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So the CEO of the biggest bank in America was just asked whether the dollar will stay as the world's reserve currency. And here's what he said. If America is in a weakened state, and this is important, too, like if we're not destroy its military in 25 years, and destroy its economy, we won't be the reserve currency, either. So his two conditions are military and economy, but I think there's arguably something even more important than that. It's about whether the rest of the world's money still has to flow through your economy. And that brings me to what happened this week, because a couple days ago, the president of Russia, Vladimir Putin, signed a 287-page law. It's called the
Federal Law on Digital Currencies and Digital Rights. It was signed on August 4th, so effectively this means Russia just legalized crypto. It is their version of the Clarity Act. Now the question is, why would Russia do this? There's two theories. The official theory is because this is a story about a nation's access to money. Here's Vladimir Putin's explanation of it. Much in the same way uh so Russia, they might suddenly find themselves cut off from their legitimate financial assets currently held in dollars or euros at any time, and they could also lose access to the entire Western financial
payment infrastructure. We all fully understand that this is fundamentally about unfair competition. Well, the excuses they provide can vary, uh but they will always find one, like the ongoing conflict in Ukraine in our case, uh or a conflict in the Middle East in another instance, the various conflicts across the African continent, or even the way they treat the LGBTQ+ community. Look, they are always going to find fault with anything. So he's basically saying that if and when the US wants, they will always find any reason they want to put economic pressure on a nation. So this is Russia's way of clawing back its access to money.
Okay, how? So, when a company in one country sells something to a company in another country, the money moves through a sequence, like your bank to a bank that has a relationship with your bank to a bank that has a relationship with that bank and eventually to the seller. And in most of those chains, no matter where in the world you are, they'll end up passing through a US institution somewhere along the way. That connection point is what's called a correspondent account. It's the most important thing in international finance because whoever controls that account controls whether your trade happens or not. And Russia lost access to a lot of those chains in 2022.
Now, Russia still has oil, it still has gas, precious metals and food and all the other things that other countries want to buy. The problem for Russia is getting paid. That's what this law is actually about. Russia wants back into the world market. And that's where crypto comes in. It's what's called a bearer asset that settles between two parties without a correspondent bank sitting in the middle deciding whether to allow it or not. The crypto law says, if you're a Russian company importing or exporting and you want to settle a contract in crypto with a foreign country, this law says that you can do it.
There's no limit on the transaction. You can even do it wallet to wallet if you want. You just have to report it and pay taxes on it. Now, hold on. Why would Russia go through all this trouble to build something legal and licensed instead of just using some shadow banks or some crypto, right? Well, here's why. Because if you try that, the US will cut you off. In fact, the Treasury Secretary, Scott Bessent, just made an example of Iran and what would happen if you don't follow the rules.
He said, quote, "Iran's shadow banking system is buckling under economic fury and the regime is running out of ways to move money. Every facilitator that keeps the regime afloat is putting a target on its own back. Treasury will continue to expose these networks and cut them off from the US financial system. End quote. Okay, very interesting. What does that mean? What it means is the United States is cutting any country, company, or person out of the US dollar system if they allow sanctioned countries or businesses to go around them. That is why couple days ago the US
Treasury put out a list of a few names. There were a couple people, there were a handful of companies and what all of them had in common was they moved money to help Iran. Hundreds of millions of dollars on the behalf of an Iranian bank in multiple currencies across at least four countries. And they did this using a series of shell companies. So the US found out and now it's cutting them off. So the US is basically saying either comply with the system and play by the rules or you don't get to play with others. Now, if you're a sanctioned country like Russia you want to make sure that you still have the technology to allow your country to trade with others regardless of whether the US
allows it or not. That's why Russia's passing their own version of the Clarity Act. That is the official understanding of it. The unofficial theory though, I think it's a lot more interesting. So in today's video, I want to share with you a very plausible theory about why Russia is really doing this and what effect this might have on Bitcoin. This is going to be super interesting. So with that said, let's get into it. Hi, my name is Andrei Jikh. Hope you're doing well. Come for the finance and stay for Russia's Bitcoin. Now, the low-level understanding of what I've seen is that Russia is now of a sudden pro-crypto and they're so forward
thinking. This is really bullish for Bitcoin and it's why it's going to go to $150,000 a coin. Okay, fine. Here's what I think the high-level theory is. And by the end of this video, you can decide whether you buy it or not. The unofficial theory says Russia is not legalizing crypto because it likes Bitcoin. What it's doing with crypto and stablecoins is it's building a wall for the tsunami of what's coming to the world. And the tsunami is when the US finally approves the CLARITY Act. Why? Well, it's because of what a stablecoin actually is. Because a stablecoin is a dollar that lives on your phone.
It does not need a bank or a branch in some country, right? It doesn't need permission from anyone's central bank. If you have an internet connection, you effectively have a dollar account. And that has never been true before in human history. See, for the last 80 years or so, if you were a country and you wanted to keep your citizens within the confines of your own currency, it was actually pretty easy to do because you control the banks. You control who gets a dollar account. You put in what are called capital controls. And the dollar could only get in through the doors that you control. Stablecoins, though, they sort of give the master key to anyone with access to them. So, imagine you're Russia, but you're
sanctioned. Another country says, "You can't trade with others and if you try, you can't get paid." So, all your businesses get cut off, your currency gets put under pressure, your interest rates skyrocket because now you're forced to print money, your citizens have watched the ruble lose value their entire lives, and now at some point in the next year or two, the United States is going to pass a law that lets US banks and US corporations issue US dollars onto the internet with the backing of the most stable assets in the world, US Treasuries, which are fully regulated, they're completely legitimate. Anyone in the world with a smartphone can hold those.
Including every single person in Russia. That is the tsunami. Now, I made a video about how Russia accused the US of planning to do this, which is by offloading 36 trillion dollars at the time, now it's 40 trillion, of US debt onto the whole world through what they called the crypto cloud. So, what Russia's really worried about is basically 140 million of their own people deciding that they'd rather save in dollars on an app they have on their phone. So, this is not a guess at what Russia is worried about. They have said this themselves. Again, that was Anton Kobyakov, who's the presidential advisor to Putin, and he's also one of the people who organizes their big annual economic forum.
That is something that no border could ever stop, no army that could ever defend against it. So, what do you do? Right? You can maybe try to shut off the internet. That's really hard to do. Maybe you can turn off the app store, but you can't really stop this technology. This is coming. But there is one thing you can do. And what you can do is you can get there first. You build your own digital money. You make it mandatory. You route all the people's salaries and all the businesses through it. And you make sure that by the time the dollar version comes out, right? You already have your own
version. And then separately, you can use your technology to go around the sanctions. Cuz that's how you get paid. That is the unofficial theory. Russia is just building a digital wall for what's coming. Let's go through the evidence for this theory and how all of this might work. Now, before I explain that, I think the most important asset that we have that money can't buy more of is time. And that's where Cook Unity comes in. Cook Unity is a meal delivery platform run by actual chefs. There's over 130 of them,
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I've also had Chef Chris Ratel's blackened shrimp with fresh corn grits and Chef John DeLucie's shrimp fra diavolo, imported Italian spaghetti in a seafood tomato sauce. Everything's handcrafted in small, made-to-order batches in a local kitchen near you. It's minimally processed, organic proteins, responsibly sourced seafood, and more importantly, it's delicious and it saves so much time because there's no grocery run, no prep, no clean up, and I'm back at the desk to make more videos in about 10 minutes time. If you're interested, you can go to the link in the description now to try Cook Unity and get 50% off your first order of chef-made meals delivered fresh to your door. And you can pick your weekly menu, plan for orders weeks
out, or pause the whole thing anytime, which is pretty important for me when my schedule becomes unpredictable. Again, Cook Unity is offering my viewers 50% off their first order. You can click the link in the description down below or visit cookunity.com/andre and use code Andre to get 50% off your first order. And now, let's get back to it. So, let me explain Russia's Clarity Act and what this crypto law actually does. See, this is how we know this is not a Bitcoin adoption story because this law does almost nothing for an ordinary Russian person who just wants to buy and invest in a Bitcoin. That's because an ordinary Russian citizen is what the law calls a non-qualified investor. And so by law, they are capped
at just 300,000 rubles, meaning they can buy about $3,700 worth of crypto per year. That's it. Now, before you can even buy any of it though, Russia also wants its citizens to pass some sort of test, which they really haven't defined yet. And you can only buy assets that their regulators have pre-approved. And as of right now, that list doesn't even exist yet. They haven't published it. And even if you could get through all of that, you still can't spend any of it. The ban on using cryptocurrency to pay for goods and services inside Russia stays exactly where it was. So, you can't buy a cup of coffee with it.
Businesses can't even advertise that they accept Bitcoin. So, for anyone saying that this is Russia being forward-thinking and adopting their Bitcoin standard for their economic model, this theory says that this is completely wrong. It was not designed for the average person saving their money to protect themselves against the evils of debasement. This law, first and foremost, is all about foreign trade. The whole point of this crypto law is to get Russia paid by other countries. Now, wait a minute. Hold on. If that's the case, then why involve and cap the citizens at all? Like a guy in Moscow buying Bitcoin is not a sanctions workaround. He's not settling an oil contract. He's got nothing to do with
any of this. So, why write him into the law and then test him and then ban him from spending it? It seems odd that they would make it as hard as possible to do anything with crypto, despite it being called a crypto law. Now, the answer is because they're trying to protect against something called capital flight. Meaning Russia wants to keep its money at home. It doesn't want people moving their savings out of rubles and into crypto. That's part of the answer, but it's not the whole answer. Because Russia already technically has capital controls. They've had them for years. They didn't need to write 287 pages of suitability tests to stop the money from leaving their country. They already had that tool.
There's something else going on here, and it has to do with what will happen on September 1st. September 1st isn't just the day this crypto law takes effect. September 1st is also the day Russia launches its own central bank digital currency, their own CBDC, or in this case, the digital ruble. So, let me explain what that actually is and why they would want one. So, the digital ruble is not a crypto. It's actually the opposite of crypto. It is money issued and created by the Bank of Russia. It exists on a platform the Bank of Russia runs, where every transaction is visible to them, right?
There's no crypto aspect to it like mining. It's just a database, and again, the central bank owns that database. By the way, Europe already banned it. Europe's 20th sanctions package blocked European entities from transacting in digital rubles back in May of this year. It's actually 3 months before their ruble launches. Now, starting on September 1st, the 12 systemically important banks in Russia, which are banks like Sberbank, VTB, Alfa-Bank, Tinkoff Bank, right? They will all legally be required to let their customers transact in it. By the way, VTB, that's also the same bank from the Treasury list I mentioned earlier, the one that the Iranian bank employee was
working on with currency conversions. So, just keep that in the back of your mind. But, okay, so it's not only going to be the banks that will need to accept it. It'll also be any business doing more than 120 million rubles a year in revenue. They'll have to accept it, too. Which, by the way, is roughly a million and a half dollars a year. Then, in September 2027, that rule expands to smaller businesses, ones that are doing over 30 million rubles. And by September 2028, it's going to have to be everyone else as well. So, the full timeline is that on September 1st, that'll be the crypto law. Again, it's optional, capped at just $3,700.
You need to pass a test. You can't spend it anywhere. And the second thing that's going to pass is that digital ruble. That's where banks and businesses will have to offer it, and that's where every transaction will go through a ledger that the Central Bank controls. Now, what's interesting to me about all this is that the Russian people don't actually want this. In fact, there's a state-run pollster in Russia, not some Western think tank. This is the actual government polling, and they found that most Russians don't understand why they even need a third form of money alongside cash and their bank account.
A separate survey by a job site called SuperJob found that only about one in 10 Russians would be willing to take their full salary in these digital rubles. So, about 10%. Okay. So, here's the question, then. If you're Russia, how do you get your people to start using this new form of money? And the answer is Russia's going to start paying their banks. There's going to be a small fee per transaction for every salary payment processed through the digital ruble. And the Central Bank will be paying commercial banks to push its own currency onto people's paychecks. And that's because the demand is just
not there. So, they have to manufacture it. But then, what about the $3,700? Why is that there? Some people think it's because of investor protections, right? It's about protecting people against volatility. Maybe it's protecting people against scam coins. But in reality, it has nothing to do with any of it. This theory says, it's $3,700 because that is the number Russia has decided it can afford to let people hold in an asset that the Russian government cannot see, it cannot freeze, can't control. They're basically saying, "Okay, we can let up to $3,700 go unaccounted for, but don't spend it anywhere, and don't use it for anything, and don't advertise that you accept it."
It's basically an exit wall to protect against the tsunami that is the US Clarity Act. Okay, so now the question is, well, what does this all mean for Bitcoin? And the answer is, probably not much, at least not in terms of price. Russia's just not buying Bitcoin. There is no sovereign wealth fund allocation, and there's no plan for one, there's no strategic reserve, there's basically nothing like what El Salvador did. This law does not create any new buyers. If anything, it actually caps buyers. Remember, Russian people are limited to only $3,700 per year. And the trade settlement side, by the way, which is the unlimited part, that's technically not investment demand, either.
Nothing says that Russia has to buy and hold Bitcoin. That's just Bitcoin being used as a settlement layer, kind of like gold. Money goes in one end, it moves across the border, comes out the other end, and it gets converted. So, unfortunately, I can't give you some price prediction. Anyone telling you that this is why Bitcoin's going to go to $150,000 or higher is trying to sell you something. But here's where I think this is way more important than the price. I think the important thing is to pay attention to which direction the world is going in. And I think where it's going is away from the Western system of money. There are now multiple competing implementations of how we move money.
There's, for example, something called BRICS Pay. There's China's CBDC, which might be backed partially by gold and a basket of other currencies. There's Russia's CBDC. There's going to be a lot of technologies for transporting money from point A to point B. That is the system that is now evolving. And while it's evolving, there are very powerful players with leverage and real access to capital that want as much influence as possible over that new system so that they don't become irrelevant when it gets here. In the US version, for example, the state won't issue the money, right? It's going to be the corporations. That's why companies like BlackRock and Larry Fink think. That's why they want to manage
their reserves. The banks want to make sure that Apple coin is not going to pay you higher interest rates than your savings account do because that's where banks get a huge amount of their leverage from. Now, the crypto companies, they want to sit at the table. They want to become the new banking system. Russia wants to protect its influence in the world. China wants to maybe take the influence away from everyone else and make it so that the concept of money is not tied to statehood or any nation. So, there's all these different competing versions that are going to replace the old system. And unfortunately, nobody in this room is arguing on our behalf
because we're not a player in any of this. We are what's called the deposit base. I did a separate video where I go into a lot more detail about the US Clarity Act, what it does, and more specifically about who it's fighting for power over it, and it's very interesting. So, go check it out. If you want to know more of my thoughts on the economy and how I'm thinking of investing into some of these positions, you can find those videos and more in the premium member section where I post my extra thoughts. I post a little early sometimes, and if that's valuable to you, the link is down below. Thank you so much for watching this video and being a premium member. As always, I hope you have a wonderful rest of your
day. Smash the like button. Subscribe if you haven't already. I'd love to see you back here next time. Take care.
