Bitcoin, CBDC's, and the GENIUS Act

This is Matthew Cat's Bitcoin University. Today I want to talk about Bitcoin, CBDC's, and the Genius Act.

Try this one weird trick if you'd like to understand the true intent of any government act. All you need to do is replace the main word with its antonym, with its opposite. So, for example, if you want to understand what the Bank Secrecy Act is about, you can just call it the Bank Surveillance Act. Or the USA Patriot Act, you can just call it the USA Trader Act. And now we have the Genius Act, which, of course, using the same method, you should read as the idiot act.

Genius stands for "Guiding and Establishing National Innovation for US Stablecoins Act." And like many government things, even the acronym doesn't quite work, does it? Now, if you were foolish enough to believe that Bitcoin is the greatest financial innovation of our lifetime, the current administration would beg to differ. This is a post from the White House, Genius Act signed into law.

The Genius Act creates a clear and simple regulatory framework to establish and unleash the immense promise of dollar-backed stablecoins. This could be perhaps the greatest revolution in financial technology since the birth of the internet itself. This tells you what the White House really thinks about Bitcoin versus stablecoins.

What's a stablecoin? It's what you get when a central banker mates with a blockchain. It's a very intricate procedure. You get dirty fiat, forever wars, Federal Reserve, IRS payment tokens on crypto rails. And if that doesn't sound like Bitcoin, you would be right. Hooray.

Stablecoins are the great store of value, just like the US dollar. We can see that stablecoins, because they're basically US dollars, they will hold value the same amount. But that's not all. You probably didn't realize that stablecoins are also perfect censorship-resistant money. That's why Tether yesterday blocked some USDT which got stolen. This is not to say that I'm in favor of criminals, but just to point out that stablecoins are highly surveilled and they can be confiscated or frozen at any time. Stablecoins are simply a form of US dollars that can be more easily programmed, censored, and confiscated. So, actually, this is a genius act from the point of view of the authoritarians who want to control you and your money.

The Genius Act gives the Federal Reserve, in other words, the US Central Bank, a lot of regulatory control as well. And that's what makes these kinds of stablecoins virtually indistinguishable from CBDC's, apart from the very technical factor that CBDC's would be issued directly by the Fed and ride directly on some Fed blockchain rather than being available on multiple blockchains. I think that would be the technical distinction, but they're basically the same thing when it comes to surveillance, when it comes to control, and when it comes to fiat debasement.

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Now, unfortunately, this is the new American way. So, for example, the US government, according to the First Amendment, cannot ban free speech. But that's okay. Just have the Biden administration call up Jack Dorsey at Twitter and Zuck at Meta and tell them which people to deplatform. That's how the government can control free speech. Government can't ban guns. That's okay. Just have the US federal government go after anyone who provides banking services to gun sellers, like Obama did under Operation Chokepoint. I'll put a link to this in the description notes below.

So, what's happening here with the Genius Act? This is very similar to the anti-free speech and anti-guns playbook that's been followed over the last two decades. The US government can't roll out a CBDC, a central bank digital currency, because Trump made some promise to voters. That's okay. Just have Tether and Circle and all the big Wall Street banks roll out stablecoins instead and then have the federal government exert control over them by applying pressure to these companies. So, this is how you do it. The government can't interfere in these things directly, but what they can do is allow a few huge corporations to get market share and then just control those corporations, as they did with Twitter during the whole pandemic. It's the American way. And the best way. And the best part is that it keeps the central bankers and other elites in charge.

We spoke about the real motivation for stablecoins in previous videos over the years. This is one from about a year ago, "USD Stablecoins Exporting US Toxic Sludge." In this video, I discuss how expanding the US dollar stablecoin market could be used to increase demand for US treasuries in the wake of declining petrodollar and East Asian trade surplus recycling. If so, this would be yet another example of the US dumping its toxic waste on developing nations. What developing nations really need is BTC, but perhaps USD stablecoins could be the entry drug.

So, we've covered this before. In summary, that argument is that the US government needs dummies to buy its toxic sludge debt, and foreign governments just don't want to buy it anymore because they don't want to have their treasuries confiscated like Iran and Russia did. And this is why China's been letting its role of treasuries mature and roll off its balance sheet. But the big, not-so-beautiful bill is going to lead to more huge deficit spending that needs to be paid for by borrowing. So the playbook here is just to issue a lot of short-term debt, short-term US government debt called T-bills, which have a maturity of, let's call it, one month to a year. Just issue a lot of these T-bills and have stablecoin issuers buy them to help to fund the US government. I believe this was Paul Ryan's idea originally, which was floated a couple years ago. And this is what Tether's been doing for years. They now have in net circulation $161 billion worth of Tether dollars, US USDT. If we take a look at how these are backed, 81% of them, 80-81% of them are backed by US Treasury bills, US bills. So that puts it at about, let's call it, $128, $129, $130 billion worth of T-bills that they need to buy every single year. Now, if we look at that's very significant. That is more T-bills, or that's more treasuries than, let's scroll down here, that's more treasuries than Saudi Arabia owns, South Korea, UAE, and even Germany. So Tether now owns more T-bills than Germany does. So that gives you an idea of how these stablecoin issuers can drive demand for toxic US government debt.

The Genius Act is really nothing more than a way to keep the US debt Ponzi going while delaying the Bitcoin revolution. When people tell you that stablecoins are going to help onboard more people to Bitcoin by providing fiat on-ramp crypto rails, I think that's complete nonsense. It's easy to buy Bitcoin today using US dollars. You can buy them from your bank or various apps. You don't need a US dollar stablecoin for that. It's also easy to earn Bitcoin today by selling goods and services. This is perhaps the best way to accumulate Bitcoin, and just accept Bitcoin for your goods and services that you're selling. There's a company called Zapright that makes it really easy to do this. I'm not being paid or compensated in any way by them. I'm just a happy customer. This is Zapright. I'll put a link to them in the description notes below. And they allow your business to accept Bitcoin over Lightning and on-chain as well. You can see on my website at bitcoinuniversity.com, there's this option in the top menu. You just click "Pay with BTC," and it takes you to their checkout page, and you just, all you need to do is put in an email because I need to be able to contact you somehow to give you your login information, but then on the next screen, you can pay using Bitcoin or Lightning, on-chain Bitcoin or Lightning.

So, I don't think we should be exploiting the global south by onboarding them into digital dollars like US dollar stablecoins instead of BTC itself. Stablecoins are good for politicians. They're good for central bankers, and they're good for shitcoiners too, who want to onboard more and more people into their shitcoin ponzies. But stablecoins have nothing to do with separating money from state. In fact, they're the exact opposite. Stablecoins are just another fiat monstrosity now being heavily promoted by the same administration that brought you the Trump and Melania scam coins.

Fortunately, there is still a form of freedom money that cannot be censored, confiscated, or debased, and that you can use to protect you and your family from the Epstein-loving elites who openly despise you and think that you're stupid. And that solution is called Bitcoin. Much better solution than stablecoins. The dollar really is a monstrosity. It's a monetary parasite. There's nothing American or virtuous about it either. The US dollar is the money of endless war and oppression by bankers, and our own founding fathers would have despised it and despised stablecoins as well. So don't buy the bill of goods that the bankers and the Republican and Democrat fiat maximalists want to sell you. Just opt out of the system and buy and hold Bitcoin instead.

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