#782 Should We Ban Central Bank Digital Currencies?

This episode is a little different than the usual podcast format. There is no guest. Instead, I will share a couple of thoughts I have around a specific topic. Today I break down the recent decision by Representative Tom Emmer to put forward a legislative order to ban the Federal Reserve from creating a Central Bank Digital Currency. ======================= Today’s episode is sponsored by Abra. Based in California and backed by top VC firms, Abra is an all-in-one simple, secure app that allows you to trade over 110 cryptocurrencies, get 0% interest loans using your crypto as collateral and earn interest with up to 14% APY on stablecoins and 8.15% APY on Bitcoin. Join nearly 2 million users by downloading Abra from the Google Play or Apple App store. If you download the app today, you will get $15 in free crypto once you fund your account. You came, you invested — now conquer. ======================= Unstoppable Domains is THE #1 provider of NFT domains. These aren’t traditional domains, these are domains with superpowers. With your unique NFT domain such as pomp dot crypto or pomp dot nft, you can replace your long complex wallet addresses, verify ownership of your NFTs and join the 10’s of thousands of people who are now using their NFT domain as their Twitter and Discord usernames. Go to unstoppabledomains.com and get YourName dot crypto, dot x, dot nft or a range of other endings for as low as $5 and never worry about gas or renewal fees because with Unstoppable Domains you pay once and own forever! ======================= Nasdaq-listed BTCS was the first US-public company to secure today’s top layer one protocols. Recently, BTCS launched the beta version of its digital asset analytics dashboard! From across multiple exchanges, the BTCS Data Analytics Dashboard lets you evaluate your entire portfolio’s performance with plans to add year-end reports and yield earning on your crypto through linking to staking pools. Test out the BTCS Data Analytics Dashboard today at BTCS.com. =======================

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

• 0:02Anthony Pompliano?

  What's up everyone, this is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Now let's kick this thing off. Hey everyone. Today's podcast episode is a breakdown of the recent decision by Representative Tom Emmer to put forward a legislative proposal to actually ban the Federal Reserve from creating a central bank digital currency. Before we get into this episode, I want to quickly talk about our sponsors though. Today's episode is brought to you by Abra. Based in California and backed by top VC firms, Abra is an all-in-one, simple, secure app that allows you to trade over 110 cryptocurrencies, get 0% interest loans using your crypto as

• 0:41Anthony Pompliano?

  collateral, and earn interest with up to 14% APY on stablecoins and 8.15% APY on Bitcoin. You can join nearly 2 million users by downloading Abra from the Google Play or Apple App Store. If you download the app today, you will get $15 in free crypto once you fund your account. You can go to abra.com to learn more. You came, you invested, now conquer. Abra, conquer crypto. Abra.com. Go check it out today. Today's episode is brought to you by Unstoppable Domains. Unstoppable Domains is the number one provider of NFT domains. These aren't traditional domains, these are domains with superpowers. With your unique NFT domains such as pomp.crypto or pomp.nft, you can

• 1:22Anthony Pompliano?

  replace your long, complex wallet addresses, verify ownership of your NFTs, enjoy the tens of thousands of people who are now using their NFT domain as their Twitter and Discord usernames. Go to unstoppabledomains.com and get your name.crypto.x.nft or a range of other endings for as low as $5. And never worry about gas or renewal fees because with Unstoppable Domains, you pay once and you own it forever. Head on over to unstoppabledomains.com today to check out more about what they've got. Again, go there and you can get any domain with any ending for as low as $5. UnstoppableDomains.com. Today's episode is brought to you by BTCs. BTCs is a NASDAQ-listed company. It's the

• 2:05Anthony Pompliano?

  first US public company to secure many of the top Layer 1 protocols. This quarter BTCs Just launched the beta version of a new digital asset analytics dashboard. From across multiple exchanges, the BTCs data analytics dashboard lets you evaluate your entire portfolio's performance with plans to enable year-end reports and yield earning on your crypto by linking to BTCs sneaking pools. This groundbreaking dashboard is currently in beta mode. Test out the BTCs data analytics dashboard now by visiting BTCs.com. Again, that's BTCs.com. Go check it out.

• 2:39Speaker 01

  Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only.

• 3:02Anthony Pompliano?

  Bitcoin critics have been proposing the idea of a government ban for the digital currency over the last decade. Their argument is that Bitcoin threatens the US dollar or other fiat currencies, so governments around the world will intervene to stop the adoption of the asset. Most critics are willing to admit that it is unlikely that governments, militaries, or central banks could actually shut down the decentralized computing network. Instead, the critique revolves around the idea that governments will ban or outlaw ownership. While this argument may seem absurd to the Bitcoin community, there is historical precedent for these types of government actions. President Franklin D. Roosevelt signed Executive Order 6102 on April 5, 1933, which explicitly was aimed at forbidding the hoarding of gold coin, gold bullion, and gold certificates within the continental

• 3:47Anthony Pompliano?

  United States. According to Wikipedia, the next few days and months were much the same. On April 6, 1933, The New York Times wrote under the headline "Hoarding of Gold." The executive order issued by the president yesterday amplifies and particularizes his earlier warnings against hoarding. On March 6, taking advantage of a wartime statute that had not been repealed, he issued Presidential Proclamation 2039 that forbade the hoarding of gold or silver coin or bullion or currency under penalty of $10,000 and/or up to five to 10 years imprisonment. They go on to explain the impact of this executive order. Executive Order 6102 required all persons to deliver on or before May 1, 1933,

• 4:32Anthony Pompliano?

  all but a small amount of gold coin, gold bullion, and gold certificates owned by them to the Federal Reserve in exchange for $20.67, that is the equivalent to $413 in 2020 terms. Under the Trading with the Enemy Act of 1917, as amended by the recently passed Emergency Banking Act of March 9, 1933, a violation of the order was punishable by fine of up to $10,000, which is about $200,000 in 2020 terms, and up to 10 years in prison or both. Now, the US government shouldn't be able to shut down gold or gold production. They couldn't put gold bars in jail or financially fine the inanimate asset. The only option was to outlaw ownership and require citizens to turn in their gold.

• 5:17Anthony Pompliano?

  Ultimately, the Bitcoin critics have argued that the US government could pursue a similar strategy with the digital currency. Regardless of whether the network can be shut down, the government will simply ban ownership and require all US citizens to turn in their Bitcoin. The idea would be twofold. The government would financially gain from the ownership of Bitcoin, but they would also open an opportunity for a national central bank digital currency. In effect, the CBDC would replace Bitcoin as the digital store of value, medium of exchange, and unit of account. The central bank would maintain their monopoly on the production and distribution of money, along with centralized control over the variable monetary policy that it holds today. Something happened yesterday, though, that the Bitcoin critics did not expect. A sitting

• 6:01Anthony Pompliano?

  US congressman put forward legislation to outlaw the Federal Reserve from creating and distributing a central bank digital currency. Yes, you read that right. Representative Emmer is attempting to ban the central bank digital currency rather than trying to ban ownership of Bitcoin. He tweeted, "Today, I introduced a bill prohibiting the Fed from issuing a central bank digital currency directly to individuals. Here is why it matters." Emmer's main issue with the current CBDC proposals is that they will likely lead to a lack of innovation and an increase in financial surveillance capabilities. It is telling that the congressman decided to explicitly call out China's CBDC efforts as an example of what the United States must avoid doing. Representative Emmer also said, "As our country, as other countries like China develop CBDCs

• 6:46Anthony Pompliano?

  that fundamentally omit the benefits and protections of cash, it is more important than ever to ensure the United States digital currency policy protects financial privacy, maintains the dollar's dominance, and cultivates innovation." Lastly, Representative Emmer left the door open for a central bank digital currency in the United States, but appears to require it to fit within a specific framework. That framework would produce an open, permissionless, and private central bank digital currency, which frankly is the exact opposite of what the Federal Reserve and other central banks around the world want. Representative Emmer continued, "Any CBDC implemented by the Fed must be open, permissionless, and private. This means that any digital dollar must be accessible to all, transact on a blockchain

• 7:27Anthony Pompliano?

  that is transparent to all, and maintain the privacy elements of cash." The Bitcoin critics have been pontificating for more than a decade about the potential government ban of the asset. None of them anticipated that sitting US politicians would actually attempt to ban the creation of a central bank digital currency. This is interesting because we have yet to see a politician put forward legislation to attempt banning Bitcoin or other digital currency assets. My big takeaway on this development is that politicians, business owners, and everyday citizens recognize the issue at hand. The blind belief in the Federal Reserve is eroding quickly, and the concerns of future infringements on financial privacy are getting louder. Majority of people believe that government should stay out of their financial life, including how much money they have, who they transact with, and what they are purchasing.

• 8:11Anthony Pompliano?

  The United States has historically served as the shining example on a global stage when it comes to freedom, innovation, and economic prosperity. Our country was built on the idea that the government should fear the citizens, not the citizens fearing the government. Authoritarian governments such as China see an opportunity with central bank digital currencies. They want to increase financial surveillance and significantly hamper the freedom of their citizens. The United States is better than that. We don't need to trust the government or central bank. The technology exists now to avoid giving them the power, control, and ability to potentially violate our trust in the future. It is encouraging to see Representative Emmer taking this courageous step forward. The conversation changed yesterday. We shouldn't be outlawing ownership of Bitcoin. We should be outlawing our government's ability to spy on their citizens.

• 8:55Anthony Pompliano?

  I hope that you guys enjoyed this one, and we'll talk again tomorrow.