Number of the day

$300B 

That’s how much profit global companies have lost to economic and geopolitical uncertainty since 2017, according to a study by EY-Parthenon.

Do the Blockchain Boogie

We already explored how Nvidia cleared $4T last week, but you know what else just hit that number? Crypto. It’s a big number compared to, say, Intrigue’s market cap (we’re working on it). But it’s still small compared to, say, the world's money supply (M2): ~$100T.

And that gets to the crux of what we're exploring today: is crypto an asset or a currency?

The world's power-capital just weighed in on that exact question during a congressional 'Crypto Week', producing a few bills with some big implications for the US and the world.

But first, a quick episode recap: Trump 1.0 was a crypto-sceptic, until the president had a road to Damascus Miami conversion during the interregnum, and crypto donors ended up comprising almost half of last year's corporate campaign finance as he vowed to make the US the crypto capital of the world. The president has since released his own coins, and has put crypto-friendly faces in key regulatory seats: yes, dear Intriguer, you can now cite your FartCoin portfolio for consideration when applying for your next (Miami) mortgage.

But it's not the PotCoin mortgages that pushed crypto beyond $4T. Rather, it's three bills.

First, President Trump just signed the GENIUS Act into law on Friday after clearing both houses of Congress. It regulates 'stablecoins', which are pegged to things like the USD.

Who needs that? They're like a bridge not only between your PepeCoin and MoonCoin, but between the crypto world and the broader traditional finance world most of us inhabit. And that 'bridge', like any bridge, enables folks to walk both ways: for example, anyone trading traditional things (oil, gold, currencies) might now 'tokenise' (digitise) them via stablecoin, enabling quicker, cheaper, and more secure 24/7 trading.

But of course, to regulate something you've first gotta define it, which is also what the GENIUS Act does, ending some of the uncertainty that’s curbed Wall St and Main St enthusiasm. There's now talk of JPMorgan and Citi issuing their own stablecoins.

Oh, and defining something also shapes how you regulate it, which takes us to…

Second, the House also passed the CLARITY bill, seeking to shift crypto regulation to a smaller (and lighter touch) commodities regulator. It’s now with the Senate, but there’s your draft answer, Intriguer: maybe crypto currencies are not just assets, but commodities.

In its current form, the bill helps the crypto world avoid the SEC’s tougher Wall St rules, with critics arguing it's just grifters wanting more space to grift, while backers say this looser leash is key for the sector to innovate. But not all innovation is welcome, because…

Third, the House also passed an 'Anti-Central Bank Digital Currency' bill, banning the Fed from doing something it's never really shown an interest in doing: issuing its own digital currency. Again, it's still with the Senate, but the bill’s proponents want to pre-empt the Fed getting any ideas from (say) the EU, where central bankers are already working on a digital euro, erring on the side of shaping crypto from the inside rather than risk FOMO.

So what’s the problem with that? Critics fear a digital Fed coin might entail government surveillance and thereby erode some of crypto’s benefits like privacy, liberty, and beyond.

Anyway, that’s partly why crypto hit $4T on Friday. It's gone from something you might associate with boofy-haired tropical nerds or fake-tanned Dubai influencers or TikToking money-launderers or Lambo-driving Miami teens, to something that now has the imprimatur of Congress and the president of the United States.

Intrigue’s Take

So… where's the geopolitics in all this? Pretty much anything coming out of DC is going to ripple around the world, but these crypto bills are interesting. Here are three examples:

• First, the whole rationale for many crypto folks is to diversify away from fiat currencies like the USD given (they argue) all the debasement via printing, deficiting, and debting. But counterintuitively, this new GENIUS Act arguably reinforces US dollar dominance, because the most common crypto 'peg' is already to the USD, and DC just kinda made it official.

• Second, we've written previously about how capitals (particularly Brussels vs DC) are now duking it out via regulations that reflect their competing philosophies, whether on AI, energy, or privacy. And as with any emerging field, there's an early-regulator advantage in shaping the game, so this feels like a 'shots fired' moment in crypto. Eg, how will DC engage (if at all) with a new digital euro?

• And third, there’s the economic dominance at play: while backers want the US economy better exposed to (and in control of) crypto’s upside, critics fear the resulting capital flows will just further plug the US economy into crypto's darker side, whether that be market-shaking volatility or eye-watering fraud. We arguably got glimpses of both in 2022, though crypto folks say this new legislation includes sufficient protections.

Anyway, let us know what you think about cryptocurrencies in today’s poll down below!

Sound even smarter:

• Bitcoin hit a new $123k price record last week. Spare a thought for Laszlo Hanyecz, who famously blew 10,000 of the coins to treat himself to a couple of Papa John's finest back in 2010. Those coins would now be worth ~$1.2B.

Meanwhile, elsewhere…

Extra Intrigue

🤣 Your weekly roundup of the world’s lighter news

• An Irish court has caught a drug dealer dealing drugs during his own drugs trial.

• An upstate New York hiking trail remains closed because a moose won’t budge.

• A Belgian regulator has upheld a complaint against a ticket inspector for saying “bonjour” in a Flemish-speaking area.

• A UK study suggests cooling your home by smearing yogurt on your windows.

• And while we’re there, Heathrow has started piping airport sounds through the airport, to help travellers get into the airport mood.

Competition of the day

Just as the DC summer was really starting to get to us, a pretty swell invite fell into Intrigue’s lap: twilight tennis at the Australian ambassador’s residence.

Sure, it’s the only grass court in DC, and sure the residence once belonged to General George Patton, and sure, it’s now home to Australia’s ex-PM Kevin Rudd, and okay sure, the court was restored thanks to the Australian billionaire founders of Westfield.

But somehow, our highlight was seeing a few fellow Intriguers there, including a Senate staffer who credited Intrigue for the invite! (we made the intro at a DC gala back in March)

So maybe the lesson is… read Intrigue and anything could happen?

Today’s poll

Last Thursday’s poll: Do you think this Pentagon / MP Materials partnership will work?

✅ Yep, they've got the tech and the cash (74%)
❌ Nope, the lift is way too big (25%)
✍️ Other (write us!) (1%)

Your two cents:

• ✅ A.A: “It’s overpromised and it will under deliver, but the partnership will still stand.”

• ❌ M: “The Pentagon could barely work from home during covid — now we expect them to expertly pivot to manage private equity too? ”

• ✅ M.H: “Looks like the U.S. may be going back to the public/private partnerships of the Bush II era.”

•  ❌ T.S: “Government owned businesses rarely succeed.”

• ✍️ R.O: “Mining is only part of the problem. Bigger is refining, and China’s companies have most of the technology in this space.”