Stephen: This is your host, Stephen Sargeant. We just had an amazing conversation with Lee Bratcher. He's the president and founder of the Texas Blockchain Council. We talk all about Bitcoin mining in Texas. We talk about all about politics and crypto and digital assets and Donald Trump. But there are amazing conferences coming up.

So we talk about Emmett Smith and Terrell Olins that are gonna be at their conference coming up probably next week by the time this podcast airs. This is a great conversation. Lee is really tapped into everything that's happening at the regulatory level and the state level with Texas when it comes to blockchain, Bitcoin, man mining data centers.

You have to listen to this episode. Super exciting to see his conference come to fruition. And for you Canadians that follow me 'cause I'm a Canadian. There is some amazing nexus with the Canadian Blockchain consortium, Klay and Jade, and the amazing work that they're doing with Lee. Check out this episode, reach out to me and Lee and let me know how you like it.

Talk soon.

Stephen: This is a special edition of Around The Coin. We have the president of the Texas Blockchain Council. I'm your host, Stephen sart, and we have Lee Bratcher Lee, you're the founder and the president of Texas's Blockchain Council, which is a huge and probably industry leading, I think, association when it comes to digital assets, especially coming outta Texas.

Why don't you give us a little bit of background. I'm gonna talk about your early days, and then we're gonna get into what you guys are working on there in Texas.

Lee: Yeah, happy to Stephen. Thanks for having me on. Uh, I founded the TBC in 2019. At the time I was a political science professor, uh, here in Dallas. I had, uh, been in the military, discovered the Bitcoin white paper while I was at the Army War College researching, uh, property rights, um, and writing, writing some papers around.

How people, when they're secure in their property rights are less likely to engage in interstate conflict. Uh, and they're more likely to have flourishing communities. So the concept of Bitcoin as digital property rights, uh, something that can be scarce and fungible and, um, it really resonated. And so I did my dissertation on, you know, blockchain land administration.

Um, and the tokenization of real estate. And, um, from there I realized that there was a, a kind of a gap in the market. There was at this time, you know, in 2019, but now there's a lot of people who do this really well, but at the time there weren't very many people who were liaising between the builders, um, and regulators and policy makers.

So that's, that was the inspiration for getting this. The TBC started.

Stephen: Have you seen since you, you know, blockchain land registry? I know there's a couple of pilot projects. I think I saw the India, maybe even Sweden. Have you seen anything come to fruition over the last eight years? 'cause this is still a, you know, especially with so many refugees moving country, like there's that Land rights is huge.

Have you seen any like viable products coming out of that?

Lee: Yeah, you know, there was about 40, uh, pilot programs across the world, and you named two of the more significant ones in India and Sweden. My thesis and, and the, the, the thrust of the dissertation was actually this is, this is not a technical problem. The technical capacity is there. It's been there for a long time, but there are, from the land administration perspective, there's too many veto players that benefit from the way the things are done now.

And so my, I've always thought and hypothesized, and this has kind of come to fruition, that. Innovation in, in land and real estate is going to come from the private sector and it's going to come around, um, sort of commercial syndication, bringing capital together, bringing more liquidity, kinda like what Figment is doing.

And, and a lot of other companies, um, property and securitize and, um. Uh, even that industry, I think is a little bit, um, challenged through lack of liquidity and, and too much decentralization around, and not decentralization in a good way. What I mean is like too much, um, fractional attention. The ATSs don't have enough mind share to, to command, uh, you know.

The investor base to, to actually make it work. So we're still a few years out both on, I think we're probably five plus years out on the public, you know, sector side of counties adopting blockchain for land administration. Um, and, and we're sort of in the midst of the early stages now and probably between one and five years out from a pretty strong S-curve starting out for the private sector tokenization of.

You know, it's basically upending the syndication, um, industry.

Stephen: I am curious, 'cause you said you started TBC in 2019 and you know, there was a huge gap maybe between bringing together builders, the public sector, you know, even some of the private sector giants. And it's because, you know, after the 2017 chaos and the plummeting of crypto, nobody wanted to talk about blockchain.

You know, everyone was like, Hey, look at this Bitcoin thing, and then the industry completely tanks. Why did you decide at that time? You know what, let, let's go even, let's double down and build something here at that point, because that has to be, that's usually when a lot of people leave the industry versus when someone like yourself says, no, we need more.

We need more conversations. Was there something you're like, I see this being long term, or I just see we're having these communication, these meetups. Why don't we make this a little bit more formal for the people that really wanna build in this space?

Lee: Yeah, I had a long-term conviction, you know, around 2018. I realized that this is the, the industry that I wanted to pivot my career to for the long term. So, um, I knew the timing, timing doesn't always work, but it ends up that we built the infrastructure before the 2021 bull run, which was quite helpful.

So we had, you know, we were slogging through a bear market and then, and then we were ready and there. So in the same way that a startup founder. You know, builds a company in the bear market and they're there for the bull market. We build the, in, uh, the association in a bear market and, and we're ready for the bull market 2021 and the China ban for Bitcoin mining, which really set off the Texas, um, you know, Texas Miracle, if you will, with regard to Bitcoin mining.

And now we're about 18% of the global hash rate.

Stephen: I love that. Can you tell me about your association specifically? There's so many associations now popping up. Everyone's looking to policy or lobby for their certain, you know, their certain constituents. What is something that you think that you're a differentiator on? Is there a specific, you know, avenue that you're like, Hey, we really go hard.

I know we've talked about on other podcasts or you've talked about on other podcasts, amicus briefs, like you have no problem getting into the legal framework. Uh, and mixing it up a little bit, what do you think makes TBCA little bit different than maybe some of the associations out there?

Lee: Yeah, we specialize in a few different things and we try to focus on what we're good at and let other folks do what they're good at. Right. So we don't do hardly any work in the, you know, on Capitol Hill with treasury, with the IRS. That we lead that to, you know, organizations like the Blockchain Association in dc What where we specialize in is state level policy, both in Texas and beyond.

Um, particularly Bitcoin mining. Um, of course we pass the Texas Strategic Bitcoin Reserve. Um, we work a lot with coinbase kraken crypto.com, blockchain.com around uh, financial services money transmission policy. Uh, proof of reserves, that kind of thing. So we try to carve out niches where we have expertise and try not to spend too much time in areas that we don't.

And we, we have been pretty successful in being, uh, you said, uh, AMEX briefs. We have been pretty successful in litigation against the federal government and other entities. Um. You know, particularly because Texas is a, a favorable jurisdiction to go, you know, be on a level playing field with, um, with the federal government.

So, uh, it's, it's a, you know, the fifth Circuit is Texas and Louisiana. Um, and we feel like Texas is, is well positioned with judges that are, that are neutral arbitrators. Um, whereas in, uh, some of the other districts, um, you know, particularly the DC circuit, uh, is a little bit deferential toward the federal government.

And so we found that especially when the federal government oversteps, particularly during the Biden administration, um, we were able to, um, step into the void there.

Stephen: Tell me about that. You know, you're 2019, you're going into the Biden administration, you know Bitcoin prices are down. You're building an association. What was it like dealing with now two different parties? Um, you know, what's that been like and do you think, yeah, tell me what that's been like first and then I wanna, uh, talk to you about like what are some scenarios that come up, you know, in the next election?

Lee: Yeah, you know, the first Trump administration, we were persona non grata because of, uh, Stephen Mnuchin. Um, and you know, our first. I guess foray into this litigation side of things was when Elizabeth Warren pressured the Department of Energy and, um, the, uh, EIA energy administration, uh, energy Information Administration to, uh, single out Bitcoin miners and, um.

Seek information that was competitive and proprietary beyond the ability, beyond what the law permitted them to do. And so we, we partnered with Gray Reed, uh, and some local counsel and, and, uh, riot platforms, one of our members. And very quickly, uh, with a matter of about 12 days, uh, DeFi defeated Depart, department of Justice and, and the EIA and some legal action.

Um, and, and. We've been cooperative with the federal government as much as we can, and, and certainly with the Texas, you know, uh, public utility commission with Ercot. Um, and, and you know, so if any, if anything, we, uh, lean towards cooperation, but there were a couple occasions where, uh, we just thought, Hey, this is, this is wildly inappropriate and, and this can't be permitted to stand.

So, um, tho those experiences were. You know, set us up for doing a lot of amicus briefs and working with some of the big players, um, in, uh, litigation against the SEC, um, and, and other parties in, in dc.

Stephen: I am curious because, you know, even when I've seen you do podcasts years ago before the Trump administration or before even, you know, a lot of conversations in the US about digital assets, it seems like you had a lot of support from Republican parties. You know, very important members coming to talk at your conferences, have open discussions.

Have you noticed that even in, you know, the previous election, like you see Trump going on podcasts, like all in podcasts. Is, you know, digital assets feel bipartisan now. It feels like we've gotten a little bit of legislation coming out there that doesn't matter who's in power, we're still gonna have digital assets, stable coins built here in the us.

What are your thoughts about that? Have we gotten a little less political? Is it still political? And how do you navigate that with the association?

Lee: That's a great question and I appreciate you, um, posing it. It's pretty nuanced at the state level. Typically, it's not a straight left and right thing. Um, it's normally around education, um, and, and not like formal education of obviously all these elected members are very educated, more so around how much time they've spent.

Learning about digital assets and, and whether it's a new concept to them or not. Um, if it's a new concept and they're like, perhaps, you know, more experienced, an older member, a rural member who deals with other things rather than financial services, um, they're likely, and, and oftentimes those are Republican members that are, are likely to be.

Uh, cautious or negative towards the industry. Um, and then you might have some suburban democrats that are younger that just understand natively digital. Um, and so it's pretty nuanced and, you know, even at the federal government level, it's, it's nuanced, obviously, the Trump administration. Um, has appointed some incredible leaders, uh, Atkins at the SEC.

Uh, you've just got, uh, hopefully we get Brian Quentin's at the CFTC, but we've got, uh, Caroline Fam, um, who I'm sure will stay there, uh, as, uh, one of those commissioners. Just incredible, um, regulators. Um, although, you know, we have even seen from the Trump administration some inappropriate stuff like the launch of the Trump meme Coin.

Um, the Melania Coin. Um, you know, there, so there's things that the Trump administration has done that have been very bullish for the industry and that we think are the right course of action. But there's also things that the Trump administration have done as, and that we've called out and said, Hey, that's, that's not right.

That's not, um, helpful for, uh, the industry. And, uh, so it's, it's a tough what The fact that it is so tough means that it is. Becoming a non-partisan thing. Right. Um, it, it is still somewhat partisan. Um, and, and we're working to try to make it non-partisan.

Stephen: I'm curious. The Trump administration, you know, just signed executive orders around the strategic Bitcoin reserve and the digital asset stockpile, but Texas actually passed the bill around its own strategic Bitcoin reserve. Why is that important at a state level, do you think? Uh, especially since not all the details have been figured out at a federal level when it comes to the strategic Bitcoin reserve.

Are you taking the ethos and running with it in Texas? Is it gonna be closely resembling what's happening at the federal level? And, you know, this is probably something that you were pushing for. Is it there a reason why you think it's important to Texas and its residents?

Lee: Yeah, we were certainly pushing for it and Texas will likely be the first. Uh, sovereign entity in the United States to put Bitcoin on the balance sheet. Uh, obviously, uh, through, through direct purchases, right? Obviously the federal government has some Bitcoin through seizure. Other states have it through, through the same mechanism.

Um, New Hampshire passed a strategic Bitcoin reserve, but they did not allocate any budget money to buy Bitcoin. So Texas did allocate $10 million in the budget to buy Bitcoin, which is a small portion of the budgets, 0.0004% of our biannual budget, which, um, is obviously a pretty insignificant and and negligible amount, but it is sending the right signal.

Um, key and, and a key factor here is that Texas has a budget surplus. Uh, Texas is very fiscally responsible. Those funds were, were a surplus that could have been invested in any number of things. Texas has, uh, lots of assets, um, that at our disposal. Um, you know, oil and gas assets fund a lot of our public universities.

Um, through University Lands and the state of Texas has, um, um, assets that are in US treasuries, in, in all any number of, um, investments. So this is just a very small fiscally sound investment that paves the way for, uh, more work. But what it, what's more important is it sends a signal that Texas is. Um, gonna be home for capital markets, the future of capital markets, Bitcoin, digital assets are gonna play a role in the future of capital markets.

Texas understands that. Um, so it's part of that larger narrative that says, come to Texas, invest here, build here. Uh, the government is, you know, we, we understand it at the government level, not everyone certainly. Um, and what we know, what we don't know, we're gonna ask and we're gonna, we're gonna educate ourselves and we're gonna bring in partners to help with custody and, uh, other things of that nature.

So we're optimistic. Um, Texas is, is, you know, growing like crazy from a GDP perspective and a population perspective. Even Dallas Fort Worth 200 people a day, moved to Dallas, um, and. We have the New York Stock Exchange coming, nasdaq, the Texas Stock Exchange, all descending on Dallas. Of course, the tech sector in Austin's really strong and, and Houston is the energy capital of the world.

So we feel like we have a, a, a pretty diversified economy here. That was at one time oil and gas centric energy. Um, commodities centric agricultural, but now is, is leaning really hard into, um, financial services, uh, technology, innovation, medical, the medical, um, industry. So incredibly diversified economy.

State's growing like crazy. The GDP is is growing, so we're, we're optimistic.

Stephen: Have you felt the shift? I think, you know, the last eight years, you know, a lot of builders, entrepreneurs from Silicon Valley have kind of migrated to Texas. It's become the new, kind of like FinTech tech hub. Have you felt that switch like crypto? Have you felt a, like, can, can you feel a physical switch like that go on as you're driving through the city here, like, Hey, I didn't see this building a couple years ago.

Do you feel that?

Lee: Absolutely. I mean, I'm looking out my window right now at a building that Goldman Sachs is building. Uh, they're bringing 5,000 employees here, Scotiabank. One of the largest banks in Canada just announced they're bringing a thousand employees down to Dallas. Uh, it is growing like gangbusters. You know, the real estate industry is depre depressed, uh, across the United States, particularly office, uh, and, and office space.

But it is not in Texas, in the larger cities in particular. So, um, we're, we're insulated from a lot of that here.

Stephen: I'm in Canada, I'm in Toronto. When I see on Instagram, some of those properties in Waco, Texas for like 600,000. And I see the sliver of land you get here in Canada for twice as much. It has a lot of people thinking like, yeah, oh, hot heat, nice vibe, tech. Uh, you mentioned an interesting stat that Texas accounts for 17% of Bitcoin mining globally, I believe.

I think 36% of the mining power is coming directly out of the us and you account for half of that. Where do you think Texas aims to rank on this global scale of mining over the next three or four years?

Lee: It is a good question. Um, the, the big factor, throwing a wrench into Texas becoming a larger. Percentage of the global hash rate is AI data centers. Um, there is a big fiber line, a uh, backbone of, of sort of the internet between Dallas and Denver. And many of our Bitcoin mining companies have data center sites on that line, and they're able to, uh, their prime sites for ai.

So a lot of the hash rate in Texas, I'd say up to half. Could be converted to, to ai and that other half is perhaps not in an ideal location, um, and is not capable of being converted for, for training or inference purposes. So, and when I say training, I mean model training, a AI model training. So what we're seeing, you know, the core site in Denton, we're seeing, um, you know, different companies.

Riot Cipher signed a deal recently with Google, uh, backstopping it from a financing perspective. A lot of these companies are making pretty, pretty profound strides, uh, in the I AI realm. And so Texas is gonna be the data center capital of the world. Part of that's gonna be Bitcoin mining. Part of that's going to be, uh, ai and, and part of it's going to be traditional cloud and, and traditional data centers.

Stephen: And how do you look at it like from a profitability standpoint? Is it like more profitable to do ai, especially like with the growing demand in the future? Does Bitcoin make more, 'cause you're mining Bitcoin, the price keeps on going up. Like if you own a data center, how do you decide which way do you want to go?

Or do you say, Hey, why, why pick or, or we can do end, we can do half Bitcoin mining and hedge that with half ai uh, data centers.

Lee: Uh, AI compute right now. There, there's a pretty significant arbitrage there, so it's far more profitable than Bitcoin mining. Hash price is pretty d um, depressed. We're over as Zeta hash. Um. You know, there's just a ton of, uh, competition on the Bitcoin mining side. So margins are tight. So anybody that can convert to AI is going to convert to ai.

The sites that can't are gonna be the, the ones that are remaining Bitcoin mining and the ones that can't, are typically pretty rural and get very low energy prices anyways. AI compute, um, doesn't need to chase the lowest price. They, those companies will pay a lot for their electricity because. The demand is insatiable at the moment, so you could see them paying double, triple, um, in some cases quadruple what a Bitcoin miner can afford to pay for energy.

Uh, and that's really the dynamic that drives. W what's gonna, whether a site's gonna get converted or not.

Stephen: That's interesting. I didn't think about that. I didn't think you just can convert everything. Just Yeah. You have to take in other factors. One factor is weather. Like in Canada, we've had wind storms. There's been some crazy weather over the last three years, I feel like. How do you like, quote unquote weather the storm, uh, during, you know, downtimes like Bitcoin mining there, there's outages.

Uh, there's, you know, as you said, there's so much infrastructure that could be impacted by a bad storm, which it seems like Texas and a lot of the US states get those storms. How do you like keep that into account when you're building some of these sites, when you're trying to do Bitcoin mining and you can't afford to have those adages?

Lee: Yeah, so I'll, I'll talk about weathering the economic storms and then then, uh, the physical, you know, weather storms. So, um, these industries are very cyclical and right now, ai, the profit margins are, are very strong, but that gap is gonna be closed. That's just the nature of, of markets, right? So people are piling in, those margins are gonna compress.

Bitcoin mining's margins are not good right now, but the nature of the network and the difficulty increase, you could, if you have a fast runup in the price, um, you know, say from 110,000 where we are today to over 200,000. Bitcoin mining looks a lot more attractive because that was a quick runup. The difficulty didn't jump fast to keep up with, um, the price.

And so hash price goes up. I think, you know, we're, we're probably a year away from those margins kind of meeting in the middle where there, there could be a time, a year or two from now during the next bull market where Bitcoin mining is more profitable than ai. Um, certainly not the case right now, but, uh, I see those things dancing, sort of a, this, uh, symbiotic dance where.

Uh, the margins will increase for Bitcoin mining at some point because of the nature of markets and, and vice versa for, for AI that might compress. And then some, you know, new model's gonna come out that needs 10 x of the amount of energy, right? Jevons Paradox says that the more efficient, uh, we are with, um, any sort of energy consumption, the more we are gonna use it.

So any, any process, if you will, that becomes more efficient, you might think. We're gonna use less energy. So we get Nvidia comes out with cheaper and faster and more efficient chips. Oh, well we probably don't need as many Nvidia, uh, you know, chip sets to do the same amount of compute. Well, that is true, but Java's Paradox says we're gonna use a lot more of that, um, that resource.

So as things become more efficient, you actually use, use more of the energy. Um,

Stephen: a lot of sense actually, as someone that probably watches and listens to a lot more all in podcasts than the average Canadian. Uh, the big talk is this energy race that we seem to be in with China and the struggle to produce more energy. Are you and your constituents within the council or just in general, you know, very energy focused state?

Are you concerned about this? Do you feel it's a race more than anything else? And, you know, how does, how, how does this reliance on energy for AI and Bitcoin mining, how does this impact you and your industry?

Lee: It is a race. It is a race to generate more electricity and to do it in a more efficient manner. Um, the biggest, you know, the Department of Energy just put out a RFI and request for comment around how the United States can win in this battle for energy dominance. And at first I thought, well, we need to install a lot of small modular nuclear reactors, SMRs, and that takes a lot of time and money, and that's a good thing.

We should do that. But then I realized the, the number one factor. For the United States to win at energy dominance is to be more efficient in the way we use energy, and particularly around, um, transmission planning, uh, site development and, and interconnection, uh, requests. So the, the number one thing that I would say and that we will say in our comment letter to, to the Department of Energy is let's get FERC and nerc the, uh, the Federal Energy Regulatory, um, commission to.

Design a non firm load category to allow for interruptible loads. And then you could put in, in some circumstances, twice the amount of data center compute on the site that would previously have served half that amount. So, um, a non firm category with interruptible load and there will be some kind types of AI that's interruptible, some kinds that are not right.

Um, you know, you could shift load around depending on geography and time of day for on the inference side. And you can also, uh, sometimes training load is interruptible. Sometimes it's not. If it's in the middle of a training run, you don't wanna interrupt it. But if you're done with your training run and you're deciding when to start the next, um, you might say, Hey, let's wait until nighttime.

Let's not start it here at 4:00 PM when energy prices are super high. Um, let's wait till 10:00 PM So that, that is a form of flexibility and the, the, uh, companies that get better at that are just gonna be more profitable.

Stephen: Is there any side effects? You know, I hear like, okay, we're racing against China, and you know, I don't know exactly how they run things over there, but the kind of like hit on them is like, Hey, they're not gonna follow all the environmental or the regulatory. The checkpoints. The guardrails, and that's why they're able to move so fast.

Is there any concern with us racing against the competitor? That might not be taking into account a lot of other things that we should be taking account for in our society. And we end up running into side effects that just because we're racing, we're not focused on everything else that's happening as we, you know, as we run by.

Lee: Yeah, I think there's some risk to that. Um, I think the greater cha, the greater risk though is. Handcuffing ourselves too much. Um, China Produ produced more solar energy generation than, uh, new, so net new solar last year than the United States produced all types of generation. So just in solar, they, they built more new solar than we built, built new all categories, wind, solar, nuclear, um, gas, natural gas, um, hydro, right?

So, um. That's a concerning dynamic and trend. And so I think the greater risk is that we, we handcuff ourselves against, you know, an industrial juggernaut.

Stephen: Is there a point where it's like, Hey, we're, we're gonna be way too far if they're producing eight times more energy than the us. Every single year. It's like we have to start doing something by this year or else we're gonna be in trouble. It's gonna be too far that gap eight times every single year, compounded over a decade.

Uh, we're gonna be way too far to even compete. Do you think of it in terms of like, Hey, we need to start doing something by this time or else we're really in trouble? Or is, are we at that point now where we're really in trouble, we need to do it today?

Lee: Well, I I do think we need to do it today. Um, I think we, we, we absolutely, I mean, energy gen, energy infrastructure takes a really long time to build. So if you're not starting today, you're, you're already. Years behind. Uh, and, and we are starting, we are unleashing, um, competitive forces, particularly in Texas, in PJM, some of these other ISOs around the country.

There are some backward looking ISOs, like in California that are just in disaster. But, um, a lot of, a lot of these, um. You know, grid serving organ entities and organizations are, are pretty forward looking. Uh, TBA and, you know, kind of in that Tennessee, Kentucky region is, is very strong as well. So, um, we also need to invest more in building the factories that produce transformers and transmission equipment.

Uh, that is, you know, sub substation, material transformers, and transmission equipment is probably the biggest bottleneck right now. Um, and you know, I think. Our industrial capacity in those areas has been lacking. And so that's probably where I'd suggest that. And, and I think the competitive market, you know, there are companies that are, giga Energy actually just announced they're building transformers in Houston, right?

Which would've been unthinkable three years ago. You had just outsourced that to, you know, Italy, India, um, you know, Bangladesh, et cetera.

Stephen: At the start of this conversation, we talked a little bit about the legal proceedings you've been involved in. It's been about 15 months since I heard you on the Chain Analysis Podcast, which was a great episode. What is the state of those amicus briefs? Are those lawsuits all gone? Is there still some remnants of maybe overreach by the SEC and other association or other, uh, authorities in the us?

Where are we standing with a lot of those amicus briefs? And then like what happens when there's a change of, you know, Gary Gensler's out and somebody else comes in, uh, all that work that you've done, what happens at that point?

Lee: Yeah, most of those cases have been resolved. So the most common scenario is kinda the federal government, uh, decides to either drop the case altogether or, um, there's some sort of stay and, um, you know, we're in a holding pattern. Uh, in, in most cases, the judge, um, has, uh, cited in favor of the industry or the federal government just decided to not pursue the case any anymore.

So we're not currently involved in any litigation at the moment.

Stephen: And you know, one of the reasons is because now they're etching out a lot of these regulations, guardrails, and guidelines in actual law. We have the Genius Act that's passed through and the Stable and Clarity Act seem to follow. Uh, what do you think is the best case for these scenario? Like maybe give a high level of how these acts impact you and the work that you've done.

And maybe just talk about the process. Obviously you saw this coming, you've probably made commentary or proposals based on some of the things that you saw. Maybe give us a high level of how the Genius Act could help, uh, the US citizens.

Lee: Yeah, the Genius Act was a great win for the industry. Of course, that's the act that regulates the stable Coin industry. Um, the, the. Market structure, um, bill that's working its way through, it's worked its way through the house. And now in the Senate is, is on more tenuous grounds, um, particularly because democrats in the Senate are a little bit frustrated at the Trump family for being so involved in the crypto industry.

Uh, so there's, you know, they, they're kind of shouting conflicts of interest potentially. And so that's given, given, um, put, put pause on that legislation, although there's. We're still optimistic that it could be, um, um, signed in a law by the end of the year. Um, that is, is unclear at this point. But, um, one thing that is interesting is the banking lobby is actually trying to insert language into clarity that would.

Um, really hamper and, and change the rules of the road that the Genius Act set out around stable coins and around stablecoin rewards. Um, I think everybody kind of agrees that, you know, stable coins, um, you know, the issuer can, can earn, uh, a yield, but the, the holder of the stable Coin perhaps shouldn't be earning a yield.

Uh, on their stable Coin that looks a little bit different. You know, it's more of a, a security instrument than a payment mechanism.

Stephen: It gets into that investment and you know, retail. Yeah. Okay.

Lee: So that, that's kinda the way things stand. But, um, the banking lobby is a little bit anti-competitive and they're trying to prevent, uh, you know, even folks, um, exchanges like Coinbase from offering, uh, rewards for holding stable coins.

Um, essentially. Saying, Hey, we don't want com competition. Um, as, as banks and, and those are mostly the big banks, um, I think there's a lot of innovative regional banks that said, Hey, bring it on. We're, we're ready. Um, but that's a little concerning that, you know, we, we need innovation, right? We need competition.

That, that drives, uh, drives us out of stagnation. And the banks are, are advocating for stagnation, which is disappointing.

Stephen: Is it, you know, is it debate that like, Hey, we're not calling it interest, we're calling it a reward, or they're getting other tokens. Is it the banks aren't liking the loopholes that the industry's trying to go around? Like, Hey, we're not giving them interest, but if you do invest this amount, or you do use a stable Coin, you do get these tokens, you do earn these tokens.

Is that the issue with the banks is like they want it set out that they can't receive any other benefit other than the amount that they're dealing with.

Lee: Right, right. Yeah. Which is again, a little bit hypocritical because, um, many banks out there are taking deposits and paying you no interest in checking and savings accounts and turning around and, and making, um, you know, pretty, pretty sizable. Um, returns on that capital. So, um, that's in my opinion, quite hypocritical.

Uh, and, and certainly the, the holder of the, uh, the stablecoin is not going to reap a full four or 5%, uh, based upon the rewards that, uh, you know, that that reward might be pretty worthless, right. From a, um, and it might be worth something. But that's, that's competition that at, at play, right. Um, so they're, they're, they should not be able to compete with a money market fund, right?

Money market fund is gonna be sort of that, you know, highest potential, uh, yield for a risk-free investment, like, like a short-term treasury. Um, banks certainly don't compete with that, typically in their high interest savings accounts. Um, and they certainly don't compete in traditional. Savings accounts.

I mean, if you've got your money in Bank of America, the Bank of America is paying about 0% interest.

Stephen: You must have just put it under your matches at that point. And what's kind of funny is like the banks offer so much rewards to get the deposits on the front end and then pay no interest. And now the crypto industry is like, say, say we're not, we're just offering rewards after they make the deposit. So it's kind of like this funny thing is you could get an iPad for depositing money, but the second they make interest, the second you earn a a mean Coin for investing In USDT, there's an issue, which is kind of funny.

I've seen you Kal, Jade of the Canadian Blockchain Consortium. It looks like both your associations are doing great work. You come from the, you know, very much like Texas and Alberta seem like very, like we're like the Texas of the North and you're like the Alberta of the South. Um, but we have seen that stable coins have been classified as securities in Canada, which kind of like lack or at least limit the potential for them.

What do you think about this decision? Will this leave Canada outside of the crypto conversation for years to come unless something changes.

Lee: Yeah, it was a, it was a shortsighted decision, unfortunately, but I, I am optimistic that groups like the Canadian Blockchain Council can, can, uh, educate and, and get those things changed. Uh, we've partnered with Klay several times on different trade missions and, uh, we're actually co-hosting a dinner during the North American Blockchain Summit with k uh, she's bringing down two ministers from Canada.

Um, we're gonna have conversations with them on stage and also have sort of a Texas. Uh, Texas, Canada Connection, VIP dinner at the Bush Presidential Library at Freedom Hall. Um, it's gonna be a lot of fun.

Stephen: That's awesome. And they're doing hard work and I think, you know, had the liberals not won that last election and you know. A lot of their Pierre Paolo conservatives are the ones really embracing what she's doing out there in Alberta. I think I just saw on LinkedIn, they were having a conversation with some of those ministers, including Pierre Paolo, uh, pollier.

Um, I'm curious. We talk about the North American Blockchain Summit. This is probably, this is your, this flagship conference. You have some of the most well-known industry experts. Nostalgia hit in when I saw Emmett Smith and Terrell Owens is gonna be there too. But you also have politicians and builders in this space.

What can we expect this year at nabs?

Lee: You know, this year we're focusing quite a bit on, on industry and on the builders. In years past, we've focused a lot more on policy, but, um, great strides have been made in that area, so we are focusing a little bit. More on the builders and, and on leadership. And, and that's why you saw kind of Emmett Smith to, uh, joining us to talk, uh, just, just general leadership and, and you know, I think there's a need for us to mature as an industry.

Um, and I think Emmett Smith is a great example of somebody who, um, you know's, been a long time in the NFL. It was a hall of fame running back. Um. He kind of matured the Cowboys, you know, he and Aikman matured the Cowboys in the nineties, and now Emmett is a business manager in his own right, um, with several different, uh, investments in, in real estate energy and, and other, um, industries.

So kind of a good example of, of sort of that leadership and maturing over time.

Stephen: What's it like? I'm sure there's a lot of pre-conference conversations. Are they interested in crypto? Like we saw some NFL players taking Bitcoin now as salaries. Is there much more of a conversation of like, Hey, like. Had I taken Bitcoin as my sa, even half my salary instead of getting the man, not saying him specifically, but instead of getting the mansions and the parties, you know, it's a totally different conversation.

Now are, do you find like more sports players are coming to these types of conferences, learning how they can invest their wealth?

Lee: Yeah, we, we do, and particularly with, with Emmit Smith, his son is very into digital assets in crypto. Um, he, I believe is a, is a college football player at a and m and he's the one that's been talking to his dad about the industry. So, uh, you know, Emmit Smith is not a spring chicken anymore, and it was kind of that generational divide where his son was like, Hey.

You need to, you need to get on the bandwagon here and, and understand this stuff. So I wouldn't be surprised if he slipped him a copy of the Bitcoin standard or, or some kind of, uh, literature book that, that helped him get where he is today.

Stephen: I am assuming we're we're close enough in age that like having Emmett Smith is this kind of like a full circle moment where you're meeting somebody, but it has nothing to do with sports. It's based on what you've built and what he's built. Is that kind of a surreal moment for you?

Lee: Oh yeah. I mean, I remember going to Cowboys games back in the day I passed him at Smith in the hallway. And uh, I used to be a Green Bay fan and a Cowboys fan, and I certainly still am. I'm more of, I'm more of a Cowboys fan now, having lived in Dallas for the last 15 years. Um, you know, at the time I was, I was, you know, probably in college or high school and I had a Green Bay jersey on at, at a Cowboys game, and I walked past Emmett Smith in a suite and I asked him for an autograph and he was like, son, you're wearing a Green Bay jersey.

Uh, so, but then I, I rode next to him on a plane a couple years ago, maybe a year ago. And, uh, you know, I didn't remind him of that occasion, but we got to talking about digital assets and I said, Hey, you should come out to our conference. So, um, we're excited to have 'em.

Stephen: That's pretty cool with so much momentum in the US and similar to my questions around like, Hey, with so much happening in the energy sector and racing against China. Is there anything we're missing? Are you having any discussions on stage where somebody's like, Hey, I love everything that's happening for the industry.

But even to your point, some of the meme Coin stuff is like, Hey, do we really have to get involved in like if we're gonna be taken serious, can we just kind of remove that stuff from what we're trying to do? Because that is the things that the naysayers and the scrutinizes like are always gonna pick up on.

Is there anything that we should be a little bit cautious 'cause we are moving so fast again now.

Lee: I, I think so. I mean, I've seen some projects say, Hey, we're gonna do whatever we want because we're not gonna, um, this, this is Trump's SEC, and they're not gonna come after us. That's absolutely the wrong attitude that's gonna give. US burned as an industry. Um, and I, I think the, um, the behavior from, from the Trump family in particular, uh, particularly the meme coins, uh, was hugely problematic.

Um, you know, certainly not, there's a distinction there. You know, what a Trump is doing with American Bitcoin and, and Huddy. Um, is, is right down the fairway and exactly what, you know, we would want to encourage, which is just building, building a really strong company. Um, and, and there's no pump and dumps involved there.

That's building infrastructure. Uh, that's very exciting. Uh, but there are some things that that, that other advisors to the president, um, and people in his circle have done that are, that are just, uh, inappropriate and, you know, we gotta call it out when we see it.

Stephen: And is it the take that like, Hey, the world, you know, liberty, like something like that. It's like, okay, you're building your business. But is what is a debate here that like, of course Trump wants all these digital assets, executive orders to go through. He's holding the bucket with all of his companies as his friends and just collecting digital asset dynasties.

Uh, and you know, all these, you know, Bo Hines is going over the Ted, like you're seeing a lot of these transitions happen, like really in the last eight months. Is that the concern? Is that, hey, who's watching because it's so transparent. Like how come they're now billionaires and we're still here? You know, trying to figure out what's the difference between a stablecoin and a memecoin.

Lee: Yeah, I, I think it's the, the pump and dump stuff that's very concerning when you're. When you're dumping tokens on retail or when you're saying, Hey, the top 200 holders of my meme Coin can come to dinner at the White House, that's, that's where we, we get a little bit concerned.

Stephen: The buzzwords this year have been digital asset, treasuries, DATs, and stable coins. Can you share maybe your insights on these two categories and maybe what conversations you'll be having on stage at nabs? 'cause I'm sure everyone's, everyone's now come up with a digital asset treasury apparently.

Lee: Yeah, we do have a panel with, um, some of the CEOs from some of these DATs and, um, we're optimistic. I think they, the last month or two, the nav compression has been very real. Some of them are trading below. Um, you know, they're nav and that's concerning, I think, but we'll, we'll eventually turn around. Um, and so that, that proliferation of that strategy is actually non-competitive.

The, the better. Um, you know, the more companies building digital asset treasury companies, the better they're likely to do as a, as a segment. So, still, still bullish on that. I think, uh, the, the major differentiator is gonna be what are the operating companies doing? You know, are they. Strong functioning businesses 'cause anybody can just do a SPAC and buy Bitcoin.

But what is the underlying business? And, uh, you know, if you're not make Michael Saylor doing some incredible financial engineering, then you, you have to have a different strategy, a diversified strategy. And that is utilize Bitcoin as a pristine asset, as pristine collateral. Run a good operating business, whatever that may be.

Um, and, and hopefully the market rewards you for that. Uh, and then of course, stable coins, we're seeing incredible growth. Um, the 12 month rolling average, um, if you look on the Visa DS dashboard went up from like 37 trillion average in transaction, uh, uh, volume over 12 months to the new 12 month rolling average is.

You know, approaching 50 trillion, right. So the growth has been pretty tremendous. Um, probably slowed down a little bit, uh, here in the last week of, of September, just because of the, the long liquidations that we've seen this week. But that's, that's the nature of any industry.

Stephen: Whether it be, you know, the Navs conference or just building T-P-C-T-B-C in general. Do you have any advice for those who are looking to build a similar organization, either in another state 'cause they see this, or even another region around the world where they're like, Hey, you know, especially now it's hot.

Do you have any words of advice for getting into this, especially when you're at some top tiers and when it comes to politics and the safety of your own fam, like we're seeing a lot of these things intersect. Do you have any advice for anyone trying to build A TBC where they live?

Lee: Um, yeah. I'd say at the state level there's probably only enough room for one trade association in, in any given state. So if you already have a state association, you know, it's a non, it's a long slog, right? These are non-profit, uh, entities, so you can't like, grow it and sell it, uh, or exit. So most people are gonna be builders and entrepreneurs building for-profit companies, which is great.

Uh, I'd say, um, there aren't relative to other growing, like if you say relative to ai, there are far fewer founders. Per unit of market opportunity in, in digital assets. And there are an ai, um, and that's for a lot of reasons, but one of them in particular is just because, um, there's a little bit of a social stigma still around the digital assets industry that we have not yet shaken.

So that's why it's, that's why we do see more founders per unit of market opportunity in ai. Uh, so I'd recommend, hey, if you're, if you're considering building. You've got perhaps more opportunity and less competition to build in crypto than in ai.

Stephen: Possibly because a lot of those crypto people move to AI and they move from cannabis and real estate and they keep on jumping around. So you, you can at least account for a quarter of the people aren't gonna be around by the time the next new thing comes out. Um, and that's super interesting. Um. And I'm just curious, any other exciting announcements or, you know, you just mentioned the nonprofit thing.

How does somebody go about that? Is there other opportunities for you? 'cause you've built such a huge network that you can maybe go advise for companies, it feels like you're entrepreneurial. So, you know, how does that work? Or is this like, hey, I picked this mission, I picked this as my purpose and I'm focused here not on maximizing maybe profits and personal income, but on impact that we can have, you know, 20, 30 years from now.

Or is it maybe just the perks of like, Hey, me and Emmett are gonna be sitting together on stage having lunch afterwards. And, you know, my childhood dreams have been met. Uh, that's good enough for me.

Lee: I, I feel like there are certain things that I can do. Most things though when, as in my role as president of the TBC present conflicts of interest. So I typically don't do, um, consulting or things on the side unless I've cleared it through board of directors and, and it's been cleared and vetted for no conflicts of interest.

So, uh, I'm pretty. Um, dedicated in the mission. That doesn't mean that I'm gonna be at the TBC forever, but, uh, I, I do think that my mission is gonna be particularly around making Texas the financial capital of the world. And, um, whatever form that takes, I.

Stephen: Any other exciting announcements coming to Navs? Maybe like, is Mike Madano gonna come out and do like a Dallas Stars, you know, Minnesota North Stars reunion? I'm not sure anything else coming for 2025 or at Navs in next week or so?

Lee: You know, we, um, I, I think the most compelling opportunity is actually, um, we're hosting the Governor Abbott at the pre nabs event at the Cress Estate, which is just a beautiful, uh, estate here in Dallas. So VIP gathering there with, with, uh, some top notch industry leaders in the governor. I'm excited about those conversations for sure.

Stephen: Is there a book or a podcast and idea that has really shaped your thinking as you know, founding and being the president of TBC? Something that you can be like, oh man, through those tough times, like the Bitcoin standard, I knew this was gonna be a long, is there anything that comes to mind where you're like, maybe people should read this before you believe Anything that we see on this podcast, read this book and get the foundation or the fundamentals down.

Lee: So on Bitcoin, I'd say inventing Bitcoin by Pritzker. And then of course the, the Bitcoin standard by, uh, safety, but. Broader than that. I've really enjoyed, um, Dale Carnegie, um, how to Win Friends and Influence People. That, that has helped me quite a bit in the trade association world because a lot of it is building influence through making connections with people.

Um, so that's, that's been one that I've, I've read a couple of times. I'm looking over at my bookshelf here at others, uh, that I've read over the years, but, uh, yeah.

Stephen: for the last six years, is there any characteristic that you see in people that have like, Hey, they're not moving on to AI just because it's hot. Like is there any characteristics or you know, a vibe that you're getting from people that have been in this, been in the trenches with you over the last six years, whether at TBC or just, you know, there are industry events in 2018 and they're still there at industry events in 2025.

Any characteristics from them?

Lee: What I'd say is there's, there's a lot of people that like to make noise and. What we find is those are often the people doing the least amount of building. So, um, the, the excellent, you know, founders, the excellent, um, builders that we're watching, and even executives at large corporations like Galaxy or Coinbase or others, um, are are doing a lot of that work quietly and professionally.

Um, so I, I typically try to. Avoid the people that are making a lot of noise.

Stephen: They don't have to be controversial on, on Twitter or anything else. Lee, what's the best place for people to find you? Are you, are you living on crypto, Twitter? Do you like a little bit more composed LinkedIn? Where? Where can people find you or they just have to show up to this event and see you in person?

Lee: Now both would be great. Uh, I am on LinkedIn and Twitter. I'm Lee uh, underscore bratcher on Twitter. You can find me pretty, pretty easily on LinkedIn. Um, and then, you know, come to, come to Texas Capital. It's a, the Wednesday event before nabs, and then North American Blockchain Summit on the ninth and 10th of October.

Um, will be a really good week to be in Dallas.

Stephen: I can't wait to see pictures of you and Kle and Jade and all the amazing you and Emmett. Uh. Maybe you gotta play a little bit of football in the background. You never know if you get to, you know, throw a pass to Terrell or fake a hand off to Emmett. That's super cool. Lee, thank you so much for joining me Around The Coin podcast today.

Lee: Thanks for having me, Stephen.

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