[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.