Joyce Yang, Founder of Global Coin Research: China's Hostile Position Against Bitcoin

Joyce Yang is the Founder of Global Coin Research. In this conversation, Joyce and Anthony Pompliano discuss the regulation of crypto in Asia, how China is responding to the interest in Bitcoin, and what U. S. based teams don't understand about the global aspect of the cryptocurrency markets. ----- BlockFi allows you to keep your crypto, put it up as collateral, and receive a USD loan funded directly to your bank account. They do loans ranging from $2,000 to $10,000,000, and they're perfect for helping you reach your financial goals of all sizes. Visit BlockFi.com/Pomp to learn more about putting your crypto to work without having to sell it. ----- If you enjoyed this conversation, share it with your colleagues & friends, rate, review, and subscribe. This podcast is presented by BlockWorks Group. For exclusive content and events that provide insights into the crypto and blockchain space, visit them at: https://www.blockworksgroup.io

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

• 0:01Anthony Pompliano?

  What's up everyone, this is Anthony Pompliano. Most of you know me as Pomp. You're listening to Off the Chain, simply the best podcast in crypto. Let's kick this thing off.

• 0:13Anthony Pompliano?

  Joyce Yang is the creator of Global Coin Research. In this conversation, we discuss the regulation of crypto in Asia, how China is responding to the interest in Bitcoin, and what US-based teams don't understand about the global aspect of the cryptocurrency markets. I really enjoyed this conversation, and Joyce has unique views on the world. I hope you enjoy it nearly as much as I did. As many of you know, crypto investors store their digital assets on exchanges, or in cold storage for long-term safekeeping. However, this strategy doesn't help them grow their investment holdings, or build overall wealth. With the new BlockFi interest account, users can now securely store their Bitcoin or Ether at BlockFi, and receive 6% annual

• 0:55Anthony Pompliano?

  interest, paid monthly in cryptocurrency. 6% is an absurdly high rate. It's the best rate in the industry. I highly suggest you go check out blockfi.com/pomp. Again, that's blockfi.com/pomp, to sign up and start earning crypto today. Anthony Pompliano is a partner at Morgan Creek Digital. All opinions expressed by Pomp, or his guests on this podcast, are solely their opinions, and do not reflect the opinions of Morgan Creek Digital, or Morgan Creek Capital Management. You should not treat any opinion expressed by Pomp as a specific inducement to make a particular investment, or follow a particular strategy, but only as an expression of his opinion. This podcast is for informational purposes only.

• 1:38Anthony Pompliano?

  Alright guys, I'm here with Joyce. We got a lot to cover, very quickly. Maybe let's just start with your background, and then we can dig in.

• 1:48Speaker 01

  Sure. Hey Pomp. Hey everyone, how's it going? So my name is Joyce Yang. You may, or may not have heard of Global Coin Research. We're a paid newsletter, primarily focusing on Asia crypto and blockchain. Asia, as you can imagine, is a huge region that has more than 50% of mining activities, and 50% of trading volume, and...

• 2:16Speaker 01

  Honestly, I think it's more exciting than what's going on in the States right now. So what we try to do is we provide value in two ways for our readers. For one, we provide information on what's going on in Asia. There's lots of news going on. We filter them out for you by either translating the local news or identifying the most important news for you. And the second value we add is actually contextualizing what's going on in Asia. That means through podcasts, in-depth analysis, and conversations with actual important folks from different regions. That includes congressmen from Taiwan. That includes traders from Singapore. So be sure to check out globalcoinresearch.com for some newsletters and news of what's going on in Asia.

• 3:00Anthony Pompliano?

  So she can't say this, but I'll say it. You're one of the experts on crypto in Asia, and you've got the background that fits it. You were born in China, moved to New York when you were like 10. Tell us a little bit about kind of growing up, early years in China, and then what it was like when you moved to the US.

• 3:16Speaker 01

  Sure, sure. So my family immigrated to the US, specifically New York, Queens. If anyone's there from Queens, give me a shout out. I went to school in Bronx Science, which is up in the Bronx, and went up to Harvard for undergrad. And I spent half my time in China, and I have a huge passion for what's going on in Asia and the most recent developments, internet trends, as well as what's going on there in cryptocurrency. And after Harvard, I spent five years in equity research looking at open-source software companies and boring database companies out of the West Coast.

• 3:55Anthony Pompliano?

  Let's talk about that for a second. So growing up in New York, why'd you move to the West Coast? Just job, or you always wanted to go there? What drew you there?

• 4:02Speaker 01

  Definitely the technology companies there. I think I love learning. This is what Global Coin Research is all about, is sharing information, sharing what we learn with folks who may not know about what's going on in certain in-depth areas. And we picked crypto for this particular platform. But in my past career, I spent time looking at software companies and the changes in SaaS trends, which were super fascinating.

• 4:28Anthony Pompliano?

  You were doing equity research at Merrill Lynch, right? And... A lot of it, you know, we were talking before that open source software, right? Some of these things that have overlap with crypto, but no direct crypto kind of research. Do you think a lot of that helps you today in what you're doing?

• 4:47Speaker 01

  Oh, yeah, for sure. I mean, I think crypto and blockchain is an extension of what current databases cannot do. And it's, you know, I see folks who are essentially entering the space from previously in the software space.

• 5:02Anthony Pompliano?

  Yep.

• 5:03Speaker 01

  One person who I really admire, actually, is this guy named Diogo.

• 5:11Speaker 01

  I forget his last name right now.

• 5:13Anthony Pompliano?

  It's okay.

• 5:13Speaker 01

  Diogo from, uh, from, uh, from this custody solution called Anchorage. And they recently raised about, I think, over north of $50 million from A16Z and other folks on creating a custody solution. And Diogo Monica, that's his last name. Diogo used to work at Docker, and I followed Docker closely when I was in equity research. And, you know, Docker used to really preach this idea of containerization.

• 5:42Anthony Pompliano?

  Yep.

• 5:42Speaker 01

  Which really helped speed software development and accelerate, you know, and kind of empower developers with these tools for software development. And, uh, and he's now in this crypto space. So I find that super empowering when there are smart people who are entering the space.

• 5:58Anthony Pompliano?

  Well, smart people, and there's overlap between the two things, right? Open source software, just software in general and crypto.

• 6:04Speaker 01

  Right. He was focusing on security at Docker, and now, you know, he's creating a custody solution for making sure that none of our wallets get hacked. Which is super important.

• 6:13Anthony Pompliano?

  So, okay, so you're at Merrill, right? You do the equity research, then you head over, you worked at a Chinese bank for a while. Um, and then you eventually start Global Coin Research. Maybe talk a little bit about, um, what was the initial thought process or ideas to why to start Global Coin and kind of how you got started?

• 6:32Speaker 01

  Yeah, for sure. So I was working at a Chinese bank, and that was actually in, um, with an office in New York. And the bank was based out of China, headquartered in Beijing, called CICC. If you are local to China, you probably have heard of it. It's the largest investment bank in China. And, uh, it's the first investment bank that's formed by Morgan Stanley and China Construction Bank back in the 80s. So when I was working in the bank, I realized a lot of folks in the US don't have an idea of what's going on in Asia and China. And, you know, I was looking at technology companies then Alibaba and Tencent and many institutional investors, you know, portfolio managers would try to learn

• 7:14Speaker 01

  about what's going on with these companies, but they're so massive and large, but yet there's so much opaqueness because of the culture and the language barrier.

• 7:21Anthony Pompliano?

  Yep.

• 7:22Speaker 01

  And carrying over to crypto, that's even more the case and it's increasingly more relevant than anything else because crypto is inherently global. And if we look at the stats here, you know, going back to what I'm saying about why I focus on Asia primarily is because we look at the exchanges, you know, Binance is, you know, decentralized, but a lot of employees are based in Asia. CZ lives in Singapore and Huobi is based out of China and OKX is registered in Singapore or Hong Kong, sorry. So that's the top three exchanges. And if you look at mining, of course, you think of Bitmain, which we also heard about the news today with all these losses, but you know, that they're still based in China. And we look at participation

• 8:05Speaker 01

  in these networks, you know, think about EOS, the top 15 supernodes are from China.

• 8:11Anthony Pompliano?

  Yeah. Well, before we get into the crypto industry in Asia, I want to set the scene because a lot of people, right, a lot of people are like me. They're Americans who are on Twitter. They kind of hear some things about China. They hear about companies from China, Korea, Japan, et cetera, but they don't actually understand the cultural differences or the technology differences. So maybe let's just start with this idea of the cashless societies of Asia, right?

• 8:40Speaker 01

  Yeah, for sure.

• 8:41Anthony Pompliano?

  And talk through a little bit about what that means. How do people actually interact with money in Asia? And maybe even get into a little bit around Alipay, WeChat Pay, things like that.

• 8:50Speaker 01

  Yeah, for sure. So I just read the stat actually that now in China, only 15% of transactions in retail are cash or in fiat.

• 8:58Anthony Pompliano?

  Only 15% of retail transactions are in cash in China?

• 9:03Speaker 01

  In fiat, yes, in China. And China is really where we see the leading kind of companies and trends in cashless society.

• 9:13Speaker 01

  And you know, the leading players there are Alibaba with Alipay and Tencent with WeChat Pay. And those folks, in aggregate, have about, I think, a billion accounts in China alone. And if you just think about the Chinese people overseas, many of them, including myself, I'm a US citizen, but I still use WeChat. And whenever I go to China, you know, you cannot hail a taxi without using WeChat or Alipay.

• 9:39Anthony Pompliano?

  What is the user experience, right? So, most people here think of, if they go to pay for something, they're gonna take cash out of their pocket or they're going to take a credit card out of their wallet, right? And they're gonna swipe or insert the chip.

• 9:52Speaker 01

  Right.

• 9:52Anthony Pompliano?

  And just now, it's starting to become a little bit more popular with Apple Pay or something like that. But what is the actual user experience? I go to a store that has Alipay, WeChat Pay. I grab, you know, some clothes, walk up to the register. What do I do and how does that transaction actually occur?

• 10:08Speaker 01

  So, I pull out my phone, I pull out this QR code that identifies with my wallet, my digital wallet, and I scan it with this scanning machine that they have.

• 10:17Anthony Pompliano?

  So, they have a machine? And you literally just take your phone and put it up to the scanning machine?

• 10:22Speaker 01

  Right.

• 10:22Anthony Pompliano?

  And it's able to read who I am?

• 10:25Speaker 01

  Right, and my wallet, yes, and the code. And it's super easy, within a second or two, you know, stalls or even, I mean, you could see on the internet that trends of homeless people looking to accept digital cash with their own QR code hanging on their, you know, on their shirt or their neck. So, it's very prevalent and it's probably the easiest way to transact in China.

• 10:49Anthony Pompliano?

  And, so that is a consumer transacting with a retailer, right? Is the ability to walk up?

• 10:56Speaker 01

  Peer to peer as well.

• 10:56Anthony Pompliano?

  When you go peer to peer, is it similar to like a Venmo experience? Where I can just type in a number, type in a username, send it? Or is, do I need to be in proximity to actually scan or maybe I can do both?

• 11:08Speaker 01

  You could do both.

• 11:09Anthony Pompliano?

  Okay, so I can do either one?

• 11:10Speaker 01

  Right, and you could send me your QR code or your name or your username and I will send you my money in an instant.

• 11:19Anthony Pompliano?

  Got it.

• 11:19Speaker 01

  Yeah.

• 11:19Anthony Pompliano?

  And so how do the banks look at this stuff today? Do they feel threatened by the technology companies kind of entering into the payment space? Are they trying to work together? Just what's that landscape look like?

• 11:30Speaker 01

  So I think the banks definitely work with these technology companies. You know, if you think about the leading conglomerates in China in technology, it's Alibaba and Tencent. And they all have their own financial arm where they want to work closely with the banks to accelerate this movement of cashless adoption. And, you know, I think it's fascinating because when I, we wrote a post on Tether back in the day when there was so much backlash about Tether, Tether not having enough reserves to back up its, its coin. We, we also identified this trend in, in WeChat where, you know, back in 10 years ago or 20 years ago, when WeChat first started and WeChat payments started, started happening,

• 12:16Speaker 01

  there was no reserves backing those WeChat digital money. You know, there's, the yuan was really just, you know, a IOU, but you know, there was no actual money being transacted. And soon 10 years later, now we're seeing actually the government regulating and requiring these reserves to be set up to make sure that every dollar that we're transacting on WeChat is transacted is also in reserves with the WeChat company or Tencent company.

• 12:42Anthony Pompliano?

  Got it. So there was actually issues or questions around like fractional reserve banking and this idea that whipping electronic, you know, bits around the internet may not actually line up with the cash, right, in the banks.

• 12:58Speaker 01

  Right, right.

• 12:59Anthony Pompliano?

  Sounds a lot like crypto.

• 13:01Speaker 01

  Exactly, exactly. There's so much experiments that we could draw parallels to between China and US.

• 13:06Anthony Pompliano?

  You know, as you've described this, it really does feel like maybe China and, and the Greater Asia region has been dealing with digital currencies, right? They're not blockchain based, they're not cryptographically secure as we think of like crypto, but they are digital currencies, digital money. And so there's a lot of the user behavior that's been learned or habitual, habitatized over time that have trained people to do this, right?

• 13:31Speaker 01

  Yes, I agree. Habitually, I think. If you look at the kind of the rise of the technology conglomerates in China in the last 15 years, they came later than Facebook, you know Alibaba was one of the largest IP is the largest IPO, I think, in in NASDAQ, but it's it's it's came very much later than a lot of the technology waves that we saw in Silicon Valley. But people were very quick to adopt and they make the product very easy to use. So even, you know, 90 older 90 year olds, you know, just older people who are usually not familiar with technology are able to use, you know, just like the way Apple is designed for everyone to use across the world. So I think product design wise, they really have gotten that right.

• 14:16Anthony Pompliano?

  Got it. And then let's talk a little bit about just the the kind of capital controls and things that go on in China and other countries. One thing that I think most Westerners are catching on to that maybe haven't paid attention to the regulation and the financial markets there is it's really hard to move money in and out of the country, right? And so maybe just talk a little bit about kind of what the logic there is, why governments do that, because that's, you know, has a has a big contribution, I think, to some of the interest that the individual citizens have in crypto as well.

• 14:48Speaker 01

  For sure, for sure. And I think, you know, Bitcoin cryptocurrency is really attractive to Chinese people and especially in China for speculation reasons, you know, potentially to make a quick buck. And the alternative to use Bitcoin is to avoid capital controls, right, to take the money outside of the country. And partially, that's because driven that's driven by the fact that the Chinese people do not believe in the Chinese government and they do not believe that the fiat yuan will be able to stay afloat and be pegged, you know. I think the yuan was taken away from its peg, I think, just a few years ago. And so to many folks who grew up in China, they see a lot of volatility and they also

• 15:32Speaker 01

  see a lot of the shadow banking in China, you know, with illegal lending activities and also just lots of, you know, unreported, underreported financial activities that are actually not that may be increasingly leading to a crisis in itself. So this is why people are looking to take their money out and actually, you know, put in the dollar or put it into alternative stable currency. But I think ultimately, the issue, and there was a great article that just was written by Ha Su, this researcher, who talked about Bitcoin is a great hedge to the cashless society, which I totally agree. But at the same time, I think, because, for example, already we

• 16:16Speaker 01

  see that eighty-five percent of Chinese population are used to doing digital transactions on WeChat and Alipay, they don't really have an incentive to use Bitcoin. You know, Bitcoin, I think, has a great attractive reason for one speculation, and that is primarily because China is very unequal in income. There's a lot of income inequality. And so, you know, what people, when they heard about cryptocurrency, initially, they wanted to, you know, make a quick buck.

• 16:48Anthony Pompliano?

  Yep.

• 16:48Speaker 01

  Right? And they, you know, people in the age between, you know, teenagers to grandies were looking to buy cryptocurrency and then to later sell to the greater fool.

• 17:03Speaker 01

  But, you know, I think before there was a speculation of Bitcoin, there was always always speculation around, you know, Chinese Asia market, which is the mainland stock market, which is really rigged also because of the, kind of the very early, unsophisticated establishment of the institutional market. You know, if you compare the institutional market or the stock market to the US, to that of China, China has about eighty percent retail participation in these markets versus in the US, it's primarily diverse, where eighty percent of the participants are institutionals.

• 17:42Anthony Pompliano?

  Got it.

• 17:42Speaker 01

  So my argument there is that I think people are, you know, for one, people turn to cryptocurrencies for speculation, but there's alternatives, ways to speculate as well. And then the second thing that I think that Bitcoin is actually

• 18:02Speaker 01

  Was used for, which is to avoid capital controls, can also be, you know, went around with other types of alternative ways, right? Because before Bitcoin, there was also other ways that people got money out of the country.

• 18:13Anthony Pompliano?

  Absolutely.

• 18:13Speaker 01

  Right, there was Hong Kong that you could use, you know, as, you know, create different entities and set up different kind of establishments to really route your money in that way.

• 18:21Anthony Pompliano?

  For sure. Well, and I guess one of the things is that the government is trying to not only control the people, they're trying to control the money and the flow of money, but they're also trying to control information, right?

• 18:36Speaker 01

  Right.

• 18:36Anthony Pompliano?

  And we've seen, I think, China now twice, we've seen these examples where somebody has gone and put a message on the Ethereum blockchain, right? And kind of the immutable ledger. And I think one was around the sexual harassment or sexual assault case.

• 18:50Speaker 01

  Right.

• 18:50Anthony Pompliano?

  You know, they didn't want to be silenced, so they actually attach a message to a transaction. It gets put on record and the Chinese government can't stop that information from being publicly presented. The other one was around, I think, a pharmaceutical company and something to do with like some nefarious activity or something. But you've got overarching messages, look, this isn't just about the free flow of money or value, it's also about the free flow of information.

• 19:16Speaker 01

  Right.

• 19:16Anthony Pompliano?

  Right? In countries where Westerners don't understand that, right? I grew up in the United States and the idea that you don't have freedom of speech is hard to fathom, right?

• 19:26Speaker 01

  Right.

• 19:26Anthony Pompliano?

  And in these countries, it's actually the norm. It is the default.

• 19:29Speaker 01

  Right.

• 19:30Anthony Pompliano?

  Maybe talk a little bit about how blockchain itself is being thought about, and then we can really jump into more of the details of Bitcoin and cryptocurrencies and how that's being looked at in each country.

• 19:44Speaker 01

  Yeah, for sure. And so, you know, going back to what you said about the Chinese government being very stringent about controlling information, that's their, I would say, one of the top priorities now under this new regime, under Xi Jinping. And You see that from the activities that, you know, the cyberspace administration of China is doing. They're requesting all the activity logs from Tencent and Alibaba.

• 20:07Anthony Pompliano?

  So they're requesting all messaging activity from the two largest players in the market?

• 20:13Speaker 01

  Yes.

• 20:13Anthony Pompliano?

  Wow. Is that being handed over?

• 20:15Speaker 01

  It is, of course. They have to. You know, whilst they're facing with shutdown. And, you know, and that's something, you know, that's something we haven't seen before, even though those two companies have been existing for about ten to fifteen, twenty years.

• 20:30Anthony Pompliano?

  Yep.

• 20:30Speaker 01

  And now the Chinese government realizes that these companies cannot control the information as much as, as precisely as the way they want to, right? They want to really take these companies as their sole propaganda machines and pushing through their own messages. And they, they are no longer tolerating any kind of, you know, mistakes or, you know, execution problems with that's happening in these companies. So now I really think that the Chinese government is taking these information to, you know, control to a whole new level.

• 21:04Anthony Pompliano?

  Well, there's two parts to it, right? Because one, it sounds like, I didn't know that WeChat, Alibaba, they're all turning over information to the government, right? I mean, that would be completely ridiculous in the United States if everyone's content was being turned over. We already have issues where them making requests about a single user's messaging is, is kind of, people are up in arms about. Imagine if the entire user base, right?

• 21:28Speaker 01

  Yeah, yeah. But I would argue that in China, the priorities of, of what matters to a citizen is, you know, is income stability. And then secondary to that is privacy and information, information protection. You know, I think privacy is something that is very. Not very much an important aspect to most Chinese people because they know that they are being monitored

• 21:55Anthony Pompliano?

  Yep.

• 21:55Speaker 01

  in China, right? If you kind of look at the history of what China has done to folks who have spoken out, right, it's very obvious that, you know, you are being watched and they have all these increasingly more monitoring tools that they're equipping themselves with in the central party to make sure that you will not be able to or that you'll be discouraged from speaking out, which I think honestly, as a Chinese citizen, those things I take as, putting myself in the shoe of a Chinese citizen, I think I take those things as secondary to my happiness of, you know, being able to, you know, eat good food and just have a good job. And those are the important things to a regular person, honestly.

• 22:37Anthony Pompliano?

  What's up with this social credit score thing?

• 22:39Speaker 01

  Yeah.

• 22:40Anthony Pompliano?

  Right, so for those that, or maybe you tell us what is going on there? What is it and how real is this or how kind of immediate is the implementation of this?

• 22:50Speaker 01

  I think the implementation is being tested out, but so this quick background for folks who are not familiar with the social credit system. For many, if you've seen the episodes of Black Mirror on Netflix, there is an episode of a girl who gets rated by every one of her person that she interacts with. You know, you have a, you get a rating of five out of, you know, out of five stars. You know, how was my interaction with Pomp today? I would say it's a five, of course.

• 23:17Anthony Pompliano?

  Ten out of five.

• 23:18Speaker 01

  Ten out of five, definitely. And so, you know, and you're, you're, you're, you're, you're essentially, what you recognize, what you're being recognized from the outside is this rating that others give you. And the Chinese government is essentially implementing that from a institutional point of view, where, you know, if you aren't able to pay your debt on time, they will give you a poor score. So it's essentially a credit score? I would say it's just a credit score.

• 23:45Anthony Pompliano?

  It's like an Uber, it's like an Uber score, right?

• 23:47Speaker 01

  Yeah, it's like if you added all those scores together.

• 23:49Anthony Pompliano?

  Yeah, it's just not the writers giving the information. It sounds like there's some automated scoring, there's some feedback scoring.

• 23:55Speaker 01

  Right, it's probably an opaque system where there are a lot of things and there's a black box. And then, you know, you come out with the score.

• 24:00Anthony Pompliano?

  And is it, uh, and maybe you don't know this, but is it like a number like, hey, you're ranked one out of 10? Or is it like a letter grade?

• 24:06Speaker 01

  I think it's a number grade, but I'm not sure of the details. But honestly, I think it's not something that is very drastic or particularly dramatic to any individual citizen who's there. They probably just take it as part of this, you know, increasing, uh, identity online. And then you need this almost, you know, I think actually it's more efficient that way. Yeah, it's efficient, right? Because if you combine Airbnb.

• 24:29Anthony Pompliano?

  The fact that I just connected gamification of life to what the Chinese government doing is ridiculous. Because, uh, I think the concerns that a lot of people have are very serious and grave in the sense of, um, if this was a score that would help you, you know, get faster service at a restaurant or get access to certain government services, like that actually may be pretty interesting application of scoring technology, et cetera.

• 24:55Speaker 01

  Yeah.

• 24:56Anthony Pompliano?

  I think people's fear though is the opposite. Like they're going to say, you can't live in certain areas. You actually have less rights than somebody else. Like, do you think that the everyday citizen in China is worried about what seems the Westerners are worried about? Or they don't, they're completely, you know, uh, agnostic, I guess, to the idea that this could be used for nefarious purposes?

• 25:18Speaker 01

  So I think the Chinese citizen always relies on the government to make sure that they have a stable life and that there, there, there's no, um, kind of civil unrest. So, you know, um, and, you know, this has been taken pretty far for the Chinese government as a ruler to do that. Because if you look at Xinjiang and there, there's lots of civil unrest there and they're putting so many police members out in Xinjiang and you could just see police everywhere, like on every corner of the street. So, so I think a regular citizen just finds it to be the government's job to make sure that they are, you know, they have a safe and, you know, a safe, regular, you know, life where they can just go to work and, you know, carry on with their lives without any kind of civil unrest.

• 26:02Speaker 01

  And this is what the government cares about the most as well, because they're managing, you know, over a billion people.

• 26:07Anthony Pompliano?

  Yeah. Wild, wild.

• 26:09Speaker 01

  Yeah, wild, which, which I think really makes, which I think I have another case for why it's harder for Bitcoin to succeed. Because China has successfully centralized over a billion dollars, billion people. And that's over the course of centuries, right? If you look at Qing Dynasty, that's when there was like a bunch of warring states. And Qing Dynasty really aggregated and was able to consolidate all the warring states into one country. And that's happened since like the 1600s. And then now.

• 26:38Anthony Pompliano?

  Are they gonna be able to centralize Bitcoin?

• 26:40Speaker 01

  They're not gonna be able to centralize Bitcoin, but they're, they're basically kicking Bitcoin out.

• 26:43Anthony Pompliano?

  All right, so let's go really deep. What the hell is going on with Bitcoin in China?

• 26:48Speaker 01

  Yeah.

• 26:49Anthony Pompliano?

  You get all the rumors about the centralization of mining in China. The Chinese government controls Bitcoin. Uh, the Chinese government bans it one day, they accept it the next day. One city likes it, one city doesn't, just what is going on with Bitcoin in China?

• 27:03Speaker 01

  Yeah, for sure. So like I mentioned before, Bitcoin is primarily used for speculation. And then also for avoiding capital controls or escaping capital controls.

• 27:10Anthony Pompliano?

  Okay.

• 27:11Speaker 01

  Right? So I think, and I had this really interesting conversation with Leo Wees, who is the Bitcoin, uh, the head of the Bitcoin Association of Hong Kong. And we did a podcast as well where he, I think, is super, you know, insightful about what's going on there as well. Since he's actually local to Hong Kong. And he says that, you know, what China is trying to do is create this narrative of Bitcoin, where they're saying that Bitcoin is something that we can control. And Bitcoin is something that we can manage. And these rules that they've been kind of setting out, you know, banning ICOs. And then most recently banning a lot, like forcing all this different, you know, um, technology or any kind of entities to disclose their involvement with any crypto blockchain companies.

• 27:57Speaker 01

  Are all ways for them to make sure that they tell their citizens that we know what's going on. We could control what's going on. You know, and I think, you know, they see all this OTC or over the counter transactions happening in WeChat. That's been happening over the course of five, the last five years, but they haven't done anything about it. You know, and I think that's.

• 28:14Anthony Pompliano?

  Interesting.

• 28:15Speaker 01

  And that to me tells me that these arguments for Bitcoin, which is, you know, decentralization, privacy, uh, private transactions and, and, uh, you know, and the last speculation, hasn't been able to cause enough of a stir for the government to worry about it. So to me, it seems like the government honestly doesn't really care that much. They actually don't are not worried that Bitcoin will disrupt the society that they are in now.

• 28:40Anthony Pompliano?

  Do you think that the Chinese government has set up mining facilities and is mining Bitcoin themselves? Uh, or Bitcoin Cash? And do you and and the second question is, do you think that they've bought crypto themselves?

• 28:54Speaker 01

  I think they probably like folks probably buy it for fun, you know.

• 28:57Anthony Pompliano?

  Not the individual governments, like the Chinese CCP. Has a CCP bought Bitcoin and put on a balance sheet? Or do you think that the CCP has invested in building mining facilities and done it? Or do you think that's more rumors and probably unlikely that it's occurred?

• 29:12Speaker 01

  It's very unlikely that it's occurred, I think, because if you look at Bitmain, right? Back then, when last few years when Bitmain was uh creating these mining pools, so over fifty percent of mining essentially from these aggregate pools. China didn't do anything about it, like they could have had the chance to really dominate Bitcoin if they wanted to. Honestly, and just even when there was exchanges that were setting up shop there, you know, Binance. CZ and He Yi, who was also the co-founder of Binance, came from OKX. And OKX was set up shop in China and it's still there. And it's still, you know, very relatively close to where China is, because it's Hong Kong, where it's headquartered. And um and they don't, the Chinese government doesn't do anything about it.

• 29:52Speaker 01

  You know, they could potentially really own all of that and really manage and tell, say, dictate exactly what they want to do with these things. But they don't, because I think they realize that it's the ideologies that's embedded within the Chinese citizens doesn't align with this. This, you know, ethos of decentralization and privacy that, you know, Bitcoin's been preaching. So I think there's going to be an alternative coin or, you know, the digital version of fiat, the yuan. Um, that comes in and actually, you know, takes over and really improve people's life the way they want to.

• 30:23Anthony Pompliano?

  Do you think that Bitcoin can replace fiat currency in China? Or you think it'll be really, really hard?

• 30:30Speaker 01

  It will definitely not be in China if any, you know, I think-

• 30:33Anthony Pompliano?

  You think China's one of the hardest places for Bitcoin to take over dominant?

• 30:36Speaker 01

  For sure, yeah. If you think about just the way how China's been controlling or managing its narrative, it's mostly through information and and that's prevalent in Weibo, which is Chinese Twitter, and also prevalent on WeChat where they're monitoring everything that you're doing. And, and, and, you know, I don't, and people are seamlessly transacting in this digital yuan already with WeChat and Alipay. So why do I need Bitcoin? Only when I need to take money out of China. And if China actually grows to become a, you know, first world, you know, high GDP growth country, like, I will feel more comfortable even putting my money and keeping it in China. Right? It's mostly the inequality aspect that I find it to be where folks find it very attractive.

• 31:20Speaker 01

  You know, the poor people want to speculate and make money, the rich people wants to take money out.

• 31:24Anthony Pompliano?

  Yeah.

• 31:24Speaker 01

  Yeah.

• 31:25Anthony Pompliano?

  Side note, you mentioned Chinese Twitter. I'm trying to go viral on Chinese Twitter, on Weibo. I gotta get an account on there and figure that one out.

• 31:31Speaker 01

  We'll help you set one up. Yeah, let's do that.

• 31:34Anthony Pompliano?

  But speaking of Chinese Twitter and American Twitter or Western world Twitter, one thing that you've mentioned before that I think is a really interesting concept is this idea of Chinese or just Asian funds and projects trying to kind of go to war to get mind share in the Western world, right? So kind of this idea that more of them are coming here and stuff. Just talk a little bit about kind of why they're doing this, how are they doing it, who's doing it successfully, etc.

• 32:01Speaker 01

  Yeah, yeah. Just to address the Weibo comment really quickly, and I think this is super interesting that most folks don't know, is that there are different messages being made actually on Weibo on the Chinese side versus on what's made on the US side. So for example, in marketing between Tron in the US side and the China side, you know, very different messages. And even when you interview, when you see interviews of CZ and Hei on Chinese and English, they're very different content. So I translate those for folks.

• 32:26Anthony Pompliano?

  Wait, why are they different?

• 32:27Speaker 01

  Because I think people, the interviewers ask different questions.

• 32:30Anthony Pompliano?

  Okay.

• 32:31Speaker 01

  And they're actually usually more pinpointed questions and direct questions to CZ and Hei. And, and they also, I think, give a lot more access to some of these folks, more so than the US interviewers. So I find that super fascinating. And that's something that people should not ignore, because then you always have this information arbitrage that people could take advantage of when you know more, you know, more than one languages.

• 32:51Anthony Pompliano?

  So people in the US or the Western world may actually be getting better access and know more from the mouth of CZ, Justin Sun, etc., because they're, they're interacting with Western reporters and media in a different way than they are with Asians.

• 33:09Speaker 01

  Right.

• 33:10Anthony Pompliano?

  Wow.

• 33:10Speaker 01

  Right. Yeah, I think that you could take a look at some of our translations.

• 33:14Anthony Pompliano?

  Okay.

• 33:15Speaker 01

  On our website, where we really highlight, you know, here are the things that CZ says in Chinese. He's mentioned this, like, never in English. So, so here's what he said in Chinese, and it's really interesting and useful for folks, you know, now that we're in crypto, because really what CZ says affects everyone, right? And then to answer your second question about kind of folks coming from the East in the, in the funds and, um, um, from the funds and the projects coming to the West. I don't think they're necessarily coming with antagonistic kind of intentions. You know, if we look at Tron, they're entering the US with a big conference they set up in San Francisco with Kobe Bryant. You know, that, that, that unfortunately

• 33:57Speaker 01

  didn't cost too much stir because we're in a bear market, but there was Kobe Bryant, right? And, um, and if you look at, uh, funds, you know, we see hashed, for example, the largest fund in Korea with all their partners now setting their eyes in the US because they recognize that the technology here are second to none. You know, there won't be as many investments they could make in Korea or anywhere in Asia as a result. So you will see this trend in this ongoing bear market that, you know, funds who are really looking to invest in technology, who are really looking for returns, are coming to the US for it because that's, you know, especially Silicon Valley, I'd say. And then for the projects, you know, the ongoing, um, they, they also are flooding here because.

• 34:42Speaker 01

  Um, I think for one, you know, if you look at Tron, they already dominate China. They have a great marketing machine there. And the next big market is the US. You know, you could look at, argue that a lot of the countries in Asia is a big market, but they're definitely not as big as the US.

• 34:57Anthony Pompliano?

  So, okay, so here's what I want to understand. Let's talk about Tron for a second. And I don't care about the technology, the coin. I want to talk about Tron, the marketing machine, right? Justin Sun seems to have come out of nowhere, built this massive online following. Uh, it's very apparent to me here in the West that he has um, a Western world audience and a Eastern world audience. Um, from what you're telling me, it sounds like he's probably talking differently to each one of those audiences. And it just feels like it's this massive machine on a global scale. Where do the Eastern projects and companies learn this? How do they go about building this?

• 35:41Anthony Pompliano?

  Like, like, it's fascinating when you look at it from a pure marketing standpoint of how, coming from a piece of the world that, we don't even speak their language, right? In the Western world.

• 35:50Speaker 01

  Yeah.

• 35:50Anthony Pompliano?

  And for them to permeate into the Western world culture and communication products, how does that happen?

• 35:57Speaker 01

  Right, right. It's a great question. And I think, you know, just thinking about the backdrop of, you know, the countries between US and China, um, and the general population of folks who understand crypto within these countries.

• 36:10Speaker 01

  China and the folks in Asia generally understand what's going on crypto in Asia, in Asia as well as the US. You know, they have an eye, they keep an eye of going on, that's going on with what's going on in the US. And, but in the US, most people, you know, for example, Twitter is very US centric, unfortunately. I, I know that you, there's a lot of folks of you who are coming from different places, but I think it's a very, like crypto Twitter is very US centric. Um, you know, if you go to Weibo, it's obviously different. It's Chinese centric. And, and, and the fact that, and, and just kind of knowing that crypto is global and in the past, China has always looked to the US for technology developments, for, you know, to Silicon Valley for, for these innovations. This is happening now.

• 36:53Speaker 01

  And I think Tron is able to do that by buying BitTorrent. You know, by having a legitimate, a legitimate company setting up, you know, in the US who could speak on behalf of it, makes this branding better. Right? And then then once you issue a token based on top of that platform, then then everyone gets to share a bit.

• 37:13Anthony Pompliano?

  Yep.

• 37:13Speaker 01

  Right? And especially if you continue to pump that thing, too.

• 37:16Anthony Pompliano?

  It's basically, what it sounds like is the marketing is really understanding American culture, understanding incentives, and really tapping into how to insert yourself into the conversation in a way that you know will resonate in that culture.

• 37:30Speaker 01

  Yeah, I think it's hustling and it's also that they have a lot of money.

• 37:33Anthony Pompliano?

  Yep.

• 37:33Speaker 01

  Yeah, having a lot of money will help you a lot through this bear market. And it's not just Tron, I think, you know, looking at it from an opposite end, there's a project, I'm a consultant with Tezos, they are, you know, setting up four foundations in Asia, one in Hong Kong, one in Korea, one in Japan, one in Singapore, Southeast Asia. And they have localized all these different communities to build on top of Tezos and to form partnerships with universities there, to work with professors, to build on, you know, Camel, and to kind of foster this innovation. And so that's happening both sides, you know. But I think what I see from the the Western projects tend to be more, you know, focused on the long term.

• 38:15Anthony Pompliano?

  Absolutely. I saw a picture of, I think it was Justin Sun, Kobe Bryant, and it might have been Crypto Ron. And I just remember saying to myself, we went from like ETH giveaways on Twitter to this. Like, how did these three people from three so different walks of life all come together at a conference in San Francisco to talk about magic internet money?

• 38:38Speaker 01

  Yeah.

• 38:38Anthony Pompliano?

  It was just, it was incredible.

• 38:39Speaker 01

  Yeah. If you have money and then, you know, we're in a bear market.

• 38:44Speaker 01

  You can get a crowd very easily.

• 38:45Anthony Pompliano?

  All right. One minute on Bitmain. Recent news came out that they took some pretty heavy losses in Q3. They probably took the same or greater losses in Q4. What's the general sentiment in Asia around Bitmain and kind of the mining empire that they built previously?

• 39:03Speaker 01

  I think Bitmain, I've, so I, I'm a tech contributor as well and I wrote, I've written extensively about Bitmain before. And I think, you know, in the last year, they really have grown from, you know, fifteen hundred people to three thousand employees. And it was just, they're really banking on this bull market to fulfill itself and, you know, take this advantage to IPO. But I think they really missed that opportunity and, you know, the bear market really fell, yeah, fell on them. Um, I think, you know, Jihan, there's, there's news of him stepping down as well as Mike Crejain, which is the other co-founder. And I believe that. And I think, you know, it's, it's definitely hard on him because he's really built the company from the ground up with Mike Crejain. And now, you know, they're bet on Bitcoin Cash.

• 39:48Speaker 01

  You know, that's really funny because I always wonder, you know, if the government really cared about Bitcoin. You know, why would, why don't they kind of try to stir Jihan towards, you know, focusing on Bitcoin instead of Bitcoin Cash? Like, why, why the huge bet on Bitcoin Cash? It's, it's, to me, it felt like an ego decision.

• 40:07Anthony Pompliano?

  That's an interesting take.

• 40:08Speaker 01

  Yeah.

• 40:09Anthony Pompliano?

  I don't know the answer, but I think there's a lot of people who would agree with you.

• 40:12Speaker 01

  Yeah. I mean, I'm sure Jihan will continue to be in this space and we'll hear more about him.

• 40:17Anthony Pompliano?

  Yeah.

• 40:17Speaker 01

  Yeah, yeah, yeah.

• 40:18Anthony Pompliano?

  Anybody who's built these, these large companies very quickly, they've got the skill set, right? They, they kind of got lightning in a bottle.

• 40:24Speaker 01

  Right, right.

• 40:24Anthony Pompliano?

  Um, and so we'll see what they do.

• 40:25Speaker 01

  It's always ironic because he, I don't know if you heard about him, how, uh, about his story of how he started Bitmain, which was that he was the first translator of Bitcoin white paper and, uh, and he translated into Chinese. And he really believed in Bitcoin, right? But the, the more I thought about it now, the more I'm like, well, if you decided that you supported Bitcoin, then why were you trying to monetize through Bitcoin mining machines and also creating these mining pools, which essentially centralized Bitcoin, right? Which, uh, uh, uh, to me, maybe this is just like a random thought that I had, but happy to hear what you guys have to think.

• 41:00Anthony Pompliano?

  Um, trust me, there will be people who definitely tweeted both of us and let us know. All right. So, uh, rapid fire, three questions. What's the most important company in crypto in Asia?

• 41:15Speaker 01

  I don't know how to say, I don't know how to decide what's important. I would say the companies that have the most money will be the ones who will continue to run. And so that would be Tron, that would be EOS, that would be Binance.

• 41:26Anthony Pompliano?

  Wow, Tron, EOS, and Binance. I did not expect any of those three to be on the list.

• 41:31Speaker 01

  Well, they have a lot of money.

• 41:32Anthony Pompliano?

  Yeah, yeah.

• 41:32Speaker 01

  You know, that's, that's.

• 41:33Anthony Pompliano?

  Money runs the world.

• 41:34Speaker 01

  Money really runs the world, especially in crypto.

• 41:35Anthony Pompliano?

  One day Bitcoin will run the world, but we'll stick with money for the moment.

• 41:38Speaker 01

  I agree with that, too. Bitcoin outside of China, I agree.

• 41:42Anthony Pompliano?

  All right, awesome. What is the most important book you've ever read?

• 41:49Speaker 01

  I'm gonna follow CZ and C. C. P. It's no kidding. CZ is setting a good bar there. You guys check out his books. I actually just recently read this book called Billion Dollar Whales.

• 41:59Anthony Pompliano?

  Oh, it's fantastic. That is a great pick.

• 42:02Speaker 01

  That's a very good, thank you, thank you. I think it's fascinating and it's talking, so Billion Dollar Whales is, talks about this huge scheme made by essentially a 27-year-old who took a billion dollars from the Malaysian pension.

• 42:19Anthony Pompliano?

  Oh, I think he took more than that. J. Lo is, it's the One M D B scandal with Goldman Sachs. A guy, 27-year-old in Malaysia, literally just swiped billions, I think. What's your favorite fact from the movie? And I'll tell you mine.

• 42:34Speaker 01

  Oh, there's so many. Oh, the fact that he's in China now.

• 42:37Anthony Pompliano?

  Okay, all right. So that is crazy. They can't find them. He's in China somewhere. Mine was that he took some of the proceeds from his scheme and he financed the Wolf of Wall Street movie.

• 42:46Speaker 01

  Oh, right, right, right. Of course, exactly.

• 42:48Anthony Pompliano?

  I don't think people are like, wait a minute, that's pretty crazy.

• 42:50Speaker 01

  Oh, yeah, you guys should definitely read it. It's a global story. And you know, what I drew from that was like, oh, wait. So J. Lo essentially befriended a lot of celebrities in the valley to gain his recognition from the Saudi money and also from the Malaysians. And it sounds like Tron is also befriending Kobe Bryant and is releasing all these partnerships with celebrities in the US who are doing the same thing. Okay, anyway.

• 43:12Anthony Pompliano?

  That's a very interesting correlation there.

• 43:15Speaker 01

  Yeah, sorry, that was just a random correlation.

• 43:17Anthony Pompliano?

  Before I end, I always let somebody else ask me a question, but we gotta talk about aliens first. What are the odds that they exist?

• 43:24Speaker 01

  Oh, man.

• 43:28Speaker 01

  What do you think?

• 43:30Anthony Pompliano?

  Oh, like 99.9%. Yeah, like, I would be, I think there's a greater chance of aliens existing than Bitcoin becoming the global reserve currency. And I think there's a very high percent chance that Bitcoin will become the global reserve currency.

• 43:48Speaker 01

  Wow.

• 43:49Anthony Pompliano?

  Yeah. Like, I like, it's just math, right, in terms of probability, how big the galaxies are, right, and you kind of go through it. Uh, the likelihood of how much progress we've made already in terms of finding certain conditions where life could exist and could not exist, how many planets there are, right? It's just, there's so much we don't know. Uh, and there is such a low probability that we are the only planet in the entire universe that got lucky enough to have life.

• 44:21Speaker 01

  Yeah, no, that makes sense. Yeah.

• 44:23Anthony Pompliano?

  Well, see, you didn't answer the question, though. What do you think?

• 44:26Speaker 01

  I haven't thought of too extensively, unfortunately, but I, I see, I see your point.

• 44:30Anthony Pompliano?

  Over or under 50%?

• 44:36Anthony Pompliano?

  She wants to say under so bad.

• 44:39Speaker 01

  Under, guys, what do you think? Under?

• 44:41Anthony Pompliano?

  All right.

• 44:42Speaker 01

  Am I the only one? Was that under?

• 44:44Anthony Pompliano?

  No, there's some people who, Josh Brown, he'll always get, uh, memorialized for saying that ghosts are more real than aliens, which is a ridiculous statement, but, uh, shout out Josh Brown.

• 44:53Speaker 01

  Nice.

• 44:54Anthony Pompliano?

  Uh, all right, what one question do you have for me?

• 44:57Speaker 01

  Well, what's your favorite company right now?

• 45:00Anthony Pompliano?

  Uh, my favorite company is Morgan Creek.

• 45:04Speaker 01

  Oh, man, I gotta be more specific.

• 45:05Anthony Pompliano?

  No, I, uh, so if you ask the most important company, um, and I've talked about this a bunch on the podcast, but, uh, I think it's probably Facebook. Um, and the reason why I think it's the most important is whether they are successful or not with whatever they release, they are likely to have the highest number of people experience blockchain and crypto immediately.

• 45:25Speaker 01

  Right, I agree with that.

• 45:27Anthony Pompliano?

  So they launched to 200 million people in India, right, the stablecoin rumor that's going around.

• 45:30Speaker 01

  Oh, no, it's definitely gonna happen.

• 45:32Anthony Pompliano?

  200 million people just experienced blockchain and crypto? That's more than all crypto users combined for the last 10 years.

• 45:37Speaker 01

  Right, right, right. I agree with that totally, and I think that's something similarly that's happening in China as well, where WeChat and Tencent will, Tencent and Alibaba would release some kind of their form blockchain, and bam, you have a billion point five people.

• 45:49Anthony Pompliano?

  Come on, guys, don't mess it up.

• 45:51Speaker 01

  Yeah, that's gonna be a war between, I mean, I had this conversation with Lily Liu, who is also a very smart lady, based out of California. You know, I think the war in the end is going to be Bitcoin versus Facebook versus China.

• 46:03Anthony Pompliano?

  I'm holding out that Facebook, Alibaba, Tencent, if they just adopt Bitcoin, and Jack Dorsey, right, with Twitter, like, if they all just start pushing it as the native currency on the internet, it would be pretty incredible. I think the odds are very unlikely, though.

• 46:18Speaker 01

  Yes, I agree. Everyone will be pushing for their own coin, unfortunately. And I think Apple is exploring that too. So that's a, that's a great thing, I think, to end with.

• 46:27Anthony Pompliano?

  Awesome. All right. Thank you so much for doing this. We're gonna have to do this more regularly because I think you've got pretty interesting insights in Asia and China.

• 46:33Speaker 01

  Thank you. Thanks, Pop. Thanks for having me.

• 46:36Anthony Pompliano?

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• 47:16Anthony Pompliano?

  Apple, Spotify, and other podcast charts, please do us a favor and rate, review, and subscribe. To review, simply go to the Off the Chain homepage, scroll down until you see the five blank stars. Taking 15 seconds to fill those stars in and leave a quick review goes a long way in helping us take the entire crypto ecosystem to the top of the charts. I appreciate you listening, and see you next time on Off the Chain.