 They're not afraid that criminals will use it, they're afraid that all of the rest of us will. Bitcoin, or at least cryptocurrency, is one of the biggest threats, number two out of three in fact facing our world today, or at least that's the story being told by the International Monetary Fund, better known as the IMF. The IMF is one of these supernational organizations that plays a very large role in the coordination of international monetary policy among other things, but what are they concerned about and why is it so dire? Well, it's cryptoization of course, a word that you've probably never heard of, I certainly hadn't, but on this episode, boy oh boy are you going to. But before we get to that, my name is Adam B. Levine and this is Speaking of Bitcoin. Today I'm joined as always by the other host of the show, Andreas M. Antonopoulos. Hello. And Jonathan Mohan. Hey, hey. Stephanie is out this week. So on the topic of cryptoization, which you can find on page 49 of the report if you are following along with us, the IMF notes that according to multiple data sources and methodologies, emerging markets are adopting cryptocurrencies the fastest and at a faster pace this year than in prior years, especially when compared to places like the US or UK, which are actually seeing some of the slowest adoption. But why is that happening? According to the IMF, quote, weak central bank credibility and a vulnerable banking system can trigger asset substitution as domestic residents seek a safer store of value end quote. So in other words, if people have the option, as we've been saying, to save in something that can't get stuck in an insolvent bank or devalued by a corrupt monetary policy regime, they're pretty motivated to start doing that. And in fact, they are and they do. Another factor driving adoption is quote, inefficiencies in payment systems and limited access. But how much of a concern is this really? Well, the IMF says things are OK so long as the technologies only see quote, a limited degree of adoption end quote. And people only use it as a transmission rail before quickly converting it into local currency. But if there is a quote, more extensive degree of adoption end quote as a means of payment or store of value that can pose significant problems. Those challenges include quote, impeding central banks, effective implementation of monetary policy and lead to financial stability risks end quote. In addition to repeated concerns about mining and environmental impact that have been pretty much discussed to death over the last half dozen years. The IMF also was concerned about quote, the banking system coming under pressure if the crypto ecosystem becomes an alternative to domestic bank deposits or even loans end quote, which they say, as we've been discussing a little bit earlier, could push banks to take bigger, less stable risks. Now we're not going to address that part right now because we talked about that before the break. But again, this idea of alternatives, right? So I mean, that's what cryptoization is really. It is the idea that there are alternatives that present options for people outside of the existing system and that therefore leads to the failure of the existing system, which as we've been discussing this whole time is kind of the opposite actually of what's happening. And to the extent that it does lead to the failure of the existing system, then again, it is blaming the straw rather than the fact that the camel's back has been long overloaded and all it really takes is just a slight breeze in order to knock the thing over, right? This is the pinnacle of free market thinking in the world today. They have managed to turn the word competition into a slur by changing it into cryptoization. Competition is the fundamental basis of free markets unless it's competing against the ability to tolerate monetary mishaps when made by central bankers. It's amazing. It's amazing that they are effectively turning competition into a bad word and are so terrified of a free market in currencies. It's the one area of markets where you can't have an open free market and competition. And so why is that? Why is currency exempt from free market pressures? Why is it that currency cannot have competition? That's the question we should be asking. That's the question that Bitcoin poses. And it's a question that people find difficult to answer because they've never thought of it in those terms. When you post it that way, they start saying, yeah, really, why can't you have competition and money? I think that is what they're most terrified about, honestly. It's not, again, like the vehement reaction that we've seen, right? There was a World Bank blog post, I think it was World Bank. It might have been the IMF that we actually talked about back at the end of the summer that was almost explicitly, although without ever naming it about El Salvador and where it basically called the idea that a nation might adopt a cryptocurrency or a stablecoin even, an undesirable shortcut, right? With the idea being that they have the correct path and while you're trying to jump the line or something like that, again, it's not that they're concerned that it will fail. It's that they desperately need it to fail because to the extent that it doesn't fail, it will be repeated. And so I'm not suggesting that they're working against it, but I would be willing to bet some money that central bankers around the world, occasionally when they think about El Salvador, they go to bed thinking, man, I really hope it goes poorly, right? Because the alternative to that, the alternative, should it prove to be successful? Well, there's a lot of countries around the world who have adopted the dollar because it was the cleanest dirty shirt, but you inherit the US's monetary policy. And the US's monetary policy, again, for better or worse, whatever you think of it, it has monetary policy. And it is in the interest of certain parties, be it Americans, be it the people who are at the top of the food chain. It doesn't matter. It has people for whom it is designed to serve. And that is in sharp contrast to a system like Bitcoin, where there is no monetary policy in terms of preferential monetary policy for one preferred or favored group or another. It simply has the transparent monetary policy. It has the issuance rate. It has the amount of blocks that are supposed to be found in a given time. And it's a self-adjusting system that is designed to make it so that, regardless of the real world environment in which it operates, it will self-correct automatically, simply based upon the simple set of rules that anybody who wants to understand it can understand. And again, that is in stark black and white contrast to the system we're talking about here, where the current financial structure is not just unwilling and unable to adapt to circumstance, but where that is the thing that is most at risk, right? The idea that the system itself should accommodate reality rather than reality accommodating the system is the fundamental disconnect between these two things. In Bitcoin, there is no alternative. There is no ability to try to conform reality to the system. Instead, the system must conform to whatever those realities are. And again, that's just something that presents such a different viewpoint on how monetary policy should work at the macroeconomic level, not even to speak of the national level, but again, it is intolerable and must be demonized to the extent possible because otherwise, what if it catches on? Yeah, it's funny. I feel like they're beginning to take note of some of the ideas and slogans that we were first discussing in, honestly, in 2013. The idea that Bitcoin isn't for the developed world, but is for the other six billion, the idea that it's appealing to those who have fewer choices and greater needs, who are dealing with corrupt banks topped by corrupt governments, insolvent banks with insolvent currencies, and that is in those areas precisely, regardless of technological advancement or existence of infrastructure or difficulty with technical education, that they will go through hell to learn how to do the impossible in order to exit that system, in order to find some form of safety. And the Bitcoin is precisely for that, that it always was and continues to be for the other six billion. They're beginning to notice that. I think they're beginning to realize that this may indeed be the case. And so that will resurrect another slogan I popularized in 2013, which was, they're not afraid that criminals will use it. They're afraid that all of the rest of us will. And that's the bottom line. So we have one more part to get through, which is the eight primary policy recommendations that the IMF has made, which they believe will help dig us out of this unenviable situation. They're separated into three different sections. Standard supervision and data gets four recommendations. Stable coins specifically get two recommendations. And then macro policy considerations or macro policy recommendations gets another two. Sorry, Adam, I missed that last part. Which position was disbanding the IMF at? Yeah, surprisingly, was it at the list of eight? No, they don't talk about that. That's not one of the ones that they think should happen. But we were all very surprised to read that. But yeah, I just feel like every government program is a success, even the failures. So I feel like we should all just come together and like George W. Bush on the supercarrier have a mission accomplished banner, let the IMF have an awesome celebration, and then we don't disband it. They just they did it, guys. They succeeded. We're done now. You can rest. Stability achieved is the banner. Oh, man. OK, OK. So policy recommendations. All right. So standard supervision and data policy recommendation number one, quote, national regulators should prioritize the implementation of global standards applicable to crypto assets. Let's just take these one at a time because they're short and they're relatively easy for us to just talk about what that is saying. Correct me if I'm wrong here is that nobody can diverge, right? The national regulators need to come together, agree about how they're going to do it and then eliminate any room in the world for a company or a person to go to escape whatever the global rules are. That's how I read that. Is that how you guys read it? Yeah, regulated to death and prevent any exit from that regulatory environment. And we talked about this aspect, this idea also. And it's really simple. There is no world in which you can get such comprehensive cooperation and convergence of interest. There will always be countries that for strategic reasons have to go against that trend and want to go against the trend. And the ones that do will be handsomely rewarded by the flow of capital that is trying to exit that regulatory system. So it's a self-fulfilling, self-reinforcing, self-funding prophecy that there will always be ones who don't adopt that system. So OK, good luck with that. Regulated to death, original, I guess. No more Ireland's, I think, is a way we can say that, right? Like again, they've been talking about this with like corporate tax and stuff like that, too. But the whole problem with this idea is, is that different countries have different balances of things that are good or bad for them. So the reason why Ireland has been some place where many large companies have chosen to base is because they offer more preferential tax treatment. And that's not to say that you have to locate in Ireland, but it's to say that it's an option, i.e. it's an alternative. And by giving people a choice, you make it so that countries that choose to have higher rates of taxes or other rules or whatever, that they actually have to compete and they don't like to compete because they would like to have everything be the same so that they can just make the rules and then people have to follow them and have no choice. This is the IMF saying that for the entire world as the first recommendation, the top recommendation that we need to put into place in order to solve this cryptoization problem. Yeah, but in other realms of social and human behavior and organization, we have a name for this. Like if you require strict adherence to an ideological position without exception, in religion, we call that fundamentalism. In politics, we call it totalitarianism. What do we call it in financial affairs? It's financial totalitarianism. It's simply that the idea that you can have everyone in the world, regardless of their motivations, their interests, their different realities, different environments, different contexts, all support a single universal ideology and financial regulation or adoption of technology or approach to technology, that's totalitarianism. Not going to happen. Shouldn't happen. At least we hope not. So policy recommendation two, regulators need to control the risks of crypto assets, especially in areas of systemic importance. And quote, this one to me reads more like, Hey, everybody, you need to proactively regulate across all of the areas that we think are problematic individually within your country, which then ties back to the first one, which basically says that all of these rules need to be a minimum level of severe or just the same unified across. Well, at least common denominator standards, especially for people who have custody of assets. That's the only way the traditional financial system works. If you give Bob the money and you don't do anything additional, Bob always runs away with the money. And that's been the reality of finance forever. So everything else, all financial regulation is so that when Bob's holding the big bucket of money, Bob doesn't run away with it. That's it. And does that apply to crypto? Yeah. If you give all of your money to Bob coin or Bob exchange, and there is no additional rules or oversight or any other mechanism to prevent Bob from running away, and there are custodian, they're breaking the decentralization rules of cryptocurrency. You need something to stop them from running away with the money. Now, their answer is put a lot of oversight on Bob. Our answer is not your keys, not your coins. Don't give it to Bob in the first place. I think our answer works better because it doesn't depend on layers and layers and layers of goodwill and perfect process all working all the time. I think this is actually even a little bit broader than what you're saying there. I mean, because again, this speaks to regulators need to control the risks of crypto assets, especially in areas of systemic importance. You're talking about the consumer risks really right there, right? You're talking about people put money into a bucket and then Bob might still a bucket. The way that I read this, when we say in areas of systemic importance, to me, that means again, we're back to that alternatives thing, right? To the extent that an alternative can be allowed to exist and gains any sort of meaningful traction or popularity is to the extent that it becomes a systemic risk. So what they're saying is that regulators need to step in. And I mean, we saw a comment from Jerome Powell, Chairman of the Federal Reserve not too long ago, which was basically to the effect of stable coins need to register with Treasury and then Treasury gets to decide not just how they're regulated, but which of these stable coins actually are allowed to exist. And so if you have that type of mechanism in place, and this is actually really similar to some guidance that was issued by the Federal Reserve after Wyoming passed its law around special depository institutions, which basically are a bank that does not do any lending. It's like a bank except instead of the bank taking actual custody and becoming kind of the legal owner of any money that you deposit into it. It's more like you give your car keys to a valet. It's more like a trust. Yeah, exactly. You are transferring control temporarily, but you retain title and ownership to the underlying thing, which means that these banks typically can't land any of the money that they have under trust unless they're specifically authorized to do so and actually wind up charging people for keeping money in their institution. Because it is their money in the institution rather than it being subsidized by the fact that the bank is actually using it to create more money for themselves. So what the Federal Reserve did in this guidance, I can't remember the exact one I read it maybe six months ago, was they said that, well, these could present systemic risks. And so here's the test that someone needs to pass or an institution needs to pass in order to get the appropriate licensing to tap into the Fed based financial, you know, national system. But we reserve the right to just decide for any reason or no reason that even if someone meets all of this, that we're not going to issue them a license. Right. So they set up here the things that we're going to use to assess you. But if we just don't want you to use the system and we decide that this might be a risk to the currency or anything else, there was a giant laundry list of things, then we'll just decide not to. So again, it's like policy when it goes our way and arbitrary when it doesn't. And they like, that's just the way it is. But this type of regulatory capture and destruction of change is what they do. I mean, this idea that's described in the Bitcoin manifesto of helping the disenfranchised and giving them voice and exit has been around for 30 or 40 years. The last person who got the closest was Peter Teal with PayPal. I'll quote him in a moment from a book called The PayPal Wars, where he goes on what you would describe would be a perfect synopsis for Bitcoin. And the reason PayPal failed was the moment they got too big because they're centralized, all of these forces that the IMF are describing that they need to do to Bitcoin, they applied to PayPal. And because it wasn't decentralized, it worked. And what they're going to learn is, you know, the eye of Sauron can only think of someone who wants power, right? It can only conceive of people who want power, who think like it, who are like it. The concept of a hobbit is just so anathema to them that they don't even know how to get it to do what they want. And what they need to realize is, you know, Bitcoin's a hobbit, right? Like it doesn't want power. It doesn't need power. You give it the ring and all it sees is a field with a bunch of crops on it, right? Like it doesn't even want to control the world. And in that lack of desire, in that lack of control, in that lack of centralization, they're just not going to be able to do anything about it. Number three in this section against standard supervision and data is coordination among national regulators is key for effective enforcement and less regulatory arbitrage. I don't really have any comments about that one. Seems like we've been having this whole conversation. And the points that they're making are actually basically the same point just at different levels. What do you think? When did arbitrage become a bad word, too? Again, it means, you know, someone taking advantage of an opportunity. Now, the fact that that arbitrage exists means that there's an inefficiency in the market, right? It means that in one place, there's one set of rules. In another place, there's another set of rules. And by crossing and working in both of those places, you can actually create advantage for yourself. So you go back to their earlier points and, well, you just eliminate any different rules and then arbitrage is gone. So it's no problem. All right. Sounds like a pipe dream. Continue. Okay. So four, regulators should address data gaps and monitor the crypto ecosystem for better policy decisions. I think this can broadly be summarized as more people should work with companies like Chainalysis, right? Or build their own in-house capabilities to be able to do this type of really deep data, you know, dives such that nobody can hide for us, right? All right. I mean, someone's got to finance the development of privacy coins. Well, I just think it's not even about privacy, right? It's not even about tax evasion or any of that. The whole reason why three billion people can't get a bank account is because the government has decided that they choose for them not to have a bank account. And so under this clout of, well, if only you were able to use identity services like Chainalysis, well, then we wouldn't have a problem with the service that you're providing. But the entire purpose of the service is to help the people that they explicitly say they will not serve. And so it's a tautology that says, well, the moment crypto and stable coins will be happy with is the moment they stop servicing the people that we tell you you can't service, which is half the human race. And it's because they don't have the documentation that they choose for them to have in order to be able to be in the banking ecosystem. So it's this circular logic of, well, only after you stop serving half of the human race, then we'll be OK with you not doing anything. So the first three, I think we can summarize as there is no alternative, and I think we can summarize four as and there's no place to hide, right? Like you're not allowed to hide either. We need to know everything about you. And we can see this manifesting in the US right now, you know, where in one of the infrastructure bills that's currently going through the legislature, there's a provision in there that basically says that banks need to start reporting balances and flows from any bank account in the US that contains or receives more than six hundred dollars over the course of a year. So again, this really feeds into that. We don't trust you. And if you're trying to hide anything, we're not going to let you do that because we need to know everything so that we can make sure that you're following the rules. And the Fourth Amendment no longer exists. And if you realize next year, they're going to introduce a policy that says that any phone number with minutes exceeding more than six hundred minutes in a year, you'll have to just turn over all of the A.I. transcripted voice recording backups of every phone number and these unserialized phone numbers. Man, that's the real problem. And then before you know it, we turn into China where your phone number is your identity. And the moment you lose your phone, you got nothing and you can't do payments and everything is surveilled. OK, so just from my edification, that's a hypothetical you're putting out there, right, Jonathan? That's not something that's been announced that I missed. Oh, it's been announced just not the circles that you travel, but, you know, seriously. OK, so moving on in their section on stablecoins specifically, they say, so this is this policy recommendation. Number one, quote, regulation should be proportionate to the risks and in line with those of global stablecoins. I actually don't really know what I think about this one, just in terms of I'm not exactly sure what they mean. What do you guys think it means? So the interesting question is the risks to whom? Yes, my assumption would be the risk to the global system and or central bank autonomy or central bank independence as personified by the IMF itself. Of course. You see, this is the thing just before you said, well, these regulations are not about consumers. These are about the system. And I really question this whole duality. I mean, I think it's a very American thing, too. And it's been kind of hammered into our head that there's a difference between the economy and consumers. I mean, the word consumers itself is straight out propaganda. But the idea that Main Street versus Wall Street, the consumers versus the economy, the system versus the people, like seriously, how can you have stability in a system if the people don't have stability? If all we're doing is protecting against the risks to the system, it shouldn't that include the risks to the people or the people only affected if the system is affected? It's kind of like this really weird separation where the IMF sees itself and I think this is common in the upper echelons of banking and finance in general, where they see their role as systemically important and they start blurring means and ends until eventually the means are the ends and protecting us is protecting the economy. And you end up with these really perverse incentives. So I don't really know what this means. I mean, the question we should always be asking in these types of scenarios is who's risk, who benefits? We both know just briefly before we go on again to the question of is it about the people or is it about the system? I think clearly it's about the system and the reason why it's about the system is because you can't help people with monetary policy. What people need for monetary policy isn't stimulus. It's stability. It's the ability to make decisions that over a medium or long term aren't going to prove to be stupid because 12 people who are really smart and well credentialed decided that they were going to change the rules every three months. That's kind of the world that we're living in right now. And again, like this warrants a whole episode is the idea of the preservation of the system is prioritized above the well-being and utility of the system for the people who are nominally supposed to use it. Instead, it appears to be run primarily with the people who are operating the system or who are very close to those positions of power, close to the people who are running the system. That is who it appears to be operating for. And perhaps this was always inevitable because these types of systems, again, like to the extent that you do this type of active management is to the extent that you introduce these types of uncertainties into the system, which then degrades its utility for everyone else. Now, we're clearly at the end, God, I hope it's near the end of this cycle of degradation of the system as it stands right now. But at this point, it just feels like they've abandoned all pretense of this being about anything other than the preservation of the system. It's, again, like it's not about the people, it's about the country, right? I love this because the final visual for me doesn't come from reading economics or studying philosophy or reading the reports of the IMF. It's from the movie Wally. The final outcome of this, where you work to preserve the system, is a lone little trash robot picking up mountains of trash on a planet that's been dehumanized. Yeah, exactly. We got three more to get through and then we're gonna wrap this thing up. So the second part of the stablecoin policy recommendations is coordination is needed to implement recommendations in areas of acute risk, enhanced disclosure, independent audits of reserves, fit and proper rules for network administrators, issuers and more. Now, in this particular circumstance, I think this is fine. Again, like to the extent that there are real companies operating real stablecoins, right? You know, like your coin bases of the world and stuff like that, they should be regulated. I actually have no problem with that whatsoever because they're performing a custodial function. And as we were discussing before, again, Bob really can run off with that bucket of money. You know, again, like the world in which stablecoins were birthed into, you know, was a very different world than the one that we're living in today. This whole thing, again, back at the time that we were getting started talking about this stuff, there were so many unknowns of just from a technical standpoint, would this fail? And Tether was the first project kind of out the gate to say, all right, well, we're gonna provide this idea of a stablecoin, right, tied to US dollars. You don't have to go back to your bank every time you want to sell crypto, which used to be the status quo. But again, fast forward eight years, that is not the world that we're living in today. The world that we're living in today, there's lots of competition. And one of the things that I've been kind of most heartened by is sort of the mix of what makes up the asset backing. Well, if you look at that four years ago, we didn't even know what the mix was because nobody talked about that because nobody needed to because there was no competition. But now with multiple big players in the space, we've kind of seen this race to the boring, as I've been calling it personally, where it's like, you start off with Tether with most of their money held in commercial paper, and then somebody comes out and they say, but we hold ours in cash in a bank. And then another one comes out and says, well, we hold it in a bank and we don't even lend it to anybody, right? And like there's just all of these different things that again, by nature of competitive pressure, people and the companies that were the early movers in the space are forced to accommodate. And now even Tether, again, like still a problematic project for lots of reasons, but even Tether has shared a lot of their constituent or a lot of what they're actually holding their money in and they've intentionally made it more boring because now that they have to tell people how they're keeping their money and people care and people ask them, why are you doing that? That doesn't seem safe. Even if it's making you some money, they've had to become more boring. So on the one side, national regulation around companies like that, that seems like that's something that's actually pretty in line with this stuff. Decentralized projects, not so much, but centralized projects, it is what it is. But at the same time, just the natural market pressures of competition have already achieved the result that we're talking about without any of that really coming into play yet. Yeah, I'm struck by something else, which is all of these recommendations so far seem to me to fall in two extreme opposites. One group of recommendations are the mundane and consequential and ones that are obvious and really won't have an impact if the overarching goal is to prevent or delay or disrupt cryptoization and the evils that will come with it. So, a bit here and there, let's put some lipstick on the pig, let's try some half measures in consequential shape. And then there's the other end of the spectrum where it's big, massive, completely pie-in-the-sky wishful thinking that will never work, but has to work completely and totally for it to work at all. And there's nothing in between. There really isn't anything innovative, counter-disruptive, creative in these recommendations. They've just put together the list of things we really wish we could do, but we actually know we can't. The giant idea is it will only work if they work perfectly, otherwise not at all. And also, let's fiddle around in the margins over here, rearrange the deck chairs on the Titanic to reuse that analogy. Yeah, I love that analogy, by the way. I was thinking exactly the same thing. Okay, cool. So, final section is policy recommendations, specifically around kind of macro concerns. One, enact de-dollarization policies, including enhancing monetary policy credibility, a sound fiscal position, effective legal and regulatory measures, and the implementation of central bank digital currencies. Now, this is a really fun one, I think. That sounds like an announcement for an SDR stable point. What it's saying, I think, is that you better get in front of this, right? Like, if you're wanting to keep the system that we have today, you better get in front of this. And so part of that is, as we were talking about earlier, de-dollarization policies, right? So, bringing back kind of the sovereignty of monetary policy into the fold at the national level. It's kind of an interesting argument for the IMF to make, given how dependent they are on the US dollar and on the US empire. But, again, that's what they're saying there. A sound fiscal position, I mean, that seems reasonable. Basically, that means probably it's good if you can afford to pay your bills rather than having to devalue, which then leads to kind of all of these other problems, effective legal and regulatory measures. I mean, that also sounds pretty good. That means instead of lawlessness within your financial system that you might actually have laws that aren't just on the books, but that actually apply and apply equally in an attempt to prevent bad actors and corruption and to kind of lead to better outcomes. And then the last one, the last one is the fun one, implementation of central bank digital currencies. Central bank digital currencies are only useful in the context of, they take the sort of trappings of the technology of the cryptocurrency movement, and then they wrap it around that same creamy nugget of central bank monetary policy. People think that this is about technology, but we know that this is not about technology. This is about monetary policy. And the idea that monetary policy, not that it would be controlled by someone else, because again, many countries are willing to outsource their monetary policy to the United States. That's not the concern. The concern that there would be no monetary policy that is affected in anyone's behalf in favor of any particular group, that is the problem. That is the thing that is intolerable. And it's why as we see this movement continue, we will see many central bank digital currencies. And they will typically be accompanied by bands of any sort of competing product. Because again, the reason why cryptocurrency, especially Bitcoin, are valuable is not because of the technology. It is because you do not have to worry about the monetary policy shifting under your feet after you've already made decisions using it as a baseline assumption. And that, again, cannot be tolerated. Yeah, I think that's the direction we're going. And we're probably going to see that. But I think it's ultimately ineffective. Because let's go back to the statement made earlier on in this report and this where it all falls apart. Where are these things being adopted? They're being adopted in developing countries where people have the most need because they're faced with insolvent banks, insolvent currencies, hyperinflating currencies, corruption, corrupt governments, confiscation, capital flight, all of these ills of financial collapse. That's where cryptocurrency being adopted. Those countries creating central bank digital currencies will do absolutely nothing to stymie this flight, nor will it stop them from leaving if they ban the use of cryptocurrencies because that's just one more law they're going to have to break on a Tuesday. The bottom line is that there is a need not for the trappings of cryptocurrency, not for the wrappings of cryptocurrency, not for the appearance of cryptocurrency, but for the essence of cryptocurrency, decentralized neutrality, unimpeachable sovereignty over your own finances. Those are the essential elements of cryptocurrency. And you can wrap your central bank garbage in all of these words and do a lot of marketing, but the people who need it the most, the people in these developing countries, they know it's a pig. They've seen this pig before. The new hue of lipstick is not persuasive. This pig not only got delivered to them 20 years ago, but it also had the blessing of the IMF then with a package of austerity to boot. They're not going to buy this time either. So the final policy recommendation again in this macro section, I actually think that we agree with, and correct me if I'm wrong here, quote, capital flow restrictions need to be reconsidered with respect to their effectiveness, supervision, and enforcement. Maybe I'm just giving too charitable a reading here, but I read that a lot like saying, sorry guys in this new world where blockchains don't care about your borders and they don't care about your policies. You might want to not have those policies because otherwise you're going to be encouraging people to use those technologies that can ignore them. That's how I read it. How do you read it? That's hard to tell really. It's either that or it's a completely toned death. Let's double down and reconsider capital flow policies and make them stronger as if that's possible, which I think is the direction that most countries are going. So if you look at the history of these controls, it's like if you spend more than X and that X either keeps getting smaller or they just wait for inflation to eat it up, right? In the 1970s where they put the reporting requirements of 10,000 US dollars for a transaction in the US, you could buy a small house for that kind of money, right? Now you can't buy a mid-sized sedan. So it's a very, very different amount, but the rule has remained stubbornly the same. You look at what they're doing in Europe, in many countries they have limitations of up to 3,000 euros and those limits are dropping in France. I think they dropped it to 1,000 euros for cash. Now they're talking about smaller amounts. You just mentioned $600 for capital flows. So the trends are actually much more on the cynical side. Double down on a failing policy, make the requirements lower and lower and lower until everything is reported and everything is controlled. Again, it's this wishful thinking of totalitarianism, which ultimately pushes more people into these alternative systems because here's the thing that either they don't get or they don't care about getting. The people who get caught up in these traps, in these nets are the taxi driver who was carrying too much cash to deposit to the bank, the laundromat operator who are not doing money laundering, they're just trying to get on with their life and they get into these horror Kafka stories of losing access to their money or being unable to send money to their family or whatever and that's the moment when they get introduced to alternative mechanisms of payment. So crippling further your national mechanisms of payment in order to kind of approach more closely this ideological totalitarian environment only makes them suck more for the average person and that suckiness is our greatest marketing for cryptocurrency. So keep doing that, keep doing that. That's the cynical read. The charitable read, you think they've finally seen the light and realize that that's what's happening and they should probably try to relax these things? I don't think so. In fact, I think they might have a hard time selling it. Like if they go back to the average politician or campaign and they say, you know what, turns out we really didn't need to be so strict on money laundering. It's not as dangerous as you might think the criminals are not going to do it at all with cryptocurrencies or whatever. I don't think they're gonna believe them anymore. They've been sold this ideology for 50 years now and so I don't think you can soft-pedal, back-pedal this into a more relaxed stance. I think that the charitable interpretation on my side is just that, again, this is the IMF saying something publicly. Behind the scenes, they know the threat that they face and many of the countries around the world and the people who operate those systems understand the threat that they face. Perhaps not thinking that it's explicitly about cryptocurrency, but it's the threats to their controls, right? So we're basically out of time for this episode just to kind of sum it up. What is the IMF afraid of? Any alternative or way for normal people or companies or anybody to in any way opt out of the existing financial paradigm in which they play such a crucial role. Those in power or in close proximity to power have everything to lose from an alternative that lets people make a choice. The idea of choice in this particular case is the problem itself. In reality, that the IMF has with all of this. In a world where there is no alternative, the status quo can't even really be questioned because there's nothing to compare it against. But in our world, Bitcoin exists, crypto exists, and simply by existing, they present a view of what a global financial system could be. And just by doing that, before we've even seen any real level of global adoption, it's spurred more change to the global financial system than any reform effort, certainly in my lifetime at least. It's an existential threat to their power in a way that they can't tolerate. And that is terrifying to the institutions who benefit from the way things are today. That's all the time we have for this episode of Speaking of Bitcoin. This episode featured Andreas M. Antonopoulos, Jonathan Mohan, and myself, Adam B. Levine. This episode was edited by Jonas with music by Gertie Beetz. If you have any questions or comments, send us an email at adamatspeakingofbitcoin.show or leave us a review on your favorite podcast player. We definitely appreciate that. Thank you very much for listening. We'll be back with another episode next week.