WEBVTT - U.S. Better Be Prepared For Another Strike On Syria: Stavridis 0:00:05.800 --> 0:00:08.720 Welcome to the Bloomberg p m L Podcast. I'm Pim Fox. 0:00:08.760 --> 0:00:11.520 Along with my co host Lisa Bramowitz. Each day we 0:00:11.640 --> 0:00:15.120 bring you the most important, noteworthy, and useful interviews for 0:00:15.200 --> 0:00:17.840 you and your money, whether you're at the grocery store 0:00:17.960 --> 0:00:20.720 or the trading floor. Find the Bloomberg p m L 0:00:20.840 --> 0:00:32.520 Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot com. North 0:00:32.600 --> 0:00:36.760 Korea and potential negotiations with the US, we do to 0:00:36.800 --> 0:00:41.559 find out that top representatives of nately CIA Director UH 0:00:41.640 --> 0:00:46.000 Mike Pompeio, did meet with Kim Jong un, the leader 0:00:46.080 --> 0:00:49.400 of North Korea, in recent weeks. Joining us now to 0:00:49.400 --> 0:00:52.480 discuss I'm very pleased to say is Admiral James Servriti 0:00:52.600 --> 0:00:56.720 is retired US General U S. Navy Admiral and former 0:00:56.760 --> 0:00:59.520 military commander of NATO. He is a current Dean of 0:00:59.560 --> 0:01:02.520 the Flesh Your School at Tufts University and a Bloomberg 0:01:02.640 --> 0:01:06.160 View contributor. Admiral stefridis thank you so much for being 0:01:06.360 --> 0:01:11.399 with us. Are we being played with these negotiations? I 0:01:11.440 --> 0:01:14.479 would say it's too soon to tell. Um. There is 0:01:14.520 --> 0:01:19.120 a possibility that there is a sincerity here, uh driven 0:01:19.200 --> 0:01:23.720 Let's face it. By financial exigencies in North Korea, UH 0:01:23.760 --> 0:01:27.759 and the fact that he really has nuclear weapons now, 0:01:28.280 --> 0:01:31.720 so he may feel, in all honesty that this is 0:01:31.760 --> 0:01:33.920 a good point for him to negotiate. I think we 0:01:33.959 --> 0:01:36.960 are being played if we think that he's going to 0:01:37.040 --> 0:01:39.640 give up those nuclear weapons. I do not think he will. 0:01:40.880 --> 0:01:46.520 Admiral Stefrida's Japanese Prime Minister Shinzo Abe meeting with President 0:01:46.560 --> 0:01:50.320 Donald Trump in Florida and Mara Lago. What do you 0:01:50.320 --> 0:01:53.160 think the position of the Japanese is visa VI what 0:01:53.360 --> 0:01:57.520 is seemingly a bilateral negotiation between the United States and 0:01:57.600 --> 0:02:01.800 North Korea. I think they will push very hard to 0:02:01.840 --> 0:02:05.920 expand these talks rapidly. The next step should be to 0:02:06.000 --> 0:02:10.320 go from bilateral, as you correctly point out US North Korea, 0:02:10.400 --> 0:02:14.280 to four party talks to bring in South Korea and China. 0:02:14.400 --> 0:02:18.800 We will never solve this problem without fully integrating China 0:02:18.919 --> 0:02:23.560 into the discussion. Once we make some serious progress, hopefully 0:02:23.639 --> 0:02:26.560 through four party talks, then I think you have to 0:02:26.600 --> 0:02:30.160 go to six party talks. That's when Japan and Russia 0:02:30.200 --> 0:02:33.160 come into the equation. This is the work of a 0:02:33.320 --> 0:02:36.440 year or two, and if President Trump thinks he's going 0:02:36.480 --> 0:02:39.440 to sit down across the table from Kim Jong on 0:02:39.680 --> 0:02:42.120 and walk out with the Nobel Peace Prize. That is 0:02:42.160 --> 0:02:44.320 not going to happen. This is going to be the 0:02:44.360 --> 0:02:48.000 work of at least a year of solid negotiation building 0:02:48.080 --> 0:02:51.760 toward inclusion of our Japanese allies. Given the work that 0:02:51.880 --> 0:02:57.240 lies ahead, is this meeting premature? I don't think so. 0:02:57.440 --> 0:03:00.720 I think that this is a reason all time to 0:03:00.880 --> 0:03:05.960 try a kind of uh, dramatic gesture that might crack 0:03:06.120 --> 0:03:08.680 this thing open and move it in a positive direction. 0:03:09.040 --> 0:03:11.600 Another way to put it is compared to where we 0:03:11.600 --> 0:03:14.600 were four months ago before the Olympics, when we had 0:03:14.960 --> 0:03:19.000 nuclear detonations and ballistic missiles flying over Japan and headed 0:03:19.040 --> 0:03:22.080 towards Guam, this is a better place to be in. 0:03:22.440 --> 0:03:26.160 But we should not be overly euphoric about what's ahead 0:03:26.520 --> 0:03:30.280 and where to understand that this is hard work negotiations 0:03:30.280 --> 0:03:34.200 and diplomacy or time consuming and difficult, especially with someone 0:03:34.240 --> 0:03:37.040 like Kim Jong un. Admiral Strafridi's I want to get 0:03:37.080 --> 0:03:40.640 your view on CIA Director Mike Pompeio, since he was 0:03:40.840 --> 0:03:42.960 the one who traveled to North Korea last week to 0:03:43.000 --> 0:03:46.320 meet with the North Korean leader. Uh, what do you 0:03:46.360 --> 0:03:50.240 think of him as sort of the initial UH spokesperson 0:03:50.360 --> 0:03:53.560 for the US. I think it would have been a 0:03:53.680 --> 0:03:57.280 very odd choice, except for the fact that he is 0:03:57.880 --> 0:04:00.720 nominated and I think has a better then even chance 0:04:00.840 --> 0:04:04.680 of being confirmed as the next Secretary of State. Given that, 0:04:05.200 --> 0:04:08.840 it makes sense if if he had been planned to 0:04:09.000 --> 0:04:11.640 stay at the CIA for the next three or four years, 0:04:11.840 --> 0:04:13.840 I think it would have been a very strange choice. 0:04:14.360 --> 0:04:18.479 Leaving that kind of structural answer. Aside as a person, 0:04:19.000 --> 0:04:22.080 I think he's a very good choice. He Iss high 0:04:22.120 --> 0:04:27.479 emotional intelligence, UM, He's academically very well prepared West Point 0:04:27.480 --> 0:04:30.719 grad first in his class there UM coming out of 0:04:30.760 --> 0:04:35.440 the CIA. He has a depth now in intelligence. Former congressman, 0:04:35.520 --> 0:04:37.760 so he gets the political piece of this. I think 0:04:37.760 --> 0:04:41.080 he's a very reasonable choice, given that he is on 0:04:41.240 --> 0:04:45.880 tap to become Secretary of State. Admiral Stevids just quickly. 0:04:46.240 --> 0:04:50.479 John Balton, national Security Advisor reaching out to Egypt and 0:04:50.680 --> 0:04:53.400 other Arab nations in order to replace the U S 0:04:53.400 --> 0:04:56.440 and Syria. Is that kind of work. I think it's 0:04:56.560 --> 0:05:00.160 unlikely that we are going to wholesale replace the u US. 0:05:00.200 --> 0:05:02.719 The idea that we're going to just step away in 0:05:03.320 --> 0:05:06.880 our son of friends are going to step in is unrealistic. 0:05:06.960 --> 0:05:10.920 But I think the idea of building a coalition that 0:05:11.000 --> 0:05:15.360 includes significant Sunni Arab states to include Jordan's Saudi Arabia, 0:05:15.440 --> 0:05:18.200 Gulf states as well as Egypt, I think makes sense. 0:05:18.279 --> 0:05:20.400 It will require U S boots on the ground. We're 0:05:20.440 --> 0:05:22.120 not going to be able to just leave the region. 0:05:22.680 --> 0:05:24.840 I'm trying to get a sense of what the U. S. 0:05:25.080 --> 0:05:28.320 Relationship is at this point with its allies, with grappling 0:05:28.920 --> 0:05:32.040 with Syria in particular, do you get a sense of 0:05:32.040 --> 0:05:35.360 how much more the US is working with its allies 0:05:35.400 --> 0:05:39.120 in light of what happened there. We will continue to 0:05:39.200 --> 0:05:43.640 try and build the coalition in preparation for the possibility 0:05:43.680 --> 0:05:47.200 of another round of strikes. Let's face it, um we 0:05:47.279 --> 0:05:52.160 have now struck twice, but in the interim between those 0:05:52.200 --> 0:05:56.760 two strikes, we've seen Assad continue to use chemical weapons 0:05:56.800 --> 0:06:00.080 with impunity. I am unconvinced that he's going to have 0:06:00.080 --> 0:06:02.760 a sudden epiphany like St. Paul on the road to 0:06:02.839 --> 0:06:07.320 Damascus and stop using those weapons. So we better be 0:06:07.400 --> 0:06:10.520 prepared for another strike, and that means getting our allies, 0:06:10.600 --> 0:06:13.200 partners and friends on board. The reason why I asked 0:06:13.200 --> 0:06:16.080 that Admiral Strafrides is because there's been so much tension 0:06:16.160 --> 0:06:18.599 with respect to trade and a lot of harsh words 0:06:18.640 --> 0:06:20.680 back and forth between the US and allies, and I'm 0:06:20.720 --> 0:06:23.760 wondering how much that plays into some of these military 0:06:23.800 --> 0:06:28.520 relationships that are required for conflicts like this. It absolutely does, 0:06:28.720 --> 0:06:34.800 and one of the very strong arguments for UH maintaining 0:06:34.960 --> 0:06:38.840 balanced global relationships is that in times of trouble, you 0:06:38.880 --> 0:06:43.440 need friends and you can't surge trust. Um. You've got 0:06:43.440 --> 0:06:45.479 to build it a brick at a time, and when 0:06:45.480 --> 0:06:50.839 you knock it down with a series of bad choices, economically, 0:06:51.440 --> 0:06:56.039 it does bleed over into your day to day military 0:06:56.080 --> 0:07:01.359 intelligence and operational relationships. Admiralst of Vitas, what is the 0:07:01.480 --> 0:07:05.360 U s strategic reason for being in Syria. I'll give 0:07:05.400 --> 0:07:09.600 you four reasons, and I think these will call that 0:07:10.080 --> 0:07:14.600 we need to remain in Syria. The first is quite straightforward, 0:07:14.600 --> 0:07:17.560 and that is continuing to destroy the Islamic State. The 0:07:17.600 --> 0:07:20.920 second is we have a shared interest with the global 0:07:20.960 --> 0:07:23.840 community and stopping the use of chemical weapons, which appears 0:07:23.880 --> 0:07:30.640 to be continuing forthwith. Thirdly, um, we have a strategic 0:07:30.840 --> 0:07:35.800 challenge with Iran in that region. Who threatens Israel, Saudi Arabia, 0:07:36.040 --> 0:07:40.240 Jordan's and other Sunni states. And fourth and finally, um, 0:07:40.280 --> 0:07:43.480 there's an enormous humanitarian crisis sin Syrian. I think we 0:07:43.520 --> 0:07:46.840 have a moral obligation to be part of resolving that. 0:07:46.920 --> 0:07:49.280 To do that, you have to create security in the region. 0:07:49.320 --> 0:07:52.200 So I'll give you those four reasons, and most reads, 0:07:52.240 --> 0:07:56.480 they're all legitimate reasons. One thing that is also at play, though, 0:07:56.680 --> 0:08:00.280 is President Trump's support from his base. There was a 0:08:00.280 --> 0:08:03.800 lot of pushback after these strikes in Syria, with people saying, 0:08:04.200 --> 0:08:06.560 President Trump, you said that you wanted to pull troops 0:08:06.600 --> 0:08:09.680 out of the US, out of Syria. Rather, why should 0:08:09.840 --> 0:08:13.200 those conflicts be our cost? We should just turn our 0:08:13.240 --> 0:08:16.640 focus on ourselves. How much does that factor into the 0:08:16.680 --> 0:08:19.840 debate and the strategy of the US. I think it 0:08:19.920 --> 0:08:23.320 will play a significant role, and it should. Um. We 0:08:23.560 --> 0:08:27.320 these are national decisions and that's what leaders do. They 0:08:27.320 --> 0:08:30.280 ought to step up and explain why they need to 0:08:31.200 --> 0:08:35.360 continue to take the hard right choice, not the easy 0:08:35.640 --> 0:08:38.960 wrong choice. And I think that the fact that President 0:08:39.000 --> 0:08:43.439 Trump essentially reversed his position UH several days later is 0:08:43.480 --> 0:08:47.439 a good indicator that people like Secretary of Defense Gimattis 0:08:47.559 --> 0:08:52.040 and CIA Director Pompeio and others convinced him to do so. 0:08:52.040 --> 0:08:55.480 So I don't think we're gonna leave Syria anytime soon. 0:08:55.800 --> 0:08:59.680 Point one and point two. Uh, the level of engagement 0:08:59.760 --> 0:09:02.600 is very different here than the hundred and fifty thousand 0:09:02.600 --> 0:09:05.360 troops that we had in Iraq or the hundred and 0:09:05.360 --> 0:09:09.000 sixty thousand troops that I commanded in Afghanistan when I 0:09:09.040 --> 0:09:14.000 was NATO commander. We're talking to three five thousand troops. Um, 0:09:14.040 --> 0:09:17.120 this is a very sustainable commitment for the United States, 0:09:17.160 --> 0:09:20.160 and I think good leaders will recognize that and seek 0:09:20.240 --> 0:09:22.400 to explain it to the American public. Just to wrap 0:09:22.480 --> 0:09:25.920 up here, Admiral Staffridi's given the fact that you are 0:09:26.040 --> 0:09:29.000 the author of Seapower, the History and geopolitics of the 0:09:29.000 --> 0:09:32.360 world's Oceans, the fact that you were formerly U. S. 0:09:32.559 --> 0:09:36.280 Navy admiral, former military commander of NATO, given your vast 0:09:36.320 --> 0:09:41.319 experience with the international relations on the military front, are 0:09:41.360 --> 0:09:45.439 you more optimistic about the sort of global outlook right 0:09:45.440 --> 0:09:49.600 now than you worked two months ago. I am cautiously, 0:09:50.280 --> 0:09:55.120 very cautiously optimistic. On North Korea. I think there's a 0:09:55.240 --> 0:09:59.120 real possibility of negotiating our way out of what two 0:09:59.200 --> 0:10:02.280 or three months ago pre Olympics looked very, very dangerous 0:10:02.800 --> 0:10:06.920 in terms of the Middle East. I am more pessimistic 0:10:07.080 --> 0:10:11.200 because I uh don't see a strategic plan being laid 0:10:11.200 --> 0:10:15.600 out by the administration. In simply lobbying Tomahawk missiles is 0:10:15.640 --> 0:10:17.800 not going to get us where we need to go there. 0:10:18.160 --> 0:10:23.720 So it's a mixed picture. But overall, um, I am 0:10:23.840 --> 0:10:29.520 very concerned, uh finally about great power politics and the 0:10:29.600 --> 0:10:33.360 dynamics of our relationship with both Russia and China had 0:10:33.440 --> 0:10:36.640 degraded over the last three or four months. So running 0:10:36.679 --> 0:10:39.480 it all together, i'd say we're on a down trend 0:10:39.600 --> 0:10:42.320 right now and we've got some work to do. I 0:10:42.320 --> 0:10:44.200 want to thank you very much for spending time with us. 0:10:44.240 --> 0:10:47.160 Admiral James Stefridis is the Dean of the Fletcher School 0:10:47.240 --> 0:10:51.359 of Law and Diplomacy at Tufts University. Also a Bloomberg 0:10:51.400 --> 0:10:54.600 of you Calmnists joining us from Boston Home to Bloomberg 0:10:54.600 --> 0:10:57.640 one six on Boston, New Report in thirty in Metro West, 0:10:57.640 --> 0:11:00.640 in the South Sure and Admiral's to read This is 0:11:00.640 --> 0:11:04.840 the author of Seapower, The History and Geopolitics of the 0:11:04.880 --> 0:11:23.840 World's Oceans, The use of cryptocurrencies not only is gaining 0:11:23.880 --> 0:11:28.480 popularity when it comes to international transactions for businesses, but 0:11:29.000 --> 0:11:33.760 also being used by people for retail transactions on which 0:11:33.800 --> 0:11:37.760 they would like to maintain their privacy. And the premier 0:11:37.840 --> 0:11:41.760 online destination for adult entertainment it's called porn Hub, has 0:11:41.800 --> 0:11:46.800 announced that it is now accepting anonymity focused cryptocurrency Verge, 0:11:47.320 --> 0:11:49.600 in order to keep current with what it describes as 0:11:49.640 --> 0:11:53.480 its communities, payment preferences. And here to tell us more 0:11:53.520 --> 0:11:57.360 about Verge and cryptocurrencies is Justin Velo. He is the 0:11:57.360 --> 0:12:00.959 founder and the CEO of Verge Austin. Thanks very much 0:12:00.960 --> 0:12:04.120 for coming in. Can you first tell us what is Verge. 0:12:05.040 --> 0:12:08.079 Verge is a cryptocurrency. It's very similar to the Bitcoin 0:12:08.120 --> 0:12:12.319 blockchain UM, but it's also modified. It has much faster 0:12:12.360 --> 0:12:15.920 transaction time. Bitcoin has about a ten minute transaction time 0:12:15.960 --> 0:12:18.920 for for a confirmation of a transaction hours is about 0:12:18.920 --> 0:12:22.760 thirty seconds UM. And we have a much higher supply 0:12:23.080 --> 0:12:25.920 because we believe that it's better for distribution. The more 0:12:25.960 --> 0:12:28.640 the more coins we have, the better. So Bitcoin has 0:12:28.679 --> 0:12:31.559 minted or will mint in its lifetime, twenty one million coins, 0:12:31.800 --> 0:12:35.760 whereas we will be minting sixteen point five billion, So 0:12:36.120 --> 0:12:39.160 you know, we're we're uh, you know, we're what we 0:12:39.200 --> 0:12:42.160 see as a more fair currency. Okay, So just to 0:12:42.160 --> 0:12:45.920 give some perspective, the cryptocurrency has about oh one billion 0:12:45.960 --> 0:12:48.760 dollar market cap, and it has increased quite a bit 0:12:49.160 --> 0:12:52.600 over the past few months. You know. Uh, we're talking 0:12:52.640 --> 0:12:55.520 about pornography, which is sort of interesting because we stay 0:12:55.520 --> 0:12:58.240 away from it. But it's a huge business and porn 0:12:58.280 --> 0:13:01.520 hub has nearly a hundred million daily users. And people 0:13:01.559 --> 0:13:04.040 don't want other people to see that they're buying pornography, 0:13:04.520 --> 0:13:07.160 which is why there must be some interest in a 0:13:07.240 --> 0:13:12.000 secret way of delivering payment. Who approached to with this transaction? Um, 0:13:12.040 --> 0:13:14.400 it was sort of a mutual approach. Um. I believe 0:13:14.440 --> 0:13:16.720 that people from we have a very very big community 0:13:16.920 --> 0:13:18.760 of you know, people that are very interested in the 0:13:18.800 --> 0:13:21.520 coin and very excited about the project itself. Uh. So 0:13:21.559 --> 0:13:23.640 I believe that, you know, people from our community. We're 0:13:23.640 --> 0:13:26.000 talking about hundreds of thousands of people. Uh. And I 0:13:26.000 --> 0:13:29.200 believe that they started initiating contact with them, probably through 0:13:29.240 --> 0:13:32.320 their website, you know, saying hey, we would really like 0:13:32.360 --> 0:13:36.040 you guys to start supporting cryptocurrencies. Okay. I'm wondering though, 0:13:36.080 --> 0:13:38.959 what this does for the reputation of cryptocurrencies that people 0:13:39.040 --> 0:13:42.000 kind of want to cloak their actions and are looking 0:13:42.040 --> 0:13:44.920 for ways of doing so. And you know, pornography is 0:13:45.080 --> 0:13:47.880 uh some people might you know, shake their head at it, 0:13:47.920 --> 0:13:50.320 but it's not you know, a terrorist activity, but somebody 0:13:50.320 --> 0:13:53.760 could potentially use it for that. Absolutely, Um, people deserve privacy, 0:13:53.840 --> 0:13:56.760 especially in that aspect of their life. Um. And you 0:13:56.800 --> 0:14:00.000 mentioned the hundred million visitors a day uh statistic, which 0:14:00.080 --> 0:14:01.880 is interesting, But what I find more interesting is that 0:14:01.920 --> 0:14:04.880 it's actually over a billion unique visitors a year, which 0:14:04.880 --> 0:14:07.439 is actually a double digit percentage of our population on Earth. 0:14:08.360 --> 0:14:10.880 So I think that that's uh, you know a little 0:14:10.880 --> 0:14:13.560 bit more important to look at. It's it's a very 0:14:13.600 --> 0:14:16.280 common thing. And uh, you know there's still some stigma 0:14:16.920 --> 0:14:21.080 around sexual preferences, uh, you know, fetishes, things like that. 0:14:21.680 --> 0:14:23.840 But you know these things, you know, if we all 0:14:23.880 --> 0:14:25.360 love and respect to one another, this is none of 0:14:25.360 --> 0:14:27.320 our business and we shouldn't judge each other by it. 0:14:27.520 --> 0:14:29.320 But we live in in a time and age still 0:14:29.400 --> 0:14:32.200 where people do so it's you know, it's very important 0:14:32.200 --> 0:14:35.160 that people have privacy, and especially online. And wonder if 0:14:35.200 --> 0:14:39.120 you could just describe for our listeners, how do you 0:14:39.240 --> 0:14:44.200 raise the money in order to have all of these coins, 0:14:44.240 --> 0:14:47.560 these these artificial tokens. Okay, Well, see a lot of 0:14:47.560 --> 0:14:49.360 projects that launch do what's called an i c O, 0:14:49.440 --> 0:14:52.960 which is obviously very similar to an ipal coin offering. Yes, um, 0:14:53.000 --> 0:14:54.520 and then there's all you do one of those No, 0:14:54.640 --> 0:14:57.200 we did not. How did you raise the money? Uh? 0:14:57.560 --> 0:15:01.120 Through the community? So you used online source like a 0:15:01.160 --> 0:15:03.720 crowdfunding site and what to do? So? Yes, and it's 0:15:03.720 --> 0:15:07.560 and it's voluntary. Okay. So what has been your response 0:15:07.640 --> 0:15:11.800 to people that say that the coins that were created 0:15:11.840 --> 0:15:15.360 as a result of that fundraising effort, that many of 0:15:15.400 --> 0:15:19.280 those coins either disappeared or that the money that they 0:15:19.320 --> 0:15:24.520 then used to purchase these digital coins has been locked 0:15:24.560 --> 0:15:28.360 and they cannot get it out of their wallets. That 0:15:28.480 --> 0:15:30.920 that's not how it goes. It's basically like throwing your 0:15:30.920 --> 0:15:33.880 money into a pot. Um. What what we've done is 0:15:33.920 --> 0:15:36.760 we've given some a lot of these funds for integration 0:15:36.880 --> 0:15:40.360 of Verge into the actual platform, the software platform behind 0:15:40.400 --> 0:15:42.920 porn hub UM. But then we've also had other goals 0:15:42.960 --> 0:15:45.560 like we're building an iOS wallet, um. You know, we're 0:15:45.600 --> 0:15:49.040 looking to get integrated into a hardware device for even 0:15:49.080 --> 0:15:52.640 stronger storage of but I understand. But but my question 0:15:52.760 --> 0:15:56.320 is that if if there is this fundraising that went on, 0:15:57.120 --> 0:16:00.920 there's publicly available information that says it over eighteen million 0:16:01.000 --> 0:16:04.720 of these well no, they were simply moved, were right. 0:16:04.800 --> 0:16:07.840 But were they moved with the knowledge of the people 0:16:07.880 --> 0:16:10.840 who had invested? Oh? Yeah, absolutely. I think everybody knew 0:16:10.840 --> 0:16:13.520 going in that these funds were allocated for specific things 0:16:13.800 --> 0:16:17.680 and that's what they're being used for. Oh, I'm just wondering, Uh, 0:16:17.760 --> 0:16:20.000 what else have you thought of partnering with, I mean, 0:16:20.040 --> 0:16:22.800 any cannabis companies or other types of things like that. 0:16:22.800 --> 0:16:24.800 That that's absolutely another one, Like you know, a medical 0:16:24.840 --> 0:16:27.360 marijuana industry is another one where um, you know, there's 0:16:27.360 --> 0:16:29.120 a stigma to it where you don't you may not 0:16:29.160 --> 0:16:32.040 want your employer or some of your even friends, you know, 0:16:32.080 --> 0:16:33.880 to know that that's part of your lifestyle, you know. 0:16:33.920 --> 0:16:35.480 And this is something that I was trying to get 0:16:35.480 --> 0:16:37.360 out earlier. I mean, it's one thing for there to 0:16:37.400 --> 0:16:41.360 be a stigma around sexual preferences. There's another thing to 0:16:41.480 --> 0:16:45.560 sort of have money laundering or financing terrorist activities. How 0:16:45.560 --> 0:16:49.280 do you prevent that type of use from this coin? Well, 0:16:49.320 --> 0:16:51.320 I mean, at the moment, I would say that most 0:16:51.360 --> 0:16:54.800 of those nefarious things that happened with currencies probably stemmed 0:16:54.800 --> 0:16:57.400 from the US dollar. Um. I mean, when's the last time, 0:16:57.560 --> 0:16:59.800 you know, you heard a story about US going into 0:16:59.800 --> 0:17:02.960 its horrist location and uncovering palettes of cryptocurrency or finding 0:17:03.000 --> 0:17:05.439 hard drives with bitcoins. We don't we find palettes of 0:17:05.560 --> 0:17:08.399 you know, shrink craft hundred dollar bills. So well, one 0:17:08.400 --> 0:17:11.480 of the biggest owners of bitcoin is the US government 0:17:11.600 --> 0:17:15.199 from actually seizing Yeah, so so there is there is 0:17:15.240 --> 0:17:19.359 that activity, and basically this is a designed cryptocurrency to 0:17:19.680 --> 0:17:22.280 cloak activities. You have to wonder that's going to be 0:17:22.320 --> 0:17:24.840 a motivation for people to use it. Sure, but I 0:17:24.880 --> 0:17:27.359 think that we can see. Um, I'm similar to the 0:17:27.359 --> 0:17:30.600 tour project, which is a open source piece of software 0:17:30.600 --> 0:17:33.080 that helps hide your IP address that was actually originally 0:17:33.119 --> 0:17:35.320 developed by the US government. So I mean I think 0:17:35.359 --> 0:17:38.399 that's to some degree. Uh, you know, privacy is important 0:17:38.440 --> 0:17:41.760 in the US government recognizes that too. So interesting having 0:17:41.800 --> 0:17:43.560 you on. Thank you so much for being with us. 0:17:43.720 --> 0:17:48.760 Justin Vellow, founder and chief executive officer of Verge Cryptocurrency, 0:17:48.960 --> 0:17:52.639 just announcing that it is partnering with porn Hub to 0:17:52.800 --> 0:17:56.439 allow people to pay for their pornography consumption with a 0:17:56.520 --> 0:18:15.720 cloaked identity through the crypto asset. That's discussion. He is 0:18:15.800 --> 0:18:20.640 the Finance Minister of a Luxembourg. Pierre Gramina joins us now. 0:18:20.800 --> 0:18:23.639 And just to give some context, many people may not 0:18:23.800 --> 0:18:27.360 know that Luxembourg City is one of the three official 0:18:27.440 --> 0:18:30.880 capitals of the European Union. Indeed, it is the seat 0:18:30.880 --> 0:18:34.880 of the European Court of Justice. And from that perspective, 0:18:35.280 --> 0:18:39.280 he has an interesting look into the role of trade 0:18:39.440 --> 0:18:42.000 and taxes and a variety of other issues in the 0:18:42.000 --> 0:18:44.119 European Union. And he joins us here in our eleven 0:18:44.160 --> 0:18:46.560 three oh studios. Minister, thank you very much for beating 0:18:46.560 --> 0:18:51.560 with us. Appreciate it. Maybe just set for our listeners 0:18:51.560 --> 0:18:55.720 a little bit about Luxembourg, your role and the role 0:18:55.720 --> 0:19:00.480 of Luxembourg which belies its size in the European Union 0:19:00.600 --> 0:19:04.640 because it has served as a nation that has tried 0:19:04.720 --> 0:19:09.200 to mediate and to help integrate Europe since the creation 0:19:09.280 --> 0:19:13.400 of the EU. Eure absolutely right, Luxembourg is a founding 0:19:13.440 --> 0:19:16.760 member of the European Union. It was the smallest one 0:19:16.800 --> 0:19:20.600 of the six founding members that is today the second 0:19:20.640 --> 0:19:25.080 smallest one, but being at the heart of the European 0:19:25.160 --> 0:19:30.760 continent between Germany and France, and having been also the 0:19:30.960 --> 0:19:34.560 victim of two world wars, we're probably the most staunch 0:19:34.720 --> 0:19:40.000 advocate for European reconciliation, and the European Union has achieved 0:19:40.040 --> 0:19:42.840 that goal. We haven't had any war in Europe since 0:19:42.920 --> 0:19:46.639 the setting up of the European Combinate Steel in fifty 0:19:46.680 --> 0:19:50.320 two and the European Community in nineteen fifty eight, and 0:19:50.359 --> 0:19:53.520 that's often forgotten, and we continue to keep that on 0:19:53.560 --> 0:19:56.960 our mind and act as a mediator as a neutual 0:19:57.640 --> 0:20:01.320 partner to find solutions. U. You are a neutral partner 0:20:01.640 --> 0:20:06.199 also to asset managers and other investment companies that have 0:20:06.440 --> 0:20:09.919 put their headquarters in Luxembourg. A lot of corporations have 0:20:10.000 --> 0:20:13.720 as well, in part because of beneficial tax treatment that 0:20:13.760 --> 0:20:16.760 they get for going to Luxembourg. How much pressure are 0:20:16.800 --> 0:20:21.159 you getting right now from other European countries, given the 0:20:21.240 --> 0:20:24.040 need to raise money and given the need to sort 0:20:24.040 --> 0:20:26.480 of prevent a race to the bottom with respect weakening 0:20:26.520 --> 0:20:32.280 tax rules. While we've had a rough ride in the 0:20:32.400 --> 0:20:36.000 past on these issues of taxation, but since two thousand 0:20:36.119 --> 0:20:40.560 fourteen the present government has changed its root in this matter. 0:20:40.680 --> 0:20:44.119 We have given up the bank secrecy laws. That was 0:20:44.400 --> 0:20:48.679 one of the criticisms that we were receiving. It was 0:20:48.760 --> 0:20:51.919 something that was not any more accepted. It was an 0:20:51.920 --> 0:20:54.680 old tradition in many countries, not only in hours. We've 0:20:54.760 --> 0:20:59.359 decided to part with that and to embrace tax transparency 0:20:59.800 --> 0:21:02.680 and since then, obviously the pressure is far less. We 0:21:02.760 --> 0:21:06.560 have obviously attractive tax rates, but if you look at 0:21:06.600 --> 0:21:10.880 the average of taxes of Luxembourg in the O City, 0:21:11.080 --> 0:21:14.000 we're just in the middle field. Now. I get pressure 0:21:14.040 --> 0:21:16.160 in my country very often that we should have lower 0:21:16.160 --> 0:21:18.800 taxes than what we have now. Yes, I mean we 0:21:18.880 --> 0:21:22.119 have a corporate tax rate of eighteen percent. If you 0:21:22.240 --> 0:21:26.000 add municipal taxes you get at twenty six percent, So 0:21:26.280 --> 0:21:29.040 I think this is a decent amount. Have any companies 0:21:29.160 --> 0:21:33.639 or are fund managers removed their premises for remove their 0:21:33.640 --> 0:21:37.720 headquarters from Luxembourg as a result. No, because the reason 0:21:37.800 --> 0:21:41.160 why we were successful was not based solely on taxation. 0:21:41.280 --> 0:21:43.879 I think if you look at what happened in the 0:21:43.960 --> 0:21:48.960 Brexit context, we are one of the winners short term 0:21:48.960 --> 0:21:51.480 in the sense that quite a few players in London 0:21:51.560 --> 0:21:55.160 had to find a place on continental Europe because they 0:21:55.160 --> 0:21:59.080 are losing the passport for financial services into the EU 0:21:59.160 --> 0:22:02.560 Single Market, and many chose Luxembourg. I mean, I think 0:22:02.560 --> 0:22:07.000 of American banks who have decided to beef up their 0:22:07.640 --> 0:22:11.840 private bankings hub in Luxembourg. They could have chosen other places. 0:22:12.160 --> 0:22:15.679 I think of asset management firms that have taken the 0:22:15.720 --> 0:22:18.920 same decision. I think of insurance company. It shows that 0:22:19.440 --> 0:22:23.119 the general framework of Luxembour's attractive. We are one of 0:22:23.160 --> 0:22:25.600 the ten countries left in the world that have a 0:22:25.680 --> 0:22:29.080 triple A rating Financially. This is important when you're an 0:22:29.080 --> 0:22:33.359 international financial center. We've been able to attract Chinese banks 0:22:33.400 --> 0:22:36.560 to Luxembourg. Seven largest Chinese banks are in Luxembourg. Some 0:22:36.680 --> 0:22:41.120 have come more recently. So it shows that fortunately what 0:22:41.200 --> 0:22:44.840 we were pretending that it is a full international ecosystem 0:22:44.920 --> 0:22:47.880 that we have that explains why we've been successful. It's 0:22:47.880 --> 0:22:53.600 not only about taxes, Minister. Before you were the finance minister, 0:22:53.680 --> 0:22:57.520 you also served as the country's ambassador to Japan and 0:22:57.640 --> 0:23:02.080 South Korea, also the consul general and director of the 0:23:02.080 --> 0:23:05.399 Board of Economic Development in San Francisco, so you have 0:23:05.560 --> 0:23:10.400 a global perspective about how companies and countries uh integrate 0:23:10.440 --> 0:23:15.520 in order to do business. Recently, the United States has 0:23:15.560 --> 0:23:20.439 taken the position that certain types of optical component technology 0:23:20.600 --> 0:23:25.360 cannot be sold to certain Chinese companies. Is a company 0:23:26.160 --> 0:23:31.399 in Boston, Acacia and also in uh San Francisco, O 0:23:31.560 --> 0:23:35.680 Clara optical component technology not to be sold to companies 0:23:35.720 --> 0:23:39.680 like z t E. What is the position of Luxembourg? 0:23:39.680 --> 0:23:41.520 Does it feel as if it's between a rock and 0:23:41.560 --> 0:23:45.399 a hard place, because a lot of times these rules 0:23:45.400 --> 0:23:49.200 and regulations will make it more difficult for country companies 0:23:49.240 --> 0:23:52.720 all over the world to do business with other companies. Yes, 0:23:52.760 --> 0:23:56.439 I think there's a few issues that need to be 0:23:56.480 --> 0:23:59.840 covered here about your question, which is a very legitimate 0:24:00.000 --> 0:24:03.399 and obviously a country like mine is for open trade 0:24:03.440 --> 0:24:09.000 as far as possible, bringing down trade barriers and other obstacles, 0:24:09.080 --> 0:24:11.560 and and also making sure that the EU s such 0:24:11.640 --> 0:24:14.960 doesn't build fences and and go to protection is to 0:24:15.160 --> 0:24:18.159 So that's the general principle. Having been a diplomat I 0:24:18.720 --> 0:24:21.760 for twenty years, I very well know that some strategic 0:24:21.840 --> 0:24:25.120 material cannot be sold to other countries, So I think 0:24:25.800 --> 0:24:28.600 you have to put this in parallel. Open trade is 0:24:28.640 --> 0:24:32.439 one thing, strategic issues is another. We're a member of NATO, 0:24:32.520 --> 0:24:36.360