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Trip planner by Expedia. You were made to outdo your holiday, your hammocking and your pooling. We were made to help organize the competition. Expedia made to travel.
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After gaining bipartisan support in the House and Senate, the Genius act was signed into law by President Trump last month. The act aims to build trust in digital money by ensuring it is backed by U.S. dollars or U.S. treasury bonds. Proponents say this added regul regulation keeps innovation in the US and strengthens the US Dollar. But critics worry it will favor big banks only and could put more control in the government's hands. In this episode, we speak to one of the architects of the bill, Senator Bill Haggerty of Tennessee. I'm Daily Wire executive editor John Bickley with Georgia Howe. It's Saturday, August 30th, and this is a weekend edition of Morning Wire. Joining us now to break down the Genius act is one of its architects, Tennessee Senator Bill Haggerty. Senator, thank you so much for joining us.
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A
Certainly. It's great to be with you this morning.
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It's good to be in the studio with you.
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Yes, indeed.
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So the Genius act, it's hard to imagine not voting for something called the Genius Act. But first of all, what exactly is it?
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So the Genius act is very simply taking our payment system into the 21st century. It allows for digital assets to be utilized here in America. Prior to the enactment of this piece of legislation, digital assets in America were basically under attack. Four years of Biden's administration essentially shoved this entire technology offshore. Those who did try to operate here in America were constantly under fear of being prosecuted by the sec, the doj, you name it. They did everything they could to debank people in the industry. There's a strong push to stop this. And the reason I think they wanted to stop it is because it's decentralized in its very nature. The Biden administration, Elizabeth Warren, a major proponent of this, wanted to see a central bank, digital currency, something, something that they could control, centralize and control. That's the exact opposite of what we're doing here. We're allowing private issuers to step in. It could be a bank, it could be a non bank financial institution that's registered with the Office of the Comptroller of the Currency, but a registered institution who files all the necessary disclosures to prove that every one of these digital dollars is backed up dollar for dollar with the U.S. treasury Security. So it's solid, it's stable, it's safe. But the most important thing is it moves over to the blockchain and off of the rails that we built back in the 1970s and 80s, which are very clunky. And as you know, it sometimes takes five to 10 days for a transaction to clear through your bank, particularly if you do something overseas. That's a lot of working capital that's tied up in the system that shouldn't be. With the blockchain technology, it clears almost instantaneously. Instead of days, it's seconds in terms of clearing. What you also do is you take out the risk that the other side of the transaction goes bankrupt. That's called counterparty risk. That goes away. If you're doing an overseas currency transaction, the risk of the currency fluctuating during the period of of settlement, that goes away as well. And you have a much more secure system because it's all encrypted.
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Now. The argument against it is decentralizing is dangerous in some ways. What is the argument for decentralizing currency?
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Well, if you appreciate liberty and freedom the way I do, and I think the way most Americans do, what you don't want to have happen is what the Chinese have done with their central bank digital currency. The Chinese use this currency to basically restrict transactions by their populace. For example, if you were to drive a little bit too far outside of Beijing, your currency doesn't work. Let's say you're here in America and one of my kids, captain of the shotgun team when he was in high school, what if he went to buy that extra box of shells? Maybe somebody decides they don't want them to. It's a means of controlling your transactions. And I don't think anybody that thinks this through wants to see a centralized digital currency. Decentralized is something that is much more popular, much more acceptable to Americans. And what it does as well is it allows for these private sector benign issuers to become large holders of treasury securities because for every digital dollar they issue, they have to back it up with the short term U.S. treasury. High quality and importantly, the largest holder of U.S. treasuries very soon will be stablecoin issuers. Not China, not Japan, the way it is today. So it removes our dependence from those overseas players and puts us in a far better place.
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There's a lot of terminology here that I think probably a lot of listeners would appreciate having unpacked. Stablecoin, you just mentioned that that's key to this entire certainly. What is stablecoin?
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Stablecoin means that it's directly tied to an asset. It doesn't fluctuate like Bitcoin. It's tied to a stable asset, in this case a dollar. And that dollar has to be backed up. It's always worth a dollar. It's always got to be backed up by a very high quality asset, a short term U.S. treasury Security. It has special bankruptcy protections. Our legislation put that in place so that anybody trading these dollars, the issuer has a problem, the currency is covered immediately so that it's incredibly safe, it's incredibly secure. Using the blockchain, again, it's encrypted and it puts us in the 21st century in terms of the innovation that's going to flow from using the blockchain and using digital technology here in America.
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And the difference between that and cryptocurrency. What is the difference between stablecoin and cryptocurrency?
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Cryptocurrency is a broader term, if you will. A stablecoin is basically a dollar denominator. It could be denominated in another currency as well, but it's a specifically denominated asset. Other cryptocurrencies can fluctuate and the value of those currencies depend on the scarcity. I think most people are familiar with Bitcoin. You've got to do mathematical calculations to continue to quote mine the Bitcoin. And there's a finite number of coins. So as you approach that finite point, the value is likely to go up and appreciate because demand exceeds supply. And that's how the pricing mechanism works in a non stable environment. In a stable environment, it's fixed, it's backed up, it's simply a new and modern means of payment. But importantly, what it does is send a message to the digital asset community that America is open for business, America is open for innovation. And as I came into the United States Senate talking with players in the industry here, I kept hearing over and over again that we're moving offshore, our best developers are going to other countries. That's not what we want to have happen here. This blockchain technology can be utilized in so many positive ways. Whether it's again taking friction out of the system, you think about trading securities, all the clearances that have to happen, all of the records that have to be matched. Again, almost instantaneous takes friction out, takes cost out. It allows working capital to go back to those who need it. Think about the small businesses that rather than wait five or 10 days for a transaction to clear, they can get it almost instantaneously. That's working capital that goes back into our economy rather than sits idle in some sort of transaction.
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No man's land now the stablecoin, like you said, it's backed up by the dollar. Does this help ensure that the dollar remains the global currency?
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You've hit a great point. From a strategic standpoint, we want to make certain that the dollar remains the reserve currency of the world. The only way to make certain that that happens is for the United States to enter into the digital asset arena. Unlike the previous administration, unlike Gary Gensler at the sec, Elizabeth Warren on the Democrat side who hates this, the whole Biden administration waged war against this. We really want to see the dollar become the strongest reserve currency in the world. If we did not do that, I hasten to say this, if we did not do it, the dollar would have lost its reserve currency status because other countries that put in place stablecoins that were willing to allow this to happen would dominate the whole payment system around the world. Today, people want dollars. We're making it easier and easier for them to get them.
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Now you mentioned Elizabeth Warren and how she worked against the genius act. She introduced something like 84amendments, but you ended up getting a lot of bipartisan support in this. How did you pull that off?
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So Elizabeth Warren has always been against this. Again, I think her favored result would be a centralized, controllable transaction means mechanism like a central bank digital currency. I'm absolutely against that. She is the ranking member, which means she's the senior member of the Senate Banking Committee. And the first meeting that we had of this Congress and the Senate Banking Committee earlier this year, as you said, she unloaded 84amendments at 11:30pm the night before our committee hearing started at 9:30. We'd had comments. I've been working with Democrats, I've been working with Republicans, we've been working with everybody that we could certainly in the industry to bring in comments since the fall before. But she decides to unload these amendments the night before, very late the night before. And the majority of them would have been extraordinarily toxic. They would have destroyed the bill. And it was a four hour process that we went through. But at the end of the day when the vote came again, four hours of Elizabeth Warren trying to propose these amendments that would destroy the bill, me politely sending it back over the fence saying that's not going to work and here's why. And when the vote finally came, she lost half of the Democrats on her committee. She was able to keep half with her, but half came with me. They voted with all the Republicans and we put it out of the committee in the most bipartisan bill that's come out of the Senate Banking Committee in over a decade, if you can believe it. In over a decade. Amazing. But Elizabeth Warren is formidable legislator. She used a procedural mechanism to tank the bill early on. When I tried to bring it to the floor, she got every Democrat to vote against it. And I hear it was a very rough meeting beforehand and a lot of confusion that was generated by what she was saying, that somehow this would enrich President Trump and his family, these sorts of things. She was focusing on meme coins, which has nothing to do with this. But again, this distraction did lead to an early fail. And I went to John Thune, who is the Senate Majority Leader, and asked him to just bear with me, give me a little bit more time. And again, in the Senate, time on the Senate floor is the coin of the realm. It's precious. And so I appreciate John Thune believing in me. I kept working with my colleagues in the Senate, and when we brought it back to the floor, after I'd addressed all of the issues that Elizabeth Warren had raised, we were in a position to have a very strong bipartisan bill. And we have 18 Democrats also supporting the Republicans in this. That's a very solid outcome.
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So Trump has now signed this bill into law. When will it go into effect, and how will it affect Americans?
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It will take effect 120 days after the final regulation or within six months of the signing, which already. So it's going to happen later this year in terms of when it takes effect. Companies are already moving in this direction, and people, I think, that are in the industry players are feeling much more confident that they can go ahead and issue a stablecoin now because they can see the rules of the road. You'll have implementing rules put in place by the Department of Treasury, whom we work very closely with. But we will see whether you're regulated by the state. We accommodate state regulation and federal regulation, and you can be regulated overseas as long as the regulatory structure in that country is substantially similar to what we do here in America. And the treasury will determine all of that.
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I wanted to close by asking you a larger question about the economy. There was a lot of trepidation going into the rollout of the tariffs. I think there's a lot more confidence now that things are moving in the right direction. How do you feel about the Trump administration's handling of the economy? Now we have the Genius act, another major component. Are things moving in a direction that's positive for Americans?
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I certainly do. I might hit it at a very high level, and I might come Back to the stablecoin legislation to talk more specifically about how it will help in one arena. But broadly speaking, from the moment President Trump was elected, the markets responded positively. What he did is he ended the war that the Biden administration had waged on the energy industry here in America. Now we're looking at oil prices that are down in the 60s. There's a reason Vladimir Putin asked to meet with Trump in Alaska. It has to do with his economy. If you think about it, Putin only invaded Crimea back in 2014 when Obama allowed oil prices to cross $100 a barrel. Same situation occurred again when Putin invaded Ukraine. Biden waged war on American energy that actually had global repercussions. Oil gets over $100 a barrel and Putin invades Ukraine. I had my staff actually analyze this, if you can believe this. The price increase alone that was generated by the Biden war on energy, just the price increase alone, no increase in volume, explains and pays for the entirety of the Russian defense budget. We paid for that war. We have paid Vladimir Putin for that war. Trump has gotten us back into the drill, baby, drill business again. Not only does it have positive effects on our economy and counter inflationary effects, but it also had a very important geopolitical effect in terms of bringing Putin to a point where he has to negotiate because his economy is teetering. We get down to the mid-50s, he's in big, big trouble. So energy is the first thing I would point to. The one big, beautiful bill that we passed actually extended and made permanent a number of tax provisions that will incentivize investment in the American economy. And it's a very simple equation. You want to incentivize capital investment because the more capital investment you have, the more jobs that are created by that capital investment, and the more jobs you have, the more economic activity. It's a virtuous cycle. And President Trump set that in place working closely with us. We passed it through the Senate, passed it through the House, and he signed it into law. And that's just recently happened again. More certainty for capital investment, more incentives to make that capital investment here in America. And I think today that anyone in the international business arena would tell you that America is the most attractive place to invest capital. The President has reduced crime in America. He's working on that very hard. He secured our border. That has positive implications for our national security. And he is also working very hard to try and level the playing field on terrorists. And this is something I worked with him on for years. I served in the first administration as the U.S. ambassador to Japan. And we've had an imbalance with Japan, we've had an imbalance with Europe that goes all the way back to World War II. And if you think about it, those economies after World War II were devastated. We put in place very favorable terms of trade. We gave them the advantage to help rebuild their economies.
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It made sense way back then.
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It did make sense back then when these were devastated economies. What we should have done, though, is establish a time limit or a GDP per capita limit or something of that nature. Because where you land today, and I'll use one of the most egregious examples, if you look at where we were before President Trump came into office, if we built a car here in America and sold it into Europe, Europe, we'd be charged a 10% tariff by Europe. But if the Europeans built a car in Europe and sell it to the United states, it's a 2.5% tariff. No one would do that sort of deal today. And President Trump has been in the process of righting that wrong. If you look at it, America is the largest market certainly in the world, and we have the lowest tariff barriers of any market in the world. Other countries have been frankly, highly unreasonable in terms of maintaining barriers. And when I say barriers, it's tariffs. That's part of it. But non tariff barriers are quite significant. I have a lot of experience in Japan. I was the US Ambassador there. We negotiated two trade deals with the Japanese. When I was ambassador, no one thought it was possible. We got it done, a major trade deal on opening ag markets and we're going to move further there. And also a very important deal on digital assets and how we will share information between countries. China can never accede to that treaty because they don't abide by those rules. They surveil everything. But what I think we see unfolding right now is a serious change in the world order, world economic order, where those that have enjoyed this sort of unfair economic advantage are basically paying it back. Right now. They want access to the US Market, so it's working.
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Senator, thank you so much for taking the time. I know you're a busy man, so appreciate it.
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Certainly great to be with you. Thanks.
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That was Senator Bill Haggerty of Tennessee, and this has been a weekend edition of Morning Wire. These are questions that take cultures thousands of years to answer. During Answer the Call, I take questions from people just like you about their problems, opportunities, challenges, or when they simply need advice. How do I balance all of this grief, responsibility?
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How do you repair this kind of damage.
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My daughter, Michaela, guides the conversations as we hopefully help people navigate their lives.
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Everyone has their own destiny.
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Everyone.