{ "episodeId": "SLP614", "speakers": { "stephan": { "name": "Stephan Livera", "role": "host", "tag": "STEPHAN" }, "freddie_new": { "name": "Freddie New", "role": "guest", "tag": "FREDDIE" } }, "segments": [ { "speaker": "stephan", "time": "00:11", "start": 11.17, "text": "Hi everyone, and welcome back to Stephan Livera podcast, brought to you by Bold, the best place to buy your Bitcoin. So for American listeners, go to getbold.io. Now, joining me today for the first time is Freddie New. He is the general counsel over at The Little Car, and from a Bitcoin perspective, he's head of policy at Bitcoin Policy. UK. So Freddie, first of all, welcome to the show." }, { "speaker": "freddie_new", "time": "00:33", "start": 33.3, "text": "Thanks so much, Stefan. like I said, huge honor to be on. I've been a long time fan, so it's kind of weird to be talking to you, but, appreciate the opportunity. Thank you." }, { "speaker": "stephan", "time": "00:42", "start": 41.61, "text": "Yeah, I, I think you're doing some great work, I've seen you're, you know, doing some work out there in terms of advocating for Bitcoin policy and of course, helping people stay up to date on what's going on, in, you know, Bitcoin and regulatory affairs in the UK and, in Europe and these things. So, just take a minute and, you know, give us, give the listeners a background on yourself and who you are, what you're doing in the world of Bitcoin." }, { "speaker": "freddie_new", "time": "01:04", "start": 64.05, "text": "Of course. so, rough background. I started off as, as an M&A lawyer. did a lot of private equity and venture capital work, and also a lot of restructuring and insolvency work during the financial crisis. which is, as you can imagine, was, a lot, very interesting, if a bit hairy. and then about five or six years ago, I moved into the business side of things. So I still practice law, but now in businesses, and those are mainly startup businesses with a slant towards fintech and engineering. so like you said, my, my main job is as general counsel at an electric vehicle company. We make very high-pod, models of, classic cars like the Bentley, Ferrari, Aston Martin DB5. lots of customers in Dubai, coincidentally, as you'd expect. and then also on the side, I, I did a lot of work over a number of years for a, a UK fintech called Curve, and I was, instrumental in assisting to launch their Bitcoin product a few years back. and as part of that, I ended up doing a large amount of advocacy and feedback for government consultations in the UK. we're gonna get into this during the conversation, but there's a, we are very much behind a lot of the rest of the world in our understanding of Bitcoin. and there's a huge level of confusion here between Bitcoin and, and crypto. please, Stephan, let me know if you'd prefer me not to swear, and I won't use the colloquial term for, for other cryptos, if, Don't want me to. and during part of that, that process, I came to realize that there was no one really in the UK speaking solely for Bitcoin. There was a lot of, as it were, altcoin marketing but no one really focusing on Bitcoin. And following the Bitcoin conference in Edinburgh, which some of your listeners may have attended or be aware of a bunch of us got together and decided we would pull together a, a Bitcoin focused policy group in the UK, advocating for only Bitcoin, and we were the first of our kind." }, { "speaker": "stephan", "time": "03:09", "start": 189.37, "text": "Fantastic. Yeah. So, yeah, I think there's a lot of things to get into, as you said, the regulatory environment in the UK, as well as, I know there was the ECB, you know, recently came out with, some, nonsense about Bitcoin, and I know you were a part of the response, so we'll get into that later, but let's Can you give us a bit of a background, what has the h-h-history of Bitcoin related, you know, regulatory affairs looked like in the UK?" }, { "speaker": "freddie_new", "time": "03:41", "start": 221.43, "text": "Of course, I think it's worth starting quite far back in the past, and I think as context for that, it's, it's worth noting that the UK in many senses is quite an ossified country, and I think this feeds into a lot of different aspects of why there's such a misunderstanding of Bitcoin here. And by ossified, I mean it's, it's very hard to, to effect change and build things in the UK, which is, which may strike some people as a bit of a surprise, you know, back, back in the '80s, the, the City of And a lot of innovative finance products were invented and created and, and run out of London in that time. And London historically has had a fantastic opportu— a fantastic reputation and great opportunities for, you know, financial creativity effectively. but over the years, I think the UK has become overregulated in some areas and sort of underregulated in others. So, an example of this ossification is, is our inability to build physical things. you may, you may have heard of HS2, High Speed Two. It's a railway that they were attempting to build between London and Birmingham. They've spent sixty billion pounds and haven't built More than about ten miles of that railway. It's absolutely ridiculous, and it turns out it's not gonna be built at all. And I think the same thing is, is becoming true of our, what used to be our, our financial expertise as well in London. And I think part of this is because London has historically been so sophisticated, for example, in terms of its adoption of securitization or various-- or, you know, the, the, its dominance of the eurodollar market, in, in the recent past. If things were invented or invented adjacent to London, then they, they were, they were leapt upon and, and our, our ba-- our bankers Thought, recognized rightly, they can make a lot of money out of them and went ahead to do so. One of the issues with Bitcoin is that there is an element of extraordinary intellectual superiority among those people who work in the city, and I'm sure you've encountered this multiple times yourself. It seems utterly incomprehensible to these people that something invented by an anonymous cypherpunk could have the power and value and meaning and significance that Bitcoin actually does have. And in many ways, talking to these people, and you know, I come from the same world. I, I worked in the City of London for, for twelve years and- My, my investors are there and etcetera, etcetera. It's very, very difficult to, in, in many cases, to get over the weird hump that no one knows who Satoshi was, which I, I, I find a lot of them are bizarrely obsessed by. sorry, that, that was a, there was a long scene setting to your initial question. But you know what, that," }, { "speaker": "stephan", "time": "06:18", "start": 377.51, "text": "that kind of reminds me of, it's like in the modern day world when it's less about Getting things done, it's more about who you are, what's your identity, do, do you kind of comply with the right, do you hold the right views, right? This kind of luxury beliefs kind of idea, like it's kind of related to these ideas. And I think, I'm also thinking a lot of, Chrisus or Jesse's, infamous article, \"Why the Yuppy Elite Dismissed Bitcoin,\" right? I think it's that exact what we're talking about, and this professional, quote-unquote, professional class, it exists all around the world" }, { "speaker": "stephan", "time": "06:54", "start": 414.08, "text": "class, and you need to sort of come from the right pedigree. And I think that's why this identity question of who is Satoshi, it matters so much, because unless Satoshi attended, you know, Oxford, they don't care." }, { "speaker": "freddie_new", "time": "07:07", "start": 426.77, "text": "Yeah, but, I, I, I went to Cambridge actually, so, I even, I don't, even I don't tick that box. But I think you make an excellent point. And, you know, I, I quote that Crease's article all the time because I think he hit it bang on. He is also from that kind of world, and his, his friends are the same. And, you know, The, the funny thing is, I'm, I'm relatively rare, although there are more and more of my type of person entering the Bitcoin space. For a long time, the, the career risk, I think, was associated for finance professionals with identifying, Bitcoin as something that had value. But over the last eighteen months, and we'll, we'll get into more details as we chat, I've seen more and more serious finance professionals in the UK coming out and describing what they're doing with Bitcoin, why it has value, why it's important. Maybe this is a good point to start talking through the, the, the history of how the, how the, the regulators and the politicians have, have seen it. Yeah, let's get into that. Like," }, { "speaker": "stephan", "time": "08:01", "start": 480.67, "text": "if you could walk us through, like, what, what were, what were they kind of initially viewing Bitcoin as? And, you know, and then I guess maybe the stablecoin conversation as well, like, where did they kind of place things there? And then what's today? You know, if you could walk us through some of that." }, { "speaker": "freddie_new", "time": "08:14", "start": 494.32, "text": "Sure. So sort of potted history, as you, this may not surprise you to hear that initially the, the, the, the message was Bitcoin is for criminals and it's an unbacked crypto asset which has no intrinsic value, so all of the usual buzzwords. the first significant piece of evidence that we submitted was actually to a parliamentary committee, the, the Treasury Committee. I think I wrote about ten thousand words on that piece, and, I know they read my piece because I was quoted in their report. Unfortunately, the committee at the time consisted of people who were aptly described by Krissus in \"Why the Yuppie Dismissed Bitcoin,\" and their report concluded that Bitcoin should be regulated as gambling. that's, it had no int- no value whatsoever, but people knew it should be free to gamble on it. Funnily enough, that would have been great for Bitcoin holders because gambling wins in the UK are tax exempt So there, there would have been no capital gains tax payable at that point. There's been a significant shift, though, in understanding since that initial report came out. So we've written a large number of papers and our, our initial pushback to that, included some wording which is now, funnily enough, found its way into legislation that's before, before parliament. which we see as a sig- as a significant win. that was in conjunction with some very thorough work done by the Law Commission. Now, in the UK, the Law Commission is a body of lawyers who look at changing, changing habits, changing social mores and so on, and they recommend changes to the law. as context, in the UK historically, there've been two different types of property. You, you may be familiar with these yourself, but just a recap, there, there was a rather old-fashioned model called a, a chosen action, which is something like a contract that gives you rights you can enforce, and that, that, that can be a type of property. And the other type of property is a chosen possession, a thing in possession, which is an asset, you know, a table, a chair, something like that. and in our ini-initial response to the gambling report from the Treasury Commission, we, we said, \"No, you know, Bitcoin is an actual thing. It is a form of property which is completely new and unique and unlike anything that we've seen before.\" And our existing legal framework doesn't really have the vocabulary to describe that. and then much to our surprise, this type of thinking found its way into the law commission's report And, even more to our surprise, because, I mean, you know, as a Bitcoiner, you tend to be more pessimistic about the ability of politicians to understand this stuff, we found a piece of legislation just a couple of months ago put before Parliament to, to recognize, yes, digital assets such as Bitcoin can be a real thing, and they should also be protected under the law, and they should have the same protection as your car or your house. Or, or any other, other form of property, which is a significant step forward, and I think that's an indication that although a lot of politicians may be struggling with their understanding, the lawyers are Perhaps for the first time ever, are slightly ahead of the game here. I know people like to, to dump on lawyers, but, I, I think they came through here for us. so I think that, that's the, yeah, that, that's the, a, a, a nice step in the right direction." }, { "speaker": "stephan", "time": "11:29", "start": 689.3, "text": "Yeah. So, so I guess the-- Just to get the timelines here, so that gambling report, when was that? And when, you know, c- could you give us a timeline there?" }, { "speaker": "freddie_new", "time": "11:39", "start": 698.59, "text": "Sure. So, our sub and the full report came out about nine months later. the Law Commission report came out later that same year, so the gambling report was early '23, Law Commission report came out mid '23, late '23. So it's taken, taken about a year for that to feed through into legislation, which came out in summer '24. So in some ways, quite a, quite a big change in quite a short time." }, { "speaker": "stephan", "time": "12:07", "start": 726.98, "text": "Yeah, and, and I'm, I can imagine like even in early, 'cause I was wondering actually what was, what was the view even, let's say, in twenty thirteen or twenty seventeen, in those times. I'm curious if you kind of had, if you, if you know or if you don't." }, { "speaker": "freddie_new", "time": "12:22", "start": 742.43, "text": "I can give you almost a direct quote actually. So there was a, an MP in parliament back in twenty fourteen, which I think was the first time the Bitcoin was mentioned in parliament." }, { "speaker": "freddie_new", "time": "12:34", "start": 753.86, "text": "He was, he's a guy called Steve Baker. he's a- Oh yeah, he's yeah, I have no idea. You, you'd get on. You know, he's, he's, he's libertarian, free marketeer, he's very interested in personal liberty and personal freedom. and he gave what I think was the first speech about Bitcoin in Parliament, largely in the context of the national debt, which is, also something that we've been hammering recently. the fundamental understanding that Our national liabilities are unsupportable without gigantic m- amounts of money printing, and that, the consequence of that is obviously devaluation of the currency, and therefore looking at hard assets that can't be diluted or issued at a whim by, by government is increasingly important. And yeah, Baker gave a fantastic speech on, on this in, in twenty fourteen. of course, he was completely ignored at the time, because Bitcoin's this funny computing thing. And I think that's another thing worth flagging. There's, there's, there's a strange antipathy towards technology in the United Kingdom it's a combination of extraordinary arrogance on the one hand, pretending that the UK is somehow going to be world beating in AI, while at the same time we're shutting AI data centers in Scotland, or that we're going to be a clean energy innovator when it takes ten years for us to connect wind farms to the national grid. I'm not quite sure why the u- the Brits have this, this kind of attitude. I'm, it, it's a sort of perennial amusement and interest to me, but, you know, m-maybe you have some ideas. I don't know." }, { "speaker": "stephan", "time": "14:10", "start": 850.15, "text": "Yeah, I mean, you would know better than me, I'm, I'm an Australian, but, I think the, yeah, we've seen this shift over time that, you know, maybe some governments kind of ignored Bitcoin and then after, yeah, at one point- There was sort of, oh, it's gambling or maybe we all-- and I remember in, let's say, twenty fourteen, fifteen days, it was all, oh, blockchain technology, right? So there was this kind of idea, and then twenty seventeen, there was a lot of shitcoins, and what we've seen is kind of a lot of the quote-unquote crypto, sort of advocacy groups would come out and advocate for, you know, the right to- Scam or the right to shitcoin, and then sort of Bitcoin has been sort of treated like an also ran, and then I think I, I mean, some of that is probably touching on why you, you and the guy started Bitcoin Policy UK, but, nevertheless, even though there are, you know, shitcoiners trying to scam and whatever, there are a lot of shitcoiners who also hold Bitcoin and they also advocate for Bitcoin, so it's kind of a, it's not like a total enemy relationship there, right? At, at times, your We are pushing the same direction, right?" }, { "speaker": "freddie_new", "time": "15:18", "start": 918.47, "text": "Exactly. I think that's a really good point to make, and actually, it's worth flagging a couple of areas where we do share some interests with, with these guys as well. So one is access to banking services. So one wedge area that we've been pushing the government on is to ensure that banks don't close businesses' accounts if they are involved in the cryptocurrency industry, and often that includes Bitcoin and other coins as well, and to ensure that individuals are free to use their bank accounts to, to buy- Many coins on exchanges and inevitably, you know, in the case if, if you've got a regular person using Coinbase, there's gonna be shit coins on, on Coinbase as well, as we well know. So in some areas, we can align with the crypto body here, which is imaginatively called Crypto UK. but we've made it clear to them, you know, we're, we're Bitcoin only in some areas, we're, we're pushing at the same door, in some areas we're not. And the way that we as an, as an organization tend to categorize it is that, you know, Bitcoin, Bitcoin is money. It's a new kind of money, it's a unique kind of money, and it's important for the government to understand that. other coins we tend to categorize as venture backed Tech companies, and some of them may fail, some of them may not fail. That's how start-- the startup culture is supposed to work. but, you know, they'll have a team, they'll have a foundation, they'll, they'll have, you know, airdrops in the same way that a VC-backed company would have, you know, early offerings of shares to a small pool of investors, who will be at an advantage over later investors. So we, we try to dis- we try to distinguish Bitcoin from other kind of cryptocurrencies without being rude about them, although obviously we, we would secretly love to be. But, yeah, yeah." }, { "speaker": "stephan", "time": "16:59", "start": 1019.48, "text": "Yeah. And, and I wanna also touch on something you mentioned earlier around the bank accounts, right? So in the US conversation, people know this as Operation Torque Point two point o, they also know this as, okay, the US government, it's come out now that the Biden administration basically- Attacked Silvergate and Signature and shut them down, that they weren't necessarily, you know, that they didn't necessarily need to be stopped. I'm curious, is there, you know, are there parallels in the UK as well around banking access being shut off for Bitcoin or crypto exchanges and Bitcoin companies in the UK?" }, { "speaker": "freddie_new", "time": "17:33", "start": 1053.46, "text": "There are. So, Danny, Danny Scott of Coin Coin is on record, in the, he's spoken, about HSBC many times in the past, his difficulties, with them. A key problem we have in the UK at the moment is that many banks won't allow you to transfer money onto an exchange in order to make a purchase. And that's something that we flagged, I flagged this directly to, the City Minister, to the, the Economic Secretary of the Treasury. I spoke about this in Parliament to the, All Party and then I follow that up with, written submissions to the APPG, setting out which banks were friendly, which banks were not. a very interesting way that some exchanges in the UK are getting around this restriction is that they are actually setting up e-money accounts. so you're probably aware that, many fintechs are able to use e-money accounts which are in your own name. So if I wanted to transfer money to myself, you, you, using an e-money account, it l-- to the bank, it looks like a transfer to myself, and, you know, it's entirely legitimate. It's lawful in the UK to hold cryptocurrency, to hold Bitcoin. It's lawful to buy it. There's no sense in which a bank, should be restricting you from doing so. Taking a bit of a step back though, one of the, one of the reasons that the banks have been doing this is, is not because they, they really hate cryptocurrencies or Bitcoin. It's actually because it's self preservation. So there's a, a type of fraud that, is called authorized push payment fraud or APP fraud. And until recently, the, the banks could, in each instance, be on the hook for, several hundred thousand pounds per instance of APP fraud. So if I'd transferred money to a scammer, called up my bank and said, \"Oh, this was, this was an APP fraud instance,\" the bank would be on the hook for a, a large amount of money. They'd have a significant financial exposure. Interestingly, that threshold has just been dropped down to below a hundred thousand. I think it's gonna be about eighty-five K, and that change will, will be coming in shortly. So I'm curious to see where the banks will be Become a bit looser in their enforcement of that restrictive policy because their own financial exposure to losses will be less. so funnily enough, although that was often hitting, attempted purchases of Bitcoin, I don't personally think that it was directed at Bitcoin specifically. I think it was more out of a fear of loss for the banks because they, they were on risk effectively." }, { "speaker": "stephan", "time": "19:59", "start": 1199.44, "text": "Yeah. Now I'm curious, so yeah, certainly there's that fraud risk that the bank has to watch out for, and certainly there are cases where maybe it's like elderly abuse or there's cases where like an older person who's not tech savvy, they've been- Scammed into something and they've, like, the scammer is trying to walk them through, \"Hey, send your money to this bit-- crypto exchange, buy Bitcoin, and send it to me, et cetera.\" That kind of thing. And so there are cases where Bitcoin and crypto exchanges are trying to stop that particular type of scamming and fraud, and maybe the bank involved in that process is also saying, \"Hey, we wanna try to not facilitate this kind of scamming.\" So obviously, okay, fair enough. there's the other element which I'm sure you're familiar with is the whole AML and sanctions regime, right? Anti-money laundering sanctions, et cetera. So I can imagine a lot of banks, maybe they're worried on that angle too. They're worried that they might be inadvertently, you know, dragged into the net or sort of seen to be, \"quote unquote,\" allowing money laundering because they allow- Allowed, you know, s-certain Bitcoin and crypto exchanges to, you know, use that bank account to facilitate the fiat side of that transaction. Is that, I presume, that's also part of- The hesitance that some UK banks have with Bitcoin companies, right?" }, { "speaker": "freddie_new", "time": "21:14", "start": 1274.01, "text": "Yeah, I think that's a fair question, and it's potentially an issue. I would tend to counter that if I was advising the banks by the fact that virtually every exchange you'll be using will have KYC due to the eyeballs And if you're transferring money to Coinbase, Coinbase know exactly who you are. They've seen a copy of your driving license, your passport. and in fact, I'd, I'd kinda go on the offensive there and say if, if there's any concern about you using your Coinbase account to avoid sanctions, then, you know, you're, you're, you're being pretty damn stupid because you're, you'd be using a KYC account that, you know, has your home address, your passport, you'd automatically be linking a, an on-chain address to your identity. And if- If you're then transferring money from your Coinbase account to a sanctioned entity, it's cut and dried. You've, you've just done the cops' work for them. All they need to do is demonstrate that you have used that address to transfer funds to a sanctioned entity, and, you know, they don't, they don't even need to get out of bed before they can put a charge sheet together. so I think I'd, I'd go on the attack there and, and focus on, the, you know, the transparency of the ledger as being helpful to law enforcement. You know, I've said before, only stupid criminals use Bitcoin. You're creating a permanent, unalterable record of your transactions that is completely public and which is admissible as evidence in court. Why, why on earth would you do that? And that's why only zero point three four percent of all Bitcoin transactions, as far as we know, according to the latest data, are used for illicit purposes. If you want, if you want to evade sanctions, use JP Morgan. That's right." }, { "speaker": "stephan", "time": "22:46", "start": 1366.5, "text": "And, I am also, Curious on the, so I mean, there's a few things that kind of go into that, because on one side of it, there are the, there's like the privacy-focused Bitcoin community, and they might be using, you know, things like CoinJoin and things like this to try to obfuscate the chain in terms of what, the past transactions are, but then at the same time, there's the regulated world, and the regulated world, let's say banks and Bitcoin and crypto exchanges that are, you know, above board and KYC have-- will sort of, be in a different position where they, they, will have to sort of prove to their regulator, \"Oh, look, yes, mister regulator, I've got this AML program, or I've got this, that, I'm ticking this box and that box and so on.\" not saying I like it, of course, I'm, I'm against AML regulations in general as a libertarian, but I'm just trying to characterize the world as it is today. Yeah. and so- I, I think that's probably where maybe one aspect of the tension is, and so, where do you think that's gonna end up going? Do you, do you see that like the state is gonna try to- Go harder and sort of expect more AML compliance, or do you sort of see it like, things are gonna stay in this current period, current, stay at the current level?" }, { "speaker": "freddie_new", "time": "24:09", "start": 1449.31, "text": "Yeah, if I had to guess, I would say that exchanges are probably gonna become more and more like banks. And it's gonna be interesting to see whether more and more banks are able to hold Bitcoin on behalf of their customers. I think there's an increasing level of hybridization going to take place. We're already seeing that with banks such as Zapo, which is available in the UK, that's obviously a regulated bank you can hold a bank account with them and you'd never need to touch Bitcoin at all, or you can purchase Bitcoin on their platform and hold it. What seems to be happening, certainly in the UK, is, and more so in Europe, and we, we might get into this if we have time to touch on, on MiCA, the market in crypto asset regulation that is, is coming to force in Europe, there was a, a bit of a concern around what they call unhosted wallets, and what the rest of us, you know, call or UTXOs. And the fix they seem to be implementing is that a transfer off a regulated platform off-- that has done AML and KYC on you to a, an on-chain address outside the platform will require you to provide information about the person to whom you're transferring it. Now, ninety-nine times out of a hundred, that's gonna be yourself to your, to cold storage or to your own, your own hot wallet. And what I've seen in terms of the reviews that we've done of, of different transfers out from the various exchanges is that That really is as simple as you doxing the first step off the exchange. Now, as we both know, that, that will potentially dox all of your other, all of your other addresses that you may, you may transfer to from that initial step. But most of the exchanges at the moment seem to be requiring only a," }, { "speaker": "freddie_new", "time": "25:55", "start": 1555.05, "text": "a, a doxing of yourself effectively. So you say, \"Yes, who, who are you transferring this to? I'm transferring to myself. Do I own and control this address? Yes, I do.\" And that is how the banks cover their own backs basically. they have, they can then demonstrate to the regulator that they took prudent steps to ensure that they found out who the person was transferring the money to and it was themselves. so I, I think that, that's probably the world we're gonna end up in." }, { "speaker": "stephan", "time": "26:21", "start": 1581.29, "text": "Back to the show in a moment. 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The Bold Vault is a two or three collaborative multisig where you hold two keys and Bold holds one as a redundant backup protecting against loss or theft. You can use Trezor, Ledger or Coldcard hardware wallets to spin up a Bold Vault in just a few minutes and the Bold Vault Is the only collaborative custody vault available with zero monthly fees. They're also offering zero fees on your first ten thousand dollars of Bitcoin buys and twenty five dollars of free Bitcoin when you buy a hundred dollars of Bitcoin or more. Try Bold today and upgrade your stacking experience over at getbold dot io. Yeah, I see. And so interestingly, I noticed, it depends on who you're talking to, right? Like if you're talking to someone like yourself or me, who's kind of more hardcore about, you know, self-custody and this kind of thing, but if you, let's go one tick out, there might be, or one notch out on the onion or whatever we're saying, the, there will be a lot of people who just use these, you know, whether they use like Binance as a kind of neo bank, right? They'll use it as, So they'll take, when, when they wanna sell some, when someone wants to sell some fiat, you know, some stablecoin or Bitcoin for cash, they might just say, \"Hey, transfer it to my whatever,\" they'll show you the QR code on their thing, and they'll just kind of use it like a bank, and it's not necessarily every, every exchange in and out is to and from their own wallet, it's actually they're, they are trying to use it like a external transfer. So I'm curious what you, what you make of that. Do you think that practice will" }, { "speaker": "freddie_new", "time": "29:31", "start": 1771.12, "text": "That's a really good question. I, I think that is worth looking at that through the lens of more mainstream adoption. I think you're completely right, a lot of people aren't going to necessarily p-be playing around with hardware wallets. And I mean, w-without, without going too much into my own background, you know, it took me a while before I, before I did that myself as well. Obviously, I don't own any Bitcoin, I wish I did, and, you know, if I had bought any, I would be interested in, in experimenting with hardware wallets. But I think, you know, if we're looking towards a world where everyone's grandmother has, has a Bitcoin option, I think in, in reality, we, we may need to admit that not everyone is going to be fiddling around with a hardware Like banks, and I don't necessarily think that's a bad thing. I often go back to Hal Finney's comments, I think in 2010, about, yeah, on-chain transactions being as rare in that world as, as they are today. where you, where you have banks holding Bitcoin and final settlements being made in much the same way as final settlements made today at central banks between commercial banks. You know, you get, get to the end of the day, and then there's, there's a, there's a settlement process, and it doesn't necessarily all happen, all happen at once. There are concerns obviously around, around paper Bitcoin and so on, but I think that's a positive move towards adoption and recognition by large institutions that Bitcoin is real. a lot of Bitcoiners are sensitive about the involvement of large institutions, but, you know, Bitcoin is for individuals and institutions and alike. It's, if, if we believe it's for everyone, then each of these different types of entity are gonna use it in a different way. I, I think it's important to-- So certainly, I, I, I admit that." }, { "speaker": "stephan", "time": "31:11", "start": 1870.53, "text": "Yeah. Okay. so yeah, as you said, I think it's kind of, yeah, and, I mean, I, I think Bitcoin mostly challenges central banking and government control of money. It doesn't Banking will still exist, of course, I want as many people to self-custody as possible, but I also recognize there are limits on how many can do that, right? I think the ballpark number is like ten to one hundred million in terms of on-chain users, even accounting with Lightning. So, you know, un-until, until or someday if we, if the Bitcoin ecosystem comes to consensus on some kind of soft fork or maybe it's a covenant thing, I don't know. You know, that's kind of the ballpark. So it implies that, you know, a hundred million people can hold on-chain coins, but there'll be a lot of people in the future who are custodial users, therefore they are kind of like bank customers in a sense. But maybe that's in the future, and we'll sort of have to see. But for now, I mean, let's chat a little bit about, I guess regulator, regulator attitudes and how that's shifted over time. And, as I understand, in the UK, it's, the FCA" }, { "speaker": "freddie_new", "time": "32:19", "start": 1939.26, "text": "Correct. it's worthwhile spending a bit of time on them, so they are probably the biggest blocker to a sensible adoption of Bitcoin in the United Kingdom at the moment. So as we've mentioned already, the, the attitude of, of Parliament certainly seems to be shifting. The attitude of, of government is generally positive, although there's still a lot of confusion around the distinction between Bitcoin and crypto. We're, we're working on, on educating them as to that distinction. it's useful you mentioned the, the underlying blockchain technology because we still to this day hear a lot of that rubbish coming out of, politicians, but you know, it's a learning process. At, at some, at some point they'll realize the only good thing that blockchain technology is useful for, and, a-and come to the same understanding as we have. The FCA is a, is a different kettle of fish, though. they are extraordinarily resistant to firstly recognition of Bitcoin as an asset at all. And they've taken a number of different steps over the past few years. I'd probably highlight two of those. The first is restriction of access to exchange traded products, and the second is a very damaging categorization of Bitcoin, for definitional purposes, which has a lot of knock-on effects for the asset and the industry. so touching on the first one initially, prior to, I think about twenty-twenty, autumn twenty-twenty, retail investors in the UK could access exchange traded products of, of, of one kind or another, in their Tax advantage wrappers." }, { "speaker": "stephan", "time": "33:51", "start": 2031.2, "text": "you know, I see. And so just to be clear, when we're talking about-- We're talking here similar to like an ETF or an ETN, this kind of thing?" }, { "speaker": "freddie_new", "time": "33:58", "start": 2037.76, "text": "Yeah, yeah, exactly. so there were a couple of products. They weren't, they weren't full exchange traded funds, but, they, they were, they were synthetic instruments that offered exposure to Bitcoin. back in 2020, the FCA outlawed the, retail ownership of any such products. So you didn't have to sell them, but if you sold them, you couldn't buy back in. So an awful lot of people have been essentially frozen in their twenty twenty positions. now the FCA talk a lot about, their regulation supposed to be preventing customer harm And they came out with some bullshit calculation about how much financial damage they would have prevented by, by taking this step. unfortunately, these poor individuals who are holding these, these instruments are, like, as I say, are completely locked in, and they are no longer the best instruments to hold in order to get Bitcoin exposure. whether holding Bitcoin itself or some of the new ETNs and ETFs, that have recently been launched. incredibly, in the UK, it's still not permitted for regular retail investors to have ET-ETN or ETF exposure of any kind to anything that touches any form of crypto asset at all. so we've gone very hard on, on the City Minister on this, saying, \"You know, firstly, it's absolutely outrageous. There's an extraordinarily logical inconsistency in the FCA being totally fine with people holding the underlying asset but not holding a synthetic exchange traded product that gives exposure to that asset.\" I, I spoke on this in Parliament as well, and it's, as far as we were able to aware, and as far as we're aware, that there's no other comparable instance of the underlying product being fine to hold, but a synthetic product not being okay to hold. because to a traditional finance professional, the synthetic product looks safer. You've got insurance, you, you're holding it through a regulated entity that's done KYC and AML You know, maybe, maybe it's BlackRock, may-may-maybe it's Valkyrie, may-it's utterly senseless to someone who works in finance that you should be able to hold this crazy digital beanie baby, but you can't hold an ETF issued by the biggest money manager in the world. So we, we find ourselves in this extraordinary position, and we've been working with, with, with, with a, a British fund, called, called Jacoby Asset Management, who've offered the first, European, ETF And they're a British company, but they've, they've had to launch out of Jersey and list in Amsterdam because they can't list it in the UK. And we're tracking back to our earlier point around the UK being a hotbed of financial innovation and, and forward thinking, this completely undermines the UK's reputation for You know, looking for intelligent and innovative financial products to launch to the world. And I think the government's kind of on our side here. The FCA just absolutely won't budge. And unfortunately, the way that, the way that the regulators set up in the UK is that the FCA is ostensibly independent and, and independently funded. So while the government can exert pressure, they can't actually have any impact on the decision-making process there. But I think at some point it's gonna become politically untenable for them to continue with this kind of attitude, particularly when the kind of data we're getting out of the ETFs in the UK, in the US is, is just so incredibly positive. I forget what, the day after the election, what was the tra- trading volume was insane, wasn't it?" }, { "speaker": "stephan", "time": "37:30", "start": 2249.79, "text": "Oh yeah, I can't remember the exact number, but I, I think, some of the ETF commentators were saying, \"Yeah, we had a big round of inflows again the day after Trump, was elected.\" and so I think, you know, some of these things will change over time, right? I, I presume, you know, coming back to our earlier point about the yuppie elite, they very much care about perceptions, and if the rest of the world is sort of moving on Bitcoin, if the US, you know, if Trump comes into power starts going harder on Bitcoin or even Cynthia Lummis has, Senator Lummis has been talking about a strategic Bitcoin reserve. You know, if the US starts to move on that or if other countries start to move on that, then the UK, surely these, you know, regulators in the UK will then start to have to change their tune" }, { "speaker": "freddie_new", "time": "38:15", "start": 2295.41, "text": "Exactly right, and I completely agree. We've done a lot of work s-this year on, a more offense strategy. Last year we, we spent a lot of time replying to consultations. This year we've gone on the offense. And earlier in the year, we could see which way the wind was blowing, and we, we drafted a, a policy paper for the government, on exactly this, you know, that, these things are likely to happen in the near future, and the UK needs to capitalize on its position fast. Did, did you know, for example, the UK is the third largest nation state holder of Bitcoin on the planet? After the US and China. I didn't know that actually. Yeah, it's number three. It's ridiculous. It holds sixty-one thousand coins." }, { "speaker": "stephan", "time": "38:53", "start": 2333.05, "text": "Is this from like a criminal seizure, theft, or like how, how did, how did this happen?" }, { "speaker": "freddie_new", "time": "38:58", "start": 2338.27, "text": "Largely confiscations. So there were two or three smaller ones, and then it was an absolute whale, that, they, they finally got the keys to last year, I believe. Wow," }, { "speaker": "stephan", "time": "39:09", "start": 2349.04, "text": "okay. Well, there you go. That's sixty-one thousand. And I think people were talking about how Germany or it was, one particular, what's it, state inside of Germany who sold this. There was a recent thing where they sold all these coins, and I think, Joana Qatari was trying to say, \"This is a big mistake, you shouldn't have done this,\" but it's too late. I think it was, Saxony. I think it's a German state, but" }, { "speaker": "freddie_new", "time": "39:27", "start": 2366.93, "text": "yeah. Yeah." }, { "speaker": "stephan", "time": "39:31", "start": 2371.09, "text": "Have you seen they're already a billion Didn't, Gordon Brown sell the gold, just before gold went on a huge run up as well, right?" }, { "speaker": "freddie_new", "time": "39:44", "start": 2384.46, "text": "Exactly. I think, I'm gonna get the number wrong here, but it's, he's in the ballpark of a thirty-three billion dollar loss on that trade. So he sold at the pico bottom, and if, yeah, if he'd held, he'd-- that, you know, that, that, that would have, that would have closed the, the famous black hole that our chancellor keeps on talking about in the public finances. but so we focus very much on, on self-interest. We said the UK has got an incredible first mover advantage here. It holds sixty-one thousand coins as a result of confiscations. We should be doing something with that. You know, at the point when the legal process has been completed and it's absolutely clear that there are no competing claims to those coins, the UK is in an extraordinary position and it should be doing everything it can to maximize the value of that holding that it holds on behalf of the nation. I mean, again, I'll need to run the numbers on this, but I think, the-- I, I think that's increased by five hundred million dollars in just the last week, which is, you know, not to be sniffed at." }, { "speaker": "stephan", "time": "40:44", "start": 2443.73, "text": "This show brought to you by Mempool dot space, the world's leading Bitcoin visualizer, and now they've got an accelerator program. So if you have a transaction that you sent at a fee that was too low to get confirmed, now you can fix this at, with the Mempool accelerator. The way it works, you can" }, { "speaker": "stephan", "time": "41:01", "start": 2461.3, "text": "And you don't need an account, you can pay with Lightning, and then it'll show you it's now in the process of being accelerated, and then after a few minutes, it's confirmed. And so this is a great way to help you out if you are stuck, and this can happen where maybe your wallet doesn't have RBF or CPFP, or it might help you in situations where it's impractical to go and re-sign, so for example, multi-sig with keys in different locations. And thirdly, even in some Lightning scenarios, perhaps a forced close, you might not be able The Mempool Accelerator can help you out, so keep it in mind, and you can find out more over at mempool.space/accelerator. This show also brought to you by Nomad Capitalist. Nomad Capitalist is a leading provider in terms of offshore tax and lifestyle strategy planning and implementation. They can help you go overseas and legally lower your taxes. As many of you know, I grew up in Australia, but I left. I was sick of it in terms of the taxes and the COVID tyranny and all these other things. And so that's why I left Left, and now I live in Dubai, but that's not necessarily the place for you. You have to think exactly what works for you, for your family, for your business. And Nomad Capitalist have worked across dozens of different countries. They've helped people get passports, residences, bank accounts, and all kinds of other things. And importantly, it's not just about choosing one place, it may be multiple places, and it may be also about making the pieces fit together in terms of how your business fits with your family and you as an individual. Nomad Capitalist have helped many, many people in terms of going overseas, and if you're interested, go to nomadcapitalist dot com slash apply. This is applicable for people with a net worth above one million US dollars. That's nomadcapitalist dot com slash apply. Yeah, it's a lot of coins, and I think this is an interesting point as well from the, let's say, libertarian perspective. I know my friend Pierre Rochard has been arguing that it's actually, it's a good thing that, so that, states hold some Bitcoin. Now, yes, from a libertarian perspective, you could maybe have to tax to acu-acquire Bitcoin, but here we're talking about confiscation, a case of confiscation, and it's also a case where I think long term we can sort of agree that if states start holding Bitcoin, that eventually takes away their censure and fiat currency creation powers, which is a long term win for all of us. So I think, to me, it's very clear that, if you can get states to, you know, just, just in general, we want more people to hold Bitcoin, right? The more people who hold Bitcoin, the safety in numbers There's, there's just a general kind of advancement of the movement, and so we will be further ahead in, you know, Bitcoin's monetization process, I think that's kind of one way, to think about that. So, yeah, the race is on, and I think what we'll, you know, we'll have to see whether the UK wants to be a leader or a laggard in this question. one other question while we're on this is, or while we're on kind of the question about being able to, you know, buy and sell Bitcoin" }, { "speaker": "stephan", "time": "44:01", "start": 2640.8, "text": "Can you clarify or clear this up for me? I've heard in some cases for UK Bitcoin exchanges, they need to kind of do this questionnaire of their customers to sort of make sure they kind of understand this, this, that, and the other about Bitcoin, and it sort of acts as another, let's say, friction to customers being able to actually just buy Bitcoin. This is for UK customers on a UK Bitcoin exchange." }, { "speaker": "freddie_new", "time": "44:22", "start": 2661.57, "text": "It's good that you mentioned that. This was the second point, around the FCA regulation that I wanted to touch on actually. So we, you know, we've spoken obviously on, on ETS and ECA Nexus, the second thing we're attacking them on is this- Daft categorization that they come up with. So there are various categorizations of investments in the UK, that are set out, by the FCA, and one of these is what's called a restricted mass market investment. Now, these can be offered to the public, but only under very limited circumstances and Through a very strict set of loopholes. previously restricted mass market investments included things like shares in, non-listed companies or, complex loan products peer-to-peer lending, wrapped, wrapped instruments for so quite esoteric products. the FCA had a consultation last year, to which we and most of the industry responded quite aggressively because they were proposing to categorize Bitcoin and all crypto assets as restricted mass market investments. Now, you can offer restricted amount market investments to the public, but in order to do so, you, you need to ensure that they know what they're buying, which is why the questionnaires that you've mentioned are, have been introduced. so on my Twitter, I use my pinned tweet, we've got a, we've got a list of walkthroughs of the types of questionnaires that people in the UK are likely to be asked If anyone's having trouble with their exchange, have a look at my pinned tweets. We, we've done a review of virtually every exchange that's available in the UK, setting out walkthroughs of all of the different questions if anyone's having trouble or, or issues with those. The reason exchanges are doing this is because, bluntly, they have to. They can't sell Bitcoin without, people going through those questionnaires first. And if you're in the UK, you'll also notice an annoying banner ad on every single page of your app Which states, \"This is a very risky, volatile investment. You may lose all of the money that you invest.\" That, again, is thanks to the FCA, who have been utterly boneheaded in their approach to this. so what's particularly galling, if you read the FCA's report, that they produced after the evidence was gathered, is, they stated in black and white the majority of the industry said that this definition was incorrect. So we've decided to go ahead and impose a definition anyway, which I find utterly flabbergasting. You know, why, why bother with the industry at all? yeah, I couldn't have said it better. It's completely ridiculous I'm afraid that, the FCA are run-- I mean, y-your views on regulators are probably similar to mine. they, they are not run by the best and the best people. my, my view tends to be that if, if they were, if they were good people, they won't be-- they wouldn't be in a regulator, they'd be in a real job. But, obviously I shouldn't be totally rude to them because I need to keep persuading them to, to listen to my point of view." }, { "speaker": "stephan", "time": "47:22", "start": 2842.17, "text": "Yeah, to come around, yeah. But I mean, at the-- Nevertheless, I mean, this is the, you gotta work in the system that you can, while of course, you know, of course, cypherpunks write code and certainly, you know, there, there's that element of it, but I, I also think, you know, it's a good thing to try to engage and try to push the system in a more freedom" }, { "speaker": "stephan", "time": "47:46", "start": 2865.58, "text": "I'll, do that. so I guess zooming out a little bit, what are some of your broader hopes on, let's say, Bitcoin policy UK? What are some of the main goals? Is it around things like, you know, the right to self-custody, the right for mining or banking access? Do you have any high-level goals that you're trying to, you know, expla- achieve there?" }, { "speaker": "freddie_new", "time": "48:09", "start": 2888.76, "text": "Well, I'm worried you've, you've been doing sort of background research on me because our, that, that's effectively our policy goals are almost exactly as you've listed. Number one is, is ensuring that self-custody and ownership of Bitcoin remains legal, and the piece of legislation I mentioned earlier is a fantastically powerful step in that direction. Second is access, free access to exchanges and, access to banking services, so that in the hybrid world we live in, you can continue to buy and sell freely if you so w- if you so desire, and you can move money up from fiat to your exchange and back again without any friction. thirdly, we, Again, clo-clo-close to the mining point you made, we'd like the government at least to commence feasibility studies, on the development of the mining industry in the UK. At the moment, the UK has less than one percent of the global hash rate, and we have an awful lot of curtailed wind, wind energy. and that can't, that can't be connected to the grid yet or is simply burnt off and wasted. And touching again on one of the points I made earlier around the difficulty of building in the UK, one of the stumbling blocks there is that our planning regulations very seldom allow for For mixed use, for example, co-location of a data center with a wind farm, these are two different categories of, of construction and building. And at the moment, it's the mining industry looks at the UK and says, \"Oh, it's just not worth bothering. The re-the regulation is, is, is too intense.\" And so there's a lot of wind, there's a lot of free wind power being burnt off, which in many cases the taxpayer is, is paying for. just last year, for example, in Scotland, we curtailed a million homes worth of electricity, from wind power alone, which is utterly idiotic and there's, there's a buyer for that electricity out there, and we'd like to educate the government on that. and, you know, zooming out even further, our, our key aim is that every person in the UK and, you know, and, and worldwide as well should have the opportunity to, to save, to hold, and to use a non-state issued money that no government or central bank can dilute, or debase. That, that, that's really key for us. Yeah." }, { "speaker": "stephan", "time": "50:17", "start": 3017.05, "text": "And one other one I might just add, I'm curious if this has come up in the UK conversations at all around, for the, you know, for my developer listeners and, friends out there, is there anything in terms of the right to develop, right? This is something it's become a conversation as well with, the cases of Samurai Wallet and, Tornado Cash. Is there anything there that can be done to sort of preserve the right for develop-- Bitcoin developers and, whether they are protocol or application developers in the UK?" }, { "speaker": "freddie_new", "time": "50:44", "start": 3044.13, "text": "Obviously we don't have as well- developed, constitutional protection for free speech in the UK, but it's better than people might think, and we look at this a lot in the context of CBDCs. You, you may guess that we're, we're not a fan there are two particular articles of interest to, the CBDC effort. One, one article eight on privacy, but the one I think of more relevance to your question is Article ten, and that's the rights, the, the right to free speech. And the way that Article ten of the European Convention on Human Rights is drafted, which is incorporated into English law as well through the Human Rights Act The way that is worded, it that includes the free transmission and receipt of information, and that definition of information is not restricted. So in some senses, that's very broadly similar to the constitutional protections, for the creation of, of speech Which, as we know, has also been applied to code. So although this hasn't been tested to the same extent it has in the United States, I think there's definitely a human rights argument to be made, under Article 10 for the protection of the transmission and receipt of information, which would include code. so I see. So hypothetically," }, { "speaker": "stephan", "time": "51:57", "start": 3116.98, "text": "if a UK Bitcoin developer were to be sued, you might be able to find some protection there for them." }, { "speaker": "freddie_new", "time": "52:03", "start": 3122.55, "text": "Potentially. And you know, a lot of this will come down to, to funding. So in order to, to argue that case, you would need to instruct really good lawyers, bluntly, the community, we, we would need to step up and, and, and assist to fund those, those kind of efforts. One area where the UK has been lagging is in, bluntly funding for, for, for those kind of efforts. The US, as in most things, is, is far ahead of us here. They have a large number of well-funded and well-resourced, lobby groups and PACs We, our, our organization operates on a shoestring. We're all, we're all volunteers. We do this in our spare time because we think it's important. And I think if, if we see, arrests and charges brought in the UK, we're gonna need to organize some financial backing to defend those, those persons. Article ten, I think, is, is, is a useful area to explore in terms of a developer's rights to create and impart and receive information. And that, that's probably the angle I would attack" }, { "speaker": "stephan", "time": "53:02", "start": 3182.42, "text": "Gotcha. Now, we've been talking a lot about the regulatory side of it, what about on the political and legislative side of it? Now, maybe you could explain a little bit, I don't know how much you've engaged with, let's say, the political parties of the UK on Bitcoin. Are there, you know, you know, we've seen Trump recently elected in the US, is there any- You know, is there any hope in the British, or the UK political parties or, maybe is it like, you're hoping for like a Farage or something to sort of be more pro, you know, Bitcoin?" }, { "speaker": "freddie_new", "time": "53:38", "start": 3218.35, "text": "Well, I mean, not, not being, not being rude, I think a lot of the Europe, a lot of the politicians in the UK have been caught with their pants down by what's happened in the US over the last few months. We flagged To, the Chancellor, the importance of the Bitcoin conference last year. Not only did we have Trump speaking, we had Vivek, and we also had RFK. It's significant looking at the likely members of Trump's cabinet, how many of them hold and are interested in Bitcoin. You mentioned Senator Lummis earlier, I've actually, it's fa-funny you said that, I've actually seen just in the last twenty-four hours a draft of her piece of legislation pushing for the strategic reserve, and, you know, she's, she's been tweeting about that, just in the last few hours. So We are in dialogue with the city minister on the importance of Bitcoin, and we have made ourselves available to advise them if they realize their pants are down and, you know, perhaps they'd like to pull them up. And, and get into the room on this. what we've suggested are, you know, very, very simple pieces of, of policy changes, Things like, an amendment to, to tax policy that such as was recommended by the Lamas and Gillibrand bill, which had a de minimis level of, I think, two hundred dollars, below which you would be able to freely transact without creating a taxable event. Germany have a very forward-thinking tax policy, which is that if you hold the asset for a year, so if you buy Bitcoin, hold it for a year, you can then transact freely with it without, again, causing a taxable event. So we need to demonstrate Perhaps by, by the production of data that, free movement of money within the economy is generally good both for businesses and for people and will ultimately lead to more positive financial and fiscal outcomes than an aggressive tax policy, which, as we know, in many cases, will simply act as a throttle on further economic activity. That's a harder argument to make to the Labour Party, but there are sympathetic people in the party that we are reaching out to. you mentioned Nigel Farage, he, I think already holds Bitcoin. so, you know, he's an interesting character because to some in the UK, he's still relatively toxic, to others, he is an absolute hero. So, de-depends which, which group of people you, you, you want to get on board. One sensitivity we're particularly aware of is that we don't want Bitcoin to become a, a politically, political partisan issue like we said earlier, our view is very much that Bitcoin is for everyone, whether you're a libertarian or, or a communist, it's everyone should be allowed to hold it." }, { "speaker": "freddie_new", "time": "56:18", "start": 3377.5, "text": "And we don't want it to be for one party or for another. So, but however, I, our arguments in relation to the Labour Party are more in terms of, for example, the humanitarian use cases or the un-or financial unfairness. The, the latest data, for example, from the FCA show that there are more than a million people in the UK adults who still don't have a bank account, and very often that's because they don't have necessary KYC, they don't have a fixed address. They're excluded from the financial system, they can be included if, and to the extent they're able to use Bitcoin. So that I think from a, you know, financial fairness and inclusion point of view, is an argument that could appeal. And again, there's a lot of, interesting work to be done on the mining industry's capability for, let's say, mitigating landfill methane em- emissions, or as we've said a couple of times, during the pod integration with, renewable wind energy." }, { "speaker": "stephan", "time": "57:13", "start": 3433.15, "text": "I see. Yeah. So yeah, lots of things. I, I did wanna save a little bit of time to touch, touch on your ECB response also, so we should, cover some of that. Yeah. are you able to go a little bit over or do you have a hard stop?" }, { "speaker": "freddie_new", "time": "57:26", "start": 3446.09, "text": "No, no, no, I'm good, I'm good." }, { "speaker": "stephan", "time": "57:28", "start": 3448.21, "text": "okay, well then let's chat about it. So, you know, I know the ECB recently came out and I believe there were two consultants, what's his name, Jürgen Schaaf and, I forgot the other guy's name. Insel. Right. and so, yeah, and so they came out with, I mean, they were basically the, you know, these are like the typical arguments, \"Oh, it's volatile,\" \"Oh, you know,\" and now they were trying to sort of say, as I read them, they were trying to make an argument about wealth concentration, right? So it was this kind of inequality sort of argument. do you wanna just- Talk a little bit about your response that you were a part of." }, { "speaker": "freddie_new", "time": "58:03", "start": 3482.7, "text": "Yeah, yeah, sure. So, give me a bit of background. These guys, they're, they're, oh, they're two of my favorite people in the world ever. They, I call, I call them the most consistently wrong men at the ECB. Every time is just ridiculous. So they, I first encountered them in November 2022 when they released a paper for the ECB called Bitcoin's Last Stand. That came out on November 30th, 2022. So for anyone with, with a memory longer than about five minutes, well, remember that was the absolute bottom after the FTX debacle. And if you bought Bitcoin in November '22, you've made out like an absolute bandit. You're laughing. Yeah, yeah, yeah, exactly. they couldn't have timed it worse. I mean, my, my main message about these guys is, you know, just look back at their track record, they absolutely have no idea what the hell they are talking about. but they keep on doing this. So that, that, that was fun. And then when the ETFs came out, when, when the approval happened in, January this year. They released another p-paper called \"The, Bitcoin: The Emperor's New Clothes.\" No, sorry, \"The Naked Emperor's New Clothes.\" they probably didn't realize that this was, this title was already in use. It had been used by a, it, it, it was a, a, a pornographic novel, under the title \"The Emperor's New Clothes,\" which, you know, I, I, I hesitate to recommend to everyone, but it's pretty funny they used the same title. this was saying that the, the, It's still rubbish and everyone will lose all of their money. Obviously, as we know, if you bought the ETF in January, you've done pretty well by now. but this, these guys, they love punishment, so, they decided to release this, this new paper. which as you, as you rightly point out, was essentially around the, the unfairness of, of, of Bitcoin. And the, the gist of their argument was that if the price of Bitcoin keeps going up forever, as it inexplicably seems to be doing this would be really unfair and it will disadvantage everyone who buys later. And, astonishingly, they actually said that governments should, people should lobby their governments to, for legislation that would, restrict ownership of, and or ban Bitcoin completely. And aside from the fact that, as we know, that's completely impossible to do, it's pretty extraordinary you've got two economists working for a central bank, who are fundamentally making an argument that just because you, as an investor, took risk Early on, in the full knowledge that you might have lost all of your money, in exactly the same way as if you'd been, an investor on, in Apple, in Apple's IPO or Google's IPO in the early two thousands, you took risk on those companies, and you should, you know, I'm, I'm economically libertarian as well, I believe you, you take risk, you get rewarded. it's extraordinary to hear that kind of argument from two ostensible economists. so there was a lot of kerfuffle around this, and I wrote a few lengthy tweets on it, and then Dennis Porter's a friend, he and I had a call. had that in the diary anyway, and he mentioned that, he was putting together, a paper and would I like to, would I like to chip in? So I jumped at the chance, it was, it was very fun. worked with, with Murray, who's one of his academic advisors, worked with Alan Farrington. and we essentially went, went through the fundamentally intellectually dishonest viewpoints in, in, in this article and, tore them to smaller shreds as we could." }, { "speaker": "stephan", "time": "01:01:37", "start": 3697.4, "text": "Right. So, yeah, so I, I think it's interesting you point out the, the point around risk, right? Because this is a-- In fact, this is like a common- Sort of leftist worker exploitation argument you'll hear, they'll sort of say this idea of, \"Oh, the, the entrepreneur is earning this, you know, this higher amount, but he's only paying the worker this lesser amount, and therefore it's exploitation.\" They're, they're, they're neglecting this kind of aspect of risk, and they're neglecting the aspect of time, right? This aspect of the entrepreneur was putting in this money early And it was uncertain that he would make a profit. That's just, that's the nature of being an entrepreneur in the, in the market. And so it's a similar thing even with Bitcoin, and as you said, it's similar with, if you had bought Microsoft stocks or Apple stocks or Google stocks or Tesla stocks or Nvidia stocks in the early days, yeah, it was, you know, it wasn't as sure of a bet as it is now. So, obviously it's a different thing. But, it's, it's funny that they're, they're sort" }, { "speaker": "stephan", "time": "01:02:35", "start": 3755.84, "text": "It's gonna take over the world, so the government better come in to stop it. So it's sort of like, yeah, they can't even get their story straight, right?" }, { "speaker": "freddie_new", "time": "01:02:42", "start": 3762.51, "text": "Yeah, I think that's why it's, it's so important always to go back and look at what people said previously and how and why their arguments have changed. And this, this is true for everything, not, not just Bitcoin, but- It's, again, I spend a lot of time trying to think my way into these people's heads. They, they obviously hate and loathe and fear Bitcoin. They don't want it. They, they believe that central banks should be the only entities to create money. Obviously, as we know, commercial banks create the majority of money in the economy every time they make loans. but they don't-- they want central banks to, let's, should we say, to be the only entity that's, that is setting monetary policy and giving commercial banks those powers. And again, tracking back to something we said at the beginning of, of the, the conversation, it's very, very difficult for these kind of people to understand that something else might have that power, and there is a neutral protocol which has its own monetary policy set in stone that they can't affect. It's very, very hard for them intellectually to comprehend that, and I, I don't know, I don't know if you ever read The Black Cloud by Fred Hoyle, a piece of sci-fi. no. it's, it's, it's about this gigantic alien intelligence that makes contact with Earth, and at, at a crucial point in the book, it, it, it's, it's a benign intelligence, it tries to communicate with, with one of the human characters, and the amount of information that it downloads into his brain is such that he has a colossal aneur It's, it's effectively what's happening to these people. They, they can't understand why Bitcoin exists and why it has value, and the level of their incomprehension is such that they can't even make the-- they c- they don't even have the intellectual humility to, to step back and ask themselves If I think Bitcoin is so worthless, why does, why do people keep adopting it and why does the price keep going up? Their only, their only answer is, \"Yeah, it just seems--" }, { "speaker": "stephan", "time": "01:04:30", "start": 3870.41, "text": "It feels very-- Yeah, it just feels very out of touch, similar to the way, let's say, the legacy media are treating some of the elections nowadays. They sort of-- They can't, they're unable to sort of have a, let's say, a theory of mind of other people, and so they're unable to sort of-- Understand why they think a certain way, and they, they're sort of used to being able to sort of command the world from their ivory tower, and they're coming from this kind of technocratic mindset where they think, \"Ah, you know, it's kind of mother knows best,\" but they're not actually your mother, right? They're just, they, they, they think they, have the right to sort of determine what is the m- what should the money of the world be, and, you know, it's, it's just a very, yeah, it's But at the same time, it's good that you guys got a good rebuttal out there, and I mean, it was very quick rebuttal as well, because, you know, sometimes these messages, it needs a quick rebuttal, because as the saying goes, the lie gets halfway around the world before the truth gets his pants on or whatever it is. So" }, { "speaker": "freddie_new", "time": "01:05:31", "start": 3931.8, "text": "Exactly. We, we, we left to it and got it done quickly. And I think may, maybe sort of tying, tying it back to, to politicians' attitudes, what, what you said there, I think is fundamentally very important. A lot of these guys are operating in a world where they can call up the CEO of a bank and ask for a transaction to be frozen. So one of our absolutely key messages to everyone we deal with, whether that's regulators or politicians, is that Bitcoin doesn't function like that. You can't stop me from signing a transaction other than by physical force. And at some point, that transaction is gonna be swept out of the mempool, and mined into a block, and it will become true for the purposes of the Bitcoin ledger. And getting them to understand that they live in a new world, I think is that's the gating item. If we, once we can get over that hurdle, and then they can, okay, well, okay, so this is reality. How do I then respond to that reality? At the moment, a lot of them haven't comprehended that reality has changed." }, { "speaker": "stephan", "time": "01:06:25", "start": 3985.49, "text": "Yeah. So, I know you're obviously more focused on the UK, but I'm sure you have some thoughts on how the EU regulation and the EU approach, is going. Can you contrast that for us a little bit? Like, what's-- Where are the main differences in UK regulatory environment and the EU regulatory environment?" }, { "speaker": "freddie_new", "time": "01:06:44", "start": 4004.37, "text": "I think the key one I'd highlight is a bit of a focus on mining and energy. So we've, we've already mentioned MiCA, that's short for the Market in Crypto Assets, regulation. I'm generally not a fan of, of regulation of this kind, but as regulations go, it's not a bad piece of, of regulation. They've, they've consulted with the industry, it's very thorough. It aims to set out, it aims effectively to legitimize the industry for regulatory purposes however, they have a B in their bonnet around energy use and the extent to which they pay attention to the realities of, of Bitcoin as Troy Cross, I think, calls it a dung beetle, isn't it? Bitcoin isn't a competitor for energy in the, in the open market because they can't afford to be You know, the cost of production of Bitcoin is such that it can't compete with you or I as domestic buyers of electricity. They will only buy electricity that is cheap enough for them to make a profit, and if not, they switch off. And in addition to that, so the usage of only waste, of wasted energy, there's an important message around the extent to which, Bitcoin can use methane, and as we know, methane is eighty times worse than carbon dioxide as a, as a warming gas, and, you know, the key pieces of work that we've done as regards the EU are, are on mining. So As part of the, the, the MiCA implementation efforts, there was, a drive to force different crypto asset businesses to disclose how much energy their crypto asset uses. we again went on the offense here and, and, oh, oh, sorry, to disclose the negative environmental effects of their crypto asset. We went on the offense and said, \"Well, you know, if, if you're disclosing the negative environmental impact, let's also request...\" disclosure of the positive impacts, and then we, we wrote an extremely long paper detailing in, you know, aggressive, an aggressive level of detail exactly how many positive impacts there were. You know, if, if you're gonna try ban mining for environmental reasons, you know, here are all the reasons you shouldn't ban it for environmental reasons. So try to use some of their arguments against them in that context. So I think there is a risk in the UK and, sorry, in the EU. Norway's obviously not an EU country, it's part of EFTA, the, European Free Trade, Association. They are increasingly aggressively, pushing to ban mining in their jurisdiction. if they do that, then it's likely that mining will move to less clean forms of energy. So one of the arguments that, when we're, we're in contact with, with various of the teams in Norway who are working these responses, we've given some feedback to them ourselves in support. one of the arguments there is that, you know, if you, if you care about the environment, Norway's production of electricity is largely pretty clean, as was Iceland's. and if you ban mining in your jurisdiction, you're actually gonna increase carbon emissions. So if you're worried about carbon emissions, keep the industry." }, { "speaker": "stephan", "time": "01:09:37", "start": 4177.71, "text": "So yeah, so I think the, yeah, the renewable policy in the EU is, perhaps Yeah, hindering, or at least the approach on Bitcoin and their kind of, the way they're approaching, yeah, Bitcoin mining is, hindering them. but, let's see what can be done there, whether that can be turned around. and also, I just got reminded there was one other thing, I'm curious if you have any, if you have any insight into this or any knowledge on this, but I know there was a UK pension fund that recently allocated three percent of their assets into Bitcoin, I believe it was, Anything about that or, yeah?" }, { "speaker": "freddie_new", "time": "01:10:14", "start": 4214.69, "text": "I know a little. so CardRide are a very, they're very good friends of ours, very supportive, they have a great team, very hardcore Bitcoiners, I'm sure you'd get on with them personally. I, I won't, won't name any names, but, we've been in touch with them for a while on this, and they've, they, they're a solid shop, they've done really thorough research on this And, they advise, I think, ten pension funds, and the first one, I believe, has just made its that three percent allocation. so we're very supportive of this effort. It's fantastic news, and in fact, a bunch of our team were at an event with Cartwright just last night. where coincidentally they were, they were showing dirty coin, also to Steve Baker, who I mentioned earlier. So that's a" }, { "speaker": "stephan", "time": "01:10:57", "start": 4257.76, "text": "full, full circle, yeah." }, { "speaker": "freddie_new", "time": "01:10:59", "start": 4259.58, "text": "Yeah, triple whammy. no, so they are very good people, they, they are The kind of finance professionals that I mentioned earlier in the chat, that's, you know, we, we want to, we want to showcase as much as we can and, and whose efforts we, we support. I think the biggest problem is that if you only have a three percent allocation, we're gonna see sales of Bitcoin in the future to in order, in order to keep that, that, that allocation at three percent." }, { "speaker": "stephan", "time": "01:11:26", "start": 4286.42, "text": "Yeah, and unfortunately three percent is, a very small allocation. But of course, I mean, everything has to start small for a lot of people. Sometimes they need to proverbially dip their toe in the water. So I understand that, but, I would say for people who are considering allocation, you wanna make sure you've, you know, you've got enough Feel the upside when it comes. So, that's something everyone, but everyone has to obviously make their own decision based on what they're able to, you know, what, what kind of volatility are you willing to stomach? Because as we all know, Bitcoin is volatile, so that's, that's part of what it is. so look, let's finish up on this. What can people do if they wanna help you guys out, especially for any UK Bitcoiner listeners, what can they do to help, to help you out at Bitcoin Policy UK?" }, { "speaker": "freddie_new", "time": "01:12:09", "start": 4329.03, "text": "Awesome. I'd suggest, two or three things. So we're, we've got two Giza funds going. one is to raise, raise money to deliver books to, politicians in parliament. We've, we've just bought the first, the first tranche of those. it's actually an anti-CBDC book, but of relevance to Bitcoin as well. we're tailoring delivery of those books, dependent on politicians, political leanings. So either the Bitcoin Standard, for example, or also the Progress" }, { "speaker": "freddie_new", "time": "01:12:38", "start": 4358.63, "text": "For, raising money to buy old miners, and we're using those in educational products in sc- in schools, and also to explore, waste heated, waste heating applications, and again to produce case studies which we can put in front of regulators and governments and politicians to explain, you know, the side benefits of having a mining industry in the country. the UK is a cold place. lots of us need to heat our homes. There's, there's a potential growth industry right there. and the third thing is, keep an eye on our website. We are looking to, over the ne- course of the next year, to develop template letters, to contact your politicians. we created one during the election in the UK, and we're looking to, to refresh that and create another one to make it as easy as possible for Bitcoiners in the UK to lobby their MPs. As we saw in the election in the US, this is a and there's really no downside to you as a politician supporting Bitcoin, and there's a significant downside to you opposing it. shout out to Sherrod Brown, chief architect of choke point two and Cyanara, he has lost his, lost his senate position. yeah, so I, I'd say those, those, those are a couple of things. If you wanna, if you wanna throw us some sats, they'd be gratefully received. However, if you wanna join our organization, we're now, we're now transitioning to a membership f-free for individuals. you know, have a look at, we're, we're currently rebuild-building the website as soon as it's back up. Have a look, get in touch, any and all support is welcome." }, { "speaker": "stephan", "time": "01:14:13", "start": 4453.01, "text": "Fantastic. Well, yeah, I encourage any, UK listeners, in my audience, check out Bitcoin Policy UK. I think I've got like se- last I checked, I have maybe seven percent of my listeners are, in the UK. So, guys, go and support Bitcoin Policy UK. I know," }, { "speaker": "stephan", "time": "01:14:30", "start": 4470.6, "text": "Bitcoiners and libertarians have a kind of, a view of like not trying to engage with the state at all, but I, I, I really do think it's worthwhile trying to engage where, where possible, where there might be, a chance of influencing things in a, in a positive, you know, pro-liberty direction. So guys, go out and check it out. Links will be in the show notes. And Freddie, thanks for joining me." }, { "speaker": "freddie_new", "time": "01:14:51", "start": 4491.5, "text": "Thank you so much for having me. It's been a pleasure. Cheers, Stefan." } ] }