This article comes fromonthebrink-podcastThis article comes from

, the original author: Nic Carter&Tom Emmer, compiled by Odaily translator Katie Ku.

Tom Emmer：The U.S. House of Representatives has successively initiated a number of bills related to cryptocurrencies. Recently, CoinMetrics co-founder Nic Carter used this topic to talk to Representative Tom Emmer from Minnesota. He is the co-chair of the Blockchain Core conference and one of the most vocal advocates of cryptocurrencies. The two sides jointly discussed topics such as encryption policy in 2022, CBDC and Modern Monetary Theory (MMT), trying to clarify the impact of cryptocurrency on the existing world.A few years ago, I learned about a theory called information theory of capitalism, which involves a wealth of knowledge.Economic growth is actually the result of knowledge growth

Nicolas Carter：. As an entrepreneur like you, take risks and learn from the risks you take. Assuming you work in a truly free market, this knowledge advances. Not only are you doing better as entrepreneurs, but our quality of life as a society has improved amazingly. The result is that the real economy grows amid wealth expansion. Politicians like to call it prosperity in general terms.

Tom Emmer：Keeping up to date with cryptocurrencies and blockchain is so important, I feel like I'm always inundated with information, but how do you stay in sync with it?

Frankly, the financial system has been poorly managed for decades. The Fed has been manipulating the market and controlling interest rates. Interest rates close to zero are actually fraudulent because you're not pricing capital. At its real price, you're effectively borrowing money from tomorrow. The White House is full of new MMTs who believe that as long as governments control their own fiat currencies, they can print money regardless of consequences. Isn't cryptocurrency a direct result of this behavior?That's what we're ultimately going to focus on, becauseThe Fed is manipulating the cost of capital, driving it down

, I use the word fraud to describe it because the fraud is so strong. But that's a tool they use to manipulate the cost of capital, so it's not really the cost of capital. So capital doesn't go where it would normally go. In fact, it's a bit like Medicare. If you reimburse people a higher amount for coronavirus-related deaths in the United States, there will be more coronavirus-related deaths, and I'm not saying that's happening. This is an analogy. When you incentivize the market, the market can be very selfish. They will use that incentive to their own benefit, rather than letting the market do it for them.It seems to me that these MMT folks are legacy institutions that are now at odds with crypto people like you and the crypto community. The crypto community has taken hold because of the mismanagement of monetary policy.When you do this with interest rates, when the next crisis comes, you guess the cost of capital will price itself properly and assets will return to their real value. But debt will remain high. What does this mean for people in the crypto community who have discovered an alternative store of value? People like to compare cryptocurrencies to gold. But I think what people are doing, whether they know it or not, is protecting themselves from intermediaries, and。

Nicolas Carter：Intermediary intervention actually distorts the market

Tom Emmer：I think your analysis is very astute. If you know Balaji Srinivasan, he also said that the most influential battle of the next 10 years is the effective sound money battle between cryptocurrencies and MMT. MMT sees them not as an establishment, but as a sort of outsider group. In the second quarter of 2020, government spending exceeded 50% of GDP. It looks to me like a normalization of MMT, like a secret implementation of MMT in Washington.

I don't think it's a secret. I think it's very obvious, overt. MMT people don't want to be seen as the establishment. If they abandon their ideology and let their greed, desires, and interests run wild, they will have to admit that it will never end well. Looking at the evolution of the crypto community, before 2008, you really didn't have much experience until the mysterious Satoshi Nakamoto. At first, the traditional financial industry and institutions did not pay much attention to this, because they thought it was just a flickering bubble.

Nicolas Carter：in the US and around the world. The U.S. dollar is still the reserve currency, while cryptocurrencies have started to flourish. In the next 10 years, see if the disruptive force of cryptocurrency will finally win. One side is about individual freedom and the other side is more about you ceding your identity to a central authority.

Next, I will enter the topic of stable currency CBDC, which is the most attractive topic for me. Just on the subject of the level of spending we've seen in the last two years, I'm disappointed in the Republicans in Congress who, in my view, have not resisted the massive fiscal hit that we've seen since 2020.

Tom Emmer：Speaking of inflation, I think it's interesting. Because bitcoin enthusiasts and gold investors have a lot in common, I think they are very close ideologically. Of course, we've been calling for quantitative easing to achieve inflation for the past 10 years, and it hasn't happened. I think the change started with quantitative easing, which got stuck in the financial system instead of going into the real economy. Now you have this direct fiscal monetization, government spending directly into the economy, directly into households. So it is not surprising that there is an actual inflation shock. Interestingly, MMT always stays the same until the inflation shock, and inflation is the only limit of MMT. I mean, do you think inflation is a result of spending? Or do you think MMT's point that inflation might be driven by monopoly or corporate greed has merit?How do you define corporate greed?Any profitable business is greedy. It's about commodity capital finding their way through human activity, run through human ingenuity and heart rather than government choice, so, I don't think it's corporate greed.

But at the end of the day, we're going to take emotion out of all of this, and we're going to look at what made this country, not the financial system it is today.We need more people in Congress to start realizing this,I don't want encryption to be a partisan issue

Nicolas Carter：. But I think from the government's point of view, there are people who believed in the old banking system, the way it existed, and they were unwilling to discuss new options.

Tom Emmer：You mentioned CBDC and stablecoins earlier. I think this is a controversial issue facing two paths. I am a strong critic of CBDC, whether it is the promotion of stablecoins by private institutions or the takeover of CBDC by the public sector. What would happen if we gave the Fed unlimited power to monitor day-to-day retail transactions? You are outspoken on this issue. What concerns do you have about the US CBDC system?I think the US CBDC system is the greatest experiment in the world. We should never allow the Federal Reserve to turn itself into a retail bank that collects all sorts of information on the American people and tracks their transactions. Current Treasury Secretary Janet Yellen argues that the sprawling bill failed to monitor U.S. bank accounts with cumulative transactions exceeding $600. In my opinion, this is where we should be aware of the red flags,。

You must protect privacy at all costs

Nicolas Carter：Currently, there are two potential CBDCs. One is a central bank account, where the central bank collects individual customer information and issues CBDC directly to the individual, and then the central bank can track all transactions. Another is to leverage our existing financial system. The bank is the entrance and can collect transaction information, just like collecting KYC information. The catch is, the BoE is still able to track these transactions on the blockchain. It would be no different than the digital dollars we use today when we swipe our credit or debit cards.

I don't think every central bank is talking about rediscovering the value of cash in a digital environment. Cash gives you complete control over where you spend, and it gives you complete privacy. You have full discretion as to who you can trade with. But you never see any white paper saying we want to create this experience and put it into the digital domain.

Tom Emmer：For example, we need to inject anti-money laundering into this system. We need to incorporate KYC into the system and transaction threshold, even exceeding the threshold of anti-money laundering. Just like we've forgotten what cash feels like, we've normalized surveillance. So CBCD seems different to cash to me. I worry about cash disappearing entirely.I think when the government has an extremely onerous tax policy, it does mean that they're going to trade in a different way. You create a market for the cash society where people are literally trading other things of value that the government can't track.We're talking about a potential digital totalitarianism where our government tracks our every transaction through a central bank digital currency.

Nicolas Carter：It is actually possible to use existing data to create all sorts of information about individual U.S. citizens.I think the politicization of finance is a stated goal of the far left in America.There are now $150 billion in stablecoins, a reaction to the politicization of finance.

Tom Emmer：It's because crypto exchanges were expelled by banks. Therefore, stablecoins were created to facilitate their relationships with customers outside of banks. Obviously, this raises concerns, but it is also a direct response to a highly sclerotic and exclusionary banking industry. So the proposal now is to bring stablecoins back to the banking sector and force them to obtain a banking license. What do you think about this idea?

This is no different than when cryptocurrencies first started. The establishment seeks to keep cryptocurrencies out of traditional markets and seeks to find ways to create barriers or frictions that prevent transactions. But the beauty of this whole crypto community is that this community finds a solution, finds a way to move value, no matter what governments try to do to stop it.

Nicolas Carter：That's why I'm really bullish on the future of stablecoins. The emergence of stablecoins is actually a reaction to bad policy. I advise my colleagues and their staff in Congress to keep a close eye on cryptocurrencies as a potential solution. We have almost no new banks now because it is very difficult and expensive to create a bank and comply with the regulations that already exist. From our perspective, rather than trying to cram stablecoin issuers into the existing banking framework, I think we should be more creative with any regulatory or supervisory framework.

Tom Emmer：Some people think that stablecoins are unregulated, this is the case with some offshore funds, but onshore funds are either issued under the US MTL digital currency regulatory license, and then you have to have a New York trust license and a Nevada trust license . They view issuers as trustees. So you can't invest in crazy stuff. There are specific liquidation terms where depositors are privileged in liquidation. So there are protections. Are you going to seek to cross the line and create some federal legislation or a federal model for stablecoin issuers?Regarding regulation. Those who know nothing about society, their entire financial experience is based on the traditional financial system, completely unregulated. It's like the Wild West, with no rules.

second,second,Maybe we can discuss some reserve standards for stablecoins

Nicolas Carter：. Our friends in the Senate are talking about some new regulatory agencies assigned specifically to the crypto community. The problem we have now is that every regulator thinks they have some jurisdiction over this community, and that's wreaking havoc. From my perspective, it pushes capital overseas. I think our federal government has to work with the industry in a way that allows stablecoin issuers to innovate, while ensuring that Americans are protected. Policymakers must work with industry to make sure we're doing the right thing. I just don't think legislation is the quickest way to do this, so I think we need to think about a standards-setting framework or a federal charter option.

It's interesting that you have certain structures, like the special purpose thrift institutions in Wyoming, a couple of issuers that do get licensed, but they're blocked with the Fed master account. So they can't gain access to the Fed that way. Stablecoin issuers have been trying to secure these licenses, but so far, have been largely unsuccessful.

Part of the reason I moved to Florida actually was because I felt the policy makers here were more crypto-friendly.

One of the things I find interesting about stablecoins is that they flip the script a bit, because cryptocurrencies are often portrayed by some critics as an anti-American thing, there is a saying that "stablecoins are competing with the dollar". Stablecoins, on the other hand, are almost all denominated in U.S. dollars. Almost all of them are backed by treasury bonds, which is a big source of purchasing power of treasury bonds. In fact, the encryption industry is spreading the dollar's influence to the world.

Tom Emmer：When talking to your Republican colleagues, we try not to frame encryption as a partisan issue. So, what are their main objections to your crypto advocacy?

Nicolas Carter：I hear two main issues from the Republican side, the first being regulation. Second, the issue of sanctions. These are the two biggest questions I hear a lot. Now, my other personal question is how to convince them that central bank digital currencies are not really the answer.

Tom Emmer：I actually see a lot of alignment between Wall Street and the crypto industry, they see this as a profit center and they can still make very strong profits from crypto products. But I think it's mostly a war between people who want the government to take over all financial operations and people who want private institutions to play a role. Speaking of bipartisanship, you introduced the Securities Transparency Act, which is one of your main agenda items this year.

Nicolas Carter：I will continue to promote the Securities Transparency Act, as we actually did in the last Congress. The Securities Transparency Act would create a new definition of investment contract assets that would allow the SEC and token issuers to easily distinguish tokens when they are offered as part of a securities contract from when they are not. is a fundamental change. I'm open to tweaks and modifications based on the state of the industry, but I think we need to be more flexible.

Tom Emmer：We do see this. We see startups going overseas, they're looking for jurisdictions. We look forward to the ability for Congress to pass more pro-cryptocurrency legislative changes, when do you expect that?