Cynthia Lummis: The BITCOIN Act - BTC in U.S. Reserves?
Summary
TLDRIn this episode of Bankless, Senator Cynthia Lummis discusses her proposal for the U.S. to establish a strategic Bitcoin Reserve, akin to Fort Knox, to hold 1 million Bitcoins. She believes this could address the nation's $35 trillion debt problem without additional borrowing. The conversation covers the potential for a global Bitcoin arms race, the importance of being an early adopter, and the political implications of such a move. The bill also touches on the affirmation of individual rights to self-custody of Bitcoin and the potential impact on the U.S. dollar as the world's reserve currency.
Takeaways
- 😀 Senator Cynthia Lummis, a strong advocate for Bitcoin and crypto, has authored a bill proposing the U.S. to accumulate 1 million Bitcoins for a strategic reserve, likening it to a 'Fort Knox of crypto'.
- 💼 The bill suggests leveraging the current undervalued gold certificates from the 1970s, revaluing them to the current market value of gold, and using the difference to purchase Bitcoin.
- 💰 The U.S. already holds around 200,000 Bitcoins, primarily acquired through asset forfeitures like the Silk Road case, which if included in the strategic reserve, would put the country 20% of the way toward the 1 million Bitcoin goal.
- 🌐 The strategic reserve concept has gained attention, with some presidential candidates, including Trump, showing support for similar ideas, indicating a potential bipartisan interest in cryptocurrency strategies.
- 📉 Senator Lummis believes that a Bitcoin reserve could help address the U.S.'s $35 trillion debt problem by providing a hard asset that could counterbalance the devaluation of the U.S. dollar.
- 🔒 The bill includes provisions for state-of-the-art security measures, suggesting a distributed storage approach for the Bitcoins, ensuring their safety and integrity.
- 🏛️ The legislation also aims to halt the current practice of selling seized Bitcoins and instead incorporate them into the strategic reserve, aligning with the long-term 'buy and hold' strategy associated with Bitcoin.
- 📈 The discussion highlights the potential for a global 'arms race' in Bitcoin accumulation, where other nations might follow suit if the U.S. leads in strategic Bitcoin reserves, possibly shifting geopolitical dynamics.
- 🌐 The bill underscores the importance of the U.S. leading in the digital asset space to maintain its status as a global economic power, especially as digital currencies and assets become increasingly integral to the world economy.
- 🛡️ The legislation also seeks to affirm the right to self-custody of Bitcoin for private holders, reinforcing individual financial sovereignty and security in the digital age.
Q & A
What is the main idea behind Senator Cynthia Lummis's Bitcoin proposal?
-Senator Cynthia Lummis has proposed the creation of a strategic Bitcoin Reserve in the United States, akin to the Fort Knox of crypto, to address the nation's $35 trillion debt problem by accumulating 1 million Bitcoins, which would be about 5% of all Bitcoin that will ever be mined.
How does Senator Lummis's bill suggest funding the purchase of 1 million Bitcoins?
-The bill suggests revaluing gold certificates held by the U.S. government, which are currently valued at their 1970s price, to their current market value. The difference between the book value and the market value would be used to purchase Bitcoin over a five-year period.
What is the expected outcome of holding 1 million Bitcoins for 20 years according to Senator Lummis's plan?
-The plan anticipates that the 1 million Bitcoins would appreciate significantly in value over 20 years, potentially reaching $17 trillion, which could help reduce the U.S. national debt by half.
Why does Senator Lummis believe Bitcoin is suitable for a strategic reserve compared to other assets?
-Senator Lummis views Bitcoin as 'digital gold' due to its scarcity, with a capped supply of 21 million coins, and its decentralized nature, which makes it a hard asset that is not controlled by any government, providing a hedge against inflation and currency debasement.
How does Senator Lummis's bill address the current U.S. holdings of Bitcoin?
-The bill calls for halting the sale of any confiscated Bitcoin and transferring existing forfeited Bitcoin into the strategic reserve balance sheet, ensuring it is not sold and adding to it through the proposed revaluation of gold certificates.
What is the stance of the current U.S. administration on Senator Lummis's Bitcoin proposal?
-The current U.S. administration, particularly the Biden administration, has not embraced Senator Lummis's proposal, possibly due to differing views on cryptocurrency and financial policy, including influences from the more central-government focused wing of the Democratic party.
How does the bill ensure the security and integrity of the strategic Bitcoin Reserve?
-The bill includes provisions for state-of-the-art security measures, including a Fort Knox type setup for cold storage of the Bitcoin, and a proof of reserve system to ensure transparency and prevent any unauthorized access or sale of the reserve.
What role do states play in Senator Lummis's strategic Bitcoin Reserve plan?
-The bill allows for voluntary state participation, meaning individual states can choose to purchase Bitcoin and store it within the secure framework established for the federal strategic reserve, contributing to the overall reserve.
How does Senator Lummis's bill address the right to self-custody of Bitcoin for private holders?
-The bill affirms the right to self-custody for private Bitcoin holders, ensuring that U.S. citizens have the legal right to hold and control their own Bitcoin in personal wallets without government infringement, emphasizing the permissionless nature of Bitcoin.
What are the potential international implications if the U.S. establishes a strategic Bitcoin Reserve?
-The establishment of a strategic Bitcoin Reserve by the U.S. could prompt other countries to follow suit, potentially leading to a global 'arms race' for Bitcoin, which could increase the asset's value and hasten its adoption as a global reserve asset, challenging traditional financial power dynamics.
Outlines
🚀 Introduction to a Bitcoin Strategy Discussion
The paragraph introduces a hypothetical scenario where the US starts buying Bitcoin, potentially sparking a 'Bitcoin arms race' with countries like China and Russia. It sets the stage for a discussion on the concept of a strategic Bitcoin Reserve, akin to the US's Fort Knox for gold, but for cryptocurrencies. The conversation features Ryan Johan Adams and David Hoffman with Senator Cynthia Lummis, who has authored a bill for the US to purchase 1 million Bitcoins to address the nation's debt problem. The paragraph also mentions the support this idea has from certain presidential candidates and the fact that the US already holds a significant amount of Bitcoin through asset forfeiture.
🌐 Global Implications of a National Bitcoin Reserve
This section delves into the global impact of the US establishing a Bitcoin reserve, suggesting it could lead to a shift in international power dynamics. It discusses the potential for other countries to follow suit, creating a new form of competition over digital assets rather than traditional weaponry. The conversation highlights the strategic importance of being the first major economy to adopt Bitcoin at a reserve level, emphasizing the need for the US to lead in the digital asset space to maintain its status as the world's reserve currency.
💼 The Economic Strategy Behind Bitcoin Reserves
The paragraph discusses the economic strategy behind creating a Bitcoin reserve, focusing on how it could help the US manage its debt. It outlines Senator Lummis's proposal to use the difference between the book value and market value of gold certificates to purchase Bitcoin without adding to the national debt. The conversation also touches on the potential for this strategy to be seen as a form of money printing, but argues that it's a necessary step to secure the US's financial future.
🛡️ The Fort Knox of Crypto and Its Security
This section explores the concept of a 'Fort Knox of crypto,' a secure storage facility for the nation's Bitcoin reserves. It discusses the importance of state-of-the-art security measures and the potential for voluntary state participation in the reserve program. The paragraph emphasizes the need for a robust and secure infrastructure to protect the digital assets, drawing parallels to the physical security measures in place for traditional reserves like gold.
🌱 The Growth and Potential of Bitcoin as an Asset
The conversation turns to the growth potential of Bitcoin and its readiness to be considered as a reserve asset by the Federal Reserve. Senator Lummis argues that Bitcoin's characteristics, such as its scarcity and decentralized nature, make it a strong candidate for backing a fiat currency like the US dollar. The paragraph also addresses concerns about Bitcoin's relatively short history and compares the potential impact of a Bitcoin standard to the historical significance of the gold standard.
🔒 The Importance of Self-Custody and Individual Rights
This section highlights the importance of self-custody rights for private Bitcoin holders, emphasizing the individual's sovereignty over their digital assets. It discusses the bill's provisions to protect these rights and ensure that citizens have direct access to their assets without needing to rely on intermediaries like banks. The conversation also touches on personal stories that underscore the value of self-custody and the potential for Bitcoin to empower individuals globally.
🏛️ The Political Landscape of Cryptocurrency Legislation
The final paragraph delves into the political landscape surrounding cryptocurrency legislation, discussing the differing stances of various political figures and parties. It reflects on the potential impact of the upcoming election on the future of crypto legislation in the US, with a Trump win being portrayed as a 'game changer' for the industry, while a Harris win could mean a more challenging environment. The conversation concludes with a call for increased understanding and support for digital assets across the political spectrum.
Mindmap
Keywords
💡Bitcoin
💡Strategic Bitcoin Reserve
💡Debasement
💡Asset Forfeiture
💡Self-custody
💡Proof of Reserve
💡Debt
💡Sovereign Individual
💡Cold Storage
💡Digital Gold
💡Innovation
Highlights
Discussion on the hypothetical scenario of the US buying Bitcoin as a strategic move, potentially sparking a global 'arms race' for Bitcoin.
Introduction of the concept of a 'Fort Knox of crypto', a place where the US could store a significant amount of Bitcoin.
Senator Cynthia Lummis's proposal for the US to build a strategic Bitcoin Reserve, aiming to solve the national debt problem.
The idea of using gold certificates, valued at their 1970s price, to purchase Bitcoin without affecting the US balance sheet.
The potential for the US to accumulate 1 million Bitcoin, representing 5% of the total Bitcoin supply.
Senator Lummis's argument that Bitcoin can help preserve the US dollar's value and maintain its status as the world's reserve currency.
The comparison of Bitcoin to gold, highlighting Bitcoin's role as 'digital gold'.
The possibility of other countries, such as China and Russia, following suit and starting their own Bitcoin reserves.
The importance of being the first country to establish a Bitcoin reserve and the potential strategic advantages it could offer.
Discussion on the voluntary participation of US states in the strategic Bitcoin Reserve initiative.
The concept of a 'Bitcoin standard' as a potential new global standard, replacing the gold standard.
Senator Lummis's personal story highlighting the importance of individual financial sovereignty and self-custody of Bitcoin.
The inclusion of proof of reserve and the right to self-custody in the proposed legislation.
The potential impact of the US adopting a pro-Bitcoin stance on the global stage and the reaction of other countries.
Senator Lummis's views on the current political climate regarding cryptocurrencies and the need for education within Congress.
The contrast between the Republican and Democratic parties' stances on cryptocurrencies and the potential for bipartisan support.
The implications of the US leading in the adoption of Bitcoin and the potential economic and political advantages.
The potential for a strategic Bitcoin Reserve to act as a diversifier and a hedge against inflation.
Transcripts
wouldn't it be fun if the US is buying
Bitcoin and it scares China and Russia
so they start buying Bitcoin and we have
an arms race over Bitcoin instead of
over
weapons welcome to bankless where today
we explore the frontier of a strategic
Bitcoin Reserve this is Ryan Johan Adams
I'm here with David Hoffman and we're
here to help you become more bankless so
the question on the menu today what
would it look like for the US to build a
Fort Knox of crypto that's the place in
the US where it holds all of its gold
and what if we filled that Fort Knox of
crypto with 1 million Bitcoin 1 million
Bitcoin units that would be 5% of the
the uh supply of all Bitcoin Dave is
laughing here but this is actually not a
crypto fantasy it's almost sounds like a
fantasy novel that we're creating but
this is a bill an actual bill authored
by Senator Cynthia lumus and she says
it's the only way to solve the US's 3 5
trillion debt problem and she's dead
serious about it we have her on the
podcast today before you say there's no
chance anything like this could pass
like understand I I get the reaction but
I'm not actually so sure a few points of
evidence the idea of a strategic Bitcoin
Reserve already has support of two
presidential candidates including Trump
and the US is already 20% of its way to
the 1 million Bitcoin Supply it already
has 20% of that amount and also the cost
of this might be just a small small
bookkeeping change with with treasury in
the fed and a little bit of money
Printing and the US has certainly
printed money for less than
this regardless as to whether you think
that this has like no shot in Hell or
maybe it's a Hail Mary but it's just not
likely to to happen maybe that's what
you think but you do have to appreciate
a sitting us Senator Senator drafting a
bill to like get it done like at the end
of the day regardless that's like kind
of cool the fact that we're having this
conversation is crazy yeah yeah
uh like I have talked Ryan to many very
pilled people during my crypto travels
people who have taken the Bitcoin pill
and then like taken five more uh and
just have like have taken a ton ton of
Bitcoin like the the bitcoiners and like
Cynthia's up there like she's she's very
pilled uh she's a bitcoiners bitcoiner
and she also happens to be a sitting US
senator who can draft legislation and
Garner support for it and get it through
so in 2024 you got to kind of just like
appreciate for where we are in this in
this part of crypto's History all right
we're g to get right to the discussion
with Senator lumus but before we do we
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bankless Nation I'm very excited to
introduce you to Senator Cynthia lumus
she is the proc crypto Senator those are
my words I don't know if she uses those
words but I say that because I don't
think that there's anyone in the US
Senate who's a stronger crypto and
Bitcoin Advocate she gets the absolute
highest rating on the website stand with
crypto she's made over 256 public
statements about crypto but who's
counting and she's the recent author of
legislation that would have the US
purchasing 1 million Bitcoin 1 million
Bitcoin in a strategic reserve and
basically establishing a Fort Knox of
crypto senator lumus welcome to bangas
thank you Ryan it's great to be with you
and David as well um you're in Argentina
I'm very
envious uh it is winter there uh tell us
what the weather's like oh it's stormy I
had to run home and I got very wet if
being from Seattle it felt like
home is it is the winter like or the
prospects for weather getting any better
David or is it just going to be like
it's coming into Springtime but like
bonari isn't so far South that there's
any snow uh so the winter here is like
relatively
mild well um we could talk about some
seasonality with respect to our politics
because it is election season in the US
you like that segue there um but but
first Senator lumus I think we want to
talk about this big bold idea that you
have and this legislation you put
forward in in a bill um called it's
called the Bitcoin act and uh Bitcoin
stands for something uh of course the
the you like I I think there's an
acronym behind this somewhere but it in
involves establishing a strategic
Bitcoin Reserve in the United States so
I want to talk about what this bill
actually contains maybe to start but
before we get there why did you put this
forward what what is this all about it's
about our nation being $35 trillion
dollar in debt and having no
Solutions one of the things that made me
run for the US House uh in 2008 and now
again uh come back to run for the US
Senate is my concern over uh having the
us remain the world Reserve currency
with our US dollar making sure that we
have sound money making sure we do not
debase the value of the US dollar or now
that we have gotten a grade F in all of
those areas how do we fix it and that's
been
uh an ongoing challenge for me the only
thing that I have found that rationally
addresses the US debt is having a
Bitcoin Reserve so here's how it would
work we take gold certificates that are
valued right now at their
1970s value they're on the US
government's books at their 1970s
value uh we Val them at their current
value a gold is over $2,400 an ounce and
then we take the difference between
those two numbers and use it to buy
Bitcoin the Bitcoin would be purchased
over a five-year period aggregating in a
million Bitcoin that's about 5% of all
the Bitcoin that will ever be mined and
then we put it in Cold Storage put it on
ice and we let it accumulate for 20
years at which point it would cut our
current debt in half uh so it allows us
to invest in Bitcoin with no effect on
the US balance sheet no additional debt
being accumulated and yet it's
converting what we're
now seeing US Dollars being being
debased and continually declining in
value and it's putting it in Cold
Storage on an asset that is growing in
value so it's finally it's the only
thing I've ever seen that addresses our
US debt and I've been looking for this
my entire career and so I'm really
excited about it because I know it'll
work I just know it'll
work is the main logic here Senator
lumus that um we have a bunch of gold we
have the most gold uh out of anyone in
the world and you are just saying hey
let's diversify from physical gold into
also an appropriate and balanced amount
of uh digital
gold well
interestingly we can do this
without um divesting of any of our
physical gold we keep our physical gold
it's just these gold
certificates that we convert to current
market value and then put the difference
in Bitcoin so it's it's
even it yes it's a diversifier certainly
it's a diversifier but the great news is
we don't even have to sell our physical
gold to do it and it doesn't affect our
current balance sheet so it's um it
allows us to keep these two hard asset
stores of value one of them is physical
gold the other one is Bitcoin which is
digital gold uh and we hold them and let
them grow in value now what we know is
um since Bitcoin was created um its um
value has grown faster than gold and I
believe that will continue to be the
case although if you look at people who
have modeled this uh over time it its
growth
will begin to decline a little bit in
relation to its first 15 years of
existence but it will still continue to
grow and it's going to be a
hard asset that is going to help save us
from ourselves we have put ourselves in
a world of hurt it is
unsustainable what we've done to
ourselves with regard to the US debt and
so while we're also growing this hard
asset in value over 20 years years it's
helping to
underpin the US dollar uh that we're
allowing to be debased so it it kind of
has a dual purpose it's it's really
fascinating so it's like I I think if um
listeners are wondering like where
where's the money come from uh like for
this you know I I want to just maybe
repeat some of this back back to you uh
Senator and you kind of confirm this
like I guess I was looking at how much
gold the US has of course the US has the
most gold in a strategic reserve of any
country in the world um bu a lot like
over 8,000 uh you know metric tons uh it
appears at least this is according to
google maybe the US has some other
stored in other places uh and what
you're saying is like the 1970s Book
value of a lot of the gold certificates
on the treasury balance sheet and of
course Book value is just like I guess
something arbitrary it's maybe the 1970s
locked into the 1970s price is a lot
lower than the market value of those
gold certificates and so all we have to
do is uh reassign that market value to
what it should be and then there's this
excess difference in kind of like uh
treasury cash let's say uh that we can
use to go start buying some of the 1
million uh Bitcoin Supply that your Bill
calls for 1 million Bitcoin right now at
like 60k per Bitcoin at the time of
recording is about uh $60
billion um so of course the market price
will will fluctuate particularly if the
US started being a buyer of this Bitcoin
but uh some some of the the funds to buy
that Bitcoin are sort of just in the
Delta between the book value of gold
certificates on the on the FED treasury
balance sheet and the actual market
value of that gold so if this sounds
like printing money I don't know is that
what Treasury and the FED sort of does
like I guess in a way it is but I I
don't know if you have any Reflections
on that uh Senator but that's kind of
how I understand it you have described
it well that's how it works um we the
United States already has uh
around 200,000 Bitcoin so let's say we
have five years to get to a million
we're already complete with year one as
long as the Biden Administration doesn't
sell more of it the problem is they've
been selling it that's the stupidest
thing they're selling it now right
they've been selling over the last few
months yes and it's the stupidest thing
they could do they need to hang on to
the money that is in the asset
forfeiture program uh it's over 200,000
Bitcoin uh we need to hang on to it and
then add to it uh by the mechanism you
just described it is the difference or
the Delta between its Book value and the
fair market value of gold certificates
yeah if if you're curious on that
200,000 uh by the way I I read the bull
the the bill in its entirety I don't I
don't usually read bills but I just like
wanted to be informed in this and
there's there's a section in in the bill
that says basically that asset
forfeiture I did you know Bank list
listener that the US has the uh the most
Bitcoin uh like I think still more than
Michael sailor I'm actually not sure I
mean he's got he's got yeah we're almost
equal okay 200,000 we have over 200,000
China's got I think 190,000 so they're
almost as big as we are that's right and
and the the the way the US and China
have um acquired these Bitcoin are
through sort of um asset forfeiture
right so there's illegal activities of
various kinds um you know back to Silk
Road yeah Silk Road drug bus all of
these things they've require this
Bitcoin so the bill basically says like
once uh we go through the um I'm
paraphrasing like highly here but once
we go through the process U of you like
due process in the court system and we
make sure that this doesn't belong to
any US citizen that is is a truly
forfeited uh asset seizure according to
federal law then we just take that and
convert that and put that on um the US
strategic Reserve balance sheet so
rather than sell it as we're doing right
now we just keep it and so the bill
calls for a halt of all selling and to
transfer the existing uh forfeited
Bitcoin into the um the Reserve balance
sheet that's is that correct that is
correct and and one of the things that I
thought was PR particularly cynical uh
when referencing the Biden
Administration is uh I um discussed this
uh specifically and rolled it out at uh
Bitcoin 2024 in
Nashville uh president Trump came in and
advocated for what he called a Bitcoin
stockpile a strategic
stockpile uh Robert F Kennedy spoke at
advocating for an even
larger uh strategic Bitcoin Reserve than
I proposed so here are three people that
are definitely uh not in sync with the
Biden Administration and the Biden
Administration doesn't want Trump to be
elected or RFK to be elected uh and so
the Monday after the Bitcoin 2024
announcement the US sells a bunch of
Bitcoin and I thought it was actually
cynical enough that it was their way of
saying okay Trump okay RFK okay
lumus in your face we're gonna sell
Bitcoin uh today and uh I I do you think
that that was actually intentional or or
that that wasn't just a coincidence that
was actually a decided move I don't know
but it it I don't know but there there's
some discretion in terms of like like as
as you point out some this 200,000 000
plus um Bitcoin that the US has um you
know that has been forfeited and is new
custody that's been around for a long
time some of it dates back to kind of
like Silk Road uh Bitcoin 2013 2014 got
it so there's some discretion as to when
you sell it is there not like there's
not a there's not a a set of laws that
dictate hey you must sell within X years
it's just kind of sitting there and you
could sell it whenever you want to well
which is why Ry and uh we wanted to
address that in the legislation and
specifically say stop
selling put it in reserve and add to
that
Reserve has any other country done this
or the US be among the first I mean well
you know El Salvador has Bitcoin of
course a much smaller amount uh but um
there are other countries considering it
there are other states that are doing it
one of them is Louisiana
uh and I was talking to Governor uh Jeff
Landry over the weekend about it um so
uh there are um States now uh either
through their Pension funds or other
asset diversification goals uh that are
that are buying Bitcoin so there's
States and by by the way there's a
section in this bill called like
voluntary State participation right
where individual states can kind of jump
on this and and I assume because you
know part of the bill we haven't talked
but I'm sure we will is kind of the
setup of a complete self- custody of the
US government I I call this kind of like
a Fort Knox type of uh setup environment
with cold storage you know um Cutting
Edge stuff the best of the best and I
assume the voluntary State purchase of
this is basically States if you're
Louisiana if you're Texas if you're I
I'll give a a blue state if you're
California you can go uh purchase
Bitcoin and then maybe store it in in
kind of the the the S the custody
situation that the feds have put
together that's correct because the bill
proposes that not all of the Strategic
Reserve would be in the same
wallet it would be uh diversely uh
distributed uh among wallets and in in
different regions but subject to
state-of-the-art um security uh so uh we
want states to be able to participate
that
in that if they want once we have
established state-of-the-art security
for the
assets Senator I think uh all the bank
list listeners and even myself and Ryan
understand and appreciate the merits and
strength of Bitcoin I think it's number
four in the total crypto uh total market
cap of all assets out there uh but
nonetheless I think when people hear
this proposal of putting Bitcoin behind
the global Reserve currency of the
dollar inside of the fed there's like a
little of a sticker shock with that uh
it's only Bitcoin is only 15 years old
there are companies that have you know
similar market caps to bitcoin that are
older than than Bitcoin like we could be
putting apple or or you know Microsoft
as uh part of the treasury why do you
think Bitcoin is ready for like the
Federal Reserve level prime time uh like
why do you think why do you think it's
time for Bitcoin why why now
well Bitcoin uh is not issued by
government it's not particularly
regulated by government so um as a asset
backing up a fiat currency that the US
has uh it has
characteristics that make it in many
ways a harder asset than say a US Stock
uh like apple uh and uh it is such a
different asset from the US dollar from
any fiat currency uh because of its
scarcity there will only be 21 million
Bitcoin ever mind uh and it is it's
designed to be a hard asset it's
designed for
scarcity uh that it provides a certain
underpinning that the US dollar doesn't
have you know during a 22mon period
during covid the United States printed
more dollars
than had ever been printed in the whole
history of the United States uh and so
we've proven
ourselves uh incapable of disciplining
ourselves uh when it comes to preserving
the value of the US dollar we're
continually debasing the value of the US
dollar by printing too much of it and by
spending too much of it this is an asset
where neither
occurs because it is so completely
distributed and so divorced of a
government edict uh that uh it is a true
diversifier what's interesting about
this too and let let me know if this is
some of the the logic behind this
Senator David's question of like well is
it too early to do this at at there's an
element and we know of crypto holders
right we're all here early everyone
listening to bank list is it's still
early guys um it's still early um if you
wait until G7 countries and you know
China has has purchased it right then it
doesn't have the prospect that you
opened with senator of kind of reducing
the 35 trillion doll uh hole that the US
is in right you you you wait until
Bitcoin yeah you want to you got to be
if if you're trying to uh actually H app
have the value acral appreciate to the
us and knock out this $35 trillion um
debt that we have then you have to be on
the front side of this or else like the
plan doesn't work right so we're talking
about buying at you know 60k to 100K in
this uh kind of range and hopes that all
of this this Reserve this 5% this 1
million Bitcoin what appreciates to like
10 trillion 15 trillion or something
like this like you said it could cut the
um the $35 trillion uh you know debt in
half is is that the expectation here the
the expectation is that a million
Bitcoin 20 years from now would be worth
$17
trillion wow and that's why so that's
that's you know in this logic why you
have to kind of be first I noticed in
the in the bill too there's some um a
provision around basically forced
holding so none of the Bitcoin that
would be acquired in this could be sold
at all during the first 20 years is that
correct I believe that that's how we
worded it uh and and we did that
specifically so the uh accounting and
math associated with getting to that $17
trillion number plays out you know if
the United States starts getting in the
cookie
jar uh it it it won't play out it won't
work it had in order to be as
effective as a reserve um it it it must
be held Buy and Hold You Know Bitcoin is
designed
to buy and hold I mean the whole term
hoddle or hold on for dear life uh is
designed to encourage people uh to to
buy and hold this was never designed to
be an asset for day Traders uh it always
had the incidence of Long Money Slow
Money uh that people would
learn is is worth hanging on to um so
that's part of the original even
principles of Bitcoin uh and so to um
get people out of the notion of thinking
that Bitcoin is just a a different type
of asset like a stock and you can day
trade it and buy the dips and you know
sell at the highs it was never designed
for that purpose and and so we're trying
to statutorily
Institute the original purpose of
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this is uh so fascinating because and
like we are uh Bitcoin Advocates crypto
advocates in general so to like don't
don't take this the wrong way because I
I mean this in the in the best of ways
like this is an idea that's almost crazy
enough to work you know what I mean like
it's just like the way sort of the math
uh works out and particularly if the US
is behind it and makes this level of a
purchase in it because there's uh Ripple
effects when the um the global store of
value uh the governor of the global
store of value which is you know the US
the fed and the treasury basically
starts purchasing this asset it almost
becomes reflexive enough can any G7
country afford to not purchase Bitcoin
after this wouldn't it be fun if the
next arms race was not for weapons it
was for Bitcoin
wouldn't it be fun if the US is buying
Bitcoin and it scares China and Russia
so they start buying Bitcoin and we have
an arms race over Bitcoin instead of
over weapons that we're we're as
globally we're challenging each other to
have a secure store of
value I feel like they'd kind of have to
if the US did this I can't believe that
China would well certainly would not
continue selling the confiscated Bitcoin
that it has it would it would I'm I'm
sure hold that and maybe it would
purchase you you sort of have to if if
your economic adversary is starting to
um store all of this value um I I would
think you'd have to react by you know
like purchasing some
yourself so let's let's play this out
I'm curious about what you think of
this uh the US went off the gold
standard in
1971 completed its uh departure from the
gold standard in in
1974 what if uh during this
Century um we go back on a standard but
it's a Bitcoin
standard and so we have yes we still
have our gold uh but we now have in
addition to that another hard asset a
digital gold Bitcoin
that is growing in value and uh can
underpin the US dollar and preserve the
US dollar as the world Reserve currency
that needs to be one of our goals too
you know the whole world is going to be
having digital
assets uh I believe in your lifetime not
in mine maybe but Ryan you and David are
young I think in your lifetimes all
assets are going to be digital and
it's important that the US lead in this
area you know we've always been the
innovator we've always been the leader
and right now we've been kind of
hesitant sitting on our hands and people
in Congress don't know what this is and
they don't want to lead that's not
American we always lead and so when we
see countries David you're in AR
Argentina big you're you're at a big
Bitcoin conference or or digital asset
con conference it's because the world is
yearning to have somebody lead in this
area you know uh the European Union's
ahead of the United States Singapore is
ahead of the United States uh we the US
needs to lead in this area and we
haven't done it for some reason uh we
just don't have our act together on this
so um part of the reason I'm trying to
get us to have a legislative framework
working with Senator Kirsten Gill brand
in New York um is so we can lead in this
area and so the notion of a strategic
Bitcoin Reserve is another way to lead
we've always been the country you know
the Louisiana Purchase buying
Alaska um the United States has always
been willing very good Investments I
should add good Roi on those purchases
and we grasp Big Ideas and this is just
an area where where we have blinders on
we haven't grasped the big idea and it's
time for us to do that we have a
strategic oil Reserve as you pointed out
we have Fort Knox we have strategic gold
assets this is digital gold this is even
more of a hard asset than oil why would
we have reserves in those asset assets
and not add the most formidable Digital
hard asset on Earth and that's
Bitcoin I think we definitely appreciate
the uh Congress people Senators
Regulators who have the foresight to
lean into this industry when you call
this a strategic reserve and like you
said we have a strategic Reserve about
oil so we don't it wouldn't be the first
strategic asset that we have uh but when
you talk about uh leading being first
there's there's something m about being
first to bitcoin and and I wonder like
how important is being like the first
government to actually lean into Bitcoin
like like I said like you could just
like we should have a rest strategic
reserve of oil but like we're not first
to that how important is being first
here to you to the strategy part of the
Strategic Reserve like how much magic
would be lost if we were like third or
fourth in your opinion well certainly we
would lose the advantage of being the
first first world country uh to start
accumulating Bitcoin at a
price uh that is the the lowest it's
ever going to be in the long run um and
so we have a strategic advant advantage
in that we are buying
low um and furthermore um it is our way
of acknowledging that this digital
economy
including what the the what constitutes
money what constitutes a store of value
and a means of exchange are part of that
digital economy in fact the first part
of the digital economy and the first
utilization of Bitcoin uh or rather the
blockchain uh that um launches this
whole new web three um nobody right now
would say gee I wish we would have uh
waited
with adopting the internet until four or
five other countries adopted the use of
the worldwide web and the internet we
saw that it was going to be a game
changer and we let it run we didn't
interfere in its
regulatory um life uh until later now
we're crapping now we're grappling with
privacy considerations and and such on
the internet but initially the potential
of the internet was sort of recognized
and allowed to
exist how is it that bitcoin's any
different when we see something this
transformative and that basically
transitions us from the internet economy
sort of web one Web Two is sort of
social media where you and I interact
and now we're going to web 3 and really
the digital assets are the transition to
web 3 and web 3 is going to be huge in
terms of protecting private property
rights uh on a tokenized um
blockchain
so this just seems like the logical
progression we know what's happening the
United States innovators are the leaders
in this is why would we let our
government sit on its hands and watch
other countries the European Union and
Singapore and other countries take the
lead from us on this when we absolutely
know what's going to
happen they absolutely know what's going
to happen part I want to I want to
double down on that uh I sometimes when
I try to explain people the value of
Bitcoin I use uh the metaphor of it's a
game of chicken there's only 21 million
chairs out there and it's a game of
musical chairs and there's like a lot of
capital in the world to play this game
so like say say we start buying some
Bitcoin we get our digital Fort KNX up
and going do you expect that to create
like this game of chicken between
nations you expect like the next thing
to happen to have like the European
Union to China all these other countries
to like also be buying
Bitcoin I don't know that it will happen
but I think it could happen uh because I
think that
observers of uh Bitcoin its qualities
the fact that there are more nodes all
the time all over the world and every
time there are a hundred new nodes this
asset gets harder it's it hardens the
asset
because every single node has the entire
Bitcoin
blockchain on that node whether that's
nodes in uh Catman do or uh you know San
Francisco and so because that asset
can't be um you know stolen or forged or
replicated in some way that's
inconsistent with its core value and its
blockchain it's just going to become
more secure and hardened and valuable
over time so China can see that the EU
can see that Russia can see that and
it's it and but the nice thing is it's
also infinitely
divisible so and you don't have to carry
it around in your pocket and worry that
somebody's going to steal it or you're
going to be
robbed um so it has so many of the
qualities of money it almost has all of
the best qualities of money that have
ever existed and I think as more and
more people see that country R they're
going to say hey we want to get in on
that and if the United States sees that
and they're using this as a mechanism to
keep their currency the world Reserve
currency why don't we want to compete
with them I mean I like my my my take on
this too is like even if you think the
world where um you know Bitcoin has a
you know the there's a world of the
Bitcoin standard even if you think the
probability of that is is somewhat low
right just think about the expected
value it's like this proposal this bill
is incredibly cheap we already have 20%
of the one million which like that's
already happened now you you get the
other 800,000 and what's the cost of
that on the market what you know 50
billion I mean what's that in the
context of the US budget and by the way
with kind of the uh the way that you
were talking about doing this where you
sort of um you just change the book
value to the fair market value of of
gold you know somehow maybe that this
money is already there it costs nothing
it's just like you wait 10 years to play
that game
and it's going to be more than 10x uh
the cost to actually do this and then it
can't you like uh provide the outcome
that that you're hoping for Senator
which is like to actually reduce the
debt there there's some other cool
things as part of this bill that I just
picked out that I really liked uh one is
this whole Fort KNX for for Bitcoin uh
comes with proof of Reserve so you know
kind of thought through that so that
would be you know uh publicly accessible
that was included in the bill I really
like that um and then also there's this
establishment of the right to self-
custody that I felt was important so um
the bill is also affirming self- custody
rights of private Bitcoin holders so if
you are a US citizen you hold some
Bitcoin in in private Keys then um this
bill just cements that as a right the
government cannot infringe upon that
which is important because we have that
uh by proxy through you know the the
Constitution the first 10 amendments we
don't actually necessarily have it in
law codified that US citizens have the
right to private keys can you talk about
that last bit a little bit how does that
mesh with the the entire strategic
Reserve strategy here yeah Ryan it's
it's the sovereign
individual and it it is uh the person a
person can hold their own store of
value um let's look at a bank and I'm
going to tell you a story and this
actually happened to
me um
my husband and I had bank accounts our
Bank
closed he was home he moved our money
into a new
bank I was elsewhere in the state so I
couldn't sign the bank
statements he went to bed one night had
a massive heart attack in his sleep and
didn't wake up the next morning he died
my my name was not on our bank accounts
because he moved them to the new bank
Bank while I was out of town so I go in
to the new bank to get our money my
money and I can't get it because my
name's no longer on the account only his
name is on the account and he has died I
can't find his
will I need to pay our
bills this happened to me so what you
have with a bank is an IOU
what you have with a private individual
Bitcoin wallet is access to your money
it is permissionless that's what we mean
by permissionless you don't have to go
to the bank and ask them for your money
you don't have to trust someone else to
hold your money that's the ass that is
why having an individual wallet is so
valuable you don't have to trust anybody
you don't have to trust that the bank is
going to be solvent that they're not
going to lose your money you don't have
to have it insured by the
FDIC because you hold it so it's
permissionless and it's
secure uh and having lived through that
time before I found his will and it was
like an 8-week period And I had bills
piling up during that period I'm having
to call people and say I can't pay you
right now cuz I don't have access to our
money and I'm still looking for the will
and I'll pay you when I can it was a
horrible
experience not just because my husband
died suddenly and it was such a shock
but because my finances were not
available to me so I have you know
deeply personal reasons to want access
as to private wallets the sovereign
individual and I want to make sure that
people around the world who are living
in totalitarian regimes who they can't
trust I want to know that when someone
in the United States sends money to
their mother in I don't know some
corrupt
country that they can get it on their
phone and hold it uh that they don't
have to trust anyone else to get this
asset and hold it and protect it that's
the value of the individual wallet and I
I can't stress enough how strongly I
feel that that's a quality we must
protect that's part of the reason we're
doing it legislatively well said you're
protecting the right of every citizen to
go bankless I mean uh that that's
exactly what this bill would be doing
too um Okay so we've talked about the
bill how did how did it go so uh I think
crypto listeners here are obviously
we're very excited about um like all of
the things that that you just talked
about Senator how about among your your
colleagues uh sense that there might be
more resistance there or or maybe there
was just tell us about the positive and
and negative reception of this and even
like the prospects of something like
this happening well it won't happen this
year um I filed it this year because I
want the feedback I want the comments I
want to start the
dialogue um it um it's going to be an
education
process explaining what you and I been
talking about on this
podcast and doing it over and over again
with my colleagues in the
Congress it's going to be important it
it was
important that when uh former president
Trump spoke to bitcoin
2024 that he spoke in favor of a
strategic Bitcoin stockpile it indicated
to me that he knows the difference
between Bitcoin and
other uh cryptocurrencies digital asset
and they have their own value and they
have their own place in this world but
bitcoin's Place uh is more like digital
gold so first it told me he knows that
Bitcoin is digital gold and that he re
recognizes the importance of having a
strategic reserve a Buy and Hold Slow
Money approach to
bitcoin the same was true of
RFK he obviously gets it as well and so
the fact that he has not only at the
Bitcoin 2024 conference articulated
advocacy for this but has done so
repeatedly over time so you
I can see why the Biden administration
at least in in this hyper Poli poitical
time we're in where we're less than a
100 days from an election they would
look at their opponents Trump and and
Kennedy RFK supporting this so I'm not
surprised they're not embracing it uh
it's um they don't I don't think they
want to get carried away with the me too
idea I also
worry that they been heavily influenced
by the Elizabeth Warren wing of their
party um to me Elizabeth Warren is a
very smart woman but she's also a woman
who believes in government that
government needs to control things and
and money is the means to control
people and so if you lose control of the
money you lose control of people and uh
I I think that's why you know real
strong central government Advocates fear
Bitcoin because you really do lose
control of people when you don't control
the money um and there are a lot of
people like that in the federal
government so this is going to be a
heavy lift but that's why I wanted to
start the discussion now uh that's I
want people to start thinking about what
is
money and how does Bitcoin
protect us Innovation first and
foremost and how does it protect our
status uh as the world Reserve currency
for the US dollar I think this is so
pivotal to the future of America as the
leading nation in the world that I want
to get out in front of it and um I'm
going to continue to uh share that story
until as they say until hell freeze is
over and when hell freeze is over we're
going to skate on the
eyes I I I got to say it's been
incredibly exciting to see uh crypto as
an election issue this year the you know
presidential election issue and it
certainly has been uh on from the Trump
perspective also RFK whom you've
mentioned uh you gave a take there about
kind of why the Democrats have been a
bit more silent and I I should say KLA
Harris in particular so there there were
hopes of course I I think all crypto
Advocates have hopes that crypto can be
a bipartisan issue the way the internet
was in the 1990s both Democrats and
Republicans this is obvious good for
America of course we're pro internet
like why would you not be are you not
pro Innovation are you not pro jobs
you're not pro economy it's all the same
thing uh yet the uh KLA Harris well the
Biden Administration has certainly not
been uh Pro crypto them last two years
in particular but you like all four have
been uh fairly crypto hostile you know
we don't have to rehash everything that
Gary gendler has done bankas audience is
is well aware of these things now the
Democratic National Convention is
happening this week as we're recording
this episode and there was some glimmer
of hope okay the ethereum ETF went
forward the Bitcoin ETF went forward so
there was maybe some idea of political
pressure on the administration to kind
of relent on their anti- crypto posture
and there was hope that in the policy
platform of the Democrats you would say
you would see some mention of crypto and
uh a 94 page policy came out earlier
this week There's mention of AI
uh and discussion of that nothing on
crypto so so far comma Harris has been
completely silent on crypto what's your
explanation for that do you think it
goes back to sort of the Elizabeth
Warren contingent and and kind of uh the
power dynamics there is there something
more to it because it feels like it's
going to be increasingly hard for
politicians who are anti- crypto to win
elections and I assume KLA Harris is
trying to win an election here well I
hope you're right that uh politicians
who are anti- digital assets uh find it
rough to get elected because this has
become a much more mature asset class
and Industry and advocacy around it than
it was in previous elections and so you
saw the Republican
platform um articulate its advocacy for
digital assets by the way that platform
was heavily influenced almost entirely
written by Donald Trump and so that is
um an an a statement of support that
comes directly from our candidate to our
party
platform the fact that that hasn't
happened in the Democrat Party is is of
concern if we could clone Kirsten Gill
brand we'd be in really good shape uh
but you know she's kind of a voice in
the wilderness now there's a few others
you know Rana and others uh the good
news is this the house passed fit
21 while Kiren Chiller brand and I have
been laboring in the trenches of
bipartisanship on this subject in the
Senate the house on a bipartisan basis
passed
fit21 we got in the Senate um staff
accounting bulle
121 uh the repeal of it passed on a
bipartisan basis in the Senate and the
house did it too so the good news is
that disclosed to both parties that this
is bipartisan and that there's
enough bipartisan appetite and
understanding of this asset class that
we can move legislation on a bipartisan
basis then you're seeing
cryptocurrency digital assets whether
it's Bitcoin or stable coins or um you
know alternative coins or utility tokens
there an issue in the Ohio Senate race
between shered brown who has been a
opponent um and Bernie Marino the
Republican who is an advocate for
digital assets it is a key
difference between the two of them in
the Ohio Senate race I think that race
is almost going to be a bellweather race
uh for how digital assets uh are viewed
in elections going
forward we in the crypto industry have
gotten a lot more allies out of the
Conservative Republican Camp than we
have certainly from the left by quite a
wide margin uh I think I can count all
the pro crypto liberal Pro crypto
Democrats on like a single hand and
they're and they're great and they're
great but like nonetheless like all of
the proponents of the crypto industry
have come from uh the right yet also at
the same time uh even uh earlier on this
conversation you're talking about like
we couldn't even imagine if the United
States was late to the internet why
would we be late to bitcoin and the
internet is not a left or right like
technology it's it's just like the
internet what do you think about the
future of our our nation's partisanship
as it relates to this industry you want
to see the left kind of like wake up and
adopt and accept crypto at in their
platform or do you kind of think that
like Bitcoin and crypto has a more comfy
home uh amongst the Republicans and the
conservatives well I I I do think that
it has a more comfy home among
conservatives now but um as as you look
at some of the more libertarian
leaning uh
liberals um joh widen for example uh he
is the current chairman of the Senate
finance committee he's sort of a
Libertarian leaning liberal and he's
also very Pro Bitcoin and digital assets
um and so um if we I think you're going
to see if there becomes a
more um digital asset friendly Democrat
party it's going to come from the
Liberty libertarian wing of the Democrat
Party because the progressive Wing that
is very central government
focused I don't think is ever going to
be able to get comfortable with this
asset because of the sovereign
individual aspect of it it
divorces
money from the federal government as the
one and only issue were purveyor uh of
of money and people like Elizabeth
Warren just cannot wrap their heads
around that and we see her as one of the
leaders of the progressive wing of the
Democrat Party I think that's going to
be the hard opponent of digital assets
going forward that particular wing of
the Democrat Party Senator thank you so
much for um spending time with us today
this has been absolutely fantastic
um all the best in in both this bill and
then future legislation very hopeful we
we can get it all done I just last
question for you as we close this out so
uh if if Trump wins what does this mean
for crypto legislation versus a kamla
Harris win what are the similarities and
differences in both of those scenarios
total Game Changer if Trump wins I say
if Trump wins he in his State of the
Union message or his first message to
Congress advocates for a bit bit coin
strategic Reserve I think he Advocates
towards a regulatory framework that is
very pro-innovation I think he puts
Regulators in place at the SEC cftc OCC
that are friendly to an understanding of
digital assets total game Cher I think
that if camela Harris wins the exact
opposite is true and we're going to be
fighting an uphill battle for four
years amazing Senator thank you so much
for joining us on Bank list today my
pleasure great to be with you as usual
Bank list Nation we feel compelled to
let you know that crypto is risky you
could lose what you put in but we are
headed west this is the frontier it's
not for everyone but we're glad you're
with us on the bankless journey thanks a
lot
[Music]
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