arc of centralization upward. I would agree with that. But FDR really finished it off where basically he just interpreted interstate commerce so broadly as to essentially vitiate the 10th Amendment. But now the 10th Amendment is back, meaning powers are getting reserved back to the states.

And so that means you have 50 governors and you have mayors of cities that are doing innovative things. And the chessboard is opening up again, not without conflict. I think there may be some conflict associated with this, but I do think that's, you know, like, where do I have my hopes in the U.S.? I have my hopes on the refounding and the state and the local and the spirit of, you know, the pioneer American, the frontier American, which is a lot of you folks. But then, of course, I also have my hopes outside the U.S., right? As pro-U.S. is, you know, I'm pro-American as opposed to pro-the state. But I'm also pro much of the rest of the world,

which had a terrible, terrible, terrible 20th century under socialism and communism and fascism and fundamentalism. And it's now doing pretty good. And they don't, you know, you can be pro an average American without wanting the U.S. government to be able to, like, remote kill switch some other country's economy, right? That's not democracy. That's domination in the name of democracy, you know? So that is kind of how I think about it is, like, there's definitely a pro case within the U.S. of refounding. And this is also the point that, you know, Simon made,

which is fair competition actually makes you better. Domination doesn't make you better. Fair competition makes you better. All right, let me pause there. With the idea of refounding, and any guests, you can raise your hand if you have a question or would like to comment with Balaji, but with the idea of refounding, obviously, as you said, that pushes power not only towards states and local governments, but obviously towards foreign entities as well. I mean, would you argue that that's the reason we're seeing such aggressive movement from the federal government against this trend? Because that would be against their interest and they actually don't want to see that refounding and the power being shifted to the smaller entities. If you truly believe in equality, you believe that everybody should.

I mean, it's not just that a tiny group of people in DC have root access over the entire world, right? You know, that's not, that's not right. Or at least, there's a pretty strong argument that they just inherited it. And that was maybe the order of 1945. But it's, it's just not the reality of today. For example, you know, one thing that's a big thing in India, where I spend a lot of time is India is not on the security council, right? Is that democratic? It's not, right? There's 50 different things like that where the world order is simply something where it's not considered just by like 96% of the world, as well as maybe 50, 60, 70% of Americans. So that is something where, yeah, the incumbents don't like that, but something is going to get renegotiated because the current, we call it

economic power equality balances, it's not the right answer for some guy in Washington, D.C. to be able to hit a button and shut off the accounts of millions and millions and millions of people worldwide. That's not equality. That's not democracy. I don't know what that is. That's like some kind of financial totalitarianism. Right. But what you're talking about is the future that quite a few people fear from a central bank digital currency. I don't have a particular opinion as to if and when that will happen in the United States. But that exact choke point or kill switch would be theoretically on every citizen's wallet and bank account. So do you think that any of this is a push in that direction? I mean, Elizabeth Warren is flat out kind of hinted towards, hey, listen, Bitcoin doesn't have value, but digital currency does as long as it's backed by the power of the government. That's what she's talking about right yeah and one of those reasons by the

also that i was like you know let's let's have awareness of what's happening now why did i burn a million well you know i i'm not saying so so when we think about it is if you think about the concept of camouflage right you could have soldier that intentionally goes and applies camouflage to their face, and then they sit in the bushes, and they're a sniper, and they're like a camouflage predator in the sense that it's intentional. But you could also have camouflage in the sense of a sneak, which just evolves camouflage, and it's not intentional, but just evolved and emergent, right? And so the emergent thing that I see happening, I'm not calling it intentional, but the

emergent thing I see happening is, A, the Fed has managed through a complicated series of things to get all the banks to trust it and then render a bunch of them insolvent by devaluing these bonds. B, huge amounts of money is suddenly flying out of regional banks, community banks, all of the gray tribe and red tribe are essentially under attack by blue tribe in an emergent way, whether it's conscious or not, right? It's something where it just so happens that all the tech banks, you know, the crypto banks suddenly all got blown up. And all the Republican banks, the community banks, those are also getting blown up. And where's all the money going? It's going to the big banks, blue banks, and it's going to the money market funds, right?

So emergently, A, the money is all getting centralized either at the money market funds right so emergently a the money is all getting centralized either at the fed or at you know banks that are too big to fail which you know the fed implicitly will backstop 200 um i know about the you know it is true that the fed has also said they're gonna uh bail out essentially all deposits but net net they've caused such uncertainty that the money is on net flowing from the small banks to the big banks so a they're centralizing all the money effectively at at either the fed or at the big banks fed through the money market funds custodian bank with reverse repos effectively storing it at the fed trillions of dollars is there so a the money's getting centralized b they're cutting off the

crypto ramps um by attacking signature by attacking silvergate by attacking coinbase by attacking Coinbase, by attacking Binance, by attacking everybody in the space. Okay. C, they are, you know, like, rolling out this CBDC in, you know, in July, they pushed up the timetable. And D, the printing press is going again, even if they're denying it, even if they're not calling it quantitative easing. Again, like a snake, they just evolve a different a different word right because you've kind of adapted to something oh no fed now it's not a cbdc it's just a instant payment system that has many of the same properties as a cbdc oh you know this new btfp program it's a loan don't you understand it's a loan that they'll have to pay back of course they'll probably roll over the loan or they'll do something else once you've managed money into existence why are there any rules right so the whole thing has kind of evolved and emergent i'm not saying it's intentional but the emergent thing is kill all the red and gray banks centralize all the money

at the big banks in the fed cut off the rails for crypto exit and then roll out this fed now kind of thing in july you put it all together like that, it doesn't feel so good. Have you looked at the Restrict Act as well, Balaji? Yes, exactly. The thing is, they don't even call it positive things anymore. They used to at least try to call this stuff the Patriot Act, which is at least good. Restrict is a little in your face. know the next one will be like the totalitarian act right or the you know end the first amendment act or something like that but exactly right the restrict act someone was like oh yeah when are the capital controls coming to america huh i'm like the restrict act is even worse than capital controls it defines like a

transaction and some communication and and there's some guy who's like, oh, no, you're wrong. It's not 20 years in prison and 250K fine for using a VPN. That's just the max penalty. I'm like, oh, thank you. Thank you very much. Thank you for the clarification. Also, isn't the Restrict Act only roughly 55 pages? They used to actually hide all of this activity in very long bills and small language. I mean, this is, as you said, it's incredibly in your face and obvious, intentionally vague. There's no room for interpretation that this is particularly positive. Yes. And I'm so glad that we have uncensored Twitter. Thank you, Ilan.

Ilan, if you're listening, thank you. I'm so glad we have uncensored Twitter. I'm so glad we have an uncensored internet to actually talk about this because it's a total bait and switch where, you know, you can make an argument on it for a very tailored kind of thing on TikTok, you know, yes or no. But this is not that. And in fact, actually, you know, the most ironic thing about it, Scott, was evidently the Commerce Secretary was like, you know, yeah, I've got the authority, but I may not actually even want to ban tiktok because you know we would lose all the voters under 35 so you might get a donut hole or at least what they were trying for was a bill that wouldn't ban tiktok but would give them power for an unelected board to shut down anything um without review and then they wouldn't ban tiktok also do you know what i'm saying so it'd be like massive power without even achieving the ostensible objective of the whole thing which is china i mean effectively isn't that china's policy towards american social media So it'd be like massive power without even achieving the sensible objective of the whole thing.

Which is China. I mean, effectively, isn't that China's policy towards American social media? That's exactly. See, that's the thing is basically people think that the answer is to become China, to be China. And, you know, this is the thing. You know, people talk about China copying the U.S. And China does copy the U.S. Absolutely. They're very conscious about it.

If you go to 8BTC.com or something like that, all the Chinese tech founders know all the American companies. They're very conversant with it. They're, in a sense, humble because they're learned. Whereas very, very few Americans, and I'm not saying this is a diss. It's just something where China's hard to understand. You have to actually spend energy on it. You read Kai-Fu Lee's AI Superpowers,

you'll get a sense of the Chinese tech ecosystem. They've got their own Galapagos Islands. You know, like their, you know, Meituan, like the Groupon of China was like actually very successful there as opposed to Groupon here, right? So the point is that it's like very one-way awareness. They're totally aware of what's happening in the U.S. and not vice versa.

So when China copies, they do so very consciously. They do so, you know, as like a strategy and so on and so forth. But then when America copies, they do so very consciously, they do so, you know, as like a strategy, and so on and so forth. But then when America copies China, like, for example, with lockdowns, like, for example, with these sort of speech controls, like basically what this is, the Restrict Act is the American Great Firewall. Okay, it's just not admitted that they're trying to copy China in a crappy way. I mean, not that copying it is good but like copying it without even admitting that they're copying it right and uh and and basically copying them to beat them and it's actually like you you can't win by using uh whatever the definition of win is

in my view win is not military confront win is not destroy the remaining civil liberties winning means building an admirable society again right that's actually by the way that's the core reason you know meersheimer all these guys they talk about you know all the conflict oh you know china's now you know fighting us the thing is china for many many many years used to admire the u.s and look up to the u.s like may go it's like you know it's i forget what it translates to but it's like a admirable country or something like that. And they used to admire the U.S. and they used to look up to the U.S. And then post, you know, 2020, sorry, beautiful country. That's what it is.

Post 2020, after COVID, you know, it used to be in all previous natural disasters. You had some hurricane or flood or earthquake or something like that. And you'd see video of brawny Marines, you know, getting off the plane and helping people, right? Whether it's in like Haiti or New Orleans and people had that backstop. And in fact, every movie, if you think about it, like Independence Day, you know, the aliens come and they blow up the White House. Like the decision goes to Mr. President, right? And you don't even realize that the fictional story, the decision lands up on the desk of the president, right? So you don't even realize that the fictional story, the decision lands up

on the desk of the president, right? So it is portrayed, you know, I have this concept in the Network State book of God, state, and network, like what is the most powerful force? Is it Almighty God? Is it the U.S. military or is it encryption? And all kinds of movies have put this narrative in people's heads that the U.S. military, the U.S. government will be there when everything else fails. You know the movie Contagion, Scott, you ever seen that? Of course. Right? And you compare that, you compare Contagion to what actually happened in 2020. And actually, a lot of the disease stuff, some of it, I mean, obviously, COVID-19 was not as severe

as the disease in Contagion, at least eventually at first it was it seemed quite bad but the the biggest difference is the cdc in contagion was portrayed as selfless competent civil servants that's not what we got right and uh and so people's mental model around the world was updated because the u.s was basically thrashing like every other country but it was no longer you know like it was no longer, you know, like it was no longer just had a handle on the problem was helping everybody else. Instead, it was like writing and fighting and so on, et cetera, with itself, political chaos, everybody pointing fingers, yelling, yelling, yelling, yelling. And and it wasn't there. And every country had to figure it out for themselves.

And that was this critical moment where I'm not sure people realize how critical that was, where countries basically stopped looking up to the u.s model and so the actual answer the way to win is not like to then point a gun at somebody not to then say i'm going to cut off your you know i'm going to sanction you i'm going to confront you the answer is to look within and to build an admirable society again which is totally within your capabilities with our capabilities whatever but it's it's not something that you can do by pointing a gun at somebody, or by, you know, threatening to seize their money or yelling at them, or saying you're disrespecting me. And so on, you have to be worthy of respect, you have to actually go and rebuild an admirable society. And, and the thing is,

that's so like obvious, but it's also, it's hard to do, right? Like, for example, when I was a kid, India was not an admirable society. It was like something that was like very poor. And I mean, it was just, it was like dysfunctional in lots and lots of ways. And a lot of hard work by a lot of people have built into something where, you know, look, it's not perfect, but I'm shocked at how much better it is. It's incredibly, incredibly better. I'm amazed at it. And that's something which is decades and decades of hard work. You can't just like snap your fingers and get there. I think the talent exists.

You have Elan. You have, you know, Dorsey. You have Mark. You have a lot of builders. You have a lot of people in this room, right, who are genuine builders. They're held back by the state. I absolutely agree with that. They could build an admirable society.

But that is a different thing than like just military confrontation or economic confrontation. That's like a last resort. It's not like a first resort. At least that's how I think. But that sounds like something that would happen on a long time frame. And when we're specifically talking about Bitcoin or crypto in the United States and a technology that is advancing at the speed of light, especially now, obviously, with the incorporation of AI, I brought this up earlier. I mean, Scaramucci, when he was on here at the very beginning, now hours ago, said, you know, nothing happens here until Gary Gensler is gone.

That's the first thing he said. And I sort of commented that I fear that everything that's being built that will be meaningful in this space and industry is being built now elsewhere because nobody in their right mind would touch the United States. And that basically puts the United States another five or 10 years behind, even if we do get sensible regulation or legislation at any point. So considering how fast this industry happens, how can we build something that's meaningful that can actually help facilitate that advancement in this country if it's just going to go everywhere else, work at the state and local level, find politicians who will work with you.

And then, you know, essentially like that, that's, I think the recipe, right? It's Florida, it's Texas, it's Colorado, it's New Hampshire, it's Tennessee, it's Wyoming, it's Mississippi, it's Montana. Maybe it's cities, maybe it's Eric Adams. I don't know, you know, like, but basically you have to have a politician who will essentially take political risk in return for it, like essentially be a heat shield and say, you know what? You're seeing the movie Pacific Rim, Scott? Yes, of course. OK, so when these giant monsters are coming out of the ocean, you can't like fight them as a human. They had to go and build giant robots.

Right. And then it was a fair fight. And the same way, like like when it's a government that's attacking you or a company, you can't win. You need your own government. You need Florida. You need Texas. You need Colorado. You need New Hampshire.

You need maybe a foreigner. You need El Salvador. You need, you know, India. You need basically other countries that have their own, you know, like they're the giant robots. They've got their own hit points. They can't simply just be bullied and knocked to zero in one shot, right? They're sovereigns in their own right. And that's actually, you know, that is stepping up and actually realizing that's the

level at which one has to operate. DC, of course, there's some good people there and so on. There's some people who are pro-freedom. But fundamentally, what dc is is about banning things and mandating things right it's about inflation and it's about taxation it's about invasion and it's about confiscation that's what it is right so you know to have like a pro-freedom person in dc is like a a protestant pope you know like in some ways, I mean, like maybe there's some Popes with Protestant sympathies, but fundamentally, the whole thing is about like the laws, the more laws you pass every law. I mean, just think about, you know, you're going on the highway, right? You've got a 40 mile per hour, lower bound,

55 mile per hour, upper bound. That's like a, if you take the V axis of velocity, you just put two lines on it at 40 and 55, you're within a bounding box there, right? And every law is like that. What's mandatory, what's forbidden, you're in a box. And now you apply that on another axis and another axis and another axis. And you are essentially within a cage of all of these rules. And what they do in DC is they just add another and another, another, another, that's, that's how they think about, you know, doing things is, um, they will come up with some law or some, some lobbyist drafts for them. They shove it into a bill. It's pushed out to production for the entire U S and, uh, there's no testing. And so my point is at best, you can play defense in DC. I don't think the answer is to wait for whatever DC is doing. I think the answer is find political sponsorship at the state and local level and then, you know, make enough money for the state and locals so that it's worth it for them.

And I think that's actually can happen. It happened for marijuana. It's happened for, you know, a lot of other industries and spaces, depending on how you look at it, happening for homeschooling now. And I think it can happen for crypto. That to me means that we're going to be re-importing the actual innovation and entrepreneurship after it's already developed elsewhere into jurisdictions within the United States that actually accept it, but it is unlikely to be built here. But maybe I'm wrong.

I don't think necessarily so. I think, I mean, here's the thing also, there's actually a good to this, which is many of the states that I mentioned are less wealthy than the coast. So you're actually helping, you know, like, you know, Florida and Texas are okay, but like Mississippi or something like that, a lot of small states can put themselves on the map, like Wyoming, you know, Wyoming is doing okay, but it can put itself on the map by, by adopting good rules. And then what they are essentially budgeting for is their budget to fight the feds on this, right? That's like, honestly, it's something where the governor's like, you know what, there's

50 entrepreneurs here. I mean, like, you know, on this particular call, you go, you find, you make a table of all the states in the US where the governors have expressed pro-crypto noises. It's about 20 states or thereabouts, actually quite a few, maybe it's even 25, I don't know. And you go and you have a delegation, you go and meet with the governor and you say, will you bank us, you know, at the state level, right? Maybe start in Florida, maybe start in Texas, I don't know. And, and now you don't have to initially wait till it happens outside the US, you can you pioneer within the

US. Now, I do think, by the way, of course, I'm pro the American founder, I'm pro the global founder, I want the global founder also, of course, you need that as well, right? You need you need the outside game as well as the inside game, right? So yes, it's great that there are global founders who are still pushing it forward. That's 96% of the world, of course, we're glad. I mean, you know, for example, just in East Asia, for Chinese liberals, like crypto is really important to get out of you know the chinese cbdc right that's like really important stuff that their entire life isn't surveilled and put in a database it's very very important other people are fighting different

civil liberties battles you know around the world but um but yeah i think there is a game plan to do it right now in the u.s and the answer is find political support at the state and local level assume dc is basically hostile even if there's some good people there. That's, I think, the recipe. Yeah, I wish we had Caitlin Long here today. I actually just sent her an invite. She's here quite frequently. Obviously, everybody knows she's the CEO of Custodia Bank out of Wyoming, and that they were rejected for their master account with the Fed. I would really love to hear her thoughts or yours as well on how that can be then shifted to the state level. I think we all know that Wyoming is extremely crypto friendly, cracking, working on a state

level bank there. And Balaji, I'm also curious your thoughts as to why you think Custodia, which was simply a fully reserved, over-reserved bank, was rejected in favor, obviously, of the fractional reserve banking system. I mean, if you look, the Fed doesn't put too many press releases there. It's got thousands of financial institutions that it regulates, but it decided to put the custodial rejection next to the weekend bailout of U.S. banks and the weekend emergency bailout, swap lines, whatever, for foreign banks. um so decided to put it very prominently and i think the fundamental reason is bitcoin is an alternate you know theory like we're this is an alternate financial system you know like it's actually genuinely that it's based on fundamentally different premises of

self-sovereignty and transparency and programmability and equality in the sense of everybody has the exact same rule of law around the world, right? Anybody has the same experience with a smart contract. All those things, you know, or just even the fact that it's full reserve rather than fractional reserve. You know, if you read their 86-page ruling, I i mean it is genuinely a a root and branch ideological competitor right that's that's fundamentally what it is it is a better way and the old system is trying to strangle the new system rather than adopt it and uh and and benefit from it right that's you know that's the tragedy of the whole thing is that um a lot of this stuff, if you had a more farsighted state that would realize you just can't fight the future endlessly, fight every single thing. They fought everything from taxis with Uber, Airbnb, every single thing.

They hate it. It's a scam. It's a bubble. It's a this and then it's a threat to democracy. It's always negative on every innovation because they're just's a this, and then it's a threat to democracy. It's always negative on every innovation because they're just kind of hanging on by their fingernails to the past. They're not aligned enough with the new stuff. That's a tragedy of it. But go ahead. Oh, Caitlin's here. Great. Yeah, Caitlin joined. Wow. That was fast. Thank you for joining.

Well, we literally just got into, we were talking about obviously how to save crypto in the United States to give you context, but we got very deep into sort of banking at the state and local level, what could be done to sort of circumvent the obvious choke point and policies happening nationally. And that obviously led to us talking about custodia, not getting the master account and being curious as to if there's still a way to sort of operate within the framework of Wyoming without the Fedmaster account? Well, there are two solutions. One is the ongoing litigation over whether the Federal Reserve had the right to deny custodia a master account at all. I'll set that aside because that's ongoing. But then the second piece of this is there's a history, a long history of uninsured bank charters in the United States. In fact, actually, it wasn't until about 1990 that most states required their state chartered banks to get insurance. This was

something that was entirely optional. And the states were the ones that chose whether to require their state chartered banks to be insured or not. And here's the punchline. Back then, the FDIC was apolitical. It's not anymore. And as a result, you have multiple states now wanting to resurrect their uninsured state charters or create uninsured state charters as a means by which to deal with the politicization of banking that's coming out of the FDIC. And what I'm alluding to specifically is Operation Chokepoint 1.0 and 2.0. Just in the past two days, legislators from two different states in different parts of the country, one is more of a red state and one is more of a blue state, have contacted me about creating uninsured bank charters because of the FDIC's politicization of banking. So it's so interesting because when I was digging into how many states, and there are a number of states that have uninsured bank charters, the whole concept here is that if the charter is insured, then the FDIC

policies control. And if the FDIC goes over its skis as it did in Operation Chokepoint 1.0, and is again in 2.0, then the states have no way of pushing back. But that presumes that the states are entitled to access the Federal Reserve payment systems, and that is the subject of ongoing litigation. So these uninsured charters are the way around the politicization of the FDIC. And the question is, is the Federal Reserve more powerful than a U.S. state? And that can only be solved through long and arduous legal action? It's been litigated a couple of times. Obviously, I'm not going to comment on the outstanding litigation of it, and to say that it was filed last June. And the arrow of history is with Caitlin,

because the arrow is leading towards greater decentralization. The states have, on balance, been decentralizing power from the feds. And that's on, as Caitlin, before you got on, we were just talking about how that's been true for sanctuary cities and marijuana laws and drug laws more generally, gun laws, abortion laws, education laws, lots of other laws. The states are diverging from the feds. And this is on a continuum of that as opposed to being an outlier. Yeah. And in both sides of the political spectrum, it is so interesting how this does not cut red and

blue. Crypto, as we saw, does not cut red and blue. And some of the anti-crypto elements, obviously Elizabeth Warren and the senator from Kansas, who's a Republican from a red state, have joined in some anti-crypto legislation. But then you also have the pro-crypto crowd, Lummis and Gillibrand. Those are strange bedfellows politically, right, from a red state and a blue state again. But it doesn't cut across the traditional Republican versus Democrat boundaries. And we're seeing that in bank reform as well. Some of the most critical elements of the Federal Reserve have become Elizabeth Warren and Bernie Sanders. And they're echoing some of the same things that the Ron Paul crowd have been saying. They just have a different solution for it.

But it's so interesting how these issues are not cutting across traditional Republican-Democrat boundaries. Yeah, there's the free Americans, there's the Fed Americans. And you're right. Also, actually, what's interesting is your point on, on Warren is actually interesting where she, her solution is total centralization, but her diagnosis of problem often sounds like, like, you know, something which is critical to the fed, but then she wants to kind of give it more power effectively. Um, and, uh, but, but yeah, I think also at the state and local level, there's a lot of Democrats who want like, you know, credit union,

local banking, that kind of stuff, as opposed to this remote kind of thing. There's a lot of, unfortunately, there's a lot of folks, you know, at the federal level who just want federal power, whether Republican or Democrat, right? Like the restrict act is quote bipartisan. So I think you're right that it's, you know, I've got this gif on how, you know, the future is to first order dollar nationalists and Bitcoin maximalists. Do you see that GIF? Scott, maybe I'll give you that. I'll DM you and you can post it.

Let me give the mic to somebody else and let them talk. I'm going to DM you soon. Yeah, DM me on the mic. you on this topic because or maybe even pivot to slightly because even when we just talked a few weeks ago we were more concerned with operation choke point but since then and kind of during that time we're seeing other banks completely wobble right i mean do you think that the to the but do you think to any degree or is this just uh in my own little echo chamber do you think that any degree to any degree that they went overboard with the attack on crypto i mean we obviously saw elizabeth born sort of attempting to dance on the grave of silvergate

and that then caused their own legacy beloved legacy system to start to uh collapse and wobble yes absolutely and i've talked about this and alluded to it in tweets as well. There's an anti-tech movement. This is much broader than crypto. And I've speculated that one of the reasons for the anti-tech movement is that the Fed systems themselves are outdated. And you've had a number of banks, including Silicon Valley Bank, that have moved well beyond the back end capabilities of the payment system, which are still operating 1970s rails. And, you know, one of the banks, I won't disclose which, when I talked to the CEO, laid out that

they spent four years building the middleware to allow for faster payments on the front end, but having to bridge to the antiquated back end, right? You've got a Ferrari front end, but a horse and buggy back end. And one of the reasons why the bank regulators, I think, have been so afraid across the board of the tech forward banks is because they have not kept up with the technology themselves. And so what you have is the bank regulators going after and trying to bring to heel the tech forward banks because of their own fear of their own technology shortcomings in the backend. And that's their fault. Absolutely. And I mean, when you think about that, it's insane, because that's inevitable that those things will fail in the future, regardless. So it's kicking the can

down the road for a much bigger crisis. Well, yeah, but it's also, you know, I'm not sure it's a much bigger crisis, though, because it's like Seyfedine and I have talked about for years. We both think that this is going to end with a whimper, not a bang, most likely. It could end with a bang, but people will just vote with their feet to the better systems. And that doesn't mean staying captured in the existing system, which is, I saw a reference to semi-analog, semidigital and i think that's right they don't want to let go of the analog nature because it's too costly and so what what we've done is digitize things in you know in pdf form well that's not really digital right it's not natively digital dollars are not natively digital period the only place where you can natively create a digital

dollar right now that i'm aware of is the only place where you can natively create a digital dollar right now that I'm aware of is the Lightning Network, because you can just basically create a dollar that is secured by as many sats as the value of your US dollar, and you can digitally create a US dollar. None of the US dollars in the banking system are digitally native. They're all analog. And why is that? It's because of the way the payment systems work. They're not digitally native. Fedwire and ACH are not digitally native. And that's not going to change with Fed now when that comes online either. These are not digitally native. And so as a result, what we've done is digitize analog, analog native US dollars. And that's, that's a

big part of the reason why the system is as bad as it is from a technology perspective. So I think most people will end up ultimately migrating towards digitally native money. Now, which is going to be the money? Is it going to be a digitally native US dollar? It could be. But right now, the regulators don't want it to be. Is it going to be a digitally native currency like Bitcoin? Well, we'll see. That's where the competition is. But I do think back to the point about is it a bang and is it going to usher in a crisis? Not necessarily. People literally don't want to be forced into an analog world and especially the gen z and millennials who have never once set foot into a bank branch don't want to be pushed backwards into an analog world and they're not going to go into one anyways balaji i i just

pinned your tweet uh pin the tweet yeah one so actually, that gif is something which I thought about a lot. And it's a realignment that Caitlin is talking about in some ways, which is you go from left, right to bottom up freedom and top down sort of authoritarianism. And, you know, I'm calling it dollar and Bitcoin, but it's, you know, it's broader than that. It's fiat and crypto or however you want to call it. To Caitlin's point also, the limitations of the banking rails on the back end were also actually visible during the whole GameStop thing, you know, a couple of years ago. And more generally, you know, in a sense, after 2008, they just stopped issuing banking licenses, as people are probably aware. But the degree to which they did so, I don't think people know. And what happened was, we essentially did two things. Fintech was a front end, and blockchain was a new back end.

Because the federal solution was just, okay, we're going to cut off competition altogether. But we kind of, you know, tech industry, you know, whatever you want to call it, routed around on both the front end and back end. And when we're thinking about that fintech front end, that slick front end that Caitlin was mentioning, imagine if Gmail, when you sent an email from one person to the other, on the back end, there was a pony express, like a horse and buggy that had to manually make its way across the country. And then on the other side, it got scanned and it showed them the email. Okay. It took two days. That's sort of like, but the front end looked like email and the back end was like horse and buggy. That's kind of what it's like. With that said, the thing is then people will say one guy who's actually a reasonable, he had a reasonable argument.

He's like, why would you then not be in favor of the new FedNow system, which would make it instant payments? And I'm like, well, because they've betrayed our trust on everything else and they're printing enormous amounts of money and they froze the truckers accounts and they have facilities within FedNow to impose applicable controls on you. And they have consumer to government payments, which is like just debiting your account and government to consumer just dropping stimulus in. And so unfortunately, I just don't trust that system. If it was like peacetime, you know, there'd be something where you could you could say yeah that improvement on the back end is pretty good but actually we just need to use Bitcoin and we need a different system because we can't trust that centralized

system so that just kind of a different angle maybe complimentary what Caitlin said Balaji a quick question on that in terms of trusting a decentralized system if they end up leveraging the restrict Act to kill self-custody, assuming they're not going to kill crypto, they just kill self-custody, and then they continue choking off the on and off ramps if they haven't done enough already, what does that lead towards decentralization? What happens to decentralization? Does that just slow it down, slow it down significantly, or just destroys trust in the concept of decentralization? I mean, I'm not following every single blow by blow, but it'd be shockingly bad if the Restrict Act passed. And one good thing, somewhat hardening thing, is I'm seeing some people who

were fairly anti-TikTok coming up very strongly against the Restrict Act, and that's good. So there's people who are capable of making that distinction between being anti-TikTok and being anti-civil liberties and free speech, right? Let's just basically hope the Restrict Act does not pass and, you know, like, do what you need to do to make that not go through. In the event that it does go through, you're in a different world where it's, you know, like the U.S. is like worse than China in some ways, because it's not even like admitting, at least China admits it's China. For the U.S. to still be pretending that it was like the old America, you know, like the Reagan, Clinton era America to what it's what it become post-restrict is, you know, too much, you know, but so let's hope that that doesn't pass.

I also haven't followed the play by play, Mario, I know that you've been looking very deeply into it. Does it look like that's legitimately likely to pass from what you've seen? It's got a lot of support. So it's funny, the support in Congress is bipartisan and the pushback from various groups and just the voters really, and the people that are meant to be convincing Congress not to pass this, the support is bipartisan. But I've asked a few people and at least unless there's massive pushback from the bottom up, it is very possible it will pass. I can't remember the numbers, but it's already got a bunch of senators even tweeting about it and supporting it and backing it. They're still vocal about it.

And none are willing to come to my space to talk about it. But I don't know. I'm genuinely concerned. That's why I've done it a whole bunch of spaces. What's also surprising about it is that people don't care. I thought they'd care. We paint it in a very scary way. We're like, hey, this is genuinely heading down the path of China. This could genuinely hurt crypto more than anything else we've seen in the last 12 months. And say bye-bye to your real freedom, in a sense, your digital freedom.

Yet people still don't get it. I don't understand why that is. I'm not sure if that will change and what could lead it to change. I think it just needs at least maybe Vivek or some presidential candidate to kind of take it by the horn and lead the way in rallying support against that bill. But I'm just really worried that doesn't happen yeah um well it is by the way it's much i mean it's crypto for sure but

it's bigger than crypto you have all these people who are like you know tiktokers who may not like crypto who are up in arms against this not so much because because they're pro-TikTok, but there's a lot of videos on it there. I don't know. I mean, there's got to be somebody who – I shouldn't say got to be somebody. Probably people should put in energy to make sure that people on this call or this chat should raise their hands. What's funny is one thing they told us, I had a bunch

of guys from Washington come into the show and they come on a regular basis and the argument they were making is like, don't make an argument that this will kill crypto because right now the sentiment towards crypto is not very friendly. You have to focus on the overreach of the government

and how this is going well beyond TikTok and killing privacy. Yeah, yeah. It's way bigger than... It is crypto, but it's way bigger than crypto. I agree with you. I mean, it's like... I mean, they define transactions so broadly.

Like, you know, even China... So vague. It's so vague. It's like... And it's also a star chamber. Like, my understanding is it's like... And I may be wrong about this, but here's my understanding. It's like the it's like, and, and, and it's also a star chamber. Like my understanding is it's like, uh, and I may be wrong, but here's my understanding. It's like the commerce secretary gets a committee that is an elective. They're able to deliberate in secret and basically throw anybody in jail for saying something the government doesn't like. What, you know, what is this? Right? Like that's, that's just bananas. And, um and um it's it's horrific actually um and uh it's also unfortunately it's it you know when everyone's like oh it won't be used like that i'm like you know i haven't been so impressed with the track record recently you know from obviously

nsa surveillance to now like it's been getting worse and worse and worse so why would you ask for such a power you know um and especially like being marketed as oh defending against anyway so i i basically agree is that it's much much bigger than crypto it's like literally every post on the internet right to your point they could just narrow the language if that was their intention right to to to say they won't use it for that purpose is completely pointless if they could change the language to make it only specific and fit for purpose yeah and the best argument i've heard is oh you can't do a bill of attainder which specifically targets somebody or whatever i'm like you know what you could have a much more narrowly targeted thing for tiktok if you wanted to they're just i mean obviously they figured out somebody to bail out just GM There's pretending that they need to do this super abstract thing

For a specific thing And then whether you want to ban TikTok itself That's a whole separate question But let's say you do want to do that There's ways of doing that with a surgical scalpel As opposed to an absolute sledgehammer That burns a village in order to save it So Mary, you

should do a lot on that. You should get people going on that for sure. Hey, look, I think the best example I've used to scare people, and I've had a whole bunch, I couldn't believe that example. I made it as a joke, expected people to push back. I turned out, I tried to start dispelling my own joke, and I'll tell you what it is. And then attorneys, I've had at least six attorneys confirm that this could be accurate considering how vague the bill is. And I said, if a pizza shop is hosting a website with a company that has a server in any of those countries, including China, the pizza shop is safe, has nothing to do with anything.

They're like, no, this is very vague bill. And I've had multiple attorneys say this throughout the space. None of them heard each other and they're like, no, the pizza shop could be targeted under the bill. That's how crazy it sounds and how far-reaching it is. So I don't know. We'll see. If it passes, I think we should be extremely concerned. Maybe nothing bad happens now, but you never know when they leverage that power.

It's just giving influence to a central influence. Centralizing influence, centralizing power is always probably the most concerning thing, in my opinion. Caitlin, have you taken a look at this at all? And by the way, everyone, we're going to be ending in about, you know, five to 10 minutes. I think we've taken enough of all the guest time. So we will wrap up. I just do want to hear if Caitlin, you've taken a look at the Restrict Act at all. Yeah, I have. It's just another example of crazy broad terms. The good news is what I've been told, and I'm certainly not an insider, so take this with a grain of salt, is that it doesn't have a chance of passing. Let's pray it doesn't and make sure that it doesn't. But

to me, I would analogize it to what the three federal banking agencies did in their January 3rd statement. If you go read the January 3rd federal banking agency statement from the FDIC, the Fed and the OCC, they discourage banks from using open, public and or decentralized protocols. OK, we know what they're getting at, which is open, public and or decentralized blockchain protocols. But that's not what they said. They said in the statement, open, public or decentralized blockchain protocols. But that's not what they said. They said in the statement, open, public, and or decentralized protocols. What is TCPIP? It's an open, public, and or decentralized protocol. What is HTTP?

It's an open, public, and or decentralized protocol. Okay, so that thing got put out there on January 3rd without any public statement. And what they actually drafted was effectively banning the banks from using the internet. Remember what I just said early on, that there is a push to move us back to analog slow banking because the systems on the back end that the government is operating, the Federal Reserve is operating, can't handle fast payments on the front end. And that the banks themselves, from a balance sheet perspective, aren't liquid enough, right? The data that's come out is that the small banks are sitting on 6% of deposits in cash, and the large banks are sitting on about 10% of deposits in cash on average.

Okay. So we saw 25% of the deposits withdrawn within the span of hours at Silicon Valley Bank. So when the small banks have only 6% of deposits in cash and the large banks have only 10% of deposits in cash, Houston, we got a problem in the banking system okay so doesn't that mean that rather so then rather than fix it and make it faster they would prefer to slow the bank runs yes and at first i made fun of the banking agencies for saying they don't want the banks to use open public and or decentralized protocols but as it all played out, now you start to see how that might have actually been deliberate as opposed to just a drafting error that was caused by the fact that they pushed this through without public comment. And I joked at the time, it's lawyers. Of course,

I'm trained as one, not practicing, but trained as one. Lawyers writing policy without consulting tech people. But I'm now not entirely sure that that wasn't deliberate because of what we're dealing with. They knew that there was not enough liquidity in the banking system to deal with a fast-moving bank run. It is by design. And so this gets back to the whole topic of the conversation. We have these tech forward protocols now. And people might look at those protocols, Bitcoin as a system is much, much, much more stable than the banking system is. Bitcoin as a money is less stable in its value fluctuation. But as a system, Bitcoin is far more stable than the banking system itself.

And people get the ability to choose by walking with their feet. Do they want to use Bitcoin or do they want to stay in the banking system? And over time, I think you're going to see more and more people migrate towards a Bitcoin-based system. It is also worth noting that, of course, what we saw in reaction to the bank runs and the big crackdown on crypto that happened during Q1 is that Bitcoin was the best performing asset in Q1. And you're continuing to see transactions and wallets and hash rate move up and to the

right. It's continuing to grow and deepen and broaden as a network. And that's all in the face of the attempt by US regulators to throw sand in the wheels. And I just think that's spectacular that Bitcoin doesn't care what US regulators are doing. So do you think what happened could decouple, could at least take a step in the direction of Bitcoin decoupling from a risk asset? Because that's been the narrative for years now, Caitlin Balaji. Yeah, I think it will. But it already has. We saw it in Q1.

It already has. This is why it decoupled from risk assets in Q1. But it will continue in the short term, probably, to trade more as talked about this, you know, just the number of mainstream people who during the banking crisis were reaching out to both of us independently. And I saw it, I just got deluged, absolutely deluged in my LinkedIn account by mainstream tradified people. These are, you know, traditional finance people. These are bankers, lawyers, accountants, right? White collar folks who are not sort of the, you know, early crypto adopters. And they, I could just see collectively all these people who were reaching out were having their, their, oh my God, wake up moment that I had in 2008, recognizing that the system

they're working in isn't stable. By the way, it never has been. And so the folks, as more folks wake up and realize that, they start to, I think, go down the rabbit hole and get orange-pilled. Yeah, and just to add to what Kaylin's saying, and maybe, you know, wrap up, Scott, is all of Kaylin's comments are excellent. Basically, I think the big thing about Bitcoin is you can hold it, right?

Like gold. It doesn't have counterparty risk. That's why it's not, I don't think of it as an asset in the sense of like stocks and all this. Everything there, everything that's on the stock market, everything that's in a, you know, U.S. bank, everything, frankly, that's in any bank whose central bank is friendly with the Federal Reserve, can basically be frozen. As we saw what happened to the truckers, as we saw what happened to Russian assets, as we saw, as will happen, right? There can and will be digital lockdown. And everything that is essentially either on a server the Fed controls directly or indirectly, it's like within the Fed's video game. They can hit a button and tons of money appears over here or assets are frozen there. They're the system

administrator of this whole world. What are they not the system administrator of? Well, they can't hit a button and create like bread and physical things outside. They can't hit a button and freeze the Chinese system. That's its own whole kind of thing. They can't hit a button and freeze the Indian system. There's other central banks that are somewhat independent. And finally, and most importantly, they can't hit a button and freeze Bitcoin. And it just exists outside the Fed's video game. And that is the fundamental reason why there should be diversions. Whether enough people see that in time, whether or not we can keep the rails open, whether or not people realize that the true vote is not necessarily a typical election, but it's voting with your wallet against the central planning and for BTC, whether or not

people realize that the problem is not low rates or high rates, or even, you know, at a more fundamental level, increasing them very fast or not, but just the variability and unpredictability of monetary policy versus the clean algorithmic policy of Bitcoin. Hopefully enough people will realize that in time to realize that the safe haven is not the same banking system that caused the crisis in the first place, but something outside of it that's outside their video game. And that's why I Bitcoin. That's why hopefully we Bitcoin.

So that's all. I don't think there's a better way to wrap it up than that. Pretty incredible. We've been here for three hours. For me, space is a whole new requirement on my brain's capacity after being used to doing 30 and 60 minute chats. I'm always impressed that everybody can do this. Seems like a totally different conversation that we had at 11 a.m. with Anthony Scaramucci, Meltem Demirz. I want to thank all of the guests. Balaji, thank you so much. And Caitlin for popping in last second. Unexpected has really turned this into something

very special, which I encourage everybody to share it. The recording obviously will be available. Also, we post these on Spotify, Apple music under my wolf of all streets podcast account and just a very interesting note actually these twitter spaces posted on spotify have been more popular than the podcast i've been working my ass off on for five years they've gotten more listens views and engagement so shows you that we're truly on to something and that elon and twitter themselves are on to something with Twitter spaces and this format, which I believe to be extremely powerful in this conversation more so than even the others.

So I please encourage you all to share this, listen back to the parts that you like, take notes. I know that I certainly will be doing that. And we will be back. We're going to start increasing the frequency of these, but definitely next Tuesday at 11 a.m. Eastern Standard Time. I know we have Chris Giancarlo, ex-CFDC chairman, I believe it was his exact title. I've spoken with him before. I know the next week, Raoul Paul will continue to

bring these epic conversations. Thank you all so much for joining. And now in two minutes, I have to go record another podcast, so I do need to go. Thank you all. It's been absolutely amazing. Thank you for your time. And I look forward to sharing these spaces with you more in the future. Bye, everyone. Thank you. Thank you. Thank you. Let's go.