U.S. Strategic BTC Reserve - The BITCOIN Act | Senator Cynthia Lummis

U. S. Senator Cynthia Lummis is a leading Bitcoin advocate in Congress who recently introduced her proposal, "the Bitcoin Act," which seeks to create a strategic Bitcoin reserve for the United States of America. In today's episode, we explore how the bill could address the $35 trillion debt, the conversion of gold certificates to Bitcoin, and its economic implications. ------ 🎬 DEBRIEF | Ryan & David unpacking the episode: https://www.bankless.com/debrief-the-cynthia-lummis-interview ------ BANKLESS SPONSOR TOOLS: 🐙KRAKEN | MOST-TRUSTED CRYPTO EXCHANGE https://k.xyz/bankless-pod-q2 ⁠ 🦄UNISWAP | BROWSER EXTENSION https://bankless.cc/uniswap 🛞MANTLE | MODULAR LAYER 2 NETWORK https://bankless.cc/Mantle ⚡️ CARTESI | LINUX-POWERED ROLLUPS https://bankless.cc/CartesiGovernance 🗣️TOKU | CRYPTO EMPLOYMENT https://bankless.cc/toku ------ ✨ Mint the episode on Zora ✨ https://zora.co/manage/1155/zora:0x0c294913a7596b427add7dcbd6d7bbfc7338d53f/56 ------ TIMESTAMPS 0:00 Intro 6:40 The Bitcoin Act 10:01 Gold to Digital Gold 15:01 U. S. Strategic Reserves 18:00 U. S. Discretion in Selling Forfeited Bitcoin 20:44 Is Bitcoin Ready for Federal Reserve Backing? 23:24 Bitcoin Adoption to Tackle U. S. Debt 28:17 Bitcoin's Potential Impact 33:15 Being First in Bitcoin Strategic Reserves 39:22 Pros vs. Cons of Bitcoin Strategic Reserves 49:08 Bipartisan Prospects and Democratic Silence 53:52 Conservative Support vs. Liberal Adoption 56:30 Trump vs. Harris on Crypto Legislation ------ RESOURCES Senator Cynthia Lummis https://x.com/SenLummis The Bitcoin Act https://www.lummis.senate.gov/press-releases/lummis-introduces-strategic-bitcoin-reserve-legislation/ https://www.lummis.senate.gov/wp-content/uploads/BITCOIN-Act-FINAL.pdf ------ Not financial or tax advice. See our investment disclosures here: https://www.bankless.com/disclosures ⁠

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

  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.

• 0:32Ryan Sean Adams?

  Welcome to Bankless, where today we explore the frontier of a strategic Bitcoin reserve. This is Ryan Sean 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 supply of all Bitcoin. David's laughing here, but this is actually not a crypto fantasy. It almost sounds like a fantasy novel that we're creating. But this is a bill, an actual bill, proposed by a US senator authored by Senator Cynthia Lummis.

• 1:14Ryan Sean Adams?

  And she says it's the only way to solve the US's $35 trillion debt problem. And she's dead serious about it. We have her on the podcast today. And before you say, there's no chance anything like this could pass, like, understand, 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 bookkeeping change with Treasury and the Fed and a little bit of money printing. And the US has certainly printed money for less than this.

• 1:54David Hoffman?

  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 happen. Maybe that's what you think. But you do have to appreciate a sitting US senator drafting a bill to like get it done. Like, at the end of the day, regardless, that's like, kind of cool.

• 2:10Ryan Sean Adams?

  The fact that we're having this conversation is crazy.

• 2:13David Hoffman?

  Yeah. 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 and just have taken a ton of Bitcoin, like the Bitcoiners and like. Cynthia is up there. Yeah. Like, she's very pilled. Yep. She is a Bitcoiner's 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 gotta kind of just like appreciate for where we are in this part of crypto's history. All right, we're getting right to the discussion with Senator Lummis, but before we do, we want to thank the sponsors that made this episode possible, including our recommended exchange. Go get your crypto assets and your Bitcoin that is Kraken. Go create an account. Who knows, maybe the US government is gonna buy Bitcoin

• 2:58David Hoffman?

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• 3:43David Hoffman?

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• 4:27David Hoffman?

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• 5:42Ryan Sean Adams?

  Bankless Nation, I'm very excited to introduce you to Senator Cynthia Lummis. She is the pro 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 Lummis, welcome to Bankless.

• 6:21Speaker 00

  Thank you, Ryan. It's great to be with you and David as well. You're in Argentina. I'm very envious. It is winter there. Tell us what the weather's like.

• 6:31David Hoffman?

  Oh, it's stormy. I had to run home and I got very wet. If being from Seattle, it felt like home.

• 6:38Ryan Sean Adams?

  Is the winter like there are the prospects for weather getting any better, David, or is it just going to be like this for your entire state?

• 6:43David Hoffman?

  Yeah, it's coming into springtime, but like Buenos Aires isn't so far south that there's any snow. So the winter here is like relatively mild.

• 6:49Ryan Sean Adams?

  Well, we could talk about some seasonality with respect to our politics because it is election season in the US. You like that segue there?

• 6:56David Hoffman?

  Well done.

• 6:56Ryan Sean Adams?

  But first, Senator Lummis, I think we want to talk about this big, bold idea that you have and this legislation you put forward in a bill. It's called the Bitcoin Act and Bitcoin stands for something. Of course, I think there's an acronym behind this somewhere, but it 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 is this all about?

• 7:25Speaker 00

  It's about our nation being $35 trillion in debt and having no solutions. One of the things that made me run for the US House in 2008 and now again, come back to run for the US Senate is my concern over 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 an ongoing challenge for me.

• 8:10Speaker 00

  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.

• 8:35Speaker 00

  We value them at their current value. 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.

• 9:13Speaker 00

  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 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.

• 9:56David Hoffman?

  Is the main logic here, Senator Lummis, that we have a bunch of gold? We have the most gold 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 digital gold?

• 10:12Speaker 00

  Well, interestingly, we can do this without 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. 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 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.

• 10:56Speaker 00

  And we hold them and let them grow in value. Now, what we know is since Bitcoin was created, its 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, over time, 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.

• 11:38Speaker 00

  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, it's helping to underpin the US dollar that we're allowing to be debased. So it kind of has a dual purpose.

• 11:58Ryan Sean Adams?

  It's really fascinating. I think if listeners are wondering, like, where does the money come from, like, for this? You know, I want to just maybe repeat some of this back to you, 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. By a lot, like, over 8,000, you know, metric tons, it appears. At least, this is according to Google. Maybe the US has some other stored in other places. 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.

• 12:41Ryan Sean Adams?

  And so all we have to do is reassign that market value to what it should be. And then there's this excess difference in kind of like Treasury Cash, let's say, that we can use to go start buying some of the 1 million Bitcoin supply that your bill calls for. 1 million Bitcoin right now at like 60K per Bitcoin at the time of recording is about $60 billion. So of course, the market price will fluctuate, particularly if the US started being a buyer of this Bitcoin. But some of the funds to buy that Bitcoin are sort of just in the delta between the book value of gold certificates on the Fed Treasury balance sheet and the actual market value of that gold. So if this

• 13:24Ryan Sean Adams?

  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 don't know if you have any reflections on that, Senator, but that's kind of how I understand it.

• 13:35Speaker 00

  You have described it well. That's how it works. The United States already has 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.

• 14:00Ryan Sean Adams?

  They're selling it now, right? They've been selling it over the last few months?

• 14:05Speaker 00

  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. It's over 200,000 Bitcoin. We need to hang on to it and then add to it 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.

• 14:29Ryan Sean Adams?

  Yeah, if you're curious on that 200,000. By the way, I read the bill in its entirety. I don't usually read bills, but I just like wanted to be informed in this. And there's a section in the bill that says basically that asset forfeiture. Did you know, Bankless listener, that the US has the most Bitcoin, like, I think still more than Michael Saylor? I'm actually not sure. I mean, he's got, he's got.

• 14:47Speaker 00

  Yeah, we're almost equal.

• 14:48Ryan Sean Adams?

  Okay.

• 14:49Speaker 00

  It's over 200,000. We have over 200,000. China's got, I think, 190,000. So they're almost as big as we are.

• 14:56Ryan Sean Adams?

  That's right. And the way the US and China have acquired these Bitcoins. Are through sort of asset forfeiture, right? So there's illegal activities of various kinds, you know.

• 15:07Speaker 00

  Dating back to Silk Road.

• 15:09Ryan Sean Adams?

  Yeah, Silk Road, drug busts, all of these things. And they've acquired this Bitcoin. So the bill basically says, like, once we go through the, I'm paraphrasing like highly here, but once we go through the, you know, like due process in the court system, and we make sure that this doesn't belong to any US citizen that is a truly forfeited asset seizure according to federal law, then we just take that and convert that and put that on 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 forfeited Bitcoin into the reserve balance sheet. Is that correct?

• 15:47Speaker 00

  That is correct. And one of the things that I thought was particularly cynical when referencing the Biden administration is I discussed this specifically and rolled it out at Bitcoin 2024 in Nashville. President Trump came in and advocated for what he called a Bitcoin stockpile, a strategic stockpile. Robert F. Kennedy spoke advocating for an even larger strategic Bitcoin reserve than I proposed. So here are three people that are definitely not in sync with the Biden administration.

• 16:29Speaker 00

  And the Biden administration doesn't want Trump to be elected or RFK to be elected. 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, Lummis.

• 16:52Speaker 00

  In your face, we're gonna sell Bitcoin today. And

• 16:57David Hoffman?

  Did you see that that was actually intentional? Or that wasn't just a coincidence? That was actually a decided move?

• 17:01Speaker 00

  I don't know. I don't know.

• 17:03Ryan Sean Adams?

  There is some discretion in terms of like, as you point out, some of this 200,000 plus Bitcoin that has been forfeited and is in US custody. That's been around for a long time. Some of it dates back to kind of like Silk Road Bitcoin, really 2013, 2014.

• 17:17Speaker 00

  You've got it.

• 17:18Ryan Sean Adams?

  So there's some discretion as to when you sell it.

• 17:21Speaker 00

  You're right.

• 17:22Ryan Sean Adams?

  Is there not? Like, there's not 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?

• 17:29Speaker 00

  Well, which is why, Ryan, we wanted to address that in the legislation and specifically say, stop selling, put it in reserve and add to that reserve.

• 17:41Ryan Sean Adams?

  Has any other country done this? Or would the US be among the first?

• 17:45Speaker 00

  Well, you know, El Salvador has Bitcoin, of course, a much smaller amount, but there are other countries considering it. There are other states that are doing it. One of them is Louisiana. And I was talking to Governor Jeff Landry over the weekend about it. So there are states now, either through their pension funds or other asset diversification goals, that are buying Bitcoin.

• 18:12Ryan Sean Adams?

  So there's states. And 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 I assume because you know, part of the bill we haven't talked about, I'm sure we will, is kind of the setup of a complete self custody of the US government. I call this kind of like a Fort Knox type of setup environment, cold storage, you know, 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'll give a blue state, if you're California, you can go purchase Bitcoin and then maybe store it in kind of the custody situation that the feds have put together?

• 18:51Speaker 00

  That's correct. Because the bill proposes that not all of the strategic reserve would be in the same wallet. It would be diversely distributed among wallets and in different regions, but subject to state of the art security. So 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.

• 19:20David Hoffman?

  Senator, I think all the Bankless listeners and even myself and Ryan understand and appreciate the merits and strength of Bitcoin. I think it's number four in the total market cap of all assets out there. 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. Bitcoin is only 15 years old. There are companies that have, you know, similar market caps to Bitcoin that are older than Bitcoin. Like, we could be putting Apple or, you know, Microsoft as a part of the Treasury. Why do you think Bitcoin is ready for like the Federal Reserve level prime time? Why do you think it's time for Bitcoin and why now?

• 20:05Speaker 00

  Well, Bitcoin is not issued by government. It's not particularly regulated by government. So as a asset backing up a fiat currency that the US has, it has characteristics that make it in many ways a harder asset than, say, a US stock like Apple. And it is such a different asset from the US dollar, from any fiat currency. Because of its scarcity, there will only be 21 million Bitcoin ever mined. And it's designed to be a hard asset. It's designed for scarcity that it provides a certain underpinning

• 20:51Speaker 00

  that the US dollar doesn't have. You know, during a 22-month period during COVID, the United States printed more dollars than had ever been printed in the whole history of the United States. And so we've proven ourselves incapable of disciplining ourselves 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.

• 21:32Speaker 00

  Because it is so completely distributed and so divorced of government edict that it is a true diversifier.

• 21:45Ryan Sean Adams?

  What's interesting about this too, and let me know if this is some of the logic behind this, Senator, David's question of like, well, is it too early to do this? There's an element, and we know of crypto holders, right? We're all here early. Everyone listening, bankless, it's still early, guys. It's still early. If you wait until G7 countries and, you know, China has purchased it, right? Then it doesn't have the prospect that you opened with, Senator, of kind of reducing the $35 trillion hole that the US is in, right? You wait until Bitcoin, yeah, you want to, you got to be, if you're trying to actually have the value accrual appreciate to the US and knock out this $35 trillion debt that we have, then you have to be on the front side of this, or else like the plan doesn't work, right?

• 22:27Ryan Sean Adams?

  So we're talking about buying at, you know, 60K to 100K in this kind of range.

• 22:32Speaker 00

  Yes.

• 22:33Ryan Sean Adams?

  In 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 $35 trillion debt in half. Is that the expectation here?

• 22:46Speaker 00

  The expectation is that a million Bitcoin 20 years from now would be worth $17 trillion.

• 22:52Ryan Sean Adams?

  Wow. So that's, you know, in this logic, why you have to kind of be first. I noticed in the bill too, there's some 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?

• 23:06Speaker 00

  I believe that that's how we worded it. And we did that specifically so the 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, it won't play out, it won't work. In order to be as effective as a reserve, it must be held, buy and hold. You know, Bitcoin is designed.

• 23:37Speaker 00

  To buy and hold. I mean, the whole term hodl or hold on for dear life is designed to encourage people to buy and hold. This was never designed to be an asset for day traders. It always had the incidence of long money, slow money, that people would learn is worth hanging on to. So that's part of the original even principles of Bitcoin. And so to get people out of the notion of thinking that Bitcoin is just a different type of asset

• 24:17Speaker 00

  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 so we're trying to statutorily institute the original purpose of Bitcoin, which is as a as slow money.

• 24:36Ryan Sean Adams?

  This is so fascinating because like we are Bitcoin advocates, crypto advocates in general. So to like, don't take this the wrong way because I mean this 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 works out, and particularly if the US is behind it and makes this level of a purchase in it, because there's ripple effects when the global store of value, 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?

• 25:14Speaker 00

  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 globally, we're challenging each other.

• 25:37Speaker 00

  To have a secure store of value.

• 25:40Ryan Sean Adams?

  I feel like they'd kind of have to. If the US did this, I can't believe that China would. Well, certainly China would not continue selling the confiscated Bitcoin that it has. It would, I'm sure, hold that and maybe it would purchase. You sort of have to if your economic adversary is starting to store all of this value. I would think you'd have to react by, you know, like purchasing some yourself.

• 26:03Speaker 00

  So let's play this out. I'm curious about what you think of this. The US went off the gold standard in what? 1971. Completed its departure from the gold standard in 1974. What if during this century, we go back on a standard, but it's a Bitcoin standard? Yes, we still have our gold. But we now have, in addition to that, another hard asset, a digital gold Bitcoin, that is growing in value and can underpin the US dollar and preserve the US dollar as the world's reserve currency. That needs to be one of our goals, too.

• 26:49Speaker 00

  You know, the whole world is going to be having digital assets. 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 Argentina. You're at a big Bitcoin conference or digital asset conference. It's because.

• 27:35Speaker 00

  The world is yearning to have somebody lead in this area. You know, the European Union is ahead of the United States. Singapore is ahead of the United States. The U.S. needs to lead in this area. And we haven't done it for some reason. We just don't have our act together on this. So part of the reason I'm trying to get us to have a legislative framework, working with Senator Kirsten Gillibrand in New York, 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,

• 28:19Speaker 00

  the Louisiana Purchase, buying Alaska. The United States has always been willing-

• 28:24Ryan Sean Adams?

  Very good investments, I should add. Good ROI on those purchases.

• 28:27Speaker 00

  And we grasp big ideas. And this is just an area 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 assets? And not add the most formidable digital hard asset on earth? And that's Bitcoin.

• 29:05David Hoffman?

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• 29:48David Hoffman?

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• 30:31David Hoffman?

  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 it wouldn't be the first strategic asset that we have.

• 30:41Speaker 00

  Right.

• 30:41David Hoffman?

  But when you talk about leading, being first, there's something magical about being first to Bitcoin. And I wonder, like, how important is being like the first government to actually lean into Bitcoin? Like I said, like, you could just like, we should have a 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?

• 31:08Speaker 00

  Well, certainly, we would lose the advantage of being the first first-world country

• 31:15David Hoffman?

  Right.

• 31:15Speaker 00

  to start accumulating Bitcoin at a price that is the lowest it's ever going to be in the long run. And so we have a strategic advantage in that we are buying low. And furthermore, it is our way of acknowledging that this digital economy Including 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, or rather, the blockchain that launches this whole new Web 3.

• 32:00Speaker 00

  Nobody right now would say, gee, I wish we would have waited with adopting the Internet until four or five other countries adopted the use of the World Wide 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 life until later. Now we're grappling with privacy considerations 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?

• 32:44Speaker 00

  When we see something this transformative and that basically transitions us from the Internet economy, sort of Web 1, Web 2 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 on a tokenized blockchain. So this just seems like the logical progression. We know what's happening. The United States innovators are the leaders in this.

• 33:25Speaker 00

  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?

• 33:41David Hoffman?

  The absolutely know what's going to happen part, I want to double down on that. Sometimes when I try to explain people the value of Bitcoin, I use 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 we start buying some Bitcoin, we get our digital Fort Knox 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. So like also be buying Bitcoin?

• 34:15Speaker 00

  I don't know that it will happen, but I think it could happen. Because I think that observers of Bitcoin, its qualities, the fact that there are more nodes all the time, all over the world, and every time there are 100 new nodes, this asset gets harder. It hardens the asset because every single node has the entire Bitcoin blockchain on that node, whether that's nodes in Kathmandu or, you know, San Francisco. And so because that asset can't be, you know, stolen or forged or replicated in some way

• 35:00Speaker 00

  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. 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. 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, countries, they're going to say, hey, we want to get in on that.

• 35:44Speaker 00

  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?

• 35:55Ryan Sean Adams?

  I mean, my take on this too is like, there's a world of the Bitcoin standard, even if you think the probability of that 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 1 million.

• 36:09Speaker 00

  Yep.

• 36:10Ryan Sean Adams?

  Which like, that's already happened. Now 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 the way that you were talking about doing this, where you sort of changed the book value to the fair market value of gold, you know, somehow maybe this money is already there and it costs nothing. It's just like, you wait 10 years to play that game and it's going to be more than 10x the cost to actually do this. And then it can't, you know, like, provide the outcome that you're hoping for, Senator, which is like to actually reduce the debt. There's some other cool things as part of this bill that I just picked out that I really liked. One is this whole Fort Knox for Bitcoin comes with proof of reserve. So, you know, kind of thought through that. So that would be, you know, publicly accessible. That was included in the bill.

• 36:55Ryan Sean Adams?

  I really liked that. And then also, there's this establishment of the right to self custody that I felt was important. So the bill is also affirming self custody rights of private Bitcoin holders. So if you are a US citizen, you hold some Bitcoin in private keys, then this bill just cements that as a right. The government cannot infringe upon that, which is important because we have that by proxy through, you know, 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 entire strategic reserve strategy here?

• 37:38Speaker 00

  Yeah, Ryan, it's the sovereign individual. And a person can hold their own store of value. Let's look at a bank. And I'm going to tell you a story. And this actually happened to me. 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 States, 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 name was not on our bank accounts because he moved them to the new bank while I was out of town.

• 38:20Speaker 00

  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.

• 39:00Speaker 00

  You don't have to trust someone else to hold your money. That's the S. 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. And having lived through that time before I found his will, and it was like an eight-week period. And I had bills piling up during that period.

• 39:44Speaker 00

  I'm having to call people and say, "I can't pay you right now because 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 to private wallets, the sovereign individual.

• 40:18Speaker 00

  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, 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 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.

• 41:01Ryan Sean Adams?

  Well said. Protecting the right of every citizen to go bankless. I mean, that's exactly what this bill would be doing, too. Okay, so we've talked about the bill. How did it go? So I think crypto listeners here, obviously, were very excited about like all of the things that you just talked about, Senator. How about among your colleagues, since that there might be more resistance there? Or maybe there was, just tell us about the positive and negative reception of this and even like the prospects of something like this happening.

• 41:28Speaker 00

  Well, it won't happen this year. I filed it this year because I want the feedback. I want the comments. I want to start the dialogue. It's going to be an education process, explaining what you and I've been talking about on this podcast, and doing it over and over again with my colleagues in the Congress. It was important when 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 cryptocurrencies,

• 42:11Speaker 00

  digital asset, and they have their own value and they have their own place in this world. But Bitcoin's place is more like digital gold. So first it told me he knows that Bitcoin is digital gold, and that he recognizes the importance of having a strategic reserve, a buy and hold, slow money approach to Bitcoin. The same was true of RFK.

• 42:40Speaker 00

  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 I can see why the Biden administration, at least in this hyper political time we're in, where we're less than 100 days from an election, they would look at their opponents, Trump and Kennedy, RFK, supporting this. So I'm not surprised they're not embracing it. I don't think they want to get carried away with the me too idea. I also worry that they've been heavily influenced by the Elizabeth Warren wing of their party.

• 43:24Speaker 00

  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 money is the means to control people. And so if you lose control of the money, you lose control of people. And 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. 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. That's I want people to start thinking about what is money?

• 44:08Speaker 00

  And how does Bitcoin protect US innovation first and foremost? And how does it protect our status 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 I'm going to continue to share that story until, as they say, until hell freezes over. And when hell freezes over, we're going to skate on the ice.

• 44:43Ryan Sean Adams?

  I gotta say, it's been incredibly exciting to see crypto as an election issue this year, you know, presidential election issue. And it certainly has been from the Trump perspective, also RFK, whom you've mentioned. You gave a take there about kind of why the Democrats have been a bit more silent. And I should say Kamala Harris in particular. So there were hopes. Of course, 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, which is obvious good for America, of course, were pro-internet. Like, why would you not be? Are you not pro-innovation? Are you not pro-jobs? Are you not pro-economy? It's all the same thing. Yet, the Kamala Harris, well, the Biden administration has certainly not been pro-crypto the last two years in particular. But, you know, like, all four

• 45:27Ryan Sean Adams?

  have been fairly crypto-hostile. You know, we don't have to rehash everything that Gary Gensler has done. Bankless audiences as 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 see some mention of crypto. And a 94-page policy came out earlier this week. There's mention of AI and discussion of that, nothing on crypto.

• 46:08Ryan Sean Adams?

  So so far, Kamala 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 kind of 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 Kamala Harris is trying to win an election here.

• 46:32Speaker 00

  Well, I hope you're right, that politicians who are anti-digital assets find it rough to get elected, because this is become...

• 46:44Speaker 00

  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 articulate its advocacy for digital assets. And by the way, that platform was heavily influenced, almost entirely written by Donald Trump. And so that is 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 of concern. If we could clone Kirsten Gillibrand, we'd be in really good shape.

• 47:26Speaker 00

  But, you know, she's kind of a voice in the wilderness. Now, there's a few others, you know, Ro Khanna and others. The good news is this, the House passed FIT 21. While Kirsten Gillibrand and I have been laboring in the trenches of bipartisanship on this subject in the Senate, the House, on a bipartisan basis, passed FIT 21. We got, in the Senate, Staff Accounting Bulletin 121, the repeal of it passed on a bipartisan basis in the Senate, and the House did it too.

• 48:04Speaker 00

  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, you know, altcoins or utility tokens.

• 48:34Speaker 00

  They're an issue in the Ohio Senate race between Sherrod Brown, who has been an opponent, and Bernie Moreno, 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 bellwether race for how digital assets are viewed in elections going forward.

• 49:06David Hoffman?

  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. I think I can count all the liberal pro crypto Democrats on like a single hand. And they're great and they're great, but like nonetheless, like all of the proponents of the crypto industry have come from the right. Yet also at the same time, even 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 just like the internet.

• 49:38Speaker 00

  Right.

• 49:39David Hoffman?

  What do you think about the future of our nation's partisanship as it relates to this industry? Do you want to see the left kind of like wake up and adopt and accept crypto in their platform? Or do you kind of think that like Bitcoin and crypto has a more comfy home amongst the Republicans and the conservatives?

• 49:56Speaker 00

  Well, I do think that it has a more comfy home among conservatives now. But as you look at some of the more libertarian leaning liberals, Ron Wyden, for example, 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. And so I think you're going to see if there becomes a more digital asset friendly Democrat Party, it's going to come from the libertarian wing.

• 50:35Speaker 00

  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 issuer purveyor 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.

• 51:15Speaker 00

  I think that's going to be the hard opponent of digital assets going forward, that particular wing of the Democrat Party.

• 51:25Ryan Sean Adams?

  Senator, thank you so much for spending time with us today. This has been absolutely fantastic. All the best in both this bill and then future legislation. Very hopeful we can get it all done. Just last question for you as we close this out. So if Trump wins, what does this mean for crypto legislation versus a Kamala Harris win? What are the similarities and differences in both of those scenarios?

• 51:45Speaker 00

  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 Bitcoin 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 changer. I think that if Kamala Harris wins, the exact opposite is true and we're going to be fighting an uphill battle for four years.

• 52:23Ryan Sean Adams?

  There you go. Amazing. Senator, thank you so much for joining us on Bankless today.

• 52:27Speaker 00

  My pleasure. Great to be with you.

• 52:29Ryan Sean Adams?

  As usual, Bankless 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.