podcasts
Swiss banker Phil Lojacono warns of EU collapse and highlights Bitcoin-backed lending as a rising institutional alternative.
In this wide-ranging episode, Phil Lojacono, Swiss banker and founder of Berglind, delivers a candid insider’s take on the unraveling European financial order and Bitcoin’s rising institutional appeal. He warns that the EU is on the brink of either radical centralization or collapse, prompting wealthy Europeans to move capital and domicile to Switzerland, which retains decentralized governance and regulatory independence. As traditional finance slowly warms to Bitcoin, driven by ETF approvals, MicroStrategy’s playbook, and rising client pressure, Phil is building Bitcoin-backed lending infrastructure for institutions and pension funds, offering secure, overcollateralized products in a conservative regulatory environment. He argues that Bitcoin is not only a mispriced collateral asset but a political force capable of reshaping global governance, advocating for multi-institution custody models to reduce systemic risk. Ultimately, Phil paints a picture of Bitcoin as a catalyst for both capital reallocation and policy reform across Europe and beyond.
“The European Union is a massive failure… It will either consolidate into a United States of Europe or fall apart within three to five years.”
“We’re working with banks for Bitcoin-backed lending… talking about 3 to 3.5% on the Swiss Franc.”
“There’s a couple hundred billion Swiss Francs just sitting in amortization funds doing nothing. Bitcoin is the ideal asset for long-term preservation in these cases.”
“Bitcoin-backed lending is the most mispriced credit instrument in the world.”
“I’d much rather Switzerland gain that buying power over the next few years than any other country. There’s no way around it, central banks will hold Bitcoin eventually.”
“The Swiss model mirrors Bitcoin. Fragmented power, direct democracy, and competition among cantons. It's slow, but incredibly stable.”
“Private debt funds are taking insane risk for 10% yield. Bitcoin-backed loans offer similar or better returns with far less risk, and yet they’re still ignored.”
“Fidelity stepping into multi-institution, multi-IG custody would be a game-changer.”
“Bitcoin is becoming a political force… and it’s beginning to reshape global governance.”
Phil Lojacono’s appearance on TFTC reveals a Europe grappling with financial decay while Switzerland and Bitcoin emerge as models of resilience and decentralization. As Bitcoin adoption accelerates, from ETFs to institutional lending, Phil highlights a growing infrastructure shift and urges investors, institutions, and policymakers to choose between clinging to failing legacy systems or embracing Bitcoin’s transparent, durable alternative. The window to act, he warns, is closing fast.
0:00 - Intro
0:36 - Zen at ATH
6:31 - The Bitcoin Enlightenment
10:11 - Fix the money, fix the world
15:35 - Bitkey & Opportunity Cost
17:10 - Origin of corruption
21:06 - Cutting gold, killing god
29:56 - Bitcoin as a yardstick
36:28 - Unchained
36:56 - The point of the book
40:29 - Bitcoinization of finance
1:00:01 - Flag theory vs staying put
1:05:31 - Saif House
(00:00) The European Union is a massive fate. They will clearly push for like a United States of Europe or the European Union will fall apart. Either or in the next 3 years. We are working with banks for Bitcoin backed lending and we're talking about 3 to 3 and 1/2% on the Swiss Frank. Our regulator is a bit scared given the the downfall of Freddy Swiss.
(00:19) We have multiple hundred billions of dollars sitting in these funds and they do nothing. Give it 4 years. There's a good chance that at least a small portion will be allocated in Bitcoin. You clearly saw the success of all the ETFs and then you saw the success of micro strategy.
(00:35) There's a lot of interest from banks, from asset managers, wealth managers, Bitcoin treasury companies outperforming pretty much every other stock. The dream scenario here in the United States is an entity like Fidelity needs to be the one to push multi-institution, multi-IG. Bill, it's all over. Uh the price of Bitcoin has crashed to $117,943. Yeah. Amazing, right? Again, again, it's all over.
(01:07) So, it's I literally just read a tweet from like a ThreadFi guy who who actually came up with that because Bitcoin crashed by another four or whatever percent. And uh and he claimed that Bitcoin still doesn't keep his promises or Yeah, it's ridiculous. But okay, down from uh the high price of 123,000. But uh it's been a week. It's been a fun week definitely.
(01:34) And I think the timing of this interview is very timely. Number one, it's it's Swiss week here on TFTC unintentionally. We we recorded with Pascal Quakeley yesterday. We've got you on today and uh we're going to get the the Swiss perspective on Bitcoin. But your personal perspective I think considering what's going on with the price action today is uh particularly pertinent because of the big themes that have been talked about in Bitcoin this year which is institutional adoption and more importantly traditional finance really beginning to give Bitcoin a light mark of approval. and you sit at the intersection of Bitcoin and the
(02:13) traditional financial sector over in Europe. And we were talking about it before we hit record, but really interested to get the inside scoop on how these uh traditional banks and financial institutions react when the price of Bitcoin runs up like it did this week. Yeah, I mean it's it's it was quite interesting already last year.
(02:38) I mean while when you had a lot of critiques in 2022 or even earlier where they said well there's no substance no nothing but then all of a sudden the biggest the biggest asset managers of this world came up with ETFs and everything was approved by the most powerful economy in the world. So so obviously that changed quite a bit already last year.
(03:02) I mean it it was very difficult for somebody to claim that Bitcoin is a Ponzi scheme and there's nothing behind and all these claims when the most powerful entities in the world are actively supporting it, right? So, so, so I think that the story changed already last year. Um, also the price developed nicely last year. I mean, fair enough.
(03:26) But then you clearly saw the the success of all the ETFs and then you saw the success of the of Micro Strategy and and now in in the more recent weeks the all these Bitcoin treasury companies. So I mean the the the critiques they are a bit in shambles. Let's put it that way. It's it's very hard to be to say something fundamentally wrong which was which was the case before the all the ETFs launched.
(03:57) So, and now and now obviously if the if the price rips we that that's the same probably in in every industry that's not Bitcoin specific. Everybody is suddenly it's in the media again and then and and then people say I mean now we also had the the latest the latest point which which was brought up quite a bit was that okay Bitcoin price only develops nicely in a in a low interest rate environment. Now that's clearly also wrong.
(04:21) So, so I mean we we suddenly push through all the points that that were wrongfully brought up. And what you can see in the in the thread fire world is is is basically a bit of both. You have in the meanwhile you have quite a few who are interested and are actually invested as well. But then you still have this a very strong uh bitcoin derangement syndrome.
(04:44) So you can as I as I mentioned just before, I mean now it the price went up in in USD terms to 122K and then it it it dropped slightly and then you see these people coming out of the woods again and claiming that it doesn't work which is obviously stupid but uh but yeah I mean there is there's a very good dynamic in the market.
(05:09) there's a lot of interest from from from banks, from asset managers, wealth managers um I would also expect that a lot of the wealth managers especially they have to answer quite some difficult questions by their um by their clients because I mean I I had just in two three years ago I had so many conversations about that and then and then they claimed well Bitcoin is still not proven it doesn't work blah blah blah and Now it's again the best performing asset by far.
(05:38) So obviously as a as as as a client you start to ask questions and now these these questions are asked within the industry which is great. So there's a good dynamic and I'm looking forward to what comes next. Yeah, I guess we it's probably makes sense to take a step back and um to educate the audience about what you're doing at Bergland and how you came to start this. I was actually listening to uh a podcast.
(06:05) I don't know if it was uh in German uh or Swiss recently. I was translating it, but you were you were talking about um how you decide to start this company, how you view sort of becoming a founder and it's not really going to market with an idea. It's really understanding your customer base and then building the solution that they're looking for, which is what you're doing right now. Yes, absolutely.
(06:28) Well, maybe I can give you a quick quick background. So, I found I founded my first company about 12 years ago. It was a peer-to-peer lending platform in traditional lending, so working capital lending formemes. I led that company for six years and we were active in Switzerland and in Germany. Um, and we basically well, we did a bunch of the mistakes that uh that a lot of startups do.
(06:54) Um so we invested too much we had too high costs on the on a on on a too well a very limited base let's put it that way. Um we didn't really hit product market fit before we scaled the cost which was a mistake and um and then I saw a lot of the the the financing issues like the the lending issues in the traditional world. Um nevertheless I led the company for six years.
(07:18) We sold it um in 2020 shortly shortly before the COVID lockdowns. Um then I became CEO of another of a joint venture between a large bank and and an insurance and but always wanted to go back into entrepreneurship first of all but then also focus on Bitcoin full-time. I'm in the Bitcoin space or interested in it since since about 10 years I would say and um basically wrote the whole the the whole ICO wave with a bunch of stupid crypto decisions and then and then really started to dig into it from 2018 onwards and therefore it was very clear to me that I want to focus fulltime on Bitcoin and then I thought okay so I'm involved in one or
(08:00) two or three other startups and I see the same mistake everywhere. where like the same mistake I did as well. Uh that we that we got we got too much money too early on. We invested it in the wrong things. We we built a product that turned out that the product that the market doesn't really need and doesn't want it as much as we believe they they want it. Um and so I thought okay let's do that differently this time.
(08:26) I I just start by myself. I will finance it myself. no no external capital and I will try to really find a way on what the market really needs. So that's why I decided in the beginning of last year I will just start with education and consulting. And the other thing that was clear to me was that I want to build a B2B business.
(08:51) But that was just a personal personal choice because I feel like I'm I'm better in long-term relationship building rather than large scale growth uh strategies. So that's how that that was basically very simple how I started and then said okay I'm reaching out to my network and within European banks and asset managers and and financial institutions and uh it it helped definitely that I had a network from my previous startup but I but I also wrote the Bitcoin newsletter since five years and therefore had a bit of a reach within uh within the German speaking uh within German speaking Europe and and that clearly helped me to get into a few
(09:31) banks and and uh and pension funds etc. And then the it ranged from simple workshops about what is Bitcoin, how does it work, what's self-costed, da da da, all these things very basic. But then also to some strategic projects especially one was with the bank where I said well look you there is clearly a big need within the Bitcoin industry which is that Bitcoiners do not want to sell but they need liquidity in one way or the other. So clearly there is demand for that and you guys at the bank you have access to the cheapest capital. So
(10:08) fiat capital that is. So and then therefore they should go into bitcoin back lending and they say well I understand that or they understand it that makes a lot of sense but it takes a while until we get there. Takes like two to three years until we can actually push it through all our compliance and risk departments.
(10:32) And in parallel I had a workshop with a pension fund and uh there we really had to start on ground zero basically because they were they are still nowhere. Pension funds are in my opinion still way way behind and um and there there was a lot of skepticism a lot of questions still and then I at one point I said okay let's let's do it differently. Let's leave the term Bitcoin aside.
(10:56) I'll tell you, I'll give you the opportunity to invest in Swiss Frank euro USD. You get Swiss Frank Euro USD back. Um, it's credit. You earn about 6 to 8% on the Swiss Frank, about 8 to 10 on the euro, about 10 to 14 even on the USD. The collateral is always available 24/7 tradable.
(11:21) It's highly liquid and the credits are always over collateralized. So, how does that sound? And then they were like, "Oh, this that sounds more interesting. That's more our home turf." So that was then basically those two those two situations led that led to the fact that I said, "Okay, so then let's build that ourselves.
(11:38) " Um that was then when I when I found the co-founder. So I we are now two still relatively small but uh but decided to focus on that as a management solutions with the overall goal to bring to basically fuel the Bitcoin economy and the first product is just Bitcoin backed lending which where we want to allow institutional and qualified investors to invest through the different platforms like Debify like Firefish but also through regulated custodians like Bit go signum and all the the banks that we have because they have they have another challenge with with capital
(12:14) requirements. So we want to build that solution to allow institutional investors to to invest in in in these products. That's what we do. Yeah. And I think there's many sort of points to touch on there. I mean, the first of which jumps out to me is somebody who's been following the space, leveraging these products, pun intended, uh, and investing in companies offering Bitcoin collateralized lending solutions.
(12:47) Is that it seems like the most mispriced credit instrument in the world in the sense that you describe the the collateral is sits in a wallet if you if the custody arrangement's done the right way. It's not rehypothecated. It's extremely liquid and the risk of a liquidity provider losing their principles is extremely low when you consider those factors and you mentioned the interest rates that exist.
(13:16) They're at least here in the United States way higher than traditional sort of lending products uh even though I would consider the risk to be significantly lower. And then on top of that, you have this sort of environment over the last, let's call it 5 to 10 years where the rush to private credit and search for yield has been a big trend, particularly here in the United States and I imagine globally.
(13:41) And I think these Bitcoin collateralized lending solutions provide an incredible risk adjusted profile for uh investors looking to get exposure to credit markets, private credit markets specifically. It's I mean I I couldn't agree more. It's insane to be honest. I I I still can't get my head around the actual costs.
(14:05) But the thing is the the market dynamics are right now they are as such that there's not enough fiat capital. So that's what defines the rates at the moment. There's still not enough not enough interest and that that's also why we why we exist because we want to change that. It's a lot of work. But I mean I fully agree on just a riskreward perspective. I I I couldn't find anything that comes even close.
(14:30) It's uh it it's it's really remarkable and especially if you look into the the area that that you just mentioned with all the private debt funds and alternative credit funds. I mean there is so much money lying around there and they are chasing returns of let's say 10% some on on the USD but I mean they they take considerable risk there like on growth growth growth companies preo companies or or whatever but there's there's a lot of risk in there while with uh Bitcoin back lending I mean you have a collateral highly liquid tradable 24/7 all the the loans are over collateralized nice they are not rehypothecated. It it's it's really
(15:10) quite something but I mean on on the positive side especially speaking as a as a Bitcoiner now I mean I personally think the product that we are focusing right now on is has has a has an end date. I mean there is especially now also in in Switzerland I mean our our um leading leading rate interest rate is 0% right now from our national bank.
(15:39) So the banks are looking into ways on how they can lend money and we are we are working with uh with banks um also with one that I hopefully can announce pretty soon which will provide liquidity for Bitcoin back lending and then we are talking about way lower rates like then we're talking about three to three and a half% on the Swiss Frank and that's that's going to happen. Um, so it just takes time.
(16:09) It's it's unfortunately not as fast. And then, yeah, speaking as a as a Bitcoiner, I would love it to be faster and to be to be more efficient so that the whole economy can grow faster. I mean, there's a there's a lot of lot of value for a product like that. Self freaks, this rip of TFTC was brought to you by our good friends at BitKey.
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(17:57) That's opportunitycost.app. Yeah. And based off our last conversation from last month, you made me aware of something that I was completely unaware of, which was the the relationship that Swiss regulators have with interest rates and how high they're willing to go. Yeah. Yeah. It's quite uh it's it's quite interesting at at the moment especially I mean when when you look at it right the the national bank decreased the the interest rates to 0% as I mentioned and so so for banks now they have they have an issue because their main business is um is uh how do you say
(18:38) that it's like interest rates differences. Yeah. Um so they need to find ways to allocate the the capital and um and so that that will have a very positive effect. But then um I don't know if that's also what you what you were talking about our regulator gives or limits the banks on Bitcoin backed lending and and and crypto lending if you want to say.
(19:09) So um with regards to that they still consider it as unc um uncolateralized lending and so that comes with very strict capital requirements. So that means that a bank especially let's say younger banks with more like a crypto bitcoin focus they have a problem because their balance sheet is not as strong and so because they would need to underly all these loans with tier one capital.
(19:38) Tier one capital is essentially in in simpler terms it's just equity capital. It's the most expensive capital for a bank. And so that's that means they are quite limited still but it does like the the the margins that they that they can generate right now especially are still attractive for that. So so and I think those are those are two important factors.
(20:01) We have the the regulation which will change and then we have the interest rate pressure which is already there. So you have banks that are looking into and say okay so we do have a couple of hundred millions that we can allocate to that to Bitcoin back lending and then we would need to find a solution that is outside of our balance sheet and that's where we still come in and then at one point the regulation will also change. I'm 100% sure about that.
(20:26) Um and and then it's basically the the well the banking model the traditional banks who provide capital for for Bitcoin back lending which is which is okay and isn't there an upper limit to the interest rate banks can charge as well. Uh it depends so in Switzerland it's like to private individuals there are like consumer credit uh limits that's at 9.9%. So they are not allowed to go higher.
(20:56) But formemes and companies that that limit is not uh is not in place. Yeah. I'm just trying to get a well-rounded um perspective on just the path to lowering the cost of capital for these these Bitcoin back lending products. I think what you said it perfectly, which is is just the lack of liquidity that exists for these products specifically right now.
(21:21) um since there's relatively little euros, Franks, dollars competing for these loans, they're able to charge a higher rate. And bringing this back to the justosition of Bitcoin collateralized lending versus the private debt markets that have exploded in recent years, they're taking what I would deem to be uh insane risk.
(21:46) uh it is when is that tipping point of banks and credit funds recognizing the relatively low risk provided by these collateralized Bitcoin products that floods the capital into the space. I mean there are very likely there are multiple pieces of puzzle that fall into place I would say at the very moment.
(22:10) I mean, you see the Bitcoin treasury companies outperforming pretty much every other stock and obviously private debt funds are also looking at this the stock markets. Um, so so and then they see well there's clearly value in that in in in that weird coin. So and so then they will realize okay so there there is something that is way more transparent that is that's the same price all over the world and is is highly liquid so that makes a lot of sense and at the moment and I would give it like 12 month maybe max they can still generate excessive returns I would say as compared to anything else that they that they would invest at $122,000
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(23:11) That's unchained.com/tc. Don't sit on this freaks. Take advantage of this alpha. How do you see the evolution of Bitcoin collateralized lending going? Because obviously to date it's been pretty vanilla. You put Bitcoin up in a wallet typically over collateralized. LTV is around 50% depending on the individual um uh lender that you're you're interacting with and you get cash back.
(23:40) But there's been the emergence of as you mentioned uh micro strategy like convertible bonds. Um there are different type of bitcoin collateralized debt instrument to an extent. Uh we've seen over here in the United States uh the emergence of companies like battery finance are doing uh dual collateralized sort of gradea credit in commercial real estate.
(24:06) Do you think bitcoin the meme of bitcoin is super collateral sort of getting injected into every nook and cranny of debt markets has has legs? This is something that I've been talking about on this show for probably the better part of a year and a half now is I think this is the cycle of Bitcoin as super collateral really shining and beginning to expand beyond the vanilla uh put up Bitcoin as collateral, get dollars back uh and and get more I don't want to say exotic but get into more uh more complex structure credit products.
(24:41) Yeah, 100%. I mean that's that's that's clearly happening and as usual the US is probably about two three years ahead of uh of Europe. Um so but I mean that that's basically the reason why we then said okay we start with just plain vanilla Bitcoin backed lending because it's the easiest to explain and how we believe we can crack the knot of getting fiat capital into the the Bitcoin economy uh in the easiest way.
(25:08) But that's just the first step. I mean then clearly I mean injecting it into uh real estate like battery does is is great. It's uh I mean that has a lot of potential. We we talked to a few real estate developers over here as well and I mean they are struggling with that as well.
(25:28) I mean on on on mortgages they the rates that you pay for depth etc is phenomenal but then the bigger problem is for commercial real estate or bigger real estate projects when they have to calculate over the next 20 30 40 years and then it's more on the on the capex side of things when suddenly all renovations cost 20 30 40% more because fiat just devalues all the time and that's that's very hard to um to calculate in advance.
(25:57) So what they say is that okay so let's from the amortization part we put a bit in bitcoin and we we basically benefit from the from the acceleration of the price and hence we can make sure that our that our properties they keep the value over time and so so that's also an easy to to understand uh product but then also I would say especially here in Switzerland we have this this I don't know if it's a specialtity But it's it's quite interesting. So if you buy an apartment in a in a bigger building, then you own it's called you basically
(26:35) own part of a floor, right? You own the apartment. But what you do is you you pay in constantly every year. You pay in in a so-called amortization fund. And what you can see there, which is uh also in the Thrfy world quite uh quite spectacular, I must say, it just lies around. It's just on an account. It doesn't work.
(27:00) And so suddenly you have in in the meanwhile we have an multiple bill multiple hundred billions of of dollars sitting in these funds because and they do nothing. They don't work and it's so easy to um to actually get them like to plan. For instance, um I talked to a couple of friends of mine recently and they they were uh they bought a vacation home up in the mountains and that is in one of these buildings and then there were just about 250,000 uh Swiss Franks lying around and they already know that in uh 2030 there will be a a bigger renovation project um and it will cost roughly at current prices
(27:39) about 400,000. realistically it will be 450 or something and they just calculated as such that they just need to save until there and so Bitcoin would be the ideal uh the ideal asset to save that part that that capital um to to actually get this renovations done. Um and so so what I fully agree with you.
(28:05) I mean this is just one example that where Bitcoin will will come into place and and make sure that we can actually revolutionize the financial financial industry the traditional financial industry. Well, on that note, it's a perfect tossup to what I wanted to talk about next is I mean, you partnered with Debify, Firefish, Bitco, correct me if I'm wrong, do leverage some sort of multi-IG escrow for um for the Bitcoin when it's used as collateral.
(28:40) And so I think that's been a big topic of discussion here in the United States is the centralization of custodian risk with a lot of the ETFs flooding their Bitcoin to Coinbase. And I've long been an advocate of if the banking system and traditional finance is going to step into Bitcoin uh in earnest that we really need to take a step back and think about the optimal sort of custody and how to custody the collateral when it's being used in the system.
(29:12) And I think multi-institution, multi-IG makes the sense, makes the most sense to me because you really um create an incentive structure that that really disincentivizes against rehypothecation and concentrated third party risk. Yeah, definitely. Definitely. I mean I I started with Berlin to uh and and basically had this the ideologue Bitcoin image in mind and and thought okay so it's it's it's going to be multisc above all um and this is where we focus on and and we we still do I I I I think it it is a good way but it also comes with limitations and so and now looking at the exact processes of all the platform
(29:53) I mean it Sometimes it's hard to argue why a regulated custodian isn't safer so to say because then you have I mean when you look at at processes of regulated banks we have two in Switzerland who are fully focused on on on Bitcoin or unfortunately uh crypto as a whole and I mean when you look at their at their risk policies at their risk processes then uh it's sometimes It's hard to argue why this should be less secure than the multisc setups of uh of some startups so to say and so so there is there is still a way to go I would say
(30:36) and then I also think the right way to uh to to tackle it is multi-institution but professional institutions not uh not some random one single or one key holder or so somewhere but yes I mean this this is also O going to be built up I would I would say and I don't know how it is in the in the US. I mean you you clearly have a few a few players who are already working on that.
(31:04) I think in Europe this is something that we have to tackle over the next uh the next two years or so. Yeah. I think the dream scenario here in the United States is Fidelity who's been in Bitcoin for over a decade now at this point in a century old institution here in the United States really stepping out on the ledge and I think an entity like Fidelity needs to be the one to push multi- institution multi-IG to get that seal of approval from not only regulators but traditional financial players who really respect the prestige
(31:42) and the century long track record of Fidelity. I think somebody like them stepping out and saying, "All right, we're going to be a key agent in a quorum of a multi-institution, multi-IG would be a massive step forward." Yeah, that would that would be amazing. I mean something something like that would really change the way people look at at at custody also on the institutional level because I mean so far when we talk to to to more institutional type of clients I mean either either corporate corporations who are looking
(32:15) for a for a loan then the multisig setup doesn't work. It's always it's it's always a regulated custodian and and if some if a player like Fidelity or I mean the the equivalent in Europe, it doesn't really matter um could come up with something I mean e even better would be some sort of like a global uh global consortium of uh multiple institutions that would be great um because then then we can really scale it to the to the institutional level as well. Yeah.
(32:52) So shifting gears towards uh Europe's specific perspective on Bitcoin. I mean you've mentioned it a couple times. Seems like the European regulators are two to three years behind what's happening here in the United States. Uh obviously you have the Micah regulations that have gone live this year in Europe and um there are many people that are worried about the state of the broader Eurozone economy.
(33:19) What are what are your thoughts about Europe as it pertains to Bitcoin regulation and can the success of Bitcoin be a catalyst to force more free market operations within within Europe? Yeah, I mean Europe as a whole is a difficult topic at the moment. I would say not only not only financial regul uh regulation wise but also general macroeconomic wise it's quite it's quite challenging.
(33:51) I mean Europe is the European Union is their primary strength is is regulation which is uh which is a bad thing in the first place. I mean luckily I'm based in Switzerland so we are not in the European Union and it's also one of the main reasons why um why we we are doing much better than every every country surrounding us.
(34:12) Um so this is also my personal uh primary motive these days like I I just try to do everything I can to so that we are not getting too close to this uh regulatory monster that uh that surrounds us. Um right now it is I mean but also in Switzerland I mean you you've you've seen an interesting development. We we pushed forward quite quite good in 2017 2018 under u a different uh different financial minister um and but then kind of slept in so to say and then a lot of a lot of countries uh bypassed us and hopefully we can change that again. I mean now our our regulator is is a bit
(34:53) scared given the the downfall of credit Swiss uh two years ago. So they they really try to avoid any risk. But this will hopefully change. I mean we're we're pushing on all fronts that uh that that they are a bit less risk averse especially on on on the Bitcoin scene. There's clearly a lot of interest right now from the industry.
(35:17) So I'm I'm positive that we can that that we can change at least the Swiss regulator regulator's perspective over the next uh few months um on Europe as a whole. I mean it's so some it's it's really difficult for me to understand how how these processes work. I mean it's heavily centralized. Europe gets more and more centralized and the and and the problems that they are dealing with these days are much broader than just financial problems, right? It's it's especially energy is a big issue in Europe. I mean the the the whole industry or Germany, one of the of the well powerhouses of
(35:57) Europe in the past is is is just strangled by insane energy prices and and and ludicrous policies around that. So, so I mean this is in my opinion probably even more important than than than the regulation around Bitcoin for them and I really hope they can uh change the direction there. Um other other than that I mean can Bitcoin be uh a catalyst for for for sovereignty for sure. Will it be a catalyst for growing economy? I hope so.
(36:30) But I mean you cannot get like institutions or corporations if they are not allowed to do that you won't get them to do that right. It's different on the individual level but for for corporates it's it's tricky. So, so but um so far unfortunately it still looks like in Europe the pain is not big enough um so that uh that the politicians really change.
(36:56) Um so we will see I hope but I'm uh I'm quite skeptical on on on the European Union and the way they handle pretty much everything. What's like what is going to be the catalyst? Do you imagine it like Bitcoin has another very successful cycle throughout the rest of this year potentially into next year and you see a lot of the activity happening here in the United States, Southeast Asia, other parts of the world where people are really embracing it and leveraging the sort of monetization and adoption of Bitcoin to their benefit and uh sort of people sitting in corporations in Europe looking out at the world basically embracing
(37:35) this technology and succeeding massively because of that and pushing back against the regulator saying look what's happening around us we're completely missing out on this is that what it's going to take or yeah most probably but usually I mean usually it has to start with uh quite a bit policy change and then the the politicians will force the regulator to uh to act and I mean there there we can see some some effects of one example is in in Norway way they started with with an insane wealth tax. Um just another socialist experiment that failed
(38:12) massively. So, so they installed this wealth tax and as a result a lot of the Norwegian billionaires they moved to Switzerland which is great for us um and it's terrible for the country and also obviously the net result is that is that they lost tax revenues and at the significant scale and you see that in many different places now as well and in Germany they also try to increase taxes again or or or increase depth um which will cause inflation which that they already saw. I mean the euro had uh saw heavy inflation over the last few years
(38:50) already. So, and I think there needs to be like people see start to realize that more and more. They realize, hey, we are like we're being cheated on here. So, that doesn't work. Like suddenly suddenly we have 10% and higher inflation and things are not getting any better while our country has record tax revenues but the infrastructure is bad.
(39:17) So a lot of these things come together and then they see in parallel Bitcoin appreciates a lot and then you see the I mean I mean you see the the the Arab countries and a lot of Asian countries and the US especially under the new administration really pushes forward on on on the Bitcoin side and clearly they see this these successful examples and I and I think this will will will help and and then hopefully that's going to be the catalyst in the end. I personally believe it it's always going to be price
(39:49) action in one way or the other, right? It's just getting to uh spicier conversations. Do do you think uh discussions about whether or not the European Union, the economic agreement between some European states is a failure after 30 years? And I think the European Union is a massive failure. It's uh on on pretty much all fronts.
(40:15) I mean, the it's it's a centralizing experiment and it just doesn't work. It's uh I mean, it it consolidates power on unelected bureaucrats, which is pretty much the worst thing you can do. Nevertheless, they still tried. So, and and it clearly doesn't work. Clearly, I mean, the like all all the all the countries are struggling economically.
(40:46) it doesn't like the all the policies around around immigration don't work. They do not collaborate properly. So yeah, I think it's a matter of time either and that's going to be the big discussion or the or or the big surprise unfortunately. It's either going to be that they will clearly push for like a United States of Europe um which could be an outcome because there especially in the southern part of of uh of Europe there are still a lot of countries who are somewhat benefiting from it at least on the outside they don't really but they feel like they benefit from it um or the European Union
(41:28) will fall apart it's either or in the next uh in the next three years, three to five years, I would say, because yeah, it's it's crazy. I'm having uh flashbacks to reading Boomerang by Michael Lewis where he sort of describes that dynamic between Northern Europe and Southern Europe where uh yeah, like Greece and Italy essentially being completely subsidized by the German economy in the early 2010s.
(41:55) Yeah. But yeah, absolutely. And but now you can see it in a in a in a different way almost. I mean Italy now okay it's not it's not perfect but it's it's one of the more stable countries and also economically they're not doing that bad. I mean now suddenly and that's that's always what happens in these centralized uh centralized structures.
(42:18) It's like there's there is an orientation downwards. So Germany will will go lower instead of everybody else goes up. That's just how it is. That's that's why socialism never works, right? And um and it's just because of the distance from the government structure to the actual people is too big.
(42:38) It's uh it doesn't make any sense and there's a lot of corruption in this whole process and yeah so we will see. But uh it's it's it's going to be interesting. But I mean people realize it more and more and you see it in elections all over the place. There's still some some forces trying to push against it. But I don't think it's it will be successful. Yeah.
(43:04) the um the information I I say this a lot in the context of how politics here in the United States particularly in DC at the federal government level is completely disconnected and it's basically what you describe from an information system perspective they're so far away from the raw input data it's like impossible for them to make rational decisions on behalf of people thousands of miles away absolutely absolutely they don't feel it and it's not It's always sometimes when I when I talk about these topics, it's it's like you you you start claiming
(43:36) like yeah though they cannot do it. But it's human. It's human nature. I mean this is just how it is. If it's not your money then you spend it differently. If you don't feel the consequences of your actions then you act differently. That's that's that's how it is. That's natural.
(43:56) That's by the way one of the key advantages of our political system in Switzerland or how I look at it at least. Yeah. because we have this direct democracy and it's very it's very fragmented. It's a very small country but fragmented in 26 cantons and everybody has a vote and can vote against against pretty much every decision anybody takes. So that's correct me if I'm wrong they compete on sort of tax preference too right trying to Yes. Well, tax preferences, education.
(44:24) I mean, the the the overall system is quite similar to the the to the US system. It's a republic in the end. Um, but we changed our our constitution in 1848 based on the American constitution. One thing that we that that we added is that it's not like our our constitution is not like such a sacred document. It's quite it's quite dynamic actually.
(44:52) So everybody can pretty much change it. So you just need in compared to our size obviously that's like you need a 100,000 signatures and then it comes to a public vote. So we can we can have referendums against pretty much every decision any politician takes and that's on the federal level on the canel which is your state level and on the municipality level as well.
(45:17) And so so that's why we have like 300 referendums every year. But it it uh keeps politicians in in check. And also given the the tax competition that we have, you can you can see the impact much much faster, much closer. And if you had a magic wand to fix the uh European Union problems, I know you're separated in in Switzerland, but what would you do or what would how what is the optimal path to uh untangling the centralized control that the European Union has over member states? Break it down to a free trade agreement and then split it apart. like just just say okay so you there's
(46:03) going to be free trade so economical freedoms so to say uh which is good I mean people trade that's good uh that helps but then but then pretty much uh pretty much get rid of the European Union and build a Europe of a thousand Likenstein or a thousand Switzerlands or just just go back to country level and compete I mean that's that's the thing right that's That's like it's this it's this weird image that some politicians have is that it's better when you centralize and everything bigger is better. That's not true. It's
(46:39) just way better if we can if we build on a smaller scale and we compete against each other. We compete with ideas with with structures with governance. Uh and and that really helps and I mean you can see it. It's it's just for me then that's also sometimes quite frustrating.
(46:59) I mean we our relationship to the European Union comes back every 5 years pretty much and some sort of an election and we will have a very important election soon which basically because some people want to be much closer to the European Union and basically automatically take over regulation from from from Europe just to get access to the European market which we already have by the way but apparently that should be easier.
(47:25) And now a lot of people are are um are fighting against it. But and to me this is just I can't get my head around how people can just look at the at the simple facts like on every economical KPI we're doing better than the European Union. And you can clearly see it.
(47:49) I mean 20 years ago the European Union had the same GDP per capita as uh as the US. Now the US is what 40% higher or something. So on on every KPI it failed. Nevertheless, there are still people who think it's a good idea to do to to go for it. Yeah. It's it's mindboggling to me watching from afar, particularly the energy like how Germany completely just shot itself in the foot over the last 20 years with this energy policy. And no, it's unbelievable.
(48:21) It's really unbelievable. And I mean you it's now they are they're being deindustrialized in real time and um and they had a super strong economy, right? Super strong industry. Um and and now all the companies are struggling and obviously that trickles down.
(48:46) If if Volkswagen struggles then thousands of smaller companies struggle as well. Uh and uh and yeah, it's just the primary reason is is energy prices and there seemed to be some sort of a reluctance on the political elite so to say to change to change their mind because it was clearly a mistake and it was such a big mistake.
(49:08) I mean you you can now I mean they they got rid of their nuclear reactors, right? Or they stopped it because of uh because of Fukushima in Japan. And now even Japan started started building new nuclear reactors again and Germany Germany doesn't. Yeah. Yeah. It's a it's a nightmare. Yeah.
(49:31) You had the instance in I forget if it was 2022 or 2023 when after they decommissioned a couple of their nuclear power plants. They're forced to ship coal up the Rine and then the Rine ran dry and they couldn't get the coal to the power facilities. So they had like power outages and No, it's it's really it's the stupidity of it all is is is mindboggling.
(49:51) It's I mean with that I think transitioning this back to Bitcoin. I think you gave a keynote presentation in Prague last month. Uh it was titled Bitcoin a political force reshaping global governance. And I am a strong believer that Bitcoin can be a vehicle, a mechanism, a rallying cry that people rally around and basically leverage to effectuate the political change they want to see in the world.
(50:24) And so I think you believe this too based off of your keynote. And I think just diving into some of the topics you covered there be great. Yeah. I mean, yeah, definitely. I see it in uh it's multi multi-dimensional. I mean the first the first part is clearly the the buying power and the the monetary like the monetary things obviously that will have effect on on politics in at one in one way or the other pretty soon.
(50:49) You you saw it already in the US. Clearly the last election was also influenced by probably pretty strong donations coming from people who made good money with uh with Bitcoin I would say and clearly that has some sort of an impact probably. But then it goes much further, right? I mean this is this is where I hope that we with education we can we can also do our part.
(51:22) I mean the the effects on weak currencies is just are just so bad and everybody in Bitcoin knows it. A lot of the people are not in Bitcoin unfortunately so they don't know it and I hope and I was also part of my of my keynote. It's I mean Switzerland was the last country who got rid of the gold standard. It was only by the end of the '9s.
(51:43) So it was relatively recently and for some weird reason I mean it's not not the gold standard fixed in a way that every Swiss Frank was backed by by gold that that wasn't the case but the national bank was required to have a certain percentage in gold when they printed money. So and that hindered them as well. It was also diluted over 70 years but uh but not as bad.
(52:08) And so that was the primary reason why the Swiss Frank remains so strong. And for some reason people or international investors still believe that because every time when the dollar drops, Swiss Frank goes up. and uh and and and and I really hope that given everything we see and given the success of Bitcoin, we can educate the people as well that sound money makes a lot of sense for for society and that people see that that there is a reason why we have in Switzerland we have a much more dynamic industry as compared
(52:47) to every other country surrounding us and that's the primary reason was that these companies they had to remain dynamic, innovative, lean, they had to push things forward while in the country surrounding us, they had access to very cheap capital and they got lazy and therefore uh things didn't work and that that is that's just one effect of of uh of weak currency.
(53:16) So I hope that with the success of Bitcoin we can educate society as a whole more about like the the hard money in general. But then then that's also what what I realized is that because I about 5 years ago I wrote a blog about what Bitcoin and Switzerland has in common and it's essentially what I just tried to tried to explain before.
(53:43) Switzerland is very very decentralized. It's the people are on top and politicians are servants to the people and that works like that that there's no there there's nobody who can decide about pretty much anything. It's always the people who who decide in in in one way or the other. And that's quite comparable to the to the Bitcoin system.
(54:09) That's uh basically the notes or notes are the masters, right? So obviously we have the the miners are very important but in the end they're servants and and also there's not some super power who can just decide and change monetary monetary policy which is great. So there are a lot of a lot of common factors. Um and and I also believe that's the reason because we have direct democracy here.
(54:36) Um so we can vote every single individual has a vote about pretty much everything and that helps it pushes like it makes us slow but it makes us very stable and that rings a bell when you look at how Bitcoin works. So slower is better than faster. politicians with less power is better than more power.
(55:03) And um yeah, and sometimes doing less is more. And that's that's also how I look at at it from in the in in the Bitcoin world. Yeah. Yeah. And um something I don't think's talked about enough, like honing in on Switzerland, too. I'm sure you see me typing back here. was just doing some quick research and chat GBT.
(55:25) But the Swiss national Swiss National Bank has a considerable position in Micro Strategy, which is a signal to me that they sort of know what they're doing to a certain extent that they're trying to get proxy exposure to this rapidly appreciating asset. Yeah, this is an interesting debate. I mean, we have um we have two or three people who go to the general assembly of the national bank every year and then basically have a short speech and they they calculate how much money the Swiss National Bank lost because they didn't invest in Bitcoin since a while and it's
(55:59) constantly the same thing. And then I think their claim was a couple of years ago was that instead of buying all these worthless uh government bonds from countries surrounding us, you should buy like 5% in bitcoin and then they go back every year and calculate and explain to them how much money they lost so far.
(56:25) So there is there is a bit of pressure around that that uh that they should focus on it more. So far the national bank always said well they feel like it's not big enough yet um but they are monitoring it. um when it comes to micro strategy, I mean this is also an interesting debate because I also thought so in the beginning and then I saw an interesting um presentation by one of the the I think it was even the president of the national bank and they said well just in general they just need to push down the Swiss Frank otherwise it appreciates too much against all other fiat currencies and therefore they
(57:00) print Swiss Frank and then they buy all sorts of assets in different uh in different other currencies. And so speaking about Micro Strategy, they say they basically just buy whatever USD denominated asset they can they can get their hands on and it's less about the actual asset. It's just that they want USD exposure.
(57:25) Um so I was quite quite happy when I saw that the first time and then I was a bit like me, okay, that's not as exciting as I thought it is. I thought the Swiss National Bank was speculative attacking itself probably. I mean they but I mean they the good thing there are two two points to that right.
(57:48) It's like the balance sheet of the Swiss National Bank is massive. They printed a lot of Swiss Franks recently over the last five years as well. The good thing about Switzerland is it's doesn't finance the state. it just suddenly became basically a massive hedge fund and it's then almost some sort of a sovereign wealth fund just sitting with the national bank.
(58:10) So it doesn't the money doesn't trickle down in the economy and dilutes everything and creates all sorts of uh wrong incentives but it's al it's generally wrong that we that that the national bank has a big balance sheet in the first place. So yeah, that'll be I' I've had discussions about this um with a couple of friends in the past, the fact that they own Micro Strategy and based off of our discussion over the last hour, like there's a lot of talk here in the United States of um putting Bitcoin in the Treasury and I think we're pretty at least this
(58:49) administration is ardent about we don't want it to sit at the Fed. you rather sit at the treasury. But um if you think about sort of this idea of free banking and a lot of the ideas in the Bitcoin standard particularly towards the end where safe like Bitcoin's greatest success would be forcing central banks to have um sort of better monetary policy uh or stricter monetary policy to remove the opportunity costs and the misallocation of capital and I don't know the answer to this but I go back and forth like is it worthwhile or should we be pushing? It's probably the better framing central
(59:28) banks to hold Bitcoin as an asset on their balance sheet and if so, who's going to move first? And based off of this conversation, I think Switzerland has proven to be sort of forward thinking when it comes to Bitcoin, even though it's had some some lulls uh since 2017.
(59:53) But could you see the Swiss National Bank if these if this contingency of of Bitcoiners going year in and year out and highlighting the losses uh for not allocating Bitcoin actually making the decision to get some Bitcoin? Yeah, I could see I hope so to be honest.
(1:00:12) I mean this is this is another interesting topic because there's currently an initiative ongoing people who want to force the national bank to put Bitcoin on the balance sheet. they have another year to collect these 100,000 signatures and then it's going to be a vote in three to four years from now. So, it's a it's a longer project. Um, and especially within the the local Bitcoin community that is heavily debated because there is a lot there are a lot of people who say well people cannot be or Bitcoin cannot be enforced on anyone or any institution and they don't want the national bank to uh to hold Bitcoin. I see a lot like I see that argument.
(1:00:49) Um, in my opinion, in the end, it's a it's it's also a bit of geopolitical competition, right? So, do I do I generally want to see the national banks to own Bitcoin? I think there's no way around it. So, at one point, this will happen. And then I would much rather see us uh gaining that that that buying power, that economical power um over the next few years other than any other country in general or obviously there are more friendly countries than than others but I think there's no way around it. So I do think
(1:01:29) over the next give it four years there's a good chance that uh that at least a small portion will be allocated in uh in Bitcoin. Do you think we're reaching a critical tipping point in terms of adoption in event horizon if you will about Bitcoin? Yeah. Yeah. For sure. I mean now you you can clearly see it with all these treasury companies um coming out of the woods.
(1:01:57) I mean obviously that's that's kind of the adoption curve comes from cipher punks software developers and then you uh individuals in general and then it goes up the curve and then it goes to more uh to companies to institutions and then at one point it will be countries. Um and right now we can clearly see the critical point on uh in in in the private markets or in with with companies.
(1:02:31) I mean there are so many companies now putting Bitcoin on their on their own treasury. There are now a lot of strategies to accumulate as many Bitcoin as somewhat possible. And uh clearly that's that's a path towards uh towards more countries. and um let's see who's first from from the actual like let's say G20 or something countries but yeah definitely that's I'm I would bet a lot of money that that's going to happen over the next two years and um let's see it's a brave new world and uh I appreciate you taking some time hopefully this is the first of many conversations because I think your
(1:03:07) perspective is incredibly valuable um from Switzerland as you can tell in the background my father-in-law has decided to start mowing the lawn. So, we may uh Well, that's important as well. We may uh may have to wrap up here, but where can anybody who's interested about what you're doing at uh Berginda like uh contact you and help in your efforts to get better Bitcoin collateralized products to market? Yeah, you find me on X and on Noster.
(1:03:39) Um always always open for interesting conversations. As always, you you also find my email address online, so feel free to reach out and uh let's discuss on what we can build together for the Bitcoin economy. Very much looking forward to it. All right, we'll link to all that in the show notes.
(1:03:56) Phil, sorry for the noise here at the end, but we'll uh we'll do this another time. Peace and love, freaks. Thank you very much. Bye-bye, Freaks. Thank you for listening to the show. I hope you liked it. If you did like it, please make sure you subscribe, rate, review the show. It helps us out a lot.
(1:04:14) And also, if you like these conversations, I've come to realize that many people listen to the podcast. They don't know we have another sort of layer of this media company. We have the newsletter, the Bitcoin Brief. Go to TFTC.io. Make sure you subscribe there. A lot of the topics that are discussed on this podcast. I write about 5 days a week in the newsletter.
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