#826 Financial Censorship Is Becoming Pervasive

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 discuss the recent financial censorship occurring in Afghanistan, Russia and Canada. These socio-economic trends emphasize the value of Bitcoin and it's decentralized properties. ======================= LMAX Digital - the market-leading solution for institutional crypto trading & custodial services - offers clients a regulated, transparent and secure trading environment, together with the deepest pool of crypto liquidity. LMAX Digital is also a primary price discovery venue, streaming real-time market data to the industry’s leading analytics platforms. LMAX Digital - secure, liquid, trusted. Learn more at LMAXdigital.com/pomp ======================= Compass Mining is the world's first online marketplace for bitcoin mining hardware and hosting. Compass was founded with the goal of making it easy for everyone to mine bitcoin. Visit compassmining.io to start mining bitcoin today! ======================= The world's 2nd largest crypto exchange, OKEx, has dropped the "E" to become OKX, reflecting its evolution from a traditional crypto exchange to a comprehensive, cross-platform crypto services provider. With OKX's decentralized platform and Web3 wallet, MetaX, you have full custody over your crypto. Explore DeFi, NFTs and play-to-earning gaming with the world's most powerful crypto exchange. Visit OKX.com to learn more. =======================

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. Today's episode is commentary on the recent financial censorship, both in Afghanistan, Russia, and Canada. I hope that you enjoy these deep dives on specific issues that are relevant and also important to the development of Bitcoin and the wider cryptocurrency industry. Before we get into this episode, though, I want to quickly talk about our sponsors. First up is LMAX Digital, the number one institutional crypto exchange. They offer clients the deepest pool of crypto liquidity on the planet, underscored by 100% uptime track record through volatility spikes. They leverage LMAX Group's liquidity relationships

• 0:45Anthony Pompliano?

  and ultra-low latency technology. LMAX Digital is the market-leading solution for institutional crypto trading and custodial services. If you've never heard of LMAX Digital, it's probably because you are not an institution. They have no retail, only institutions. They feature a central limit order book streaming spot Bitcoin, Ether, Litecoin, and Bitcoin Cash, all paired with US dollars, Euro, and Yen. LMAX Digital, they're secure, they're liquid, and they're trusted. Learn more at LMAXdigital.com/pomp. Again, LMAXdigital.com/pomp. Next up is Compass Mining. Compass Mining is the world's largest marketplace for mining hardware and hosting. With Compass, everyone can mine Bitcoin. Their team makes it easy

• 1:27Anthony Pompliano?

  to start mining wherever you want, at home or in one of their 23 hosting facilities around the world. Through the Compass Marketplace, retail miners can access mining hardware with similar prices and purchase plans as the world's largest mining companies. Compass miners own their machines, they choose whatever mining pool they want, and they mine directly to their own wallets. Miners who don't want to host their machines can order ASICs directly to their doorstep. Simple and low-cost hosting agreements, coupled with best-in-class customer service, are the reasons why Compass is the simplest and most popular way to mine Bitcoin. Start mining your own Bitcoin today by visiting compassmining.io. Again, compassmining.io.

• 2:10Anthony Pompliano?

  Go check them out and let me know what you think. This episode is brought to you by OKX. OKEX has dropped the E to become OKX. Founded in 2017 with a mission to deliver a cutting-edge crypto trading experience, OKX, the world's second-largest crypto exchange by trading volume, has since expanded its scope alongside the wider industry, adding features from all corners of crypto. If EX is about exchange, X is about intersections. Cross-chain, cross-functional, cross-platform, an interoperable future that's not siloed into isolated platforms and blockchains. The name change and the new look and feel represent OKX's ongoing move towards decentralized finance.

• 2:51Anthony Pompliano?

  With OKX's decentralized platform and Web3 wallet, MetaX, you have full custody over your crypto. Connect MetaX in your browser or within the OKX app to explore DeFi, NFTs, and play to earning gaming, the world's most powerful crypto exchange. Whether you're just learning about crypto, you're a seasoned DeFi DJ, an NFT enthusiast, or a pro trader, you're all invited to a better future. Go check it out today and let me know what you think. All right, let's get into this episode. I hope you guys enjoy this one.

• 3:22Speaker 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.

• 3:45Anthony Pompliano?

  Good morning, everyone. Bang, bang. It was reported late last week that the United States would be confiscating billions of dollars from the central bank reserves of Afghanistan. This seemed a little weird at first, but I didn't want to jump to conclusions since governments are always doing counterintuitive or seemingly insane things. After digging into the story, it appears that this is a highly unusual decision that could have significant impact on finance, geopolitics, and technology moving forward. Here's an overview of exactly what is happening. First, Afghanistan's central bank reserves have been kept in various US-based financial institutions. There's approximately $7 billion of total assets that belong to the Afghan Central Bank but are held in the United States. President Biden signed an executive order compelling all US financial institutions to

• 4:29Anthony Pompliano?

  transfer this property into a consolidated account held at the Federal Reserve Bank of New York. Approximately 3.5 billion of the 7 billion in assets will be routed back to Afghanistan with the hopes of helping Afghan citizens. And the remaining assets of roughly 3.5 billion dollars in assets will be held by the US government and earmarked for victims of the 9/11 terrorist attack. Now, it is important to call out that this is a highly complex situation, but it is also a highly irregular situation as well. The Central Bank of Afghanistan was holding billions of dollars in US-based financial institutions and had no sovereignty over those funds. This wouldn't seem overly weird for a central bank, except the United States had invaded

• 5:11Anthony Pompliano?

  the country and was actively occupying it for the better part of 20 years. Second, the use of an executive order to compel US-based financial institutions to turn over client assets to the Federal Reserve is as outrageous as it sounds. The Federal Reserve is allegedly an independent private organization, so it is noteworthy that the president and his administration is forcing one private organization to allow another private organization to confiscate client assets. Third, the 7 billion dollars of Afghan Central Bank assets are the property of Afghanistan. Any attempt by the United States, the president, or the Federal Reserve to prevent the country of Afghanistan and its citizens from accessing or retrieving their property is equivalent to theft.

• 5:54Anthony Pompliano?

  Regardless of the reasoning or the moral appeal, the United States is confiscating billions of dollars of assets from a country that we are no longer at war with and a country that we are reportedly trying to help become independent. Fourth, the United States is conducting this highly suspicious activity at the same time that it is becoming clear that the Afghan people are suffering immensely. In the White House press release related to the executive order, these are the facts outlined to highlight the dire situation on the ground. Even prior to the events of last August, Afghanistan's economy was on the brink. Afghanistan faced poverty rates above 50%. International donor grants financed about 75% of public expenditures, 50% of the government's budget.

• 6:36Anthony Pompliano?

  A two-year-long drought had reduced many crops to 40% of their usual yields. And Afghanistan had one of the last developed financial systems in the world, with just 10 to 20% of adults holding bank accounts. Rampant corruption crippled sectors that should have been profitable. The Taliban's forced takeover made the already frail economic situation worse. The IMF estimates that Afghanistan faces an economic contraction of 30%. And many of the senior officials and technical experts needed to provide sound economic management have fled the country as a result of the Taliban's actions. These problems reflect longstanding structural issues that predated the events of August 2021 and have worsened due to uncertainty and perceived risks surrounding the Taliban's capacity to run the economy.

• 7:21Anthony Pompliano?

  This includes its ability to implement anti-money laundering measures and measures to counter the financing of terrorism.

• 7:28Anthony Pompliano?

  So we know that citizens of Afghanistan are struggling, and the current administration has still decided to withhold potential aid and the property of those citizens because of political motivations. It is really crazy to think about the nuances of this entire situation. So why am I writing about this? The idea of financial censorship is becoming more pervasive. We have the US confiscating Afghan Central Bank assets. We have the US threatening Russia with removal from the SWIFT payment system, depending on what actions Russia pursues in Ukraine. We have the Canadian government pressuring technology companies and financial institutions to confiscate any funds that are being sent to the truckers' Freedom Convoy protest. Each of these situations is different, but they are all a form of financial censorship.

• 8:11Anthony Pompliano?

  The more aggressive that governments become with financial censorship, whether towards each other or towards their own citizens, the more popular that Bitcoin becomes in the eyes of those on the internet. Every attempt at financial censorship is a marketing campaign for Bitcoin. Bitcoin is censorship resistant money. No one can prevent you from sending it to anyone else. No one can confiscate it from you without your permission. No one can debase the currency. Bitcoin is freedom technology. It gives a user, from individuals to organizations to nation states, the freedom to choose how to use the digital currency. You can hold it, you can spend it, you can send it to someone. Whatever you want to do, you're allowed to do it.

• 8:52Anthony Pompliano?

  No government, company, or individual can impose their views or desires on you. If the Afghan Central Bank has sovereignty over their assets, the US couldn't confiscate them easily. If the Freedom Convoy raised money through a censorship resistant currency, no one could have taken those funds from them. That is where the world is headed. Sovereignty, censorship resistance, decentralization, individual rights. Slowly, but surely. Bitcoin is inevitable. It returns the world back to sound money and to individual sovereignty. Those may seem like crazy ideas on the surface, but we are watching multiple examples play out that prove why it is so important. Hope you guys all have a great day and we'll do this again soon. Thanks so much for listening to today's episode.

• 9:36Anthony Pompliano?

  I really hope you guys enjoyed this one. Make sure you subscribe on Apple, Spotify, or your favorite podcast player. And if you're looking to try to transition to get a new job in the Bitcoin or crypto industry, we've got you covered. Head over to pompscryptocourse.com. We've developed a curriculum with the top teams across the industry. It's a three-week intensive training program with over 50 events packed into that three-week time period. Go to pompscryptocourse.com to learn more and I'll meet you guys for the next episode.