The Last Trade E076: Bitcoin Enables Ethical Finance with Harris Irfan

Jackson Mikalic (00:01.75) All right, everyone. Welcome back to The Last Trade. This week we have my co-hosts Michael Tanguma and Brian Cabellus and we are joined by Harris Irfan. Harris, great to have you on the show. We were just chatting before we hit record here. We feel like we've known each other for a while, but it's actually our first time we're conversing. But of course I've been following the work you are doing with Ralph in the MENA region. But thanks for coming on. How are you doing Harris? Harris Irfan (00:12.456) Nice. Harris Irfan (00:26.877) Great, thank you. Thanks for having me, Jackson. Jackson Mikalic (00:30.25) Excellent. Well, we could get right into it Harris. Like I said, I've heard you on plenty of other shows, but really excited for you to come onto The Last Trade. think you'll be bringing a lot of fresh and new perspectives to a lot of our audience. maybe the best place for us to start would just be to give some insights and overview into your background in traditional finance, Islamic finance. How has your career progressed over the decades and What do you find yourself working on these days? Harris Irfan (01:02.025) Okay, sure. Well, I'm an investment banker by training. I started out in a small British merchant bank in early, in the mid 90s. I used to be a management consultant or at least a trainee before that straight out of university. And I worked in an area called Project Finance. So Project Finance is the financing of infrastructure, roads, railways, hospitals, schools, and I felt that it was a somewhat more noble endeavor in the city of London than a lot of the other stuff that investment bankers do. And, you know, for a while that was my field. We worked in a lot of the, what we call, public-private partnerships, or PFI in the UK, the Private Finance Initiative. This was the Tony Blair's government introducing semi privatizations to infrastructure in the UK, which then was rolled out across the world. And I moved to Deutsche doing the same work in the in about 98. I was with Deutsche for 11 years. They moved me to Dubai. We opened a new office in Dubai in 2001. And I was just fortunate that around the time that I arrived in Dubai, they'd started up a new financial center called DIFC, which is the Dubai International Financial Center. And I guess I was just on the right place at the right time. So I arrived in the region with the remit of originating Deutsche Bank's corporate finance business in the region, which is quite exciting for somebody who was really a junior to mid-ranking banker. And actually, when I arrived, a lot of clients said, can you do these deals on a Sharia compliant basis? Now, we didn't really know anything about Islamic finance. It's just something I sort of vaguely read about. But I co-founded the Islamic finance team at Deutsche. And it turned out that Deutsche was almost the perfect place to found a team that did Islamic finance because up until that point, Islamic finance had been a sort of very parochial backwater, right? Very sleepy, very stagnant. It had originally been established in the early 60s in an experiment in Egypt. Harris Irfan (03:12.999) that graduated into a commercial, commercial banks being launched in Dubai and in Saudi in the mid seventies. And then the Malaysians kind of took up the baton in the eighties, but it sort of had been very restricted financial products coming out of the Islamic finance space were, you know, not very exciting. Didn't really cover a range of different asset classes and structures. So here we were this sort of what was at the time a very entrepreneurial investment bank really, you know, snapping at the heels of the big American banks, the Goldmans and the Morgan Stanley's and the JP Morgan's and Deutsche Bank was in a sense a more entrepreneurial place than the rest of Wall Street in the city of London. And we decided that we would take our best brains from places like our equity derivative structuring team. and get them to solve the new puzzles in the Islamic finance space. So Islamic finance had never previously had structured investment products or hedging and treasury management platforms or big leverage buyouts or acquisition finance through Sukuk or Islamic bonds. These were brand new concepts and we essentially invented every single one of those concepts in the early 2000s. So there was a seismic shift. It was almost you could call it Islamic finance 2.0 when this newcomer comes along in the Middle East, sets up an office in D.I.F.C. and starts to attract the world's top scholars to advise us. We had somebody that we called that was known as the grandfather of Islamic finance. It was a gentleman called Sheikh Hossein Hamid Hassan, a theologian and comparative lawyer and an expert on contemporary finance. And it was that kind of individual who helped to shape an architect, the financial products that were being put out for the first time. And he liked working with us, right? It's the first time that he had come across these sort of Western educated, quite dynamic investment bankers. been used to these sleepier parochial domestic institutions. And there's never any pushback really. And we pushed back in a very respectful way. Harris Irfan (05:30.087) So we would say, Hey, what is it possible to do? You know, a structured investment product that works like this. And if you'd ask that question of the, what they call the Sharia coordination departments of the Islamic banks in the middle East up to that point, you know, these are gatekeepers to the scholars and their standard response would be doctor says no, right? They don't bother to tell you, okay, we can actually, we can figure out a way to make these products work. But for the first time we were speaking direct one-to-one with the scholars and we were saying, okay, We know that you can't do this traditionally, but what if we tried a different contractual structure? What if we tried to solve this puzzle and look at it in a different way? And remember, you know, derivative structuring teams in in bulge bracket investment banks are basically mathematicians and physicists. They solve complex puzzles for a living. They are paid for their cleverness. So here we were with a new set of rules. This time, not only is it tax and commercial and legal and other things, but this time we're overlaying Sharia parameters. So there is a body of jurisprudence in Sharia law, which deals with commercial and financial law. And how do we implement those principles into a financial product? And we're just taking a set of rules and it's a puzzle. We're solving that puzzle. So this was the first time the financial services industry had taken this approach to Islamic finance. And the net result was we essentially reinvented the industry and it took off. So that's really my introduction to Islamic finance. And I guess the story moves on a little bit. I left Deutsche in 2008 and did a few other things after that. Jackson Mikalic (07:08.782) That's excellent Harris. You know one thing that stuck out to me in that journey that you took us through for Islamic finance from you mentioned the 60s to really present is that you described it as an experiment early on and I can't help but see that there's a lot of parallels with how Bitcoin has I guess traversed the past decade and a half from an experiment or this idea that was shared on a mailing list in 2008 to going live in 2009 and over the course now of 15 nearly 16 years of being live, things have changed quite dramatically. We've gone from an asset or a technology that doesn't have a market price to something that is now trading nearly a $2 trillion market cap. I'm sure we'll get into, but we think that it will go much further than that. quite interesting to hear your background as it relates to just being on the earlier side and really bringing all the sophistication of what you mentioned, Deutsche Bank and investment banking from London into the Middle East and aligning with those Sharia principles in helping to really pioneer this new form of finance. Very interesting. Michael Tanguma (08:13.321) Maybe, and maybe did before jumping in to it, you guys hearing feedback or no? No. Okay. Cool. so I think there's a couple of dynamics that we'll get into later in the show, but here is something you mentioned about the existing, financial partners that were in the middle East used to saying no, and finding this healthy friction between the West and the innovation in the middle East, I think is something that Jackson Mikalic (08:21.966) You sound good. Harris Irfan (08:22.024) We hate you. Brian Cubellis (08:22.917) Sorry. Michael Tanguma (08:43.423) There's a conservative nature in the Middle East and then there's the natural innovation happens to the West that we're starting to see that balance or that dynamic start to intertwine more as we have like a global asset. But then there's something else that you referenced that following your work that really resonated early was this notion when somebody grocks or gets Bitcoin, they start to think about from first principles, other parts of the market and realizing that. the foundation might've been shaky across the board. wasn't just in the money. And so when the hearing you speak about Islamic finance and some of the things that maybe kind of got, you know, changed or manipulated, it made complete sense because I gravitated all the way to like Austrian economics in the sense of like Islamic finance and Austrian economics. have these like connotations when somebody hears them and they think of this, like, it's almost like a pejorative in a roundabout way. He's like, this like fringe versus like Islamic finance. I think you. like to use ethical finance and Austrian economics is like just like practical economics. It's just first principles, obvious thinking. And so just curious maybe to add a little bit light of like, what is the, you know, Sharia compliant and ethical finance around like, know, reba and usury are really easy examples of maybe there's a, there's way to align incentives that do not, you know, put the person that is the participating in a secondary position, but in, in put together, because I think in the West, that's something that's been missing. And most people don't even know that there's any way to construct in a financial or participate in a financial construct without effectively being on the other side of it and having, you know, a long-term obligation by the way of debt. Harris Irfan (10:22.813) Yeah, I think Jackson picks up on something interesting there, this word experiment. I would contend that this experiment started with good intentions back in 1963. And the specific experiment is something called a Mitgomer experiment. Mitgomer is a town about 80 kilometers from Cairo and a very famous economist set up what is essentially a social savings bank, a deposit institution. takes deposits from local people and that money is invested in local industry and then the profits from that local industry is shared with depositors. So it's a very simple investment management relationship and that's the essence of the Islamic economic model. It is risk sharing and it is real economy. So it's got to have some real activity taking place. So this modern concept of financialization is anathema to Islamic finance. It just doesn't gel. So creating Islamic financial institutions today and Islamic banks based on fractional reserve banking, which of course is money creation, that's absolutely not within the boundaries of the Islamic economic model. So as much as I think there has been much progress in the Islamic finance industry over the years, not all of it has been positive. So we talk about this idea of an experiment that maybe didn't hold true. to its ideals, it's kind of moved away from that. And we can analogize that maybe to Bitcoin. We have this experiment where we're talking about sound money, low time preference, resistance money, freedom money. We use these concepts as Bitcoiners, as maximalists. And then we see what's happening right now. We look at Bitcoin ETFs and BlackRock's getting involved and governments are talking about, maybe the digital currency is not a bad thing. Why don't we try CBDCs? And does that experiment hold true to its original ideals? Or does it end up becoming distorted? My contention with the Islamic finance industry is, unfortunately, it has become distorted. We've ended up with these ideals that talked about this investment management relationship where depositors put their money in and they take real risk on real industry, the real economy. And what we have now is Islamic banks, which are frankly regulated by central banks, just like Harris Irfan (12:39.733) a conventional, traditional financial institution and they have the power to create money from nothing. Well, if you have the power to create money from nothing, then money on money or money from zero is itself a definition of riba. The word riba in Arabic is a word that means surplus or excess. It doesn't just mean interest. It's actually any transaction from which money can be created from nothing or from money itself without there being any real underlying activity or trade taking place. the scriptures in Islam are very clear on this. Trade is halal, it's religiously permissible, whereas riba, usually interest, creating money from nothing is forbidden. And I think one of the difficulties we have in the Islamic finance industry is we've ended up with these Islamic banks that are regulated by central banks. who have a duty to the whole financial services industry. And in order to level the playing field, they've decided let's just treat them exactly like banks. So we give them the license to create money every time a credit transaction takes place. Every time you lend money, whatever fancy sounding contracts you overlay on top of it, and we use fancy Arabic words like mosharak, amudara, baistisna and so on, and we analogize them to things like lease structures. or investment sharing structures or partnership structures. But underneath all of this, you have an institution that has the right to create money from nothing. New digits appear in your bank account. How did that happen? You created money from nothing. So fundamentally, there is a disconnect. And I would like to see the Islamic finance industry return to those pure principles that were espoused back in 1963 in the Mid-Gamma experiment. I believe it's possible. A lot of bankers will disagree. There's a controversy in the industry right now. There is a standard setting body in the industry, a global body called AOFI. It's an organization that sets the commercial parameters, the legal and sharia parameters for certain, for all financial products in the Islamic finance space. And they just introduced or are about to introduce a new standard called standard number 62. Now AOFI standard number 62 says that all sukkuk, meaning Islamic bonds, Michael Tanguma (15:02.588) you Harris Irfan (15:07.539) should henceforth be issued on a real economy risk sharing basis in which there is asset transfer or ownership. This, by the way, is a grenade being thrown into the bankers trading floor, right? Because currently the Sukuk, the Islamic bonds that they issue for companies are essentially bond like. They have a purchase undertaking, which says that the company issuing this bond, this Sukuk, will purchase back that bond or Sukuk at maturity at par value. So in fact, the risk is the credit risk of the obligor. It's not a risk of some underlying trade activity taking place, no matter what these fancy documents say underneath. Usually they'll do something like they'll securitize or they'll wrap a property owned by the company into the SPV that issues the bond. And they say the rent coming from that property is the coupon being paid to the Sukuk holders. But the reality is you've got to purchase undertaking. You've got the credit risk of the obligor. So how is it different from a bond? And of course, if you tell the bankers, guys, you can't do this anymore. You have to have a real economy trade underpinning that Sukuk in accordance with this new standard number 62. It blows their mind, right? It melts their minds. They simply can't comprehend how you could have a non-debt financial instrument. And I think it's this sort of received wisdom that the world has to run on financialization. on this idea that debt must proliferate throughout society, throughout the world, that we must all become economically dependent on this institution that we call a bank. It's a master slave relationship. It's completely asymmetric. And that's the problem that banks have, that bankers have. And that's why they can't move away from these concepts of the current types of secuk that they have. I am very keen to return economic finance to its roots. Go ahead. Michael Tanguma (16:59.901) Yeah, that, sorry. Jackson Mikalic (17:00.93) Yeah, that's Michael Tanguma (17:03.808) That's very well put. It's something Brian and I were just talking about these concepts to somebody that understands Bitcoin. There are like a raw shark, a raw shark test. Like in you think about multi-institution early writers and what you just described is there is no question it has to go there with a sound money standard because of this came up last week in conversations around what's the cost of capital. And when it's the money sound, it's like, well, the cost of, know, GDP growth plus something, because if you're going to move the asset, right, the deflationary nature of the asset. And your reference point to master slave relationship to bring it to something tangible, especially here in the United States, but I think this is in most Western countries is I think of college education. They print money out of thin air. It's a negative incentive alignment because you assume you have to go there. You basically have shackles post leaving from from a thing that gives you your effectively haven't gotten anything if everyone gets the same degree. but now you have to go to that job. You have 150,000, a $200,000 debt. The actual product is bad because the alignment isn't there versus if there was an actual public private or private partnership and you have some kind of profit sharing or there's a new term that's been coming up the past decade. I think it's called income sharing agreement where like how good you educate and where you go, then you benefit. So there's all these different ways that you can construct this existing system, but we just haven't had the incentive. Harris Irfan (18:21.427) Mm-hmm. Michael Tanguma (18:30.472) And we all know the negative alignment post college, the depression, all the things people do working at Starbucks with their degrees and all the long like standing manifestations that this have. This is a very small micro example, but again, going back, it's not necessarily just Islamic finances, just ethical finance and doing things in a way that aligns incentives forever. Harris Irfan (18:49.629) Yeah, I don't even think it's a micro example. I think it's probably the most egregious example of that master slave relationship. know, student debt is, I find it a fascinating subject and I don't know why it's being called, it's not being called out by more people. And you take a young person at the start of their career, you load them up with a hundred, $200,000 worth of debt, which they probably have to pay off for a great proportion of their working lives. It's astonishing to me that we've created an industry in which education is just corporatized, you know, it's run by private equity firms and you'll sell all manner of terrible university courses, I don't know what value they have, just so that university can make more and more money and at the end of it you saddle these students who have been incentivized, they've been persuaded to take on these, you know, third rate degrees at universities that wouldn't previously have been considered universities, at least that's position that's something that's happened in the UK over the last 20, 30 years. you know, and they've got these, in my opinion, worthless pieces of paper in their hand and they're saddled with a huge amount of debt. I think that is a tremendous, you know, evil that's been perpetrated on society. to saddle people with so much debt. It's just not necessary. We don't need to have that debt in society. And the reason why inflation exists is because we have to pay off our debt. We've got more and more of it to pay off. So now you have two. In my parents' day, one member of the household would bring in the salary. That was enough for everybody's needs. And now at the very least, households have at least two breadwinners in order to just meet their basic needs. Society is fundamentally changed and that is a direct consequence of inflation caused by money supply caused by the D-pegging of the dollar since 1971. These are all knock-on effects. Any system that we can find that reverts us back to a fixed supply of money something that is sound money something that is scarce something that is finite something that is fungible something that cannot be manipulated by a small group of people Harris Irfan (20:59.975) That's something we have to return to if society is going to return to those wholesome values that we had. Jackson Mikalic (21:07.574) Absolutely. Brian Cubellis (21:07.619) Yeah, all really good points. One thing I wanted to mention, going back to the analogy being made between sort of these two experiments, right, whether it's Islamic finance or Bitcoin itself, I think there's another sort of element of that analogy that we can pull on where, you know, if you look at all of the crypto assets that have proliferated post Bitcoin, right, like those are effectively you know, extension of the original idea, but then losing the principles, right? Losing those initial sound money, proof of work principles, wherein anyone can spin up a new currency, if you will. And so I would liken that to some of what you described in terms of, you know, adding complexity to these things so that you sort of skirt around the rules in some way. So just wanted to pull on that thread of like, you know, the analogy is certainly meaningful in that sense. curious, Harris, in your view, you know, or I guess first, you know, when did you come to Bitcoin in this journey of studying Islamic finance? And I guess when did it begin to click for you that maybe this is a roundabout way to sort of reinforce those initial principles with a sound money? Harris Irfan (22:29.417) Yeah, so in 2014, I published a book called Heavens Bankers, which was essentially a description of what had happened in the Islamic finance industry in the previous sort of 15 years or so. and my intention was to show readers, and this was not necessary for finance specialists, it was a book intended for the layman, it was to show readers, know, this is an industry that has been born fairly recently, its intentions were good at one point and it's been somewhat distorted over time. And once I published that book, I started delivering lectures on the subject. And I think I was delivering a lecture in 2017. somebody in the audience said, it's the Q &A session, they stuck their hand up and they said, what do think of Bitcoin? And I didn't know anything about Bitcoin. I just thought it was some kind of magic internet money. And I said, look, you're going to have to explain it to me. How does it work? What does it do? And he explained it to me. You know, he went through all those usual baby steps that we all go through at the beginning and explained how it's it's decentralized, it's scarce, it's finite, it cannot be manipulated. You know, it's fungible, et cetera, et cetera. And very importantly, it's saleable across space and time. And the more I listen to this guy. I was thinking to myself, he's describing gold or at least some modern form of gold to me. And, you know, as somebody who recognizes the benefits of having 700 years of a an Islamic gold dinar, which was the standard of the Islamic Empire for 700 years, that led to fluid, friction free trade across nations, across continents, even into southern Europe. You had traders coming down the Silk Road. Harris Irfan (24:25.071) route from China through Persia through Arabia into Southern Europe and a frictionless trade where you set up money changes and invented new concepts like checks. The word check comes from the Arabic word sack from which we get the plural souq meaning Islamic bond. So, you know, there's many of these concepts that filtered their way into Europe. And, you know, we've got this history of a sound money using the gold denar and that's something I always believed in but it's not implementable today because it's impractical it requires a trusted intermediary and 8 000 tons of it held in one place in the US and etc etc so there's reasons why gold is not a very good sound currency today but this guy's describing something that seems to solve all those problems so I'm like okay you know what, you've just explained to me and that this is an orange pill moment, right? What you just explained to me, it's kind of mind blowing. I'm going to have to go away and verify what you've said is true because it sounds too good to be true. And I did. And we all put in our, you know, a hundred hours or a thousand hours or whatever it is that we spend studying the subject. And during the course of 2017, I realized that this really is something that is not just, just, it's, it's more than just a form of money actually. It's something that encourages low time preference in society and moves us all towards a more healthy relationship with our fellow human beings. And that's really the true value add of this particular concept. It's more than about making money. It's more than about, I got into Bitcoin in 2017, so I'm going to be rich, whoopee. That's not the point here. And people always, and I'm sure they ask you guys, hey, what do you think about, where's the price of Bitcoin going to go next year? I don't know. I don't care. You know, I believe in the concept, I believe in the ideal because it's low time preference, because I believe that it's a form of money that the Prophet peace be upon him would himself have sanctioned because it has all the characteristics of sound money. And we have many instances in our scriptures that talk about gold as a form of money. And people misinterpret that. They think that just because gold has been mentioned in, for example, the Quran, Michael Tanguma (26:30.291) you Harris Irfan (26:41.831) that it is the only form of sound money. No, characteristics of it have been mentioned in traditions of the Prophet and his sayings and they've been mentioned in Qur'an because that's a form of money that is good for society. So if we find a modern form of that, there's no reason why we cannot adopt that and still be Sharia compliant. So you might sometimes see people saying, but Bitcoin is haram. It's religiously impermissible. It's been forbidden by the scholars because of, and then the usual fud, you know, they talk about government hasn't guaranteed anything and it's not backed by anything. It's not real. It doesn't have intrinsic value. It's volatile. It's this, it's that. These are all nonsense arguments that we know how to rebut, but they have sound logical reasons why these are not true things. But You know, think people, Muslims in particular, they misinterpret that. what they don't realize is this is such a pure form of money, a pure sound form of money analogous to gold in its heyday when it was a global standard. The gold standard was something that was good for nations, good for civilizations. It reduced friction between nations. It led to less hostility, less war. These are all good things for society and civilization. Bitcoin can do that. Bitcoin has that capability. What if you married this low time preference sound money with a financial system that deals with real economy and real trade, not financialization and proliferation of debt and loading students with $100,000 of debt that they have to pay off during their lifetime and create a master slave relationship with some rich people sitting on a trading floor. That's not ethical. That's not Islamic. That's not Christian. You know, these are not things that a good society should be doing. We're creating a society of debt slaves and we're doing that because of fiat money. So let's combine ethical finance with sound money. Michael Tanguma (28:28.878) Thanks. Jackson Mikalic (28:36.049) And so Harris, that was in 2017, you mentioned that you'd given that lecture on your book, Heavens Bankers. And so there was the context of presenting these principles and ideas of Islamic finance that you had mentioned. That is when someone asked you about Bitcoin. I'm sure that probably the context of you presenting on the topic of ethical Islamic finance and I presume the history of it probably made you a little bit more receptive to the idea of someone bringing Bitcoin up in a conversation. And so could you take us now from 2017 to present almost eight years later and how do you see Bitcoin realigning the principles of Islamic finance? Because you had mentioned that in the 1960s it was an experiment. In the 1990s you saw that Islamic finance was moving away from the core principles and alignment that you saw early on when this was introduced in Egypt. And now how do you see in the 2020s and beyond, how does Bitcoin play a role in addition to all the other work that you're doing in the space? How does Bitcoin play a role in realigning Islamic finance and creating or guess adding to the proliferation and realignment of this sounder form and more ethical form of finance. Harris Irfan (29:54.739) Yeah. So until I'd been introduced to Bitcoin, I hadn't realized that I was naturally somebody who aligned with Austrian economics. And I didn't even, you know, I'd never come across it before. It's not something that's taught in universities. You know, it is we're all subjected to the received wisdom of Keynesianism. So it's just something that we don't get exposed to. So here I was a believer in a form of Islamic economics, Islamic economics being one in which investors and investees, if I can use that term, aligned, they are partners. There is not this asymmetric relationship between them. They have a symmetric relationship. The prophet himself was an investment manager. A word I can use is Mudarib. That's the Arabic word. And Mudarib is in manager of people's capital. So his first wife was a rich merchant in the city of Mecca and she employed him as a manager of her capital. So the capital goes to the Magarif, the manager of the money, and he deploys it on the caravan trade. You know, he buys whatever spices and textiles and brings them back within the city walls and then trades them in the market. And then the profit is split with the investor of the money. And she was so impressed by his work that she proposed to him and they were married. This is a very interesting early example of that. financial arrangement that I think under what should underpin Islamic finance and underpins the Islamic economic model. And it so happens is something that works in the context of Austrian economics and Bitcoin as well. Because if Bitcoin is a form of sound money, freedom money, money that is used purely as a medium of exchange and a store of value, not money that is traded for its own intrinsic purpose. So today we live in a society where debt and cash flows are traded, where money itself is traded, where I can make money out of money by lending you and demanding an interest rate in return, not worrying about the underlying trade or the underlying business venture that we are financing. I think bankers like to say that they take risk. They like to say that we assess risk and we do due diligence, but they don't really. I mean, if you fail, they're going to have their shirt off your back. They've got some collateral. You know, they've got some security. Harris Irfan (32:24.917) and it's that Goodfellas scene of F you pay me. You your house burned down, I don't care if you pay me. Right. So it's you know, these are are things that we are now used to in the modern world. But actually, if we go back to the roots of Islamic economics, it's really about an underlying trade. And as an investor, you have to take market risk. It has to be a free market. You have to be somebody who assesses what that risk is and does due diligence and takes care. to enter into commercial relationships with good partners. And if we as a society did this, we'd end up having a healthier economy, not one in which some of us are masters and some of us are slaves, which is where we are today. So that's where I think the alignment comes in. I think the way that we might move towards an Islamic finance industry that is based on Bitcoin probably needs to happen in a couple of stages. I think the first stage is We have to have financial instruments that are Islamic finance and Sharia compliant. It's not going to come from the banks. I think it's going to come from non-bank financial intermediaries. I set up one called CCM or Kordoba Capital Markets. And the purpose of this company was to create a trade finance instrument that investors can put their money into, is listed on a stock exchange, and it finances businesses on this arrangement. that goes back to the roots of the Islamic economic model. So this idea of prophetic economics, where an individual acts as a mudarib, a manager of people's capital and shares the profits in a business activity on which both investor and investee have done their due diligence. So what I wanted to do was to go back to this idea of prophetic economics, where you take a specific trade activity and you securitize that trade activity and you list that trade activity on a stock exchange. And investors can put their money into it and they know exactly what risks they're taking. And yes, they are taking risk. Yes, they are exposed to something because that's what the market is. And I think that's a very healthy arrangement. Now, if I can put that in a format that is bond like or Sukuk like that is that is issued through an international financial center, in our case, at Jersey in the Channel Islands that is regulated. And I know regulation is a is a Harris Irfan (34:48.295) controversial world in our word in our space because you know, we like a world without KYC and AML because we think of Bitcoin as resistance money and freedom money. But I think we need to go through those steps first. We need to convince the industry that there is a form of financial instrument that's good for everybody that will make us all money that will share the spoils evenly amongst us that won't create these asymmetric relationships. And if we can make that financial instrument commercially sound commercially successful, then the next stage is building it on an economy, on a monetary base that is Bitcoin and not fiat. And it I'm sort of at the intersection of that now. I'm about to progress from one to the other. Michael Tanguma (35:32.874) Yeah, that's a great recap. think there's a couple of things I took notes of. One of them is you mentioned the profit and, you know, having a recognition of capital returning and was chosen like that doesn't come from out of nowhere. He had to have been a merchant previously and had experience to make that capital back. And similar to yourself, having a background in entrepreneurship and seeing these markets you created CCM. And so you created a financial product and products that are Innovative by today's standards, not by hundreds of years ago. And when we met, I think there's a lot of alignment with the things we're doing with early writers and this notion of alignment, returning a sound form of capital. And I think that's where this is all a function of time before the market recognizes you need investment managers who have experience and backgrounds because it's become very hazy when everything's financialized and everybody goes to school to be a venture capitalist or an asset manager. And then they tell a good story, but it's very hard, you know, whenever, when this is happening to discern what is actually real or not. And generally the time horizons are long. So it takes time to figure that out. The other component of that that's described is the, zero is, an acceptable thing, but we haven't accepted that as a market in the sense of like investments go to zero, but because we, we re-re-leveraged, we re-underwrite. opportunities we consistently build more and more leverage where to your point, if you profit share and you also risk share and the market starts to discern who knows what they're doing and who doesn't because some things go to zero and then eventually this is how free banking operated. You just don't go to the bank if they don't return the capital. So these are all just things that volatility is a healthy part of a market. It's just we don't allow it and we're prolonging long-term volatility. So that's the one part. The other thing that's something that's fascinating to call out and curious to hear your thoughts is you referenced a lot of these topics that have permeated society like at the very like base level in the Western side of there's a built in fallacy of like who will build the roads. So when I talk with family members and people I care deeply about, we talk about well, know, Bitcoin or less government and all these concepts. It's like, no, but who will build the roads and right? The roads are proxy for who will build the schools and who will build everything. Michael Tanguma (37:53.946) And something that's always struck me again, tying back to Islamic finance is the term of zakat. And I think if I get it right, it's the recognition of the requirement from a believer to participate in 3 % of their annual wealth total. I don't know if it's total of that year or total altogether cumulative, but either way to give back. it's this under, and this kind of like aligns with the Riba incentive, because if you're making money on money, then it's a misalignment from giving money back because you're like, well, why would I give that when I can make money? That's one concept. But the other one is this notion of like, if we're all humans, and we all want to live in a prosperous society, it's a very bearish and negative take on us and as human beings that we would just let people suffer and let our roads erode and all the things versus if we are all winning together and we're all moving forward that individuals wouldn't build the schools and the roads and all these ideas that they've just like, incepted are a given that we will we will just let everything like break unless we have a form of government that inserts itself. So just curious, like your thoughts on that and how like Islam like ties into it and and yeah. Harris Irfan (39:01.289) Yeah, I think the Zakat is a good example, actually. It's the Zakat is the arms tax, as you say, it's the tax on a person's wealth. So every year, every Muslim is required to give two and a half percent of their total wealth, their aggregate wealth to charity. and that's not even that's considered a cleansing of their wealth. So it's interesting to me that an economist like Thomas Piketty proposes a wealth tax. I don't know if he proposes it on everybody or just the rich, but everybody gets, they lose their minds. my God, what an amazing genius idea. Yeah, we should have a wealth tax. Hey, this idea has been around for 1400 years. You know, this idea that if everybody paid a flat small rate on all of their wealth, then it allows wealth to circulate in the economy and that's healthy for everybody. So how does one finance roads and infrastructure and so on? There is, in my opinion, there's still a role for government. I mean, in Islamic and early Islamic history. There was a concept of the Beit Al-Maw, which was this, literally the words stand for House of Treasury or House of Wealth, which was a government treasury. And it was there to provide for widows and orphans and the infirm and the elderly and so on. It was an institution that was designed to protect the more vulnerable people in society. And arms taxes went to that institution. So there is some role for government. There is some role for government in protecting the people. What we live in a world today where government has taken over all of those roles and there's almost no role for society anymore. And, you know, we joke about being unable to do simple things for ourselves in the nanny state and health and safety and so on. We're no longer human beings that are able to assess risk for ourselves. We have to be told in a 30 page document by the government what is good and what is bad. We don't behave like intelligent human beings every we seem to have regressed. That's how it feels to me. So I do think there is a role for government, not in the way that it's progressed to modern times. There's another example of government intervention in monetary matters in early Islam. that is that a royal, sorry, I said the word royal, I didn't mean royal, mean a government mint was set up in order to verify that gold coins were of the necessary purity and weight. Harris Irfan (41:25.765) and they were stamped accordingly. So, you know, that is a role that the government in early Islam did take, but they did not intervene in matters of money. They did not manipulate the money supply. They did not inject new money into the economy simply by printing. You know, there were certain restricted roles that the government held and verification of gold at that time was one of those. Of course, the beauty of Bitcoin is We don't require a government to do that for us because there are thousands of nodes around the world that do that for us. So this is the beauty of this modern digital form of gold. And that's why I was so fascinated by it when I first heard about it in 2017. Jackson Mikalic (42:11.257) Yeah, Harris, you made a great point to just with how we have regressed in many ways as civilization and we have these sovereigns that are over encumbered by debt and we have these egregious tax rates here in the US, UK, EU, most of the Western world. Just you're shoveling so much money of your so much of your earnings into taxes. And now, of course, in the United States, there is this push with the Department of Government Efficiency Doge to really curtail a lot of the spending to manage the excess within the country. And you would think that there would be a recognition by both sides, right, that this would ultimately be a good thing to look into, right? Let's maybe shrink some of the excess, get rid of a lot of the waste. We have more money to... We have more money for ourselves first and foremost to allocate how we see fit. I like the idea of the Zakat as well where you are defining, I guess you said two and a half percent per year is mandated, right? Where you give that to people who are more in need. And just imagine if we could get rid of so much of the waste, we have more money for ourselves to provide for our families. We maybe get back to a world where one income is sufficient to provide for a family. And then you also have plenty of excess capital to help those in need and to provide to charities that you see fit within your local communities. And then we also have so much more efficiency as a private sector, right, where we could actually get a lot of the function that is currently residing with the government to be back, at least in some part in the private sector, and we could have so much more GDP growth. And ultimately Bitcoin aligns with that as well, because if we take this sound money and incorporate it some way into whether it's Bitcoin denominated debt or it's Bitcoin on the balance sheet, of sovereign nations, this will allow these countries to be more prudent with their spending and also to help recapitalize and think reinvigorate a lot of these economies. Brian Cubellis (44:10.753) One element there I think worth highlighting is if we had better transparency into where our tax dollars went, I think that in and of itself better aligns incentives. So what you're describing, Harris, if you knew that 2.5 % of your wealth was going somewhere that was useful and needed as opposed to we have no idea where our tax dollars go, that is indicative of the benefits of aligning incentives effectively. And then the other notion I wanted to pull out was at a very high level, like the waste and the misallocation of resources and ultimately the endless printing of dollars is simply just a function of high time preference and effectively saying, it's not my problem. Let's keep kicking the can down the road. This will be the next generation or the next generation's issue to sort out. But this right now helps me in the moment. Like that is, if you really boil it down, like that's what it comes down to for me. Harris Irfan (45:18.717) Yeah, there's so much to unpack there. I'm not even sure where I can start. But the first thing I will say is Bitcoin is anti-riba. Bitcoin is anti-inflation. We know that, right? We know that it's anti-inflation. We know that it can't be created out of nothing. We know that it can't be injected into an economy by a government simply by printing. So that in itself is a huge advantage because it means that it will not... flood the money supply and cause inflation and require us to hold two jobs in order to pay for everything. And it's anti-riba because it can't be created from nothing. So at a stroke, is we are unable to lend Bitcoin and create new Bitcoin out of nothing as a fractional reserve bank. Sure, there will be people who will create financial products that will lend Bitcoin an interest. Yes, of course, it's inevitable. That's human nature. But this idea of money creation through banks is just not possible with Bitcoin. So that, think, is a really important because it means that you lead to a definancial of the world. You lead to a world in which GDP is now not the most important metric to measure human progress. So GDP only measures the exchange value of goods and services. But if the exchange value of goods and services is stuff that we don't actually need, but we're doing in order to support, you know, paying our monthly mortgage, which is inflated because the asset value of our houses inflated because of A, money supply and B, proliferation of debt. quantitative easing and so on. You know, this is a never-ending cycle. So if we can find a way to break that cycle, BTC is breaking that cycle. It's anti-riba, it's anti-inflation. Harris Irfan (47:10.703) it means that we will start to focus on metrics of human progress that are not just exchange value of goods and services, but experiential value of our lives, our literacy rates, suicide rates, divorce rates, environmental pollution, all of these things that are more important than how much money is sitting in our bank account. Sure, we want to be rich. Sure, we want to have nice things, of course. But if we have a sound money, we are incentivized. towards deferred gratification. We make long term investment decisions, not decisions that determine how our next quarter is going to be, but how the next quarter of our lives is going to be, or our children's lives, or our grandchildren's lives. So that's a very different mindset. It's a fundamental change. It's how we used to be as a civilization. We used to think like that, but we don't think like that anymore because post 1971, we're only worried about which way the stock price is going to go up in the next 15 minutes, right? Michael Tanguma (47:47.215) Thanks. Michael Tanguma (48:06.878) So. Harris Irfan (48:08.423) That's the problem that we have as society right now. So I think this move towards long term decision making and deferred gratification is an important byproduct of going towards a Bitcoin monetary standard. Michael Tanguma (48:19.661) It's such a great point that you reference that I think a lot of people feel what we haven't been able to articulate is a lot of the boomer generation I just experienced this they conflate tech innovation or the apps we have on our phone with a better society or better you know like experience in life when they're literally the off of it right like these I know very well-meaning individuals that are like you guys have it easy and it's just like objectively you know when you think about Millennials and number of jobs and the debt and all these things. It's like, no, that's easy because you got the phone and you got the door to ash or whatever delivers. the reality of what you just described, it's this like permutation of, you know, since 71 of number go up. So stock go up, real estate go up by the denominator of amount of capital coming in. And so like that's the unit and they don't understand like, well, that is increased for them. It is also increased disproportionately for everyone else because their cost of living has not. kept pace and they're just missing it. And it's like this notion of incentives drive everything. If they're sitting on their nest egg in retirement, the one way I figured out to kind of spark them into action is realizing that like, well, your, your inherited or your retirement, specifically people that are retired is like, well, it's kind of, you know, you, you feel it every year on your vacation. It's kind of buying you less and less. So you're either what your retirement you thought was going to be may end soon or whatever you're leaving your family is going to be much less than you thought. And so we call them like, there's a funny joke, like spike coiners where they just start buying Bitcoin. Like I'm thinking of like in laws and they didn't really listen to us, but if they did, they'd laugh. It's like they buy and you find they have a position, but they don't buy it because they believe you. buy it because like you can't, they can't afford to be wrong if they've been sitting for seven plus years at dinner listening to this guy talk about this asset. And it went from 3000, now it's a hundred K while also, you know, everything else has increased. Harris Irfan (50:11.443) Yeah, 100 % agree with that. I like that, it's Bitcoin, excellent. Yeah, we need to... standing in the shoes of the people that we talk to. And I think one of the dangers of us as a community, as Bitcoiners, is we tend to be a little bit toxic at times. So we're trying to shove this thing down people's throats and we say, have fun staying poor. And we call everything that's not Bitcoin shitcoins. we use this language that sometimes alienates us. And we just need to find that way of what it is. People are convinced, it's hearts and minds. Often people are convinced by the emotional argument more than the logical argument. Sometimes logic doesn't work on people. Sometimes you need to use the argument of freedom money, of resistance money, of, you know you have relatives in troubled parts of the world, maybe they're in Lebanon and Gaza, maybe they're in, I don't know, in other parts of the world where their currency is depreciating massively. You know, what's a lifeline for them? you know, sometimes it's those arguments that work on them. And then at that point they'll say, yeah, okay, maybe I didn't think of it in those terms. So you just have to find the right argument that works with people. Michael Tanguma (51:24.123) Yeah, that's the foundation of this whole business. If you put in its essence is meeting people where they're at. We've been so early to Bitcoin. Historically, the fundamental is to have it right, but they're unwilling to, you know, have the discussion and it's like, there's a joke. I don't know if it's exactly this, but I like saying it's like, do you want to make money or do you want to be right? Right. And it's like, do you if you want to be right, like sure you can have it all but like that doesn't Jackson Mikalic (51:24.872) Yeah, that's the foundation of this whole business. Michael Tanguma (51:46.779) doesn't make any money, you just are there and you get to sit there in a corner versus just meet the market where they're at. And then ultimately, once you meet them there, they can come to your conclusion. But if you never get to start the conversation. So a lot of these concepts, well, we know them internally, we don't share them on the pod because it's, it's good to talk through, but we kind of try to take a more diplomatic approach. Because to your point, when people just call everything bullshit, even though we know it is, they're just like immediately like put in their head like all these guys are dogmatic, they are closed minded versus like, look, let's just have an open discussion and we have a framework and we'll help you get there. But we're open to, you know, hearing an easy example of this. talked about on our previous pod with Bram, he was referencing how do you talk about crypto versus Bitcoin? And think Brian's helped me with this. And this is, think, a thing that we mostly take internally when we talk with institutional investors is think of crypto like a venture style bet. We have a thesis that majority of them go to zero, if not all of them. but look at it as a more speculative asset versus Bitcoin is a different form of capital, more store value competing with bonds and gold. And so you should isolate how you think about them, how you secure them. And just like leaving that as it is, and obviously on this call and most people listening know that, you know, they're all going to zero. But at the same time, if you tell that to most people, they're just going to be like, look, these guys don't like, you know, especially if they have bags, right? It's very hard to tell people that have already invested in certain themes to have an open dialogue because people who have the sum cost fallacy and they don't want to hear somebody explain to them why their investment's going to zero. Brian Cubellis (53:16.237) Yeah, they either have bags or for better or for worse, they've seen some level of social proof from institutions, VCs who are investing in this stuff. We go to some of these blockchain conferences here and there. it's like, that's a type of social proof that reinforces bad ideas effectively. And so you're also competing with that. But Michael, you're totally right is, you you just, have to put them in different buckets and be generous about your description effectively so that you don't, you know, come off too aggressive. But it is, you know, the easiest sort of bifurcation is speculation versus wealth preservation. Like those are two very different things. And if you can just sort of compartmentalize segments of the market in that way, it goes a long way to at least shedding some light on sort of the deeper understanding that we allude to when we start talking about Bitcoin versus crypto. But again, that's like a long journey. Like someone doesn't get there in a few sentences of understanding the core differences. But if you can frame it in that high level way, it's certainly helpful. Harris Irfan (54:32.541) we have this particular problem. Sorry, go ahead. Michael Tanguma (54:32.763) One thing that... I was just saying one thing, because this is something I just thought of is, and I don't know if you have, is this is eerily similar to your description of Islamic finance and getting kind of co-opted by traditional finance, because Bitcoin is very similar in the sense that Bitcoin came in and then traditional finance has taken this approach of trying to effectively co-opt because you can't really make money, right? Like you have to make money in a very low time preference way in Islamic finance and the same way have to make money in very insanely low time preference way in Bitcoin. There's not a lot of ways to make money. And so that's where you see all this conflation and crypto and putting people out on the risk curve, which it effectively keeps people away from the underlying because they're conflating again, digital assets with, with that notion. And so there's just like sparked in my head is the beauty where I think Bitcoin can, will obviously, you know, be able to have unfair advantages. The number grow up. So this notion of low time preference, you wait by the river long enough for the bodies of your enemies to float by is that because you hold a form of money, it increases in purchasing power, you increasing your low time preference by building a brand and a reputation. And over time, because you're on the winning side of that, the market's basically like showing everyone else all the FTX is blocked by the Celsius of the world. that this is kind of how you bring about this standard. But anyway, just reminding me of the your notion of Islamic finance and how it kind of got manipulated. Harris Irfan (56:07.609) We have this particular problem in the Muslim community which is that as a group of people we often defer our guidance and our decision making to scholars, to theologians and scholars end up opining on all sorts of things as they should because you know there is jurisprudence behind everything and any innovation in society. The problem that we've had over the last several years is that many scholars have been extremely misinformed about this subject and often work for governments or banks, for example, or worse still, they're just social media scholars who have a following on TikTok and Instagram. So, you know, they opine on this subject of Bitcoin and say it's haram, it's religiously impermissible because of and then again, the usual fud that I mentioned earlier. And so they haven't really deep dived into to it. They equate Bitcoin with crypto, so all the 99 % of scams and rug pulls out there they think is all part of the Bitcoin world as well. the Muslim community has deferred their decision making to people who are simply misinformed on the subject. And they haven't bothered to look behind look under the hood and work out. What is this thing called Bitcoin? How does it work? What is it? Is it insecure? know, is it Does it not in fact have intrinsic value? Is it actually volatile? Is it this is it that you know? But one of the ways I I tried to persuade them is say look We as Muslims are low time preference people We want to store up good deeds in this life because we believe in a reckoning with God and a hereafter And, you know, if we have done good deeds in our life, then that's an eternity of bliss. It's a Christian concept as well. And, you know, one of the arguments I use is we are the ultimate low time preference people. You know, in the month of Ramadan, we fast for 30 days in a row and deny ourselves food and water for in some parts of the world, you know, 16, 18 hours a day. You know, that's pretty low time preference. Harris Irfan (58:11.253) You know, we train our bodies. We train our minds. We we believe in low time preference family values We believe in educating for the future. We believe in investing for the future Bitcoin should be a natural fit for you. You know, it's the ultimate low time preference monetary base So you really ideologically you should fit with it You know, it should make sense to you this idea that governments have to control everything we do including our money supply Well, actually the history of Islam has been very different Governments and the judiciary have been historically separated. You know, the ruler and the judges are meant to be independent of each other. The law is independent. The monetary system needs to be independent. The markets need to be independent. There's a very famous tradition or saying of the of Prophet, peace be upon him, which is that he was asked by a group of companions, prices are getting out of control of certain commodities. Can you fix the prices for us? And he thought about this and he realized that that would be a great injustice on people if he were to start fixing prices, centralizing prices. And he said that prices are in the hands of God. In other words, they should be allowed to move according to the market. I'm sure we can do certain things to protect the weak and vulnerable. There are some things that we can do as a government, as a ruler. But I can't fix the prices for you, because if I did that, I'd be guilty of perpetrating a great injustice on the people. So this idea of free markets is intrinsically Islamic and a lot of Muslims don't realize that. And now what we're doing is suggesting here's a form of money that can lead to free markets, that can lead to risk sharing trade. That's actually truly the basis of the Islamic economic model. Not what you're seeing with the Islamic banks. That's just a reverse engineering of what conventional banks do. Jackson Mikalic (01:00:07.186) Yeah. there's to your point, Harris, there's so much entrenchment of high time preference thinking within both Islamic finance and also just traditional finance. know, Brian and I both have traditional finance backgrounds. And I remember from those days speaking with fund managers and the conversations were always about quarter quarterly performance. Right. Why is a fund manager underperforming a benchmark in a given quarter? And it was constantly me having to re explain the thesis on behalf of the fund. manager to financial advisors or their clients that, they have a secular investment thesis or they take positions with high conviction that they expect to play out over a three or five or 10 year period. And there's such an entrenched philosophy or behavior of high time preference where we face this with Bitcoin as well where We want to articulate that Bitcoin is a long term store of value. It's an asset that should not be held for a year or two years. We believe that it should be held at least for a four year cycle. And the data is there to back that as well, both on the absolute and risk adjusted basis where the lowest taker is about 20 % or so over a four year period. Right. So if you can If you can ditch the high time preference thinking that's so entrenched within this system and realign your investment philosophy, you can potentially see very outsized returns that are also in a form of money, like you said, that are more fair, just, transparent. And that's a win-win proposition for everyone. my concern as well, as I think it was articulated by both you and Michael, is that you're starting to see Bitcoin be co-opted. And there's really nothing we can do about that, of course, because there are these natural incentives where you have asset managers Michael Tanguma (01:01:47.784) Yep. Jackson Mikalic (01:01:54.132) stepping into the ring, they now want to make money off their product. And while there are great things about the ETFs in particular, it's really not aligned with the idea of Bitcoin in terms of self sovereignty and ownership and savings technology or a form of peer-to-peer money. Now you're seeing it financialized, you're seeing it centralized, which is presenting hidden risks to investors as well. And I expect that will only become more pronounced over time, unfortunately, but it's great to have advocates like you in the space, not only from traditional finance, but from Islamic finance as well, and being able to offer what I think are still fairly uncommon and asymmetric views on how Bitcoin can play a very significant role in realigning incentives and creating a more just and fair monetary standard. Harris Irfan (01:02:47.133) Yeah, I think I agree that there's, you know, there are some potential advantages to this modern, this recent phenomenon of Bitcoin ETFs and financial institutions getting in on the act. But, you know, there is a solid alternative to self-custody. Self-custody doesn't work for everybody. You know, it's complex. mean, you my mother wouldn't be able to do it. You know, she just, it's just complicated for her. You know this the one of the reasons why I was so keen to work with Ralph and Michael and others on on Ramp Mina was because I felt that this was an essential addition to the Bitcoin ecosystem to have multi institutional custody and You know, I think for those individuals and enterprises For whom you know, there is a risk that if you give the keys to one individual and that's a massive risk that you're placing on an organization this idea of utilizing this inherent nature of Bitcoin to allow for multi-signature authority. This is an extremely important addition to the ecosystem and one I think that is going to be of increasing importance in the coming years. Michael Tanguma (01:04:01.17) Yeah, it's an interesting something I've sometimes like the hyperbolic statements are the things that make you know, kind of just like the punch and one of the things that I've kind of gravitated towards is people just let their money go to zero versus buy Bitcoin to your point if they have to do self custody. And what I mean by that is because everyone knows that if they buy Bitcoin and they lose it, goes to zero and they hear all the tropes around self custody and landfills and North Koreans hacking all these things. So it's just it's just innate to be like, well, I'll just like if if I'm losing in real purchasing power, 5%, right? So nominal returns five and I'm losing, know, inflation is 10. So I'm losing 5%. It's like, well, at least I didn't lose it all, right? Like I didn't lose it because I invested in this wrong asset. So people will just naturally not invest no matter how hard we explain and what we explain about all these things here, unless they know that it's bulletproof, unless they know that they allocate. And again, that maybe the investment is the wrong investment. But then they wouldn't put material wealth if that was the case, but they can understand that there's no other asset. what I like. And Bitcoin is such great product market fit. We're at $2 trillion and people invested with the notion that they can lose all the Bitcoin the next day if the exchange goes down or their self-custody set up, which means that that's an incredible product market fit. But at the same time, we still have so much opportunity to go. And it's that Delta we talked about yesterday's pot about. That's the reason why it's not 10 trillion is because this underlying market structure around the custody. which has a lot of transparency built in when you think about gold and where we ultimately fell with gold is this notion of too many claims on the underlying. Well, that is impossible to happen if you construct it the right way where you know where the Bitcoin sits, you know, any kind of claims against it. And you can do that math and you can have a bank run. There's a lot of thing in one entity doesn't hold it all similar to a Coinbase where we don't really ever know how much Bitcoin they have. then secondarily, if you ever Bitcoin's not scalable for the number of people on the earth. If you need to issue some notes against it, well, there's actually no real way from a central party, but there's a lot of embedded financial products that will occur post this kind of like creation of multi-institution custody. Harris Irfan (01:06:07.209) Absolutely. Jackson Mikalic (01:06:08.131) Yeah, one of the big things there as well is there is the, guess, the more idealistic Bitcoiner or the hardcore Bitcoin maxi that... Jackson Mikalic (01:06:21.985) does not want to see the ETF succeed or does not like the idea of the ETF soaking up all these all this liquidity and being the most successful financial products that we've seen on Wall Street. But the idea really the core thing there is that that speaks to the lack of Bitcoin native solutions that do meet people where they're at, which is why I'm excited about multi-institution custody. And I encourage other people that are building in the space or want to build in the space to look for market gaps and build solutions so that all the Bitcoin doesn't end up in Coinbase in an ETF product, right? Like if that's something that people don't want to see as the future of Bitcoin, then the products need to exist where the only choices aren't leaving it with an exchange or managing it yourself and kind of being on an island and your family not having certainty about them being able to access it. And then also the incentive for violence and kind of pushing us back into a barbaric time. So it's really a challenge then for people who want Bitcoin to succeed and want it to be adopted in a way that's aligned with the idea and the experiment of 16 years ago, you have to take it upon yourself, right, to join a company or to build a company that's going to offer alternatives to Bitcoin sitting in one institution and being just another financial product that's shield by the largest asset managers in the world. So it's really a challenge to people who want to get involved. There's plenty of opportunities to do it. And what we're doing here at OnRamp is just one example of something that took technology that's existed for over a decade now with multi-stakeholder right? And we've just provided a new implementation or flavor of it that didn't exist in the market five years ago. So there's going to be more maturity of the market. There's going to be new solutions brought to market. And really there's such a massive opportunity now to provide these solutions that are aligned with the ethos and experiment and ideals of Bitcoin. So really excited about that in particular. Harris Irfan (01:08:14.483) Yeah, and I think, yeah, for my particular area of interest, geographical area of interest, which is the Middle East, you know, there aren't any ETFs out there. know, the markets are not as sophisticated. And therefore, I think it's essential that this particular service is provided. I mean, that's something that obviously Amr Aminah is working on. Michael Tanguma (01:08:15.023) Yeah, maybe. Harris Irfan (01:08:37.615) know, multi-institutional custody is going to get there before ETFs get there. And, you know, I'm very pleased about that because I have mixed feelings about ETFs. I recognize that there's going be a lot of investors who, you know, they're just never going to self-custody. They're just never going to go there. So the next best thing is for their 401k or in the UK, we have the SIPP, the S-I-P-P, which is the equivalent. You know, that's, there's no, there's no, there's no other way they can do this. So I think for the Middle East is particularly interesting. Michael Tanguma (01:09:08.591) Yeah, I'm glad you brought that up because it's a perfect transition to your interest and excitement. What's what's happening there? I think, well, from an individual perspective, you know, obviously, it's it's the cost of Bitcoin has never been higher. I think that from my entrepreneurial perspective, risk adjusted has never been a better time to come into this space and build a position because the entrepreneurs, the individuals that grok the market understand the underlying mechanics of Bitcoin to Jackson's point will be able to build much better products than anybody on Wall Street. And that's how you compete with Wall Street is you just build better products. You play a different game. That's what multi-institution is. That's what delivery, that's what all the education that we can offer. There's nobody on planet earth that can do this because it's still a nascent asset class. So that's the opportunity. And where Mina is so fascinating, and we talked about it on the yesterday's plot is that the conservative nature mixed with the commodity understanding of commodities and oil rich is primed. for the asset Bitcoin, the problem when we went out there is that there's so much crypto and they tell themselves as being innovative in these new emergent economies like the UAE and Saudi Arabia and Bahrain, as they've kind of overshot the innovation. Like they have the ministry of AI and all these things, but then they're trying to get too cute with the crypto and stable coins. So we went there, it's like had all this innovation, but there was nothing related to Bitcoin and it's just this like gap. It's a desert in the desert. of offerings. so curious like how you think about the space there and the opportunity to leapfrog almost the West and the learnings because we've had to go through a lot of pain in 15 years of all the craziness. So curious how you think about that in the Middle East. Harris Irfan (01:10:46.121) Well, Dubai in particular is a very interesting place because they're extremely commercially dynamic and whatever they choose to focus on, there is this idea of overshooting, there? And they're certainly doing that with crypto right now. But they attract good people. It's a low tax environment. It's a good place to live. They've set up a strong financial district with strong robust legislative environment and a regulatory environment. A reputation is good. And, you know, they they see an opportunity in the world and they jump on it. And they've clearly seen this opportunity in crypto. I don't know how we are going to tackle that, to be honest. I don't know how we are going to be able to convince people that it's good that you've you've recognized the opportunity here, but we just need to focus you a little bit. Let's just get a lens around this and start to focus your direction here. I'm not sure what the solution is there, but I do know that there is a a merchant mindset in a place like Dubai and they really want to be a hub, whether that's a port. that physically transports goods from one place to another, whether that's a financial center. They have historically been very good at that kind of thing. So let's hope we can channel their efforts into something more meaningful than crypto scams and red pools. Michael Tanguma (01:12:18.959) My optimistic take is, there's a couple, one is that talking with the regulators, they were very close to almost being rugged by the SPFs to the world, in particular SPF who was trying to raise capital from sovereigns before that blew up. But then also the experience in another part of the world, Texas, specifically around the conservative nature of Bitcoin and going into a room, looking people in the eye, building relationships and basically explaining the difference between gold and crypto because nobody tells that story. So if you're able to do that enough times and be consistent, you over time, again, it goes back to low time preference, the market sorts it all out because we all know that this is just a matter of time before something crazy happens and it ends up in losses. So that's our hope or that's the plan, right, to go there and that's in the playbook is to be conservative, to explain it, to meet people where they're at. And to your point, there's no real structured products that are spot Bitcoin that allow for delivery and these things that the pensions, the UK found very sophisticated. So it's an incredibly exciting market. Jackson Mikalic (01:13:22.337) Harris, what do you see? And I know we're coming up on time here, but real quick, what do you see just in terms of sovereign nations competing? Do you think that will start to play out in 2025 or is that a little bit longer dated from where we are currently? Because I don't know if you've heard, but I've certainly heard a lot of rumors about sovereigns in the Gulf potentially purchasing Bitcoin and holding it on their balance sheets. We know that there is sovereigns that have been directly involved in Bitcoin mining for some years now, but do you think that sovereigns game theory will play out in 2025 or is that still a ways away? Harris Irfan (01:13:58.057) I don't have a crystal ball unfortunately, so I just don't have the answer. But I can tell you that if you talk to our colleague Ralph, Ralph Jabran in Dubai, and you jump in a car with him, I'm sure he'll drive you around parts of Abu Dhabi where you might find some evidence that mining is already taking place. So I'm sure it's being down the quiet by many nation states around the world. And I think that's just game theory because you know if the US is talking about a strategic reserve then everybody better get on it very quickly before the US starts buying up because if it does happen and you're left without any coins then you you're in big trouble. So it's a relatively low cost option for nations to start building up their Bitcoin reserves and getting involved in mining and so on. So if everybody stays true to game theory, then yeah, sure, 2025 could be a very good year for Bitcoin. But you never know. I've been trying to advocate it for certain nations. I'm personally, I'm a Pakistani heritage. So I speak to relatives and people in Pakistan and I say, you you guys got to jump on Bitcoin because you are an economically troubled country. You're a politically troubled country. You you've got a lot of problems and there are a lot of things that having a vibrant economy can fix. And if you want to have a vibrant economy, have a vibrant monetary system. And if you want a vibrant monetary system, jump on Bitcoin when it was $10,000 when I told you it's now $100,000. So what are you guys waiting, still waiting for? Anyway, I hope they get there. But as I say, nobody has a crystal ball. Jackson Mikalic (01:15:31.991) Fair enough. Michael and Harris, you guys will be out in Abu Dhabi in a couple weeks or I guess about a week's time or so. Any thoughts as relates to the Bitcoin MENA conference and the institutional day before we wrap up here? Michael Tanguma (01:15:48.564) Yeah, go ahead. Are you having to go? No, very excited. We have experience going to the Bitcoin magazine events and they can be very eventful and chaotic. So we decided to put together a side event, an institutional day event that focuses on, I won't list them all, but like mining, custody, financial services and other things. Harris Irfan (01:15:49.961) No, no, no, no, no, no, no, Jackson Mikalic (01:15:51.425) the very Michael Tanguma (01:16:11.974) in relation to the region have an amazing guest list of speakers, Harrison Iowley speaking. So if you're interested in attending, we'll link to it in the show notes, but excited to see everyone out there. think given the recent price action and to Jackson's point, the geopolitical conversation as it's come up, I think it's going to be a very productive and fruitful week that would have maybe not have been the case. I think it would have always been to get close to individuals we've been working with and talking to, but six months ago, I think the price being closer to $45,000, $50,000, leaves the sentiment very different than sitting at $100,000 strategic reserves and everything else that's coming into 2025. So pretty excited to see what comes from it. Harris Irfan (01:16:54.969) I'm excited as well. mean, I would say that I'm quite a sober former banker. So, you know, my natural environment is other sober professional and institutional people. And I probably don't fit in so well to your typical Bitcoin conference, but I think I probably fit into the institutional day. Jackson Mikalic (01:17:18.913) Thank you, Harris. For those who want to learn more about what you're doing and get in touch with you directly, what would be the best way for them to do so? Harris Irfan (01:17:27.529) I'm on Twitter under Haris Irfan. I'm also on LinkedIn. I occasionally publish blogs on LinkedIn and my activities through CCM, Cordoba Capital Markets, we are regularly publishing and socializing the things that we are up to. I think personally that we're at the next phase of evolution of the Islamic finance market. And if we can combine that with Bitcoin, then that's just, that's the end game, I think. Michael Tanguma (01:17:56.201) Yeah. So I would second that and encourage searching Harris's name in like podcast feeds. Cause there's a lot of great content if you like this that you can find where he talks more about a lot of these concepts we discussed today. Jackson Mikalic (01:18:08.543) Excellent. Thanks Harris for joining us today. was a pleasure. Thanks Harris. Really appreciate it. Harris Irfan (01:18:11.219) Thank you. Brian Cubellis (01:18:12.313) Thanks Harris, really appreciate it. Harris Irfan (01:18:14.227) Cheers.