#642: The Weaponized Bank Secrecy Act with Yaël Ossowski

Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
You've had a dynamic where money has become freer than free.

(00:10):
You talk about a Fed just gone nuts.
All the central banks going nuts.
So it's all acting like safe haven.
I believe that in a world where central bankers are tripping over themselves to devalue their currency,
Bitcoin wins.
In the world of fiat currencies, Bitcoin is the victor.
I mean, that's part of the bull case for Bitcoin.

(00:31):
If you're not paying attention, you probably should be.
Yeah, Al, everything is fake.
Really, everything is made of plastic.
It's covered over, papered over in some function.
It's all fake.
So is it paper Bitcoin summer, plastic summer?
It's all of them rolled into one.
It really is.
The only thing we can trust is the ledger itself and the private keys.

(00:58):
that give you access to the utxos you hold is that the only truth we have left in this world
i'm one of the only ones i think now everyone's roaming around with ai devices i mean you've heard
this from other programs and shows you know the intimate relationships people have with their
chatbots is insane and i don't think we've put out a good number of you know resources data

(01:20):
polling on this stuff but i think people are in the movie her it's like happening in real time
especially with this new grok model the waifu waifu is out i don't pay enough for this yet on the on
the x so i couldn't tell you too much about it for the moment but uh probably where i am there's
gonna be a lot of people roaming around the halls uh looking at their phones and uh communicating

(01:41):
with their new companion great movie by the way companion if you haven't seen that one
about ai robots and uh sort of the future of companionship uh there's too many of these
movies about AI are very dystopian. There's very few that are like tech positive. This one actually
had a gleam of positivity. So one thing to recommend. Yeah, I think as with all things in

(02:04):
life, everything in moderation, except for nicotine. But the like I've been using it,
I'm not gonna lie. I've used all the models, Chachi Bt, Grock, Claude. And they're helpful,
But I use them in moderation for research purposes only, and they're very valuable.
It helped me do research for this episode on Earth.

(02:25):
A lot of things that you've talked about in the past that I wasn't aware of that we'll probably talk about during this discussion.
But I agree. I saw your tweet earlier.
I think we are, as a society, highly disregarding the need for end-to-end, locally hosted, encrypted sort of chats with AI because I think that's very important.

(02:48):
I use Maple AI, which isn't locally hosted, but they use secure enclaves in the cloud to make sure that your prompts, your inputs are end-to-end encrypted.
Maple AI has no way to see what you're actually chatting with the model about.
I think that's going to be very important that there's a section of the market that caters to that need, which is going to be increasing moving forward.

(03:13):
I mean, it's an open space for entrepreneurs because I know you've seen it. And there's so many anecdotes of people who go to the doctor and they just chat with them. And like in the corner on the browser, there's a tab there. Chat GPT. If you were to go over there and look, are there patient scans? Are there questions? Because doctors are supposed to be very caught up on the literature, you know, journal articles and everything else.

(03:36):
I don't know if many normal, you know, family, doctor, general practitioners are.
Probably AI tools would be very good for them.
I just don't know how much information they're inputting into things like chat GPT that relate to your own patient information or scans.
And there's a lot of people doing that now.
I think people just have to think about it.
And it's much like your own money, right?

(03:57):
Where are you going to bank?
Where are you going to host your keys?
Where are you going to put all of that cash, all of your savings?
And we have to start thinking about our data a lot, too.
I think this has been obfuscated by cloud computing and people not even understanding what data centers are or data, the cloud generally.
And we're seeing it more and more.
There's a lot of debates across the U.S. about data centers and building up and we need things for AI.

(04:22):
And people are like, why do we need all this stuff?
It's all in the cloud.
Like, well, what do you think the cloud is?
But it's someone else's computer.
We've got to build this stuff.
So there'll be a lot more debates on that.
I'm hoping we have an interesting point in at least the country on the federal level because Trump is there and he does suck up a lot of the oxygen and does lead a lot of the conversations.

(04:42):
And he's been very pro innovation and AI.
He's a bit muddy on Bitcoin and crypto stuff, as you can see this week.
It's crypto week.
Marty, if you didn't see that.
Gotta love crypto week.
It's a big week.
Yeah, crypto week.
So he's definitely taking a lot of that.
It would be such a shame if the entire Bitcoin agenda of Trump, which maybe it's different from the average Bitcoiner, if all of that is sunk because Democrats did not like Trump coin.

(05:14):
And that's what it seems like is happening, unfortunately.
Yeah.
Yeah. So to add context for the buildup to this conversation for anybody listening, Yael is a fellow at the Bitcoin Policy Institute.
We met last month in DC, actually sat next to each other at dinner, at the BPI dinner after the event and had a great conversation.

(05:35):
I wanted to bring you on here because I think you have a well-rounded understanding of many things going on, not just in Bitcoin, but energy, AI.
And it's funny, as we're starting this conversation, I'm being reminded of the last conversation I had with Matt Pines, who's also at BPI.
And we're going to have some F-16s flying over here.

(05:58):
So please, please don't be startled by the engine noise that comes in.
Pretty cool.
They're about to figure out why health care ain't free.
Yeah, they've got a fuel plane in front of them, too.
But I think it's interesting because all these topics, Matt and I talked about it the last time he was on the show.
They're beginning to intertwine, like AI, energy, Bitcoin.

(06:22):
Like they're all meeting at this singularity almost.
And I think it's important that we get policy right for all three of these industries as they begin to converge into some sort of homogenous – I don't want to say homogenous sector.
but they're all going to interplay with each other to a certain extent.

(06:43):
Yeah, I think so. And ideally, what we want to forward are good principles,
because the last thing that you really want when you're actually creating laws is just
paper upon paper upon paper of complex rules that are very complicated, that are very long.
And I think I'm doing policy as I have done for the last decade. You just realize that everything

(07:04):
that people are upset about, you know, stuff is already illegal. It's already on the books.
And they just want to adapt the old rule to something new when realistically you just need
an interpretation. You don't need an entirely new law, something else on the books. Like if you look
at the entire federal code, tens of thousands, hundreds of thousands of pages, you know, no human

(07:26):
being could read through this right now. I mean, you can only do it realistically with an AI at this
moment. But we have to try to figure out what are the main principles that we want to advocate for?
What are the things that we would like to see? And what are the things that are public behavior
or public rules and things that are private behavior and private rules? And I think for

(07:46):
many different industries, people get very caught up in that public, like public obligations,
because whenever you write new rules in the government, your point is you're restricting
the freedoms of individuals, of businesses, of people. Whereas when you have private regulation,
you have people competing, you know, there are essentially just the rules of the market and they
have to provide the best product, do the right thing, figure out how they can offer the lowest

(08:09):
prices for consumers, all the rest. And we focus so much on that public thing that it just constrains
more individuals, more individuals, more companies, more entrepreneurs. So they really have to figure
out, you know, if they want to start a business, if they want to do something that's AR Bitcoin
related, they essentially need to have a lawyer on staff to like tell them, is this compliant?

(08:29):
Can I do this? You know, Google Bitcoin guys would love that. It's just compliant. And I think we
want to figure out what are the good principles that we want to advocate for, particularly for
Bitcoin. You know, there's a lot of crypto lobbying in D.C. I've seen a lot of it. There's a lot of
money. Every single PR firm on K Street has gotten some quiff of crypto money, which normally

(08:51):
as opposed to Bitcoin. So you can read through the tea leaves there. But it's all about these
like super complex rules that come out about defining X and Y. And most Bitcoiners just want
to be left alone. And we want to know we're not going to go to jail and we can use this stuff for
ordinary things, that we can use it to get a loan for a house, that we could buy a car,
that we can get paid, that we can just live life. And I think this is the key difference that does

(09:16):
open up in the crypto versus Bitcoin policy realms is that Bitcoiners want actual real stuff
and want to use it in the real world, real world. And then the crypto world is more in a
kind of cloud-esque things of they're creating new industries and bureaucracies and new layers.
And it's super complex, but there's a lot of money that's funneling it. And unfortunately,

(09:38):
I think that'll kind of carry the day in DC for a long while, long after Trump.
new rube goldberg machines that in my mind really don't make any sense uh if i'm being frank here
no and that is the frustrating thing about being a bitcoiner who wants all the things
that you described and i was actually happy i mentioned this on rabbit hole recap last week

(09:59):
but one of my favorite talks at the bpi event dc last month was alex gladstein particularly
the three minute section where he said on capitol hill like you need to be specific like
When you say crypto, it doesn't mean Bitcoin and everything else.
It doesn't even mean everything else either.
Be specific.
Are you talking about Ethereum, Solana, Bitcoin, Ripple, God forbid, whatever it may be?

(10:22):
And I think it's important that DC really does create those demarcations between the different assets
because I think they're ultimately trying to achieve different things.
And Bitcoin overwhelmingly trying to achieve something grand in what I think is incredibly beneficial for the world.

(10:43):
And I'm sure you know this already, but I think the rest is just pure, pure noise, pure scams, pure easy money scams.
I do have a new term for you.
This came out of the Clarity Act, which is one of the bills that will be debated on here in Congress this week.
uh bitcoin is technically according now to the proposed law a so-called mature blockchain system

(11:06):
is it the only mature is there another mature blockchain system so the i have the document
here so basically like the definition of a mature blockchain essentially it means that there's no
control um and then essentially you cannot have any one person who has more than it says 20 stake

(11:26):
in the network uh so it's talking about the tokens so principally i guess bitcoin i mean
they're talking about commodities versus securities and kind of making this whole
difference but this mature block i don't know who pushed for this i've never heard of this before
uh certainly you know this is not in any any meetings i've ever had with legislators talking

(11:47):
about mature blockchains i think it's interesting maybe it is something that you need if they just
mean the ones that are decentralized and the ones that are essentially open source and can't become
humundeered by a committee of 12 people or like a board of directors.
I guess that's what they mean.
But interesting that we're going to be stacking our mature blockchain network and system the

(12:09):
rest of the summer.
Yeah.
It's very frustrating because, I mean, what would you say to the extent that or the confidence
that you have that these politicians and the lobbyists behind them and the lawyers behind
them writing these bills actually understand these things from first principles?
yeah i think there's not much understanding you know they know it's a technological thing and

(12:31):
they're basically the existing rules make things difficult i think that's the extent of it some
people might know because they this is the example that everyone brings up is oh i have an exchange
on my phone i've got coinbase or something and i tried to do this and i couldn't send this amount
until i verified at a different tier and i had to take a selfie and it's like well that's because
of the bank secrecy act and that's because of the things that you've done and i i think there you

(12:55):
haven't had too much information. What I think is a good thing, which many people might call the
weird corrupt system, is that a lot of people who were in government, who are staffers, are all now
working in the industry a bit. So they're working for various wallets or various crypto exchanges,
some Bitcoin firms. So at least there, they're coming to learn a lot more. And then they're

(13:17):
going back to their former colleagues and just like teaching them a bit, showing them. So I'm
not super blackpilled on that. I think definitely there's a lot more knowledge, more information.
The easier that developers make tools and apps and everything else, we can actually show people
and it's a lot easier to do. I mean, the number of times that I've just showed people

(13:38):
mempool.space so they can understand a bit more about the blockchain and how it works and
all the different transactions that are being confirmed, that is really helpful.
and realistically if we can get a bit more of that it just means that they're not going to
push forward bad rules because that's realistically what we want that i've done this a lot at the

(13:59):
state level and talking to state legislators or talking in media is that you know the goal of
people who are in bitcoin policy is not that we want you know the rule that it's only bitcoin and
we win right it's just let us be free and restrict the government from doing more to make our lives
harder to use this stuff. That's principally it. It's a negative freedom argument rather than a

(14:21):
positive freedom. We're not looking to have the license to do something. We just want to have our
enshrined right that we already have be protected so that developers don't go to jail for creating
decentralized tools that we really like. And I think that attitude goes back to that principle
that I mentioned. The more that we can do that with things like AI, the less that we're going

(14:42):
to have a super regulatory regime like in the European Union where they have the precautionary
principle and you always have to essentially get permission before you launch something or you have
to be sure that everything is in order, no one's going to be harmed. And I think the reason why the
United States is different and we have a different attitude for it and we have a republic is because
we've turned that on a dime and we say, well, no, the most important thing is you have rights that

(15:05):
are natural to you as an individual. And we as a government, the only time we can step in and
restrict you from doing something is if you're harming other people. And that, because it's
ingrained in the Constitution, because it's ingrained in the Declaration of Independence,
it does make things a bit different here which is why in all of my work wherever I go still in the U you just have like the healthiest of democratic systems We actually able to do this stuff have a voice and I think have good principles behind a lot of it

(15:32):
So however bad it might feel that people don't know how to send a Bitcoin transaction and change addresses and everything else,
we still have the opportunity in the system and the infrastructure to actually make that case and say, hey, just leave us alone.
Let the people build, let the innovators create products that users and consumers want.
So I'm much more hopeful on that than I probably have been.

(15:55):
Well, let's dive into that because I'm very happy you brought it up because that's the next thing I wanted to talk about.
The one phrase that stuck out to me from our conversation at dinner in D.C. last month was negative freedom versus positive freedoms.
And you were describing it in the context of your efforts at the state level and some of the bills that have been passed there.

(16:19):
I think from first principles, just like really dive into this concept of negative versus positive freedoms, just describing that from first principles and then applying it to things Bitcoiners want, whether it's the ability to participate in collaborative self-custodial transactions and coin joins or the ability to run a node or a miner, whatever it may be.

(16:45):
Yeah, I think the most important one, we go right back to the origin. We go to the OG. We go back to the Constitution, First Amendment. Congress shall make no law. That's it. That's that's the ultimate negative freedom. It just says, like, we cannot legislate in this domain when it comes to your speech, when it comes to your religion, when it comes to your freedom of assembly.

(17:05):
So that started the trend of limiting the actions not of people, but of the government, of this common institution that, yes, we are building.
We are building the government at this moment, but we've set up these safeguards to defend your individual rights from the over encroachment of this authority that we're building.

(17:26):
And I found that realistically throughout the years, you had most laws that really would comply with this.
And they say, well, the government can regulate that or can't get involved in this scenario.
The courts began to interpret things, you know, interstate commerce.
OK, well, if you have your riverboat and you're selling commodities, you know, from Missouri and you go over to this other state, maybe there we can have some regulatory rules.

(17:50):
and at the state level, you know, people don't really know that many of their localities,
their cities, their municipalities, I know we're all very Jeffersonian about our system and we say
local is better. But to be frank, a lot of localities are just absolute tyrannies and
they're not very well run. Many people are corrupt. If you just look at any construction company or

(18:12):
orange cones that you have in your street and you wonder why they've been there for so long,
just look at the contract of the construction company and the city commissioner who signed off
on it. There's probably a family connection or something. So one thing that we started looking
at is at the states, you do have a good amount of ability to constrain various levels of government.

(18:33):
And this is something that I've learned more from. Realistically, I would say in the 1990s,
you had a lot of these preemptions. So in the state of Michigan, the Republicans, when they
got their small majority. I don't even know what it was, like probably late 90s.
They had a majority for the first time in a long time, and they found it their duty
to constrain the localities and municipalities from doing bad stuff and dumb stuff,

(18:57):
such as banning plastic straws. So they come up with preemptions and say, hey, the government,
local governments, local jurisdictions cannot make rules on the use of plastic straws.
It sounds petty, but realistically, what it means is that you're actually protecting the
rights of people to use plastic straws from a different level of government from the locality

(19:18):
that would otherwise do that rule. This is the same thing in Texas. Austin City Council does
some really weird stuff with their laws. Texas finds ways to constrain them. Either they tie it
to funding or anything else. And I think that's the better way that we can do Bitcoin policy as
well. We do not need to have a full scope Bitcoin law that's figured out and drawn out. I mean,

(19:41):
realistically figure out where the government and the state is intervening when it comes to Bitcoin
usage and Bitcoin users and just restrict the government from doing that. It's much better than
a positive law approach, which would be people must do X or Y rather than the government is
refrained from doing X or Y. And this mentality shift with how we do policy is also very advantageous

(20:05):
because it's protected for a longer time. This is the problem with many of the things that Trump
is doing is it's not actually enshrined in law. You know, they can turn around and just like do
an executive order day one. You know, I don't know, 100 Biden is president or whomever,
the next Democrat. He come in and 86 everything. And we have to think always from a negative rights
approach because it's how the Constitution is built, how the American system is built.

(20:28):
And when you're living in a free society, you want to have all your laws like that.
It's about constraining the powerful institution that is the government,
of which we're all forced to play a part, right? We're not forced to work for a company,
but we're forced to pay taxes and be in the government and everything else.
The more we can have that approach, I think would just be a lot better.
There are a lot of activists who go around different states and want to have positive

(20:51):
Bitcoin rules and have this for Bitcoin and like a special tax exemption for this Bitcoin mining
thing. It's just not principally where I think we should go. I think it's a waste of our resources
and realistically will just be repealed and done away with and probably creates more opposition
than support. And I think that's why people like Alex, who are doing great work, elevating the

(21:13):
stories of human rights activists is super important. People who are entrepreneurs and
developers who are launching stuff on GitHub or in app stores every day are important. And then
also the people using that stuff for everyday use, whether they own a hair salon or, you know,
some kind of doggy daycare and they're accepting Bitcoin or, or now apparently where I am every
Steak and Shake. So it's good to see. You're in Steak and Shake country, sir.

(21:37):
I am. I was very surprised. It's kind of everywhere. And Bitcoin lightning is the
native token of the Steak and Shake. Who would have known? It's beautiful. It's a beautiful thing.
I went to college in Chicago and played club lacrosse and we would caravan through the Midwest
and Steak and Shake was our, was our staple road trip stop. So very proud to see that they

(21:57):
adopted bitcoin they wanted a bit maha with it they got the tallow now i've seen the ads they
did a eat more chicken ad that's supposed to be making fun of chick-fil-a it's just like have more
tallow have more kale have more tallow and they're selling it too they're selling the tallow by the
jar now it's really a steak chick really making the comeback riding uh the bitcoin marketing boost

(22:21):
to the best of their abilities it's beautiful to see but as it pertains to negative rights and
positive rights and our efforts to get good legislation in from the negative rights perspective
for Bitcoin? How would you rate the success of that journey up to this point?

(22:43):
I think it would depend. I mean, if you just look at a simple one is anti-CBDC rules.
So many states have passed these and they've essentially just restricted
any state agency from requiring or accepting a central bank digital currency, which again,
does not do away with the issue, but it just it ties their hands. And the more that you can tie

(23:04):
the hands of government from doing something, that means that people's liberties are somewhat
preserved and good. And that's what they're voting on in D.C. as well. It's just sort of
an anti-CBDC thing that'll be enshrined. I think there's a lot more to do. Again, there's a lot of
I would call them the positive, positive rights activists who are in the crypto industry,

(23:25):
you know, want to have certain implementations. And this is stuff that we don't really see in
the headlines, you know, want to force blockchain usage in various government agencies,
and their company will be the blockchain. And there's a lot of lobbying for that stuff.
That's pretty gross, if you think about it. It's not really highlighted because it's in
small appropriations bills. It's in, you know, weird committees nobody's ever heard of.

(23:50):
And that is essentially jockeying to make XY token like the token of the HHS or the token of
the Defense Department. And it's not something that you need to have and that you need to have
neutral money. And we need to have our law be neutral as well. And too much of the positive
stuff says we should have this company follow this procedure with this law. And there must be

(24:13):
one example is they use you have to use a qualified custodian, which I think everyone
has accepted and financial regulation is normal. And that'll be the same with crypto brokerages and
all the rest. But, you know, a lot of this stuff, they're setting up too many guardrails and putting
up too many that make it so that it is somewhat crony capitalism. And I think if you have negative

(24:33):
rights regulation, you avoid all crony capitalism. You increase competition by not, you know,
enshrining certain rules that people need to have in order to provide services to the government or
anything else. And you just constrain government from doing stuff. So we could always be better.
Look, the U.S. is always going to be the better place for this. I'm not sure how much state

(24:58):
legislation will matter because realistically for for Bitcoiners, all that matters is our ability to
get Bitcoin, earn Bitcoin and then spend Bitcoin. And a lot of that is tax policy, unfortunately.
some of it is in money transmission license rules and things that are happening with the bank
secrecy act at the federal level which according to the rules this week uh this is what i read if

(25:23):
if every crypto exchange so-called or commodity broker of the mature blockchain system they would
be considered a financial institution which sucks for other regulations they'll have to follow
But it does mean that the Bank Secrecy Act threshold that is applied to crypto exchanges, Bitcoin exchanges right now is like $2,500.

(25:45):
So anything you send that is Bitcoin that you withdraw over $2,500, there's a suspicious activity report filed that would now be raised to $10,000.
Which, again, small advantage.
Ideally, we would do away with Bank Secrecy Act.
It's a whole other conversation.
But it's small improvement.
So we're never going to have a huge window change through policy, anything else.

(26:09):
I think it really just comes down to instituting rules that prohibit and restrict government agents from doing too much.
Obviously, the laws against fraud are already on the books.
We can apply them easily.
Extortion already on the books.
All this stuff is already illegal.
Just let us use our money and do it in a way so that we're not penalized.

(26:29):
It's getting better.
All right.
It's good to hear it's getting better.
But you brought up the Bank Secrecy Act and said it's a whole other conversation.
Let's have the conversation because this is a topic I've been beating the drum about in the newsletter and on the show for well over six or seven years now.
At this point, it is the boogeyman in the corner of the industry that really forces the hands of industry participants to bend over backwards to comply with something that I would argue.

(26:58):
didn't even achieve the goals it set out to achieve when it was originally enacted into law
in the 70s and is being applied to to an asset in bitcoin that really doesn't fit into the
framework that was set forth decades ago yeah and realistically set up in the 70s 1975

(27:22):
the same dollar amount it's like how much is the dollar devalued and how much has inflation gone up
since 1975 and we're still on that ten thousand dollar limit so it what it makes the bank secrecy
act so bad it has nothing to do with secrecy and uh realistically it's just a bank regulation
and you'd be surprised to learn that most banks actually hate this they actually don't like it

(27:46):
they don't like complying with it it's very burdensome they need to hire entire departments
that only do compliance related to it. And it's enforced in a way that they can track so-called
illicit finance, bad behavior, criminal activity. But again, it's they're sending reports preemptively
to the government. So every transaction that's over $10,000 essentially has to have the suspicious

(28:09):
activity report issued that goes into the central database at FinCEN, a financial crimes enforcement
network where they're supposed to sift through it. And if you ever have one of these filed on you,
it's like a notch on your kind of internal credit score. So it deems that you are as a consumer,
someone who's kind of a, you know, hard to deal with. And it means that you are not going to be

(28:33):
able to open up as many bank accounts or take out a loan or do anything else. And it may have
nothing to do with what you're transacting. It's just the amount and where you send the money
doesn't even matter. And this was actually ramped up a lot by Trump in the last couple of months.
Basically, anybody in a border state, if you are sending any transaction that's over like $200,

(28:55):
they want to have it. So you have suspicious activity reports that are filed. So anybody
who happens to live in Arizona or Texas or Nevada or California and all of the northern states as
well. And what the Bank Secrecy Act really does is forces this compliance and is realistically
weaponized. And we learned this through Jim Jordan, who's the congressman from Ohio,

(29:19):
had this entire government weaponization subcommittee. It was covered a bit in the
headlines, but they produced this report that basically said that so much of the Bank Secrecy
Act was actually weaponized against ordinary people, people who bought guns, people who went
to Trump rallies, just people were buying things online, people were sending money to their
grandmother. They were all thrown into this database and then at some point were denied

(29:43):
financial services. And that is not because the government forced these banks to do so,
but it's because the banks didn't want to deal with the additional compliance.
And what the weaponization committee said is like, look, we got to figure out a way to get
rid of the Bank Secrecy Act or ratchet up that amount. They were looking at it through a more
MAGA, you know, going after President Trump lens. But, you know, you call a spade a spade.

(30:08):
And I think that was a good momentum for the movement. Senator Mike Lee has a really good bill called the Saving Privacy Act, which I think alleviates all of this. And thanks to some of our efforts, also includes a protection for self-custody of Bitcoin.
But what it would do is just essentially get away with the ability to send the reports to FinCEN and the government.

(30:31):
Banks would still have to keep records, but we would not force the suspicious activity reports to be sent to the government because that just creates all this additional compliance and is financial surveillance.
So this is being talked about also on the left.
The Democrats actually not far from where you are There the New Jersey Senator Andy Kim So he is super anti Bank Secrecy Act I don know where he coming from for that

(30:58):
You know, he was a guy who was big into the drone stuff that happened over the Christmas break.
But he's come out in hearings and said, look, this is hurting ordinary people.
He's not necessarily a Bitcoin guy, but he talks to his constituents and ordinary people who try to open up accounts.
And he said this stuff is actually hurting people.
There's a lot of reporting requirements and it puts people in danger because their information somehow can also get leaked.

(31:21):
You know, you don't have the best databases at these banks, particularly local credit unions have to file this stuff.
So, again, that's a positive rights thing, right?
They've made this law that forces banks to do X or Y, keep tabs on on their customers and they have to keep all that data.
There's no requirement that it be encrypted.
There's no requirement that it be held in some secure location.

(31:42):
It's just there.
And I don't know how many you've seen, but you've seen it either on NOS or on X.
There's exchange hacks that happen all the time, bank hacks, the photo of people holding
the ID.
That stuff gets out into the ether.
And if people hold significant amounts of Bitcoin or cryptocurrency, they become a target.
And we don't talk enough about that, too, because a lot of younger people who are millennials,

(32:07):
oftentimes minorities, have been stacking sats for a long time.
And they've done it because they haven't trusted the system. And if they've been using a lot of these centralized exchanges, which, again, points to the kind of reason you should be always very cautious, that could be very dangerous to them. And who knows what could happen?
So overall, I think Bank Secrecy Act reform is being discussed more and more on both left and right, which is a very good thing.

(32:33):
I think if somebody got in the room with Trump and just explained it a bit more, he'd probably come out against it tomorrow.
But we'll see what happens. But but for right now, removing that as well from the from the Bitcoin conversation also helps because it is harming people in the normal non-Bitcoin economy, which will be a statistic we'll see at some point by the Federal Reserve.

(32:54):
Like what is the Bitcoin economy and what's the non-Bitcoin economy?
But it is harming ordinary people a lot.
And I think there is some good impetus to change that.
Yeah, it's completely insane.
I think somebody in the industry ran the numbers too.
I mean, the whole reason that it exists in the first place is to prevent money laundering.

(33:15):
And it's not effective at doing that.
I think the last stat I saw was probably three or four years ago.
Who knows how fresh this is or how more advanced the government has gotten to be being able to leverage the advantages that Bank Secrecy Act affords them from an information perspective to get better at this.
But I highly doubt it.
But some like point one percent of money laundering is actually stopped by Bank Secrecy Act suspicious suspicious activity reports.

(33:43):
Yeah. And this could be done by by the banks themselves.
I mean, look, they don't want they don't want to be held liable for any of this stuff.
I think that's what a lot of people don't don't think about in the conversation is that the banks hate this part because it's just additional compliance.
Like they're just looking out for their own backs and their own skin when they give people credit cards and accounts and everything else like they have to protect their own assets.

(34:03):
So, of course, they're going to implement their own systems of kind of control and making sure things are nobody's being scammed or something.
But Bank Secrecy Act just introduces this additional layer through this very weird system where they have to file all of these transactions through this old school system.
And it's just additional work and doesn't really do anything.

(34:25):
Nick Anthony at Cato is really good on this because he's gone through the number of reports filed each year.
It's like millions upon millions of these suspicious activity reports that no human being could ever review, but that are filed, that are there, that are in a database that could be activated if somebody is part of an investigation or something happens.

(34:45):
And I think we have to also think of the industry perspective of these guys have to comply with this stuff.
And man, I've gone to European like Bitcoin and blockchain events and stuff.
it's like there's a reason that 75 percent of the sponsors are you know compliance organizations
you know it's like identity providers and stuff it's like that's where they're forced to buy this

(35:08):
stuff they're forced to get it they're forced to use it and implement chain surveillance as much as
possible this is the way that the rules are set up right now and if we actually want to effectively
help people and allow people to have their freedom again you got to figure out a way to curtail that
and remove it really from the remit of the federal government at all.

(35:28):
So hopeful, getting there.
Are you optimistic that Mike Lee's bill or something else?
I would love to just repeal it outright, if possible.
Yeah, and that's kind of what this does.
It goes through, I mean, it does a lot more.
There's all this stuff related to the SEC
and this like audited financial trail
and just all the different things
that if you happen to be a public company,

(35:50):
you have to deal with, which is pretty onerous.
I'm not rich enough to be in that position, but but, you know, this stuff is very onerous as well.
The problem is that most of these pieces of legislation are very good, but they're tied to politicians whose wins are always, you know, the sales are going in a different direction.
So Mike Lee is kind of a MAGA guy right now.

(36:12):
People like him, but they didn't like him because he had a bill to sell off some federal lands, which I think you talked about.
so it's it's hard because you have that stuff happening all at once and sometimes it always
just takes a crisis or an outrage some kind of raging moment to change things so that's why i
said it's going to take like trump coming out one day it's like man that bank secrecy thing you know

(36:34):
that really sucks and that's why the trump uh sons when they've gone to the bitcoin conference and
stuff uh when apart from saying uh you're welcome for pumping the price which whatever uh they always
say too, it's like we were we were as a family targeted by the system and we had our accounts
closed. And that's why we looked at things like Bitcoin. And I think the more that that message

(36:56):
is kind of heard, that will also have an impact. So I'm not sure there's there at least there's
one Republican, I believe one Democrat who are on board now. They're talking more to other people
to get the kind of bill going. It's just. You never really know. And, you know, I thankfully
never worked in Congress, you know, as a staffer or something, I probably would have lost all my

(37:18):
hair. But overall, the more that people can discuss these issues, maybe it gets cut up into
various pieces and we go for just an outright appeal or limiting. It'd take a bit of time,
but I think Trump can open the Overton window on that. Yeah, let's do it, Donnie. I know you
listen to the show. It's time. I heard he's on Fountain. You know, he's he's actually earning

(37:41):
sats while listening to you yeah i mean he's boosted us too it's uh it's incredible thank you
um no like the other thing i'm not sure if you call it thomas massey's conversation with tia
vaughn the other week that's one thing i wonder with all these individual bills like is the nature

(38:01):
of what's happening on capitol hill these days and how anything gets passed such that it gets
harder for specific bills like this to actually get passed? Do they have to get swept into an
omnibus bill with some concessions being made in the process? Yeah, nobody wants to defend their

(38:21):
vote on anything, right? So if it's just one bill instead of 12 bills or 13 bills, they don't have
to explain it. It's not in some attack ad. So I get that perspective of why they don't want to have
all these individual bills. Realistically, they're just lazy. They don't have enough time.
And, you know, sometimes I'm actually thankful we don't have a super hyperactive Congress because then they would be passing bills left and right.

(38:44):
And, you know, the Supreme Court would be very slow to strike them all down.
But at the same time, it would be a lot more accountable if we did have that.
Because like we the I think I heard Odell talk about this on Rabbit Hole Recap is the amount of money that's going into Department of Homeland Security and agents and stuff like these are not just people who are going to Home Depot.

(39:07):
parking lots, you know, they're getting, they're getting laptops, they're getting tools, they're
getting chain surveillance stuff. Like they're, this is a weaponized police force that is yes,
used for migration. Forgive me for sounding like a progressive, but you know, we're, we're sort of
militarizing a part of our government that hasn't really been uber militarized before and giving
them really awesome tools that are emerging from the private sector, whatever companies might be

(39:34):
offering stuff. And that is something that really would harm our own individual liberties as
Americans, which I'm very concerned about. But yeah, overall, it's a complicated space.
I think congressional reform is just like super boring. Nobody wants to cover it.
The reporters who cover it are super bored. It's a lot of like infighting. People are trying to

(39:58):
represent their constituents and then also the people who give them money. And it's just hard.
I think we don't necessarily need to look to Congress always for our solutions.
Definitely don't need to look just to the president for our solutions.
It's, again, just figuring out the stuff that would be in place and protect Bitcoiners that we don't have to worry about going to jail or being hauled before a committee.

(40:19):
That would be better. So obviously, I'm a huge admirer of Thomas Massey.
Love a lot of his of his work and principles.
You know, we don't have too many of these people.
it's pretty much uh you only have one or two of these uh sort of congressmen or senators every
generation and right now it's thomas massey ran paul as well they're fairly good but again i don't

(40:40):
get all my hopes up on just what's happening in the halls of congress that's why the what's
happening with bitcoin builders and users in the community and people on nostr and like these
projects are really what i think give people a lot of fire and show the potential of this technology
which I'm excited about.
Yeah.
No, it's funny.
I had a discussion with Balaji last week.

(41:03):
It's like we're reaching like a singularity in the private sector
and nothing ever happens in the public sector.
And I think over the last few months.
Can I ask you quick though about Balaji?
Because I love the network state.
I've read it.
It was really interesting just hearing him talk
because like I think you get about four questions in.

(41:24):
but what is like for your response to that like what is your what's your overall takeaway from
what he's trying to build uh because i think he gets always very tied up in taxonomy of you know
you have like the the red america and the blue america and this and that and the grays and ccp
and it's just like he's caught up a lot he's created an awesome framework i just don't know

(41:46):
what it means specifically for me who might be sitting in whatever you know dover delaware what
am I going to do about X or Y? Yeah, no, I appreciate it. I mean,
Blasch and I have a good relationship. We talk off air probably
pretty frequently. And I don't agree.
Like, I love his perspective and the way he distills everything and the

(42:09):
sort of how he places everything on the chessboard
from his perspective. I do think
the sort of doomerism about
America's future is a bit overstated. And the whole concept of the network state is really
interesting. And I can see it. But I think the application, I would argue that the application

(42:33):
is not something that I would want to participate in because I come from a big Irish Catholic family
in the Philadelphia area. I'm very tied to my roots, my nuclear extended family, friends, network,
community that I grew up with part of the reason why I moved back to the area, despite
the fact that many people warned me I'm moving back to a shit lib capital of the country. It's

(42:56):
like, yeah, I love my family more than I hate the shit libs. I'm willing to go back and fight for
it. But I do think the idea of network states in the sense of you have like minded individuals who
meet in the digital realm and talk about ideas and build things. I don't think they need to all
just like uproot and meet in a physical location and then go restart individual city states whatever

(43:19):
it may be in those places i think you just share ideas build things in the digital realm and then
get to hand-to-hand combat and meet space in your locality and try to make where you live
a better a better place and i i brought this up at the end of our most recent discussion um that
was released earlier this week but like i think part of the degradation and the social fray that

(43:45):
we're seeing in society today these days really stems from the degradation of the nuclear family
and i saw this up close and personal when i was in living in chicago i volunteered at an inner city
lacrosse program that started in 2011 and i worked there for three years and that was
the one stark thing that really stood out to me throughout the three years volunteering there is

(44:10):
like the south side west side southwest side of chicago is really a terrible place these days
because the nuclear family just doesn't exist kids are being raised by their aunts and their
grandmothers and their the family isn't there and you have this sort of a negative feedback loop that
leads to these negative consequences.

(44:31):
And I think the idea of uprooting and just meeting with like-minded people to build community
doesn't really jive with what I've experienced personally.
I think culture and community are important and you can't really, they're emergent things.
You can't just centrally plan them.

(44:52):
It's like similar to El Salvador's Bitcoin City.
It was always a bad idea to me.
You can't centrally plan.
a decentralized city. Like it doesn't make any sense. That's an interesting point. I mean,
like Bellagia, I've been an expat, you know, living outside the U.S. for the last couple of
years. And I always think about that as being very purposeful with your migration, where you go,

(45:12):
the community that you build. And oftentimes you're just sort of a victim of a victim of
circumstance, like where you happen to be, you know, whatever relationship you're in,
whatever job you have. You know, most people don't have the will or the money
to create like a whole facility with digital nomad types.
And often this is the ideas of the 1930s and the 40s in Spain.

(45:33):
We had all these like left wing communes.
People thought they were reinventing socialism.
And these things always turned out chaotic and, you know,
nobody cleaned the dishes or took out the trash and didn't tend to work very well.
But I like that.
I like the the small cities like Prospera, the idea of Liberland as well,
if you've ever heard of Liberland.
And well, this is another. Yeah, I think these are great, good experiments.

(45:58):
Most people are not going to choose to move to these because of familial ties and everything else, which I totally get.
And I understand. And if Balaji's network state makes sense, then we're also way more digital anyway.
So in a sense it didn matter about our actual locality and where we live And it is more of these online communities somewhat But yeah I think we have a lot of choice of that I mean Americans are super super privileged that we can move to like 50

(46:26):
states and there's all types of flavor of what you want. Hawaii, Alaska, you can go to Puerto Rico,
you can go to Texas and go to Washington, Oregon, North Carolina. There's a lot of choice there. And
it's pretty good. Most people who live in small European countries with like 2 million people
don't have that choice so yeah pretty lucky i've got pennsylvania illinois new york texas and south

(46:47):
carolina on my belt states i've lived in and all very different in their own regard and south
carolina is just always one of my favorite choices man this is a place most people do not travel to
but it is a place that has just so much potential just like great culture laid back low country
living baby and yeah i'm a big boy back no and i would i do want to make it clear like network

(47:13):
state this whole model of uprooting and moving and trying to create these communities doesn't
make sense for me it may make sense for other people and i wouldn't be surprised that some of
them have massive success in our sort of prototypes for for how to do this in the future but for me
the family ties way too strong absolutely yeah i mean i was an immigrant twice in my life so i guess

(47:37):
i'm i'm always searching for that familial connection uh and getting back to the to the
origin but it's it's tough man it's um finding out where to live where to be and i think having
purpose and ideology and technology and the promises of everything biology talks about
But yeah, it's it's awesome. It depends on which one you want to have. Right.

(47:59):
It actually is the total free market in action.
Very different from today's discussion on immigration policy. But again, that's another topic.
Yeah. No, and I don't want to sound too idealist, but yeah.
And maybe it's Stockholm syndrome.
But I do earnestly believe that the fire of the American spirit does still exist to many Americans.

(48:22):
maybe not a majority, maybe a very small minority.
And I do believe in the intolerant minority's ability to sort of prevail.
And having lived in all these different states, particularly Texas, South Carolina, even Pennsylvania,
Pennsylvania west of Philly is very freedom oriented until you get to Pittsburgh.

(48:42):
But I do think that the ideals of liberty, the fire of liberty still exists in the bellies of many Americans.
It's just figuring out how to get the government out of the way and do it tactfully.
And that's why I'm so passionate about Bitcoin, because I think it's an incredible vehicle to do that in a nonviolent sort of roundabout way.
Absolutely. Yeah. And all the lessons that we also learn through Bitcoin are just being applied to every other industry and every other technology, too.

(49:11):
It's always like that constant meme of was it James Franco who is there?
He's got the noose around his neck in the first time.
I think there's so many other industries that are facing like the talk about the environmental stuff with AI data centers, talking about the illicit finance things.
I mean, Bitcoiners have been talking about this stuff for years and years.
And these other industries just have to learn now.

(49:32):
It's like, well, thankfully, we thought about it for a long time.
We've come up with like proposed solutions and we figured out workarounds where necessary.
So you don't need to do this.
Yeah.
No, the energy side of things is something I've been passionate about for seven years now, having been in the mining industry.
And I think that's one thing in the research that ChatGPT helped me with is something that you've written about.

(49:59):
And do I exist in ChatGPT?
Like it actually worked?
I gave them your website and said it's called this and look at everything.
But I'm sure if I asked them, you would come up as well.
But this idea of Section 230 for energy policy really, really struck a chord with me.
It's like, oh, I've never thought about it this way, but this makes a lot of sense.

(50:22):
Yeah, and I guess to explain it.
So Section 230 is what we colloquially call the 26 words that created the Internet.
It was part of the Communications Decency Act.
It was a bill in Congress, 1996.
The point was to essentially figure out how to deal with all that smut online, all that dirty stuff.

(50:43):
And basically, if people could be liable for what types of information is put on their website.
So if you have a forum or if you have comments, you have a blog, are you as the website provider liable for whatever comments?
So if somebody disparages someone or liable someone, are you liable as the website provider?

(51:03):
is, you know, at that time, it was like GeoCities or Blogspot or something like that.
Are you the one that's going to be liable in a civil trial if, you know, somebody sued?
And what Ron Wyden did, and it was realistically Ron Wyden, who's this Oregon
representative, congressman, he put in those 26 words and basically said that, you know,

(51:26):
no publisher will essentially be the person who owns the words.
So anybody using an open communication platform, if you're just like the publisher, people are writing on it, you're not liable for what people are writing it. Now, that has allowed the Internet to bloom and to blossom and not having to deal with lawyers for everything that's published on a website opens up all this creative freedom.

(51:50):
Now, if you look at the energy sector right now, we have this immense need for more grids, more technology, more gigawatts, absolutely everywhere.
And most of our energy providers, from the dirtiest ones that deal with oil to the natural gas, even the nuclear industry and even some solar guys, they're being caught up in all these weird lawsuits themselves where people are using their products, energy products.

(52:17):
People are using their energy power and then they're being held liable for something.
So the example that I used are these climate change lawsuits.
So a lot of industry, a lot of groups like Greenpeace or pro solar activists will sue
people like Exxon or BP, Chevron, BP and Shell merger, by the way, is a huge deal.

(52:37):
But they're they will sue these companies and say, well, A, you cause climate change.
B, you lied about it. And C, you are now on the hook for everything that's ever happened related to environmental disasters, climate change and everything else. And what we're kind of proposing is, well, we need to have a kind of Section 230, like no individual company, institution, gas company, oil driller is itself responsible for climate change.

(53:07):
we cannot have a system that then starts to dole out liability based on something that is very
general very broad disputed in terms of measurement and causality we cannot have that go into the
court system and say okay yeah they're they're the ones who are liable and therefore you know

(53:28):
everything that bp's done they need to pay like one billion dollars to someone who died in a heat
wave. So finding out a way that we can extract the energy production from the energy use and to
protect the energy producers, because that's essentially what energy producers want to do,
is they want to get this stuff out of the ground. They want to be able to produce it.

(53:51):
If they're dealing with cooling stations or something else, they want to get that stuff
out into the grid. We cannot saddle them with the great American tradition of suing them like crazy
and expect that we're going to have affordable energy or expect that we're going to have great
cutting edge innovations in AI or expect that we're going to have anything propelled in Bitcoin
or anything else because they're constantly just going to be beefing up their legal departments

(54:14):
and they're not going to be giving us better technologies. They're not going to be figuring
out a way to better refine the stuff that comes out of Alberta and that is shipped through Keystone
Pipeline or something like that and thrown out to the markets. And unfortunately, it's like we're
we oscillate between hating energy companies and loving them. Generally, in the United States,

(54:34):
we're at an OK moment right now. But if gas prices go a bit higher, you know, we'll have a Joe Biden
figure who say we should probably criminalize these guys for raising prices. And maybe Trump
would do the same, to be honest. I don't know. The idea of a Section 230 is just figuring out a way
to get rid of the lawfare and the liability concerns when it comes to energy producers.
And I think we need it right now. If you look up any state in the union, there's some kind of

(54:58):
lawsuit against any kind of oil company, energy industry right now. Even in my home state of North
Carolina, you've got the nuclear provider, Duke Energy. They're being sued. And they're the ones
who've turned North and South Carolina into these nuclear behemoths, super renewable, sustainable
energy. And they're being sued for causing climate change, much the same. Like we're not going to

(55:20):
find the ultimate climate change culprit in court. And I think it's a folly to do so. And it's just
very expensive and it means that all of our energy prices are probably going to go up because they
got to deal with it i i hope we can i hope we can reason with that but i'm figuring out more and more
that most people don't know anything about energy which you've learned a lot about no i didn't know

(55:43):
a lot about energy until i was forced to by way of getting into the bitcoin mining industry and i
was astonished it i was 26 when i started and i had even started my career uh at a commodities fund
we traded energy but like i was more looking at the macro but once you get down to the micro of

(56:05):
how you actually extract oil and gas from the earth and then get it to midstream and get it
downstream get it to a power facility and a substation and the rest of the grid the transmission
lines, all that. It's highly complex. It is a feat of human ingenuity that should be marveled at and

(56:25):
celebrated vigorously by anybody who appreciates the fact that you have air conditioning and you
can walk into your house and turn on a light switch and there will be light. It is, I mean,
just the energy infrastructure is probably one of the best things that humanity has ever brought
to the world and to your point like it goes through this ebbs and flows with the energy

(56:46):
companies of hate and love and particularly right now where we sit in 2025 looking at the future
looking what china has done in terms of energy production over the last two decades and how we've
lagged like i think something like this is incredibly important especially if we have the
the goal and the intent to go out and expand generation by as much by like orders of magnitude

(57:11):
over the next two decades, something like this probably needs to exist.
Oh, yeah. And you'd be surprised to learn just how much many of the big tech companies are just
not even looking at city grids or different ways of generating electricity. They're just like going
all in on their own projects, you know, putting $10 billion in nuclear, owning their own

(57:31):
infrastructure. I mean, one thing that's fascinating to me that I've learned a lot about,
you know, of course, with the energy is the submarine cables. So how we have the internet
around the world is not because we have satellites, but actually because we have these huge networks
of cables that are just laid in the ocean and they connect everything. And we've had sort of

(57:52):
special purpose companies that are developed to put these submarine cables together. And it's
essentially all of the internet of the European continent and Latin America. And we've had sort
of the same companies doing it for years and years. Not much innovation hasn't changed. Now,
a lot of the tech companies like Microsoft, Facebook, Amazon, they're just like, bro,
we're going to lay our own cables because we cannot rely on this. We don't know if there are

(58:15):
Russian or Chinese submarines that are going in and trying to tap these lines. Like there's just
so much that's vulnerable that's right there that we don't understand. And going back to Energy
Canada, my home nation, you know, we are a energy exporting nation. Literally, that is our major
product. And we've had governments now for over a decade who've denied that reality and made Canada

(58:40):
much poorer, have essentially made it so that is not the top G7 country it used to be and have
really harmed a lot of the workers there because there aren't as many opportunities, whether it be
nationalizing energy projects, stopping transmission of energy, transportation of energies, making
exports illegal. There's just so much of the energy that's tied to absolutely everything in

(59:05):
our lives. And I think people forget that they just assume we just can all just log into the
computer with our laptop job. And as you said, the air conditioning will run, everything will
just function. But if we don't have electricity for two hours, there's a lot of stuff that would
fail. Like a lot of people would be harmed. Hospitals on edge. We'd run out of diesel.
The toilets don't work because you can't get the water up. There's just so much stuff tied to

(59:29):
energy. And I think we have been in the Yosef Schumpeter model. We've been a sort of, we've
enjoyed the benefits of this great capitalistic market for so long that we kind of forget about it.
And we can, we kind of leave that to decay and rot and that could harm people if we don't
continue to build and continue to allow producers to get that to the marketplace that we can use it.

(59:52):
And I don't want to be again in a scenario like in the European Union after the invasion of Ukraine,
where all of a sudden the Russian gas is gone. And where I live in Austria, you know, we saw our
energy prices double and sometimes triple depending on the month. And we didn't have reserves. We don't
have our own natural supplies of natural gas for heating homes and everything else. What are you

(01:00:16):
supposed to do? It's the lifeblood of our entire civilization. And we have to figure out ways to
incent more energy producers and ensure they're not caught up with these like crazy lawsuits that
will ultimately drag them down and make all of our prices too high yeah it is baffling how idiotic

(01:00:36):
both the u.s and european energy policy has been over the last two decades and it is like it makes
you wonder like is this just like a civilization cycle where we're you didn't say this exactly but
I think along the same lines of we've reached a state of decadence where we forgot what got us to the ability to be decadent or completely letting it rot below us.

(01:01:03):
Yeah, no, 100 percent. And it's the same in our political institutions.
You know, we have this mayoral election in New York City, which, yeah, whatever.
Nobody cares about New York City, but everybody cares about New York City.
It's where the media is. And there's a guy who's very open about socialist ideas and government run grocery stores.
who's probably going to be the next mayor.
And what I was mentioning with the Schumpeter model,

(01:01:26):
it was this great Austrian economist basically said that you you have capitalism.
Everything is great. People are rich.
You know, they get very decadent, as you mentioned.
And then they kind of forget how they got there, why they got there.
And they just start essentially turning the state more into socialism,
giving people more benefits without actually providing the same incentives.
And then it just breaks. You have creative destruction. It all is gone. And then you have to rebuild again. And we're going to continuously have these cycles. I think Trump was a kind of force of that cycle. He stopped something that was happening. I don't know exactly how to define it. You know, but whatever the sort of Obama Biden era stuff was, there was Trump who was stopping it. But we have to admit he's oscillating in the other way pretty hard, too.

(01:02:09):
and while there is a lot of advantages there's any number as uh matthew said on your program uh
recently there's a lot of disadvantages too i think many people realize that yeah what was the
uh we just did i mean it's the department of defense just by a large stake and a rare earth
metal producer here in the united states yeah and i i'm just peeved i didn't have a share in it

(01:02:33):
myself but yeah but no that's a step towards like number one it's like overt positioning like we're
getting back to industrial policy but number two like teetering on the edge of like quasi nationalizing
a critical sort of rare earth metal extractor yeah and uh you know related to uh to bitcoin

(01:02:54):
again the fannie mae freddie mac are these you know mortgage providers and stuff you know that
was set up, yes, as like a quasi-government thing, but now it's just like completely owned by the
government. And Trump has even mentioned with a few of these deals that the United States would
own, like the Ukraine deal was kind of mentioned. It's like, well, the U.S. would just own this and

(01:03:16):
that. It's like, well, we're getting into the nationalization game here. I didn't know I did
not sign up for this part where we're nationalizing certain industries and lands. And you typically
don't want that because government is not very efficient at allocating resources and understanding
supply and demand pricing and prices a lot of other people out and makes it so that things are

(01:03:37):
not looking too good. That was actually one of the problems of this CHIPS Act that people are very
enthused about is that we're going to give a billion dollars to these companies to build in
Arizona. But, you know, what are you really getting for that? Are they actually building
the real stuff here? And what are you doing to deleverage Taiwan from China? It's like super

(01:03:58):
complicated questions. And there's not really a way that governments can centrally control it,
which is why it's good to be skeptical and good to limit government wherever possible.
But yeah, a lot of scary stuff. Yeah. You think about like the Sovereign Wealth Fund announcement
of Howard Lutnick, like we're going to get equity stakes in Moderna and Pfizer so they can
inject you with mRNA vaccines. It's like, what? What are we doing here?

(01:04:19):
i haven't seen any other proposals of what would go in there though uh
i i guess uh because realistically we don't want the government owning a bunch of stuff when we're
are what 38 trillion dollars in debt like there's stuff to pay off we don't need to
you know put things on the robin hood uh brokerage right now like we need to actually be selling

(01:04:39):
things yeah it's uh it's very chaotic times and that's why again that's why i anchor to bitcoin
I do believe it's that sly roundabout way to take control of money out of the hands of government and central banks.
And if you fix the money, you can begin to really limit the government and what they can do.

(01:05:02):
And that, I mean, that brings up like the topic of the week, which is the constant berating, not only the week last month of Fed Chairman Jerome Powell and this sort of back and forth on D.C.
You have many reps and senators tweeting, it's time for you to resign.
And there was a rumor that Trump was writing his letter that was going to fire Jerome Powell.

(01:05:24):
And then he stepped back from that in a press conference right before we came on to record.
But I wrote a newsletter about this last night, and it seems pretty obvious.
They've been as close to explicit.
The Trump administration, Scott Bessent, others have been.
Obviously, they don't like Jerome Powell, but it seems like they want to go to full merger between the Treasury and the Federal Reserve.

(01:05:47):
so that they can turn things on turbo and sort of make sure that there is no independent Fed chair
stepping in the way of their fiscal policy goals.
Yeah, and then we're one way stop to funny money.
Look, there's a look in a pure, the way that it should be is that there would be no central bank.

(01:06:08):
Interest rates would be set, you know, just by the market.
It'd be fine, right?
La la land.
But that's ideally how it should be.
when you have this kind of politicization i don't just say like nobody wants to defend pal right you
just you need i feel weird somebody's criticized him for years like last time i'm writing the news

(01:06:30):
there i'm like this is like listen i don't not like the biggest fan of the guy either but but
he's also the devil we know right like if if you did have a merger you had a thing where like trump
would set the interest policy i mean he'd be at zero rates forever he's a real estate guy like
This is what he wants is zero rates forever, which have their own unintended consequences.
And I think one of the greatest distillations I ever had on this was actually Ron Paul's

(01:06:53):
book in the Fed, which talked at great length about, I mean, his in cases that we should
just audit the Fed and try to curtail some of what it can do.
But he goes through a lot about the Great Depression and sort of the jiggering that
they did with a lot of the rates actually caused a lot more harm that people may realize.
And I think because we haven't really had that good historical lesson brought up too often.

(01:07:16):
Yeah, we'd go ahead. We'll have the interest rate at this and then whatever it might be.
It's like this stuff is the central price signal price of money signal for absolutely everything in the economy.
There no way you can actually make a good determination of what it should be It all just market reaction And this stuff is it always very concerning to see Again I don like more government institutions

(01:07:39):
I don't like more rules and laws and things like that.
But the only other alternative is to introduce, yes, some kind of Bitcoin system that wouldn't even have to deal with this because the Bitcoin interest rate is whatever I set it at rather than what the government sets it at.
Yeah, it's completely insane.
And whether it's how D.C. operates just plainly with the laws they're creating and putting out there or central bank policy or potentially soon to be Treasury central bank policy, whatever it is.

(01:08:11):
To me, I'm a keep it simple, stupid. I'm left curve, left curve. I'm the caveman.
But it literally comes down to information systems like you cannot make good decisions in a central location for people thousands of miles away from you.
You are so far removed from the data inputs that is quite literally impossible for you to make a good decision.

(01:08:32):
And you need to decentralize and distribute that information or the decision making based off those informational inputs to as local level as you can get.
We've gotten so far away from that in the United States.
You're a good Hayakian.
There's good price discovery right there.
Yeah.
Yeah.
it's uh
yeah and like how so how do you

(01:08:55):
that's wrong with the assumption that um they're successful in kicking pal out
like i'm sure you saw but like july 3rd scott percent was on cnbc it was
bluntly asked like will you become the fed chair is that a possibility
and he said it has happened historically and then she pressed him like is it going to be you and he
just gave a non-answer and it was like the most blatant admission by omission

(01:09:19):
I've ever seen. Who knows whether it'll be Besant or Warsh or Hassett. It seems like those are the
three front runners. But I think all three of those front runners will effectuate the plans
of the Trump administration would seem to be, it's like teetering on the edge of explicit.
I think it's still an implicit sort of signaling that we've been getting over the last,

(01:09:44):
even before the election, that they're going to merge the Treasury and the Fed so that
they can drop interest rates and the federal reserve under the purview of of the treasury
will be there to to buy the bonds to make sure yields are low um yeah and what's interesting
about besant is i mean he is a bitcoiner right he knows this stuff and you you know a lot of

(01:10:11):
spent at least my professional career you know just in bashing the fed and centralized money
creation and printing and everything else. But here's someone who like understands and actually
owns Bitcoin and understands the unique qualities and would be in a position where he's determining,
you know, so much of the central price that's put on money. I don't know what to think,

(01:10:36):
because again, these are the institutions that we've tried to slay for many years, you know,
um hails from the crypt hey trying to slay these monsters for so long and then you have people who
are at least bitcoin adjacent who are in that and i don't really know who's holding them to just to
discipline uh that'd be something very interesting you know was so much of it just a thing during the

(01:10:58):
campaign and to get bitcoiners and crypto people excited or do they still hold those principles and
that's what also i'd be really interested in because there's a lot of market confidence in
best like super smart guy knows how to make money understands things but at the same time he does
have that that eye on bitcoin and whatever stable coins could do as well so i i have to say that

(01:11:21):
that would play a part somewhat so i don't know if he would go uber crazy uh if he were to do
anything i don't even know if it'd be him oh i know kind of weird to talk about i i'm making the
bet um on whatever the bitcoin version of polymarket is that basically pal stays until his
term ends. What is that? Early next year?
Yeah.

(01:11:41):
I think this will
be buried by some other story at some point,
because the economy will still grow.
People traveling a lot more. Gas prices will be
low.
I think it'll be okay.
Yeah.
Part of me wonders, is this
all K-Fob, Kabuki,
theater?
Not half wrong. Another part

(01:12:03):
is maybe they're serious.
They do it.
and like the the qanonomy is like they're gonna they're gonna speculative attack the dollar and
then issue bit bonds or something like that like aggressively acquire bitcoin try the rug
china and russia and then the third part is nothing ever happens like it'll go to term it's

(01:12:23):
all k-fob and we'll transition yeah i mean i've heard a lot of it uh is obviously related to
housing which is why bill pulte who's the head of the federal housing finance agency like he's been
the number one fire too late pal guy on X and everything else is that looking at mortgages is
super important because yeah, a lot of our economy is based on, you know, energy and the military

(01:12:47):
industrial complex, but also on construction and building houses. And if you have like a,
basically dearth of people who won't be working in construction anymore, because they've all been
deported. Yeah, there's going to be like all kinds of problems in the housing industry. We already
have higher prices for building materials because of tariffs. And then if people are not able to get

(01:13:08):
lower interest rates to build homes or buy homes in the first place, that's also very problematic.
So I think it would depend on how the housing numbers go. And I think that will determine
anything Not 100 sure how to lean out But yeah that a big important thing because people in the u love their homes they do but let walk through this like because i been saying this

(01:13:28):
for the last month or two like again don't want to defend pal but if you look at the cpi data you
take out gas and electronics which have fallen like electricity food medical care medical cost
and rent, shelter, have all gone up well over 3.5%,

(01:13:49):
between 3.5% and 6% year on year based on the last print.
So that's basically the basket of essential goods
needed to go about your day-to-day life are well above.
I don't even know if the target's two or three anymore.
It's over both of them materially year on year, which is not good.
So the free market, it's not even free market,

(01:14:13):
But like if you're thinking interest rates sort of drive prices, like it makes sense to me that you would keep them high for longer because there is still inflation that exists in other parts of the economy outside of gasoline and tech deflation.
And then when it comes to housing, like I think you're going to have high mortgage rates.
There's two parts of the equation of the housing markets, the mortgage rate and the price of the housing.

(01:14:35):
And like I think we just need to let housing correct from like a nominal cost perspective or a real cost perspective.
and just let the market figure out what a house is worth in each individual market.
And what were mortgage rates in the 80s and 90s were like 13 percent.
It's not out of the realm of normality that the mortgage rates are this high.

(01:15:00):
But to your point, like houses were not $800,000, right?
And that correction would be a huge detriment to most of the boomers because that's the retirement plan.
so in canada it's very explicit they say that you know our goal as a government is to ensure that
housing prices do not go down like they're very explicit about it now because most of the people

(01:15:22):
who own homes are older and that's their retirement plan is like their house whether they gift it to
their children or sell it on the open market so this is going to be a generational battle too
because there's a lot of uh housed older people who are doing very well and a lot of unhoused
apartment dwelling youngins uh who just have bitcoin don't have too much fiat and like we're

(01:15:45):
competing in the same space to try to live right yeah no i mean maybe it's uh the uh
my selfish intent coming up like yeah i want to buy a forever house for my family i don't want to
pay an obscene amount for it i'm okay to lock in a higher mortgage if the price is right like

(01:16:06):
sell your goddamn houses, people. Yeah. And the, you know, the U S has always had a fairly active
housing market, you know, had people flipping houses, people selling things and you have like
a good used market and you do have a phenomenal amount of building and places like Texas and
Tennessee, more of the red States. There's a lot of work on zoning that's happened. That's,

(01:16:26):
that's kind of been done. It's getting there. And, you know, it's not always a finance equation.
oftentimes, at least with kids, it's like, where are the schools and are they good schools and
how close are you to family and so many of these other issues. But with housing, it's like a thing
that we've never really solved. And again, in New York City, they're talking about, you know,
even more rent control and everything else, which has never worked anywhere. And Argentina is a very

(01:16:51):
good example. Milet got rid of rent control and you've just seen like rents fall, become so much
more affordable for normal Argentinians, not just digital nomads from the U.S. who are going to
Buenos Aires, but normal people actually able to afford stuff, which is why I think it's always
helpful to have Millet and his story in Argentina, like always have that in the front of our mind of

(01:17:15):
like this could be our alternative of what's happening. And it's all good so far and actually
pretty great, apart from whatever crypto thing he was involved in. Well, I find the whole Argentina
this story, particularly over the last year, it's so hard to discern
the signal from the noise because you'll hear
examples like
this. It seems to make sense to me.
Get rid of rent control, let the free market decide

(01:17:35):
price to go down. That seems real. But then others
are like, he's a webcook, like completely.
Yeah, but that's all rhetoric,
right? You just have to look at the data
of the numbers and the debt and
you know, they
no longer have a deficit, which is like
I can't even imagine when
the United States will no longer have a deficit ever.
like he was actually able to implement things i think there has been because it's you know

(01:17:59):
governance is dirty it's gross like this following this stuff is hard difficult and remaining true
to principles is very difficult but mille has done a fantastic job he's been very good that's
like questionable stuff relating to like his sister who is a key advisor um but um there's
zach over at reason who did a very good documentary on argentina and mille fairly recently

(01:18:22):
we got him on Noster as well
which is fairly cool but he put together
something good on the YouTube that goes
into the actual story and talks to people
most of it is actually framed through the left
wing unions who hate him
because he's been doing a lot of union busting
and I think that has
much like the normal mainstream
media kind of been the narrative

(01:18:42):
so you haven't heard too much positive
you kind of have to look at the
numbers yourself to actually like send good people
down there to get the real truth
yeah
no i have free market it works it's like and so what um in terms of priority list for you
on the policy side of what we need to get past as it pertains to bitcoin energy whatever maybe like what how would you describe like your top two to five priorities of what you think we need to get done

(01:19:17):
But there's this year throughout the rest of Trump's administration between now and midterms,
like what's the window looking like and what do we need to get done?
Yeah, I think like it's crypto week in D.C., as we mentioned, and it's the Clarity Act,
It's the Genius Act and the Anti-CBDC Act.
Yeah, sure.
Anti-CBDC Act, very important.

(01:19:38):
Get that enshrined.
The others don't really matter for Bitcoiners.
Realistically, it's a lot more about the crypto world for stable coins.
Everyone has these arguments.
I'm going to say steadfast.
It really comes down to being able to use Bitcoin and not having to give the IRS every
single transaction we do.
So need to have de minimis taxation rules.

(01:19:59):
anything that's under $10,000 that you spend in Bitcoin. You never got to declare it. Don't show
anybody nothing. That would be ideal, especially if you're using brokerage exchanges, wallets.
I think that is really important. There is a more beefed up IRS that is coming in the Trump
administration. There's a lot more people who've been hired. So I don't know who they're going to

(01:20:21):
go after. It could be Bitcoin people. I'm not sure. So having de minimis rules, I think it's
very important for average everyday normal use of bitcoin as money that is definitely important
and basically that apart from all of the developer issues and um you know with with samurai and with

(01:20:43):
even tornado cash and these trials which you've talked a lot about you know something like the
blockchain certainty regulatory act i believe it's called um is it's at different stages of
being implemented into various parts of legislation, so I have no doubt it'll make it in.
If it has the teeth to do so and actually protect developers who are working on decentralized
projects is another question. I'm not sure. I do think that for me, the de minimis tax stuff,

(01:21:07):
really important. The Blockchain Regulatory Certainty Act for developers is really important.
And I think for me, that's about it. I don't need to have necessarily a reserve. I know my
colleagues at Bitcoin Policy Institute are doing a yeoman's job of making that case and are very
interested in it. And I think there are a lot of advantages to Bitcoin in the hands of a national

(01:21:32):
policy. You hear my skepticism of government enough, but I think for me, those are the most
important ones for now. Just letting people use Bitcoin as ordinary money every day in their lives
and then also making sure that we're not arresting people who are granting us the tools to do so.
yeah i think i'm aligned there on priorities it's keep it simple stupid just let me

(01:21:55):
save in bitcoin let me spend it let me receive it and leave me the fuck alone please that's all i
want yeah if i had like a specific you know project you know if i was on the board of something i'd
be like well it'd be great if uh every uh whatever used a qualified custodian exchange that only
passed start and this is the problem with lobbying it's the problem with government it's the problem
with most of these rules is that they're catered to creating monopolies for certain companies.

(01:22:20):
And I think most people don't call that out enough that that's what regulations do. The more that you
instill regulations and you put things there, you're not harming the big companies. The big
companies have the resources to fight it. You know, Coinbase and all these others, like they'll be able
to do whatever, they'll comply, they'll hire more lawyers. It's the small developers and people come
up with cool stuff who get harmed and then the users who can't use those products. So absolutely

(01:22:44):
right. Keep it as simple as possible. Yeah. What can anybody listening to this do? Do they have
agency or is it all dependent on the lobbyist? No, I think it's dependent on agency. You know,
the de minimis tax rule has been talked a lot. I think that is something that Senator Blumis is
pushing. But again, $600 is a right-tier congressman, bro. I can't. The more arguments I think that

(01:23:09):
people hear in non-traditional channels is actually very important. That's most of what I do is
speaking to consumers and people who just go to the shop or the convenience store.
And like the more that people can hear stories, can hear anecdotes, can get articles written
from their perspective.
I think it's just helpful because unfortunately, if it's just the Bitcoin lobby that's talking

(01:23:29):
about this, it's not good.
It's got to be the person who has a hair salon in Minneapolis or, you know, the guy who owns
a auto parts store in Detroit.
You know, it has to be ordinary people who are using Bitcoin and the technology and want to be able to use it without being penalized.
So those stories are more needed than anything.
And it's not right.

(01:23:49):
You're a congressman.
It's just talk to more people about it.
If you can, you know, find journalists to talk about it.
Do your own podcast about it.
Figure it out.
You know, I couldn't tell you any any single solitary advice.
But the more people who at least discuss it and make it known, people will listen.
And they'll take that up and might take some time.

(01:24:11):
But I think there's enough groundswell here that we could actually implement that change and make it so that we don't have ugly dates every year with the IRS.
That's the least we can ask for.
Keep talking about it, freaks.
Yael, this was incredible.
We're going to do this many more times in the future.
Thank you for the work you're doing, not only at BPI, but also Consumer Choice Center.

(01:24:37):
it's a very important yeoman's work to take a term you used earlier doesn't seem pretty i don't think
i'd ever want to do it so i'm thankful there's individuals like yourself out there who like to
get in the mud with the political side of things absolutely mate well we do it we do it for the
cause so thanks so much all right see you peace love freaks okay

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