So I wanted to take a few minutes today to outline what I see as the major political economy issues, raised by cbdc's. And I can summarize By the broader Trend here as a consolidation of bank and state, this is a consolidation of all levels of banking with State regulation and oversight. And I will end my presentation by explaining how Bitcoin offers an adult and alternative to this Growing System Of Control. First, I want to start by, you know, Cutting through some of the narrative around cbdc's. So this is a quote, you know, many here will be familiar with president of the Minnesota Federal Reserve Neel. Kashkari, who said last year? I keep asking anybody anybody at the fed or outside the FED to explain to me what problem this meaning of CBT? See Is solving, and there have been a number of purported benefits presented, as you know, Innovative that cbdc's offer that no other technology does. You know, first is is real-time settlement. The contention that our financial system is Antiquated and slow, but it doesn't hold up to scrutiny because there are other non CPT You see implementations that already exist that offer the same benefit for example fed now which is being rolled out this year and the Bitcoin lightning Network as the non-state alternative second is the benefit of financial inclusion, the billion or so, people around the world who don't have access to the existing banking system but the Obstacles to these people creating accounts with the banking system are precisely the identity verification requirements around Banking and Mel kyc and generally low income. They can't afford to pay to maintain minimum deposits, or pay banking fees and neither of these problems are problems. That cbc's will solve. In fact they expand The orbit of identity verification requirements that is already in place. I've also heard, you know, some allude to cdc's being a mechanism for wealth redistribution or you know, increasing socio-economic equality and that is emphatically. Not the case I mean cdc's are just another digital form of Base money. They you know there is no re distributive. Project implicit in any cities, you roll out anywhere in the world. What they do do well though is that they provide a system to accelerate the full surveillance of financial transactions. So ID verification were CBDC usage is a design requirement, in every  implementation. This is not something that that Regulators or private actors, building and implementing CBDC architectures, will will skip on.

A fact is a benefit for the state that cbc's offer the ability to individually Target monetary policies and other benefit of cbc's. So they're fully programmable money, meaning that deposits and spend can be controlled The individual level and even out the Logan level, this actually represents the full merger of fiscal policy, monetary policy and policing. And that's the theme of the conversation. Coming coming up here, another big motivator for States and implementing cdc's is capturing tax revenue from the quote-unquote informal economy. So those who are not included in the banking system transact Marilee and physical cash. Many of those transactions are not currently taxed and so by in effect replacing physical cash which is what cbc's will eventually do and requiring that ID verification states do intend to capture that additional tax revenue and then finally, for the brics countries The incentive to build a CBC network is that they are, you know, able to create a alternative to the US dominated Global Financial system. And this has become much more urgent after the United States froze, Afghanistan's, and Russia, Sovereign reserves over the past few years. It's made clear to Sovereign actors that there. FX reserves are not safe if they're not directly custody that money has become fully politicized. And so what is happening is that different political monetary systems are being built out in response to the political us dominated Global monetary system. As chairman Jiang, Carlo mentioned, cbc's are already very Advanced and implementation in countries around the world. This process of developing and launching cdc's is happening entirely outside of the democratic process and without feedback. From the populations of any country in which they are being implemented and where we have pilot Projects of cbc's in the field. For example, in China, Nigeria the Bahamas Eastern Caribbean. It's clear that the people don't want to use them, they see them as surveillance coins. They see them as attempts to Corral people into the use of Fiat currencies, that many of them don't want to use. And so there is a coercive element to the implementation. Cdc's, that is not being taken into account at all in these debates at the state level. And so I want to take a step back and, you know, see what he sees or just one symptom of a broader problem that I see is the growth of the surveillance State. This this is a kind of momentum where in the state grows, grows the amount of data that it Lect on ordinary people with with basically very little in the form of a countervailing, push from civil society. And so we've seen for example that you know the United States intelligence agency network has grown dramatically it. Now costs the taxpayer almost 90 billion dollars a year Derek This is just at the federal level, most Americans have never heard of most of these agencies. And in fact, it's unclear, really how many total federal agencies? There are. There is no one authoritative source, that spells out all of the US federal agencies and their mandates. Their various sources depending on how agency is the There is no standard definition of agency place. The numbers that you know, anywhere from around 62 over 400 and so how can we in fact, understand or rain in abuses of the administrative state? If we can't even document that state in its current state surveillance systems, are poised only to grow cities across the world. The United States. Exception are are implementing more stringent surveillance surveillance practices. There's a lot of funding to do this. Some of the infrastructure Bill funding is doing this but then also you know Municipal and state Appropriations are doing this. This points to the broader Trend that's been identified by some historians as surveillance capitalism sir. Valence capitalism is a accelerating surveillance economy in which both private actors and state actors stand to benefit from growing, surveillance of the general population. In the case, of the state surveillance of Ford's control, the ability to influence behavior at scale, in the case of the private sector, that type of Behavioral influence of Ford's profit. And so in the words of criminal law scholar, Andrew Guthrie Ferguson, what is different about the system of surveillance today from the type of surveillance that say is afforded law enforcement in the constitution is its scope and persistence. It is automated, it is accelerating, it is accurate it. Accumulates data Aggregates that data and then actualize has Data. And of course, it is persistent pervasive and profitable. So this this brings us to a discussion of a ml K YC which was brought up in the conversation earlier and my contention here is that a ml K YC is basically a global system of warrantless surveillance that has in effect made constitutional protections like The subpoena process irrelevant. And here I actually quote chairman Giancarlo from your book you correctly. Point out. Doubt that Fourth Amendment. Privacy protections have been eroded considerably since the Attacks of September 11 2001. In fact, no account-based. Transactions are truly private because in every case they require a personal identity as a prerequisite step, and this, of course, will be a core component of CBC infrastructures. This is a quote from the US Federal reserve's report or white paper on cbc's that was published in January of last year. So exactly, One year ago, NEC BDC intermediary would need to verify the identity of a person accessing CPC just as Banks and other financial institutions currently verify the identities of their customers. So, you know, this, this brought to my mind a quote from Timothy met. One of the cypherpunks who wrote in the IDs that the Four Horsemen of the invoke ellipse or in fuck ellipse will be, will be used to justify doing away with privacy online. These are terrorists, pedophiles drug dealers and money launderers, and we're seeing that in action today. This is just a short list of US, based am L laws. Starting with the 1970 Bank, secrecy Act. Act, there's basically a new am L log every few years. The 2001 Patriot Act was perhaps the most significant of these in recent memory. And we've also seen since 1989, the establishment of the financial action task force, which is a Global Network of financial police, fincen. And the US Treasury Office of Intelligence and Analysis. The overall Trends here are that reporting threshold for financial transactions, are being continually lowered these government and para government organizations are not subject to the data protection laws. That commercial actors are and so, they maintain, you know, profiles on billions of people without any of the imperative to delete that data to, you know, make Citizens aware. That that As being collected to modify that data if it's inaccurate. And then of course, they all share information between one. Another one of the results commercially of AML laws is that anywhere between thirty percent and 65 percent of decline, transactions globally are in fact, legitimate and so that results in up to 640 billion dollars in Lost Revenue, not to mention the hassle that Three people have to go through to unblock cards and bank accounts that have been frozen due to some fraud algorithm being tripped. A question that is rarely asked is how effective is anti-money laundering legislation? In 2018? Ronald poll did a comprehensive study of the effectiveness of AML laws worldwide and came to the conclusion that


At less than Percent is the impact that AML laws actually have on criminal finances compliance costs. However, exceed those recovered criminal funds more than 100 times over and Banks taxpayers and ordinary citizens are penalized more than criminal Enterprises. And so as with all surveillance surveillance its surveillance for those who lack the power to circumvent this ones, This is a quote, from the former director of europol. Rob Wayne bright also from 2018, professional money launderers, and we have identified four hundred of the top top level in Europe are running billions of illegal drug and other criminal profits through the banking system with a 99% success rate. So again, we must ask who are these laws for? This is a short history of US Government insistence on exceptional access which is basically the requirement that encryption back doors, be put in services and products used by Ordinary People. You know, obviously the Snowden Revelations put a lot of this into mainstream conversation but it's important to note that none of the programs identified by Edward Snowden have actually been formally sunset. As a result of the public outcry, all of this, you know whether it's a secret NSA, keep provisioning services and Recovery Services warrantless surveillance under Section 702 of fisa prism Upstream. All of these are ongoing programs and and not checked by really any Democratic body. Most recently, the treasury Department's office of Intelligence analysis was was revealed to be basically illegally rifling through the Private Financial records of millions of US citizens which it was collecting illegally from fincen. The NSA was also accessing that data illegally. There was a brief outcry about this but this got caught in the bureaucratic turf war between the treasury. Oia and fincen, both of which are treasury Department's. There was a politicized aspect to this battle and so it just kind of quietly went away. Just a couple of days ago, the Wall Street Journal broke, a story that the Arizona attorney general's office created a program called track to basically, just collect data on money transfers from Western Union with the full collaboration of Western Union. 150 million money transfers are stored in this database also completely illegal didn't go through the subpoena process. But again we'll see if there are any consequences for this. And so what this points do is really the incompatibility of a surveillance state with Democratic governance. And this, this incompatibility was recognized by none other than former director of the Bi James Comey who was very upset by the fact that end-to-end encrypted messaging apps existed that the FB I could not access and he explicitly said in 2015, that that's a problem with democracy. And so what we're seeing is a kind of a consolidation by the state away from democratic governance. The expectation, continued expectation of democratic governance on the part of the people and these Incommensurate point of views are not in dialogue with one another.

So it in the context of banking and cbc's, this consolidation of State Authority is represented, most clearly by the blurring of the distinction between central and Commercial Banks. So central banks have commitments to backstopping customer deposits. And so if central banks are put in competition with commercial banks for deposits, Modeling has shown, for example, in a paper by the Philadelphia fed, that consumers will overwhelmingly prefer, the central banks and will gravitate to a central banks over time, this is why most CDC designs, have this fig Leaf of separation between central and Commercial Banks where they are wholesale cdc's and not retail cbc's. However, in practice this really is Nothing more than a fig Leaf because we could we could we get a maybe? Yeah. All right, because ultimately the retail cvtc accounts that will be managed by local banks will still be subject to Central Bank oversight and targeted monetary policy. So, you know, five thousand dollars is about the median checking account balance in the United States CBC account caps at less than this amount would certainly be required to avoid significantly cannibalizing Commercial Bank deposits. This this was already put in place by the Central Bank of the Bahamas and their sand dollar initiative. Identity verified CBC accounts are capped at five thousand dollars annual balance and non identity verified accounts are capped at 500. So that's that's quite a low amount and again, raises questions about the future of Commercial, Banking undersea, BDC regimes. And then, you know, finally we get to this question of, you know, whether central banks are in fact independent at all, the 80s and 90s were kind of the high point of Central Bank, Independence globally, but since the that time and particularly, since the the great financial crisis central banks implicit mandate to maintain economic stability, has resulted in more direct political control over its functions. So, you know, things like bailouts targeted monetary policy. So the different distributional impacts of monetary policy. The Sure, on central banks to be more transparent about their goals and objectives, all of that introduces these are all political dimensions of Central Banking. And in fact, maintaining the stability of the financial system as a whole is often at odds with the imperative to maintain price stability or control inflation, which is another Mandate of central banks. And so, how that trade-off is made is a political decision

So I want to end with this metaphor of, you know, the airport as a paradigm for the emerging Bank State. The airport is a quintessential border institution as the world has internationalized and state capacity is grown the, this difference between inside and outside. Local and foreign has collapsed into a permanent State familiar. Other Is the Vigilant containment that is not hospitality and never become solidarity. The airport is a space of both law, and lawlessness in which the distinction between those two is often erased. And so here, I want to bring in philosopher, Giorgio agamben who has theorized extensively the Lawless law. That characterizes the state of exception, the state of exception is

You can think of it as akin to the Roman Eustis IAM which was generally proclaimed during the state of tumultuous when the Roman state was threatened from either without or within the Eustis IAM was the suspension of law that enabled. The Roman state to raise an army and confront whatever the threat was this. So this was you know a zone of anomie in the words of AG on been in which All legal determinations are deactivated. And it also functions, as a threshold of indeterminacy between democracy and absolutism and the threshold of indifference between enemy and law. In other words, if the law encompasses everything or nothing, then the distinction between law and lawlessness is meaningless. And so why Bitcoin It is virtually impossible to reverse the momentum of State consolidation of power as such. So the state will not constrain itself. The only long-term checks on state power emerge from a civil society, whose Powers significant enough that the state fears it. This is the thesis of darrone, a chomo blue and James Robinson to historians one at MIT, one at the University of Chicago, their book. The narrow Corridor, they they suggest that the only thing that preserves Liberty in the long run is something called the Red Queen effect, and that is an analogy taken from Alice in Wonderland, where Alice races the red queen, and the Red Queen represents the the state Alice represent society. And this constant race, the maintaining of parity in the capacities between State and Society Is what ensures Liberty? So, the universalization of end-to-end encryption and a direct ownership model of censorship resistant. Digital Assets in this case in the case of the bank state that is what research civil societies, power in the face of of that growing State consolidation of power. And so I would suggest here that Bitcoins most important properties. Is precisely its statelessness and it's censorship resistance if mirrors, physical cash and that it is a better asset that can be exchanged directly. Without identity verification. It is a guarantor of individual liberties at the protocol level. There is no one party or set of parties that controls the protocol. It's a complex set of game theoretic conditions that ensure that incentives remain appropriately, distributed, and balanced Bitcoin. For this reason enables direct peer-to-peer transacting using quote unquote self-hosted wallets, basically a digital version of the wallet you carry around in your pocket, and it serves as a monetary DMZ or demilitarized zone for States. So, it represents a non-political alternative to the u.s. controlled and the bricks controlled Financial systems. And Central to this to this Liberatore potential Bitcoin is the fact that it represents a move away from the account model of digital asset. Custody. So anytime we're we're talking about a third party, trusted custodian. We're talking about centralized implementation of public key infrastructure in which some custodian, hold the Private keys that the that determine ownership of an asset Bitcoin is an implementation of decentralized pki. Meaning it represents a direct model of digital asset. Custody the asset is custody by The end-user Who owns their private keys and therefore can operate in a self Sovereign Manner. And so this is critical. Bitcoin has no customers that is why there cannot be a ml K YC requirements for the you Of Bitcoin. It is a tool tools create inclusion as people freely, adopt them not based on top down coercion. And so, ultimately, the takeaway here, is that Liberty is a bottom-up process. And as States, move forward, with implementing cbc's, having a liberty oriented alternative, like Bitcoin will be key to ensuring that a space for Freedom continues to exist.


Not only that was fantastic. I just want to give the mic back to Tomato for a couple minutes because he has to leave and then we Circle back to Chris if there any other question to my existing they're here. Yes. I think it was important to at least go ahead. I thought we were going until 1:15 so I actually have another meeting.

We brought to the fore, some of the discussions today. Yeah. Is lifted a little bit, but if you have something to add, I think you had a perspective on the fund. If you have a couple more minutes, or I had actually prepared a whole discussion of some of the jackals increases increases for a bull, but I guess one last question, to leave with Chris. And of course, one of the areas in which we are working, is Who provide money and we will use in this view, Digital Life World. There are various options. There is, of course, the unpacked trip to acid which we would argue is not money. Does not have a stable store of value. There is the possibility of very well regulated stable points and I agree with you. I don't like the word stable Point either. It's a catch-all for us. We might imagine that with sufficiently clear regulation. We have some sort of wine that is denominated in a monetary unit of account. If we can be redeemed card, any state of the world upon demand. I'm not sure what the business model will be to issue that type of point, but it is a possibility. And then, of course, there is a possibility that commercial Banks get involved and visualize their deposits, which And then be transferred in on blockchain, or on some sort of leisure and there are all sorts of questions about how that man can be developed whether digital version of Commercial Bank deposits, could be transferred to people who are not customers of the issuing Commercial Bank, or whether you need some sort of other arrangement for interoperability and whether that Arrangement might be CPC. So they Visual version of Central Bank Reserves that I act both as an instrument of Terry instrument to settle transactions across different issuers. And as infrastructure to ensure interoperability just as today Central Bank payment, infrastructures allows for interoperability and then of course the next step which is also one that we're interested in is the digitalization of financial assets, c'est bon This equities Commodities and whether those will take off with value, the reasons people that would friction two days off. And if they were to take off and of course, it would need money on the blockchain. Peace. And so, perhaps until now, we become enamored with the idea of paying for coffee with digital money, because we're somewhere, we're all consumers, we all pay for coffee in the morning. That is more the tail wagging. The dog where I did. In fact, if the digital assets really worth to take off they would require additional money for settlement. That would be the dog like the material into the use cases. We could go forth go beyond thinking about the role of CBC and that world ruler cpcs both monitoring instrument and infrastructure to allow for interoperability Just Between the issuer's of money but also between the shores of money and issuers of digital Assets and of course the world that I'd love to debate with you. Unfortunately, I know we're out of time but I just wanted to put those ideas on the table and I do hope to meet you soon and to continue the discussion. It's been fascinating. Thank you very much and I'll see you soon. Thank you so much. Excellent questions and food for thought of the role. So I think I can pass it back to Chris for a moment to me my own, take from the whole discussion. Is that, you know, there's this revolution, it's it's going to happen willy-nilly and a lot of that has already happened. I mean, you have been a regulator these markets. So these things are old some extent and even if people haven't heard about them but in one thing is the future of digital money, which you have, I think nothing else explained, there's a lot of Merit and I think that some of that and the other is the issue of public system, money and especially when the police stick The digital money, you know, with all this privacy rights. I don't know. I know in your book is sort of start with that with the word where, you know, it's really the peer-to-peer concept to others. This freedom is unleashed the internet value. But then, you know, it seems a different Philosophy from the CBD C. So if you, if you want to say a few words about that and what tomorrow's of his last thoughts about the role of the intermediate of it? Really, I think useful. Thank you, big letter, and I want to respond to some of those sorts of yours intimacy. But with reference to two Natalie's I think excellent presentation, much of which I very much agree with that concern about privacy, ultimately it to me is the fight for the future of money. This could move to a digital architecture of value I think can either Be the sun setting of our fundamental freedoms as a free people or hopefully a new beginning. And why do I say that when you think about our constitutional rights freedom of speech? Freedom of assembly, freedom of religion, freedom of privacy, in our own person, in the fourth amendment in a free market economy. What are those freedoms? Other than how we spend our money, right? We speech in In the, in the, in the, in the media we consume in the utterances, we make on Twitter and on Facebook, we assembled by organizations we pay dues to right. We exercise, our freedom of religion or not religion, by organizations, we belong to. And so, if the degree of we already have a set of surveillance and censorship, Is expanded in the new digital era that we've effectively lost those freedoms. That would be freedoms that need Mabel, but I actually think I think Natalie touched upon this itself. There is this technology and she points to Bitcoin in. Certainly I think Bitcoin has censorship resistance built into it has privacy protection built into it. It gives us a vision of how to use this digital technology as a way to stop the trend where on and reverse. Now, I want to point out something this Many, and many out there who say, CBD seabed, private operated digital money good. Well, what we're seeing in the Twitter files proves that just because you Outsource the Public Square, to a private actor, your privacy, maybe more is Right, government will lead on private actors and you can see a bad future. Where government says okay we won't do CDC will allow private actors to operate, stable coins. And then Tell them what the sensor and what the survey and we'll tell them. You can't use that stable coin to fund Planned Parenthood. If it's a right-wing government where you can't use it to fund, right to life of your, a left-wing government. Are you can't buy ammunition so on and so forth. And those private actors aren't governed by the first method. So, one of the arguments, if we get it privacy, right? Is it least. The government is subject to perfect and constitutional protections. The private Hector is not. Now I will tell you that I'd say they're much supportive of a world that we might go to where Bitcoin could be money for all the reasons that we feds. But I would tell you having spent five years in Washington and a lifetime is an approach to pre and post 9/11 World. So I'm not sure governments are moving away from the CBDs or will give that up, okay? I might guess is within 15 years. After the globe. As I said before, we'll be using China Stitch installation--. Teaching cards, my guess is. The eurozone's will be using a digital Euro currency in a my guess is the United States will deploy a CBC whether we like it or not, whatever arguments we have. And so we have been digital dollar project of thought. Look, you can have an outside game or an inside game. Our goal is to get in front of it and to make sure that privacy is Central to the Public's discussion of a CBC. So that when policymakers take up authorizing, it has privacy is Centers of okay one more point. Then I'm sure that we got some thoughts and I don't want to monopolize the conversation. You've already given me a lot of time and I'm grateful for it but I'll say one other thing last week I spent a few days on Capitol Hill with some of the senior policymakers in the new house leadership to put on the other side of the aisle as well and they were all talking about staple coin legislation. And I asked that what pop privacy Provisions? Are you putting in the new stable coin legislation? And uniformly, the answer was we haven't thought about that. Are you kidding me? You're going to allow operators to operate, stable coins, but you're going to allow them to take all that data. You're going to allow them to be told by government with the stable quick can be used for you, haven't thought about privacy. We, the people have not made privacy from Center in this new digital form of money and that's what we're trying to do. With the digital dollar project might think that's got to be part of every conversation. Good future. Twit and probably unlikely one would be one way there are CBDs these because I think that's going to happen no matter how much we may not want it to happen. But also where Bitcoin is not suppressed where Bitcoin exist. We're stable coin operators are required because to ensure privacy and like of censorship. And we're a CBC is subject to the First Amendment. And the only way we get to that world is by making privacy front center and every one of these conversations, thank you. Q. Thank you, Chris. I think they're on the same page. Then there, I would like to give it back to that Elite from momentum and we've never done before with my, but I think this is with them, 100 people and but I'm sure people have to go. So we're gonna spend another few minutes and then closed off. Because just marvelous, I could stay here all day but you know, we have a promising closing on time. So now that you have a few words to say, yeah, I do.

You see I just I don't think it's possible. I could start even precluded the the weaponization of the global banking system and the financial system, as a instrument of not just identity verification, but consistent surveillance. That is already a fade-out complete. That is done. And the CDC will not depart from the assumptions, underlying the existing Financial system which is also one of the reasons that it's Superfluous as an initiative. Like the global banking systems already fully digital, it's fully surveilled. The the main benefits of the CBC at this point, for the state are getting down to that granular programmability of token by token individual. Or by individual transacting. And so I would suggest cbc's are fully lost cause they likely will be implemented in many countries against the will of the people often as a surprise. Like people will hear about them for the first time, when a seat cvtc account is created for them at their bank and then used to say, you know, Implement a negative 2% interest rate to, you know, recover some of the sovereign debt burden. Of that bank. And so people will begin flocking to bitcoin not because they love Bitcoin but simply because it will be the only non-state self Sovereign alternative out. There we all have to leave this through and see it. And Chris is working on this topic. So I think Natalie is working they stopped. And of course it I am a fish working on this topic. I hope you can. First I wanted to thank immensely Chris for joining us. Us and sharing the insides of his book and he's experienced the very deep knowledge about these topics for putting himself into this this fight right gloves off and Natalie for a very important, I think perspective of the risks and and of the need of Awakening of the society. And The demand, we need to ask to regulators and state operators and two miles of for of course, she's he's intelligent and insightful questions. Please share the recording with anybody, you know, because the debate is has to continue. If I can, I'll try to copy the chat and send this to some of the speakers in case I have time to to get back to some of this questions.