The Last Trade E034: Building Better On-Ramps in MENA with Talal Tabbaa

Brian Cubellis (00:00.706) Thumbs up. And we're live. Back to last trade down a man this week. Our co-host Jesse Meyers is making a high time preference decision closing on a house this morning. Wow. Just throwing it all out there. You've got to get it out there. I was going to say something else about it being cold and him coming from California and this cold weather might have kept him under the covers this early. You just you just threw it all out there. I guess I guess it's live Jesse will be back next week. We're happy for Jesse Congrats Jesse but We're here with Talal Tabah CEO of coin mana very excited for this conversation I'm not gonna lie gentlemen. I'm not gonna lie to all I've been in Bitcoin for 10 years and my understanding of what's going on in the Middle East and northern Africa with Bitcoin is lacking outside of some brief conversations with people and what you see in the news with countries getting into mining, obviously Dubai, Abu Dhabi, big sort of parts of the world where Bitcoiners are flocking to. But it's a part of the world, part of the Bitcoin community, if you will. I don't have a lot of exposure to it. So I'm really excited to sit down, speak with you, get your perspective, learn more about what's going on. And you're a part of the world. But before we do that, How did you find CoinMana? Why did you found it? And what has the experience been like for you as a Bitcoiner building a company in the Middle East? Beautiful. So first of all, I didn't found CoinMana. My partner did. And I joined as, I'm a co-founder of the company. I'm CEO and yeah, basically running the company, but it wasn't my idea. And I didn't really come up with, branding, the concept, et cetera. So we're three founders of the company, myself, Dina and Yazan. Dina used to run BitOasis. She was head of operations or director of operations at BitOasis, which is the oldest exchange in the Middle East. I think it kicked off in maybe 2014, 2015. I used to be a furious customer of theirs. I really used to be a very angry customer of theirs. And that's when I started realizing, all right, shit, maybe the Middle East does need a more reliable exchange. Brian Cubellis (02:29.795) And yeah, basically how I knew about Coinmina is I got an email saying, welcome to like, log in to talal at coinmina.com. And that's basically my partner, Yazan, had sent out, created basically the book, the domain, set up the Gmail and then sent me an invite to my email. And that's how I knew about Coinmina. And that was around during COVID. probably first couple of weeks in COVID, like in 2020. And I told them, all right, sure, I'm down to build an exchange. All of the ones in the Middle East are very underwhelming. And I've personally suffered from this issue. I think it's a bit cliche, but you know, when they say like you're most suited to solving the problems that you've suffered yourself. If I've suffered from the lack of quality service from other Middle Eastern exchanges, then we set out to set up the best one. And... My first request or demand was that I'd only do it if we are regulated by one of the top regulatory bodies. So we'll obviously today walk you through the different regulatory systems that you have in the Middle East. And there's quite a few. But yeah, to answer your question directly, Cohen-Mina wasn't necessarily my idea. But yeah, I've been working on it since 2021. and we've now become the largest local exchange in the region. Obviously, your Binances, your OKXs, etc., they still have quite a bit of volume, but hopefully by the end of the year, we believe we should be the number one player in the Middle East. Brian Cubellis (04:16.638) So you mentioned BitOasis, the exchange landscape was not up to snuff for you, particularly. What are you guys trying to improve on at Coinmina specifically? Yeah, so if you ask me, I don't necessarily think that on-ramp and off-ramp is necessarily the sexiest use case of Bitcoin or crypto in general. However, it is the Trojan horse for... launching all the different on-chain services and on-chain experiences that I think is revolutionary. So it's impossible to do anything on-chain if you don't have a reliable on-ramp and off-ramp. So I guess Coinmina today offers customers the ability to deposit fiat and buy crypto or deposit crypto and withdraw fiat. And essentially, the main differentiating factor between Coinmina and other... regional players is that we are reliable in terms of your ability to always be able to deposit money to coin Mina and withdraw money from coin Mina and the reason why we're able to do that is from day zero we knew that the activity that we're doing requires massive reliance on the banks and We basically set up a fully regulated entity that complies with all the regulations. So Basically not your keys not your coins applies a lot. We're a centralized custodial service provider that's regulated by the central bank. That's why we're able to have reliable on-ramps and off-ramps. Basically, the user experience at Coinmina is significantly better than what it is at other regional players. If I'm completely honest, the market is big enough for multiple big players. In the Middle East, you have a very high GDP per capita. If you look at Qatar, Saudi, Kuwait, Oman, these countries all have very high GDP per capita. They also have a very young population with near full smartphone penetration. Yet you have some of the worst banking services in the world. Like if you compare how poor banks are in the Middle East versus Europe, China, the US, it's absolutely insane. So people are really incentivized. Brian Cubellis (06:42.506) really incentivized to adopt crypto. Since we launched Coinmina, we realized that the biggest use case today, and as a passionate Bitcoiner, it sometimes pisses me off, but I guess I can understand why the retail and mass population want it, but it's USDT. Like, for example, in countries like Egypt, Lebanon. Pakistan, where the local currency is literally collapsing. Clients or customers want a reliable way to store USD. Like it's interesting how problems are relative. If you're sitting in the US, you're worried about your USD losing value and therefore you want to move to Bitcoin so that you can protect your purchasing power. Someone in Egypt, their local currency has dropped from maybe 24 Egyptian pounds to one dollar to maybe 40. So this is like in the past year or so. So purchasing power literally almost cut by half and customers want USDT because their cost structure is in USDT and they don't have the sophistication of hedging or so yeah, I guess the main takeaway from launching and operating Coinmina is that USDT is by far the most popular asset for emerging markets. And I think that's also related to the shortage of traditional US dollars, like normal US dollars in those markets. So I guess that to me was a very interesting phenomena. And it's actually solving a real world problem. Because if you are sitting in Egypt and you want to send $100,000 to China or the US or to Paris, it's not easy. It's really difficult to do so. go through so many hoops and you might or might not be able to do it. Whereas if you have USDT, you can send it wherever you want. And yeah, I guess you wouldn't be part of the traditional financial system. So that's an area that I personally found to be very interesting, like alternative rails. And to my surprise, some customers don't even properly know what crypto is. They think of USDT as like a digital dollar. Brian Cubellis (09:06.75) Yeah, it's good to get people using crypto, but hopefully people start realizing the importance of Bitcoin as a way to preserve wealth. But in this case, people are using it for cross-border payments and not necessarily for savings. Yeah, that makes a lot of sense. Talal, I'd be curious and interested in my understanding is in Bahrain, initially, you guys got the license with the But as you as the past few years, you've expanded into other entities or other countries and curious how you thought about that expansion. But then also you mentioned something early on about the regulatory bodies being very important if you were going to participate. And a lot of people think it's the Wild West and crypto and specifically in that region where it's my understanding, it's completely opposite as far as getting the borrower licenses and actually getting the rails and things in place. I would love to hear kind of like how you thought about the, you know, initial place where you domiciled in the regulatory bodies, but then going into Dubai and other industry or other regions, how you think about that? Yeah, so I guess I'll tell you a bit about what Coinmina's thought process was, and then I'll expand to the other regulators. So when we thought of Coinmina in 2020 or 2021, as an on-ramp and off-ramp, my single biggest reliance is on the banks. So if I'm going to be relying on the banks, I need to be regulated by the same body that regulates the banks so that they don't look down at my license. If we had obtained a license from the equivalent of the SEC, which is the Security and Commodity Authority in Dubai, for example, the banks would have easily said, hey, listen, this is not our regulator. We can't really touch this. So we initially set out to be licensed by the Central Bank of Bahrain. And that proved to be a very smart decision because it allowed us to open. all of these banking channels and the Central Bank of Bahrain is a very reputable regulator. So by them adding crypto, it helped us massively in being able to open bank accounts and start get the ball rolling. So if you think of like the Middle East, you have the Gulf cooperative countries, so the GCC, the biggest market by far is Saudi Arabia. Saudi Arabia doesn't have crypto regulations yet. Brian Cubellis (11:28.426) It's not legal and it's not illegal. So they haven't regulated, but they also haven't banned it. So people in Saudi Arabia mostly buy crypto from overseas exchanges like Coinmina, or they use B2B markets. So Saudi is still a very untapped massive market. And I guess I'll go from size of market and potential. And then in my opinion, UAE is obviously the... financial center of the Middle East. So if you think of what are the global financial centers, obviously the first thing that comes to mind is New York, London comes to mind, Singapore, Hong Kong, Tokyo, and now Dubai is also what the financial center of the Middle East. So for us we knew that we wanted to be regulated in Dubai. I personally live in Dubai, very big fan of the city. I think they move at a different pace from everyone else. Insanely visionary leadership and ability of execution is absolutely insane. Like I first moved to Dubai in 2012 and I can't explain how different the country is. And they dream big. Like usually if you're the size of a city, you don't dream that big. But in Dubai, they always dream big and I guess the regulator that they set up, which is literally called VARA, the Virtual Asset Regulatory Authority, only regulates crypto. They only regulate virtual assets. So let me take a step back. I talked about Saudi. There is no regulations in Saudi yet, but in the United Arab Emirates, you have the main two cities are Abu Dhabi, the capital, and then Dubai, the financial center. In Abu Dhabi, you have ADGM, which is the Abu Dhabi Global Markets. You have a few exchanges set up there. Coinbase recently, I believe, set up their asset management arm there. You have... Binance have a custody license that they recently withdrew. So there's some activity in ADGM. I personally liked VARA more, and that's why we went for the VARA license. And VARA is, again, the Virtual Asset Regulatory Authority, and they're based in Dubai, and they specifically regulate virtual assets, and they regulate it based on the service that you provide. So whether you're a custodian, broker, exchange, advisor, it doesn't matter what asset. Brian Cubellis (13:53.406) you're managing or servicing, they regulate you per your service. And in my opinion, that's a very good way to do it, as opposed to what the Swiss tried to do back in the day in like payment token, utility token, security token, and everyone tries to disguise their securities as a form of utility. No point doing that. I guess that's what Dubai realized. Then they set up VARA. So Coinmina were regulated by VARA, I'm a central bank of Bahrain. You also have the Dubai International Financial Center, which is... where traditional banks historically have been set up, they've recently announced their plans to also regulate crypto. So you do feel like there is some sort of healthy competition between the regulators. And that's not something that is very common, if I'm completely honest. It's great for us because it gives us optionality on where we want to launch specific products out of. But yeah, so to take a step back on the comment of Dubai being the wild west, similar to crypto, when you have something that's super high growth, you attract the best and you attract the worst because there's lots of opportunities and legit and grifters will both want to take part or they will both want to capitalize on what's there. As a regulated entity in the United Arab Emirates, it's actually very stringent. So you have to go through a lengthy licensing process. You can go to VARA's registry and you can see which applications are approved and which are pending. And the process takes time. It took us 13 months from start to finish. And that involved a central bank approval for our client money account. Obviously there is an unregulated market in the UAE and that's the OTC market that deals with physical cash, but that's a completely different industry in my opinion. So at Coinmina, we only accept wire transfers, card and crypto deposits. If you enter into the cash business, that's a completely different ballgame. And that market is not regulated by VARA or regulated by any body. And that's how, I guess, similar to how P2P markets are operating today in an unlicensed manner. Yeah, I guess also you have Oman. Brian Cubellis (16:16.966) the Sultanate of Oman, which is just south of the United Arab Emirates. They've also launched their crypto regulations, which should be coming into effect this year. And then Qatar, which hosted the World Cup and is also a very ambitious country, they've launched their tokenized, I forgot what they call it, like tokenized digital assets. But in my opinion, it's no such thing as just tokenized financial assets. core digital assets for you to be able to do these on chain tokenized assets. And if it's a private blockchain, then it's again, very different from what we're trying to do at, uh, at coin Mina. So I guess many things in the digital asset space are brushed with the same brush, uh, even though they're extremely different. Yeah, it's, it's incredible. You must pinch yourself all the time thinking about the amount of opportunity. Um, the one thing to. to share the bet from a leader, in my opinion, will come from the market as we've seen. Maybe it's Binance and Coinbase historically the past 10 years, but over time as the market matures you start to work hyper locally. You go to the places you trust, you go with the licenses that you recognize. It makes complete sense that other exchanges would form like yourself and then establish relationships where people are going to be able to go to an office or be able to talk to somebody. We see that here in the US. in Texas specifically during the 2021 bull market and the miners and folks would call us up. It's like, I don't know about doing business with Coinbase. I don't know if I'm sending my dollars out to SF. And so I can imagine there's a similar feel across the world when it comes to finance and banking. Yeah, I mean, that's SF and Texas where it is significantly, bless you, where it's significantly easier than what a fragmented market in the Middle East is where you have to get different license in each country. But yeah, again, we believe that the opportunity is more than worth it. And that's why we've gone ahead and gotten those licenses, because we want to compliantly open and operate bank accounts that allow retail, institutional corporate customers to deposit their dwindling fiat in terms of purchasing power and move on to Bitcoin or whatever asset they want to move to. Brian Cubellis (18:39.662) I'm sorry, I was on mute there because I was sneezing. But you mentioned earlier, this is something I really wanna dig into is just the overall understanding. You mentioned that people really don't understand that they like tether because of the stability. Obviously we have countries like Lebanon, Turkey, Pakistan, going through crazy hyperinflationary events over the last few years. And then obviously the Middle East is a very energy rich part of the world. You have countries that you mentioned, Oman. creating a regulatory structure. They also made a big investment in a private miner last year. I believe Exahash was the name of that miner. What do you think, or not what do you think, how, I know there may be a relatively lack of, a relative lack of whole understanding of what Bitcoin is and potential it provides, but are people starting to wake up to this in your mind to really understand? the opportunity that Bitcoin presents and the opportunity the Middle East specifically has to lead in this new market and this new industry? Yes, so I think we need to separate between two types of countries, ones that produce oil and energy and ones that have a failing currency, because these usually don't go hand in hand, like Lebanon, Turkey, Egypt, their GDP doesn't come from selling oil. whereas Kuwait, for example, or Oman, or Saudi, or the United Arab Emirates, a big part of the GDP is from oil exports, and that means they are easily able to peg their currency and maintain that peg because they have so much USD reserves. So I would say that in the GCC countries where they produce oil, what are they doing in reality? They are monetizing energy. What is the best way in the world to monetize energy? It's Bitcoin. So I think those countries have realized that. And I was actually earlier in Abu Dhabi today at one of the bigger Bitcoin mining facilities. And it is run by one of the public, or it's operated, sorry, by one of the public listed companies in the U.S. And they're doing an awesome job. And so far they're huddling only. And I went to them to try and sell them our services so that they sell their Bitcoin through us and pay off their operating expenses. But yeah, seems they're huddling so far. Brian Cubellis (20:59.522) countries that have oil production and have excess energy in their grid, they are going for Bitcoin mining because they've realized that basically this is the best way to monetize your energy. If you look at Abu Dhabi stock exchange, there was a mining company called Phoenix that IPO'd, and that I guess sets a precedent of the first digital asset company going public in the Middle East. Oman has also done the same. and many other countries that produce oil are looking at that. Because the reality is if your cost per kilowatt hour is less than three cents per kilowatt hour, then you're making bank, you're printing money. Between three and five kilowatt hours, you can make some money, but below three is considered like a very lucrative business. So in those countries, you are able to get such a tariff. And these countries know what Bitcoin's worth. It's all relative to the problems that you have. If you are UAE, Saudi, Oman, you're producing a lot of oil and therefore you have energy, but your monetization of that energy is not very efficient. Whereas if you mine Bitcoin, that is the most optimal way of monetizing your energy because you literally spend energy, you get back your Bitcoin. And on the other hand, countries like Turkey, Lebanon, Egypt, where they don't have a pegged the purchasing power has been literally falling exponentially, like falling over time. They are looking for USDT. Those markets, I've spoken to many of our customers that want what in their mind is like a dollar electronic, which is like the digital dollar. They don't even know what crypto is. And I've actually spoken to many of our customers in Egypt that just want to buy this digital dollar. They don't even know what Bitcoin is. But I guess let me take a step back and give you some context on our customer base. We have sheikhs that trade in 25 million dollar lots, and we have customers that literally trade with two, three dollars. So we've covered a very wide spectrum of our customers. But to give you just an idea of how important education is, we had a customer that kept trying to withdraw Bitcoin to their physical address. Brian Cubellis (23:25.13) You know, like on our application, there's an address checker. So if your Bitcoin address starts with BC and whatever it goes through, like it checks that your, the address that you're sending to is correct. And we kept receiving this weird error that this customer's withdrawal wasn't going through and we went and checked and it turned out this customer is trying to withdraw a big amount of Bitcoin to like apartment 6F on a specific road in Riyadh in Saudi Arabia. So. We actually ended up delivering the bitcoins on a treasure to the customer. But that gives you an idea of how nascent we are. So to answer your question on whether people realize the importance of bitcoin, I think the wealthier countries, the ones that produce oil, have properly understood it. And in emerging markets, the biggest issue is lack of dollars. Today, if you're in Egypt and you want dollars, there isn't enough dollars in the country. So USDT trades at a very high premium and people still see Bitcoin as a higher risk asset that is too volatile. And I guess when you're hurt by your own currency failing by 30, 40 percent and you've seen Bitcoin to be volatile over time, USDT is the preferred choice in those markets and actually in Egypt and in Lebanon. Yeah, Egypt, we operate more, but we see over 90% of total trading volume on USDT, which is crazy. But again, that is because customers are afraid of their local currency and they've already been hurt by devaluation. So they have minimal risk tolerance or threshold or ability even. They can't afford to lose any money in the short term. Those countries, usually they are not big on saving because you don't have... wealthy population. So whatever you have you spend. And I guess with countries like Saudi, UAE, Kuwait, Qatar, where you have a richer population, a lot more people see the value of Bitcoin as a way to protect your wealth long term. Brian Cubellis (25:37.838) It's very similar to American demographics in general. You know, when you break it down, it's a similar stance on like, there's the, I think it came out like 90% of stocks in the US are owned by top 10% of individuals, or the top 90% of stocks are owned by 10% of the individuals. And you think about those individuals are that like segment you're referring to that are looking at trying to understand Bitcoin from a lens that is buying 25 million dollar lots versus the person that's trying to just make it to the paycheck. The paycheck doesn't have the time or the luxury to think about how can they preserve their wealth because they don't have a lot. wealth reserve. Yeah, agreed. Yeah. And it's so fascinating where we are right now. We're 15 years in to Bitcoin coming up on another halving. It's going to cut the subsidy from 6.25 to 3.125. It has felt like over the last two years specifically, obviously you've been with Coinmina for the last few years. And it feels like, I don't want to use the cliche, crossing the chasm, but it does feel like they're is finally some urgency on behalf of business owners like yourself and countries particularly to recognize like, oh, this Bitcoin thing's not going away. We've got to take advantage of it, prepare, understand, and then capitalize on the opportunity that lays ahead. And so what do you think the next two, three, five years look like for Bitcoin in the Middle East? You like I, my, I think that the Middle East is going to become a powerhouse in the mining industry. Uh, it just makes too much sense. I was going to say just to add a little more meat cause it's a, it's a big, um, I think that coupled with something that was really exciting when we started talking and just excited to go out there and what's happening is there's these like three, um, like tailwinds, I think that are working in favor of the region and what Marty just shared. And one of them. Brian Cubellis (27:38.934) It didn't end in the best way, but I think about, I think it was the Saudi Sovereign Fund that invested in WeWork. And there's this like, been this narrative, and it's happened, it's not just a narrative for the past 10 plus years, of diversification away from oil into emerging technologies. And so I think that's like one. The other one is just global macro in general, as we think about. you know, this idea, whether it's sovereign individual or this, you know, infringement of states rights on civil liberties and whether it's Dubai, Singapore, and these other regions, even Texas, um, where individuals are fleeing or leaving their existing places to go to places that treat them more like, um, customers than, uh, you know, employees, and really having to offer a good product. And then the last one is really, uh, the Bitcoin growth, like the story of Bitcoin as emerging technology. So it fit into that tailwind that I just described, but then also it ties directly to the energy source, which again sits at the core of the GDP of a Texas or the MENA region. I'm curious, like all those things combined, to Marty's point, like it seems very positive and bullish for that region for the next three, five years. And curious on like how you see it, but then also how the market's seen it in that region. Yeah, so I'll start off with an interesting point that you mentioned about like competition on residency. So. I'm personally Jordanian, okay? So Jordan is a country that's a three hour flight north of Dubai. It's a great country, but the economic opportunities there aren't that amazing. So I moved to Dubai. The process was quite easy. I moved my money here easily via crypto. You have the ability to liquidate if you need to. But most importantly is that it's kind of created competition between other places that you could move. I used to live in Zug, Switzerland before that, also moved for crypto reasons. But this crypto competitiveness or like the country competitiveness, like they are, it's like a customer acquisition play. So for example, Dubai has this golden visa program that allows you to get permanent residency for 10 years. And that'll allow you to plan better and basically set up your life here. Brian Cubellis (29:55.758) I don't know if anyone that's visited Dubai in months where it's not too hot. I think the overall feedback is it's one of the best places to live on Earth. I'm certainly biased. I've been here for the past five years and realistically staying for the foreseeable future. But yeah, Dubai has been able to attract so many different people from the crypto world and I would say that it is a combination of multiple factors. So first off is insanely high quality of life versus what you pay and the quality that you get. Dubai is unmatched in my opinion. Secondly is taxes. We have no taxes in Dubai. There's VAT tax and a few ones, but there's no personal income tax, no capital gains tax. And that's something that I guess shocks some people in Europe or the US where tax literally the government's your... Brian Cubellis (30:53.006) invited partner. And then finally, finally safety. Dubai is, I've never seen anything as safe as Dubai. You could literally, and obviously that is by design, and Dubai is very harsh on anyone that breaks the law, but that leads you to have a very, very safe country that is something that Bitcoiners and people that have made it in crypto appreciate quite a bit. So that's a bit on the residency competitiveness side. But to go back to the original question on where do I see Bitcoin and specifically mining in the Middle East? Okay, so historically, the region used to sell oil to the US when the US was a net importer. And now I guess that's no longer the case. And those countries, Saudi Arabia, UAE, etc. used to sell oil, receive money and keep it in treasury bills to make whatever yield that treasury is going to make. But the purchasing power of those treasury has constantly been going over time. So I think Saudi Arabia, UAE, and other countries have started to essentially no longer put the funds in US treasury bills. And that can be seen by the foreign ownership of US treasuries. That data corroborates the point that I'm mentioning. And they're starting to invest it in anything that's local that can allow them to move away from oil revenue diversification. sorry, concentration, so to diversify their revenue streams. I guess one example is what they've done on the sports level in Saudi. They now own and run the PGA, which is the golf tournament, and they did that through Liv, which is, I guess, quite controversial on how they did that. But the most followed sports, the most followed person on Instagram globally, Cristiano Ronaldo, now lives in Riyadh. That would have been... not been possible if the Saudis did not stop deploying the oil proceeds into treasuries and instead started to diversify them locally. So part of that exodus or part of that move of capital, I believe a big part will go towards mining. I think Phoenix Group being publicly listed in Abu Dhabi has opened up the eyes of so many different governments, government entities. Brian Cubellis (33:16.806) And yeah, it's likely become like a subject of national security. Are you mining your Bitcoin locally? Are you storing it locally? Like I sometimes think of custody and how much it's going to change in the coming 10 years. If like just imagine how much shit governments gave us about local data custody or local data storage. Like if you're using Amazon, I need to or at Coinmina when you use Amazon. we need to use the Bahraini cluster of Amazon so that the data is stored locally in a compliant way. That's on data. Imagine what they're gonna do for the ultimate form of money. Where do you need to cut your Bitcoin? So I think that in the Middle East, we'll see emergence of top quality custodians, but even beyond that, I think the types of players that will be involved will change. Now, every bank... during their board meeting, they're going to discuss whether they're launching a crypto or a Bitcoin offering or not. Because if BlackRock's offering it, then there's no excuse for any local bank or any investment company not to also offer it to its customers. So as much as some people hate the ETF and think it goes against the principles of Bitcoin, in my opinion, Bitcoin is anti-fragile and should be able to sustain any type of pressure, including the ETF. But there is definitely an impact on how financial institutions think about it. To go back and answer your question in a more coherent manner, how do I think cryptos and Bitcoin is going to look like in the Middle East in three to five years? It will solidify, the Middle East will solidify its spot as one of the top regions in the world for crypto and Bitcoin across services, mining, regulation, custody. And part of that effort would also be quasi-governmental, because one of the things that I guess in the United Arab Emirates and in other Arab countries is there, but not as common or maybe even frowned upon in the US or free markets, is government involvement. So, for example, Emirates airline, I don't know if you've gone on Emirates airline, it's insanely good. Brian Cubellis (35:36.41) And the impact of Emirates Airlines on the country and the city was absolutely amazing. Dubai Airport, Dubai International Airport, is the busiest airport in the world, and that is because the government spent smart money to build this carrier or their airline that has a total net benefit for Dubai. So I guess even on the mining side, I do believe that we will see government-backed, government-supported initiatives that... Um, yeah, we'll, we'll start a race for other countries to do so because yeah, there's like a, who's going to do it first. I think El Salvador was the first to be super aggressive. Um, and now we're seeing many countries follow suit, maybe not switching their local currency to Bitcoin, but working on quasi sovereign initiatives that will lead them to have a lot of Bitcoin custody locally. And Talal, you got to slow, you got to slow down. Marty's packing his bag. He's a. He's ready to go. I'm glad you mentioned the El Salvador thing because I've talked to folks that are very close there and while it's a very great thing to see, it's something I'm starting to learn in the Bitcoin space and the ecosystem is the first to the door may not necessarily be the ultimate winner. And when I think about like El Salvador, they established kind of a brand and a country and a way to do things. But the reality is you can take those learnings. and then start to apply them in a more efficient way. And as you mentioned, like the private public market, as you start to bring in other individuals from the private market into the public market in the reference to Dubai, you could start to just have a more kind of free market without the air quotes of like how you actually scale building a city or a country that's gonna be friendly to this ecosystem versus like from a bureaucratic nature, which my understanding that's a lot of what's happening in El Salvador now while trying to be friendly. to the ecosystem, it's actually been the opposite in the sense of when you're doing it brand new, you end up just with a lot of that natural kind of like, I don't know if tech debt's the right word, but it's that same like legacy debt that's built into everything else you do versus starting with some of like the framework, but then fresh eyes. Yeah. And I think that's like, by the way, that's the exact reason why we decided to go with Vara as our regulator. Because they're starting with, as they say in French, like carte blanche. It's a... Brian Cubellis (37:57.858) There's nothing there, you know, they're just starting. There is no legacy knowledge of how FX brokers work or stock brokers work. It's purely designed for digital assets or virtual assets as they like to call it. Um, and yeah, I guess we were one of the first to get licensed there. And so far it's definitely going in the right direction. No, starting carte blanche, like Tabula Rasa, blank slate. I guess it's a good natural segue into. the partnership between OnRamp and Coinmina. Like you do have the opportunity where I think here in the US, I think this last 12 months, specifically more specifically the last seven months with the lead up to the ETF approvals has proven that the regulators here in the United States are trying to like form fit Bitcoin, this whole new alien technology into centuries old securities regulation and financial regulation. that exists here in the US. And by starting with a blank slate in the Middle East, there's a really good opportunity to really set the standard. That's something we've been talking about on this show for almost a year now in other places. It's like, I do believe that Bitcoin as this alien technology with these native properties that enable you to custody and secure your assets, your Bitcoin in a very unique way that is simply impossible in the incumbent system. You can... if you have a blank slate, go out and create new standards and really push the ball forward in terms of actually leveraging the innovative properties that exist with this technology, something like multi-sig, multi-institution, multi-sig, mult multi-institution, multi-sig. I think this is where the market should go. And as an American, it is a bit disheartening to see that. they're trying to form fit Bitcoin into, again, regulation that was written over a century ago. Whereas it seems in the Middle East, you guys are sort of setting yourself up to really innovate on the regulatory front to ensure that individuals and companies are able to leverage these native properties that make Bitcoin a better asset in the digital age. Yeah, so I think 1933 is the securities law, right? It's, yeah, that's been a while. Brian Cubellis (40:24.614) None of us were even close to being here. Look, I think Dubai is a very ambitious city, which means that they always aim high. They sometimes don't necessarily hit the jackpot 100 percent. But on the ones that they do, yeah, I guess one of my favorite quotes is for His Highness Sheikh Mohammed, ruler of Dubai, which I guess the—don't quote me on the translation, but because it's in Arabic. But it basically says the biggest risk is not to take risk. So I guess that is the ethos of the city. And it only was fitting for them to adopt digital assets in the way that they did. And honestly, having lived in Zug, which previously was like a place where many crypto people moved to, I was there between 2015 and 2017. So. Now I see a lot more people that used to live in Zouk have moved to Dubai. Obviously the US is still the largest market in the world, and most of the innovation in Web 2 and in Web 3 has come out of the US. If you think of many of the applications that are built on Ethereum and whatnot, many of it has come out of the US, whether New York, San Francisco, etc. So I wouldn't count the US out just yet. Maybe the regulators and the SEC in specific hasn't been, has tried to box Bitcoin into the security wrapper. But I do believe that the perceived and potential upside of digital assets will end up winning and entrepreneurs and companies in the US will find a way around it because the upside is so high that they're incentivized to do so. Yeah, I think that ties in. something that Marty says often about states and states rights. And we see this in the US with Wyoming and Texas, Tennessee is another state that's really exercising kind of the friendliness, whether it's via mining, financial services, how Bitcoin as an asset is held. You said something that was about the risk or not to take it. It reminds me of a, you know, kind of I don't watch football anymore, but the Cowboys, you know, they just got completely crushed and this idea that I was watching the game. Brian Cubellis (42:48.422) And I was thinking of this idea of you have to play to win. You can't play not to lose. And when people are tight, when they're kind of worried and like they have a seat, they have a position that's like at the forefront in this analogy, like the Cowboys were one of the best teams from a record perspective. And that would be like an incumbent financial institution or just an incumbent in the market. You kind of play it safe. And the reality is the market doesn't. doesn't want that. It needs you to keep moving the puck forward. That's how you become. I mean, you think about Amazon and how like, I think what's the whole thing. Relentless.com still reverts back to amazon.com. That was he owned that domain. And so this idea of you have to play to win, not to lose. So you have to look at the opportunities with that fresh slate and then think about the innovation. And so like in reference to Marty and the partnership, I think the education is so important. I don't know if we'll pull it up, but it's on Coimena's website. And I think we'll probably post it somewhere. But the first piece we partnered was with Bitcoin, Bitcoin's full potential valuation by Jesse. And it's important because in the industry, you rarely see kind of the Bitcoin native kind of like education that lives within that meets the market on the asset management finance side where they are. It's generally like one sided or the other, where you kind of have. the bitwise is in these firms that are putting, you know, 10 baskets of ETF or 10 baskets of cryptocurrencies in a in a bucket and just selling it to the market. Or you have the other side that's telling the market, hey, you know, you got it. Now your keys not your coin, but there's no like meeting them where they're at, in the sense of like, how do you evaluate this? How do you think about it as a in the global macro context, and from a portfolio perspective? And so I think that it's going to And that transcends all borders, right? It's the market's the market from assets, whether it's equities, commodities, bonds, and the way you size it proportionally and the volatility exists in Dubai, in Texas, in Singapore, all over the world. And so I've thought about that deeply as far as working with Coinmeno and the research and some of the other things that we're discussing and that bringing what we've kind of put together with Jesse, Brian on the team to be able to help transcend that idea that Bitcoin's volatile. Brian Cubellis (45:00.802) Bitcoin doesn't exist. There's a bunch of error between zero and Bitcoin's current price of $43,000. We all know and most people listening that there's a lot of fundamentals baked in. But the fact of the matter is the market really doesn't know it yet. And so be able to get that information out there is really important. Yeah. So it's my colleague Zaid who leads content marketing education at CoinMina. He used to send me on ramps reports and we realized that we are referring back to pretty much in every conversation. So, yeah, I guess it was, we're very happy to have this partnership. And I guess us being educated through Jesse's writing, and he has such an amazing digestible style of writing that we need to figure out how we translate his style into Arabic, but I'm sure Zaid will be able to sort that out. And yeah, I mean, one of the biggest, factors for No adoption not going faster than it is education I think it's only a matter of time until We see Bitcoin integrated into curriculum at school like there's no reason why Kids don't learn about the importance of money and how hard money differs from soft money Yeah, they're an early stage and maybe At the coin-mina level, school kids aren't really our target addressable market. It's more so funds, investment managers, banks, et cetera. But yeah, I guess it's an area that we spend a lot of time and effort and resources on, even though it doesn't have, let's say, tangible direct ROI. But it does have a very, very important impact. Because without it, it's impossible to... acquire and retain proper clients. Like you can't convince people that don't understand Bitcoin properly, don't have the same conviction as people that properly understand it. And through those reports is how we aim to make our customers more conscious and aware of how groundbreaking this technology is. Yeah, that's exactly right. I think it's like the chicken or egg thing. I think our biggest cost center and investment is in education. When you think about Brian Cubellis (47:26.646) the pods and the content produced and the individuals that have joined the firm because we've seen it. I always joke like for the next 10 years, every company that navigates or leads in this industry will have to be an education company first and then they'll have their core service because it's just still so foreign, these concepts, the asset, the volatility, the custody. And there's a big component, especially in financial services, of building trust and all of that. And so that content and these podcasts, they build trust over time. Um, um, like they, they build it, whether people know it or not, uh, in the sense of you build relationships with individuals, it's very hard to fake authenticity over every, every week through the writing in these different forms. And when that happens, the trust, uh, accompanies it. And then that's how you're able to kind of like pull down that guard of, Oh, well, you're just trying to like take my money. Or if you think about the past 15 years and the craziness we've seen in the market where your counterparty, the difference between your counterparty being good and bad was effectively a zero in what you ended up in your allocation. And so that still exists and it'll probably exist for the next five years because people don't forget that easy that this stuff has happened. And so that trust and that education is very important in the front end. So then when they're ready and their ears and eyes are open. It's like, okay, that guards down as far as like, okay, this is a good actor. Now let's just have the discussion on like, what, you know, what do I need? How do I custody it? What's an allocation? How do I think about this from an inheritance perspective? All of those things. You can't really get there unless you have trust built be built into the, to the process. Yeah. Fully agreed. One thing... sorry I got... Clear this right, it's 60 degrees in the studio this morning, so Shivering here as we talk, but one thing I wanted to touch on Alan Farrington's written a lot about this. There's a lot of discussion. There's a bunch of Bitcoiners I follow from the Middle East that are adamant that Bitcoin is the Sharia compliant money and From the people that I follow they seem Brian Cubellis (49:37.558) to believe that really that meme or that idea hasn't really caught on in the Middle East. Is that conversation happening in the circles that you're in, Talal? Have you heard people really pushing Bitcoin over fiat currencies because of this sort of the way it fits into Sharia law from the finance perspective? Brian Cubellis (50:06.482) interest basically. It does not allow, like basically if I'm gonna, you know, you need to do a specific economic activity that adds value for you to get paid. You can make profit or loss, but debt essentially or interest is not something that is allowed. And if you think of how the dollar is based, how many currencies that are pegged to the dollar are based, it is literally by the government issuing treasury bills that have interest in order to create... this dollar. So inherently by design, it cannot be Sharia compliant. So gold, which is a Sharia compliant asset or Sharia compliant money was the preferred method of transacting for thousands of years. And then as the world became more global, as the world became more global and you needed a better way to transfer value because gold is a pain in the ass to move and store and whatnot, those governments ended up going for a non-Sharia compliant form of money that is based and pegged to the US dollar. Now with the emergence of Bitcoin, you have something that is similar to dollars but digital. So I've actually looked into this quite heavily and Bitcoin is a Sharia compliant asset in my opinion. But again, Sharia compliance is, there's no one that plays the role of the auditor for religion, you know. It's as per your perception. For example, you can get an auditor to testify your financial statements and tell you if you have enough capital or not, but you can't really get someone that definitively says it's Sharia compliant or not. It's not like an ISO approval or like a FDA approval for a drug or something, you know. But there are scientists, or I guess they call them muftis, like clerks, that look into this and give their opinion. Last year there was a very popular clerk in Saudi that came out and said Bitcoin is Sharia compliant, and he had a very elegant analysis on why. At Coinmina we don't offer margin, we don't offer leverage, and we don't have any interest bearing instruments, so we are Sharia compliant as well. Brian Cubellis (52:31.49) I guess Bitcoin specifically is, by the way, Sharia compliance matters in some markets more than others. If you look at the United Arab Emirates, where over two-thirds of the population, or even more, is not local, is not Middle Eastern, is not from the country, Sharia compliance is less important, I would say. Brian Cubellis (53:00.118) Muslim, Sharia compliance becomes a significantly more important point. But in principle, Sharia compliance revolves around risk mitigation and all of the principles of Bitcoin are fully aligned to Sharia law and finance, which I actually think is a great way to look at things. it will open up markets in Indonesia, in Malaysia, in Saudi, where Islamic finance or Sharia compliant finance is the preferred way of doing business. Yeah, and I think the overarching, tell me if I'm oversimplifying, but from like the finance side, there's like debt based money, right? Which Bitcoin isn't, it's, you know, gold and Bitcoin bear assets. But then in finance, from like a usury perspective in a future state, kind of like stumbled on this and talking with a client about you know, offering products that would offer yield, right? Because you don't want to sell your Bitcoin in a future state if you're holding Bitcoin. But it's this idea kind of flips on its head of an equity based system versus a debt based system where you'll you can generate quote unquote yield or return on your Bitcoin. But it's because you are investing in a productive entity and they're providing you returns on the equity that you've invested in. And that is your return versus the alternative of what we exist today, where you you know, you're basically taking out debt. Like, and the way I think about this, the most simple form is like higher education, where you take on the debt and it's almost like shackles that exist post-college and you're kind of strapped to that. And sometimes you're strapped to it for the rest of your life, where if there was an alternative that somebody invested in you as an individual or invested in the productive upside of a business, and they were participating in the upside of the entity that you formed. And also the downside, but that also makes for just a better society as far as like that person now wants to help you versus just get that dividend return. Does that make sense in the sense of like how a productive society would form around that versus a debt base? Yeah, so actually, this is a very elegant way of explaining what Sharia law says about debt and equity. So equity is one of the few things that Keynesian, Sharia, all different economists agree that it's the purest form of alignment of incentives. Brian Cubellis (55:23.746) And that's why in Sharia, equity is always preferred and that's not allowed because in equity, we win together and we lose together. So I'm incentivized for you to win and if we lose, we lose together. In debt, I could get screwed, but you still get paid your money. So it doesn't align our incentives and that usually creates, yeah, incentives that lead to suboptimal outcomes. So... Yeah, I'm personally a way bigger fan of equity. And I guess here we've looked at two things. The base asset, which is not debt-based money in Bitcoin or gold's case, but also financial services, because you could lend out Bitcoin for interest. And even though Bitcoin is a Sharia-compliant asset, that financial service or that transaction wouldn't be. So yeah, I like how you combine it with the equity type. And the main concept behind that in Sharia basically all parties to win and lose together so that you think of yourself as one unit and not me wanting to win on your behalf. Brian Cubellis (56:33.438) Yeah, incentive alignment is very important. And we've seen what the proliferation of a debt-based society has done culturally to the social cohesion here in the United States and other parts of the world over the last 150 years. And that's part of the reason why I'm in Biquin. I mean, just from the Christian perspective, that's why Jesus went into the temples and chased the money changers out, is because they were doing something that was deeply immoral. From a from a biblical perspective and it is really fascinating that When you first get into Bitcoin, you really don't think about how it can apply to religious law across many different religions, but then you dig deeper and you dive in and it's like oh wow like this is actually a Money that has been written or not Bitcoin specifically but money has been written into all the religious texts throughout history and it's funny that we're sort of rediscovering moral money through Bitcoin as time goes on. It's just really weird how this all plays together. It's also weird that we got kind of like Psyopt into believing that it doesn't make sense. We had Matt on and he was talking about OpenSATs and the patronage that they've done and it's like so foreign that he's doing something great but that's how historically you funded things previously and it's like this idea of who will build the road is like well if we're all making you know, we want to give back to society, we will produce productive things in the world because you want your kids and you want the people around you to not live, you know, in the gutter. And this idea of like, we can't, we wouldn't do it ourselves. We need the government to make sure that they build the right roads and the right, you know, systems so that we're all governed appropriately is just so foreign. But this is how things have been done for thousands of years, specifically to what Marty mentioned. Yeah. I mean, honestly, Bitcoin is, I think it's absolutely fascinating how people from all different walks of life look and determine what's good in this asset. For example, you mentioned the money changers and how the relevance of that in the Christian religion, but it all boils down to what you as a human think is good or bad. That based money, if you think about it, if you want to say good or bad, I think... Brian Cubellis (58:55.178) And anyone that spends time studying it will be able to come out with a conclusion that it is overall net bad. And when I say net bad or good, I know that's a very overgeneralization, but I'm talking about society in general. And Marty, I think you nailed it on the head when you said the impact of the past 150 years is there. Society is not progressing in the way that I think it should. And debt-based money plays a very big part in that, for sure. Yeah, the other thing that's very fascinating is, so I think, Tal, are you going to go to the Bitcoin Oasis conference? Yes, yes. In Dubai? Okay. So I think it's, is it the first Bitcoin only like conference happening in that region? Maybe of this scale, yes. This scale? Yeah, of this scale, yes. There's definitely some bit, but yeah, this would be, I'd say the. Yeah, one of the more, the bigger ones that are only Bitcoin focused. Yes, so we look forward to meeting in person. We'll see if we can convince Margie to go out. One of the things that's been fascinating talking with the group there, Lauren Lena with the UA Bitcoin Association, is they were describing a lot of the conversations and the way business is done in the region. And they talked a lot about reputation and... you know, trust in looking, you know, individuals in the eyes and, you know, shaking hands and all the things associated you come out and it's not about doing a deal or selling somebody. And I looked at him and I was like, this sounds a lot like Texas, you know, we were just, we wore different hats over here. And I was like writing down, we just wore different hats and I'm writing down like, if you made a case for somebody to move to a friendly region, they were coming from, let's call it New York City. and you're like, and they were interested in getting into Bitcoin or working in digital assets. And you're like, it's going to be hot, but there's heavy oil and gas from a GDP perspective. It's attracting a lot of talent in the ecosystem from a Bitcoin perspective. The taxes are very friendly. And it's all really trust and reputation based, how things have been done for hundreds and thousands of years. Would you be describing Texas? Would you be describing Dubai and some of the other countries that you've been in? Brian Cubellis (01:01:11.926) as they're operating. They're very similar. And so it's exciting to be participating and then finding out that there's a direct flight from Houston is going to make things a little easier as well. Very nice. Yeah, it's you basically described both. You could replace Dubai or Texas in the description that you've had. And yeah, I've thought of this before for sure. It's the first time that I've heard this or thought about this. And yeah, excited to meet you guys in person. Hopefully Marty also, now that we know that there's a direct flight from Houston that hopefully makes the pitch slightly easier. And it's not 16 days. It'll be way better. I'll have my wife text his wife cause she's not too happy. So she'll... When is it? Next month? Yeah. February. February, if anybody wants to jump on the Emirates train, February 6th through 9th or 7th through 10th. I need to visit the Middle East. I've never been. We'll see if I can do a three-week turnaround here. It's time. If there's a will, there's a way. And honestly, it's a good event to come to. And it's a very good time to visit Dubai in general. Like February is not as packed as New Year's, but it's also beautiful weather. Yeah, would love to have you here. I mean all the Bitcoiners I know that have moved to Dubai absolutely love it. They rave about it. And that's a... I need to add some stamps on my passport so this could happen. It's gonna happen. By the way, I don't think they stamp, they no longer stamp in Dubai, you just scan it. You just scan it. Yeah, he just got it. There's no more steps. We scan the pass or the eyeballs because it was. So actually, if you're a resident here, you don't need to scan your passport anymore. You just walk through the door. That's obviously your face is being scanned and they know you're coming in and out. But the other physical stamp, I don't think exists anymore. Brian Cubellis (01:03:22.55) But we'll get you one for like as a souvenir. We can, we can easily do that. It's for, yeah. So you go through your passport every once in a while. You look at the stamps and say, I remember this trip to Costa Rica. I remember this trip to Latvia. I remember this trip to Dubai. It's a trip down memory lane in the, in the passport stamp book. I've definitely done that before. That's that's been one of the most, um, the past few weeks, I think, um, the West in general, and this is a maybe a generalization, but a little bit ignorant to what's happening in the Middle Eastern region and the prosperity that's going on. I think I kind of understood that what I was more ignorant to was just the friendliness from making it easy, specifically in Dubai to move there. You talked about it. Laura was on Stefan Lovero's podcast. And the idea of getting a visa, establishing a country in the region is in, I think, getting, having only be in the country twice a year, is that correct? It's very easy to actually set up shop in that market. Honestly, it's not easy only to set up shop. It's easy to get integrated into anything that you put effort into. Like, and something that I guess I'm clearly a Dubai fan, but I moved here five years ago and have been super hands-on when it comes to anything, crypto, anything, Bitcoin. whether it's giving feedback on regulations, whether it's setting up my entity here, whether it's bringing, trying to convince people to move to Dubai. I was honored and surprised last, in 2022, Sheikh Mohammed, the ruler of Dubai, elected an advisory board for the Dubai Chamber of Commerce. I'm not from Dubai, and I was elected on that board by his highness. And as a foreigner that came to the country to... to make a living and live a good life, it was shocking because where I'm from, if you have to be not only local, but you need to have gone through a specific, let's say path in order to reach such a government advisory position. I guess Dubai is, it pushes the boundary across so many walks of life that it's amazing. And I... Brian Cubellis (01:05:44.631) can't recommend it enough and hopefully, Marty, we're able to show you in person what this city is all about. I love the hard sell. You don't have to sell me that hard. I want to make the trip. If it's not BitOasis, I'll be there in 2024. We do have plans from the 1031 side of things to get over there at some point this year. Maybe it's in a few weeks. But to all, this has been incredible. Is there anything we should wrap up with Michael before we end it here, in terms of what you guys are doing together? No, I think we covered, I'm extremely excited. Like you said, even more so after this podcast to get out there, it's going to be a good, um, good time from all the things in the programming going on and being able to hopefully go to dinner with you and Zaid and, um, it's going to be, it's going to be very good. Yeah. And Talal, what, uh, what can we expect from CoinMan? What are you excited for this year, the next few years from the CoinMeanup perspective? Yeah, so on the coinmina side, the goal is to onboard a million users and get Bitcoin in the hands of a million users. So that's one of our main goals. We set up about two years ago. Now we're the largest of the local players. The goal is to be the biggest crypto business in all of the Middle East. So that includes the Binance, the Crypto.com, the Coinbase and whatnot. And yeah, I guess helping. improve people's lives by giving them access to a superior form of money. And I believe that if we do that properly, then we'll be able to have a very profitable high growth business. So like, yeah, you're able to do good by doing good, and you do it for yourself as well. Like we're not running a charity, we're still making money. But you're doing it in a way that benefits the public, which obviously makes you and the team feel way better about what they're doing. Brian Cubellis (01:07:43.542) they're doing. So, yeah, very excited to continue growing in the Middle East and expanding our reach as much as we can. Yeah, it's the best part about working in this industry. You don't feel, you don't feel dirty going home to work to your wife. It's like, I feel like I did something good today. It's not a zero sum. It's not a zero sum game in general. It's a forever game. Yeah. Well, Talal, thank you for doing what you do. You guys are crushing it. at Coimena and I'm really excited to see what you guys do over the next few years and really excited to meet in person at some point this year, maybe in a few weeks. We'll see you go home, talk to my wife. Maybe I'll be in Texas as well. You never know, I visit the US often as well. So we'll hopefully have both. You guys visit Dubai and I'll love to come see you in the US as well. Yeah, the Texas-Dubai connection is something that needs to be strengthened over the next few years. We have a lot in common. fully agreed. Well, gentlemen, it's been a pleasure. I learned a lot this episode. Lal, thank you again. As I said in the beginning, the Middle East is a part of the world that I'm frankly not as well educated on as I am in other parts of the world and I'm extremely fascinated watching from afar what's happening across the region in terms of Bitcoin adoption and integration into industries It's probably one of the most exciting parts of the world right now, specifically Dubai, how the city is really leaning into innovating and leading in the digital age. It's a good example to set. Hopefully it induces FOMO for United States entrepreneurs and regulators to wake up and say, hey, we're going to get blown out if we don't adopt this type of strategy as well. So you're sitting in a good spot and appreciate you coming on. Talk with us today. No, thank you, thank you. Great, thanks so much for your time guys. Really appreciate it, really enjoyed it. All right, that's all we got. We'll be back next week. Jesse will be back as well. Congrats on the house, Jesse. Congrats, Jesse. See you guys. Thank you.