Matthew Pines on the Geopolitical and National Security Implications of Cryptocurrency Adoption

Matthew Pines is the director of intelligence for SentinelOne Strategic Advisory Group and is a veteran of the national security world. Matthew is also the author of several papers on cryptocurrencies and their implications for national security, including a recent one titled, *Great Power Network Competition & Bitcoin,* and he joins David on Macro Musings to talk about these linkages. Specifically, David and Matthew also discuss the Strategic Bitcoin Reserve proposal, the problems with our current network approach to national security, how digital currency can enhance dollar dominance worldwide, and much more.

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Read the full episode transcript:

Note: While transcripts are lightly edited, they are not rigorously proofed for accuracy. If you notice an error, please reach out to [email protected].

David Beckworth: Matthew, welcome to the show.

Matthew Pines: Thanks for having me.

Beckworth: Well, it's a great time to have someone like you on the show. There's a lot of crypto issues in the news. We have a presidential election where one of the candidates claims [he is] going to be the president for [the] crypto industry. We also have talk of stablecoins, lots of things happening in that space, so I'm delighted to have you on, Matt. You've covered this in your work, but you are also a part of a national security world that I'm not very familiar with, and you bridge the gap between those two, and I think that that's our connection. We've met before, and that connection is because I'm more in the finance world, you're in the national security world, and the linkages between national security and finance come together, and we have become acquaintances because of that. Tell us about your career and your journey into that space.

Matthew’s Journey into the National Security Space

Pines: Yes, I'll give you the abridged version. So, as an undergrad at Hopkins, I studied physics and philosophy. I thought I was going to become an academic. I did a hard pivot after realizing that working in the lab eight hours a day wasn't for me. I went over to the London School of Economics and did a master’s in public policy and philosophy. Again, I kind of stalled, figured out what I want to do with my life. I came back to DC. I got a fellowship at the National Science Foundation, actually, where I was a science assistant helping manage the grant programs for all of the economics discipline, but also decision risk and management sciences and the science of organizations programs. So, I worked for two years there, helping to convene those panels, review, and support the program officers that make those grants.

Pines: So, that was kind of a feeder program to do PhDs in economics or a related field, but I, again, tapped out of going into academia. I got my start in the national security world, essentially, working as an analyst for a startup that was doing war games for the US government. And so, there, we were essentially simulating, whether it's on a tabletop level discussion or full scaling of thousands of people around the country, all sorts of bad case scenarios. And so, that's how I got my start in government work and the classified security space.

Pines: And throughout that portion of my career, I really focused on helping the government evaluate, essentially, worst case scenarios. So, that was either in these types of simulations, exercises, war games, or more analytic assessment program evaluations of our national continuity programs and our programs to understand how prepared the country is for all hazards, both natural disasters as well as the range of man-made contingencies. So, that's where I jumped from project to project, consulting for a number of different government agencies, FEMA, the National Security Council, parts of the intelligence community, the Defense Department, kind of understanding a lot of different problems.

Pines: I transitioned from doing government consulting a few years ago to lead the intelligence practice within another small consultancy that was focused on advising multinationals, critical technology companies on the intersection of geopolitical and cybersecurity risk. So, I joined the Krebs Stamos Group founded by Chris Krebs and Alex Stamos, former Assistant Director [and] former Chief Security Officer for Facebook and Yahoo, and our clients, of course, were facing a change in global order, where the premises of globalization, of free trade, of international relations were being upset.

Pines: There was acute demand from C-suites and boards to understand how to navigate these fields. And so, our core expertise was cybersecurity, but I brought some of the geopolitical dimension to integrate with that, but also to advise multinationals in how to navigate that. So, that’s what I’ve been doing for the last several years now, [and] that firm was acquired by a large cybersecurity company called SentinelOne. And so, I’ve bene there ever since as the director of intelligence for PinnacleOne, which is the rebranded Krebs Stamos Group within the cybersecurity business. So, that's the TL;DR. I have had a parallel track in the Bitcoin policy space. I'm a national security fellow for the Bitcoin Policy Institute. I've been with them for about four and a half years. There, I've been writing and thinking about and helping engage with policymakers on the intersection between Bitcoin, digital assets more broadly, national security, and geopolitics.

Beckworth: Very fascinating. So, since you're in that space, I want to ask a question since I had a guest on recently from the Atlantic Council, I believe [it was] Josh Lipsky. He talked about this gap between people on my side who are into finance and international econ issues— we think about dollar dominance a lot— and then people on the other side who think about national security issues. And these issues are connected, but we often don't see the other side's perspective. Do you also see that missing middle part there?

Pines: I do. I think that when you're in the trenches, when you're a technocrat, when you're an expert in a particular policy field, you tend to, rightly so, focus on the immediate details of policy debates, informing whatever the political mandate is of whoever's in power, and driving the internal policy discussion inside different administrative bureaucracies. From my perspective, when I look at a broader sweep of history, there are different regimes. There are stable regimes, where that policy discourse and policy apparatus is very finely tuned and help you navigate the day-to-day volatility, the year-to-year volatility in macroeconomic and political and economic conditions, and then there are regimes where there's increasing instability, increasing fragility, and national decision-makers are confronting conditions that they don't have a template for, and where the probability of more radical disruptions to assumptions behind the current monetary geopolitical framework become unsettled.

Pines: And that's where you can see in history that big changes [were] made. So, big summits, big accords that radically changed the structure of the monetary system. And those, to first order, over a generational time scale, are downstream of geopolitics. And so, when you hit those inflection moments, when you hit those points where national interest and strategic competition start to overweigh the traditional economic and policy prerogatives, then you can see things coming in from outside those traditional policy debates that can affect how you think about those questions.

Beckworth: Yes. It's easy for me to think about monetary policy, the Federal Reserve, very domestically, maybe even internationally, but I don't think about it often in terms of national security. A while back, we had Paul Tucker on the show. He told this story, which is in a book that we talked about, where when the currency swap lines were announced in 2008, also in 2020, I believe it was India that was not included, and he thought that that was a mistake. He goes, "You should have consulted the State Department when you made this list of who's going to get the currency swap lines," and I hadn't processed it along those dimensions. Now, [in] the paper we're going to discuss today, you do that. You look at the linkages between dollar dominance, national security, the crypto world, and all of those issues. So, I appreciate you bridging this gap. In fact, that's what we do at Mercatus. Our motto here is bridging the gap between academic ideas [and] real world policy problems. So, you're doing that very well, glad to have you on the program.

Beckworth: Now, before we jump into your paper, I want to get there, but before we do that, since you're in the national security space, I just want to maybe step back and talk about the US government funding expenditures applied toward defense. My understanding is that it's around 4% of GDP, around $1 trillion. If you look at it like a chart, historically, it's come down quite a bit. Obviously, [it’s] way down from World War II, but even relative to, say, the 1980s, when Ronald Reagan built up defense, it's come down quite a bit. Even the interest on debt now, I believe, is [at] the same or higher levels than what we put towards defense expenditures. From your assessment, is that too little or are we doing it about right?

Evaluating the Current Level of Defense Expenditures

Pines: The way the US government approaches its defense planning is that it sets out its strategic objectives for its military strategy. And we have had, for a long time, a two-war strategy, that we feel like we need to have the military capabilities to fight and win at least in one theater while holding one other theater of conflict with a near-peer adversary. That's the top-level strategic guidance, is [that] we need to be able to essentially hold Russia while fighting China, and then maybe a contingency here or there.

Pines: That's like a very top-level framework. Then, of course, the Defense Department is also given top-line budget guidance and says, "This is basically the pot of money that we have to work with. What do you think that apportion looks like across the different services?" And so, there's a pretty big gap between tracing what we actually think we want the military to do and what we actually are funding it to do. So, yes, $850 billion was, I think, in the FY25 National Defense Authorization Act.

Pines: Roger Wicker, who's the ranking member of the Armed Services Committee, has come out with a proposal that he wants to reach a target of 5% of GDP. He makes a similar argument that, if we're in, essentially, an environment of increasing geopolitical competition, if there is a threat of great power war on the horizon, then the operating assumptions behind how much we apportion to defense should be more commensurate with our Cold War era [spending]. Maybe not the peak of the Cold War and, say, 9% of GDP in the '60s, but maybe going back to that Reagan era steady state. I don't have a particular number that I would say. 

Pines: If you talk to a lot of folks inside the defense budget community, which, of course, is a whole cottage industry inside DC, [then] they'll say that there's a mix of— one, there's just immense inefficiency in the way that we currently execute these large government expenditures, and there's lots of questions about whether we should be first trying to prioritize how we're apportioning the budget. For example, the army, during the global war on terror, got a massive relative upweight in terms of how much of that budget it received.

Pines: It was on the ground fighting in Iraq and Afghanistan, where I say the Air Force and the Navy got proportionally less. I think [there are] a lot of folks that are looking at the more likely contingency scenarios where defense resources would be stressed or in conflict scenarios with China, and those are principally going to be fought in space by the Air Force and by the Navy. But you haven't really seen a readjustment in the proportions received by those service branches as opposed to the army.

Pines: This is, of course, a classic political economy question. And so, we're stuck with the current budgetary process, and in general, if you say that we're going to be more efficient, that doesn't actually help you inside the Pentagon, because there's always different rice bowls that people want to protect and [there are] a lot of politics involved. And so, at the end of the day, everyone just asks for more. I would say that increasingly, in the last year or two, it's been grumbling for a while. Admiral Mullen, in particular, said this a while ago, but it's become more of a standard part of the discourse, is just recognizing that there isn't necessarily going to be a whole lot more money coming, [and] that the fiscal constraints are real.

Pines: Part of the debt limit agreement last year was that there will be a 1% top line increase for the defense budget. Of course, they created a whole emergency supplemental package to get around that, and, of course, that's the way they always do this stuff. But that 1% top line is, of course, below what inflation has been over the past year. And I know some folks that are involved in the trenches of planning for, how do we expand our defense industrial capacity and that are responsible for laying out, how do we actually make these munitions? How do we make the 155 millimeter shells? How do we make the SM-2, SM-6 missiles at a scale and at a rate that we need to meet what we see as increasingly stressed conflict scenarios?

Pines: And what they're telling me is that, essentially, just the basic unit cost to produce a standard missile has gone up 30% to 50% in the past two years. They expect that to continue over the next one or two years. So, if your budget doesn't change, you're going to be buying a lot less of the same stuff, at the same time that people look at these scenarios and realize that we're going to need a lot more defense industrial capacity that doesn't seem to be coming online quickly enough.

Beckworth: Okay, we'll circle back to this whole process near the end of the show. I want to come back and talk a little bit more about what I believe is called the National Defense Authorization Act and how that works, but I want to get into your paper. And your paper is part of a book that's titled, National Security In The Digital Age: Bitcoin As A Tool For Modern Statecraft. And, again, your specific contribution, your paper in the book is titled, *Great Power Network Competition & Bitcoin.* So, maybe begin with an executive summary of your chapter and then we'll dive into the details.

An Executive Summary of *Great Power Network Competition & Bitcoin*

Pines: So, I wrote this to try to bring a slightly different perspective on the traditional topic of analysis when it comes to Bitcoin national security, which has been mostly focused on its intersection with sanctions evasion, with illicit finance, [and] with obviously big criminal drug markets. And most of the folks in the government that have digital asset experience were the folks that were tasked with standing up those sorts of units and analyses and law enforcement intelligence activities early on in Bitcoin's history. So, their frontline experience with it has been bad guys using it to do bad things. Therefore, it must be a bad thing.

Pines: That's the basic syllogism that has been implanted in the minds of a lot of national security officials, a lot of senior leadership. It just becomes an unquestioned assumption, and while, certainly, that has been a part of Bitcoin's history, I want to take a more forward looking view, a much more outside the box view to think about, well, where is Bitcoin today? What could it look like in five or 10 years? And what would an intelligent, informed US strategic approach look like if it was trying to maximize potential advantages and minimize potential risks? So, that's why I wrote this paper, to situate Bitcoin digital assets more generally with what I see as the unfolding and core dynamic facing US and challenging US power in the next five to 10 years.

Pines: And that's why I focused it on network power, because I think that, increasingly, everyone recognizes that this is the fundamental premise of modern power is network power; both power over monetary networks, power over digital telecommunications networks, power over trade networks, subsea cable networks, satellite and terrestrial communication systems, cultural networks of diffusion of ideas. This is how a globalized civilization is now functioning in the modern era.

Pines: And so, you want to look at to what extent is the US poised to either win that network power competition versus its principal adversary, China, which has a strategy of trying to win that network power competition. And so, I go through, essentially, and make an argument on different layers that, especially on the financial dimension, the current monetary system, the structure of correspondent banking that has emerged over the past 80 years or so, has accrued certain advantages, and those advantages may have waned and now may be resulting in disadvantages for the US government.

Pines: And so, I lay it out in three main sections, essentially. What are the strategic advantages or disadvantages to the United States from its current monetary network dominance? Then, the second section is, how is China approaching, from a position of relative weakness, trying to grow its endogenous national strength? How is it trying to block the ability of the US from constraining it via its power over existing networks, while also building its own to act as a failover or redundant capacity for its own monetary network ambitions? Then, where does Bitcoin fit into that role? That's kind of the basic framework. I try to pack a lot into that.

Beckworth: I like it. I like the network framing. As someone who's an economist, network effects— it really resonates with me. But everything about this was, I think, clever, because communication networks, monetary networks, cultural networks, as you mentioned— they're all very important, and the dominance that we have now, as you note in your paper, allow us to both have surveillance on our competitors, but also these choke points. So, networks— they're great for efficiency, but they're also great from the state perspective in terms of surveillance and also choke points when necessary.

Beckworth: Let's talk about some of the challenges that you bring up in the paper with our current network approach. I want to read a quote from your paper. You're talking about the use of financial statecraft and sanctions, which we've talked about on the show before. There's talk of overuse of it, and you put it very clearly here. You say, "But like a sword overused, its blade has grown dull. As the go-to bloodless instrument of international coercive force, it has given US security officials a misplaced confidence in the ability to achieve action at a distance without blowback. That is no longer the case. These tools won't suffice for great power competition." Expand on that.

Problems with Our Current Network Approach to National Security

Pines: I think you've had some great guests on the show walk through the history of financial sanctions as a tool of US statecraft, and we pat ourselves on the back after 9/11, when we stood up these new capabilities within Treasury, and we had some big wins, sanctioning Qaddafi's money and then going after terrorism. Then, obviously with JCPOA, really using it as a course of strategic lever over Iran. Then, we came into the Russia invasion, and we brought it to a whole other level.

Pines: There was a lot of, I think, cheerleading at the possibility that we were going to turn the ruble into rubble, and I think we realized, in the lessons from that episode, that sanctions against a great power, like Russia, just as a matter of material capabilities, aren't going to replace other instruments of US national strategic and coercive force. And I think that we were lulled into a sense that we could just use this hegemonic power to get our way. And I think we saw where its limits hit, essentially, with the Russia sanctions. They were effectively able to absorb the blow. It added frictions. It certainly has ground some of their war machine [and] made it a little bit more difficult.

Pines: But we're facing an environment, geopolitically, where Russia is in an alignment with its adversaries on the Eurasian continent, including Iran, China, [and] North Korea, that have large industrial capacities, that have large technological capacities, and have an interest in ensuring that Russia can sustain its war. And we are not willing to sanction, maybe not capable of sanctioning, those actors sufficiently to deter those activities. And so, when we reach that point of strategic reckoning, we have to think about, "What is our plan B?" We've been using tools of sanctions for the last 20 years as a very effective way of imposing pain, imposing costs, [and] trying to change decision making. Now, we're seeing an environment where it just manifestly has failed. Those decisions haven't been deterred. Those leaders haven't been turned to a different course of action. So, my basic point is that we should just reassess, how are we actually going to deter China, Russia, Iran, and North Korea if the sanctions don't seem to be sufficient?

Beckworth: So, when you look to China, which is the competitor in this paper, are they more intentional about this whole network approach? Are they thinking explicitly, “We need to build this network, that network?” Whereas in the US, we've been blessed with the network, because we've been the leader of the world. Are we like happy-go-lucky, “Oh, shucks, it works,” and less intentional about it? Is that the problem you see?

Pines: The US's network monetary power dominance has really evolved organically, to the point where we had this network of correspondent banking relationships that sprouted up in centers of global trade finance, created offshore Eurodollar markets that have generated this flywheel of dollar surplus recycling into US assets. And it created this— obviously, it corresponded with the hyper-growth of American military power in the 20th and the 21st century. And then they were able to use that existing hierarchical correspondent banking system to then exert this financial power statecraft. China, of course, doesn't have that 80-year history of trying to internationalize its currency or to try to create novel entrepots of trade finance that it can use as a locus to reach its larger geopolitical and economic ambitions.

Pines: So, it has had to find maybe an asymmetric strategy because, to first order, it does not want to be constrained indefinitely by this existing matrix of G7 capital and dollar-based settlement and clearing systems. And so, it's trying to find a different strategy, a more modern digital strategy to both block the ability of the US institutions, but also G7 aligned states, from constraining in different scenarios. And so, it wants to have, essentially, these failover networks. So, in particular, one that they've invested a lot in has been CIPS, which is their version of SWIFT, but it combines both messaging as well as settlement activities.

Pines: But while it doesn't necessarily exist to fully replace SWIFT— in fact, most of their transactions still take place over SWIFT, and most of those dollar transactions still get cleared through CHIPS in the US— it serves as a capable redundant failover that mitigates the deterrent threat from the United States, because if there was a contingency where we were in an escalation environment over Taiwan or a full-blown conflict [and] we wanted to apply a similar sanction regime as we've done for Russia, [then] they would have the ability to still settle their terms of trade with their main partners, especially in the Middle East and throughout Asia and Eurasia, and increasingly it seems like also Europe.

Pines: And so, the existence of that failover network does materially diminish the deterrent threat of US sanctions. So, that's been their strategy— first, to block, and then build these redundant failovers just-in-case settlement and clearing systems, but they have a larger strategic objective to expand. And so, this block, build, expand sequence is a common strategic motif that you see played out across all of their different activities. Rush Doshi, who's the National Security Council Director for China, a few years ago wrote this book, and he basically unpacked that thesis in immense detail and sourced it to their party statements about, this is the strategy— essentially, a long-term plan. How do they grow to a position of national strength, where they're a great power peer on the world stage to the United States? This is the sequence that they need to go about, whether it's in the military domain, whether it's in the economic domain, [or] whether it's in the financial domain. This is the plan that they've executed.

Beckworth: So, it sounds like they are being intentional, they're thinking this through. You have to— when you're behind, when you're the smaller kid on the street— you've got to be more intentional in how you walk, where you go, just in case the bully sees you, or the big kid on the block sees you. But it also means, then, that it's easy for the United States to become complacent, to not think. What you're doing in this paper is trying to help the US see all of its possibilities, including crypto, and using the private sector as a tool to continue this dominant network effect.

Pines: Yes, exactly. It's like we have to— one, in my experience, it's always thinking about different worst-case scenarios [and] not just assuming that your plan A is always going to work. Then, if your plan A is just going to double down on the Treasury market, maybe have to patch it together with central clearing in addition to more repo facilities and increasing capital requirements, Basel IV, then it seems like this is a sequence that is going to play out. It's obviously the primary sequence that we would expect policymakers to choose, is that we want to have our cake and eat it too. We want to just keep the same party going that we've always been able to dance to. But we just want to do minor technocratic tweaks along the margins and make little bargaining tradeoffs with different centers of political power.

Pines: And that's fine. That's plan A. But national security officials never just think that the plan A is going to work. You have to think, what's plan B? What's plan C? What if the adversary actually does succeed in their objectives? What if your plan A fails, but you’ve put all of your chips on it? Then, you're not in a great strategic position. That's basically what I'm calling for, is thinking about, what is the plan B? What is the plan C? What are these alternatives that are maybe, right now, relatively low cost, that don't require a whole lot of analytic or even strategic capital to invest in, but that could pay off if our plan A doesn't succeed.

Beckworth: Yes, so, people in your space, the national security space, they think about multiple options. They have to, I guess, out of necessity, out of training, out of the fact that they could be fighting a war where people in my world, the central banking world, they're very like, "Oh, let's just tweak this parameter, that parameter, so that we get inflation on track." And we need to be doing more, is what you're saying. We need to be thinking about the long-term stability of the networks.

Pines: Yes, and Paul Tucker, in his great book, Global Discord— I read that with extreme interest. He makes this exact point, that central banks are increasingly geopolitical, and therefore, they shouldn't be surprised if, all of a sudden, new political prerogatives start to supervene on their policy objectives. And of course, this has been refracted in various guises in US policy and political discourse of fiscal dominance or the independence of the Fed. But I see this as a structural trend, where when the chips are down, the Chairman of the Fed answers to the commander-in-chief, and you just have to bake that into your assumptions.

Beckworth: World War II, right? That was what happened in World War II. They pegged the price of Treasuries. They bought up the debt. They supported the war effort. So, they became a tool for national security.

Pines: I think you've had a recent guest on [talking] not just [about] the Fed, but the Treasury. You usually see these forces play out in our political economy in ways that, if you're looking for symptoms of these conditions starting to develop, whether you call it fiscal dominance, whether you call it geopolitical supervenience on monetary policy, you would start to see it manifest in portions of our bureaucratic apparatus that are, say, more exposed to the prerogatives of the White House.

Pines: And of course, you've had active Treasury issuance debates about, why are we actually issuing so many bills relative to coupons when we don't have to make up for the debt ceiling, TGA bill? We actually are now just continually just issuing more bills. Why are we doing that? Is it a functional QE? Is it to stabilize political conditions in a contested election? And/or is it a reckoning of the fact that we just can't allow market perception to understand that the long-term yield of the US Treasury market is highly fragile and that we don't want it to go above a certain level. That, effectively, this is yield curve control, but very indirectly, very obliquely, and without acknowledging it.

Pines: And this is ultimately the history of large indebted sovereigns, is that they want to control the price of their borrowing, and they'll look around for any balance sheet or any instrument of power that they can wield to ensure that they don't have to pay a market price for their debt. That's what history tells you, so I don't know why now would be different. You have to make an argument of why now would be a special case, where we're going to resist those forces.

Beckworth: One last thing on the national security space before we move into your proposals for Bitcoin and the use of private crypto space for national security purposes. You seem like someone who is well-read on things that I normally cover on this podcast. I know you listen to the podcast. You just mentioned that you read Paul Tucker. Are other people in your space as actively engaged in these issues? Because you are bridging the gap, and I guess my question is, do people sit around in the Pentagon thinking, "Man, I wish the Fed would talk more about or think more about x, y, and z when it comes to national security issues, because their decisions are impacting how we play out these war games, how we play out World War III scenarios, et cetera."

The Intersection of Monetary Policy and National Security

Pines: There's pockets of folks, inside the CIA in particular, that obviously have deep expertise and do these assessments. There's someone I know who's in there who's written about the sanctions risk in terms of changing reserve manager behavior, preferences for different assets, including Bitcoin. And so, there are pockets of people that look at this. I think at, say, the political level, the SESs and leadership— I think, ironically, probably the biggest wake-up call was the SVB failure last year, which was this major bank that banked a huge number of defense tech startups, deep tech startups, and the major in vogue wave of defense tech innovation. How are we going to get out of the strategic sclerosis we have from our existing defense primes while meeting the pacing threat from China? Oh, we'll do the “move fast and break things,” Silicon Valley— We'll get Palantir, we'll get SpaceX, we'll get Anduril, the whole cottage industry, the Segundo Valley 20-somethings wanting to build drones and AI and space capabilities.

Pines: But most of those startups were banked by this one bank that all of a sudden had to run in two days. The Pentagon had a Defense Innovation Unit and it had an Office of Strategic Capital that they've stood up in the past few years, specifically to nurture and develop this ecosystem that they feel is going to be their asymmetric plan to jumpstart the capabilities that they need to fight and win, or at least deter a conflict in a South China Sea or over Taiwan. And all of a sudden, they faced this panic, and they were scrambling that weekend to figure out how they could maybe change contracts, front-load payments, or even use existing resources in, say, the Office of Strategic Capital, to try to bail some of those firms out. 

Pines: But that was like a downstream— the health and maturity aspects of those bank portfolios got upside down, and there was, all of a sudden, of course, the ability to wire money on a second's notice. You had $100 to $150 billion basically flee the bank in 48 hours, and venture capital just lost their minds. And so, this intersection between monetary policy, QT wind down, the effect on the regional banking system— [the] intersection with defense technology and our strategic objectives was never really pulled together until you had a panic moment.

Beckworth: That's so interesting.

Pines: Now, I don't know if they've come up with a plan, but I think, now, leadership understands, "Oh, this is a new thing." It also turned out that there was a huge number of, say, unsecured Chinese deposits in those banks that were also bailed out.

Beckworth: Oh, really? I did not know that.

Pines: Yes. We [have] become the money laundering capital of the world. Most of our financial insurance, real estate, and technology sector exists to create scarce and desirable assets to absorb foreign dollar surpluses. And so, we need to keep those flowing in, in order to keep the basic architecture of the global monetary system.

Beckworth: So, I viewed us as the safe asset provider to the world. You're redefining us as a money launderer to the world.

Pines: Tomato, tomato.

Beckworth: Oh, wow.

Pines: It's basically— It's what we're doing.

Beckworth: That's a very sobering interpretation of the safe asset provider to the world or the banker to the world.

Pines: I mean, if you talk to any major venture capitalist, their job is to basically create pools of money, from mostly foreigners, and in the increasingly right, it's politically disfavored to go after Chinese money or Russian money. But Saudi, Emirati, other Qatari sovereign wealth funds or other rich individuals, they exist to create pools of capital and then, with that money, they funnel that into scarce assets.

Beckworth: Okay, wow, that's a whole new take on that. I'll have to process that and we'll come back, have some more discussion later. Alright, let's talk about your proposal, at least you're thinking on how Bitcoin or crypto [or] stablecoins, how could they enhance the dollar dominance, the network effects that the US currently has in terms of advantages over other nations?

How Can Digital Currency Enhance Dollar Dominance Across the Globe?

Pines: So, I think in terms of a few different tiers of analysis. The more basic tier is that Bitcoin and dollar-based stablecoins, right now, are a very large market. So, the question is, it's not going away. How do you position yourself strategically in a way that maximizes the benefits while minimizing the risks? And there are immediate benefits from having stablecoins continue to grow in dollarized parts of the world that haven't been dollarized thus far, because networks of correspondent banks, or remittances, or the hop of payment systems are just so expensive, that there's just an endogenous demand to use a dollar to pay for the dollar around the world, and that the existing system doesn't really enable that very effectively. It's very expensive, and there are folks inside Argentina, folks inside Niger, folks inside Egypt that want to hold dollars, that can't, and it's better for the United States if they hold dollars.

Pines: If those stablecoins grow and are fully reserved, [then] there's an endogenous demand for more dollar debt, especially more bills, if we're going to be pushing out more bills. That's a more tactical question. I'm not sure that that's a strategic game-changer, but it's like, "Hey, that's like a net positive thing." The more dollar-based stablecoins there are— essentially, it's crypto Eurodollars essentially helping spread the dollar, and if they're properly reserved and well-regulated, [then] that can be another source of demand for our debt. And there's a synergy flywheel between the demand for Bitcoin, the demand for dollar-Bitcoin rails, and the stablecoin market. So, those things have emerged and evolved in tandem around the world, to the extent that [if] that flywheel continues going, it leads to positive externalities for the US fiscal position. Again, [it’s] not strategically game-changing, but an important positive attribute.

Pines: The strategic overlay with China— and that's the watchword in DC, is China competition. How do we counter China's ambitions? And they have this strategy, the Digital Silk Road, a counterpart to the Belt and Road Initiative, but focused on creating a digital network ecosystem, especially in the global south, but also interpenetrating the Middle East and South Asia, where they're trying to export their techno-authoritarian governance model, where they're trying to sign people up for a whole techno-authoritarian stack built on Chinese information communication technology, that includes the digital yuan or crossbridge CBDC platforms, like Project mBridge, that have imbued within them that kind of surveillance and control authoritarian ethos that China has.

Pines: And there's willing subscribers to that techno-authoritarianism as a service model throughout Africa, throughout the Middle East, throughout Asia, throughout Eurasia, [and] even maybe in Europe, increasingly. And that is a— from the US's standpoint of the global system, that is a major threat. Not only do you have countries potentially signing on for a techno-authoritarianism that runs counter to our liberal values, but also ensnares those governments and their national populations into a fully surveilled, fully controlled stack that our adversary has root access to.

Pines: And so, to the extent that— one, we don't have a compelling alternative that is going around and really competing element for element within that stack, whether it's the cloud infrastructure, whether it's the Huawei 5GE, whether it's cell phones, whether it's ZTE surveillance, AI, all the way up through the digital currency electronic payment platform and the crossbridge CBDCs, we don't have a natural competitor that is helping to win over some of those governments, whereas dollar-based stablecoins, and Bitcoin is naturally being adopted around the world.

Pines: And it is a more organic bottom-up development in terms of bringing, essentially, a reserve asset for the people in the hands of populations that their maybe more corrupt kleptocratic and authoritarian inclined governments would rather not have them hold. And so, to the extent that we want to counter China's ambitions to ensnare those countries and to the extent we also want to encourage the proliferation of liberal values and individual autonomy, the growth of Bitcoin [and] dollar-based stablecoins around the world is both in our values interests as well as in our strategic interests. So, that's kind of like the TL;DR.

Beckworth: Very fascinating. So, again, China's been very intentional in trying to grow its networks around the world. Digital currency, these cross-border payment systems, mBridge, that you mentioned. So, you're suggesting that China would use it not only for payment sufficiency, but also to spy on these collaborators, other nations. I read an article recently on why we shouldn't use CBDCs. Who do you want spying from abroad into— potentially breaking in and spying into the transaction? So, you're suggesting that China could use this to monitor other countries closely and we would lose that edge.

Pines: Project mBridge, maybe itself, isn't going to be fully compromised from its back end, although that remains to be seen on its implementation. But there have been cases, all of these are public, of where China has offered cybersecurity assistance, and part of the package deal when they offer, say, their cloud service providers or whether it's Huawei or the spread of their mobile payments infrastructure like Alipay [or] WeChat around the world, those are basically— People want to focus on the digital yuan. But really, Alipay and WeChat are the digital yuan. That was the whole tech crackdown, was that these were massive payment platforms that were expanding rapidly in China.

Pines: The central government didn't have visibility or control over it and they wanted to get visibility and control over those digital payment platforms, and they did. That's also why you haven't seen as much pressure from the Chinese government to spread the digital yuan, is because they basically got it through these platforms. That essentially gives them the same capability. And those are extremely popular around the world, and not just for individuals, but for e-commerce. So, you can imagine this whole surveilled infrastructure that is plugged into Chinese information communication technology providers, and there's national security laws where all of those companies have to provide that information. And so, that's just baked in to the operating model.

Beckworth: That is so interesting. So, China is really expanding its reach through all of these mediums here, this technology, these networks. We really don't have any intentional thought-out plan to counter that, but we do have something organically emerging around the world that could take that role, and that's the crypto space, the crypto assets that exist, stablecoins. And you mention, in your paper, Randy Quarles, former Vice Chair and a regular listener to the podcast. Thank you, Randy. Also, [there are] past guests that I should say as well. He had a speech. He talked about how stablecoins could expand the reach of the dollar as well as serve— I think the bigger point you're making here is— a national security purpose. So, why not run with it? In other words, don't view stablecoins and crypto as a threat. View it as an opportunity, right?

Pines: I think that you've seen this history play out with the Eurodollar market throughout the history of the 20th century. Yes, Lev Menand has done a great history of the Eurodollar system and explicated the tensions that have generated inside the Fed and also other central banks about, to what extent do we want to let this flourish and proliferate, and to what extent do we need to keep it under control? So, I think that that's basically the same tension, is to what extent do we want to have this natural phenomenon play out that could increase the risk of, say, sanctions evasion [and] criminal use? Obviously, my day-to-day is cybersecurity. So, digital currencies are the preferred medium of exchange, and, to a certain extent, a store of value, increasingly not of cybercriminals, ransomwares.

Pines: Usually, they want to get paid and then they want to cash out. That's the whole point, is they want to try to find these unregulated offshore exchanges where they can take their ill-gotten crypto gains and cash them out into dollars or hard currency somewhere. And so, there's a game of cat and mouse that's going to keep playing. The same sort of thing happened with Eurodollars. It was a Wild West for anyone to basically play all sorts of shady games, but over the course of the 20th century, would you say that the US government net-gained more from having those offshore dollar nodes proliferate and expand, even if it came at a significant cost in terms of criminal or money laundering use? I think that most historians would say it was basically that was what gave us the powers that we're using today.

Beckworth: Absolutely. So, Matt, let's talk about, then, proposals that are out there that could strengthen this potential network effect for the US government, for national security, and I want to jump to something that President Trump endorsed recently in Nashville. There was a call with the senator from Wyoming for a Strategic Bitcoin Reserve. Now, were you at that conference?

Pines: I was.

Beckworth: It seemed pretty high energy. Trump was well received there. And it's understandable because the current administration has not been as friendly or at least has been inconsistent in how it approaches crypto. But let's start with Trump and we'll come back to Biden. Tell me about this Strategic Bitcoin Reserve. What is your understanding of how it would work, one, and then two, tell a story of how it would complement what you're arguing in this paper.

Breaking Down the Strategic Bitcoin Reserve Proposal and Its Implications

Pines: Yes, I think that this is certainly a new policy idea. It came, I think, more as like a meme and is now fleshed out into some serious ideas. And so, in keeping with my larger focus is that I take it as a serious policy proposal. I think it's worthy of serious analysis. And so, at least in Trump's speech, he just was very vague in terms of creating a stockpile and not wanting to sell the existing Bitcoin that's held by the US government, which is about 200,000, that has been seized from criminal prosecutions, and that's basically the minimum policy proposal from Trump.

Pines: Senator Lummis has introduced the Bitcoin Act, which is essentially a much more discreet proposal that is maybe worth unpacking, because she makes a very clear case in her legislation that the US government should essentially diversify its reserve assets. Bitcoin is a novel reserve asset that should make up some part of its overall asset mix, and she sets a target of one million Bitcoin, so, going from our current 200,000, over a 5-year plan, to purchase a total of 1 million Bitcoin that would be custody, essentially, in geographically distributed hard wallets. She specifies the specific security requirements for those holdings.

Pines: The way that she would fund that purchase program would be to revalue essentially gold certificates that are held by the Fed that had not been marked to market. So, she basically proposes remarking those gold certificates to the present value, unleashing tens of billions of dollars in liquidity, depending on the price of gold, and using those new assets in the Treasury General Account to go out and just purchase Bitcoin on the market. So, that's basically the mechanics of her proposal. She has a few other things in there about preserving the right for self-custody, using the novel features of Bitcoin so that you can do essentially cryptographic proof of reserves.

Pines: So, unlike audits of, say, gold, under Liberty Street, this would just be like open verification of the US government's Bitcoin holdings using it's proof of reserves capability. That's the basic mechanics. I think the argument that has been given— I would maybe give a version of this argument. I haven't really thought enough to fully endorse this argument, but I'm pretty close. I'm playing with it. And so, I think the two main arguments for such a Strategic Bitcoin Reserve would be— one is more like, essentially, a signaling benefit.

Pines: In keeping with my broader thrust of the strategic benefits of Bitcoin, the US government establishing a Strategic Bitcoin Reserve, of any de minimis size, sends a positive enduring signal of support for Bitcoin in the US so that we can attract more Bitcoin to the United States. More people will feel safe and comfortable holding Bitcoin in the United States with US custodians or Bitcoin businesses. Financial integration can continue here as opposed to Dubai or Abu Dhabi or Singapore or Hong Kong. So, to the extent that you send a positive signal, you attract the marginal unit of Bitcoin and Bitcoin businesses, and it doesn't cost you a whole lot. That's a good positive thing.

Pines: The more, I'd say, hard technical benefit, and this is more speculative, is as an option value for the US fiscal position, because if you actually were to acquire, say, a million Bitcoin, and the US government does also send this positive signal, the premise behind that could be, essentially, maybe short-circuiting what would otherwise be the risk of a fiscal spiral in the next 5, or 10, or 20 years. If there is a risk that, at some point, the market realizes that the US government isn't necessarily going to be good for it, that monetizing Bitcoin relative to, say, gold, benefits us relative to our adversaries.

Pines: So, if we're going down a path of, say, marginal, maybe more oblique debt monetization to meet geopolitical objectives, to meet climate objectives, to meet social transfer objectives, [then] we're eventually going to have to own up to the fact that we're not going to make money good, all of these UST promises, that there are going to be haircuts imposed somehow, someway, and that, at some point, the cost of that could become quite prohibitive and could be a nonlinear jump, where that set of common expectations flips and you get essentially a run on the Treasury market.

Pines: That'd be enormously destabilizing, a very expensive thing for the US government to endure. If there's a low-cost option that you can pay for now that essentially could pay off 5, 10 years down the line, [then] it's a risk-weighted calculation, but is it worth paying, say, $5 billion, $10 billion, $20 billion, $50 billion for that option value now if it helps defray a multi-trillion dollar bout of QE 10 years down the line? You need to do the math. But at least in theory, I could see an argument, say, that there's an option value from holding Bitcoin.

Beckworth: I guess the question would be, would it be enough to stem the run? Would it really matter relative to the size of the debt, which is $26, $27 trillion versus— But in any event, I hear your point. I guess, here's a tension that I see in this proposal. So, I like what you're saying in terms of the signaling, enhancing the network, the demand for Bitcoin. Could it take Bitcoin to the place where it becomes so powerful, so ubiquitous that it really doesn't help the dollar, and maybe it displaces the dollar? Your argument is that, no, they're complements, but they could become substitutes should it become so successful.

Pines: I think that you're putting— this is exactly my anxiety with going too far too fast or just YOLOing in or just doing it as a meme. You need to be extremely deliberative. If you're going to make a strategic policy shift on something like this, you need to think it through, you need to go slow, and you'd have off-ramps in case you get to a point of instability. Because I think Josh Hendrickson— I think you've had him on the pod— He's a colleague of mine at the Bitcoin Policy Institute as a fellow fellow.

Pines: He's written about how fiat monies exist essentially by stable equilibrium, where everyone believes that they're worth something, a positive value, or they're worth nothing. And so, if the reserve issuer of that fiat currency union is basically signaling that it doesn't have a whole lot of trust in its own— it could stimulate the thing it's trying to prevent. So, I think that you need to be very careful about, essentially, as national decision-makers, causing the run that you're trying to prevent, and I think that it's a matter of deliberation. It's a matter of policy execution, implementation, and the size and scale of such a reserve. And so, that's where, if it was 4 million Bitcoin or 6 million Bitcoin, [then] that's a risk. If it was just, keep the 200,000, [then] I don't think that that's a risk. So, somewhere along that line, between 200,000 and 4 million Bitcoin, there probably is a risk that you could stimulate the negative feedback loop that you're trying to prevent. And so, that's where I--

Beckworth: Be careful.

Pines: Yes, be careful, and that's why I don't come down on a particular size or a particular scope in terms of how fast you would apply it. It's more just the basic idea of having such a reserve is the premise that I just want to first analyze, and then if you think that that's a sound premise worth looking at, well, then you can have the more deliberative analysis of, well, then how big should it be?

Beckworth: So, you want it big enough so that Bitcoin grows and remains a complement to the US dollar, not a substitute, and where that magic threshold is, who knows. At this point, are there any other proposals that you would want to see the US government pursue to enhance this network effect?

Pines: There's basic things, but I look around at our current approach to international statecraft and economic policymaking, and I still see basic work to be done in terms of bringing different arms and legs of our current bureaucratic apparatus into a common understanding of this very topic. So, I would first want to just bring these different capacities and have a more coherent and thoughtful strategic dialogue on it before I say, “Oh, go out and do X, Y, or Z specific policy implementation." Get the national security apparatus with the economic statecraft folks, with our state department folks, with folks in Wall Street, and think about how this could actually work, and just kind of YOLO it.

Pines: I think you've covered on this discussion, I think it's been written about in other places, like, again, Trump versus Harris, different policy prerogatives will come into play. I think it's been talked about, at least in the Trump administration— A pretty radical shift in the structure of the dollar system. The explicit erection of tech and tariff walls, essentially, around our allies and partners as essentially a non-economic mafia-style tactic to force them to term out their debt. So, how do we basically weaken the dollar at the same time that we want to goose our exports and keep our geopolitical and economic alliances intact?

Beckworth: Have our cake and eat it too.

Pines: Yes. We basically were like, "Okay, instead of devaluing the gold content of a bar of gold or a gold certificate back in the 30s, we're going to devalue the duration content of sovereign reserve holdings of Treasury securities, and we're going to use geopolitical levers, inducements, and threats to do that.” We could do that, but that would be extremely costly in terms of diplomatic capital. We're going to have to get the Japanese, the Taiwanese, the South Koreans, the Brits, [and] the Germans that have their own economic issues and demographic issues and security issues and we're going to essentially cudgel them into whether it's swapping coupons for century bonds. That could work.

Beckworth: Yes. It sounds like a hot mess.

Pines: That's essentially what imperial systems do, is that they usually cannibalize the periphery to keep the core alive, and you can extend and pretend for 5 or 10 years, but it doesn't seem like an enduring basis.

Beckworth: So, you're saying, look, let's maybe focus on what we can do that's productive, given these organically growing networks already in the crypto world. Let's run with that. Let's [not] destroy what we have or cannibalize what we have and go from there. Alright, Matt, in the time we have left, I want to circle back to where we started this conversation, and that was with the defense industry. We're here at the Mercatus Center. We follow things that happen in the policy world. So, we follow, for example, closely, bills that go before Congress. I have followed the omnibus spending bills because sometimes there are things in there that affect the Federal Reserve. You follow, though, the National Defense Authorization Act. Tell us about that. What is it?

The National Defense Authorization Act and the Unidentified Anomalous Phenomena Disclosure Act: Basics and Implications

Pines: Yes, so, every year, this is like one of those must-pass bills, the National Defense Authorization Act, and then it's sort of twin, the Intelligence Authorization Act. Sometimes they even get merged, depending on the policy timeline, into a single package. But this is essentially the authorization for all of our military and with our intelligence program. So, it comes out of the House Armed Services Committee. The Intelligence Acts come out of the Senate Select Committee on Intelligence and the House Permanent Select Committee on Intelligence. So, these are the defining bills that lay out the policy priorities and programs that will be funded for the next fiscal year.

Pines: So, I pay a lot of attention— A lot of the policy that comes out, say, on restricting Chinese information and communications technologies get introduced and added to this bill, a stand up of studies around cybersecurity vulnerabilities for US ports or the Panama Canal are inserted here. So, you get a window into what senior policymakers that sit on those committees are really worried about and are trying to basically instruct the Defense Department, the intelligence community to do in the next year. It's like, “We really want you to study the vulnerabilities of our ports, the vulnerabilities from these different adversary capabilities. We really want you to build a new capability here.”

Pines: So, I review those every time they come out. They give a good clue as to what their priorities are. Then, [during] the last several years, a new thing that has been introduced to the National Defense Authorization Act that has come in from the fringe, but is now a very serious topic inside DC, and that's this topic of unidentified anomalous phenomena, UAPs, prosaically known as UFOs. And this sounds like a taboo, kind of like a snickering thing, but inside the Senate, inside the House, inside the executive branch, inside the intelligence community and others, this has become an increasingly serious topic.

Pines: And you've seen bills being introduced and passed and made into law from a whole sequence of National Defense Authorization Acts, really starting in FY '22 and then ratcheting up year after year to place more scrutiny and more reporting requirements, on the Pentagon in particular, to come back to Congress and answer some hard questions on, what exactly does the Pentagon know about unidentified anomalous phenomenon? What are they doing to reduce the internal stigma from pilots so that they can get a better understanding of, what's the nature of this potential threat, if it's coming from foreign adversaries or if it's coming from an exotic origin, [and] understand exactly what that looks like and actually report back to them?

Pines: So, that's been a sequence that's been playing out for the past few years. We reached an inflection point about 12 months ago with the National Defense Authorization Act for FY '24, where senior senators, including the Senate Majority Leader, Senator Schumer, with his main partner, Senator Rounds, introduced what they called the Unidentified Anomalous Phenomena Disclosure Act, and they had bipartisan co-sponsors from Gillibrand, Todd Young, Martin Heinrich, Marco Rubio from the Armed Services Committees, [and] from the intelligence communities.

Pines: The Unidentified Anomalous Phenomena Disclosure Act, a mouthful, the UAPDA, is a quite remarkable bill. I read these things and most of them are dry. "We're going to fund a new investment program here. We want you to do a study on this." They specifically laid out a 64-page bill with definitions of what they call non-human intelligence. They define technologies of unknown origin. They define unidentified anomalous phenomena as being non-prosaically attributed objects, so things that cannot be attributed to foreign adversary programs, or debris, or meteorological phenomenon.

Pines: [They are] explicitly saying, "We have credible evidence and testimony from a whole series of witnesses and whistleblowers that have come to the Senate, in particular, over the past few years and have given protected disclosures of unreported, potentially illegal, government programs that have been in existence related to this topic for decades." And so, this Disclosure Act would create an independent review board, modeled after the [JFK Assassination Records Review Board] group, to get to the bottom of this. What exactly is going on? What are the government records and/or materials associated with those records that might be in possession of the US government or private aerospace contractors and make a recommendation to the president on how to disclose that information to the public in a controlled disclosure campaign plan.

Pines: And so, this bill was introduced in FY '24. It was passed out of the Senate. It was actually in the Senate's version of the National Defense Authorization Act, and it went over to the House. The House didn't have a version of that. They met in conference committee in December of last year, and most of the key provisions that the Senate wanted in were taken out. And so, in particular, the main provision was for this independent review board that would have powers of subpoena, would have powers of unilateral declassification with only a presidential veto, and also powers of eminent domain to take possession of any technologies of unknown origin and biological materials in the possession of any private entity, and make disposition determinations.

Pines: Those pieces were taken out. What was kept in was an establishment of a UAP records collection at the National Archives, and that is now coming into place this year. And it is now a major political issue coming into this fall, where it has been reintroduced by Rounds and Schumer. They doubled down on it. They actually went to the Senate floor after they introduced it and said, "We're not happy, basically, with the House taking this out of the bill, this independent review board, and we want to have further disclosures, further transparency on behalf of the American people."

Pines: And it's being motivated by lots of different things, but there's a worry of technological surprise from foreign adversaries. There's a worry that our scientific paradigm has been stagnated for the past six years and that we need to have more open science and technological discovery based off of these programs. And so, this is one of those things coming in from the tails of the distribution. I just thought about, what are things that are not currently in the Overton window of policy discourse that, if they did materialize, would be quite disruptive to our current policy frameworks? This is probably at the top of that list.

Pines: And so, I think that I would expect that this topic will continue to increase in official salience over the next few months and years. There might even be some quite dramatic things happening this year on this subject as part of the political pressure to get this Disclosure Act passed. And so, yes, there have been folks looking at this from lots of different angles, including folks from a financial stability angle, which has been a major concern of, how do you have something like this emerge into the public discourse in a way that doesn't lead to--?

Beckworth: Panic.

Pines: -panic or disruption or major negative externalities. And so, the payment system, obviously, is critical. We wouldn't want folks [having a] loss of faith or the basic mechanisms of our payment system collapse. And so, there's been some solid research and papers now being produced to try to prepare the ground for some of this. It's slow, but it's going to happen.

Beckworth: Wow. There's a lot there. Let me go back to where we started on this particular point. So, the National Defense Authorization Act— you call it NDAA. You and other people like you, you look at those to see what's of interest, what the cutting issues [are] in terms of national security issues, and what you're saying is that you look across at one that really stands out that's different, potentially very important, is more disclosure on UAPs. It was in last year's bill, NDAA, [but] didn't make it. It's in this year's. Is it going to be passed this year, do you think?

Pines: That is, right now, the big question. The Senate is pushing hard. They introduced, basically, the identical bill as a signal to the House that they're still pushing in this direction. It's likely that it will be introduced as part of a manager's package, which is how it was introduced last year, essentially by the leadership, [in the] same way. Then, it will be kicked over to the House again, and there'll be backroom negotiations in conference committee probably around November or December.

Pines: So, it will be really in the hands of the next president, if this bill gets signed, to make nominations to this review board, individuals of national stature, to make these determinations— folks with national security backgrounds, foreign policy backgrounds, sociologists, economists, historians, [and] folks representing civil society, to try to bring all different facets of national power and interest to bear on making these determinations on how to selectively disclose this information. So, I wouldn't handicap the odds, maybe 50-50, at whether the full package gets through. I'd say, regardless of the UAPDA, that's the official policy process— trying to stand up an institutional framework for this issue. But there are other ways that this could erupt into the national conversation, and it will have geopolitical implications as well, as you can imagine. So, there's a lot tied up in this.

Beckworth: Absolutely, yes.

Pines: And I've had conversations with folks that are more on the national security or intelligence side on this, and some of the attitude has been, "We need to disclose this. It's a matter of geopolitical or other sort of urgency," and that the private sector will just have to adapt. But there hasn't been as much rigorous thought as to how to manage the financial stability, the overall economic implications of this. They're mostly national security folks. They think in terms of a military campaign, Phase I, Phase II, Phase III. Then, this is a Phase II or Phase III problem. It's not a Phase I problem. And because of the taboo, because this isn't necessarily inside the Overton window, there isn't serious policy attention focused on it, and that could be a problem.

Beckworth: Well, that is a very interesting development, and maybe we'll have you back on should this Schumer-Rounds Amendment actually become law and we learn new things. But we've had a great conversation today on the role of networks and the big rivalry between China, the US, and the role that crypto, stablecoins could play. We need to view it as an opportunity, not as a threat. Our guest today has been Matthew Pines. Matt, thank you so much for coming on the program.

Pines: Thank you so much.