What Bitcoin Did - CBDCs, BITCOIN & CHINA w/ Roger Huang

Episode Date: January 8, 2025

Roger Huang is the author of Would Mao Hold Bitcoin? And an expert on the intersection of Bitcoin and China. In this episode, we discuss China's economic turmoil, the implications of the property bubble collapse, and how deflation is shaping the nation's future. We also get into Bitcoin's role in China, the government's mining ban, the legal and cultural dynamics of Bitcoin adoption under authoritarian control, the CCP's strategic approach to CBDCs and the geopolitical game surrounding Bitcoin. MASSIVE THANKS TO OUR SPONSORS: IREN: https://www.iren.com/ RIVER: https://river.com/wbd CASA: https://casa.io/

The CCP is definitely watching Trump and the American administration. Immediately after Trump spoke at Pubkey and gave out, quote-unquote, crypto burgers, a former vice finance minister actually came out and said, hey, like, maybe Trump is talking so much about cryptocurrencies, did we miss the boat here? Right. So they certainly are watching. One thing most people don't realize is that China is one of the largest stateholders of Bitcoin anyways. Anyway, Roger, thank you for coming on the show.

we've been trying to make this show happen since like the old what Bitcoin did day. So I'm glad we finally managed to line this up. Yeah, I really appreciate you having you on the show, Danny. So you wrote a book called Wood Mao Buy Bitcoin. So we're going to get into that today. We're going to get into basically everything China and Bitcoin. And just China more broadly, I think. Because it's something I don't know very much about at all, really.

But I thought the best place to start would be in terms of like the Chinese economy right now. Because I don't know too much about what's happening. the only things that I've heard in sort of recent months and years is like the Evergrand property developers kind of blew up. Sure. And there was a lot of talk that was going to be like a systemic issue in China. Where is like the Chinese economy at right now? Yeah. No, happy to, happy to talk about that. I will say that like my expertise is more like Bitcoin in China the intersect, but you know, I was happy to comment on Chinese economics

and geopolitics. So the Evergrand thing was a sign. of a larger, you know, sickness, a symptom in what would become a multiple cascading kind of thing. And so in China right now, there is a property kind of bubble that burst. So there was overcapacity that was built because in the Chinese model before, there was this idea of, like, you know, building as much housing as possible because Chinese people love to invest in housing, among other things, but mostly housing, actually. So Everground's failure, there's been other property developers that have failed as well. And now you're in a situation where, like, there's a huge consumer slowdown in terms of

spend. And so I know, Danny, when we talked, you know, talked a little bit about, like, is there inflation in China? The problem now seems to actually be the opposite. opposite per se. Like it seems, of course, like government stats or whatever, how reliable they are. But the, from what we can tell, like, prices are actually going down in general. That is kind of creating its own interesting dynamics, though, because it's not the kind of deflation that's caused because people are, you know, seeing the benefits of advanced technology.

I think you're seeing that in like a couple of sectors. like most notably in automobiles. So that's one area where China's like really dominating and you're seeing a decrease in the price of smart cars, which China is also trying to export around the world. So I think that's like deflation for technological progress. But the rest of the deflation is actually like people are scared to spend money or they seem to have less money or they're not employed. There have been massive layoffs in several key sectors, including pharma and high tech. the youth unemployment rate the last time it was recorded was about like i think 18.8 percent or something so very very very high almost as high as like during the eurozone crisis and i don't know if you

remember like people were saying the youth unemployment is this or that like china's at that stage now and there are a lot of young people who are very restless as a result um you know i think the biggest thing and the most relevant thing to bitcoin and bitcoiners is that uh for chinese people they're asking assets are getting destroyed. Like I, one of the favorite questions I have whenever I meet someone from mainland is I'm just like, how is your domestic share portfolio doing? Like, how are your real estate holdings doing? And people give me answers like variously between like 30 to 60% down.

And I'm like, wow, that's pretty nuts. Yeah, exactly. Like, it's shocking. And it's happening now. So that's sort of the Chinese economy in a nutshell. things are not that great. Now, they did hit the 5% gold they set, but they had to release the crack in, they had to release quite a bit of government stimulus in order to get there. And I think that's going to continue going forward.

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standard. Visit iron.com to learn more, which is irioreen.com. So this might be a really ignorant question, but I don't really know how this kind of thing works in China. Are they free to invest, are the people of China free to invest in anything they want? Or are the very strict regulations on what they can actually do with their money? So there is at least one pretty strict regulation, which is that in order to get foreign currency, there's usually about a 50,000 USD per person per year limit.

Okay. Yeah, and people in mainland China are kind of cut off from the rest of the world. So for example, we talked about the, just to give like the most relevant example, like the Hong Kong Bitcoin ETFs, the spot ETFs. Like mainland investors are not allowed to invest in that, just as a quick example. Yeah. And so the reason I ask that is because I'm here in Australia. I know you're you in Canada, is that right? I'm in Canada, yeah.

Yeah. So I know that there's a lot of sort of foreign investment from Chinese people in terms into like the housing markets in those two countries. Is that just them basically finding any way to get the money outside of the country? Some of it's that. I think some of it is also, I mean, this goes a little bit into stuff that I haven't researched as deeply. But just to give you a couple of examples, like because of the capital controls I mentioned, one of the exemptions is tourism. So people have always talked up like, hey, if you ever go to like the airports, right?

you see like it's like Chinese people who are just buying out the Louis Vuitton store. But that actually has an economic cause, which is that because they're not allowed to have money in foreign currency, unless they say like, hey, I'm going a trip to Australia and I want to buy out the whole Louis Vuitton store. That is like a known exemption to those capital controls. In general, yeah, the housing side, again, don't take me like 100% on this. but I've definitely seen that there's a lot of mortgages issued, like irregular mortgages issued and things like that. There are definitely banks on the Canadian side. I don't know about the Australian side,

but I imagine it's similar, that will work with Chinese citizens and kind of like help them kind of move their assets. And I would say the real estate thing is three things. It's like, one, economic, it is a way for people to get money out of the system. two, it's cultural. Chinese people invest in housing overwhelmingly.

It's like a kind of store of value for a lot of Chinese people. And then third, I would say is it could be political. Meaning like, for example, a lot, it's like a known phenomenon and I think it's called like the empty home phenomenon where like if you're politically exposed

in the mainland, you don't really know what will happen, you know, to your assets or to your family, you might park your family abroad. Funningly enough, like Xi Jinping's daughter, I think, still lives in Boston or something. She did her studies in Harvard under a pseudonym. I think she's still around. Some people might remember the case of, oh, I forgot his name, but the, she's very, very unfortunate. But there was a Chinese, Bo Shilai, yeah, Bo Shilai, who was the mayor. of Chongqing or the authority in charge of Chongqing at the time because it's a centrally

administered city anyways so the his son Bocaga was like kind of like around in like different universities in the West and so you see this often even among the most elite and then certainly among people who are in the elite themselves like they'll as a hedge often park their family abroad. And so with the Chinese economy, do they have the same issues that we have in kind of Western economies where there's a huge debt burden that they don't really have a plan to get out of? There's pretty high personal, not as high as like I would say develop Western countries per se, but there is pretty high private debt, which the deflation in the short term is going to make

worse because deflation, the way it works in that mechanism, right? is like if you're inflating, that that's good for you if you're a debt holder, right? Because then the value of your debt is going down. But if you're deflating, you're actually paying more. So that kind of is a problem, especially for people who have mortgages. Again, like when we talk about like real estate investment, a lot of Chinese people exposed to, you know, holding mortgages, holding properties and things like that. the government debt amount is like smaller as like a percentage of GDP. I need to look up like the exact number, but it's it's definitely like smaller.

But the main issue in China, I think the problem is mostly that it's like a very unbalanced economy, meaning that the Chinese party state has tried to direct it top down in a number of different ways. and there's kind of like three things that I think have really messed with the economy in like non-obvious ways. Like one is the one child rule. Now the demographic curves are very unbalanced. I was actually reading this analysis about how like Chinese savings rate might have increased because it's super competitive to get married as a guy. Because now you're competing. There's like 30 million excess men in China or something.

So there's the element of that particular kind of problem, which is driven by top-down kind of directionalism, right? There's the whole dynamic of like the banking system and the way like state-owned companies are able to benefit from loans at a discount because the Chinese party state kind of directs everything, right? And then I think there's also like a system. problematic problem where the entire models based on industrial exports. So China's just tried to grind its whole economy for the last like two or three decades

into one where, you know, the cost of goods being produced is cheaper. And that stems to everything. That's like how they manage their currency. That's how they manage like tax incentives. That's how they manage a whole bunch of different things. But because of that, consumption is not a very. large part of their economy. So unlike in the developed world, so it's a little bit different.

But that's become a problem now, at least in the China. So I also have like kind of like a Bitcoin review or whatever. Like there's definitely like a different view. But from a standard economics point of view, it's going to be a problem because if you think about it from a Keynesian lens, people will spend less and they'll just keep on spending less and less and less. And China is trying to manage to kind of like this like. Keynesian kind of model.

So that is a problem for the Chinese party state authorities. So what are they doing to try and cancel that? Are they printing money? Yeah, there's like, I mean, different forms of like quantitative easing. I mean, what's been really interesting is to see how Chinese people react to what's happening. So from what I've seen, and I've talked about this, you know, volume and demand for Bitcoin has been going up from what we can measure because that is like a way to get out of the system. So I think one of the things that was really interesting to me for writing the book, I had this thesis that like, you know, since China has been affected by inflation in so many different ways.

So China is a country where paper money came out first. And it has seen some really, really long inflationary curves. And people forget three of the things I mentioned in the book, for example. One is Tenement Square. That was during a period of really high inflation. the Yuan dynasty, which Genghis Khan built and almost covered half the known world at the time, fell apart partially because of inflation. The way Mao Zedong took power partially was because the nationalist government at the time,

they were carting wheelbarrows of money. So if you think about, you know, Weimar Germany and everybody thinks about, you know, the Nazis coming to power. Well, you know, in China, you had, I'm not saying don't really love Mao. Don't get me wrong. I'm not directly comparing him Hitler. Did kill a lot of people, though. But what I am saying is that Mao is aware, was aware of inflation as a reason for why people were trying to change their government. Because the nationalist government was being ineffective.

I have this photo in some of my presentations. This girl is holding 444,000 Chinese yuan or something like that. And that was the equivalent at the time of $10 USD. So you're really talking about these like wheelbarrows of money. So inflation has had this like really, really pronounced effect on Chinese history. But actually, the deflation that we see now is creating a separate category of problem, which is that the Chinese people, like what we mentioned, their assets are being destroyed, like their asset value.

Like there is and the Chinese people households, the government, and corporations have the highest savings rate in the world or one of the highest savings rates in the world. So you're seeing this like really weird thing where like, for example, anytime there's an option to invest an alternative. So there's a gold DTF that opens for people in China. People rush into that. You know, Chinese people have rushed into like government bonds because that's like one area where they're guaranteed at least a little bit of yield. Right. So these are really interesting reactions.

The government itself is kind of just reacting and, you know, a form of quantitative easing, a form of stimulus. I think that is also relatively bullish for Bitcoin, like in the sense that the government is, you know, creating these kind of incentives to print money. But I also think what's kind of interesting is that China is probably going to export its deflation or has been a deflationary force because if prices are decreasing from factories and China's the largest export in the world, that eventually will have effects across the world as well. And you see that really with smart cars, for example. That's like one area. But you're also seeing countries and like the European Union, the United States, they're trying to react to that by saying that China's dumping these goods and like implementing tariffs and things like that.

So it's going to be a really interesting like geopolitical kind of balance to see what happens as the government reacts because they're going to have to react in turn to other governments being displeased that certain sectors, the prices are too low or that Chinese exporters are too competitive in some areas. Okay. And is this like economic turmoil now a big risk to the CCP? And how strong are the CCP right now? Yeah, that's, I wish I had a huge risk.

So listen, every time I've asked this question, I always bring up one thing, which is that there are some unique threats to the CCP's model because of what's happening. during COVID itself, we did see some of the breaking limits. Like, for example, there were protests. There were the blank paper protests. And there were protests against COVID. There were protests against COVID restrictions.

Sorry, probably against COVID too, but like, you know, more of the restrictions. And then there were protests because a bunch of, you know, people had their banking yanked. There was like this like Ponzi scheme kind of thing that happened. So you started seeing protests happening in mainland China, which, you know, which wasn't something that you had really, really seen. Like, dissent in mainland China has been pretty difficult. Like, I remember one time there was reporting because someone hung like a paper rail saying, like, you know, Xi Jinping's the emperor or something, like in Beijing.

And that made huge news, right? Like, it's not, you don't really see a lot of like public, public demonstrations. You know, the real estate element is very politically volatile. And I think the party knows this. the you know the way it works is that most people will pay a deposit

in order to get a pre-billed and it's a very politically volatile situation because if the developers screwed a bunch of people they all start protesting at once right and then they all gathering, they're all aggrieved and then people are like this is like a legitimate grievance right? We talked about

the youth unemployment you know young people have gone through various movements in China everything from it's called the tongue it's kind of called laying down flat you know like refusing to embrace work there is some level resentment I think from young people where it's like oh these old people aren't retiring there's not enough jobs and then meanwhile older people are scared because there's all these layoffs and everything that's going on as well so and also their like net worth is decreasing and everything so it is it is

a pretty volatile combination. Having said that, I don't want to be a person that, you know, can predict exactly when the CCP will fold or what have you. I think that what they're confronting is somewhat unique. I don't think they're super well positioned for it. I think these are like some of the long-term consequences that are coming to roost. Like people who are applying the one child rule. Well, yeah, but like after a while, you're going to have.

have this like really old population supported by no workers, right? Or you'll have gender imbalances. So you're seeing some of that come to roost now. Yeah, how bad is the population decline in China? The population decline. I mean, it's not as bad as other East Asian countries, but quite, quite bad. I don't remember the exact stats. But the, the demographics are definitely lower.

than they would have been before. I think if I just look this up real quickly right now. Yeah. So China's birth rate currently, 2002, is 1.18 birth for a woman, which is significantly below replacement. Just for reference, the United States is 1.66, actually. And in the 1960s, it was 7.51. Talking about like a 7x decrease in like numbers of births.

And it's funny because the party now has realized the mistake of implementing, I think, the one child rule because now they're like, oh, we need, they're actually getting incentives for people to have more children because they're like, oh, the curve is, but now people don't want to have children because they can't afford them. So interesting. All this is to say, big volatile factors. And China has had a history of like quite sudden changes in the past. For example, 1911 revolution happened in five months. So you think five months to overthrow five thousand years of dynastic rule. What happened in 1911? Because I don't know my history. Yeah. So 1911 is when China became a republic and then the revolutionaries overthrew the Qing dynasty and the emperor at

the time. So basically ending 5,000 years of dynastic rule in the matter of five months. Now, what happened afterwards was there's all this all between, you know, multiple warlords and different governments and stuff like that. But China has not been an empire. since that period of time. So the basic point I'm trying to make here is that change in China can happen quite rapidly. And help me understand that. Because if the CCP were to fall, what happens?

Is there a counterparty, or would that just be a complete period of flux and they'd have to figure something out? It's kind of gradually than suddenly when it comes to these things, right? Like we saw this with Syria. You know, the example I always bring up as E. Iran. Iran and the modern version of China actually have about the same birthday. Like, you can argue that the modern version of China that exists today has existed since 1978. The Iranian revolution happened in 1979. Iran is a much weaker country in many facets

than China. Like, it doesn't manufacture a lot of things internally. It's sanctioned. There's a lot of, like, physical threats to its rule. You know, it has a lot of enemies in the region directly. But I'm not an Iranian expert or policy expert, but I'm just trying to point out that that government has stood for the last, despite all that you might think about the weakness of it inherent into it, the dissatisfaction the people must have, like the currency, the Ra'all is going through and everything like that, that government has still lasted through. China is much stronger than Iran in many different ways.

It controls foreign reserves. It controls manufacturing capacity. It has a population that is relatively nationalistic and actually does somewhat align with the government in many respects. I mean, there are dissenters, but I don't actually think there are, there haven't been really many public demonstrations of dissent. Now, having said that, again, with the suddenly, gradually then suddenly, like, if it did happen, it could happen quite quick, is the point I would make. Like you never anticipate these things, but then if it does happen, it kind of can't happen quite quickly. I think what the Chinese government and the CCP fears or is trying to get people to fear, they've always feared the Balkan situation. So, you know, they look at the Yugoslavia.

They look at the Soviet Union really, really closely. And the thing that immediately happened in both instances is there was ethnic strife. So the biggest fear they have is that without the party. And I think there are some Chinese people who share this fear as well. I don't think it's an illegitimate fear that in the immediate, like let's say if the CCP fell apart immediately, China is likely, I think, in my opinion, to go to some period similar to other phases of its history, where generally warlords or like ethnic communities take over, like different parts. Immediately you would see stuff like Xinjiang and Tibet split off.

And I, you know, I actually think that's for the better. but that's my personal opinion. You know, but there there is probably going to be a lot of like falling apart. Now, this all rests on the assumption. Like one thing, again,

like this is a little bit just strictly my perspective and I encourage people to study throughout like China's just so vast and there's so many different people. But a lot of the people, I don't think there is a very credible democracy movement or figure in China right now, sad as I think it might be. I used to, you know, I was on Clubhouse and I used to host like the Tiananmen

student leaders. We used to do commemorations and things like that. But unfortunately, a lot of those people in that generation, they've been exiled from China for so long. And a lot of the people who are in democracy movements have left the country a long time ago, right? So I don't know how connected they are. having said that

Sanyat Sen, when the 1911 revolution I mentioned to you and revolutions like that, who ended up founding the Republic of China and the Nationalist Party and all this other stuff. It's regarded as the father

of modern China. Like he was in Japan as like a random, I don't know, like he was just doing speeches or something. So, you know, something like crazy

might happen like that. But as of now, there's not necessarily like a credible protest movement or anything that's that I really see. like at least in the hand the hand majority uh which is like the majority ethnic group in china um but you know it depends on the circumstances of what happens right yeah i i think one situation which might cause the CCP to fail is if they try to use kinetic warfare like if they try to

invade taiwan um and do other things like i don't think china as a modern society is very well set up to fight wars. That's interesting because I've spoken to Matthew Pines loads. And one, like he obviously is always looking at kind of like the national security implications for the US. And something he said to me over and over again is that if say the China did invade Taiwan and it led to like a war between US and China, that China is far better suited to that than the US is.

So it's interesting to hear you kind of say the opposite. Yeah, I think from a raw manufacturing perspective, probably what Matt is looking at is like, for example, China's got a lot more shipbuilding. In a local war over Taiwan, it's just got proximity. Like, there's a part of Taiwan that's literally like a mile or two miles off of the Chinese coast. Like, you know, so I think like, you know, and China also has, don't get me wrong, the significant advantage is they produce a lot of the hardware. They produce drones. Like, if they wanted to run a playbook where it was like drone warfare, I think they can pull that off quite successfully. Even like Ukraine, which is using.

all these drones in its defense. People forget, but they're using DGI drones. That's manufactured by China. So I think from a pure perspective, yes, but I think what I'm looking at that maybe Matt, like I think in the actual commission of a war, there's a few things that stand out to me that may not be apparent to outside observers.

One is that Xi Jinping has no military background or no significant military background. And there have been a lot of military corruption cases. They had like missiles that like were filled with water. They had to like dismiss or possibly I don't even remember anymore, possibly execute the defense minister. I mean, like they there have been multiple corruption cases in the military in China. And I think part of the reason why is because China has not actually fought a war since the vietnam, the incursion to Vietnam from 1979 to 1988. Now, that's not necessarily because China is some noble country or like whatever.

I think it's just there are some incentives, but it throws into my larger point that if China were to fight a war, it is ill-suited. The current leadership is not a military leadership and has shown that under its supervision, it's not even able to do like basic tasks like that, right? Like, you know, I think China can probably accomplish a lot of tasks, similar to Russia. Russia, I was just reading Putin's Russia, had many of the same problems. There's like endemic corruption in the army and all these other things. And so it was more of a paper tiger. And I think you saw some of that in the early parts of the invasion of Ukraine, right? But now Russia has just decided to grind it out because it just has so many more people.

And I think China will do something similar. But I would be surprised if Chinese, this is more of a cultural observation than it is. And it's not something that I can put like a quantity to, right? But I would be along the same vein as that, like the Chinese generation that's grown up now, I'm not saying that they're like soft or something. But what I am saying is that like military service is not, especially the officer class of the PLA, I feel like is not something that is very glorified. there isn't like a draft

you know and I think culturally speaking it would be really difficult to get Chinese people to die on mass if that makes sense I don't know it's like a weird I've been surprised about how resilient

Russia has been to the fact that there's been this terrible war going on and there's been so many deaths I don't know that Chinese people will accept that because Russia has at least been conducting some wars like in Chechnya and other places. So Putin has had quite a bit of time to kind of stage train the population. I don't actually think China has really staged trained the population

in that way. And especially in the military, I think there might be like lack of morale and dedication that will come through when the pavement hits and like people start really dying on mass. This episode is brought to you by River. There are many places to buy Bitcoin but there's no exchange like River. They have innovative products, phone support and a dedication to security that I haven't seen anywhere else. With River, buying Bitcoin is easy. You can set up zero-fee recurring buys to automatically build your stack and while you're waiting for the perfect buying opportunity, River even lets you earn daily Bitcoin interest on your cash balance, which outperforms most high-yield

savings accounts. Your Bitcoin is stored safely in multi-sig cold storage, plus you have peace of mind knowing that River has monthly proof of reserve, and holds all client Bitcoin that wasn't withdrawn to self-custody. Open an account for yourself or your business at river.com forward slash WBD. That's r-I-V-E-R dot com forward slash WBD. So let's talk about Bitcoin in China because just earlier you said that volumes are going up. Now, I think it may surprise some people that people in China are still actually buying Bitcoin. So what is the kind of current legal stance for Bitcoin in China?

Yeah. So right now, basically, mining is prohibited by most of the provinces in special administrative regions. There is stuff like, you know, there's like a tip line for people in inter Mongolia if they suspect someone's mining. The holding a Bitcoin is legal as property. Okay. I know this comes up like every once in a while. I've written about it several times because everybody kind of like, I almost think of it as like positive fud.

Like everybody's looking for so much good news from China. They just always keep on reiterating. Every time a Chinese court has determined that Bitcoin is property, even though Chinese courts have been doing that since like, I guess a decade by now at this point. But every time a new court does that, it seems to pop up in the press. It's like, oh, China is like enabling Bitcoin again.

But this has always been the case. And Bitcoin is protected as property by the Chinese courts and Chinese jurisprendence. But exchanges are banned. So how are people buying Bitcoin then? Is it all peer to pair? Yeah. So this is where it gets really murky because we don't have like quantitative. So we can only really go with qualitative stuff.

So since 2021, since the exchange ban, there has not been a public yuan to Bitcoin pairing. And exchanges will not announce like how much volume they're doing because it would be illegal for them to do that by the Chinese government. But from what I can tell through interviews, through like talking to people, it's mostly people who are using exchanges like finance, who will be OKX. So the risk is really the buying of Bitcoin for local for for Remy B for U.N. And so what they'll do is they'll go on like something like finance or Hobi or OKX. Some people will just like fake an address. or, you know, they'll just say like, hey, I have a Hong Kong address. So I don't know if it would surprise you, Danny, but finance is not exactly like the most strict about, like, enforcing this kind of stuff as we probably know.

I'm shocked. Yeah, yeah, you're shocked. You know, the similar thing to, I think the States, they had like a quote unquote angel squad that was just kind of like dedicated to like, hey, if you want to buy Bitcoin from us and you seem to be from China, wink, wink. this is how you would do it, right? So, I mean, there's some of that. I think more and more, it's become more like peer-to-peer trade, though, in the sense, but not in the sense of, like, people going to, like, laundromats, but using, it's kind of this weird terminology.

I can't ever really describe it. It's like a, basically, these trading desks will deposit a fee with finance or who will be or OKX or one of these exchanges. And then they'll be listed as like a featured merchant. And so they'll charge whatever spread to get Bitcoin or Tether. And then people will just send local currency through the Chinese banking system to whatever account they have flag there. They'll get, you know, tether or Bitcoin. Most people choose Tether, by the way.

The last time I took a look at this, I think there were like seven or eight OTC merchants of this type on Binance that were selling Bitcoin. and there was like hundreds selling tether. Most Chinese people will prefer to buy tether. The reason being, well, threefold. One is that the spread is lower. Two is that I hate this, but it's just the reality. A lot of people are just focused on buying shit coins, to be honest with you. So they're just going to use tether and like find the exchange with like the most training volume, the most training.

Yeah. And then I do also think that. I think it's like a psychological thing, but I do think that Chinese people in general believe more in the U.S. dollar than Bitcoin. Interesting. Yeah. So there's definitely a little bit, a lot, well, not a little bit, a lot more tether trade. But there's also a lot more volume coming in for Bitcoin as well. But if the spreads are low to buy tether, I understand why you would just buy tether and then go elsewhere to buy Bitcoin with that tether.

Yeah, I think there's people also doing that. It's really difficult for us to get quantitative stats. So the stats I'm telling you, it's chain analysis has some like previous relationships with some of the OTC counters. But that's kind of like what it really takes. It's like you would need to get like manually sourced data because there is no like everyone would publicly refuse

to answer this question. Yeah. And so on the mining side, obviously when China banned Bitcoin mining in, it was 2020 or something like that. 2020. So we saw the like miners, China drop off a cliff. But since then, they've definitely come back to a degree. So do you think

there is still mining operations going on in China, or do you think that's just a way that the data is aggregated and it's wrong? I can go into detail on this. So first is, I have a source that has told me that there is mining still going on. And that's specifically in Xinjiang, it doesn't appear the mining ever really stopped. So is that where there's a massive amount of hydro? No, that's more Sichuan. I think Shihang is more coal power.

But all the, well, all the, many of the provinces have different problems with stranded electricity of some kind. But it used to be like this like winter, summer kind of cycle because the thing is you would have like

coal burning and then you would switch back and forth and hydro and stuff like that. But in one of the, yeah, so in Xinjiang, there is no, apparently there was, there's always been mining. Interesting. It never really was turned off, even though the province tried to regulate it. There are still miners operating. So the whole thing with the, the hash rate was the, that is from the Cambridge Center for Alternative Finance.

And they had like the hash rate measuring thing. And the way they do it is they look, they get the IP addresses direct. from different mining pools. I think at the time they worked with Foundry, via and like a couple of others. You know, I might be getting that wrong. But what happened is during

a certain time period, it didn't go to zero, but there were some people who were scared and left. So they went to like the states or one of the stand, Kazakhstan, I think it was at the time. Yeah, Kazakhstan.

So, you know, there was that. There were people who were kind of like, don't really know. what's going on. So let's just shut down for like a few weeks. You know, that for sure was there. But it wasn't zero. Like basically what happened was that like everybody who could would switch to like a proxy.

You know. And then it took a while for CCAF to figure out how to like figure that out. So that's kind of like. So I know like in the public it's been reported like, oh like China hash rate mining hash rate physical hash rate is like this. And then it went down to zero. and now it's like 10% right? It's not actually really what happened.

It was kind of like more graduated. Definitely like directionally it was right. Like there's less mining now in China than there was before. But having said that there is still some mining. This episode is brought to you by CASA. For those of you out there who want to protect your Bitcoin, I want to tell you about CASA, the leading Bitcoin self-custody solution.

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And then from like a CCP lens, there's a weird set of incentives with any like authoritarian regime where they won't want the populace to have loads of Bitcoin because it kind of removes power from them. But at the same time, like there's a big incentive for them to stack Bitcoin to help evade any potential future sanctions on China. With the strategic Bitcoin reserve happening now or potentially happening now in the US, do you think the CCP are watching that and have a similar plan? Or how do you think they're approaching their Bitcoin? coin position. So the CCP is definitely watching Trump and the American administration, and they're specifically watching Trump. I actually immediately after Trump spoke at Pubkey and gave out, quote unquote, crypto burgers, a former vice finance minister actually came out and said, like, hey, maybe the former, not serving, but was like, hey, like, maybe Trump is talking so much about cryptocurrencies, did we miss the boat here, right? So they certainly are watching. And I've been in conversations with journalists and people who write for Hong Kong news outlets. And there's been a lot of focus on like, just like they call it like the Trump bump.

You know. And so there's definitely a lot of looking at that. One thing most people don't realize is that China is one of the largest stateholders of Bitcoin anyways. Because it sees the whole bunch from this thing called Plus token. That was the like 2019 Ponzi thing. Yeah. You know what's so funny? It's like sometimes I wish more people spoke Mandarin because like if you join the X rooms,

by the way, this is where all the DGens go, like the Bitcoin DGens or the crypto DGens who are Chinese. And they're just like literally gambling. They're like, oh, yeah, we're playing. And then I remember like being in one of these rooms and this one guy came in. He's just like, I'm an OG. I was like taken by plus token. And they're like, oh my God, this guy's like such an OG like respect. Like what are you into now?

He's like, oh, I'm really looking to Neo. And I'm like, it's like a fascinating character study of like. Is Neo? still going. I didn't even know that was still around. Yeah, apparently. I mean, I don't know. I don't really track it that much either. But the guy who founded Neo actually became China's quote unquote blockchain advisor, which is also like an interesting thing. And then someone told me they invested in like starkware. Anyways, like all kinds of wellness there. But no, China still actually holds a

large amount of Bitcoin. I don't know exactly how much. So it's been reported it anywhere. So they initially seized 190,000, which which would place it as like, I think the set, I think, I think, I forget how much the UK. Well, the UK, which is kind of interesting, you know that sees Bitcoin that everyone's always talking about, like Chancellor Reeves, please don't sell or please sell the Bitcoin. That actually comes from one Chinese takeaway worker, Jin Wen. I vaguely remember that story. I remember them arresting him or and seizing that Bitcoin in London or something like that.

Or her, sorry. Yeah, yeah. She was wildly bad at money laundering. Like she would go around and like, she would go to like different houses and be like, want to buy this $18 million house and they'd be like, well, you used to be a waitress that earned like, like, how did you get this money? And she's like, it's a gift from my boss. Pretty good gift. So if you're going to, the lesson is, if you're going to money launder, do better. Yeah, be better. But yeah, so that's actually from Chinese investors in a fund. And

they've actually petitioned the Ministry of Foreign Affairs to go after the Brits to sell them, Hey, this is not like your Bitcoin. This is like it was crossed over through the border. And the funds originally from Chinese citizens. So you can almost say that the 65,000 or 61,000 Bitcoin, I think, or whatever, that the UK holds may be Chinese. But good luck getting that. I think the UK still has Venezuela as gold. Yeah, I mean, the UK holds on to a lot of things.

Had the Elgin marbles for 200 years or something. But they gave it back to the Greeks. But no, but China itself, like, it holds C's Bitcoin. The largest amount we know is from the plus token. So originally 190,000 Bitcoin. Now, maybe there are reports that it's down to 15,000. So China has like a way of disposing a Bitcoin. They have like different.

There's like this company called the chain dig, I think, in English that like kind of, it's like a Chinese chain analysis. And it kind of came out from the EOS community. Actually kind of interesting enough. A lot of the. Crypto investors in China were kind of associated with it. And so this is kind of an organization that has worked in the past to help the Chinese government manage seize Bitcoin and dispose of it and sell it in like private arrangements.

They're not as ham-handed as the Germans are. So we don't really exactly know how much Bitcoin they hold. It's been reported at 15,000. So the point is that China actually already does have Bitcoin. Whether it decides to sell more of that Bitcoin or not, I think probably, probably not, I would guess. It would surprise me if they would buy more, though. The other thing is, like, you know, there have been some op-eds, at least in Hong Kong

in the South China Morning Post that have said, like, you know, China's mining ban was a mistake. Going back to the mining ban, that's actually really bad for the local government. So one of the problems, we didn't really quite cover in the Chinese economic downturn, but one of the problems is that the property bubble has gone down. And so local governments are no longer able to raise as much money. So they're actually the ones that are hurting for a ton of money. And they were the ones that benefit from Bitcoin mining because you're taking stranded power and you're just getting revenue out of that from a company. I believe that of the Bitcoin mining that still continues, it's either private deals with private companies or regional deals.

And there was a Chinese official who was arrested for essentially running a Bitcoin mining company. you know, that was processing significant amounts of Bitcoin at the time. But yeah, in terms of like the, you know, whether China will pivot, I don't think, I've written a lot about this. Like, I don't think that China will get away from the path that's currently going on. And you're already seeing, for example, safe, the regulatory, agency that's responsible the capital controls I talked about earlier is already trying to like place cryptocurrencies within a money laundering framework, you know, trying to work more closely with

the authorities. But I think the thing that most people don't realize about China in this respect is it's not that Xi Jinping is personally pissed about Bitcoin or something like that. I think you sometimes have this assumption. Because in the West, what's actually really interesting is that like it's really run by politicians. The conversation about CBDCs is really run by politicians.

So I find really interesting. You have Trump coming out and saying, I'm not going to endorse the CBDC. You have Pierre Polibert, who's probably going to be Canada's next prime minister, coming out and saying that's in my platform. Right. And then you have the central banks

and the regulatory agencies being like, okay, well, we have to respect that. Like, we can't do a CBDC in that form without Congress's approval or anything like that. But in China, it's actually kind of, kind of the reverse. I actually think the central leadership and namely Xin Jinping does not actually care that much about Bitcoin. And to be fair, guys got a lot of stuff on his plate.

Yeah, that's for sure. Yeah, yeah. But you know what that's allowed to do is that has allowed the regulatory agencies to go really full hand. So imagine a world where central bankers could central bank to the most central bankist degree. That is basically China. Yeah. So the people BEOC, yeah, yeah. Sorry, when you say, like, they don't want to deviate from the program they're on, that program they're on is the CBDC framework. And I imagine China is probably the most advanced down that CBDC path right now. I know there is a CBDC kind of being used in China, but what is the kind of state of it?

Is it widely used or is it still pretty niche? Yeah, I'm going to tie that together because I remember you had a previous question that I might have missed, which is like, is China going to use this to avoid sanctions kind of thing? So China's got the digital yuan. Yeah, the policy path is basically to embrace the central bank digital currency and to try to push that standard around the world with other partners. It's doing, China's doing that through this setup called Project Embridge, which is with the Bank International Settlements,

just sort of the central bank for central banks. Recently, the Bank of International Settlements has actually abandoned Project Mbridge. which was kind of this like inter-central bank digital currency bridge that was built between China, the United Arab Emirates, Saudi Arabia, and other places. Interestingly, China actually did purchase oil with the ECMI, with the CBDC. So it's shown that it's trying to be the most advanced when it comes to international payments and settlements. But this is also the thing, you know, that it's become geopolitically too hot, which is exactly the point of the BRICS dollar and all those other stuff.

So the Bank International Settlements, I think, specifically is trying to back away. from that now because they realize that capitals in the west like Donald Trump and whatever happens with the political leadership in the Western world will not accept there being, you know, like an inter-CBDC bridge that effectively acts as a swift alternative or as an alternative to like the the U.S. back financial order. Now, in terms of retail usage, I think it's been quite slow overall. So a few things about the digital yen from a retail perspective. So they've been pilot.

It's definitely the most advanced. So they've been doing what's called pilots. But it's not really pilots. They're pretty much like full scale. Like, for example, you go to Beijing. You can pay for public transit in ECNY. There are like a large number of platform aggregators that accept ECNY. even WeChat and like AliPay, you can use ECNY.

Like they're compatible with ECNY wallets. The problem is like there doesn't seem to be a ton of retail demand. And the reason why is because in China, most people are in WeChat pay or AliPay anyways. Are they essentially just like a private CBDC anyway? Do the government have oversight of what's happening on those platforms? Yeah, they're basically, they're basically, a private CBDC of sorts, but the distinction is slightly important in the sense of like, they still need to work with the Chinese banking system.

The retail CBDC, the thing that was kind of really creepy with what it allowed the Chinese government to do is like, for example, the pilots, they made the money expirable. They could make like individual interest rates. They could. So fucked up. I know. Yeah. It was so messed up.

It actually led to some funny stories. If you read the pilots, there's like these people being like, I mean, it's very dystopian, But sometimes we have to remember that dystopia is curbed your enthusiasm. Like people are like, because my funds were about to expire in two weeks, like, I went and bought a pair of misshaping glasses because I was the only merchant able to accept this like stupid currency that theyirdropped to me. Wait, does it expire for the person spending it? Once it's spent, does it have a new expiry date? Or is, like, how does that work? For the pilot, what they did is they just air dropped it to people.

So that's the thing. Like, we chat like can't generate money, right? But, you know, the PBOC, the People's Bank of China can just, it's a, because that's the thing with when you say it's a private CBDC, I mean, the central bank digital currency is a direct liability of the, it's direct, like, hold on the central bank, right? And so in that regard, it's like more directly of an interface. Not to say, like, to your, I think to the point you're trying to make is like, yeah, it's Chinese tech companies that work with the Chinese banking system. These are two very controlled sectors. Having said that, I do think the Chinese government would still prefer settlement in EC&Y. They've done some things. They've tried to push it in state media. They've tried to make the merchant transaction fee 0%. There was someone who was talking about how this guy who wrote the book, Cash List,

what is it called Cash List? There's this book on how it's kind of like the reverse. Actually, we haven't talked about my book, but kind of the reverse of my book, it's like Bitcoin is bullshit and the ECNY will win. So it's basically writing about how China's economy is built a certain way. And I think him and some other people are convinced that the fact that China's able to actually implement the merchant transaction fees and transaction fees. So if you think about it on average with credit cards, you know, the transaction fee is like 3.25% for merchants and accepting because of the interchange fees and stuff like that.

3.2 or 3. I forget exactly what it is right now. But, you know, if you have a system where merchants can accept payments and they have to pay 0% because it's government fiat, that does open up the world to stuff like AI payment with agents and stuff like that. It's a little bit more seamless. So I think that the Chinese government is trying to like impose that standard. It hasn't worked though.

And the main reason why it hasn't worked is because they tried to make the central bank a tech company. So the central bank is choosing all the vendors. By the way, the first person responsible for the digital UN project, the Digital Currency Research Institute, was arrested for corruption. And specifically because of this, because there was one person who could choose all the vendors. So he was taking bribes. He got arrested. Of course he was.

So this is something I always wrote about. And I didn't even know the guy was taking bribes and he would be arrested for it. But the point I was always trying to make was that you're trying to make the central bank a technology merchant, a vendor. They're not used to choosing, like, technology vendors. And then the other part of that is, like, they're not used to getting merchant adoption. You're, they're, like, the government is used to legislating by force. But the Chinese government's also been, like, kind of interesting with this. They haven't really tried to push it that hard.

Like, they haven't tried to, they tried to push it hard from a soft power perspective. They tried to make it like, oh, like, you know, if you're in the Olympics and stuff like that, you know, this is one of the options available. but they haven't like banned use of like we chat pay or alley pay and and neither do they claim do they want to do that right that would be kind of like that that step but um as a result people have the option to choose and most of them should choose we chat pay and alley pay and that's because also the central bank has failed to onboard like the long tail of merchants um i think that's something to be learned by bitcoiners by the way just like how i think like there's so many shops in China now that are just like have WeChat accounts and like Allie accounts.

And they have that for different reasons. Ali is because they have access to small business financing. WeChat is because they have access to like all communications and it's kind of like the everything app. And I see some people in the Bitcoin space trying to build something similar like a Feddy or like, you know, or business loans. but it's kind of an important insight because merchant adoption in China has been really successfully done by WeChat and AliPay. In fact, even outside of China, you could actually see many people accepting WeChat and Alipay. Do the people of China understand what they're giving up in terms of freedom with the CBDC?

Yeah, it's a difficult question. I don't want to speak for every person in China. There's a lot of them. But, you know, one of the most thing, one of the coolest things, I, when I wrote the book, is I got to meet Chinese cyphopunks. And what I think is that at least there are quite a few. I don't think there's like, you know, hundreds of thousands. But there must be at least a few thousand people who are like very, you know, aware of that tradeoff.

And we're talking about like Bitcoin Maxis who are located in the Chinese mainland or people in the diaspora that are kind of like, you know, when I embraced Bitcoin, now I suddenly understood, not just, you know, the EC&Y, but also like why maybe I shouldn't use WeChat pay or Ali Pay, even though they're so convenient. So I certainly think some people do. I think that in a vague sense, in a cultural sense, and again, this is like I'm trying to oversee a lot of things happening. Like, part of the reason for the ECMY's failure is that, like, it's just like an additional thing and then it must come from the government.

And so there is quite a vibrant Chinese internet culture. People don't really like grasp or understand that, I think, unless you're like in Mandarin and you understand it. And there are people that kind of skirt the gray area and stuff like that. So I do think that there is, there are some people who, who are aware of those, of those differences. But I don't know that it's penetrated into like the mainstream, mainstream per se. And when, obviously, the people have been living under this kind of like authoritarian regime for a long time,

is there a sense of like brainwashing and do people give up on the idea of freedom? And I mean that more generally, not necessarily like the cypacepunk faction within China. Yeah. So one of the reasons why there were protests in Hong Kong was over an educational model, China has been implementing since Tiananmen Square, which is essentially this kind of patriotic education. my sense, and again, I'm like one facet, one perspective among many here, but my sense is that Chinese people, the mainstream of what,

so there is a little bit of difficulty in trying to understand it because there's a lot of censorship. So that part, I think the way the conversation works in China, it can be really hard to discern exactly. But I do think two things. One is that this younger generation is very, very nationalistic. And they have a very, very different worldview that is very party aligned. I think the party has been quite successful, actually, at putting its vision of like why it should exist out there, at least for it seems like some level of young people. This is not so dissimilar from, I think, Modi and, but with Modi, you can actually see it in the votes or the way the Indian people vote or the way that he has such a young voter base. I don't think you can see it as explicitly in China because obviously there are no elections.

But there definitely is more of a sentiment, a nationalistic sentiment. And you can see this. I was talking to someone who has students, you know, they're like a professor. And they were saying, like when Pelosi's playing, you know, came into Taiwan that some of his students were saying, like, why aren't we shooting it down? You know, and you see these movements,

like, for example, people will burn Japanese flags and there's like anti-Japan movements and stuff like that. And so it does seem like there is this, like, nationalistic patriotism, kind of like brainwashing, I guess you could say, that has affected people. And I fear that

something similar might happen to Hong Kong now that they've arrested many of the student leaders in that movement. And on the censorship side, is, it's always like Noster getting any uptake in China? Because I know, I can't remember the code word that people use, but obviously you couldn't talk about Tiananmen Square. I don't know. I assume you still can't talk about Tiananmen Square. Is the kind of like free speech platforms getting any kind of traction?

You know, Noster actually did get a little bit, like, Damos specifically. got quite a bit of traction when it launched in China and Hong Kong. It was like, I think, one of the top apps on the app store, especially in the Hong Kong app store for a while. And as a legacy of that, there still are quite a few mainland Chinese users. Now, you know, when you're saying the freedom of speech, so Tiananmen Square, people have, there, there are a lot of things in China that you're explicitly censored from doing,

that might seem absurd. One of them is eating a certain bowl of a certain type of fried rice during, yeah, because Mao's son, his eldest son died in the Korean War while eating that. Anyways, and then Tiananmen is like also kind of like the date is not referenced and all this other stuff. June 4th. Some people, this was like a while ago, but some people in the Chinese internet took took to calling it May 35th. and like all kinds of different variations. The point being like, if you directly reference these events,

there are consequences. And for example, like comedians or people that have referenced Tiananmen Square, you know, they get their Chinese audiences cut out, things like that. You can't publish books that mentioned Tiananmen Square, at least in the mainland. So that censorship element is there. I will say having interacted somewhat with the Chinese community that is on Noster, that I get the sense that most people, it's kind of like coded,

if that makes sense. And this is also a point I try to make to other people about Bitcoin. There's like very, very few people that are willing to go out there and be like, hey, like Bitcoin is the revolution. Let's take down the CCP. I think people underrate when they live in a society like we do, how dangerous it is to like be making statements like that.

when we ran clubhouse rooms back in the day, I ran like the largest English language room on China. You know, we would have people come into our rooms. And we ran this room where we were asking if people, if the cops asked them to chutzha, which means to like drink tea, which means the local security bureaus kind of like take your internet activities and they know about it. And they go and sit down with you and they say like,

hey, is this going to be a problem? Right. They like let you know that you're being monitored. And China has arrested people for posting glory to Hong Kong to like a few Twitter followers and things like that. So the threat is very real. And so Chinese people, I think, are very used to talking in coded language. I think the fact that a few people, like, you can see almost all of the censored factions of the Chinese internet in Noster. And to be fair, in other pockets of the internet as well, like some subreddits, other places.

So it's not just Noster. But I found the Noster community pretty interesting because there are quite a few Bitcoin maxis, which I find really interesting because there are actually that many Bitcoin maxis in the Chinese ecosystem, as I can tell. Like a lot of people are very into cryptocurrency, like writ large, NFTs and Web 3 and even Hong Kong is trying to build itself as like the Web 3 home and all this other stuff. So it's super interesting. I've seen some really interesting topics. I've seen very, very few people directly referenced tenement square, zong zen, like sensitive topics, like what happened during COVID. But I have seen people reference like, here's how you can get around the Great Firewall.

Or here's how you can like access stuff without VPNs. And it's not necessarily like revolutionaries, I guess the point. Like I don't think the vast majority people, they may be thinking about it in that way, but they won't express it in that way. So the Chinese community that's anoster, they're like, hey, I'm here because it's fun. And also, because this place doesn't ask me for a phone number or an email, which tracks me, you know, to my identity. Right. So I can be free to be anonymous. I can talk about whatever I want to talk about.

And there's like diaspora members that will like talk to me in Mandarin and things like that. So it's kind of a complicated story. I came into the Bitcoin narrative being like, hey, it would be really cool. Like I was writing about Bitcoin in Hong Kong during the Hong Kong protests. And to me, it would have been a smoking gun to have been like, hey, there's someone in Hong Kong who's trying to use Bitcoin to defray the power. It just doesn't work that way when you really get into the mechanics of it. People want to do Noster because it's fun and it's different from the experience and because they can access it without a VPN, unlike other parts of the internet. You know, similarly, a lot of people want to use Bitcoin.

it's not because they're cypherpunks or they love privacy or some of them do and it's always really cool to see that but it's more because it's like a place to store your money that will not depreciate between 30 to 60% every year you know i mean every year is an exaggeration but let's say over the course of many years right um so that's kind of you know what i see in terms of master. But it has been, there's always some accounts, like, I always shout out in any of the presentations, ALE, Sherry, shout out to Sherry, who wrote that she's really proud to be in the book. You know, so lots of really cool people in there. All right. Last question. And this is like a very broad kind of geopolitical question for you. Obviously, like the West and China have had a relatively

good relationship over the past few decades because the West is so reliant on China. But it feels like that's kind of degrading. Do you think Bitcoin is going to drive a further wedge in that? Or do you think it can actually kind of force the two, well, the Western China to come together? Well, you would have asked previously, I think, about the BRICS question, I think, right? Like whether or not China would use Bitcoin as a way to get away from the American banking system. I think China's thesis right now is it can try to get central bank digital current. because it's not as sanctioned as Russia's.

Russia is sanctions a degree where like even the U.S. has threatened Chinese banks with secondary sanctions for dealing with Russians, right? They're like in the bulk of selling oil for gold in like Dubai or something. You know, like this is like the Russian state we're talking about. China's not that desperate. And so therefore it can kind of have its pie and eat it too. like it can still circulate a currency that's still accepted by most of what it cares about. And what China cares about is the ability to be able to import commodities, import oil, import energy.

And so if you have partners like United Arab Emirates in Saudi Arabia, which have been very willing to work with China on multiple fronts, AI, energy, you know, there's visa-free access to Dubai for Chinese citizens, everything like that, then you don't necessarily see the need to embrace. Bitcoin as an alternative to the system. Now, China, I think, is also going to think that through. And if the digital UN and all these CVDC bridges don't work, then the open question becomes, well, how do you escape the U.S. financial system, the U.S.

correspondent banking system and stuff like that? In that regard, I think the Trump administration and China, I think Bitcoin, I think Bitcoin is going to drive more of a wedge, but in a way that most people will not, like, I think it's going to be mostly tether related, at least for this first installation. And so China has arrested people for trading in tether. I've heard from some people that they think that the Chinese government is more pissed about tether than they are about Bitcoin. Because that just strengthens the US dollar hedgement.

It just strengthens the U.S. dollar. It's almost like the Chinese government has decided we are strategically not going to buy treasuries anymore because we no longer believe in the U.S. financial system. And then like bottoms up its own citizens are defying it in order to get U.S. dollars because the demand for U.S. dollars and U.S. Treasury reserves is so strong, even if you don't have access to U.S. banking. So I think Tether is actually going to play a really important role in this first chapter. of how US China is going to play out. Because Fitzgerald Cantor's CEO, Howard Lutnik, is now Secretary of Commerce. Secretary of Commerce, he is actually responsible. We'll see how Trump plays with this.

Like in the first administration, eventually his Secretary of Commerce was displaced by a trade kind of advisor. But as of this current iteration, the most important role that China cares about, I mean, Treasury Secretary to a certain degree, but Commerce Secretary because of trade implications, because Trump has threatened to do tariffs right away. That is in the hands of Tethers' custodian CEO, which I find really fascinating. And so I think there's going to be this interplay where Trump and Western governments are going to go away from CVDCs, and they're going to really try to – you can already see this kind of, you know, with the Stablecoin ass.

in the United States, you can see governments moving away from CBDCs, but then moving towards stable coins. I think that's going to continue, especially with the Trump administration being so pro-crypto, I guess you can say. That's going to drive a huge wedge. China is not going to be very pleased by this happening at all. And they're also going to perceive a lot of the things that we're talking about the Chinese economic downturn.

like there's going to be flight to safety which they're going to perceive like Tether and Bitcoin that's the original reason why Bitcoin and Tether there's so many restrictions is because it helps Chinese people exit the system so they're going to perceive that negatively and then they're also going to see the consequences

of all the stuff we talk about the deflation that will lead to more tariffs not just from the United States but also from the European Union which has also been complaining about the you know, overproduction of cars. They call it like overcapacity. I think industrial overcapacity. So I think it's going to drive a wedge.

I think eventually, though, it'll have to come from the very top is what I'll say. Like, Xi Jinping would have to change his mind. His government that's around him right now is like super loyalist around him. I think eventually they're going to realize this is my, I'm obviously biased, but I believe that eventually the Chinese government will see the error of their ways. I eventually think that they're going to see it. They're going to realize that, like, for example, like holding all these reserves and gold,

which is what the central bank is really trying to pivot to. And as a way to hedge against, like, U.S. dollar hegemony is not a really smart play. I don't know if Bitcoiners would want the Chinese government more involved. I mean, that's like one thing that I think about a lot. You know, if you had state-owned companies, I mean, some people are already, we didn't even talk about this at all, but the whole like bit main and the block templates and everything like that, the mining pools, you know, like if you take a look at what's happening with there, I think that people are already concerned about mining centralization. And then imagine you have like a state player that's kind of coming in or like, you know, people who are buying. the Chinese government buying Bitcoin on mass. I don't know that you would love either of those things.

But I guess what I would say with that is like eventually, I think there will either be a new form of Chinese governance or the Chinese government will realize the air of its ways. That's kind of like my thought. I don't know when it will happen. That's kind of like my thinking on it. I could be wrong, but I think that that is what's most likely going to happen is maybe not the new governance part. I think that's kind of like a really strong statement, actually. But certainly I think that Xi Jinping himself, and it would have to be him because he's going to be empowered until as long as he lives, I think at this point, will realize that this has been a huge mistake. but I think it'll be probably too late by that point.

I think many such cases of that probably. So give us the very quick wrap up on the book, Woodmow buy Bitcoin. Would Mao hold Bitcoin? Yeah, I've got it right here. Hold Bitcoin, sorry. Yeah, no worries. Well, hopefully people enjoy a little bit of Chinese history, a little bit of understanding how Chinese people are still in demand for Bitcoin,

how China still affects Bitcoin, and what lessons we can take from just what I always tell people is like China's the red team in the cybersecurity sense. China has been the most aggressive country at trying to take down Bitcoin in a number of different ways, some of which we talked about in this episode. And if people want to take the lessons from that and see what that means for the world going forward, I think my book is a great read, but I'm pretty biased. I also have to give a shout out to my cap, be the change, BTC, thechange.com just because I promised the friendly vendor.

that I would kind of shout out her hat. And that's me. But I need a one word answer. Would, would Mao hold Bitcoin? It's all clickbait. You know, Jack Dorsey asked me that question, too. Because I gave him the book and he was like, would Mao hold Bitcoin? That's a longer story than we have time for. But I will say Mao the communist, no, but Mao the rebel, yes. Okay, there we go. Thank you, Roger. This is something that I really didn't know very much about. So I've really enjoyed this. Anywhere else you want to send anyone or have you shield all your links now?

I mean, the book is out and about. I've got my Noster at like low key at Noster dash verify.com. And I'll be joining this Bitcoin company called Block Rewards. So that's something that I'm also doing. And I'm working on a second book. Very cool. What's the second book? Super rough.

Well, I mean, part of the reason why it's called Wood Mowhold Bitcoin is the original title for this book was one country through Blockin, which like 10 people in the world would have understood. So right now I'm calling it the free future. But the idea is that it's a general, it's a broader intro to freedom tech, inclusive of a Bitcoin and Austria and why these matters so much. Love it. Well, keep me posted on that.

Thank you very much at the time. Appreciate it. All right, Jenny. Thank you.