Bloomberg Audio Studios, podcasts, radio news.
What's happening in the world of crypto, though, because so much to delve into when it comes to the latest executive order.
As many anticipate that.
Such regulations will become more pro crypto, and we see that executive order signed last night with a reserve for bitcoin, we're now pleased to be welcoming to our TV and radio audiences around the world. Someone who can dive into this exact executive order. We bring in the White House AI and cryptos are David Sachs.
It's busy.
You're about to expect yet more people coming to the White House from the cryptosphere. Remind the American public and investors why you need a bitcoin reserve at all?
Well, good to be here, I mean, the reason why we need a bitcoin reserve is that the federal government already owns some. In fact, it obtained around four hundred thousand bitcoin over the past decade through criminal and civil forfeitures and seizures, and so the government has to have a strategy for how it deals with this. In the past, the strategy has been simply to sell it in an ad hoc way, almost willy nilly and that cost American
taxpayer something like seventeen billion dollars in lost value. So we want to have a long term strategy to maximize the value of these holdings. We've decided that that bitcoin is scarce, it's valuable, and that is strategic for the United States to hold on to.
This as a long term reserve asset.
So that's the plan with the two hundred thousand bitcoin that we believe are in the possession of the federal government. I say we believe because no one really knows for sure because we never had a proper audit. So that's one of the first things that this executive order provides that we're going to do a full government wide audit to find out what digital assets we actually have so they can be safeguarded and moved into a strategy that maximizes their long term value.
Right.
And then there's the stockpile.
Talk to us about the nuance there and why you need to stockpile for old coins and how you're treating them differently.
Right.
Well, the idea there is again we're going to figure out what do we actually have on the federal balot sheet, and we're going to move those Like you said, all coins are digital assets other than bitcoin into a stockpile for safekeeping. The difference there is that the Secretary of the Treasury will exercise responsible stewardship over those assets, and he has the discretion to rebalance the portfolio or to sell items in that portfolio. But that's not true for bitcoin.
The bitcoin we want to keep long term, So there's a difference there in objective. With the reserve, the goal is long term preservation. With the stockpile, the goal is responsible stewardship the portfolio management.
In essence, David, the executive order also tasks Secretary Lutnik Investment with finding budget neutral ways that won't cost the taxpayer to add to that reserve. What qualifies as budget neutral? Can you give us some examples of how that would actually work well?
Budget neutral this means it won't cost the tax or anything, It won't increase the deficit, it won't increase the debt. So that's basically the constraints on what they can do. If they can figure out creative ways to add to the stock to the reserve of bitcoin, they're allowed to accumulate more bitcoin, but again it cannot impose any burden on the federal deficit, debt or the taxpayer.
So that's the rule.
Now you can ask the question, well, how are they going to do that? And I think that's sort of up to them if they can figure out creative strategies that they believe are in the long term insto the country. They now have the authorization to develop those strategies.
Do you think using savings that come from DOZE, for example, qualify is something that would be budget neutral?
That's a good question. I don't know the answer to that question.
I think that that's something that I have to be assessed by probably the Office of Management of Budget. I think that since DOZE is cutting the deficit that and we'd want to seek a way to rescind those appropriations, it probably would not count.
But you probably have to ask the O and B that when you talk about the stewardship, particularly the stockpile, could you be seeing things like staking lending. Is there going to be other ways to maximize the volume there?
I mean, it's a good question.
I mean, you know, I think that the idea of this executive order is to create the mandate. Right, so first of all, we're going to move these digital assets from wherever they are all over the government. We're going to find out what they are. First of all, we're going to do the account and we're going to do the audit. Then we're going to move them into a
separate account for safekeeping. And then the Sectuary of the Treasury and his team will be able to exercise portfolio management and long term and responsible stewardship.
And yes, that could.
Include staking, it could include rebalancing, it could include sales. These are all options that they can pursue if the Sectary of the Treasury believes that these are in the long term interests of the American people.
Just going into what's in the holding of the US government. Going back to what President Trump mentioned over the weekend talking of Ripple Solana, other alternative coins that people are wondering whether they're going to be included in stot Paul, will they Does the US own them? Why mention them by the president?
Well, the President just mentioned the top five cryptocurrencies by market cap, So I think people are just reading into this a little bit too much. He just mentioned the top five In terms of what we'll actually have.
Again, we have to do the accounting.
We're not sure at sitting here today whether the federal government owns any of these alternative cryptocurrencies. We know it owns bitcoin. I believe it owns some ethereum. I'm not sure about the other ones. This is why we have to do the accounting. Is that, to be honest, no one's been able to give us a straight answer yet
in terms of what the federal government owns. And this is part of the problem, is that we've never really had a digital asset strategy before, and this is why we've missed out on accumulating a lot of value for the American people.
David, you mentioned earlier that you know you don't have any additional cryptocurrency assets and where you've divested from your interests there. However, Secretary Lutnik in July mentioned that he had quote shed load of bitcoin. Do you think it's important for these stewards of the Reserve and the stockpile to divest from their cryptocurrency interests?
Do you know if they've done so already.
I can't speak to a situation.
You know, every member of the administration has to go through the same ethics process and the same conflict of interest process that I've gone through. So I'll let him speak to his own situation, I can to say that in my case, I divested or sold all the cryptocurrency that I own prior to the start of the administration, so there's no conflict in my case, I just want to have the right innovation policies for the United States.
Do you think it's important, though, to just not have that appearance of a conflict of interest?
Sure?
I mean, look, we're all subject to eighteen USC.
Two eight.
These are the conflict of interest provisions. Every member the administration is subject to that. But I'm not going to speak to anyone's situation, so we all are governed by the same conflict of interest rules. In my case, I choasted to divest everything. To make it simple, you should ask every other member of the administration what their situation is.
How about the president, because I think here in lies some of the issues for those who are on the outside of crypto looking in and suddenly feel that the US president has an exposure to mean coins or Solana. How do you give the confidence to the US investor base and indeed US population that this is totally legit.
Well, honestly, I think you're kind of making something up there. I mean, how do you know that he has exposure to Salona. Is that's something you just came up with.
Well, ultimately, when we think about the mean coin exposure in particular, and people trying to understand for what reason we have a trump coin from Milan your coin, is there a clearer way that the US president can disassociate himself from any event upside when it comes to cryptocurrencies.
Well, I think he's already spoke to the trump coin, and I think that that is a collectible. The SEC said it's a collectible. Collectibles have no intrinsic value, they're not security. Is there in a different category, And I think as long as you issue at meme coin and disclaim that there's no intrinsic value, it can just be a collectible. So that is a different category I think than what we're talking about here with cryptocurrencies.
What do you make some of the market reaction?
I mean, clearly Bitcoin down later earlier today on the back of just not really getting what they were hoping for. You know, if the government is not going to buy additional crypto, then what's really the benefit. But can you say for sure that the administration is not open to using taxpayer dollars in the future. Is that completely off the table according to this EO, it is.
We've said that this will not cost taxpayers a dime. So we've been very clear in this executive Order that we will not use taxpayer funds to basically accumulate more crypto unless it can be done in a completely budget neutral way. No increase in the death st no increase in the debt, no use of taxpayer funds, no burden on the taxpayer. We've been very clear in this Executive Order about that.
David, Let's move on to artificial intelligence, where you're also weighing in on policy there. The Biden Executive Order was repealed in January. What is in the works currently that you can share about how that's looking and who's involved.
So the president is week one executive order on AI that rescinded the Biden EO. By the way, that was a very burdensome executive order that Biden had passed, those over one hundred pages of burn some regulations on AI companies.
The whole industry hated it. He rescinded that, and he tasked three people to basically evaluate a new and create a new AI action plan and those people are the head of the Office of Science Technology Policy, the now Security Advisor, myself, and so we're currently working on that plan and we'll have more information for you about that once we're ready to present.
How confident are you at this moment around AI leadership here in the United States that thick and fast the news coming out of China, for example, of the latest models that are incredibly powerful with less data and ultimately more efficient. How you exercising the view that AI can be still a leader for the United States and not losing its leadership versus China.
Well, I'm confident in American leadership, but we can't be complacent about it. I mean, it's very clear that China is going to be very, very competitive. Something like roughly half of the AI researchers in the world are from China. They are very good at math and science, and you've seen with the launch of deep Seek that they're very good. They're very good AI software companies. So this is going to be a very competitive race, and we have to win that race. But we can't be complacent about that
in any way. It's going to be a very tough competition here.
There's actually reporting from other news sources that maybe deep seat would be bad from apps here in the United States.
Do you think that's appropriate.
It's pretty mature for me to comment on something like that. If the administration announces a policy on that, then I'll comment on it.
Then let's talk about some of the other voices inside the White House as of late that could potentially.
Chime in on AI policy.
Elon Musk is he involved in any capacity.
Not in what we're doing.
So you know, again, we have an office within the White House and we deal with crypto and AI policy. Elon's doing doge and these are two totally separate initiatives.
But let's talk a little bit more about what the contours of the AI policy could look like. I realize you can't share too much at the moment, but what will be your priority areas? A lot of the talk has been around AI competitiveness and what we've seen coming out of Trump's President Trump's comments around the Chips Act and then National Science Foundation layoffs. There is some concern that this could undermine competitiveness if there's not enough federal funding going to research.
What are your thoughts on that?
Well, I think there are some items that are policy items that are coming up very quickly. So, for example, there was this eleventh hour policy that was announced by or rule that was now called the Diffusion Rule, that was announced by the Biden administration, and that governs the sale of advanced AI chips or GPUs to countries all across the world. They're basically an international version of the
Export Controls. There's one hundred and twenty day clock on that in order for the Trump administration to weigh in and make whatever modifications we want to make. So, for example, I think that's probably going to be one of the first policy items on our plate that we have to address because there's a clock on it. So I think that you export controls are a big area. Diffusion is
a big area. Just the you know, how we govern the licensing of the most sophisticated chips and semiconductor manufacturing equipment is sort of at the heart of the policy discussion right now.
Would you ultimately be supporting an end to the Chips Act.
I don't think that anyone in the administration has said we want to end it, but the President has been very critical of it, and I think with good reason. I mean, I think the intent of the Chips Act was good. We were trying to get semiconductor manufacturing to occur in the.
United States, but it's so strategic.
The problem is that the money went to, frankly, a lot of companies who are losing in that very competitive market. And some of those companies haven't even used the money that they were granted because they're not doing very well. So the Chips Act is had, I think, mixed results at a high cost, and the question is just whether we can do something much better. And I think what the President has said is that he would like to use terrorists as an incentive to get companies to onshore
their semiconductor manufacturing here. And the advantage of that approach is that the best companies have to do it too. They can't kind of drag their feet or they're going to be hit with terrifts. So I think the President has figured out a very powerful weapon, a very powerful incentive to get the best companies to want to onshore their manufacturing, including for semiconductors, and that is very strategic for the United States.
TSMC putting money where its mouth is and potentially in response to tariff concerns.
For you, right, you saw that. Yeah, sorry you mentioned the SMC. I think it's a very good point. We did a press conference with them just earlier in the week and they announced over one hundred billion dollar investment in the US and a big part of the reason why is because of the President's Tariff's policies give them a strong incentive to want to move some manufacturing here because they know that if they don't do that, they're going to be here with the tariff.
With forty five seconds. They've got to ask you, therefore, should Intel not be getting the money? Is that the company you're hinting at.
I'm not saying they shouldn't get it, but I think that everyone knows that Intel's a very challenged company right now, and I think that it's unfortunately.
We want Intel to do well.
We want domestic chip manufacturing, and Intel is a legendary company and it is one of the few companies in the United States that's capable of doing advanced chip manufacturing. So we want them to do well, and I think we will try to do whatever we can to help them do well well.
You're going to be speaking with lots of leaders from other companies today. Of course, over at the White House leaders of crypto exchanges.
Across the ball We thank you so much.
The White House AI and cryptos are David Sachs, head of that unimportant White House crypto meeting,