We can do things technologically if we set our mind to it. There's no reason why we couldn't design a digital currency that would be protective of privacy rights and one that would be an open architecture, so you don't need to rely on the government to say, trust us, we're not surveiling you. You could technologically discern that for yourself. That's what should be an American approach to
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Crypto podcast. You're home for cryptocurrency news and interviews with me. Today's Chris John Carlow, who is a former CFTC chairman, the author of the book Crypto Dad, The Fight for the Future of Money, and also the co founder of the Digital Dollar Project. Chris, great to have you back on and Tony's great to be back with you. Chris. I'm always excited to speak with you because you know, there's a lot happening around the world with
cbdc's and digital currencies, and you know, the landscape is changing. We're heading into into a more digital world and these are exciting times and there's a lot happening. So I would love to start with what's the latest with the Digital Dollar Project. Well, we continue our work as probably, if not the leading, perhaps the only voice asking a very simple question, and that
is, how do we future proof the dollar? How do we preserve its reserve currency status, and how do we most importantly preserve the values in which the dollar has historically been perceived valuers of free enterprise, of free trade, of economic independence, and individual economic liberty for American for users of the dollar, in a world that is quickly moving away from the analogue dollar dominating world
of the twentieth century and the architecture of recording value on balance sheets of commercial institutions, to a future that's going to be a kaleidoscope of both decentralized systems of value like Bitcoin and ethereum, and highly centralized systems of value, some run by big tech companies and others run by big banks, and some run by governments such as China's Digital Yuwan. It will be used for not only their own domestic use, but will be made available for export purposes in the
form of white label versions of digital currency. In this coming I call it a kaleidoscope. It's going to be much more of a kaleidoscope of different digital networks of value. And in that world, we need to think about how does the dollar in its current state survive that? And does it survive that? Or do we need to think about how do we best modernize it? And are we going to outsource that to private sector actors and if we do
so, what are the privacy concerns there? Or are we going to do some combination of a central bank issued and a private sector issued one, similar to the way that money has done today, ninety percent of it as bank created, ten percent as government created. And in that future state, how do we best protect the values of economic liberty? And those are the questions
we ask at the Digital Dollar Project. Importantly, Tony, we do not advocate for the US to deploy a central bank digital currency, because we don't know what that means right now, but we do strongly advocate for the United States not the seed leadership in this Internet of value, to the United States's
economic competitors and economic adversaries. We at the Digital Dollar Project have been fortunate to find ourselves at a number of the international global conclaves that are taking place today to work on what are the of the protocols, what are the standards for digital systems of value, issues like interoperability, issues like resiliency, cyber
resistance, and privacy rights. And sadly, the United States is not there at any of these meetings in any consistent official way, but many of our economic competitors, including our economic adversaries like China, are there, and they want to ensure a future state that is safe for systems of value that provide
for surveillance, that provide for censorship, and provide for control. It's almost as if the United States has forgotten the lessons of thirty years ago, when we made sure that the Internet of Information was one that closed societies couldn't co opt for their own purposes. We made sure that the Internet of Information was one that it was an open architecture, and that was appropriate for democrats countries and citizens of democracies. Right now, thirty years later, in the United
States is not fighting that same fight. But we at the Digital Dollar Project hope to be a standard for that, at least until we can convince the United States officialdom that it needs to take up that fight as it did so
honorably thirty years ago. Yeah. Absolutely, Now, just this past week or last week, I should say, Fetcher Jerome Powell mentioned like there's nowhere near any intepid development for a CBDC, And then you have across the globe you have Russia and putin passing bills and so forth saying they're looking to move to a digital currency, use it for trade between different countries. There's talks
about the bricks countries and the things they want to do. So at some point, I'm like, is this just geopolitical grand standing or optics, you know, a little bit of playing around here and there's things happening behind the scenes, or is the US really resting on its laurels here. Well, you know, we are in an election year here in the United States, and unfortunately the issue of CBDC seems to have fallen into a traditional Washington black
and white narrative. And I heard that testimony and I noted not just the the response given to the questions, but the relief that the questionners of Chairman Powell expressed when they heard him say the United States is not advancing its work
on looking at CBDC. Now, I'm, you know, as someone who considers myself fairly uh uh liberal in my views of individual rights, meaning that I'm a champion of economic liberty, I can both understand the relief that was sounded because the assumption was the the only type of CBDC that could be developed would be one that uh gave government uh the ability to limit our economic liberty
and to surveil our activity. It's almost as if the Chinese model is taking up space in the heads of many people in Washington and they can't envision a different kind of c DC, one that was architected to be anti surveillance, anti anti censorship, and anti control. But yet we we have done that in the development of certain decentralized systems, and there's no reason why technologically. Remember we're we're Americans, right. We can we put a man on the
moon. We can do things technologically if we set our mind to it. There's no reason why we couldn't design a digital currency that would be protective of privacy rights and one that would be an open architecture, so you don't need to rely on the government to say, trust us, we're not surveiling you. You could technologically discern that for yourself. That's what should be an American
approach to this. But the other part that is so I think simplistic in the thinking about this is the assumption that a CBDC would surveil you, but
somehow a private sector digital currency would not. I have not seen any stable coin operator, and I'm a big believer in stable coins, and I support their rollout and development, and I agree that they're a great way to extend the US monetary values around the globe and extend the dollar but I have not seen any stable coiner disclaim the ability to suck out all of that data.
I mean, and when they do, government will be knocking on their door in the same way they're knocking on the door of banks and saying, share some of that data with us. Oh, and by the way, we don't want people buying ammunition, or we don't want people supporting right to life, or we don't want people supporting abortion, and so don't let them do that with your stable coin, in the same way that government has done that
with social media. So we need to get beyond a very simplistic notion that seems to be prevalent in Washington right now that CBDC is unsafe for democracy, but stable coins are safe for democracy. That just doesn't hold water. And I'm not accusing anybody of anything. I'm just simply saying intellectually, it doesn't
hold water. We've seen how government can say, okay, well, we're barred by the by the constitution from limiting your speech, but we have no problem telling the public sector and social media companies to limit your free speech. And I could see them doing the same thing with digital currency. So I
think there's no difference between sovereign and no sovereign. What I do think we need to do, and I hope your listeners hear me clear and simple, because I'm a proponent of a digital architecture and an Internet of value as strong as anybody and my bona FID he's proven themselves during my time at the CFTC
on this subject. We need to have a national consensus that says, anything that's based on the dollar in the digital future of money must reflect American values, whether it's whether it's whether it's references the dollar, whether it's stabilized by the dollar, whether it's rolled out by the Central Bank, and whether it's rolled out by a private sector big tech company, whether it's rolled out by a stable coin operator, whether it's rolled out by a consortium of banks.
If you call it the dollar, almost as if the American public have a right to license the reference to the dollar, we demand in return that that instrument preserves our bill of rights freedoms, our freedom of speech, our freedom of expression, our freedom of assembly, and our rights to privacy. That must be the condition on any instrument that reflects the dollar. And it doesn't matter whether it's a CBDC or a stable coin or a bank issued instrument.
It must enhance our rights. And so that, I think is the issue that we should all be focusing on. The Internet of value is coming. Money is going to exist on digital networks in the future, and the issue is going to be less the matter of the value and more the matter of values. And if we can get the values right, if people around the globe knew that anything that uses the dollar as a reference point will respect their legitimate rights to privacy, then the United States is going to win this game.
We're going to come from kind of being absent at the table to leading the table. Why Because people that aspire the freedom worldwide will aspire to own dollar referenced instruments. And that's what I think. That's where I call my book the Fight for the Future Money. That's the fight right now. The fight is about the values of dollar based digital systems of value. That's where that's what we need to be fight for is free, free citizens. Yeah.
Absolutely, And because you brought up a great point that this double standard, right, because the stable coins are out in the market, people are using them, different companies are launching them, but like you said, those guardrails are not there. Just as you know some of these people who are being a bit hyperbolic about the CBDCs and so forth. But the same concerns apply there, and we don't have the regulations or the guard wills in place.
And I see companies like PayPal launching a stable coin. We have USDC issued by Circle here in the US, and there are certain banks like JP Morgan have their own bank coin, such as jpm coin. So you know, when do you think there might be the wake up call? Is it maybe after election, after all these political talking points get put to the side and people settle down, that we can get back to the table and say, okay, we got a problem here. You know, people are coming
after the king on the hill of the US dollar reserve currency. So how do we how do we preserve that? I don't know, Honestly, I've been perplexed, and I've been in many of the debates. I've been perplexed with how simplistic this has gotten. CBDC bad. You know, stable coins good. Okay, I'm a supporter again to my dying breadth of the need
for private sector innovation in the digital systems of value. In every one of the stable coins, I think has a value of proposition that is very very strong and very very positive, and so I do not want anything to impede their further deve but I do think we need to recognize our own lived experience
of the last thirty years. We hoped and thought that the Internet of Information would be one that would in a sense liberate us as as as private free citizens from control of you know of of publishing giants and information repositories, where we could interact with each other directly and share information, and the Internet was going to be this great liberating force. Only to discover Web two was this huge centralization effort where we were no longer the free citizens we thought we were.
We were suddenly the providers of data upon which a couple of big companies became behemals and then use that data to control how we think, how we acted, what transactions we did, and most importantly, what information we could have access to, and what information we suddenly decided they cited for themselves we
were not allowed to have party to. And we've learned more and more about that in a couple of key court cases where we've discovered that our federal government has been leaning on social media companies to restrict information on certain taphood subjects. So web To, you know, didn't quite work out the way we hoped it would. Now we're hoping that a new wave of the Internet, an
Internet a value, would have that democratizing force. But we need to kind of be aware the same centralization process could take place, but this time in some ways almost worse. If you think about are constant here in the United States and a very constitutional and a very US framework, And I apologize to
listeners around the world for referring to American forms. But if you think about our very vaunted and laudable constitutional rights First Amendment freedoms right freedom of assembly, freedom of speech, freedom of religion, Fourth Amendment, right to privacy in a free market economy, all of those rights are expressed financially. Our freedom of assembly, you know, concerns the dues we pay to organizations to which
we belong. Our freedom of speech is subscriptions we pay the magazines and publications we wish to read. Freedom of religion is tithes we pay to churches and synagogues and mosques to which we we wish to belong. Privacy is our right to not pay certain things that we don't want to pay, whether they be union dues or other things. If centralized authorities, whether they be sovereign or non sovereign, can surveil, can censor, can control that economic activity,
then we no longer have those First and Fourth Amendment freedoms anymore. We suddenly find that those freedoms are curtailed by the very people that are the transmittal media medium for how we pay in a free market economy, how we transact in
a free market economy. So I you know, I hope to be someone sounding the alarm, someone who, if you are a crypto maximalist, hopefully you accept what I'm saying as someone who's not hostile this innovation, but who actually took steps to further this innovation during my time, you know, as an official sector leader, and so you know, I'm very much an advocate, but I'm sounding the alarm that you know, hidden within our desire for
this new Internet of value, it could be some danger points and we must not leave our values by the side of the road as we get on with furthering this innovation. We need to be values first, and we need to insist that all these digital systems and money are ones that are preservative of our of our civil rights or our individual autonomy as free citizens and as people of democratic republics. Now, Chris, something, as you were saying that,
I thought about going back years, maybe twenty eighteen. I think it was when Mark Zuckerberg and the folks at Facebook wanted to create I think it was called DM some sort of digital currency, and all of a sudden we saw a knee jerk reaction and everybody was like, no, no, no, no, We're putting a stop to this. And I thought at that point they were going to start taking these things seriously. But then to your point, they've kind of just the urgency has ramped down. What do you think
happened there? You know, I don't know if you have any sight on that's Facebook or any details there, but what do you think happened there? Well, look, I was very very actively an observer and a commentator, and I saw that in real time. I think that scared the Big Jesus out of the governing class of country of of reserve currency status countries around the world. I mean, you know, in China, the reaction was to further its work on its digital YU one with the Chinese called it's ec and
why in Europe it was to further its work on a digital euro. You know, these are reserve currency countries that saw d M and the potential network effect that its own digital currency network with its you know, a global user base of Facebook could challenge their reserve currency status. In the United States, it had a combination effect of furthering some work by the Federal Reserve a number of pilot projects, but it also I think created this current political divide.
I think some of the current political divide is is somewhat naive. I think some of it is understandable. Why do I say it's understandable. Well, since the end of World War Two, the economic system that emerged after that is one that has been highly dominated by the United States, and that domination has brought a lot of advantages to the United States. I would argue it's also brought advantages to the world. And maybe let me take a moment and
just say what that is, because then I want to explain why. I
think that explains where we are today. So in the post war period, the United States emerged as having the dominant reserve currency, but not only that, the dominant institutions that supported the United States as reserve currency, the dominant capital markets, the dominant global banks, the dominant central bank, and the dominant system of market regulation as amplified by the Federal Reserve and its regulatory efforts of banks, and of course market regulators like the CFTC and the SEC.
The benefit of that is then that the world needs to hold dollars, whether it's to hold them to as a stable store of value, whether it's to hold them to pay a debt service on international lending, whether it's to buy the world's commodities, most of which are priced in dollars, mostly important once priced in dollars, And so the dollar is an important component of that post
World War two financial system the United States. It's called the exorbitant privilege by our friends in Europe, referring to the dollar's ability to issue debt in the world needing to hold that debt, which allows the United States to support its
way of life very successfully. But I would argue that yes, the United States has benefit, but so is the world because I think the last thirty years of what we call globalization, during which time more people have risen out of poverty around the world than ever before in human history would not have happened if there was not a state currency as a store of value and a means of transacting around the globe at a time where a lot of movie money has
moved from the wealthy North to the underdeveloped South and therefore helped a lot of countries move themselves from the lowest ranks of poverty. So I would argue that the dollar has been net good. Now there's been as many critics of sanctions policy and a lot of other elements of the dollar. We could spend hours getting into that, and I don't deny those concerns. That's why I say
net positive, all right. The reason I went through all of this, Tony, is because if you put yourself in the shoes of the current generation of leadership of the United States financial system, including its regulators in Washington, you can understand why they're reluctant to part with a system that has served so well. It has served the country well, but has also served themselves well. Any of our leaders are somewhat septagenarian, and I say that impartially across
the you know, across the political divide. They grew up in a world of past book savings, accounts and branch banking and check writing to pay bills, and for them, a new architecture of money can only be a threat to what they know. And so I've been a critic of some of the recent work of the Financial Stability of Sorry of the FSOC, the Financial Stability Oversight Counts on which I served during my time in Washington, for conflating financial
stability with preserving the status quo. And what I see a lot in Washington right now is in order to preserve in their minds financial stability, it means protecting everything that they know and love and everything that they've learned. And it reminds me of that old quote by the author of The Hitchhiker's Guide to the Galaxy who said, in life, whatever comes about before you turn thirty five is new, and it's cool, and it could very well be the source
of a lifetime's career. But anything that comes about after you turn thirty five is dangerous. It's suspect, and it needs to be suppressed. And I think you've got some of that going on right now in American leadership, both in the public sector, in the private sector, in the financial community, of seeing a new architecture of finances can only be a threat to the old system, and it truly is. Crypto is much more than just bitcoin at
seventy three thousand dollars. It's much more than just some new, funky tradable new asset class. It really is a new architecture of value. It's a digital network based architecture of value as opposed to what we've known in human history for the last four hundred years and what America has dominated for the last seventy
years, and that is a balance sheet based system of value. Right my retirement, whenever I've amassed in this world, and my net worth is actually not stacks of one hundred dollars bills in Fidelities vaults or JP Morgan's vault or Bank of America's vault. It's actually ioused from those financial institutions. And that's the current architecture of money. Ninety percent of all money is basically bank balance
sheet ioused, with only about ten percent being cash. We're moving to a new architecture, an architecture of recording values on digital networks, whether it be distributed ledger systems or different blockchains. And I think that for many in leadership they see that as a threat to everything they know, and therefore it needs to be at least ignored at first. And now I think some you know, fairly obvious efforts that outright suppression or if you can't suppress it, let's
tax it to death. And I think the United States is in this somewhat understandable but disappointing course of conflating financial stability with hanging on for dear life to the status quo. And I hope that Winston Churchill's adage about Americans is true that we always do the right thing after trying all the alternatives, and right
now we seem to be trying the alternatives. Eventually, this innovation is not going away, and I think the United States will come back to being a leader, not only in the private sector, where we are a leader, but also in the public sector as well. The biggest disappointment of what we're doing right now is actually not so much the regulatory indifferent hostility to digital asset innovation. The biggest disappointment is the lack of leadership, a lack of American
leadership around the globe to set regulatory standards. Proud to do this, you know, thirty years ago, when the first wave of the Internet came about the Internet of Information, the United actually set the global standards with our do no harm approach. A Republican Congress under Nu Gingridge and a Democratic White House under Bill Clinton came together and basically came up with a system that said, the official sector is not going to suppress this innovation. We're going to let
it grow and see what happens. And the rest of the world adopted that same approach, for the most part, the closed societies of the world to appropriate the appropriate the Internet for their own use, and the democracy stood up and said, no, this is going to be an open architecture. Sadly, that same leadership is not present this time around. As we're now embarking on an Internet of value. The United States is not setting a leadership standard.
In fact, most of the world is rejecting the crypto hostile approach of the United States. Right now, we're really a global outlier, our official sector, you know, resistance to this a global outlier. Now. As I said, I think it's understandable because of our successful history in the old architecture, but that's not going to see us through in a new architecture. We've got to, you know, put our big boy pants on, get back in the game, both in the in the in the private sector where
we are in the game, but also in the public sector. And I think, quite frankly, and I don't mean to sound immodest, but the work we did at the CFTC five years ago demonstrates that US regulators can engage with crypto successfully. And I think that I would urge the current regulatory class in Washington to follow the lead of the CFTC back from twenty seventeen to twenty
twenty. Yeah, and Chris, I remember last time we spoke, we had to discussed some of the pilots and testing that were being done by private sector folks along with the FED and so forth. And you guys have been advising different folks. Any updates on pilots and anything that looks promising, I'm not sure how much you can share there. Hi, everyone, part of the interruption. I'm Tony Edward, the founder and host of the Thinking Crypto
podcast. I have a YOUG favor to ask you. If you haven't subscribed as yet on YouTube or the podcast platforms, Hit the subscribe button, hit the thumbs up button, hit the notification bell on the YouTube platform and on Spotify or Apple or wherever you get your podcasts, please leave a five style rating and review. It supports the podcast. It allows me to bring great quality content to you. Thank you for your support, and I'll let you
get back to the content. Yeah. So, we at the Digital Dollar Project tend to keep close to our chest our pilot work until we formally announce it and publish a white paper. We're not you know, we're a five
o'h one C three. We're a nonprofit. We're non partisan, and unlike a commercial actor that may want to you know, generate some buzz from work they're doing before it's announced, our partners, which tend to be some of the more important US commercial actors preserve, prefer to conduct the pilots and generate the learnings from the pilots and announce them. And we're not in the business of saying that every pilot we do is actually going to be a proof of
concept for some use of a digital dollar. Some of our pilots prove limitations or shortcomings of that. So it's important that we do that. I will, as probably some of your listeners know, we have done a number of I think very important pilots, both on the wholesale side and on the retail side of what a center bak digital currency could do, how it can advance the dollar. We did a very important experiment for a retail digital dollar last
year showing how it can be used in global remittances. The United States to the Philippines is one of the most active remittance corridors in the world, and sadly, many of those Filipinos living and working in the United States that when they send money home sometimes pay as much as seven to seventeen percent to send money home, and it takes days and often lands up in small regional banks
in the Philippines that may be there today and may be gone tomorrow. And we demonstrated working with the Western Union Company, that a digital dollar could speed that to from days to minutes and could lower costs down to a few percentage
points from where they are. And so that's one very important use. The dollar is one of the world's most important remittance currency, and taking some of the friction and time and loss of time, latency and risk out of that would be a tremendous usage and would further the dollar's use for remittance, therefore furthering the dollars use in global trade. We do have a very active twenty twenty four pilot project agenda, and I ask your listeners to follow us at
Digital Dollar project dot org for news of our work. But we do have a very very active twenty twenty four agenda with upcoming pilots and things that you're testing. Is there any use of AI being in corporated or is it too early or you know, not a non starter right now because we're still trying to figure out the blockchain aspect of it. Yeah, so, so you know what I'll say. Right now, we have talked to a number of players about using AI in a pilot, and I invite any of your listeners
who are focused on that issue to approach us. We would very much like to craft a really well thought out pilot using AI in connection with a US digital currency and would love to explore that with the right partners. We have a number of ongoing conversations. I'd love to have more conversations with folks that
have been thoughtful about this. Any thoughts on you know, I guess maybe it's a it's a really it's a question I asked you earlier that maybe we will see some action on the US side, when you know, maybe a handful of countries decide to go live. Let's say Europe or even the UK, they launched their digital pound or digital euro, and then all of a sudden, Russia launches their digital ruble, and you know, and they start to get more market penetration. Do you think that will light a fire here
for some of the folks in DC. Yeah, I think there's there'll be a number of potential catalysts for that. I think certainly that a successful launch of the digital euro would do that. I think a successful launch of a digital pound would do that. But I think there's something that people aren't anticipating that could actually be even more likely to generate that, and that would be China's providing a white label digital currency for countries here in the Western hemisphere.
It would not surprise me to see countries like Venezuela announce a digital boulevar and when in fact, what that is is a white label version of China's digital currency directly connected to the People's Bank of China, which would make those transactions relatively sanctioned proof. You know, it's great to have sanctions against your allies,
but it's sanctioned power against your opponents that you really need. And if those opponents become basically integrated into China's digital U want, that's going to be a major economic power play on the globe, and I wouldn't be surprised to see that before the end of the decade. I think there's another element to this that also people aren't thinking about. If you think about the relationship that
exists today in the analog world between paper dollars and bank deposits. As I said before, ninety percent of the quote unquote money in circulation is bank credit is bank IOUs, not credit, but bank iouse right. You know what I have. The cash in my pocket are obligations of the federal government.
But what's in my bank account is an obligation of a financial institution. It's it's not a hard argument to make that the reason why people are willing to deposit their money in the bank is because they know that if there's a crisis and there's any concerns about that bank's ability to redeem their money, they can go to the ATM and take their money out in cash. They can convert
it from a bank liability to a sovereign liability. Well, if we in a digital future, if there's only non sovereign digital currency, if there's only say stable coins based on the dollar, and there's some concern about that stabilization mechanism, there's some concern about that issuer, that is, stable coins break the peg to the dollar. As this happened not just with algorithmic programmable stable
coins but with others as well. Where do they go because those stable coin operators have no ATMs if you want to convert from a stable coin to a sovereign instrument in a crisis, if your only option is to go to a digital euro, to go to a digital u wan, that's where you're going to go if you can't go to a sovereign digital dollar from your stable coin in a crisis. And so I think stable coin operators should be the biggest
supporters of a digital currency because it provides confidence. I'm going to put you know, ninety percent of my value or you know, I'm gonna put some percentage of my value in your stable coin, and I'm gonna trust you, and i'm gonna believe you, and I'm gonna have confidence. But the moment my confidence runs out, I'm actually gonna feel a lot better knowing I can go to a CBDC, and I feel even better knowing I go to my national CBDC, the dollar and not have to go to a digital Europe.
So I think the success of stable coins is actually going to lead to demand for CBDC. I got to say that's a great point because we've seen just even this past bear market, like USDC depegged a couple of times, Tether has deepegged, and I can imagine people, you know, there's gonna be situations that pop up over time that people are gonna want to get out. And to your point, in a digital world, I want to go over
to some sort of federal controlled currents digital currency. It will be ideal to have the US digital dollar to go to, and you know, we could engineer that rate. Show right, in the same way that the money is bank money, ten percent is cash that hasn't stopped the development of banking, right, It hasn't stopped the development. In fact, I would say once again that the ten percent is made the ninety possible. Yeah, and I think in a in a in a in a digital future, I think,
you know, a similar logic could very well prevail. If we see success in stable coins. It may actually drive to the US government wanting to issue a digital sovereign instrument to support people willing to place value, you know, in non sovereign digital networks of value. I have a follow up question on
that. China, let's say white labeled digital currency. I don't know how much you can share there or what the full details are, but would it be it's their blockchain and their centralized blockchain, if you want to call it that, and they're allowing you on maybe on a subnet or a private ledger to build your digital currency. Let's say you're Venezuela. Is that kind of the model? Well, so it's very hard to know exactly, you know, in a close society like China have that model. Some of this is
my own conclusion. I had the privilege of serving on a Hoover Institute's study that took a year to study the digital u on an issue to report to the Biden administration, which is publicly available on the Hoover Institute's website. But it was a year's worth of work. Has spent a lot of time studying the digital UoN and the more and more that I heard Chinese officials who spoke to our group adamantly disclaim any global intentions for the Digital UoN the more I
was reminded of Shakespeare's quote he does protest too much. The more they said, oh, no, we have no global ambitions made me realize they absolutely have global ambitions and it would not be hard for them to use this. And guess what their biggest selling argument would be for a white label version of the Digital Uan. The biggest selling argument will be, we provide your regime
with full surveillance and censorship capability over your citizens. And you know, somebody said to me, a fairly senior person in Washington said to me, oh, who would want that? And I thought, there's a lot of regimes around the world that are going to say, ship it in. We want to surveil our people. I mean, you know, there's many close societies that you know, fear their people having cash and would love to use that.
And so the Chinese model of CBDC is it's quite sophisticated. Our report reports on its technical sophistication, but it also is a model for surveillance and censorship. And that's why I say to my colleagues on the right side of the aisle. You are not wrong to be concerned about this, but you are mistaken if you believe that that's the only model possible. We're Americans,
after all. Let's design the other model, the freedom coin model. Let's design systems, digital systems of value for both the private sector and the public sector. In fact, let's insist that anything that references the dollar, whether it's a CBDC or a stable coin, operate on open architectures where people can assure themselves that they're not being surveilled, they're not being censored, they're not being controlled. That's the American way. That's what we ought to do.
We ought to see this as a challenge to overcome, not as a not the Chinese model is the only way to go, and therefore we need to We need to reject the future digital systems of value and leave and live in the past. Analog systems of value. An analog world is not an analog dollar is not going to serve the United States will for very long. We need to launch into the future in the same way that we you know, we we were unafraid to go to the moon, even though it hadn't been
done before. Even though we were unafraid to stand up for an open architecture of an Internet of of information, we need to once again, you know, take our values out of the closet and and you know, and and wrap them around our neck and and and and appear in every global standard setting body and insist that the Internet of value be one reflects those those wonderful privileges and rights uh under the under the First Amendment and the Bill of Rights.
Absolutely, Chris, I want to get your thoughts on the big qin's body taps. Those have been launched a huge Wall Street firm such as black Rock and Fidelity of issue them. The inflows have been incredible, and it seems a bitcoin is entering the mainstream into retirement accounts and so forth. What are your thoughts on how it's been that going. I'm cheering up and down.
I mean, honestly, I take some pride in this because I think it is it reflects a continuum of work that we started at the CFTC in twenty seventeen, first with the launch of LAMB CFTC that put out some of the very put out the first primers on cryptocurrency ever in the United States by the US government, and that allowed us to be ready at the end of the
year when bitcoin futures came about. And it was really the launch of bitcoin futures that created the first world's first, not just the United States, the world's first regulated market for any type of crypto. That gave the CFDC the regulatory knowledge and experience regulating the market. Now five years later, the market is deep, it's liquid, it's transparent, and it's well regulated. But for it, I don't think the SEC would have been able, would have
found its way to green lighting the ETF. So I think that what we're seeing from the SEC in many ways reflects the early work we did, so I take a lot of pride in this. I also think that the success of this reflects what I think all of us knew. There's tremendous demand both at the wholesale level, at the institutional level, and at the retail level
amongst Americans and people around the world for well regulated markets. Right. It's what makes this exciting is it's not only an exciting product, but it's now traded in the world's deepest, liquid and best regulated markets in the world. So I think this is a tremendous success. I think it's long overdue, but it's there. It's successful, and as you say, in little over six weeks, the Bitcoin ETF has surpassed ten billion dollars. It took the
previously most successful ETF Gold two years to get to that level. And I don't think that we're going to stop anywhere soon. So I think this is very successful. And look what we said back in twenty seventeen when there were those here in the United States and many abroad that were critical of the CFTC, including many in journalism that were critical of us, including many in the trade fi industry that took up full page ads in the Wall Street Journal challenging
the CFTC not to go forward with bitcoin futures. What we felt then and I feel today is it's not for regulators to determine the legitimacy of a lawful product. That's for the people's representatives in Congress to do. Congress is going to ban UH an instrument like that, going well, you know, God bless them, that's there. That's their lawful job, and they'll face the voters and the consequences of doing so. But it's only for them to decide.
It's not for regulators to legitimize or deal legitimy something that is lawful. The job for regulators is to put a working regulatory structure around it, with clear rules, in the case of the CFDC, clear principles, and to bring a degree of thoughtful, intelligent regulation to the marketplace so that that that good people of goodwill can trade it and trade it relying on that it's on a built on a solid foundation, that the marketplace is built on a solid
foundation. That's what we did at the CFTC, proving that we can regulators can engage with this asset class, and the proof is there, and now it's been reinforced by the Bitcoin etf And as we found when I was at the CFTC, once we approved bitcoin futures, there was immediate demand for ethereum futures, and the regulators were able to gain experience with one decentralized acid class that gave them the ability to eventually green light ethereum futures eighteen months later.
I think the same will take place at the SEC. I don't think it's going to be eighteen months, but I don't think it's going to be six months either. I mean, I think it's going to take time, but the direction has been set. I think the demand is there, and the world is looking to the US to not only build these markets, but to build solid regulatory frameworks around the world's biggest pools of capital and the world's biggest
set of retirement investment money, and the biggest set of institutional money. So I think it's an important development. I think, like our green lighting and Bitcoin Futures launch, a Bitcoin ETFs is going to be one of those milestones on the highway to a digital Internet of value. Yeah. Absolutely, And you guys did great work in setting the foundation for all of these things,
be chause you know there's still the battle between the two agencies. You know, just recently, Rosson Venam, chair current chair of the CFTC, was talking about you know, he's unsure what the SEC is doing with e theorem while the CFDC views as a commodity. So, man, I'm hoping Congress can act and put all these things to rest. I'm kind of tired of it, but you know that we have to go to the courts and we have to battle this out, and it's it's kind of ridiculous at this point.
Well, I agree with you, but let me say this, thank goodness for the CFTC the past five or six years, because if the CFDC were not there holding the flame for innovation, we would only have the SEC. Yeah, and it's and it's and it's relative, you know, indifferent slash UH antipathy slash hostility to digital asset innovation. You know, our founders of the United States right a room, they very much believed in divided government.
They felt that if government were arguing with itself, then our liberties were safe. Uh. In a in a similar kind of way that's played out between the SEC and the CFTC. I mean, although we're all I agree with you, many people are sick of it, but but for it, we might have had a majority of view coming out of the SEC dominating their approach to this. I think the CFTC has held and I tipped my hat
to Chairman Venom. I think he's been very principled. I think he has maintained his position from the beginning that Congress needs to act, and it does. But while it's what we're waiting for it to act, he hasn't backed off the CFTC's UH determination to build a smart, understandable regulatory regime around digital commodities uh and and how they trade in derivative markets. So I I I think that we should all we should all be grateful that c FDC has held
the torch over the past few years. Yeah, and you know, Chris, it's funny. I'm appreciating the checks and balances much more, right, And to your point that we have the digital branch, you have these different agencies and and say no, you know, we disagree, and maybe that's it's not a bug, but it's a feature, right, that it's there to avoid the rule the king to just make all the decisions for us.
But we can have a voice. And you're right to tip your head to the courts as well, because I think they've played a very very important role to get at us through this period of time. And you know, life
is like a conveyor belt. With great respect to the septagenarians that are running things and their way of thinking, you know, the eventually the conveyor belt, they will fall off of it. And a newer generation, a generation that grew up in a networked world, to whom network effects and the value of global networks is intuitively understandable, and they are going to be much less resistant to digital networks and money. So I'm very optimistic about the next generation
of leadership. However, I want them I you know, as someone of that older cohort, but who's less resistant to this innovation, who's actually much more positive on this innovation. I say to younger people, but don't leave your values at the door. Don't simply say the value of lower friction,
of of of faster times of greater access are enough. We also need to think about the values of economic independence, of economic liberty, of of of free markets and free market capitalism are played out in the values of these systems as well. Yeah, well said now crypto to your point, uh, free markets, And and we got elections coming up. We're seeing pro crypto candidates are taking some victories, and crypto is a ballid issue. While it may not be number one, two, three, or even four, it's
up there. And some some of these crypto voters a single issue voters. And then you have like John Deaton running against Elizabeth Warren, who has put up the banner that she's anti crypto. So I would love to get your thoughts on that. And and you know, you got political candidates as well coming out with their support for crypto. What do you think about all these things? Well, a couple of things. First of all, I don't think the anti crypto banner is going to work at all with young people.
I don't think it's going to work with minorities. I don't think it's going to work with a lot of people that that. I think the anti crypto people think it might. I think it might work with with seniors, but that's not a long term value proposition. That's That's one thing. The second thing is I think, you know, the one thing I learned five years
in Washington is that money talks and everything else walks. And I think the political class has been shocked to see how quickly ninety million dollars has been assembled and deployed and deployed with real targeting, you know, and it's all. You know, We've got every member of the lower House of Congress running for reelection this November, a third of the Senate, and both presidential candidates. It you know, it's this is going to be a several billion dollar election
cycle, and they're going to be looking for every dollar they can. I don't know who's spending the anti crypto dollars, but a lot of people are spending the pro crypto dollars. So I think it's going to be I think it is an issue. I think it's it's it's a bit of a sleeper issue, but I think it's it's it's coming out of hibernation. People are seeing its impact, and I think it's going to be a big issue.
And and and and as proof of that, you see candidate Trump now moving from a uh, sort of indifferent to I don't understand it role, to where he's now openly talking about it. I don't think he's quite found his voice on the subject yet, but I think that, uh what and what that means. What that says to me is there is a recognition that there's voters up for grabs, there's there's financial resources to be gained, and you know, we're up and running for the twenty twenty four elections right now.
Both candidates are now established. The primaries are over, we're in the general election. As of last night, the primaries are over, or they're not over. But the Republicans and Democrats have achieved the number of delegates to be their party's nominees. So effectively, we're beyond the prime, We're past primary season, we're now in the general election season. And I think crypto is going to be a major issue at the congressional level at some key Senate races.
Two key senators Elizabeth Warren and Shared Brown, they'll both express antagonists to crypto, are both in tight races, especially the Ohio race, And that money is being deployed like a scalpel, not like a bazukah. And so I think this it's going to play a major issue, and time is on that side, because this is a technology that young people, intuitively understand,
are not afraid of. If they don't, you know, have bought into the crypto craze, they're not afraid of it because it's just a new system of network and you know what, they don't like the traditional banking system anyway. I mean, take a young you know, take a young twenty year old into a branch bank and they kind of look around and say, what is this place? You know? And and of course they should because they expect to be able to have the same ability to transfer funds that they do
with text messages. And the technology is there, It's got a long way to go. We're still in the early early innings, but it makes intuitive sense to young people. Do you think John Deaton can unsee Elizabeth Warren? I think John Deaton's going to make this a very very interesting race. I just finished this book, and if you haven't read it, and if your listeners haven't read it, I highly recommend it. It's actually a fantastic It's
an amazing story. It's an amazing story of human resilience and courage. I mean, he really he had had a hard childhood and he rose above it. He used to be commended, you know, and he did it, I think, in many ways, facing both extraordinary challenges and in some ways the same life challenges that all of us face. So it's a good read. I recommend it. I come away from reading that book with a great deal of admiration for John Deaton. I'll be actually attending up program with him
in a couple of weeks. I'm looking forward to sharing with him some of my thoughts on his books and getting a signed copy from him, for sure. Chris, always a pleasure, always insightful information, and looking forward to your future updates around the Digital Dollar Project. I'll link to that in the description, But thank you for joining me and Tony, thank you for your great work and for being just a voice of thoughtfulness and intelligence on this subject
from the very beginning. You're you're one of the siren voices out there that we all listen to. So thank you, Tony. Book Book Bank bo