[PART 1] Major “crypto” bills passed in Washington DC today. Here’s a quick rundown

00:02 Major crypto bills passed in Washington 00:04 DC today. Let's talk about what they 00:06 are, what they do, and what if any 00:08 impact they have on Bitcoin. Okay, so 00:11 three bit uh three bills passed in 00:14 Washington DC today. One of them, I 00:16 believe, or maybe two go back to the US 00:18 Senate, but they will pass there. The 00:20 other go straight to the president's 00:22 desk for signature. And those three 00:23 bills are first a stable coin bill 00:26 called the Genius Act. Stable bills are 00:28 digital representations of the US dollar 00:31 which are primarily valuable to people 00:33 outside of the United States. For people 00:35 inside the United States, there's really 00:36 no reason to use a stable coin because 00:39 it's pegged to the value of the US 00:40 dollar and people inside the United 00:41 States already have access to the US 00:44 dollar with the existing banking system. 00:47 At least most of them do. So, the Genius 00:49 Act puts rules of the road around stable 00:52 coins and will result in the US dollar 00:56 being much more widely available and 00:58 widely used outside of the United 00:60 States, which is actually good because a 01:02 lot of people live in countries where 01:03 their currency totally sucks and is 01:05 getting is losing its purchasing power 01:08 and being inflated way by 50 to 100% per 01:11 year. So, the value of their purchasing 01:13 power is dropping by half like literally 01:16 every 12 months. So obviously the US 01:19 dollar drops in value by somewhere 01:20 between 4% and 9% per year, but that's a 01:25 lot better than 50% or 100% per year. So 01:28 the more people that are using the US 01:29 dollar instead of some completely 01:31 defunct local currency is actually good 01:33 for those people. It's also good for 01:35 Bitcoin because if you are using a 01:38 stable coin, the two biggest ones are 01:40 USDT. The T stands for Tether. The USD 01:43 stands for US dollar. So USDT is US 01:46 dollar tether because it is tethered to 01:50 the US dollar. The other and it's uh uh 01:53 the company behind it is called tether. 01:56 Um the other big one is circle uh USDC. 01:59 The C stands for circle. The C also 02:02 stands for coin. USD coin. Um so USDC 02:06 and USDT are the two big ones and they 02:09 represent hundreds of billions of 02:10 dollars today. But with the passage of 02:13 the Genius Act, they could represent 02:15 trillions of dollars uh of US dollars. 02:18 And the reason the US government cares 02:20 about that is because they want their 02:21 currency spread around the world. And 02:24 because all of these companies, the way 02:25 they uh mint these stable coins is by 02:28 buying US treasuries, which is 02:29 government debt. So um basically, it's a 02:32 it's a way for to create a new buyer of 02:36 US government debt in a world where 02:38 increasingly people do not want to own 02:40 US government debt. because the 02:42 government does not look like a good 02:44 credit risk at $37 trillion in debt. So, 02:46 that's the stable coin bill. It doesn't 02:48 directly affect Bitcoin other than 02:50 obviously it's way easier to buy Bitcoin 02:53 if you're uh if you already have a 02:56 cryptocurrency that you're transacting 02:57 with. So it is much easier to go from 02:60 USDC or USDT to Bitcoin as compared to 03:04 you know the Zimbabwe whatever currency 03:07 or the you know Thai bot or the Honduran 03:11 uh Limpira or a peso or something like 03:14 that. So it's good for Bitcoin in that 03:16 it makes it a lot easier to get you're 03:18 basically halfway there. If you have 03:20 USDC or USDT you're basically one click 03:22 away from turning that into Bitcoin. uh 03:25 as opposed to if you have other 03:26 currencies, it's, you know, a lot more 03:28 hurdles you got to jump through to end 03:29 up with Bitcoin. So, it's good for 03:31 Bitcoin that way, but it's not directly 03:33 applicable. But that is the Genius Act 03:36 uh that got signed or voted on by the 03:38 House of Representatives in Washington 03:39 today, and I believe that one goes 03:41 straight to the president's desk. Um I 03:44 forget which is which, but anyway, the 03:45 Clarity Act is a rules of the road for 03:48 all cryptocurrencies. It doesn't 03:50 directly affect Bitcoin because Bitcoin 03:52 is a commodity, not a security. So, 03:54 Bitcoin has already had clear rules of 03:57 the road for a long time. So, it does 03:60 not need the Clarity Act to clarify 04:02 that. But there's certainly a benefit to 04:04 having cryptocurrency in general, the 04:07 rules of the road more clear because a 04:09 lot of major institutions in the United 04:11 States are still scared of digital 04:13 assets and scared of um cryptocurrencies 04:17 because they they feel like there's not 04:20 uh legislative and regulatory clarity 04:22 around those things even though there is 04:24 for Bitcoin because there isn't for so 04:27 many other things in the world of 04:28 crypto. they are they lump them all in 04:31 together as sort of a big scary pile and 04:34 they don't want to touch them. So the 04:35 clarity act clarifies that which is it 04:38 clarifies what is a security, what is a 04:40 commodity, what is a stable coin, what 04:43 is a digital asset. Basically, it lays 04:45 out all the different sort of digital 04:47 things you might be able to own, what 04:50 the rules are around each of them, and 04:52 who the regulator is, whether it's the 04:54 security and and exchange commission, 04:56 the SEC, or the whether it's the CFTC, 04:59 the uh commodities trading futures C 05:03 commodities futures trading commission, 05:05 CFTC. Anyway, but it makes all of that 05:08 clear. All right. The third piece of 05:10 legislation is the anti-CBDC 05:13 legislation. So what is a CBDC? A CBDC 05:16 is a central bank digital currency. If 05:20 you think, wait a second, central bank 05:22 digital currency, how is that different 05:24 from a stable coin, which sounds like 05:26 it's also a digital currency? How is it 05:29 different? Well, the big difference is 05:30 one of them is controlled by a private 05:32 company and the other is controlled by a 05:35 central government. So um in the case of 05:38 Tether and Circle uh they have to back 05:42 it by US dollars and they are private 05:44 companies. Now that does not mean 05:46 private companies cannot exhibit bad 05:48 behavior but private companies are much 05:51 more likely to exhibit uh good behavior 05:54 as compared to governments which are 05:56 constantly in general uh behaving badly. 05:59 So the anti-CBDC bill says the US 06:03 government will never in will never 06:05 issue a central bank digital currency, 06:07 meaning it will never be in the market 06:09 competing with Tether and with uh Circle 06:13 and with others if there's, you know, a 06:15 major bank issues a stable coin. They 06:17 could do that. Uh the US government has 06:19 committed with the anti-CBDC legislation 06:22 that they will never introduce their own 06:24 central bank digital currency, which is 06:26 great. Again, it doesn't directly affect 06:28 Bitcoin, although it does mean Bitcoin 06:30 will not have to compete with a central 06:32 bank digital currency at some point in 06:34 the future because there won't be one. 06:36 Um, central bank digital currencies are 06:38 actually pretty terrifying. uh because 06:40 if the government has digital control 06:42 over the money for example the European 06:44 central bank and the bank of 06:45 international settlements which is the 06:49 central bank of central banks so each um 06:51 you know each geography has their own 06:53 central bank the European central bank 06:55 which is we call ours the federal 06:56 reserve the ECB is the European central 06:59 bank and you know Chinese the government 07:01 has its own central bank and all that 07:03 well there's a central bank of central 07:05 banks called uh the uh the bank of 07:09 international settlements the BIS. Um 07:11 anyway, so actually I'm going to do a 07:13 separate video with more details on this 07:15 and I will break it into two parts. 07:17 Thanks.